Mar 31, 2023
Your Directors have pleasure in presenting the fifty fifth Annual Report of Hindustan Copper Ltd (HCL/the Company) together with the audited statement of accounts and Auditors'' Report thereon for the year ended 31.3.2023.
1. Performance Financial Summary or highlights
The comparative working results for the FY 2022-23 vis-a-vis FY 2021-22 are as under:
('' in crore) |
||
Particulars |
2022-23 |
2021-22 |
(a) Turnover |
1660.63 |
1812.21 |
(b) Profit /(Loss) before depreciation, amortization, finance cost & tax |
586.51 |
560.88 |
(c) Less : Depreciation & Amortization |
174.92 |
149.87 |
(d) Less : Finance Cost |
15.93 |
28.94 |
(e) Profit/ (Loss) Before Tax from continuing operation |
395.66 |
382.07 |
(f) Profit/(Loss) Before Tax from discontinuing operation |
- |
(0.35) |
(g) Profit/(Loss) Before Tax from continuing & discontinuing operation |
395.66 |
381.72 |
(h) Less : Provision for Taxation Net (Current & Deferred Tax) |
100.35 |
7.94 |
(i) Profit after tax from Continuing & Discontinuing Operation |
295.31 |
373.78 |
(j) Other Comprehensive Income (net of tax) |
(9.57) |
(22.22) |
(k) Total Comprehensive Income for the year |
285.74 |
351.56 |
(l) Add: Balance brought forward from the previous year |
648.68 |
330.97 |
(m) Balance available for appropriation |
934.42 |
682.53 |
(n) Less : Dividend |
112.17 |
33.85 |
(o) Balance to be carried forward |
822.25 |
648.68 |
(p) Earnings per Share ('') (Both Basic & Diluted) |
3.05 |
3.87 |
During 2022-23, the Turnover of the Company was ''1660.63 crore as against '' 1812.21 crore during FY 2021-22 registering a decrease of 8.36%. The Company posted Profit Before Tax from continuing & discontinuing operation of '' 395.66 crore during the year as against '' 381.72 crore recorded during the previous year registering an increase of 3.65%. The Profit After Tax from continuing & discontinuing operation during FY 2022-23 is '' 295.31 crore as against ''373.78 crore in FY 2021-22 registering a decrease of about 21%. The total borrowings of the Company has reduced from ''408.32 crore as on 31.03.2022 to ''156.39 crore as on 31.3.2023.
Physical performance:
The comparative physical performance of production and sales for the year 2022-23 vis-a-vis 2021-22 is as under:
Particulars |
Unit |
2022-23 |
2021-22 |
Ore |
Lakh Tonnes |
33.47 |
35.70 |
Metal in concentrate (MIC) |
Tonnes |
24,760 |
24,741 |
Cathode |
Tonnes |
7.32 |
621 |
CC Wire Rod - Own Production |
Tonnes |
Nil |
1 |
CC Wire Rod - Tolling Production |
Tonnes |
6,558 |
1,240 |
Sales : CC Rod |
Tonnes |
Nil |
1 |
Cathode |
79 |
558 |
|
MIC |
24,640 |
25,248 |
|
Total |
24,719 |
25,807 |
Though MIC production during FY 2022-23 has shown marginal improvement compared to last year, the performance was below the target set for the year due to non-availability of adequate number of benches for mining at open pit mine of Malanjkhand Copper Project (MCP), Madhya Pradesh as the open pit mine has reached its ultimate depth and is in a transition phase from open cast to underground mining, under performance of contractual agencies engaged for underground mine development and production contract at MCP, suspension of production at Surda Mine, Ghatsila on account of non-execution of mining lease deed by the State Government of Jharkhand, crusher break down at Kolihan Copper Mine and continued water shortage at Khetri Copper Complex, Rajasthan.
To augment ore production from mines and make-up the shortfall, the Company has taken various steps viz. award & execution of contract for loading & hauling of 6 LBCM rock at MCP open pit mine during FY 2022-23, execution of two small short-term contracts for production from the ready stopes of underground mine at MCP, the contract for which was awarded in FY 2021-22 and the contractor engaged for ore production from MCP underground mine started bringing the imported equipment at site leading to gradual ramp up of ore production from the MCP underground mine.
Though the Government of Jharkhand had extended the Surda Mining Lease period for another twenty years up to 31.3.2040 vide letter dated 6.1.2022 but execution of lease deed is awaited for want of Environmental Clearance (EC) from the Ministry of Environment, Forest and Climate Change (MOEF&CC), Delhi for the total lease area because of nonavailability of Stage I forest clearance over remaining 65.52 ha of forest land within the Surda Mining Lease. The present status of forest clearance of Surda Mining Lease is that PCCF (Nodal), Forest Department, Government of Jharkhand has recommended the proposal for Stage I forest clearance to the State Government of Jharkhand which is pending since 13.4.2023.
To overcome the problem of water shortage at KCC, the Company has taken up the matter with the State Government of Rajasthan to increase the supply of water at KCC from Kumbharam project and measures are being taken for enhancement of rainwater storage & retaining capacity, improvement of internal water circulation system to reduce loss of water and enhancement of water reclamation from tailing dam.
The Board of Directors of your Company has recommended payment of dividend equivalent to 18.32% on paid-up capital of the Company i.e. Re 0.92 per share of '' 5/- face value for the year 2022-23 for approval of shareholders in the Annual General Meeting. The outgo on this account will be '' 88.97 crore approx.
No material change and commitment affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of the report.
The Company during FY 2020-21 had envisaged to enhance the ore production capacity from the current level of 4.24 million tonnes per annum (MTPA) to 12.20 MTPA by FY 2028-29. Status of different continuing mine expansion projects is as under:
i. Malanjkhand Mine (Madhya Pradesh)
The proposed expansion of MCP will augment the ore production capacity from 2.5 MTPA to 5.0 MTPA by developing an underground mine below the existing open cast mine. The earlier awarded contract for development of underground mine at MCP had ended on 28.12.2021. To complete the residual work of underground mine construction, a consultancy contract was entrusted on M/s MECON, a reputed CPSE Consultancy Organization, for estimation of value of residual work, preparation of NIT document and evaluation of tenders which have been divided in multiple parts (Mine Excavation at North Side, Mine Excavation at South Side, Shaft Furnishing, Men & Material Hoisting system, Crushing & Pumping system, Power system, Main Mechanical Ventilator) to complete the work in an efficient manner. Out of the above multiple parts, the contracts for completion of mine development work at North & South side have been awarded and started in FY 2022-23. For production of copper ore from underground mine at MCP, a contract for Development, Production Drilling and Ore Production had been awarded to M/s SMS Ltd led consortium in July, 2019. M/s SMS Ltd has started production of copper ore from stope since July, 2022 and majorly completed the mobilization of production equipment at the site. Further, the Company has also awarded contract for construction of 3.00 MTPA Paste Fill Plant for back-filling the voids of Underground mine at MCP to the EPC contractor, M/s Shapoorji Pallonji and Company Private Ltd and the construction work has already commenced at the site.
ii. Khetri & Kolihan Mine (Rajasthan)
The proposed expansion of mines at western sector would increase ore production capacity from existing 1.0 MTPA to 3.0 MTPA. Mine-wise status is as under:-
a. Kolihan Mine: Shaft sinking and creation of ore handling facilities below 0 mRL (meter Reduced Level) has been undertaken to augment the production capacity to 1.5 MTPA for which EC is already in place. The study report of Geophysical Exploration work, taken up in FY 2021-22, has shown possible extension of ore body upto -300mRL and the validation drilling is being carried out to confirm the prediction as well as for assessment of grade of ore as per standard practice. Based on outcome of the above, further activities like G2 level Exploration and Mine Planning will be taken up.
b. Khetri mine: Execution of the earlier awarded contract to augment ore production capacity at the mine from 0.5 MTPA to 1.5 MTPA through deepening of existing shafts and other related activities, could not be completed due to extremely bad ground / fault zone encountered and as a result, the contract had to be terminated. To sustain the ore production from mine, another contract has been awarded for conversion of track mining to trackless mining at 0mRL and below for which contract has been awarded and the work has already been commenced. For the Banwas deposit of Khetri Mine, the Company had during FY 2016-17 appointed contractual agency for ore production. The contractual agency has produced 3,75,689 tonne of ore in FY 2022-23 and the target production is envisaged to be achieved by FY 2023-24.
iii. Surda Mine (Jharkhand)
The plan envisages sinking of shaft, deepening of various winzes to increase production capacity from 0.4 MTPA to 0.9 MTPA in Surda mine. The validity of Surda Mining Lease has been extended till 31.3.2040 by the Government of Jharkhand. EC was granted by the Ministry of Environment, Forest and Climate Change (MoEF&CC), Delhi for 0.9 MTPA ore production over 323.16 ha on 30.5.2022. Subsequently, during execution of Mining Lease deed, it was intimated by DMG, Ranchi on 29.8.2022 to submit amended EC over 388.68 ha. Accordingly, the EC amendment application was made and MoEF&CC, Delhi recommended the amendment subject to grant of Forest Clearance (FC) over balance 65.52 ha forest area within the mining lease.
The present status of forest clearance of Surda Mining Lease is that PCCF (Nodal), Forest Department, Government of Jharkhand has recommended the proposal for Stage-I forest clearance to the State Government of Jharkhand which is pending since 13.4.2023.
iv. Re-opening of closed mines at Indian Copper Complex (ICC) Ghatsila (Jharkhand)
The Company has initiated action to re-open the closed mines, development of new underground mine at Singhbum Copper Belt of ICC namely, Kendadih and Rakha mines. Mine-wise status is given below:
a. Kendadih mine: Kendadih mine was reopened in December, 2017 with commissioning of winders after completion of dewatering of the mine. Production contract has been awarded on 6.7.2021. Development activities and ore production were started, but the performance of the contract was not at all satisfactory as a result the said contract has been terminated on 25.05.2023.
b. Rakha mine: Rakha Mining Lease has expired on 28.8.2021 and Application for extension of lease for further period of 20 years beyond 28.8.2021 was submitted to the office of DC, Government of Jharkhand on 30.4.2020. In response of the application for extension of Rakha Mining Lease, Govt. of Jharkhand has intimated that it is under process/ consideration as per Statute.
Simultaneously, for engagement of MDO (Mine Developer cum Operator) for re-opening and expansion of Rakha Copper Mine, development of a new underground mine at Chapri Block to produce 3 MTPA of ore and erection & commissioning of a matching capacity new Concentrator Plant at ICC, the Company has appointed Transaction Advisor for preparation of tender document and Mine Service Agreement (MSA). For selection of MDO, tendering action has been taken and web hosted in the platform of M/s. MSTC. Pre-bid meeting has been conducted on 15.2.2023 wherein four prospective bidders participated. Tendering action is in process.
Exploration:
During FY 2022-23 focus on exploration has been enhanced considerably to assess depth extension of the ore bodies in different leases of HCL as well as to enhance copper ore inventory of the Company. Budget for exploration has been enhanced about five times with respect to last 10 year''s expenditure on this head.
During FY 2022-23, 17,249 m of surface drilling and 12,660 m of underground definition drilling have been completed in different leases. Extension of ore bodies has been proved upto about 650 m vertical depth in Rakha Block and up to about
750 m vertical depth in Kendadih Block by taking up G2 level exploration. G2 level exploration is also in progress for the adjacent Rakha NW block. Validation drilling is in progress for confirmation of ore body extension up to (-) 300mRL, i.e. about 750m vertical depth, predicted through geophysical survey.
As on 1.4.2022, copper ore reserve and resources of the Company was 631.85 million tonnes with 0.99% of Cu. It is expected that the exploration activities taken up during the financial year will enhance copper ore reserve and resources of the Company.
The geological drilling and associated work completed in FY 2022-23 is around four times of the exploration activities undertaken by the Company in last 10 years.
The Company has signed a Memorandum of Understanding (MoU) for collaborative and sponsored research projects with Indian Institute of Technology (Indian School of Mines), [IIT (ISM)], Dhanbad on 3.1.2023. The MoU will allow HCL to receive technical assistance, guidance and consultancy work from IIT-ISM for enhancing copper ore production through modifying mining methods with application of state-of-the-art technologies, improvement of productivity and safety in mines, environmental clearance issues, various hydrological & hydro-geological studies and in areas of unconventional exploration methods like Geophysical exploration, Remote Sensing etc. for depth exploration of copper ore.
5. Significant or material orders passed by the Regulators or Courts or Tribunals
No significant or material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and company''s operations in future.
6. Utilization of funds raised through preferential allotment or QIP during the year
The Company has raised funds of ''500 crore approx. in April, 2021 through Qualified Institutional Placement (QIP) for meeting expansion/Capex plan of the Company by issuing 4,18,06,020 equity shares of face value of '' 5/- each at a price of '' 119.60 (including a premium of ''114.60) per share from institutional investors including Mutual Funds, Banks, Insurance companies and FII''s. The Company has utilized ''206.63 crore up to 31.3.2023. Funds raised through QIP has been utilized as per objects stated in the QIP Document dated 12.4.2021.
7. Management Discussion and Analysis
A report on Management discussion and analysis of the performance of the Company is given at Annexure-I.
8. Information in respect of Subsidiary, Associate and Joint Venture
Khanij Bidesh India Ltd (KABIL), a JV company between NALCO, HCL and MECL, was incorporated on 8.8.2019 with the objective to identify, acquire, develop, process and make commercial use of strategic and other minerals in overseas locations for supply in India and boost âMake in Indiaâ campaign. The shareholding of NALCO, HCL and MECL in KABIL is in the ratio of 40:30:30. The cumulative investment in KABIL as on 31st March, 2023 is '' ''9.75 crore.
During the year, HCL has made additional investment of ''6.30 Lakh in the equity of its subsidiary viz. Chhattisgarh Copper Ltd (CCL). The total paid up capital of CCL as on 31.3.2023 is ''63.51 Lakh out of which 74% equity is held by HCL and remaining 26% is held by Chhattisgarh Mineral Development Corporation Ltd.
Information in respect of Subsidiary, Associate & Joint Venture (Form AOC 1) pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014 is given in Notes to Financial Statements 2022-23.
The Company has not taken any deposits covered under or which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.
10. Related Party Transactions (RPTs)
Detail of RPT in Form AOC-2 is given at Annexure - II. Policy on RPTs and dealing with RPTs has been formulated and put up at the Company''s website and can be accessed at https://www.hindustancopper.com/Content/PDF/Policy%20 on%20MRPT_RPT.pdf.
11. Maintenance of cost records
The Company is required to maintain cost records as specified by the Central Government under section 148 of the Companies Act, 2013, and accordingly such accounts and records are being maintained.
12. Name of companies which became and cease to be Subsidiaries, JVs or Associate Companies
Nil during the year.
13. Establishment of Vigil mechanism
The Company has in place a Whistle Blower Policy which provide adequate safeguards against victimization of employees / directors who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The Policy has been and put up at the Company''s website and can be accessed at https://www. hindustancopper.com/Content/PDF/Whistle_Blower_Policy.pdf.
14. Application made or any proceeding under the Insolvency and Bankruptcy Code, 2016
Not applicable as no application made or proceeding pending under the Insolvency and Bankruptcy Code, 2016.
15. Difference in valuation at the time of one time settlement and valuation while taking loan from the Banks or Financial Institutions
Not applicable as no one time settlement was done during the year.
16. Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has complied with the provisions relating to constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Composition of the Internal Complaints Committee is available at the website of the Company and can be accessed at https://www.hindustancopper. com/Content/PDF/Details%20of%20Internal%20Committee%20in%20HCL.pdf
The Board of Directors of the Company has developed and implemented a Risk Management Policy for the Company including identification therein of elements of risk, which in the opinion of the Board, may threaten the existence of the Company.
18. Dividend Distribution Policy
The Company has a Board approved âDividend Distribution Policy'' in place prepared in terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 {SEBI (LODR), 2015}. The Policy is available at the website of the Company and can be accessed at https://www.hindustancopper.com/Content/PDF/Dividend_Distribution_ Policy.pdf.
19. Internal Financial Controls
The Company has in place adequate internal financial control with reference to financial statements commensurate with its size and operations.
20. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
Information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given as Annexure-III forming part of this report.
Mine Safety & Environment management remains the high priority area of the Company. The Company is always aiming to achieve âZero Accidentâ potential and committed to continue sustainable mining by diligently adhering the âSustainable Development Framework'' stipulated by Indian Bureau of Mines (IBM), Government of India.
The Company continues to maintain the tradition of attracting recognition for its safety performance and, like previous years, this year also received a number of awards in mine safety environment management as indicated below:
i. Malanjkhand Copper Mine declared winner of National Safety Award in the large opencast metalliferous mines category for Longest Injury Free Period by DGMS and has been awarded 5-star rating (highest possible rating in India) by Indian Bureau of Mines for sustainable mining.
ii. The five mines of the Company (viz. Khetri, Kolihan, Malanjkhand, Surda and Kendadih) won various accolades in Annual Metalliferous Mine Safety Week under the aegis of respective regional office of Director General of Mine Safety (DGMS), Govt. of India and in Annual Mine Environment & Mineral Conservation (MEMC) Week of Indian Bureau of Mines (IBM), under the aegis of respective regional office of Govt. of India.
Besides the above, special training, regular refresher training program and on-the-job training are provided to all employees. Safety Campaigns like âAnnual Mines Safety Weekâ, âFire Services Dayâ, âFire services weekâ and âIndustrial Safety Dayâ
celebrations are conducted regularly with active participation of employees in all the Units of HCL.
(i) HCL received the first prize of âRajbhasha Implementation Excellence Awardâ for its best performance in the direction of progressive use and implementation of Hindi in the meeting of the Town Official Language Implementation Committee (Undertaking), Kolkata held on 25.8.2022.
(ii) CMD, HCL was awarded the MGMI Award of Excellence for Non-Coal Mining for the year 2021-22 on 25.9.2022 by the Mining, Geological and Metallurgical Institute of India for his outstanding contribution in Non-Coal Mining Industry.
(iii) HCL was felicitated as âSectoral Star'' at the Fortune India''s âThe Next 500: Breaking news Frontiers event held on 24.6.2022 at New Delhi for its outstanding rising performance in the Metal Industry.
23. Corporate Social Responsibility (CSR)
The CSR Report in the prescribed format as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 is at Annexure-IV.
The focus of the Vigilance Department is on preventive / proactive measures through improvement of systems and procedures, ensuring transparency, adherence to established policies and guidelines etc. Systems improvement measures are being regularly brought to the notice of Management, which has implemented most of the suggestions.
The emphasis is on developing proper checks and balances in the working systems. At the same time, since punitive action is also required in case of misconduct to maintain discipline in the organization and to ensure fairness and probity in public life, prompt action is taken towards disposal of those cases also. Efforts are also continuing to create more and more awareness about vigilance amongst the employees of the organization.
25. Official Language Implementation
During FY 2022-23, HCL made constant endeavor to increase the use of Official Language Hindi in its Units/Offices. Hindi Diwas/ Week/ Fortnight were celebrated in the Units/Offices from 14.9.2022 to 29.9.2022. On this occasion, the messages of Hon''ble Home Minister, Hon''ble Mines Minister and CMD, HCL were circulated /read out. Various competitions were organized with a view to increase interest among employees towards the Official Language and winners were given awards on closing ceremony held on 28.9.2022. Employees are constantly motivated to use Hindi in their day-to-day official work. Hindi Workshops were conducted in the Corporate Office, Units/ Offices at regular intervals. Regular review of progressive use of Hindi was carried out in quarterly meetings of Official Language Implementation Committee under the Chairmanship of CMD at Corporate Office and Unit Heads in Units.
During FY 2022-23, HCL participated in the half-yearly meetings organized by the Town Official Language Implementation Committee (PSUs), Kolkata. HCL was awarded âfirst prize'' and âactive participation award'' in the category of Corporate Office for outstanding work in the field of official language by CALTOLIC (Undertakings) on 30.1.2023.
The progressive use of Hindi is being reviewed regularly at Board meetings. The Company''s in-house journal âTamralipiâ is published in Hindi and English languages and distributed among the employees. The recruitment advertisement is also published bilingual. Notices, etc. are uploaded on the Company''s website in Hindi and English. In order to increase knowledge and popularity of Hindi amongst employees, a scheme of âOne Hindi word and One sentence every day'' was implemented. The use of Hindi in the computer has been further increased and advance software Unicode Hindi Open Office has been made available to all units/offices of the Company. Practical training was given to employees to work in official language through modern technology.
26. Business Responsibility and Sustainability Report
Pursuant to Regulation 34 (2) of SEBI (LODR), 2015, Business Responsibility and Sustainability Report for FY 2022-23 describing various initiatives taken by the Company on social, environmental and governance perspective, is attached at Annexure-V which forms part of this report.
Annual Return pursuant to Section 92(3) of the Companies Act, 2013 is available at the website of the Company and can be accessed at https://www.hindustancopper.com/Page/AnnualReturn
Corporate Governance Report as per SEBI (LODR), 2015 is given at Annexure-VI forming part of this report together with Certificate on Corporate Governance.
29. Number of meetings of the Board
During 2022-23, eleven Board meetings were held on 2.5.2022, 28.5.2022, 29.6.2022, 30.6.2022, 13.8.2022, 3.9.2022, 12.1 1.2022, 16.12.2022, 1.2.2023, 28.3.2023 and 29.3.2023.
30. Directorsâ Responsibility Statement
In terms of Section 134(5) of Companies Act, 2013, your Directors confirm:
(i) That in the preparation of the Annual Accounts for the year ended 31st March, 2023 the applicable Accounting Standards has been followed along with proper explanations relating to material departures.
(ii) That such Accounting Policies have been selected and applied consistently and made adjustments and estimates which are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company at the end of 31st March, 2023 and of the Profit and Loss of the Company for the FY 2022-23.
(iii) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
(iv) That the Directors have prepared the Annual Accounts on a going concern basis.
(v) That the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively.
(vi) That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
31. Declaration by Independent Directors
Independent Directors of the Company have given declaration to the effect that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013.
32. Familiarization Program for Independent Directors
On joining, Independent Directors are familiarized through induction program / presentation with the overview of business, operations, new projects and business model of the Company. Visit to Units is also organized as per their convenience. They are also updated on the changes / developments including in the relevant statutory / regulatory requirements from time-to-time. Detail of Directors'' Training / Familiarization Program has been hosted at the Company''s website and can be accessed at https://www.hindustancopper.com/Content/PDF/Fam_Pro_Ind_Dir.pdf.
33. Opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the Independent Directors
In the opinion of Board, the Independent Directors of HCL are person of integrity and possesses expertise and experience required to discharge their duty.
34. Manner of Annual evaluation of Board sub Committees and individual Directors
HCL being a Government Company, performance evaluation of its Directors and criteria of evaluation is decided and undertaken by the Government of India.
The Company has in place a Code of Conduct applicable to the Directors as well as Senior Management and the same has been circulated to all concerned and posted at the Company''s website and can be accessed at https://www. hindustancopper.com/Content/PDF/CC_Dir_Sr_Exe.pdf. All Board members and senior management personnel have affirmed compliance of the Code for the year ended 31st March, 2023.
36. Directors and Key Managerial Personnel
During the year S/Shri R Kalyansundaram, Pawan Kumar Dhawan and Balwinder Singh Canth ceased to be Non-official Independent Director on completion of their tenure on 21.7.2022.
Shri Ghanshyam Sharma, holding additional charge of Director (Finance), HCL (from 13.9.2021), has in terms of Ministry
of Mines'' order No. Met.3-10/3/2020-Met.III dated 1.2.2023 joined as Director (Finance), HCL with effect from 28.2.2023 and his tenure will be till the date of his superannuation i.e. 31.5.2025 or until further orders, whichever is earlier.
The Board places on record its appreciation for the valuable services and contribution made by S/Shri R Kalyansundaram, Pawan Kumar Dhawan and Balwinder Singh Canth during their tenure on the Board.
During 2022-23, Shri C S Singhi ceased to be Company Secretary of the Company on attaining the age of superannuation on 31.3.2023 and in his place Shri Mritunjay Kumar Dev, Senior Manager (CS) was appointed as Company Secretary from 1.4.2023. The Board however, again appointed Shri C S Singhi as Company Secretary and Compliance Officer of the Company on contractual basis initially for a period of one year with effect from 3.4.2023.
M/s N K & Associates, Practicing Company Secretaries, has been appointed as Secretarial Auditor for FY 2022-23. Report given by the Secretarial Auditor is given at Annexure -VII to this report. With regard to observations of Secretarial Auditor about composition of the Board that âthe Company did not have minimum required 50% Independent Directors on its Board during the period from 22.07.2022 to 31.03.2023â, it is stated that HCL, being a Government Company and in terms of its Articles of Association, appointment of all Directors on its Board is made by the President of India through orders issued by the Ministry of Mines, Government of India. The Company has no role to play in the appointment process. The Company has requested the Ministry of Mines to fill up the vacant post of Directors.
M/s. Ghoshal & Ghosal, Chartered Accountants, Kolkata was appointed as Statutory Auditors to audit the accounts of the Company for the year 2022-23 by Comptroller and Auditor General of India (C&AG).
M/s Bandyopadhyaya Bhaumik & Co., Kolkata was appointed as Cost Auditor of the Company for carrying out the Cost Audit of Copper Ore, Concentrate, Cathode, Coutinuous Cast Copper Rods, other processed Copper and articles along with Sulphuric acid for the year 2022-23.
The comments of C&AG under the Companies Act on the accounts of the Company for the year ended 31st March, 2023 are annexed to this report.
In conclusion, your Directors wish to place on record their appreciation of the hard work put in by all employees of the Company during the year under review. The Board gratefully acknowledges the valuable guidance and co-operation received from the Ministry of Mines and other Ministries/ Departments of the Government of India and the support received from the State Governments of Rajasthan, Jharkhand, Madhya Pradesh, Maharashtra, Gujarat and West Bengal and the Company''s bankers, customers and office bearers of the recognized Trade Unions of different Units / Head Office. The Board also thanks all shareholders and investors for the trust reposed by them in the Company.
For and on behalf of the Board of Directors
Sd/-
Arun Kumar Shukla
Place: Kolkata Chairman and Managing Director
Date: 10.7.2023 (DIN-03324672)
Mar 31, 2022
Your Directors have pleasure in presenting the fifty fourth Annual Report of Hindustan Copper Ltd. (HCL/the Company) together with the audited statement of accounts and Auditors'' Report thereon for the year ended 31.3.2022.
Financial Summary or highlights
The comparative working results for the FY 2021-22 vis-a-vis FY 2020-21 are as under:
('' in crore) |
|||
PARTICULARS |
2021-22 |
2020-21 |
|
(a) |
Turnover |
1812.21 |
1760.84 |
(b) |
Profit /(Loss) before depreciation, amortization, finance cost & tax |
560.88 |
444.68 |
(c) |
Less : Depreciation & Amortization |
149.87 |
294.82 |
(d) |
Less : Finance Cost |
28.94 |
62.61 |
(e) |
Profit/ (Loss) Before Tax from continuing operation |
382.07 |
87.25 |
(f) |
Profit/(Loss) Before Tax from discontinuing operation |
(0.35) |
(0.35) |
(g) |
Profit/(Loss) Before Tax from continuing & discontinuing operation |
381.72 |
86.90 |
(h) |
Less : Provision for Taxation Net (Current & Deferred Tax) |
7.94 |
(23.08) |
(i) |
Profit After Tax from continuing & discontinuing operation |
373.78 |
109.98 |
Other Comprehensive Income (net of tax) |
(22.22) |
0.95 |
|
(k) |
Total Comprehensive Income for the year |
351.56 |
110.93 |
(l) |
Add: Balance brought forward from the previous year |
330.97 |
220.04 |
(m) |
Balance available for appropriation |
682.53 |
330.97 |
(n) |
Less : Dividend |
33.85 |
- |
(o) |
Balance to be carried forward |
648.68 |
330.97 |
(p) |
Earnings per Share ('') (Both Basic & Diluted) |
3.87 |
1.19 |
During 2021-22, the turnover of the Company was ''1812.21 crore as against '' 1760.84 crore during FY 2020-21 registering an increase of 2.92%. The Company posted Profit Before Tax from continuing & discontinuing operation of '' 381.72 crore during the year as against '' 86.90 crore recorded during the previous year registering an increase of 339.26%. The Profit/(Loss) After Tax from continuing & discontinuing operation during FY 2021-22 is '' 373.78 crore as against '' 109.98 crore in FY 2020-21 registering an increase of 239.86% due to rise in LME Price of Copper and lower required provisions as compared to previous year. The total borrowings of the Company has reduced from ''1,137.43 crore as on 1.4.2021 to '' 408.32 crore as on 31.3.2022.
Physical performance:
The comparative physical performance of production and sales for the year 2021-22 vis-a-vis 2020-21 is as under:
Particulars |
2021-22 |
2020-21 |
Ore (Lakh Tonnes) |
35.70 |
32.73 |
Metal in concentrate (MIC) (Tonnes) |
24,741 |
23,866 |
Cathode (Tonnes) |
621 |
Nil |
CC Wire Rod (Tonnes)-Production |
1 |
Nil |
CC Wire Rod (Tonnes)-Tolling |
1,240 |
1,360 |
Sales (Tonnes): CC Rod |
1 |
Nil |
Cathode |
558 |
Nil |
MIC |
25,248 |
32,997 |
Total |
25,807 |
32,997 |
Though Ore and MIC production during FY 2021-22 has shown marginal improvement compared to last year, the performance was below the target set for the year due to low grade of Ore in the open pit mine at Malanjkhand Copper Complex (MCP), MP which has reached its ultimate depth and is in a transition phase from open pit to underground mining, under performance of contractual agencies engaged for underground mine development and production contract at MCP, suspension of production at Surda Mine at Ghatsila on account of non-extension of mining lease period from 1.4.2020 onwards by the State Government of Jharkhand, water shortage at Khetri Copper Complex, Rajasthan. Physical performance was also affected due to lockdown / maintaining protocol as a result of COVID-19 pandemic and crisis of oxygen cylinder in FY 2021-22.
To augment ore production from mines and make-up shortfall, the Company has awarded two small contracts for production from the ready stopes of underground mine at MCP. The Govt. of Jharkhand has extended the Surda Mining Lease period for another twenty years up to 31.3.2040 vide letter dated 6.1.2022 and subsequently the letter for Environment Clearance (EC) for Surda Mining lease for ore production of 0.9 MTPA was received on 30.5.2022 from the Ministry of Environment, Forest and Climate Change (MOEF&CC). To overcome the problem of water shortage at KCC, the Company has taken up the matter with the state Government of Rajasthan to increase the supply of water at KCC from Kumbharam project and measures are being taken for enhancement of rainwater water storage and retaining capacity, improvement of internal water circulation system to reduce loss of water and enhancement of water reclamation from tailing dam.
During 2021-22, there has been very marginal production of Cathode and CC Wire Rod due to direct sale of concentrate by the Company as per market scenario. The Company has signed long term agreement with one of the Indian conglomerates on 17.9.2020 for sale of Copper concentrate to boost the âAtmanirbhar Bharat Abhiyan'' of the Government of India. In the current Financial Year 2021-22 around 80% of copper concentrate has been sold under this Long Term Agreement.
The Board of Directors of your Company has recommended payment of dividend equivalent to 23.20% on paid-up capital of the Company i.e. ''1.16 per share of '' 5/- face value for the year 2021-22 for approval of shareholders in the Annual General Meeting. The outgo on this account will be '' 112.17 crore approx.
No material change and commitment affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of the report.
Your Company had initially during FY 2010-11 envisaged increase in mine production capacity from 3.4 million tonne per annum (MTPA) to 12.2 MTPA. This was subsequently revised to 20.2 MTPA in order to boost domestic production of copper metal to reduce dependence on imports. The expansion plan will be implemented in a phased manner i.e. in first phase capacity up to 12.2 MTPA would be targeted and in second phase it will be scaled up to 20.2 MTPA.
Status of different continuing mine expansion projects is as under:
i. Malanjkhand Copper Project (MP)
The proposed expansion of MCP will augment the ore production capacity from 2.0 to 5.0 MTPA by developing an underground mine below the existing open pit whose life is at its fag end. After obtaining the required Environment Clearance (EC) and clearance from National Board for Wild Life (NBWL), contract for development of underground mine was awarded in April, 2015. As on 31.3.2022, the progress of important milestones are as under:
Sl. No. |
Milestones |
Planned depth / length (m) |
Completed (m) |
Status |
1 |
Service Shaft |
665 |
665 |
Sinking completed |
2 |
Production Shaft |
694 |
694 |
Sinking completed |
3 |
North Ventilation Shaft |
633 |
599 |
Sinking Completed |
4 |
South Ventilation Shaft |
645 |
641 |
Sinking Completed |
5 |
North Decline |
4610 |
3108 |
Under progress |
6 |
South Decline |
3860 |
2660 |
Under progress |
Due to precarious financial position of the contractual Agency, the Agency has been referred under Insolvency and Bankruptcy Code, 2016. This resulted into slow progress on construction of underground mine at MCP. The Contract has ended on 28.12.2021 by efflux of time. To complete the residual work, a consultancy contract was entrusted on M/s MECON, a reputed CPSE Consultancy organization, for estimation of value of residual work, preparation of NIT document and evaluation of tenders which have been divided in multiple parts (Mine excavation at North Side, Mine excavation at South Side, Shaft furnishing, men & material hoisting system, Crushing & pumping system, Power system, Main Mechanical Ventilator) to complete the work in an efficient manner. Two tenders for completion of mine excavation at North Side and South Side have been floated on 1.3.2022. Tender for Main Mechanical Ventilators have been floated on 10.5.2022 and other tenders are being floated in succession.
Another contract for Development, Production Drilling and Ore Production at Malanjkhand Underground Mine was awarded to M/s SMS led consortium in July, 2019. However, M/s SMS could not complete the mobilization of development and production equipment on time due to various reasons (like readiness of mine to execute the contract) including COVID-19 pandemic etc. All efforts are being made for early start of production.
ii. Khetri, Kolihan and Banwas mine (Rajasthan) The proposed expansion of mines at western sector will increase ore production capacity from existing 1.0 to 3.0 MTPA. Mine-wise status is as under:-
a. Kolihan Mine: Shaft sinking & creation of ore handling facilities below 0 mRL (meter reduced level) has been undertaken to augment the production capacity to 1.5 MTPA for which EC was obtained on 2.2.2015. Geophysical exploration has been taken up to establish extension ore orebody beyond 0 mRL at Kolihan. Further action will be taken up in due course upon establishing the ore body at depth.
b. Khetri mine: Contract was awarded during 2011-12 to augment ore production capacity of Khetri mine from 0.5 MTPA to 1.5 MTPA through deepening of existing shafts and other related activities. However, during execution of the contract, the work was badly affected at the initial stage due to extremely bad ground / fault zone encountered while making approach cross cut to reach below the existing Production Shaft area for setting up winding arrangement for sinking of shaft further. Despite many efforts made by the contractor the problem persisted and finally the contract was terminated in January, 2017 as per terms and conditions of the contract. The project is under study.
c. Banwas Block: A Contract was awarded during 2009-10 to develop the Banwas block as part of Khetri mine to augment the production capacity to 0.6 MTPA. The project was completed in February, 2017. During FY 2016-17, the Company has appointed contractual agency for ore production from Banwas deposit. The contractual agency has produced 305659 tonne of ore in FY 2021-22 and the target production ramp will be achieved by 2023-24.
iii. Surda mine (Jharkhand)
The plan envisages sinking of shaft, deepening of various winzes to increase production capacity from 0.4 MTPA to 0.9 MTPA in Surda mine.
Validity of Surda Mining Lease has been extended till 31.3.2040 by the Government of Jharkhand (GoJ) vide letter dated 6.1.2022. Conditional EC was recommended by Expert Appraisal Committee (EAC) of Ministry of Environment, Forest and Climate Change (MOEF&CC) for 0.9 MTPA ore production for 323.16 ha for Surda Mining Lease Area vide letter dated 29.1 2.2020. Accordingly, compliance report was submitted on 7.1.2022 to MOEF&CC. Subsequent to which, Additional Details Sought (ADS) by MOEF&CC for number of times. For compliance of above, Modified Mining plan has been prepared for Surda Mining Lease (388.68 ha) for restricted mining area of 323.16 ha and the same has been approved by Indian Bureau of Mines (IBM). Subsequently, the EC for Surda Mining lease was received on 30.5.2022 from the MOEF&CC.
iv. Re-opening of closed mines at Indian Copper Complex (ICC) Ghatsila (Jharkhand)
The Company initiated action to re-open closed mines, development of new underground mine at Singhbum Copper Belt of ICC namely, Kendadih and Rakha mines. Mine-wise status is given below:
a. Kendadih mine: A contract for reopening and development of closed Kendadih mine was awarded in 2011-12. After obtaining necessary statutory clearances, Kendadih mine was reopened in December, 2017 with commissioning of winders after completion of dewatering of the mine. Mine development work has been completed. Production contract has been awarded to M/s JMS Mining Pvt. Ltd. on 6.7.2021. Development activities and ore production have been started.
b. Chapri Sideshwar and Rakha mine: Chapri-Sideshwar mine falls within the Rakha and Kendadih mining lease area. The EC and Stage II FC for Kendadih mining lease were obtained on 20.1.2015 and 28.11.2016 respectively from MOEF&CC.
It is planned to augment the production capacity to 1.5 MTPA of ore by reopening and expansion of closed Rakha mine. The EC and Stage II FC for Rakha mining lease were obtained on 1.8.2014 and 15.9.2016 respectively from MOEF&CC.
Rakha Mining Lease has expired on 28.8.2021. Application for renewal was submitted to the office of DC, GoJ on 30.4.2020. The matter is pending with Director, Mines, GoJ.
The Company is exploring to engage contractor through MDO (Mine Developer cum Operator) route for re-opening and expansion of Rakha Copper Mine, development of a new underground mine at Chapri-Sideshwar to produce 3 MTPA of ore and erection & commissioning of a new Concentrator Plant at ICC. For engagement of MDO, the Company has already appointed Transaction Advisor for preparation of tender document and mine service agreement. The Company envisages augmentation of ore production capacity in 1st phase to 12.2 MTPA by 2028-29 in stages. The Company will take up enhancement of ore production capacity to 20.2 MTPA in 2nd phase after successful completion of 12.2 MTPA capacity plan.
5. Significant or material orders passed by the Regulators or Courts or Tribunals
No significant or material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future.
6. Utilization of funds raised through preferential allotment or QIP during the year
The Company has raised funds of ''500 crore approx. in April, 2021 through Qualified Institutions Placement for meeting expansion/Capex plan of the Company by issuing 4,18,06,020 equity shares of face value of '' 5/- each at a price of ''119.60 (including a premium of ''114.60) per share from institutional investors including Mutual Funds, Banks, Insurance companies and FII''s. The Company has utilized ''133 crore during the financial year.
7. Management Discussion and Analysis
A report on Management discussion and analysis of the performance of the Company is given at Annexure-I.
8. Information in respect of Subsidiary, Associate and Joint Venture
In May, 2022 HCL has made additional investment of '' 9 crore in the equity shares of Khanij Bidesh India Ltd (KABIL), a JV company between NALCO, HCL and MECL incorporated on 8.8.2019 with the objective to identify, acquire, develop, process and make commercial use of strategic and other minerals in overseas locations for supply in India and boost âMake in Indiaâ campaign. The shareholding of NALCO, HCL and MECL in KABIL is in the ratio of 40:30:30. The cumulative investment in the KABIL as on date is '' 9.75 crore.
During the year, HCL has made additional investment of '' 7.4 Lakh in the equity of its subsidiary viz. Chhattisgarh Copper Ltd (CCL). The total paid up capital of CCL as on 31.3.2022 is '' 55 Lakh out of which 74% equity is held by HCL and remaining 26% is held by Chhattisgarh Mineral Development Corporation Ltd.
Information in respect of Subsidiary, Associate & Joint Venture (Form AOC 1) pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014 is given in Notes to Financial Statements 2021-22.
The Company has not taken any deposits covered under or which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.
10. Related Party Transactions (RPTs)
Detail of RPT in Form AOC-2 is given at Annexure - II. Policy on RPTs and dealing with RPTs has been formulated and put up at the Company''s website at www.hindustancopper.com.
11. Maintenance of cost records
The Company is required to maintain cost records as specified by the Central Government under section 148 of the Companies Act, 2013, and accordingly such accounts and records are being maintained.
12. Name of companies which became and cease to be Subsidiaries, JVs or Associate Companies
Nil during the year.
13. Establishment of Vigil mechanism
The Company has in place a Whistle Blower Policy which provide adequate safeguards against victimization of employees / directors who avail of the mechanism and also provide for direct access to the chairman of the Audit Committee in
exceptional cases. The Policy has been posted at the Company''s website at www.hindustancopper.com.
14. Application made or any proceeding under the Insolvency and Bankruptcy Code, 2016
Not applicable as no application made or proceeding pending under the Insolvency and Bankruptcy Code, 2016.
15. Difference in valuation at the time of one time settlement and valuation while taking loan from the Banks or Financial Institutions
Not applicable as no one time settlement was done during the year.
16. Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has complied with the provisions relating to constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Composition of the Internal Complaints Committee is available at the website of the Company at www.hindustancopper.com.
The Board of Directors of the Company has developed and implemented a Risk Management Policy for the Company including identification therein of elements of risk, which in the opinion of the Board, may threaten the existence of the Company.
18. Dividend Distribution Policy
The Company has a Board approved âDividend Distribution Policy'' in place prepared in terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 {SEBI (LODR), 2015}. The Policy is available at the website of the Company at www.hindustancopper.com.
19. Internal Financial Controls
The Company has in place adequate internal financial control with reference to financial statements commensurate with its size and operations.
20. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
Information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given as Annexure-III forming part of this report.
Safety remains high priority area and the Company is always aiming to achieve âZero Accidentâ. The Company continues to maintain the tradition of attracting recognition for its safety performance and, like previous years, received a number of awards in mine safety as indicated below:
i. Malanjkhand open cast mine had won the following safety performance award in 2021-22 under the aegis of DGMS (Nagpur region I & II):
a. 1st Prize in Overall performance, Mine Planning and Record, Plant Machinery, Vocational Training & First Aid, Occupational Health Safety and Welfare, First Aid Team, Trade Test of Mine Mate and Dumper Operator.
b. 2nd Prize in Emergency preparedness, First Aid Team Captain and Trade Test of Auto Electrician.
c. 3rd Prize in Mine Working, Trade test for Diesel Mechanic and Electrician.
ii. Khetri Copper Mine had received 1st position in Occupational health & Safety welfare amenities, Vocational Training & First Aid and Accident statistics & control measures such as SMP & Emergency preparedness, Electrical Equipment & Installations, Storage, Transport & Use of Explosive and 3rd position in Overall performance.
iii. Kolihan Copper Mine had received 1st position in Overall Performance, Mine working, Mine Plans & Records, Occupational health & Safety welfare amenities, Vocational Training & First Aid and Accident statistics & control measures such as SMP & Emergency preparedness, Electrical Equipment & Installations, Publicity and Propaganda & Awareness, Storage, Transport & Use of Explosive and 2nd position in Plant, Machinery, Maintenance & Operation of Winder.
Besides the above, special training, regular refresher training program and on-the-job training are provided to all employees. Safety Campaigns like âAnnual Mines Safety Weekâ, âFire Services Dayâ, âFire services weekâ and âIndustrial Safety Dayâ celebrations are conducted regularly with active participation of employees in all the Units of HCL.
22. Corporate Social Responsibility (CSR)
The CSR Report in the prescribed format as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 is at Annexure-IV.
During FY 2021-22, the Vigilance department of the Company had taken special initiative to complete the following activities:-
i. The HCL CDA Rules, 1979 was amended with vigilance input and already incorporated the latest instructions of DoP&T, CVC, DPE, various court judgments on disciplinary matters and good practices being followed by other CPSEs. The Rules have been approved by the HCL Board and has come into effect as HCL CDA Rules 2021.
ii. Online filing of Annual Property Return by all executives of the Company has been completed within the target date of 31.1.2022.
iii. The rotational transfer policy has been implemented for all vigilance officials.
iv. A comprehensive policy for dealing with complaints has been framed and circulated to all vigilance officials.
v. All vigilance officials have been imparted trainings on disciplinary proceedings to increase their efficiency.
24. Official Language Implementation
During FY 2021-22, HCL made constant endeavor to increase the use of Official Language Hindi in its Units/Offices. Hindi fortnight and Hindi Diwas were celebrated in the Units/Offices from 14.9.2021 to 28.9.2021. On this occasion, the messages of Hon''ble Home Minister, Hon''ble Mines Minister and CMD, HCL were circulated /read out. Various competitions were organized with a view to increase interest among employees towards the Official Language and winners were given awards on closing ceremony held on 28.9.2021. Employees are constantly motivated to use Hindi in their day-to-day official work. Hindi Workshops were conducted in the Corporate Office, Units/ Offices at regular intervals. Regular review of progressive use of Hindi was carried out in quarterly meetings of Official Language Implementation Committee under the Chairmanship of CMD at Corporate Office and Unit Heads in Units.
During FY 2021-22, HCL participated in the half-yearly meetings organized by the Town Official Language Implementation Committee (PSUs), Kolkata.
The progressive use of Hindi is being reviewed regularly at Board meetings. The Company''s in-house journal âTamralipiâ is published in Hindi and English languages and distributed among the employees. There is a continuous effort to publish advertisement of recruitment / tender etc. bilingually. In order to increase knowledge and popularity of Hindi among employees, a scheme of âOne Hindi word and One sentence every day'' was implemented. The use of Hindi in the computer has been further increased and advance software Unicode Hindi Open Office has been made available to all units/offices of the Company.
Notices, etc. are uploaded on the Company''s website in Hindi and English.
25. Business Responsibility Report
Pursuant to Regulation 34 (2) of SEBI (LODR), 2015, Business Responsibility Report for FY 2021-22 describing various initiatives taken by the Company on social, environmental and governance perspective, is attached at Annexure-V which forms part of this report.
Annual Return pursuant to Section 92(3) of the Companies Act, 2013 is available at Company''s website at www. hindustancopper.com.
Corporate Governance Report as per SEBI (LODR), 2015 is given at Annexure-VI forming part of this report together with Certificate on Corporate Governance.
28. Number of meetings of the Board
During 2021-22, fifteen Board meetings were held on 7.4.2021,7.4.2021,12.4.2021,13.4.2021,15.5.2021,29.5.2021, 25.6.2021,2.7.2021,16.7.2021,7.8.2021,25.9.2021,9.1 1.2021,18.12.2021,27.1 2.2021 and 12.2.2022.
29. Directorsâ Responsibility Statement
In terms of Section 134(5) of Companies Act, 2013, your Directors confirm:
i. That in the preparation of the Annual Accounts for the year ended 31st March, 2022 the applicable Accounting Standards has been followed along with proper explanations relating to material departures.
ii. That such Accounting Policies have been selected and applied consistently and made adjustments and estimates which are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company at the end of 31st March, 2022 and of the Profit and Loss of the Company for the FY 2021-22.
iii. That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv. That the Directors have prepared the Annual Accounts on a going concern basis.
v. That the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively.
vi. That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
30. Declaration by Independent Directors
Independent Directors of the Company have given declaration to the effect that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013.
31. Familiarization Program for Independent Directors
On joining, Independent Directors are familiarized through induction program / presentation with the overview of business, operations, new projects and business model of the Company. Visit to Units is also organized as per their convenience. They are also updated on the changes / developments including in the relevant statutory / regulatory requirements from time-to-time. Detail of Directors'' Training / Familiarization Program has been hosted at the Company''s website at www. hindustancopper.com.
32. Opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the Independent Directors
In the opinion of Board, the Independent Directors of HCL are person of integrity and possesses expertise and experience required to discharge their duty.
33. Manner of Annual evaluation of Board sub Committees and individual Directors
HCL being a Government Company, performance evaluation of its Directors and criteria of evaluation is decided and undertaken by the Government of India.
The Company has in place a Code of Conduct applicable to the Directors as well as Senior Management and the same has been circulated to all concerned and posted at the Company''s website www.hindustancopper.com. All Board members and senior management personnel have affirmed compliance of the Code for the year ended 31st March, 2022.
35. Directors and Key Managerial Personnel
During the year Shri Subhash Sharma ceased to be Non-official Independent Director on completion of his tenure on 17.7.2021.
Shri Sanjay Panjiyar joined as Director (Operations) with effect from 31.7.2021.
Shri Shakil Alam, Economic Adviser, Ministry of Mines (MoM) was appointed as part time official (Govt. Nominee) Director vice Shri Alok Chandra, ex-Economic Adviser, MoM with effect from 6.8.2021.
Shri Sukhen Kumar Bandyopadhyay ceased to be Director (Finance) consequent upon acceptance of his technical resignation by the Competent Authority with effect from 13.9.2021 so as to enable him to join his present lien post as CGM, SJVN Ltd. Shri Bandyopadhyay accordingly also ceased to be Chief Financial Officer of the Company with effect from 13.9.2021.
Shri Ghanshyam Sharma, Director (Finance), MECL (a CPSE under the MoM) has been assigned additional charge of the post of Director (Finance), HCL with effect from 13.9.2021 to 12.9.2022 or till a regular incumbent joins the post or until further orders, whichever is the earliest. Shri Sharma accordingly also become the Chief Financial Officer of the Company with effect from 13.9.2021.
S/Shri Annadevara Gurunadha Krishna Prasad and Avinash Janardan Bhide have been appointed as Non-official Independent Directors with effect from 3.1 1.2021.
Smt. Hemlata Verma has been appointed as Non-official Independent Director with effect from 22.3.2022.
Shri Sanjiv Kumar Singh joined as Director (Mining) with effect from 26.3.2022.
The Board places on record its appreciation for the valuable services and contribution made by S/Shri Alok Chandra, Subhash Sharma and Sukhen Kumar Bandyopadhyay during their tenure on the Board.
M/s N K & Associates, Practicing Company Secretaries, has been appointed as Secretarial Auditor for FY 2021-22. Report given by the Secretarial Auditor is given at Annexure -VII to this report. With regard to observations of Secretarial Auditor about composition of the Board that âthe Company did not have minimum required 50% Independent Directors on its Board during the period from 17.7.2021 to 2.11.2021 and Independent Woman Director till 21.3.2022 during the yearâ, it is stated that HCL, being a Government Company and in terms of its Articles of Association, appointment of all Directors on its Board is made by the President of India through orders issued by the Ministry of Mines (MoM). The Company has no role to play in the appointment process. The vacant posts of Independent Directors were filled up by appointment of Shri Annadevara Gurunadha Krishna Prasad and Shri Avinash Janardan Bhide as Non-official Independent Directors with effect from 3.11.2021 and vacant post of Independent Woman Director was filled up by appointment of Smt. Hemlata Verma as Non-official Independent Director with effect from 22.3.2022. Regarding observations of Secretarial Auditor about 3 days delay in giving prior intimation to stock exchanges as per Regulation 29(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, regarding Board meeting wherein financial results for the quarter ended 31.1 2.2021 was considered, it is stated that though HCL has been throughout filing corporate action/ reports with the Exchanges in time, this inadvertent delay in giving prior intimation was due to superannuation of concerned officer and is one of the case. Necessary precautions are taken to ensure that the same is not repeated.
M/s. Ghoshal & Ghosal, Chartered Accountants, Kolkata was appointed as Statutory Auditors to audit the accounts of the Company for the year 2021-22 by Comptroller and Auditor General of India (C&AG).
M/s. Guha, Ghosh, Kar & Associates, Cost Accountants, Kolkata was appointed as Cost Auditor of the Company for carrying out the Cost Audit of Copper Ore, Concentrate, Cathode, Continuous Cast Copper Rods, other Processed Copper and articles along with Sulphuric acid for the year 2021-22.
The comments of C&AG under the Companies Act on the accounts of the Company for the year ended 31st March, 2022 are annexed to this report.
In conclusion, your Directors wish to place on record their appreciation of the hard work put in by all employees of the Company during the year under review. The Board gratefully acknowledges the valuable guidance and co-operation received from the Ministry of Mines and other Ministries/ Departments of the Government of India and the support received from the State Governments of Rajasthan, Jharkhand, Madhya Pradesh, Maharashtra, Gujarat and West Bengal and the Company''s bankers, customers and office bearers of the recognized Trade Unions of different Units / Head Office. The Board also thanks all shareholders and investors for the trust reposed by them in the Company.
For and on behalf of the Board of Directors Arun Kumar Shukla
Place: Kolkata Chairman and Managing Director
Date: 27.6.2022 (DIN-03324672)
Mar 31, 2021
Your Directors have pleasure in presenting the fifty third Annual Report of Hindustan Copper Ltd. (HCL/the Company) together with the audited statement of accounts and Auditorsâ Report thereon for the year ended 31.3.2021.
1. Performance
Financial Summary or highlights
The comparative working results for the FY 2020-21 vis-a-vis FY 2019-20 are as under:
(H in crore) |
||
Particulars |
2020-21 |
2019-20^ |
(a) Turnover |
1760.84 |
803.17 |
(b) Profit /(Loss) before depreciation, amortization, finance cost & tax |
444.68 |
(186.61) |
(c) Less : Depreciation & Amortization |
294.82 |
290.68 |
(d) Less : Finance Cost |
62.61 |
60.42 |
(e) Profit/ (Loss) Before Tax from continuing operation |
87.25 |
(537.71) |
(f) Profit/(Loss) Before Tax from discontinuing operation |
(0.35) |
(0.35) |
(g) Profit/(Loss) Before Tax from continuing & discontinuing operation |
86.90 |
(538.06) |
(h) Less : Provision for Taxation (Current & Deferred Tax) |
(23.08) |
31.29 |
(i) Profit after tax from Continuing & Discontinuing Operation |
109.98 |
(569.35) |
(j) Other Comprehensive Income (net of tax) |
0.95 |
(22.46) |
(k) Total Comprehensive Income for the year |
110.93 |
(591.81) |
(l) Add: Balance brought forward from the previous year |
220.04 |
869.85 |
(m) Balance available for appropriation |
330.97 |
278.04 |
(n) Less : Dividend |
- |
48.11 |
(o) Less : Tax on Dividend |
- |
9.89 |
(p) Balance to be carried forward |
330.97 |
220.04 |
(q) Earnings per Share(Rs) (Both Basic & Diluted) |
1.188 |
(6.154) J |
During 2020-21, the turnover of the Company was ''1760.84 crore as against ''803.17 crore during FY 2019-20 registering an increase of 119%. The Company posted Profit Before Tax from continuing & discontinuing operation of ''86.90 crore during the year as against ''(538.06) crore recorded during the previous year registering an increase of 116%. The Profit/ (Loss) After Tax from continuing & discontinuing operation during FY 2020-21 is ''109.98 crore as against ''(569.35) crore in FY 2019-20 registering an increase of 119% mainly due to to sale of unsold opening stock of Metal in concentrate coupled with rise in LME Price of Copper and higher Exchange Rate and decrease in operating expenditure after offsetting the impact of provision for impairment of assets of Gujarat Copper Project and Copper Ore Tailing (COT) Beneficiation Plant at Malanjkhand Copper Project (MCP).
Physical performance:
The comparative physical performance of production and sales for the year 2020-21 vis-a-vis 2019-20 is as under:
Particulars |
2020-21 |
2019-20 ^ |
Ore (Lakh Tonnes) |
32.73 |
39.68 |
Metal in concentrate (MIC) (Tonnes) |
23,866 |
26,502 |
Cathode (Tonnes) |
Nil |
5,340 |
CC Wire Rod (Tonnes) |
1,360 |
8,443 |
Sales (Tonnes): |
||
CC Rod |
Nil |
4,247 |
Cathode |
Nil |
1,492 |
MIC |
32,997 |
12,669 |
Total |
32,997 |
18,408 J |
Ore and MIC production during FY 2020-21 was less compared to last year mainly due to lockdown and maintaining social distancing protocol of CoVID-19 Pandemic, suspension of production at Surda Mine at Ghatsila, Jharkhand due to nonrenewal of mining lease whose validity expired on 31.3.2020 by the State Government of Jharkhand, low grade of Ore and water shortage at Khetri Copper Complex (KCC), Rajasthan, low grade of Ore in the open pit mine at MCP, MP which has reached its ultimate depth and is in a transition phase from open pit to underground mining, heavy rains affecting mining in lower benches at MCP etc.
To augment production from mines, the Company is taking requisite action and is also in the process of enhancing the mining capacity through ongoing mine expansion projects. Against the contract awarded for taking ore production from underground mine at MCP through decline route, the contractor has built up the infrastructure and development work is in progress. MCP underground expansion project has achieved an important milestone i.e. completion of excavation of 1500 m long drive and connection of tunnel ends of north and south sections of the mine at 240mRL. To overcome the problem of water shortage at KCC, the Company has taken up the matter with the state Government of Rajasthan to increase the supply of water at KCC from Kumbharam project and the situation has improved.
The Company has appointed Transaction Advisor for selection of MDO (Mine Developer Cum Operator) for development and operation of 3.00 Million tonnes per annum Rakha- Chapri Mine at ICC, Jharkhand during the year. Discussion with the prospective MDO partners has been held and finalisation of RFP document is in advanced stage.
During 2020-21, there was no production of Cathode and very marginal production of CC Wire Rod due to direct sale of concentrate by the Company as per market scenario.
The Company has signed long term agreement with one of Indian conglomerates on 17.9.2020 for sale of its around 60% copper concentrate to boost the âAtmanirbhar Bharat Abhiyanâ of the Government of India.
The Board of Directors of your Company has recommended payment of dividend equivalent to 7% on paid-up capital of the Company i.e. Re 0.35 per share on ''5/- face value for the year 2020-21 for approval of shareholders in the Annual General Meeting. The outgo on this account will be ''33.85 crore.
No material change and commitment affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of the report. However, in April, 2021 around ''500 crore was raised by Company through QIP by allotment of 4,18,06,020 equity shares of ''5/- each at an issue price of ''119.60 per equity share to the qualified institutional buyers. The funds so raised are being utilized towards the Capex/ expansion projects of the Company.
Your Company had initially during FY 2010-11 envisaged increase in mine production capacity from 3.4 million tonne per annum (MTPA) to 12.2 MTPA. This was subsequently revised to 20.2 MTPA in order to boost domestic production of copper metal to reduce dependence on imports. The expansion plan will be implemented in a phased manner i.e. in first phase capacity up to 12.2 MTPA would be targeted and in second phase it will be scaled up to 20.2 MTPA.
Status of different continuing mine expansion projects is as under:
i. Malanjkhand Copper Project (MP)
The proposed expansion of MCP will augment the ore production capacity from 2.0 to 5.0 MTPA by developing an underground mine below existing open pit whose life is at its fag end. After obtaining the required Environment Clearance (EC) and clearance from National Board for Wild Life (NBWL), contract for development of underground mine was awarded in April, 2015 and at present, the expansion project is under execution. As on 31.3.2021, the progress of important milestones are as under:
Sl. No. Milestones Planned depth / length (m) Completed (m) Status
1 Service Shaft 665 665 Sinking completed
2 Production Shaft 694 694 Sinking completed
3 North Ventilation Shaft 633 471 Under progress
4 South Ventilation Shaft 645 591 Under progress
5 North Decline 4610 3030 Under progress
6 South Decline 3860 2330 Under progress
Due to precarious financial position, the contractual Agency has been referred under Insolvency and Bankruptcy Code, 2016 and their liquidation is under process. This resulted into slow progress on construction of underground mine at MCP. Meanwhile, a contract for ore production from developing underground mine through decline has been awarded in July, 2019. Development activities has been already commenced. The contractual agency is in process of mobilizing equipment required for production from underground mine.
ii. Khetri, Kolihan and Banwas mine (Rajasthan) The proposed expansion of mines at western sector will increase ore production capacity from existing 1.0 to 3.0 MTPA. Mine-wise status is as under:-
a. Kolihan Mine: Environmental clearance for shaft sinking & creation of ore handling facilities below 0 mRL (meter reduced level) to augment the production capacity to 1.5 MTPA was obtained on 2.2.2015. To establish the ore bodies at depth and to establish mineralization corresponding to (-) 120 mRL and (-) 180 mRL, 6298 meter of surface exploratory drilling has been completed in 2019 -20. Mineralization 0 mRL has been established and resource of Kolihan Mining Lease is expected to be enhanced. Final exploration report is under preparation.
b. Khetri mine: Contract was awarded during 2011-12 to augment ore production capacity of Khetri mine from 0.5 MTPA to 1.5 MTPA through deepening of existing shafts and other related activities. However, during execution of the contract, the work was badly affected at the initial stage due to extremely bad ground / fault zone encountered while making approach cross cut to reach below the existing Production Shaft area for setting up winding arrangement for sinking of shaft further. Despite many efforts made by the contractor the problem persisted and finally the contract was terminated in January, 2017 as per terms and conditions of the contract.
After identification of the fault plane and bad ground below ground, a detailed study was done to modify the design of deepening of Production shaft in safest manner. Tendering action for new contract for deepening of the existing Production shaft has been initiated.
c. Banwas Mine: A Contract was awarded during 2009-10 to develop the Banwas deposit as part of Khetri mine to augment the production capacity to 0.6 MTPA. The project was completed in February, 2017.
During FY 2016-17, the Company has appointed contractual agency for ore production from Banwas deposit. The contractual agency has produced 2,34,708 tonne of ore in FY 2020-21 and the target production ramp will be achieved by 2023-24.
iii. Surda mine (Jharkhand)
The plan envisages sinking of shaft, deepening of various winzes to increase production capacity from 0.4 MTPA to 0.9 MTPA in Surda mine.
Validity of Surda Mining Lease was up to 31.3.2020 and the Company had taken action for its renewal.
The Expert Appraisal Committee (EAC) of the Ministry of Environment, Forest and Climate Change (MoEFCC) in its 35th meeting held on 6.8.2020 and 7.8.2020 had recommended in favour of HCL for Environment Clearance. LoI issued by Govt. of Jharkhand for extension of the period of the lease vide letter dated 5.8.2020 has been submitted. MoEFCC vide letter dated 29.12.2020 has intimated HCL about the acceptance of EAC recommendation for grant of EC and asked to submit BG, Lease renewal letter and Stage I FC for grant of EC. BG of ''5.71 crores submitted by HCL to JSPCB as desired by MoEFCC on 13.2.2021 and intimation given to Secretary, DMG, SGoJ vide letter dated 15.2.2021. HCL is continuously pursuing with Government of Jharkhand for renewal of Surda Mining Lease.
Meanwhile, depth exploration drilling (surface exploratory drilling) to the tune of 8924.50 meter has been completed at Surda Mining Lease during 2019-20 and final report is under preparation. It is expected to enhance the resource base of Surda Mining Lease.
iv. Re-opening of closed mines at Indian Copper Complex (ICC) Ghatsila (Jharkhand)
The Company initiated action to re-open closed mines, development of new underground mine at Singhbum Copper Belt of ICC namely, Kendadih and Rakha mines. Mine-wise status is given below:
a. Kendadih mine: A contract for reopening and development of closed Kendadih mine was awarded in 2011-12. After obtaining necessary statutory clearances, Kendadih mine was reopened in December, 2017 with commissioning of winders after completion of dewatering of the mine. Presently, Mine development work is in progress. Equipment have been mobilized and mine had produced 41,772 MT of incidental ore during 2020-21. The Company has floated tender for ore production from Kendadih copper mine and production will commence in 2021-22.
b. Chapri Sideshwar and Rakha mine: Chapri-Sideshwar mine falls within the Rakha and Kendadih mining lease area. The EC and Stage II FC for Kendadih mining lease was obtained on 20.1.2015 and 28.11.2016 respectively from MoEFCC.
It is planned to augment the production capacity to 1.5 MTPA of ore by reopening and expansion of closed Rakha mine. The EC and Stage II FC for Rakha mining lease was obtained on 1.8.2014 and 15.9.2016 respectively from MoEFCC. The Company is exploring to engage contractor through MDO (Mine Developer cum Operator) route for re-opening and
expansion of Rakha Copper Mine, development of a new underground mine at Chapri-Sideshwar to produce 3 MTPA of ore and erection & commissioning of a new Concentrator Plant at ICC. For engagement of MDO, the Company has already appointed Transaction Advisor for preparation of tender document and mine service agreement.
Meanwhile, surface exploratory drilling has been completed at Chapri Block of Rakha Mining Lease and 5243.5 m of drilling has been done during the year 2019-20. The final report has been submitted, substantial resource base has been added to the Chapri Block of Rakha Mining Lease.
The Company envisages augmentation of ore production capacity in 1st phase to 12.2 MTPA by 2028-29 in stages. The Company will take up enhancement of ore production capacity to 20.2 MTPA in 2nd phase after successful completion of 12.2 MTPA capacity plan.
5. Significant or material orders passed by the Regulators or Courts or Tribunals
No significant or material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and companyâs operations in future.
6. Utilization of funds raised through preferential allotment or QIP during the year
The Company has not raised funds through preferential allotment or Qualified Institutions Placement during the FY 202021 and hence not applicable.
7. Management Discussion and Analysis
A report on Management discussion and analysis of the performance of the Company is given at Annexure-I._
8. Information in respect of Subsidiary, Associate and Joint Venture
HCL has invested till date ''75 Lakhs in the equity shares of Khanij Bidesh India Ltd (KABIL), a JV company between NALCO, HCL and MECL incorporated on 8.8.2019 with the objective to identify, acquire, develop, process and make commercial use of strategic and other minerals in overseas locations for supply in India and boost âMake in Indiaâ campaign. During the year no further investment was made by the Company in KABIL. The shareholding of NALCO, HCL and MECL in KABIL is in the ratio of 40:30:30.
During the year, HCL has made additional investment of ''14.80 Lakhs in the equity of its subsidiary viz. Chhattisgarh Copper Ltd (CCL). The total paid up capital of CCL as on 31.3.2021 is ''45 Lakhs out of which 74% equity is held by HCL and remaining 26% is held by Chhattisgarh Mineral Development Corporation Ltd.
Information in respect of Subsidiary, Associate & Joint Venture (Form AOC 1) pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014 is given in Notes to Financial Statements 2020-21.
The Company has not taken any deposits covered under or which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.
10. Related Party Transactions (RPTs)
Detail of RPT in Form AOC-2 is given at Annexure - II. Policy on RPTs and dealing with RPTs has been formulated and put up at the Companyâs website at www.hindustancopper.com.
11. Maintenance of cost records
The Company is required to maintain cost records as specified by the Central Government under section 148 of the Companies Act, 2013, and accordingly such accounts and records are being maintained.
12. Name of companies which became and cease to be Subsidiaries, JVs or Associate Companies
Nil during the year.
13. Establishment of Vigil mechanism
The Company has in place a Whistle Blower Policy which provide adequate safeguards against victimization of employees / directors who avail of the mechanism and also provide for direct access to the chairman of the Audit Committee in exceptional cases. The Policy has been posted at the Companyâs website at www.hindustancopper.com.
14. Application made or any proceeding under the Insolvency and Bankruptcy Code, 2016
Not applicable as no application made or proceeding pending under the Insolvency and Bankruptcy Code, 2016.
15. Difference in valuation at the time of one time settlement and valuation while taking loan from the Banks or Financial Institutions
Not applicable as no one time settlement was done during the year.
16. Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has complied with the provisions relating to constitution of Internal Complaints Committee under the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Composition of the Internal Complaints Committee is available at the website of the Company at www.hindustancopper.com.
The Board of Directors of the Company has developed and implemented a Risk Management Policy for the Company including identification therein of elements of risk, which in the opinion of the Board, may threaten the existence of the Company.
18. Dividend Distribution Policy
The Company has a Board approved âDividend Distribution Policyâ in place prepared in terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 {SEBI (LODR), 2015}. The Policy is available at the website of the Company at www.hindustancopper.com.
19. Internal Financial Controls
The Company has in place adequate internal financial control with reference to financial statements commensurate with its size and operations.
20. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
Information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given as Annexure-III forming part of this report.
Safety remains high priority area and the Company is always aiming to achieve âZero Accidentâ. The Company continues to maintain the tradition of attracting recognition for its safety performance and, like previous years, received a number of awards in mine safety as indicated below:
i. Malanjkhand open cast mine had won the following safety performance award in large opencast mine category in 202021 under the aegis of DGMS (Nagpur region I & II):
a) 1st Prize in Trade Test of Auto Electrician.
b) 2nd Prize in Large open cast mines category for First Aid team captain, Trade Test of Diesel Mechanic.
c) 3rd Prize in Trade Test of Electrician.
ii. Khetri Copper Mine had received 1st position in Occupational health & Safety welfare amenities, Vocational Training & First Aid and Accident statistics & control measures such as SMP & Emergency preparedness, Electrical Equipment & Installations, Storage, Transport & Use of Explosive and 3rd position in Overall performance.
iii. Kolihan Copper Mine had received 1st position in Overall Performance, Mine working, Mine Plans & Records, Occupational health & Safety welfare amenities, Vocational Training & First Aid and Accident statistics & control measures such as SMP & Emergency preparedness, Electrical Equipment & Installations, Publicity and Propaganda & Awareness, Storage, Transport & Use of Explosive and 2nd position in Plant, Machinery, Maintenance & Operation of Winder.
Besides the above, special training, regular refresher training program and on-the-job training are provided to all employees. Safety Campaigns like âAnnual Mines Safety Weekâ, âFire Services Dayâ, âFire services weekâ and âIndustrial Safety Dayâ celebrations are conducted regularly with active participation of employees in all the Units of HCL.
22. Corporate Social Responsibility (CSR)
The CSR Report in the prescribed format as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 is at Annexure-IV.
During FY 2020-21, the Vigilance department of the Company had taken special initiative to complete the following activities:-
(1) Imparted training on preventive vigilance to all the executives of HCL as per guidelines given by Central Vigilance Commission.
(2) Filing of Annual Property Returns completed by 31.01.2021 by all the executives as prescribed by the Central Vigilance Commission.
(3) Updation of Procurement Manual of HCL for Goods & Services by incorporating the latest guidelines of Government of India and Central Vigilance Commission. The updated manual came into effect from 01.07.2020.
(4) Ensured that all the tenders are uploaded in the Central Procurement Portal (CPP), Government e-Marketplace (GeM) and the website of HCL.
(5) Disposal of all old pending cases.
24. Official Language Implementation
During FY 2020-21, HCL made constant endeavor to increase the use of Official Language Hindi in its Units/Offices. Hindi fortnight and Hindi Diwas were celebrated in the Units/Offices from 14.9.2020 to 28.9.2020. On this occasion, the messages of Honâble Home Minister, Honâble Mines Minister and CMD, HCL were circulated /read out. Various competitions were organized with a view to increase interest among employees towards the Official Language and winners were given awards on closing ceremony held on 28.9.2020. Employees are constantly motivated to use Hindi in their day-to-day official work. Hindi Workshops were conducted in the Corporate Office, Units/ Offices at regular intervals. Regular review of progressive use of Hindi was carried out in quarterly meetings of Official Language Implementation Committee under the Chairmanship of CMD at Corporate Office and Unit Heads in Units.
During FY 2020-21, HCL participated in the half-yearly meetings organized by the Town Official Language Implementation Committee (PSUs), Kolkata.
The progressive use of Hindi is being reviewed regularly at Board meetings. The Companyâs in-house journal âTamralipiâ is published in Hindi and English languages and distributed among the employees. There is a continuous effort to publish advertisement of recruitment / tender etc. bilingually. In order to increase knowledge and popularity of Hindi among employees, a scheme of âOne Hindi word and One sentence every dayâ was implemented. The use of Hindi in the computer has been further increased and advance software Unicode Hindi Open Office has been made available to all units/offices of the Company.
25. Business Responsibility Report
Pursuant to Regulation 34 (2) of SEBI (LODR), 2015, Business Responsibility Report for FY 2020-21 describing various initiatives taken by the Company on social, environmental and governance perspective, is attached at Annexure-V which forms part of this report.
Annual Return pursuant to Section 92(3) of the Companies Act, 2013 is available at Companyâs website at www. hindustancopper.com.
Corporate Governance Report as per SEBI (LODR), 2015 is given at Annexure-VI forming part of this report together with Certificate on Corporate Governance.
28. Number of meetings of the Board
During 2020-21, ten Board meetings were held on 1.6.2020, 29.6.2020, 14.7.2020, 21.7.2020, 10.9.2020, 29.10.2020, 10.11.2020, 2.12.2020, 22.1.2021 and 3.2.2021.
29. Directorsâ Responsibility Statement
In terms of Section 134(5) of Companies Act, 2013, your Directors confirm:
(i) That in the preparation of the Annual Accounts for the year ended 31st March, 2021 the applicable Accounting Standards had been followed along with proper explanations relating to material departures.
(ii) That such Accounting Policies have been selected and applied consistently and made adjustments and estimates which are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company at the end of 31st March, 2021 and of the Profit and Loss of the Company for the FY 2020-21.
(iii) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
(iv) That the Directors have prepared the Annual Accounts on a going concern basis.
(v) That the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively.
(vi) That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
30. Declaration by Independent Directors
Independent Directors of the Company have given declaration to the effect that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013.
31. Familiarization Program for Independent Directors
On joining, Independent Directors are familiarized through induction program / presentation with the overview of business,
Mar 31, 2018
REPORT OF THE BOARD OF DIRECTORS
The Shareholders Hindustan Copper Limited Kolkata
The Directors have pleasure in presenting the fiftieth Annual Report of Hindustan Copper Ltd. (HCL/the Company) together with the audited statement of accounts and Auditorsâ Report thereon for the year ended 31.3.2018.
1. Performance
Financial Summary or highlights
The comparative working results for the FY 2017-18 vis-a-vis FY 2016-17 are as under:
(Rs, in crore)
Particulars |
2017-18 |
2016-17 |
(a) Turnover |
1647.90 |
1216.94 |
(b) Profit before depreciation, amortization, finance charges & tax |
307.98 |
245.46 |
(c) Less : Depreciation & Amortization |
164.65 |
141.90 |
(d) Less : Finance Charges |
21.29 |
9.01 |
(e) Profit/ (Loss) Before Tax from continuing operation |
122.04 |
94.55 |
(f) Profit/(Loss) Before Tax from discontinuing operation |
(0.35) |
(0.35) |
(g) Profit/(Loss) Before Tax from continuing & discontinuing operation |
121.69 |
94.20 |
(h) Less : Provision for Taxation (Current & Deferred Tax) |
42.09 |
32.26 |
(i) Profit after tax from Continuing & Discontinuing Operation |
79.60 |
61.94 |
(j) Other Comprehensive Income |
5.00 |
(4.10) |
(k) Profit for the year |
84.60 |
57.84 |
(1) Add: Balance brought forward from the previous year |
700.80 |
642.96 |
(m) Balance available for appropriation |
785.40 |
700.80 |
(n) Less : Dividend |
18.50 |
0.00 |
(o) Less : Tax on Dividend |
3.77 |
0.00 |
(p) Balance to be carried forward |
763.13 |
700.80 |
(q) Earnings per Share(Rs) (Both Basic & Diluted) |
0.861 |
0.670 |
During 2017-18, the turnover of the Company was Rs, 1647.90 crore as against Rs, 1216.94 crore during FY 2016-17 registering an increase of 35.41%. The Company posted a Profit Before Tax from continuing & discontinuing operation of Rs, 121.69 crore during the year as against Rs, 94.20 crore clocked during the previous year registering an increase of 29.18%. The Profit After Tax from continuing & discontinuing operation during FY 2017-18 is Rs, 79.60 crore as against Rs, 61.94 crore in FY 2016-17 registering an increase of around 28.51%.
Physical performance:
The comparative physical performance of production and sales for the year 2017-18 vis-a-vis 2016-17 is as under:
Particulars |
2017-18 |
2016-17 |
Ore (Lakh Tonnes) |
36.75 |
38.45 |
Metal in concentrate (MIC) (Tonnes) |
31,793 |
30,587 |
Cathode (Tonnes) |
25,949 |
18,602 |
CC Wire Rod (Tonnes) |
22,211 |
18,167 |
Sales (Tonnes): |
||
CC Rod |
22,812 |
16,817 |
Cathode |
4,490 |
1,532 |
MIC |
9,133 |
10,539 |
Total |
36,435 |
28,888 |
Highlights/ Comments on physical performance:
i. Total Copper sales during the year 2017-18 was best in last seven years.
ii. Copper cathode production was 39% higher than the last year.
iii. Copper wirerod production was 22% higher than the last year.
iv. Metal-in-Concentrate production was 4% higher than the last year.
v. Total Annual copper Ore and MIC production from Khetri Copper Complex is the highest after year 1998-99.
vi. Reopened Kendadh mines at Jharkhand in December, 2017 and Commissioned Banwas mine (new mine) at Khetri Copper Complex, Rajasthan in June, 2017.
The MIC production of the Company crossed the MoU target however, following factors hampered better performance further:
i. Surda mine operations were affected due to sudden and unilateral termination of contract by M/s Eastern Goldfields Ltd for ore production from Surda mine at Indian Copper Complex (ICC) in the month of May, 2017.
ii. ICC smelter furnace is in the last leg of its campaign life. Major flash furnace overhauling was undertaken in May, 2013. Repeated breakdown of the furnace has affected the production of cathode
Remedial action taken to improve the performance are as under:
i. A short term contract was awarded for the operations of Surda mine at ICC and the mine restarted from August, 2017.
ii. A long term contract for operation of Banwas mine of Khetri mine has been awarded. The ore production from Banwas mine has since commenced from January, 2018.
iii. To sustain the ore production at Malanjkhand mine thrust on excavation is given and an additional contract for loading and hauling of 36 Lakh Bank Cubic meter of rock has been awarded.
iv. At ICC Ghatsila, major overhauling of flash furnace has been planned in May, 2018.
2. Dividend
The Board of Directors of your Company has recommended payment of dividend @ 5% on equity, i.e. Re 0.25 per share of Rs, 51-face value for the year 2017-18, for approval of shareholders in the Annual General Meeting. The outgo on this account will be Rs, 23.13 crore for dividend and Rs, 4.75 crore towards tax on dividend, aggregating to a total outgo of Rs, 27.88 crore. The dividend is as per a Board approved Dividend Distribution Policy, which is available at the Companyâs website at www.hindustancopper.com.
3. Material Changes, if any
No material change and commitment affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of the report.
4. Projects:
i. Malanjkh and Copper Project (''MP''I
Work is under progress to expand the production capacity of Malanjkhand mine from present 2 Mtpa to 5 Mtpa (2nd phase to 8 Mtpa by FY 23-24) by developing an underground mine below the existing open cast mine at an estimated cost of Rs, 1856.74 crore (upto Rs, 2900 crore in 2nd phase). All the approvals are in place, Environment Clearance and approval of National Board for Wild Life has been obtained in 2014-15 and EPC contractor for implementation of the project has been appointed. Scheduled Completion date is April, 2020. Progress so far, sinking of Service Shaft has been completed and Production Shaft is up to 643 meters. The development work of North Decline and South Decline is up to 2025 meters and 1308 meters respectively. The progress ofunderground development during the FY 2017-18 was satisfactory.
ii. Khetri. Kolihan and Banwas mine (''Rajasthan'')
The proposed expansion of Khetri and Kolihan mine and development of Banwas deposit will increase ore production from existing 1.1 to 5.0 million tonne per annum in two phases. Mine wise status is given below:
a. Kolihan Mine: For additional shaft sinking & creation of ore handling facilities below 0 mRL environmental clearance obtained on 2.2.2015. Further, 2000 m of Diamond drilling work has been undertaken to establish the ore body at depth and tendering activities has also been undertaken.
b. Khetri mine: The Engineering Procurement & Construction agency for executing the Khetri mine expansion project had started the work on 16.9.2011. Independent waste handling system commissioned, deepening of production and service shaft had been initiated. During execution, bad ground / fault plane encountered at (-) 120 mRL near production shaft. Contract period ended on 14.1.2017. New contract for tacking bad ground for deepening of the existing shaft and other related activities are under process.
c. Banwas Mine: Mine construction work has been completed in February, 2017. The Company has appointed M/s SMS Nagpur, mine developer and operation agency for long term operation of the Banwas where production ramp up has commenced.
iii. Surda mine expansion (Jharkhand)
The plan envisages increase in the depth of the mine and enhancement of production capacity from 0.4 million tonne per annum to 1.0 Mtpa. On 19-20 September, 2016 Expert Appraisal Committee of Ministry of Environment, Forest and Climate Change (MoEFCC) has recommended the proposal for Environment Clearance subject to clarification regarding forest clearance for forest land involved in underground mining. Matter is under scrutiny at Forest Clearance division of MoEFCC.
iv. Re-opening of closed mines at ICC Ghatsila (Jharkhand)
Company initiated action to re-open closed mines at Singhbum Copper Belt of ICC namely, Kendadih and Rakha mines to produce 0.21 and 2.5 million tonne of ore per annum respectively. Mine wise status is given below:
a. Kendadih mine: The Kendadih mine was reopened in December, 2017 after all the mining equipping work including mine dewatering work was completed. Mine development work is in progress and Environmental clearance from MoEFCC obtained on 20.1.2015, Stage IIFC for the project has been obtained on 28.11.2016. Equipment are being mobilized in a phased manner and the work has commenced.
b. Rakha mine: Considering the change in market scenario, the Company will implement the project through a EPC route. Environmental clearance of Rakha mining lease obtained on 1.8.2014, Stage II Forest Clearance for the project has been obtained on 15.9.2016.
v. Chapri Sideshwar (Jharkhand)
Chapri-Sideshwar mine fall within the Rakha and Kedadih mining lease area. The project is under tendering stage which is to be implemented on EPC route.
vi. Manufacturing of Copper Cathode through Hvdrometallurgv Technology - The Company has plans to set up a plant of capacity 1.0 lakh tonne per annum to manufacture copper cathode through cost effective hydro-metallurgy technology. The site of the project has been finalized and investment in the project is Rs, 3025 crore. The investment proposal after approval of the Board has been sent to the Ministry to obtain CCEA approval. The proposal is under scrutiny of the Ministry.
vii. Extraction of minerals from copper ore tails (MP)
The Company is in advance stage of erection of Copper Ore Tailing (COT) recovery facility of capacity 3.3 Million tonne per annum to recover the valuable metals and minerals from the tailing and reduce the mass in the existing tailing storage facility (TSF) so as to extend active life of TSF and unlock the value in the waste/Tailing at Malanjkhand Copper Project (MCP). A contract has been awarded for the construction of the plant on EPC mode at a cost of Rs, 200 crore. It is expected that the plant will be commissioned by June, 2018.
5. Significant or material orders passed by the Regulators or Courts or Tribunals:
No significant or material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and companyâs operations in future.
6. Management Discussion and Analysis
Areport on Management discussion and analysis of the performance of the Company is given at Annexure-I.
7. Awards and Accolades
i. HCL was conferred with Kolkata Best Employer Brand Award by World HRD Congress during the award ceremony held on 8.11.2017 at Taj Bengal, Kolkata.
ii. HCL was awarded the National CSR Leadership Award by World CSR Day on 20.9.2017 at Vivanta by Taj, Yeshwantpur, Bangalore.
iii. The Quality Circle teams âDinkarâand âSahyogâ of ICC won in Gold Category during the Chapter Convention on Quality Concepts (CCQC),2017 on 12.9.2017 at Taj Bengal, Kolkata. They were also placed in âExcellenceâand âPar Excellenceâ Category respectively during the National Convention on Quality Concepts (NCQC), 2017 held during 1.12.2017 to 4.12.2017 at Mysore.
iv. Shri Anupam Anand, Director (Personnel) was identified as one of Indiaâs Best HR Leaders in PSUs by Times Ascent Presents - Asia Pacific HRM Congress &Awards - 16th Edition on 19.9.2017 at Vivanta By Taj, Yeshwantpur, Bangalore. Jury and Council of Board members of World HRD Congress conferred HR Super Achievers - PSUs to Shri Anupam Anand on 16.2.2018 atTaj Lands End, Mumbai.
8. Particulars of Loan, Guarantees or Investments u/s 186 of the Companies Act, 2013
During the year from 1.4.2017 to 31.3.2018: NIL
9. Deposits
The Company has not taken any Deposits covered under or which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.
10. Related Party Transactions (RPTs):
The Company has not entered into any contracts or arrangements with related parties referred to in section 188(1) of the Companies Act, 2013. Policy on RPTs and dealing with RPTs has been formulated and put up at the Companyâs website at www.hindustancopper.com.
11. Establishment of Vigil mechanism:
The Company has in place a Whistle Blower Policy which provide adequate safeguards against victimization of employees / directors who avail of the mechanism and also provide for direct access to the chairman of the Audit Committee in exceptional cases. The Policy has been posted at the Companyâs website at www.hindustancopper.com.
12. Risk Management Policy
The Board of Directors of the Company has developed and implemented a risk management policy for the Company including identification therein of elements of risk, which in the opinion of the Board, may threaten the existence of the Company.
13. Internal Financial Controls
The Company has in place adequate internal financial control with reference to financial statements commensurate with its size and operations to be followed by the Company, detailing the policies and procedures to be followed.
14. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
Information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given as Annexure-II forming part of this report.
15. Safety
Safety remains high priority area and the Company is always aiming to achieve âZero Accidentâ. The Company continues to maintain the tradition of attracting recognition for its safety performance and, like previous years, received a number of awards in mine safety as indicated below:
Malanjkhand open cast mine had won the following safety performance award in large opencast mine category in 2017-18 under the aegis ofDGMS (Nagpur region I&II):
1st Prize on Vocational Training and First Aid 3rd Prize on Mechanical & Electrical equipment & Installations and SMS & emergency Preparedness
Kolihan Copper Mine received Runner up Prize for achieving Longest Accident - Free period (LAFP) in Prestigious National Safety Award-2013 on 17.08.2017 from Honâble President of India.
Besides the above, special training, regular refresher training programmes and on-the-job training are provided to all employees. Safety Campaigns like âAnnual Mines Safety Weekâ, âFire Services Dayâ, âFire services weekâ and âIndustrial Safety Dayâ celebrations are conducted regularly with active participation of employees in all the Units of HCL.
16. Corporate Social Responsibility (CSR)
The CSR Report in the prescribed format as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 is at Annexure-III.
17. Vigilance Activities
HCL has a vast potential for growth and Vigilance department has to play an enabling role to strengthen the systems and processes to achieve the higher growth trajectory. The same requires a more proactive role in strengthening of systems and procedures, adoption of rules to changing processes, updating of manuals, minimizing discretionary space, enhancement of transparency and fostering e-friendly environment through technological up gradation and capacity building, thereby minimizing human interface. Although, stress is being laid on preventive and proactive vigilance to achieve the above end, surveillance and detection cannot be neglected. For this purpose, there is a need for conducting regular inspections, particularly those of high value items and processes and to suggest further improvements. The focus is on the vigilance activities being an enabling process rather than being reactive. There is also necessity to plug delays and identify areas prone to leakages.
18. Official Language Implementation
During 2017-18, HCL made constant Endeavour to increase the use of Hindi in official work in its Units/Offices. âRaj Bhasha Pakhwaraâ was celebrated in the Units/Offices during 14.9.2017 to 28.9.2017 incorporating âHindi Diwasâ celebration on 14.9.2017. The messages of Honâble Home Minister, Govt, of India and CMD, HCL were circulated/ read out in all Offices/Units on this occasion. Various competitions were organized to enhance interest among employees towards use of Official Language and winners were honoured.
Hindi Workshops were conducted in the Units/ Offices at regular intervals. Employees were motivated to use Hindi in their day-to-day official work. Regular review of progress in use of Hindi and difficulties faced was done in Quarterly meetings of Official Language Implementation Committee under the Chairmanship of CMD at Corporate Office and Unit Heads in Units. The progressive use of Hindi is being reviewed regularly at the Board meetings too. Hindi books were also purchased during the year.
An e-copy is available on the Companyâs website www.hindustancopper.com too. Effort is continuously made to ensure that the Companyâs advertisements for recruitment/ tenders, etc. are published bilingually. âOne Hindi Word Every Dayâ scheme is operational for improving the Hindi vocabulary of employees. The use of Hindi in computers has been reinforced and advanced Unicode Software Hindi Open Office has been provided to all Units/Offices of the Company. The Hindi translation of Annual Report, MoU, Outcome Budget, Annual Report of Ministry of Mines and various other jobs of the Company were done.
The Companyâs in-house journal âTamralipiâ is published in Hindi and English and distributed among employees regularly. It is also mailed to the members of the Hindi Advisory Committee.
During 2017-18, the Company participated in the half-yearly meeting of Town Official Language Committee (PSUs), Kolkata held on 12.8.2017. HCL/CO received the âBest Performance Awardâ by Town Official Language Committee (PSUs), Kolkata for successful implementation of Official Language under the âRajbhasha Award Scheme-2016-17â on 12.8.2017.
19. Business Responsibility Report:
Pursuant to Regulation 34 (2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 {SEBI (LODR), 2015}, Business Responsibility Report for 2017-18 describing various initiatives taken by the Company on social, environmental and governance perspective, is attached at Annexure-IV which forms part of this report.
20. Extract of Annual Return:
Extract of Annual Return pursuant to Section 92(3) of the Companies Act, 2013 is given in Annexure-V.
21. Corporate Governance
Corporate Governance Report as per SEBI (LODR), 2015 is given at Annexure-VI forming part of this report together with Certificate on Corporate Governance.
22. Number of meetings of the Board:
During 2017-18, five Board meetings were held on 17.5.2017,12.8.2017,25.8.2017,10.11.2017 and 31.1.2018.
23. Directorsâ Responsibility Statement
In terms of Section 134(5) of Companies Act, 2013, your Directors confirm:
(i) That in the preparation of the annual accounts for the year ended 31st March, 2018 the applicable accounting standards had been followed along with proper explanations relating to material departures.
(ii) That such accounting policies have been selected and applied consistently and made adjustments and estimates which are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of 31st March, 2018 and of the Profit and Loss of the Company for the year.
(iii) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
(iv) That the Directors have prepared the annual accounts on a going concern basis.
(v) That the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively.
(vi) That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
24. Declaration by Independent Directors:
Independent Directors of the Company have given declaration to the effect that they meet the criteria of independence as provided under Section 149(6)of the Companies Act, 2013.
25. Familiarization Programme for Independent Directors
On joining, Independent directors are familiarized through induction programme / presentation with the overview of business, operations, new projects and business model of the Company. Visit to Units is also organized as per their convenience. They are also updated on the changes / developments including in the relevant statutory / regulatory requirements from time-to-time. Detail of Directorsâ Training / Familiarization Programme has been hosted at the Companyâs website at www.hindustancopper.com.
26. Code of Conduct
The Company has in place a Code of Conduct applicable to the Directors as well as Senior Management and the same has been circulated to all concerned and posted at the Companyâs website www.hindustancopper.com. All Board members and senior management personnel have affirmed compliance of the code for the year ended 31st March, 2018.
27. Directors
Shri V VVenugopal Rao ceased to be Director (Finance) from 5.7.2017.
Shri Kailash Dhar Diwan ceased to be CMD from 31.8.2017.
Shri Santosh Sharma took over charge of CMD from 1.9.2017.
Shri Bipul Pathak was appointed in place of Shri Subhash Chandra as part time official Director with effect from 16.2.2018.
Shri Anil Kumar Nayak was appointed in place of Shri Bipul Pathak as part time official Director with effect from 26.3.2018. Shri Niranjan Pant ceased to be part time non-official (Independent) Director from 1.4.2018.
Shri Alok Chandra was appointed in place of Shri Anil Kumar Nayak as part time official Director with effect from 22.6.2018.
Shri Sukhen Kumar Bandyopadhyay has joined as Director (Finance) with effect from 9.7.2018.
Shri Subhas Sharma has been appointed as Non-official Independent Director with effect from 18.7.2018.
The Board places on record its appreciation for the valuable services rendered and contribution made by S/Shri V V Venugopal Rao, K D Diwan, Subhash Chandra, Bipul Pathak, Niranjan Pant and Anil Kumar Nayak during their tenure on the Board.
All the operating mining leases are presently held by HCL, a state owned copper producing company. To increase production, HCL has chalked out an expansion plan to increase mine production from 3.8 to 20.0 million tonnes per annum in next six years with a capital layout of Rs, 5,500 crore. During the fiscal year 2017-18, Mine ore production of HCL, (the only copper mining company in the country) was 3.67 million tonnes as compared to 3.84 milion tonnes in 2016-17. In metal terms the production was 31,794 MT as which is 4% higher compared to 30,587 MT in2016-17.
Refined copper production during FY 2017-18 of the country was 8.43 lakh tonnes as compared to 7.98 lakh tonnes in FY 2016 17. It is estimated that during FY 2017-18, the consumption of refined copper was around 6.6 lakh tones compared to 6.71 lakh tones in 2016-17.
II. SWOT Analysis
Strength
- Only Company having ownership of all copper mines in India
- Fully developed infrastructure facilities
- Fully integrated operations from mining of copper ore to pure metal
- Skilled and experienced work force
- Established brand value
Weakness
- High cost of logistics due to multi- location units
- Relatively smaller sized plants
- Aged equipment/old technology
- Limited value added products Opportunity
- Scope for expansion of mine capacity
- Opportunity to explore new deposits
- Ready market for copper concentrate in India due to large smelting/refining capacity Threat
- High volatility of LME price of copper
- Rising cost of inputs
- Continuous attrition of skilled manpower
III. Segment-wise or product-wise performance
Covered in the main report.
IV. Outlook:
Copper demand in India is expected to grow at 6-7 % due to increased thrust of Govt, of India towards âmake in Indiaâ and âSmart Cityâ programmes and increased investment in railways, power, defence and infrastructure sectors which will drive the demand of copper in the country. Demand is expected to show significant growth considering the initiatives such as development of industrial corridors, smart city project, housing for all Indians by 2022, National highway development project, Rail project, Defense production policy to encourage indigenous manufacture, India energy plan 2022- 100GW solar, 32GW wind, 260GW thermal & nuclear, 62 GW hydro. In addition to this, there is plan for green energy corridor for transmission of renewable energy. The per capita copper consumption in India is expected to increase from the current level of 0.5 Kg to 1 kg by 2025. The per capita copper consumption of China is 6 Kg and world average is 2.7 kg.
The market for electric vehicles (EV) is expected to witness growth in coming years as government incentives continue around the world. Copper is essential to EV technology and its supporting infrastructure. The evolving market will have a substantial impact on copper demand. The increase in the electric vehicles market will significantly impact copper. The projected demand for copper due to electric vehicles is expected to increase by 1,700 kilotons by 2027.
At present custom duty on refined copper is 5 percent and the price of refined copper in the Country is fixed at import parity level factoring the prevailing import duty component. The Govt, of India has signed free trade agreement with Japan, Malaysia & ASEAN countries whereby benefit of concessional customs duty is being given to the imports of refined copper from the countries like Japan, Malaysia, Thailand, Indonesia, Cambodia, Philippines, etc. Resultantly, Imports of refined copper with duty concessions have adversely affected the profitability of HCL. Imports which were a mere 8% of total demand in the Country in the year 2010-11 have now increased to around 35% during the period 2016-17. Thus there is an urgent need to impose safeguard duty on import of refined copper to safeguard the interest of domestic copper industry including downstream industries.
V. Risks and concerns
The Company has laid down risk management framework keeping the Companyâs objectives, growth strategy and process complexities arising out of its business operations. Risk management in HCL is a continuous process of identifying, assessing and managing all the opportunities, threats and risks faced by the company to achieve its goals.
VI. Internal control systems and their adequacy
The Company has internal control systems and procedures commensurate with its size and nature of business. The Company has in place delegation of authority, policies and manuals approved by the Board.
VII. Discussion on financial performance with respect to operational performance
The financial performance for FY 2017-18 vis-a-vis FY 2016-17 is summarized below:
(Rs, in crore)
Particulars |
2017-18 |
2016-17 |
Turnover |
1647.90 |
1216.94 |
Value of Production |
1767.44 |
1617.85 |
Cost of production excluding depreciation, amortization and Finance Cost |
1459.82 |
1372.74 |
Profit before depreciation, amortization and Finance Cost & Tax |
307.98 |
245.46 |
Depreciation, Amortization |
164.65 |
141.90 |
Finance Cost |
21.29 |
9.01 |
Profit/ (Loss) Before Tax from Continuing Operation |
122.04 |
94.55 |
Profit/ (Loss) Before Tax from Discontinuing Operation |
(0.35) |
(0.35) |
Provision for taxation - Current |
46.28 |
25.97 |
- Deferred |
(4.19) |
6.29 |
Profit/ (Loss) After Tax from Continuing & Discontinuing Operation |
79.60 |
61.94 |
Capital Expenditure
During the year, the expenditure on account of Replacements & Renewals (R&R) of plant & machinery, mine expansion, mine development & green field exploration stood at Rs, 589.81 crore which was funded through the internal resources of the Company and no Government support for capital expenditure was asked for.
Contribution to Exchequer
During 2017-18, the Company contributed a sum of Rs, 309.71 crore to the exchequer by way of duties, taxes and royalties, as against Rs 247.73 crore in 2016-17, as detailed below:
Particulars |
Rs, in crore |
|
2017-18 |
2016-17 |
|
Excise Duty/GST |
45.52 |
32.54 |
Customs Duty |
57.27 |
47.21 |
Sales Tax/GST |
15.20 |
27.79 |
Royalty and Cess |
98.21 |
63.06 |
Income Tax |
75.08 |
53.89 |
Others |
18.43 |
23.24 |
Total |
309.71 |
247.73 |
VIII. Material developments in Human Resources / Industrial Relations front including number of people employed
(i) Manpower
Employee Group |
Special Categories (No.) |
|||
ESM |
PwD |
LDP |
Minorities |
|
A |
1 |
10 |
1 |
25 |
B |
0 |
1 |
0 |
3 |
C |
13 |
7 |
165 |
116 |
D |
0 |
3 |
68 |
19 |
Total |
14 |
21 |
234 |
163 |
As on 31.3.2018, the manpower of the Company was 2508. Category-wise break-up is tabulated below.
Employee Group |
Category (No.) |
||||
Gen |
SC |
ST |
OBC |
Total |
|
A |
382 |
73 |
21 |
88 |
564 |
B |
27 |
5 |
2 |
7 |
41 |
C |
703 |
207 |
250 |
202 |
1362 |
D |
323 |
135 |
62 |
21 |
541 |
Total |
1435 |
420 |
335 |
318 |
2508 |
Legends: GroupA&B: Executives; GroupC&D: Non-Executives; Gen: General; SC: Scheduled Caste; SI: Scheduled inbe; OBC: Other Backward Class; ESM: Ex-Servicemen; PwD: Persons with Disabilities; LDP: Land Displaced Person
(ii) Employment of SC/ST/OBC Community candidates and PwD candidates
The Company adheres to the prescribed Government guidelines on reservation for SC/ST/OBC/PwD categories in all its recruitment activities. The representation of SC, ST, OBC and PwD employees in the total manpower of 2508 as on 31.3.2018 was 16.75%, 13.36%, 12.68% and 0.84% respectively.
(iii) Employment of Women
The Group-wise strength of women employees as on 31.3.2018 vis-a-vis the total employee strength of the Company is given below.
Group |
No. of Employees |
Women Employees as % of total Employee |
|
Total |
Women |
||
A |
564 |
40 |
7.09 |
B |
41 |
2 |
4.88 |
C |
1362 |
48 |
3.52 |
D |
541 |
85 |
15.71 |
Total |
2508 |
175 |
6.98 |
(iv) Employee Relations
During the period, the Employee Relation continued to be harmonious and peaceful in all the Units of the Company. The successful operation of various Bi-partite fora at the Apex, Unit and Shop-floor levels have contributed immensely towards smooth functioning of the Company.
A meeting of apex level Bi-partite Forum NJCC was held on 21.8.2017 and 19.3.2018 at Corporate Office, Kolkata. Major issues resolved included payment of 07 months arrears to workmen arising out of Wage Revision effective from 1.11.2012; and payment of Underground Allowance to eligible workmen of KCC.
(v) Human Resource Development
Training and Development, based on identified needs is given due priority by the Company for all levels of employees to increase employee effectiveness, employee utilization and productivity as well as to usher in a culture of innovation and creativity with emphasis on deciphering problem-solving skills. The Company selectively nominated employees for specialized training Programmes / Workshops / Seminars / Conferences organized by reputed professional organizations and Institutes. In FY 2017-18, against a training target of5700 mandays, 8169 mandays of training was achieved.
(vi) Communal Harmony andNational Integration
In the townships of the Company located at Khetri, Malanjkhand and Ghatsila as well as in other places of work, the employees of different caste, creed, region and religion live together in harmony and celebrate all religious festivals with pomp and gaiety.
(vii) Status of implementation of Sexual Harassment of Women at Workplace (''Prevention. Prohibition and RedressaP Act. 2013
In accordance with the provision of âThe Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013â & Rules made thereunder, the Company has set up Internal Complaints Committee at all its Units / Offices. A provision in this regard has also been incorporated in the Conduct, Discipline and Appeal Rules. During the year, no complaint was received on this subject.
(viii) Status of implementation of The Persons with Disability Act. 1995
The number of employees belonging to PwDs category employed in the Company as on 31.3.2018 was 10 (ten) in Group A, 1 (one) in Group B, 7 (seven) in Group C and 3 (three) in Group D, aggregating to 21 (twenty one).
a) Recruitment: In recruitment matters the reservation for PwD was adhered to as per Government of India directives and duly incorporated in advertisement published, wherever applicable. Special Recruitment drive for PwD was also conducted in 2015-16, wherein 30 vacancies were advertised and 16 candidates joined.
b) Scholarship: HCL grants scholarship to employeesâ children under a special scheme. Particular care and wide publicity is given to the scheme. It has specific provision for PwD category children with relaxed eligibility criteria.
c) Ramp: Ramps constructed at Hospital, Works and General Office to enable easy access to elevated areas in buildings and ease of mobility. Provision of wheelchairs in Hospital/main administrative offices in Units / Projects is also available.
d) âAccessibility Auditâ of office buildings was carried out in all the five Units.
e) Conveyance Allowance: Conveyance Allowance / Transport Subsidy to PwD employees were paid at higher rates than other employees as per Government Directives.
(ix) Skill Development
a) HCL spent 18 % of its CSR funds in FY 2017-18 for Skill Development which translates to Rs, 61.74 Lakh out of a total spending of Rs, 342.95 Lakh during the fiscal.
b) KaushalVikasYojna
On 24.3.2017, HCL signed an MoU with National Skill Development Council (NSDC) to impart trainings to various categories of population as part of Governmentâs flag-ship programme of Skill Development. This included âFresh Skillingâ for Youth and âRecognition of Prior Learningsâ for Unskilled and Semi-skilled workers both regular employees with skill but not certified and those working as Contract Labour. Total of 415 persons were trained. 120 were freshers and 295 were under Recognition of Prior Learnings. 73 youths trained under âFresh Skillingâ have so far been placed, i.e., employed, in reputed companies, like Schneider Electric, Ace Designers, INDO-MIM Pvt. Ltd, Tanu Textile, SKM, Energy Measurement Services and others. Their average monthly salary is aroundRs, 8,000.
c) Apprenticeship Training
HCL imparted apprenticeship training to 290 persons in various trades in its different Units during FY 2017-18. An amount of Rs, 166.39 Lakh was spent on their training.
The number of positions for Apprentice training was enhanced from 250 to 290, i.e., by 16 % increase and new trades like Medical Laboratory Technician (Pathology), Medical Laboratory Technician (Radiology), Hospital Waste Management and Refrigerator & Air Conditioner Mechanic added in accordance with the amended provisions of The Apprentices Act, 1961.
d) Skill Development Institute
A Skill Development Institute was established at Khetrinagar Copper Complex, District - Jhunjhunu (Rajasthan) by upgrading the existing Training Center in the HRD Centre of the Unit. The inaugural course was for âAssistant Mine Surveyor It consists of six months of classroom training followed by on-the-job training of 18 months.
The 1st batch of 26 trainees undergoing training for the course of âAssistant Mine Surveyorâ completed the classroom training in October 2017. They are undergoing 18 months practical training in KCC Mines. The training of 2nd batch of 29 trainees started on 18.12.2017.
e) Digital Payments
To maximize cashless transactions by the Internal and External customers of HCL, awareness workshops were organized at each Units for dissemination of knowledge of the benefits and modes / methodologies of cashless transactions. Bank payment of wages to all Contract Labour was ensured. Posters and banners were displayed at prominent places too. Awareness drives in collaboration with bank officials to educate the Employees, Contract Labour, Customers and Merchants were undertaken in all Units/Offices covering a target population of 6015 consumers (Employees, Contract Labour, Customers) and 9264 merchants. No cash transactions were carried out in HCL. To make the campuses of HCL âCashlessâ, PoS machines were installed at Guest House, Directorsâ Bungalow, Hospitals, Town Administration and General Administration, Finance Department, Cash Sections, etc. in the three mining Units of HCL.
f) Transparency
The Company has adopted the government guideline of doing away with the process of personal interview in Group âCâ and âDâ recruitment.
(x) Swachh Bharat Mission
Under the Swachh Bharat Mission following initiatives were undertaken by HCL.
a) Open Defecation Free IODFI Villages
- In FY 2017-18, 200 number of individual household toilets were constructed in 8 number of villages in East Singhbhum District of Jharkhand under the Swachh Bharat Mission.
- One Public toilet was constructed in Musabani Town of East Singhbhum District of Jharkhand.
b) SwachhtaActivities
The Swachh Bharat Abhiyan of the Government of India was implemented in HCL in FY 2017-18 with undertaking several Swachhata Activities specially identified. Intensive âSwachhta Drivesâ were undertaken at all Units and Offices including Corporate Office. Some of the major activities undertaken included the following.
- Upkeep and cleaning of
- Offices including common area premises, Plant and Mines.
- Residential complexes, pathways and common areas of the Unit.
- Neighboring market, roads and parks surrounding Plant and Mines.
- Weeding out of old files/records, etc. in offices.
- Conducting awareness campaign in the Unitsâ Township and the neighborhood community.
- Periodic inspection of school toilets undertaken to ensure their proper maintenance usability.
- Counseling of villagers for developing in-house sanitation habits by use of household toilets for the purpose meant.
By order of the Board
C S Singhi GM & Co Secretary
Date: 28.8.2018 FCS 2570
Mar 31, 2017
REPORT OF THE BOARD OF DIRECTORS
The Shareholders Hindustan Copper Limited Kolkata
The Directors have pleasure in presenting the forty-ninth Annual Report of Hindustan Copper Ltd. (HCL/the Company) together with the audited statement of accounts and Auditors'' Report thereon for the year ended 31.3.2017.
HCL, incorporated on 9.11.1967, has entered in 50th year of its existence. As HCL, step into the golden jubilee year, the Company is committed to keep marching ahead and deliver growth to its shareholders.
Gujarat Copper Project, the fifth unit of HCL, located at Bharuch, Gujarat was dedicated to the nation on its commissioning on 6.10.2016.
1. Performance
Financial Summary or highlights
The comparative working results for the FY 2016-17 vis-a-vis FY 2015-16 are as under:
(Rs, in Crore)
/ |
Particulars |
2016-17 |
2015-16 |
(a) |
Turnover |
1216.94 |
1068.95 |
(b) |
Profit before depreciation, amortization, finance charges & tax |
245.46 |
159.10 |
(c) |
Less : Depreciation & Amortization |
141.90 |
119.01 |
(d) |
Less : Finance Charges |
9.01 |
0.13 |
(e) |
Profit/ (Loss) Before Tax from continuing operation |
94.55 |
39.96 |
(f) |
Profit/(Loss) Before Tax from discontinuing operation |
(0.35) |
(0.35) |
(g) |
Profit/(Loss) Before Tax from continuing & discontinuing operation |
94.20 |
39.61 |
(h) |
Less : Provision for Taxation (Current & Deferred Tax) |
32.26 |
1.87 |
(i) |
Profit after tax from Continuing & Discontinuing Operation |
61.94 |
37.74 |
(j) |
Other Comprehensive Income |
(4.10) |
5.92 |
(k) |
Distributable Profit |
57.84 |
43.66 |
(l) |
Add: Balance brought forward from the previous year |
642.96 |
626.24 |
(m) |
Balance available for appropriation |
700.80 |
669.90 |
(n) |
Earnings per Share(Rs) (Both Basic & Diluted) |
0.67 |
0.41 |
During 2016-17, the turnover of the Company was Rs,1216.94 crore as against Rs,1068.95 crore during FY 2015-16 registering an increase of around 13.84%. The Company posted a Profit Before Tax from continuing & discontinuing operation of Rs, 94.20 crore during the year as against Rs,39.61 crore clocked during the previous year registering an increase of around 137.82%. The Profit After Tax from continuing & discontinuing operation during FY 2016-17 is Rs,61.94 crore as against Rs, 37.74 crore in FY 2015-16 registering an increase of around 64.12%.
Physical performance:
The comparative physical performance of production and sales in FY 2016-17 vis-a-vis FY 2015-16 are as under:
f Particulars |
2016-17 |
2015-16 |
Ore (Lakh Tonnes) |
38.45 |
39.08 |
Metal in concentrate (MIC) (Tonnes) |
30,587 |
31,578 |
Cathode (Tonnes) |
18,602 |
23,024 |
CC Wire Rod (Tonnes) |
18,167 |
26,062 |
Sales (Tonnes): |
||
CC Rod |
16,817 |
21,125 |
Cathode |
1,532 |
285 |
MIC |
10,539 |
2,702 |
V Total |
28,888 |
24,112 J |
Shortfall in physical performance of the Company during 2016-17 is due to the following:
a. Planned shutdown of primary crusher of Malanjkhand mine was taken up for 14 days.
b. Less availability of high grade ore due to widening of open pit. Delay in U/G project requires widening of the open pit to sustain production up to 2020.
c. London Metal Exchange (LME) prices of copper remained under pressure during most of the period of FY-2016-17. The average LME price during the year was 5154 USD/T against 5215 USD/T in 2015-16.
d. Surda Mine (Jharkhand) operation affected due to poor performance of the contractor.
e. ICC smelter furnace is in the last leg of its current campaign life. Last shutdown for major overhauling was undertaken in May, 2013. Repeated failure of the refractory and waste heat boiler of the furnace has affected the production of cathode.
Remedial actions taken to improve the performance are as under:
a. Increased thrust on excavation at Malanjkhand mine to widen upper benches to sustain production upto the year 2020.
b. Construction of Banwas mine at Khetri Copper Complex has been completed and production ramp up from the mine will commence in 2017-18.
c. Action has been initiated for award of new contract for the operation and maintenance of Surda Mine. Thereafter the production from Surda mine will improve.
d. Cathode production will improve as production ramp up from newly acquired Gujarat Copper Project (GCP) will improve further. The Kaldo furnace of the Unit will be made operational in the second quarter of fiscal year
2017-18.
2. Dividend
The Board of Directors of your Company has recommended payment of dividend @ 4% on equity, i.e. Re 0.20 per share of Rs,5/- face value for the year 2016-17, for approval of shareholders in the Annual General Meeting. The outgo on this account will be Rs,18.50 crore for dividend and Rs,3.77 crore towards tax on dividend, aggregating to a total outgo of Rs,22.27 crore.
3. Material Changes if any
No material change and commitment affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of the report.
4. Projects:
i. Malanjkhand Copper Project (M.P)
Work is under progress to expand the production capacity of Malanjkhand mine from present 2 Mtpa to 5 Mtpa by developing an underground mine below the existing open cast mine at an estimated cost of ''1856.74 Crore. All the approvals are in place, Environment Clearance and approved of National Board for Wild Life has been obtained in 201415 and EPC contractor for implementation of the project has been appointed. Infrastructure facilities required for sinking of the shafts are in place at site. The activities are progressing to complete the project on schedule time of March 2020.
ii. Khetri, Kolihan and Banwas mine (Rajasthan)
The proposed expansion of Khetri & Kolihan mine and development of Banwas deposit will increase ore production from existing 1.0 million tonne to 3.1 million tonne per annum. Mine wise status is given below:
- Kolihan Mine: For additional shaft sinking & creation of ore handling facilities below 0 mRL environmental clearance obtained on 2.2.2015. Further 2000 m of Diamond drilling work has been under taken to establish the ore body at depth.
- Khetri mine: The Engineering Procurement & Construction agency for executing the Khetri mine expansion project had started the work on 16.9.2011. Independent waste handling system commissioned, deepening of production and service shaft had been initiated. During execution, bad ground / fault plane encountered at (-) 120 mRL near production shaft. Contract period ended on 14.1.2017. New contract for tacking bad ground for deepening of the existing shaft and other related activities are under process.
- Banwas Mine: Mine construction work has been completed in Feb 2017. The Company has appointed Mine Developer and operation agency for long term operation of the Banwas Mine.
iii. Surda mine expansion (Jharkhand)
The plan envisages increase in the depth of the mine and enhancement of production capacity from 0.4 million tonne per annum to 0.9 million tonne per annum. On 19-20 September 2016, Expert Appraisal Committee of Ministry of Environment, Forest and Climate Change (MoEFCC) has recommended the proposal for Environment Clearance subject to clarification regarding forest clearance for forest land involved in underground mining. Matter is under scrutiny at Forest Clearance division of MoEFCC.
iv. Re-opening of closed mines at ICC Ghatsila (Jharkhand)
Company initiated action to re-open closed mines at Singhbum Copper Belt of ICC namely, Kendadih and Rakha mines to produce 0.21 million tonne and 1.5 million tonne of ore per annum respectively. Mine wise status is given below:
- Kendadih mine: The contract for reopening and allied mine development has been awarded to the successful bidder on 4.2.2012. Environmental clearance from MoEFCC obtained on 20.1.2015, Stage II FC for the project has been obtained on 28.11.2016.
- Rakha mine: Considering the change in market scenario, the Company will implement the project through a mine-developer-and-operator route. Environmental clearance of Rakha mining lease obtained on 1.8.2014, Stage II Forest Clearance for the project has been obtained on 15.9.2016.
v. Chapri Sideshwar (Jharkhand)
Considering the change in market scenario, the Company will implement the project through a mine-developer-and-operator route. Environmental clearance has been obtained on 1.8.2014, stage -II forest clearance obtained. Chapri-Sideshwar mine fall within the Rakha and Kedadih mining lease.
vi. Manufacturing of Copper through Hvdrometallurgv Technology - The Company has plans to set up a plant of capacity
1.0 lakh tonne per annum to manufacture copper cathode through cost effective hydro-metallurgy technology. The site of the project has been finalized and investment in the project is Rs, 3025 crore. The investment proposal after approval of the Board has been sent to the Ministry to obtain CCEA approval.
vii. Extraction of minerals from copper ore tails (MP)- The Company has awarded contract to install and commission a commercial scale plant of capacity 3.3 million tonne per annum at Malanjkhand at cost of Rs,200 crore to extract valuable minerals and metals from copper ore tails.
5. Significant or material orders passed by the Regulators or Courts or Tribunals:
Malanjkhand Copper Project (MCP) of the Company operates Copper Mines and Concentrator Plant at its project site with electricity obtained from M.P. State Electricity Board. The electricity duty charged from HCL/MCP for both Mines and Concentrator Plant was at the rate applicable to mines although the Concentrator Plant was registered as a ''Factory'' with the State Government on 19.12.1986. As per applicable laws, the electricity duty chargeable for ''Factory'' was at a lower rate than that applicable to mines. HCL/MCP represented the matter before the State Government Authorities in this regard but the matter was not resolved. Thereafter, the issue was agitated by HCL/MCP in the Courts of Law between 1998 to 2016, namely MP High Court at Jabalpur by way of Writ and the Hon''ble Supreme Court by way of SLPs from time-to-time.
The moot issues to be decided in the matter were as under.
1. Interpretation of the word "Adjacent" occurring in the Explanation (b) to Section 3 of the M.P. Electricity Duty Act, 1949.
2. Whether ''concentrate'' is a ''mineral'' and whether explanation to Part-B of the M.P. Electricity Duty Act, 1949 applied even through the manufacturing process is involved to bring it into existence.
In the finality, the Hon''ble Supreme Court while examining our SLP No. 10643-10645 of 2012 in the matter, by its Order dated 10.11.2016, examined the aforesaid issue and thus ordered.
The Court in its judgment gave the word ''adjoining'' a wider connotation. It would include close proximity such as being in the same locality. The Court in its findings also noted that the word ''processing'' used in the Explanation has to be interpreted in the context and for the purpose of the said item. Process can be given either a wide or a narrow meaning. The learned judges applied the rule of noscitur a sociis which means that the meaning of the word is to be judged by the company it keeps. It relied on several precedents, and by giving it a narrow meaning in the present case, it ruled that the process to create concentrate and alloy comes under manufacturing and not under processing which is an allied activity to mining. The Court also held that Copper Concentrate is not a mineral but a manufactured product. Summing up its judgment, the Court held that the High Court was not correct in its analysis. The said High Court judgment was set aside and the Hon''ble Supreme Court directed to levy the tariff as meant for the manufacturing unit. It further stated that if any amount had already been paid by HCL to the revenue, the same should be adjusted towards future demands.
6. Management Discussion and Analysis
A report on Management discussion and analysis of the performance of the Company is given at Annexure-I.
7. Awards and Accolades
i. HCL received the Industry Leadership Award - Base Metals at the 2016 Platts Global Metals Awards, held in London on 19.5.2016. The annual awards program honours exemplary performance in fifteen categories spanning the entire steel, metals and mining fraternity.
ii. The Quality Circle teams ''Sanjivani'' and ''Sahyog'' of Indian Copper Complex (ICC) won in Gold Category during the Chapter Convention on Quality Concepts (CCQC), 2016 on 27.9.2016 at Kolkata.
iii. The Quality Circle teams ''Sahyog'' and ''Sanjiwani'' of ICC were placed in ''Par Excellence'' and ''Excellence'' Category respectively during the National Convention on Quality Concepts (NCQC), 2016 held from16th to19th December, 2016 at Raipur.
iv. The Jury of Employer Branding Institute & World HRD Congress conferred upon HCL the ''Best Employer Brands Award'' on 18.12.2016 at IPE, Hyderabad.
v. HCL was declared the Winner of ''Golden Peacock Award for Corporate Social Responsibility'' for the year 2016 by the Awards Jury and was presented the Award on 20.1.2017 in the "11th International Conference on Corporate Social Responsibility" held at Bangaluru.
vi. HCL received the ''ABP NEWS - CSR Leadership Awards'' on 17.2.2017 at Mumbai.
vii. Jury and Council of Board members conferred HR Leadership Award (PSU Focus) to Shri Anupam Anand, D(P)/ HCL during the Award Ceremony on 16.2.2017 at Mumbai.
viii. HCL was recognized as one of the 50 Top PSUs with Innovative HR Practices by ASIA PACIFIC HRM CONGRESS-2016.
ix. Tamralipi, the in-house journal of the Company, won the In-house Communication Excellence (ICE) Award 2016 in three categories, viz., Most Creative Name (Winner); Best Magazines Among Government and Other Organizations (First Runner Up) and Best Magazine in a Regional Language (First Runner Up) at the ICE Awards Ceremony 2016 organized in Mumbai on 4.6.2016 by the Shailaja Nair Foundation.
x. HCL received the ''Griha Patrika Protsahan Puraskar'' for the year 2015-16 from Nagar Rajbhasha Karyanwayan Samity (Upkram), Kolkata, for the Hindi version of House Journal Tamralipi.
8. Particulars of Loan, Guarantees or Investments u/s 186 of the Companies Act, 2013
During the year from 1.4.2016 to 31.3.2017: NIL
9. Deposits
The Company has not taken any Deposits covered under or which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.
10. Related Party Transactions (RPTs):
The Company has not entered into any contracts or arrangements with related parties referred to in section 188(1) of the Companies Act, 2013. Policy on RPTs and dealing with RPTs has been formulated and put up at the Company''s website at www.hindustancopper.com.
11. Establishment of Vigil mechanism:
The Company has in place a Whistle Blower Policy which provide adequate safeguards against victimization of employees / directors who avail of the mechanism and also provide for direct access to the chairman of the Audit Committee in exceptional cases. The Policy has been posted at the Company''s website at www.hindustancopper.com.
12. Risk Management Policy
The Board of Directors of the Company has developed and implemented a risk management policy for the Company including identification therein of elements of risk, which in the opinion of the Board, may threaten the existence of the Company.
13. Internal Financial Controls
The Company has in place adequate internal financial control with reference to financial statements commensurate with its size and operations to be followed by the Company, detailing the policies and procedures to be followed.
14. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
Information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given as Annexure-II forming part of this report.
15. Safety
Safety remains high priority area and the Company is always aiming to achieve "Zero Accident". The Company continues to maintain the tradition of attracting recognition for its safety performance and, like previous years, received a number of awards in mine safety as indicated below:
Malanjkhand open cast mine had won the following safety performance award in large opencast mine category in 2016-17 under the aegis of DGMS (Nagpur region I&II):
2nd Prize on Use of explosives
2nd Prize on Transport in Mines & Dust Suppression
Malanjkhand open cast mine had won the following award under the aegis of IBM in 2016-17 (Jabalpur Region):
2nd Prize on Mineral Beneficiation
Khetri Copper Mine and Kolihan Copper Mine have received 1st Prize in all India Rescue Competition 2016 in First Aid competition practical.
Besides the above, special training, regular refresher training programmes and on-the-job training are provided to all employees. Safety Campaigns like "Annual Mines Safety Week", "Fire Services Day", "Fire services week" and "Industrial Safety Day" celebrations are conducted regularly with active participation of employees in all the Units of HCL.
16. Corporate Social Responsibility (CSR)
The CSR Report in the prescribed format as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure-III.
17. Vigilance Activities
The focus of the Vigilance Department is on preventive / proactive measures through improvement of systems and procedures, ensuring transparency, adherence to established policies and guidelines etc. Systems improvement measures are being regularly brought to the notice of Management, which has implemented most of the suggestions. During the Vigilance Awareness Week-2016, a booklet was published, outlining the various system improvements, suggested by the Vigilance Department in recent past.
The emphasis is on developing proper checks and balances in the working systems. At the same time, since punitive action is also required in case of misconduct to maintain discipline in the organization and to ensure fairness and probity in public life, prompt action is taken towards disposal of those cases also. Efforts are also continuing to create more and more awareness about vigilance amongst the employees of the organization.
18. Official Language Implementation
During 2016-17, HCL made constant Endeavour to increase use of Hindi in its Units/Offices. Raj Bhasha Pakhwara and Hindi Diwas were celebrated in the Units/Offices from 14.9.2016 to 28.9.2016. The messages of Hon''ble Home Minister, Govt. of India and CMD, HCL were circulated/ read out in all Offices/Units on this occasion. Various competitions were organized to enhance interest of the employees towards Official Language and winners awarded. The employees are constantly motivated to use Hindi in their day-to-day official work. Hindi Workshops were conducted in the Units/Offices at regular intervals. Regular review of progressive use of Hindi and difficulties faced were carried out in Quarterly meetings of Official Language Implementation Committee under the Chairmanship of CMD at Corporate Office and Unit Heads in Units. The Company participated in the half-yearly meeting of Town Official Language Committee (PSUs), Kolkata held on 11.8.2016. The Hindi edition of House Journal ''Tamralipi'' of HCL was awarded by Town Official Language Committee (PSUs), Kolkata under ''Rajbhasha Award Scheme-2015-16'' on 11.8.2016. The progressive use of Hindi is reviewed regularly at the Board meetings.
19. Business Responsibility Report:
Pursuant to Regulation 34 (2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 {SEBI (LODR), 2015}, Business Responsibility Report for 2016-17 describing various initiatives taken by the Company on social, environmental and governance perspective, is attached at Annexure-IV which forms part of this report.
20. Extract of Annual Return:
Extract of Annual Return pursuant to Section 92(3) of the Companies Act, 2013 is given in Annexure-V.
21. Corporate Governance
Corporate Governance Report as per SEBI (LODR), 2015 is given at Annexure-VI forming part of this report together with Statutory Auditors'' Certificate on Corporate Governance.
22. Number of meetings of the Board:
During 2016-17, eight Board meetings were held on 30.5.2016, 22.8.2016, 26.9.2016, 13.12.2016, 16.1.2017, 10.2.2017, 27.2.2017 and 29.3.2017.
23. Directors'' Responsibility Statement
In terms of Section 134(5) of Companies Act, 2013, your Directors confirm:
(i) That in the preparation of the annual accounts for the year ended 31st March, 2017 the applicable accounting standards had been followed along with proper explanations relating to material departures.
(ii) That such accounting policies have been selected and applied consistently and made adjustments and estimates which are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of 31st March, 2017 and of the Profit and Loss of the Company for the year.
(iii) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
(iv) That the Directors have prepared the annual accounts on a going concern basis.
(v) That the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively.
(vi) That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
24. Declaration by Independent Directors:
Independent Directors of the Company have given declaration to the effect that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013.
25. Familiarization Programme for Independent directors
On joining, Independent directors are familiarized through induction programme / presentation with the overview of business, operations, new projects and business model of the Company. Visit to Units is also organized as per their convenience. They are also updated on the changes / developments including in the relevant statutory / regulatory requirements from time-to-time. Detail of Directors'' Training / Familiarization Programme has been hosted at the Company''s website at www.hindustancopper.com.
26. Code of Conduct
The Company has in place a Code of Conduct applicable to the Directors as well as Senior Management and the same has been circulated to all concerned and posted at the Company''s website www.hindustancopper.com. All Board members and senior management personnel have affirmed compliance of the code for the year ended 31st March, 2017.
27. Directors
Ms Sujata Prasad ceased to be part time official Director from 21.6.2016.
Shri Subhash Chandra was appointed in place of Shri Nikunja Bihari Dhal as part time official Director with effect from 20.10.2016.
S/Shri U D Choubey and Ashok Kumar Singh ceased to be Independent Directors from 21.10.2016 on completion of their tenure.
Ms T C A Kalyani was appointed as part time official Director from 25.10.2016.
Shri N K Singh was appointed as part time official Director from 15.3.2017 in place of Ms T C A Kalyani who ceased to be Director from 7.12.2016.
The Board places on record its appreciation for the valuable services rendered and contribution made by Ms Sujata Prasad, Shri Nikunja Bihari Dhal, Shri U D Choubey, Shri Ashok Kumar Singh and Ms T C A Kalyani during their tenure on the Board.
28. Secretarial Audit Report
M/s N K Associates, Practicing Company Secretaries, has been appointed as Secretarial Auditor for FY 2016-17. Report given by the Secretarial Auditor is given at Annexure -VII to this report. With regard to the observations of the Secretarial Auditor about composition of the Board of Directors of the Company, it is stated that during 2016-17, three posts of part time non-official (Independent) Directors were laying vacant (one post since 19.3.2016 and two posts since 22.10.2016). HCL, being a Government Company and in terms of its Articles of Association, appointment of all Directors on its Board is made by the President of India through orders issued by the Ministry of Mines (MoM). The Company has requested MoM to fill up the vacant posts of three Independent Directors.
29. Auditors
M/s. A Kayes & Co, Kolkata was appointed as statutory auditors to audit the accounts of the Company for the year 2016-17.
M/s Chatterjee & Co, Kolkata was appointed as Cost Auditor of the Company for carrying out the cost audit of Copper Ore, Concentrate, Cathode, Continuous Cast Copper Rods, other Processed Copper and articles along with Sulphuric acid for the year 2016-17.
30. Comments of C&AG
The comments of C&AG under the Companies Act on the accounts of the Company for the year ended 31st March, 2017 are annexed to this report.
31. Appreciation
In conclusion, your Directors wish to place on record their appreciation of the hard work put in by all employees of the Company during the year under review. The Board gratefully acknowledges the valuable guidance and co-operation received from the Ministry of Mines and other Ministries/ Departments of the Government of India and the support received from the State Governments of Rajasthan, Jharkhand, Madhya Pradesh, Maharashtra, Gujarat and West Bengal and the Company''s bankers, customers and office bearers of the recognized trade unions of different Units / Head Office. The Board also thanks all shareholders and investors for the trust reposed by them in the Company.
For and on behalf of the Board of Directors
K D Diwan
Chairman-cum-Managing Director
(DIN-01829545)
Place: Kolkata
Date : 17.5.2017
Mar 31, 2016
The Directors have pleasure in presenting the forty-eighth Annual
Report of Hindustan Copper Ltd. (HCL/the Company) together with the
audited statement of accounts and Auditors'' Report thereon for the year
ended 31st March, 2016.
1. Performance
Financial Summary or highlights
The comparative working results for the FY 2015-16 vis-a-vis FY 2014-15
are as under:
(Rs. in Crore)
Particulars 2015-16 2014-15
(a) Turnover 1068.95 1127.49
(b) Profit before depreciation, interest &
tax 62.82 100.86
(c) Less : Depreciation 16.00 19.73
(d) Less : Interest & Finance Charges 1.44 0.68
(e) Profit before tax 45.38 80.45
(f) Less : Provision for Taxes (including
deferred tax) 1.82 12.85
(g) Profit after tax 43.56 67.60
(h) Distributable Profit 43.56 67.60
(i) Add: Balance brought forward from the
previous year 1092.35 1059.26
(j) Balance available for appropriation 1135.91 1126.86
i) Dividend 0.00 13.88
ii) Corporate Dividend Tax 0.00 2.83
iii) Amount transferred to General Reserve 0.00 0.00
iv) Depreciation charged from Retained Earning 0.00 17.80
(k) Balance in P&L account to be carried forward 1135.91 1092.35
(l) Earnings per Share(Rs) 0.47 0.73
During 2015-16, the Company posted a Profit before tax (PBT) of Rs.
45.38 Crore as against Rs.80.45 Crore clocked during the previous year
registering a decline of around 43.59%. The turnover of the Company was
Rs. 1068.95 Crore during FY 2015-16 as against Rs.1127.49 Crore during
FY 2014-15 registering a decrease of around 5.19%. The Profit After Tax
(PAT) during FY 2015-16 is Rs. 43.56 Crore as against Rs. 67.60 Crore
in 2014-15.
Physical performance
The comparative physical performance of production and sales in FY
2015-16 vis-a-vis FY 2014-15 are as under:
Particulars 2015-16 2014-15
Ore (Rs.000 Tonnes) 3,908 3,505
Metal in concentrate (MIC) (Tonnes) 31,578 24,878
Cathode (Tonnes) 23,024 21,205
CC Wire Rod (Tonnes) 26,062 19,576
Sales (Tonnes):
CC Rod 21,125 16,609
Cathode 285 5,032
MIC 2,702 -
Total 24,112 21,641
Ore production of 39.08 lakh MT in 2015-16 is the highest in last 17
years. Overall MIC production during the year is 27% higher as compared
to last year. The total sales has increased by 11% over last year and
CCR sales has increased by 27%. Sale of 2756 MT CC Rod 19.6 mm to
venders of Indian Railways this year has successfully established HCL''s
new product.
While the physical performance has shown good improvement in 2015-16,
the same could not be reflected in the financial performance mainly due
to steep fall in London Metal Exchange prices of Copper by around 21%
as compared to previous year.
2. Dividend
Your Directors have not recommended any dividend on equity shares for
the year under review.
3. Material Changes if any
No material change and commitment affecting the financial position of
the Company occurred between the end of the financial year to which the
financial statements relate and the date of the report.
4. Mine Expansion Schemes
The ongoing mine expansion scheme envisages expansion of Malanjkhand,
Khetri, Kolihan and Surda mines, Banwas as an extension of Khetri Mine;
re-opening of Rakha and Kendadih mines and development of new mine
namely Chapri- Sideshwar to increase mine production to 12.4 Million
tonne per annum (Mtpa) from present 3.4 Mtpa. The mine-wise scheme and
status is given below:
i. Malanjkhand Copper Project
It is proposed to expand the production capacity of Malanjkhand mine
from present 2 Mtpa to 5 Mtpa by developing an underground mine below
the existing open cast mine at an estimated cost of Rs.1856.74 Crore.
All the approval are in place, Environment Clearance (EC) and National
Board for Wild Life (NBWL) has been obtained in 2014-15. Contract
Agreement was signed with L1 bidder. The Foundation stone laying of the
project had been held on 12.4.2015. Sinking of North Ventilation Shaft
and South Ventilation Shaft has commenced during the year.
ii. Khetri and Banwas mine
The proposed expansion of Khetri & Kolihan mine and development of
Banwas deposit will increase ore production from existing 1.0 million
tonne to 3.1 million tonne per annum. Mine wise status is given below:
Kolihan Mines: For additional shaft sinking & creation of ore handling
facilities below 0 mRL environmental clearance obtained on 02.02.2015.
Action for floating tender is under process.
Khetri mine: The Engineering Procurement & Construction (EPC) agency
for executing the Khetri mine expansion project had been appointed on
15.07.2011 and the work at site started from 16.9.2011. Independent
waste handling system commissioned, deepening of production and service
shaft has been initiated.
Banwas Mine: Development of Banwas deposit started in May, 2010, and
the work is expected to be completed by 2016.
iii. Surda mine expansion
The plan envisages increase in the depth of the mine and enhancement of
production capacity from 0.4 million tonne per annum to 0.9 million
tonne per annum. Terms of Reference received from Ministry of
Environment & Forests (MoEF). Public hearing for Environment Clearance
was held on 15.12.2015. Final EIA report prepared and being uploaded to
MoEF website.
iv. Re-opening of closed mines at ICC
Company initiated action to re-open closed mines at Singhbum Copper
Belt of ICC namely, Kendadih and Rakha mines to produce 0.21 million
tonne and 1.5 million tonnes of ore per annum respectively. Mine wise
status is given below:
Kendadih mine: The contract for reopening and allied mine development
has been awarded to the successful bidder on 04.02.2012. Environmental
clearance from MoEF obtained on 20.01.2015, stage-I forest clearance
obtained, stage-II forest clearance is awaited.
Rakha mine: Considering the change in market scenario, the Company will
implement the project through a mine- developer-and-operator (MDO)
route. Environmental clearance of Rakha mining lease obtained on
01.08.2014, stage -I forest clearance obtained, stage -II forest
clearance is awaited.
v. Chapri Sideshwar
Considering the change in market scenario, the Company will implement
the project through a mine-developer-and- operator (MDO) route.
Environmental clearance has been obtained on 01.08.2014, stage -I
forest clearance obtained, stage -II forest clearance is awaited.
Chapri-Sideshwar mine fall within the Rakha and Kedadih mining lease.
5. Significant or material orders passed by the Regulators or Courts
or Tribunals:
No significant or material orders have been passed by the regulators or
courts or tribunals impacting the going concern status and company''s
operations in future.
6. Management Discussion and Analysis
A report on Management discussion and analysis of the performance of
the Company is given at Annexure-I.
7. Awards and Accolades
i. The Quality Circle team ''Dinkar'' and ''Sahyog'' from Indian Copper
Complex and ''Pragatisheel'' and ''Sudhar'' won in Gold Category during the
Chapter Convention on Quality Concepts (CCQC), 2015 on 22.9.2014 at
Kolkata.
ii. The Quality Circle team ''Dinkar'' and ''Sahyog'' from Indian Copper
Complex won in "Excellent and ''Sudhar'' and ''Pragatisheel'' won in
''Excellent'' and ''Distinction'' Category during the National Convention
on Quality Concepts (NCQC), 2015 during 6.2.2016 to 8.2.2016 at
Kolkata.
iii. HCL received the "Griha Patrika Protsahan Puraskar" for the year
2014-15 from Nagar Rajbhasha Karyanwayan Samity (Upkram), Kolkata, for
the Hindi version of House Journal Tamralipi, in a prize distribution
ceremony on 29.8.2015.
iv. HCL received the "Protsahan Puraskar" for the year 2014-15 from
Nagar Rajbhasha Karyanwayan Samity (Upkram), Kolkata, for achieving
excellence in implementation of the Official Language in day-to-day
office work.
v. Mines Rescue Team of Khetri Copper Complex won 1st Prize in First
Aid Theory and Practical Competition, 2nd Prize in Rescue Practical
Competition and 2nd Prize in Rescue Theory Competition in the 46th All
India Mines Rescue Competition held at Manendragarh Rescue Station,
South Eastern Coalfields Ltd, Manendragarh (Chhattisgarh) from
5.12.2015 to 8.12.2015.
vi. Three members of the team namely, S/Shri Naresh Kumar Katariya
(Captain), Sanket Kumar Toshniwal (FAB Controller) and A T Alam
(Member), also participated in the Promotional Competition of Rescue
based on international norms and won the third prize out of six
participating teams.
vii. HCL was awarded the National PR Day Award of Excellence for
External & Internal Communication by the Public Relations Society of
India, PRSI, Kolkata Chapter on 21.4. 2015, the National PR Day.
viii. Tamralipi, the house journal of HCL, won the In-house
Communication Excellence (ICE) Award 2015 conferred by the Shailaja
Nair Foundation in the category of Best Cover Page as the First
Runner-Up on 6.6.2015.
ix. Tamralipi, the house magazine of the Company was awarded the Bronze
Award at the 9th Global Communication Conclave of the Public Relation
Council of India, PRCI, held at New Delhi on 13.3.2015 and 14.3 2015.
8. Particulars of Loan, Guarantees or Investments u/s 186 of the
Companies Act, 2013
During the year from 01/04/2015 to 31/03/2016: NIL
9. Deposits
The Company has not taken any Deposits covered under or which are not
in compliance with the requirements of Chapter V of the Companies Act,
2013.
10. Related Party Transactions (RPTs):
The Company has not entered into any contracts or arrangements with
related parties referred to in section 188(1) of the Companies Act,
2013. Policy on RPTs and dealing with RPTs has been formulated and put
up at the Company''s website at www.hindustancoppr.com.
11. Establishment of Vigil mechanism:
The Company has in place a Whistle Blower Policy which provide adequate
safeguards against victimization of employees / directors who avail of
the mechanism and also provide for direct access to the chairman of the
Audit Committee in exceptional cases. The Policy has been posted at the
Company''s website at www.hindustancopper.com.
12. Risk Management Policy
The Board of Directors of the Company has developed and implemented a
risk management policy for the Company including identification therein
of elements of risk, which in the opinion of the Board, may threaten
the existence of the Company.
13. Internal Financial Controls
The Company has in place adequate internal financial control with
reference to financial statements commensurate with its size and
operations to be followed by the Company, detailing the policies and
procedures to be followed.
14. Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
Information on conservation of energy, technology absorption and
foreign exchange earnings and outgo stipulated under Section 134(3)(m)
of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts)
Rules, 2014, is given as Annexure-II forming part of this report.
15. Safety
Safety remains high priority area and the Company is always aiming to
achieve "Zero Accident". The Company continues to maintain the
tradition of attracting recognition for its safety performance and,
like previous years, received a number of awards in mine safety as
indicated below:
Malanjkhand open cast mine had won the following safety performance
award on 13.12.2015 in large opencast mine category under the aegis of
DGMS (Nagpur region I&II):
2nd Prize on Use of explosives
3rd Prize on Mine Lighting, HEMM and overall best performance
Five individual first prizes won in 28th Mines safety week competition
and the prizes are received at Kotputli, Rajasthan.
Khetri Copper Mine and Kolihan Copper Mine have received award/Prizes
in all India Rescue Competition 2015 in the following categories:
1st Prize in First Aid theory and Practical competition
2nd Prize in Rescue Practical competition
2nd Prize in Rescue Theory competition
Besides the above, special training, regular refresher training
programmes and on-the-job training are provided to all employees.
Safety Campaigns like "Annual Mines Safety Week", "Fire Services Day",
"Fire services week" and "Industrial Safety Day" celebrations are
conducted regularly with active participation of employees in all the
Units of HCL.
16. Corporate Social Responsibility (CSR)
The CSR Report in the prescribed format as per the Companies (Corporate
Social Responsibility Policy) Rules, 2014 is given in Annexure-III.
17. Vigilance Activities
The Vigilance Department of HCL has been taking proactive preventive
vigilance measures, along with expeditious finalization of pending
disciplinary cases. Systems improvement measures are being regularly
brought to the notice of Management, which has implemented most of the
suggestions.
Efforts are also continuing to create more and more awareness about
vigilance amongst the officers and employees of the organizations.
Besides organizing training, a booklet was also released during the
Vigilance Awareness Week- 2015, containing inter-alia, various Do''s &
Don''t''s and also ''Some Common Irregularities to be taken note of.
18. Official Language Implementation
During 2015-16, HCL made constant endeavour to increase use of Hindi in
its Units/Offices. Raj Bhasha Pakhwara and Hindi Diwas were celebrated
in the Units/Offices from 14.9.2015 28.9.2015. The messages of Hon''ble
Home Minister, Government of India and CMD, HCL were read out in all
Units/Offices on this occasion. Various competitions were organized to
enhance interest among employees towards Official Language. Prizes were
distributed to the winners. Employees are constantly motivated to use
Hindi in their day-to-day official work. Hindi Workshops were
conducted in the Units/Offices at regular intervals. During 2015-16,
the Company participated in the half-yearly meeting of Town Official
Language Committee (PSUs), Kolkata held on 29.8.2015. The Company''s
in-house journal "Tamralipi" is published in Hindi and English and
distributed among employees regularly and also mailed to the members of
the Hindi Advisory Committee. Effort is continuously made to ensure
that the Company''s advertisements for recruitment/ tenders, etc., are
also published bilingually. The progressive use of Hindi is being
reviewed regularly at the Board meetings.
19. Business Responsibility Report:
Pursuant to Regulation 34 (2) SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 {SEBI (LODR), 2015}, Business
Responsibility Report for 2015-16 describing various initiatives taken
by the Company on social, environmental and governance perspective, is
attached at Annexure-IV which forms part of this report.
20. Extract of Annual Return:
Extract of Annual Return pursuant to Section 92(3) of the Companies
Act, 2013 is given in Annexure-V.
21. Corporate Governance
Corporate Governance Report as per SEBI (LODR), 2015 is given at
Annexure-VI forming part of this report together with Statutory
Auditors'' Certificate on Corporate Governance.
22. Number of meetings of the Board:
During 2015-16, seven Board meetings were held on 8.4.2015, 28.5.2015,
11.8.2015, 6.11.2015, 23.12.2015, 14.1.2016 and 3.2.2016.
23. Directors'' Responsibility Statement
In terms of Section 134(5) of Companies Act, 2013, your Directors
confirm:
(i) That in the preparation of the annual accounts for the year ended
31st March, 2016 the applicable accounting standards had been followed
along with proper explanations relating to material departures.
(ii) That such accounting policies have been selected and applied
consistently and made adjustments and estimates which are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of 31st March, 2016 and of the Profit and
Loss of the Company for the year.
(iii) That proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
(iv) That the Directors have prepared the annual accounts on a going
concern basis.
(v) That the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and operating effectively.
(vi) That the Directors have devised proper systems to ensure
compliance with the provisions of all applicable laws and that such
systems are adequate and operating effectively.
24. Declaration by Independent Directors:
Independent Directors of the Company have given declaration to the
effect that they meet the criteria of independence as provided under
Section 149(6) of the Companies Act, 2013.
25. Familiarization Programme for Independent directors
On joining, Independent directors are familiarized through induction
programme / presentation with the overview of business, operations, new
projects and business model of the Company. Visit to Units is also
organized as per their convenience. They are also updated on the
changes / developments including in the relevant statutory / regulatory
requirements from time-to-time. Detail of Directors'' Training /
Familiarization Programme has been hosted at the Company''s website at
www.hindustancopper.com.
26. Code of Conduct
The Company has in place a Code of Conduct applicable to the Directors
as well as Senior Management and the same has been circulated to all
concerned and posted at the Company''s website www.hindustancopper.com.
All Board members and senior management personnel have affirmed
compliance of the code for the year ended 31st March, 2016.
27. Directors
Shri Nikunja Bihari Dhal was appointed as part time official Director
from 14.9.2015 in place of Shri Arun Kumar who ceased to be Director
from 4.8.2015.
Shri Sanjay Kumar Bhattacharya joined as Director (Mining) of the
Company from 15.9.2015.
Shri Hemant Mehtani and Smt Simantini Jena appointed as part time
non-official (Independent) Director of the Company from 17.11.2015.
Shri Dileep Raj Singh Chaudhary and Shri Niranjan Pant appointed as
part time non-official (Independent) Director of the Company from
1.12.2015.
Shri S Nanda ceased to be Director (Operations) from 1.2.2016 on
superannuation. Shri Santosh Sharma joined as Director (Operations)
from 1.3.2016.
Smt. Bulbul Sen ceasesed to be Independent Director from 18.3.2016 on
completion of tenure.
The Board places on record its appreciation for the valuable services
rendered and contribution made by Shri Arun Kumar, Shri S Nanda and Smt
Bulbul Sen during their tenure on the Board.
28. Secretarial Audit Report
M/s N K Associates, Practicing Company Secretaries, has been appointed
as Secretarial Auditor for FY 2015-16. Report given by the Secretarial
Auditor is given at Annexure -VII to this report. With regard to the
observations of the Secretarial Auditor about composition of the Board
of Directors of the Company, it is stated that during 2015-16, four
part time non- official (Independent) Directors were appointed by the
Ministry of Mines (MoM), Govt. of India, (vide order dated 17.11.2015
and 1.12.2015). However, consequent upon completion of tenure of Smt.
Bulbul Sen on 18.3.2016 one post of Independent Director has fallen
vacant. HCL, being a Government Company and in terms of its Articles of
Association, appointment of all Directors on its Board are made by the
President of India through orders issued by the MoM. The Company has
requested MoM to fill up the vacant post of one Independent Director.
29. Auditors
M/s. A Kayes & Co, Kolkata was appointed as statutory auditors to audit
the accounts of the Company for the year 2015- 16.
M/s Chatterjee & Co, Kolkata was appointed as Cost Auditor of the
Company for carrying out the cost audit of Copper Ore, Concentrate,
Processed Copper and articles thereof and Sulphuric Acid for the year
2015-16.
30. Comments of C&AG
The comments of C&AG under the Companies Act on the accounts of the
Company for the year ended 31st March, 2016 are annexed to this report.
31. Appreciation
In conclusion, your Directors wish to place on record their
appreciation of the hard work put in by all employees of the Company
during the year under review. The Board gratefully acknowledges the
valuable guidance and co-operation received from the Ministry of Mines
and other Ministries/Departments of the Government of India and the
support received from the State Governments of Rajasthan, Jharkhand,
Madhya Pradesh, Maharashtra, Gujarat and West Bengal and the Company''s
bankers, customers and office bearers of the recognized trade unions of
different Units / Head Office. The Board also thanks all shareholders
and investors for the trust reposed by them in the Company.
For and on behalf of the Board of Directors
K D Diwan
Chairman-cum-Managing Director
Place: Kolkata
Date: 30.5.2016
Mar 31, 2015
The Shareholders Hindustan Copper Limited Kolkata
The Directors have pleasure in presenting the forty-seventh Annual
Report of the Company together with the audited statement of accounts
and Auditors' Report thereon for the year ended 31 March, 2015.
1. Financial Summary or highlights
The comparative working results for the FY 2014-15 vis-a-vis FY 2013-14
are as under:
(Rs in Crore)
2014-15 2013-14
Turnover 1127 1616
Profit before depreciation, interest & tax 101 448
Less : Depreciation 20 15
Less : Interest & Finance Charges 1 2
Profit before tax 80 431
Less : Provision for Taxes(including deferred tax) 12 145
Profit after tax 68 286
Add:/(less) Statutory appropriation 0 0
Distributable Profit 68 286
Add: Balance brought forward from the previous year 1059 903
Balance available for appropriation 1127 1189
i) Dividend 14 93
ii) Corporate Dividend Tax 3 16
iii) Amount transferred to General Reserve 0 22
iv) Depreciation charged from Retained Earning 18 0
Balance in P&L account to be carried forward 1092 1059
Earnings per Share(Rs) 0.73 3.10
During financial year (FY) 2014-15 HCL posted a Profit before tax (PBT)
of Rs. 80 Crore as against Rs.431 Crore clocked during the previous year
registering a decline of around 81.44%. The turnover of the Company was
Rs.1127.49 Crore during FY 2014-15 as against Rs.1615.90 Crore during FY
2013-14 registering a decrease of around 30.22%. The total expenditure
of the Company declined by about 15.22% by posting a number of Rs.1016.36
Crore as against Rs.1198.75 Crore year-on-year. However the Profit after
tax (PAT) during FY 2014- 15 is Rs. 67.60 Crore as against Rs. 286.42 Crore
in 2013-14.
2. Dividend
The Board of Directors of your Company have recommended payment of
dividend @ 3% on equity, i.e., Re
0.15 per share of Rs. 5/- face value for the year 2014-15, for approval
of shareholders in the Annual General Meeting. The outgo on this
account will be Rs.13.88 Crore for dividend and Rs. 2.83 Crore towards tax
on dividend, aggregating to a total outgo of Rs.16.71 Crore.
3. Material Changes if any
The Company has entered into an agreement to acquire plant & machinery
including leasehold land of Jhagadia Copper Limited (JCL)(in
liquidation) through Asset Reconstruction Company (India) Ltd. (ARCIL)
at a value of Rs. 210 Crore through auction process. The Company has paid
an amount of Rs. 105 Crore up to 31st March, 2015 and the balance amount
of Rs.105 Crore has been paid in April,2015. The JCL Plant has facilities
for manufacture of 50,000 tonnes per annum of LME 'A' grade Copper Cathodes
by secondary smelting process.
4. Change in the nature of business:
There has been no change in the nature of Business of the Company
5. Physical performance
The comparative physical performance of production and sales for the
year 2014-15 vis-a-vis 2013-14 is as under:
Particulars 2014-15 2013-14
One (000 Tonnes) 3,505 3,827
Metal in concentrate (MIC) (Tonnes) 24,878 32,276
Cathode (Tonnes) 21,205 22,825
CC Wire Rod (Tonnes) 19,576 22,976
Sales (Tonnes):
CCRod 16,609 14,826
Cathode 5,032 7,386
MIC Â 8,361
Total 21,641 30,573
Factor Affecting Performance
During 2014-15, adverse performance of the Company can be attributed to
the following:
- Steep fall in London Metal Exchange prices of Copper, prices have
fallen by 20% by the last quarter of the financial year.
- 21% fall in copper ore grade of Malanjkhand mine which contributes
around 65% of the ore production to the Company. Also, submerging of
lower benches for a longer period to due to unseasonal rainfall
affected by cyclonic storm.
- Stoppage of Surda Mine(Jharkhand) operation from 8.9.2014 due to
State Govt. orders pursuant to Hon'ble Supreme Court judgment on
operation of mines on deemed renewal basis.
- Extreme water shortage at Khetri Copper Complex (Rajasthan)
Remedial Action
To improve the physical production, the Company has redesigned the
Malanjhkhand open pit mine in consultation with IIT, Khagarpur.
Jharkhand Government has extended the Surda Mine lease pursuant to the
MMDR Amendment Act 2015 and production from the mine is likely to
commence after the mobilization of resources is completed by the
Contractor. Dewatering system at Malanjkhand mine has been strengthened
to take care of excessive rainfall during the year. Necessary steps
have been initiated to enhance excavation at MCP open pit mine to
expose more ore face which will improve the copper ore grade.
To argument the water availability at Khetri in near term, deepening of
four existing wells at Chaonra has been taken up to augment additional
1500 Cu. M / day water supply. As a long term measure, proposal for
providing surface water @ 5000 Cu. M /day from Indira Gandhi canal was
sent to Govt. of Rajasthan is being actively pursued.
6. Mine Expansion Schemes
The ongoing mine expansion scheme envisages expansion of Malanjkhand,
Khetri, Kolihan and Surda mines, Banwas as an extension of Khetri Mine;
re-opening of Rakha and Kendadih mines and development of new mine
namely Chapri-Sideshwar to increase mine production to 12.4 Million
tonne per annum (Mtpa) from present 3.4 Mtpa. The mine-wise scheme and
status is given below:
i. Malanjkhand Copper Project
It is proposed to expand the production capacity of Malanjkhand mine
from present 2 Mtpa to 5 Mtpa by developing an underground mine below
the existing open cast mine at an estimated cost of Rs. 1856.74 Crore..
All the approval are in place, Environment Clearance (EC and National
Board for Wild Life (NBWL) has been obtained in 2014-15.The Foundation
stone laying of the project had been held on 12.4.2015.
ii. Khetri and Banwas mines
The proposed expansion of Khetri & Kolihan mine and development of
Banwas deposit will increase ore production from existing 1.0 million
tonne to 3.1 million tonne per annum. Mine wise status is given below:
Kolihan Mines: For additional shaft sinking & creation of ore handling
facilities below 0 mRL environmental clearance obtained on 02.02.2015.
Action for floating tender is under process.
Khetri mine: The Engineering Procurement & Construction (EPC) agency
for executing the Khetri mine expansion project had been appointed on
15.07.2011 and the work at site started from 16.9.2011.
Banwas Mine: Development of Banwas deposit started in May, 2010, and
the work is expected to be completed by 2015.
iii. Surda mine expansion
The plan envisages increase in the depth of the mine and enhancement of
production capacity from 0.4 million tonne per annum to 0.9 million
tonne per annum.
Operation of Surda mine has been stopped since 08.09.2014 as per
directives from Govt. of Jharkhand. TWP awaited from ED, Wasteland
Development Board.
iv. Re-opening of closed mines at ICC
Company initiated action to re-open closed mines at Singhbum Copper
Belt of ICC namely, Kendadih and Rakha mines to produce 1.5 million
tonnes and 0.21 million tonne of ore per annum respectively. Mine wise
status is given below:
Kendadih mine: The contract for reopening and allied mine development
for 4 years has been awarded to the successful bidder on
04.02.2012.Environmental clearance from MoEF obtained on 20.01.2015,
stage -I forest clearance obtained, stage -II forest clearance is
awaited.
Rakha mine: The contract for reopening and expansion of Rakha Copper
mine for 5 years has been
awarded to the successful bidder on 02.07.2013. Environmental clearance
of Rakha mining lease obtained on 01.08.2014, stage -I forest clearance
obtained, stage -II forest clearance is awaited.
v. Chapri Sideshwar
The Letter of Intent (LoI) was issued to the successful bidder on
08.11.2011 to develop an underground mine at Chapri-Sideshwar to
produce 1.5 million tonne of ore per annum. The work shall start after
obtaining statutory clearances and restoration of the power facility at
site. Chapri-Sideshwar is part of Rakha and Kedadih mining lease.
Environmental clearance from MoEF obtained on 20.01.2015, stage -I
forest clearance obtained, stage -II forest clearance is awaited.
7. Significant or material orders passed by the Regulators or Courts or
Tribunals:
No significant or material orders have been passed by the regulators or
courts or tribunals impacting the going concern status and company's
operations in future.
8. Management Discussion and Analysis
A report on Management discussion and analysis of the performance of
the Company is given at Annexure-I.
9. Awards and Accolades
i. During the year 2014-15, the Company received the Tritiya Puraskar
(Third Prize) for successful implementation of Hindi as the official
language from Town Official Language
ii. Committee (PSUs), Kolkata held on 8th September, 2014. The Hindi
edition of House Journal "Tamralipi" of HCL was awarded First Prize by
Town Official Language Committee (PSUs), Kolkata under "Rajbhasha Award
Scheme-2013-14" on 8th September, 2014.
iii. The Quality Circle team 'Sanshodhan' from Khetri Copper Complex
won in Silver Category and two other teams, i.e., 'Adarsh' from Khetri
Copper Complex and "Udayan' from Taloja Copper Project won in Bronze
Category during the Chapter Convention on Quality Concepts (CCQC), 2014
on 23.09.2014 at Kolkata.
iv. HCL was awarded as the "Organisation with Innovative HR Practices"
at the Asia Pacific HRM Congress held during 2011-12 in Bengaluru.
v. HCL has been conferred the SKOCH Order of Merit for CSR project
namely ' Systematic Rice Intensification' and has been selected as
amongst the best projects in the Country in November, 2014
vi. HCL was endorsed the Rs.50 Most Caring Companies of India' by the
World CSR Day.
vii. HCL was awarded the 'The IME Journal Mining Innovation Award' in
the field of 'Mining Technology & Ore Recovery with effective
Environmental Management, & CSR Initiatives for Sustainable Development
on 21st June, 2014 in New Delhi.
10. Particulars of Loan, Guarantees or Investments u/s 186 of the
Companies Act, 2013
During the year from 01/04/2014 to 31/03/2015: NIL
11. Deposits
The Company has not taken any Deposits covered under or which are not
in compliance with the requirements of Chapter V of the Companies Act,
2013.
12. Policy on Related Party Transactions (RPTs):
Policy on RPTs and dealing with RPTs has been formulated and put up at
the Company's website at www.hindustancoppr.com.
13. Particulars of Contracts or Arrangements with Related Parties
The Company has not entered into any contracts or arrangements with
related parties referred to in section 188(1) of the Companies Act,
2013.
14. Establishment of Vigil mechanism:
The Company has in place a Whistle Blower Policy which provide adequate
safeguards against victimization of employees / directors who avail of
the mechanism and also provide for direct access to the chairman of the
Audit Committee in exceptional cases. The Policy has been posted at the
Company's website at www.hindustancopper.com.
15. Risk Management Policy
The Board of Directors of the Company has developed and implemented a
risk management policy for the Company including identification therein
of elements of risk, which in the opinion of the Board, may threaten
the existence of the Company.
16. Internal Financial Controls
The Company has laid down the internal financial controls with
reference to financial statements of the Company, to be followed by the
Company, detailing the policies and procedures to be followed. The
financial statements are passing through the processes of Internal and
External (Tax, Cost and Statutory) Audits, before being approved at the
meeting of the Board of Directors of the Company.
17. Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
Information on conservation of energy, technology absorption and
foreign exchange earnings and outgo stipulated under Section 134(3)(m)
of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts)
Rules, 2014, is given as Annexure-II forming part of this Report.
18. Safety
Safety remains high priority area and the Company is always aiming to
achieve "Zero Accident". The Company continues to maintain the
tradition of attracting recognition for its safety performance and,
like previous years, received a number of awards in mine safety as
indicated below:
Malanjkhand open cast mine had won the following safety performance
award on 14.12.2014 in large opencast mine category under the aegis of
DGMS (Nagpur region I&II):
1st Prize in Open cast working 2nd Prize on Use of explosives 2nd Prize
on overall best performance 3rd Prize in HEMM.
Seven individual prizes & special prize on first aid were won by Mine
rescue team in All India Rescue competition 2014-15 held at Ramgarh,
Jharkhand.
Five individual first prizes won in 28th Mines safety week competition
and the prizes are received at Kotputli, Rajasthan.
Two first prize, two second prize and three 3rd prizes were won by
individuals in trade test for mines workmen and the prizes were
distributed at Kotputli, Rajasthan.
Besides the above, special training, regular refresher training
programmes and on-the-job training are provided to all employees.
Safety Campaigns like "Annual Mines Safety Week", "Fire Services Day",
"Fire services week" and "Industrial Safety Day" celebrations are
conducted regularly with active participation of employees in all the
Units of HCL.
19. Corporate Social Responsibility and Sustainability (CSR&S)
The CSR&S activities in the prescribed format as per the Companies
(Corporate Social Responsibility Policy) Rules, 2014 are given in
Annexure-III.
20. Vigilance Activities
The focus has been on preventive vigilance through institutional
mechanism so as to make the preventive vigilance effective. A large
number of suggestions for system improvement have been given by the
Vigilance Department to the Management, primarily with the aim of
making the systems more transparent. Vigilance Department is also
making efforts to sensitize the employees about the need to exercise
vigilance by one and all. Special seminars are being conducted both at
the Corporate Office, as well as, various Units to create vigilance
awareness in true spirit.
21. Official Language Implementation
During the year, HCL made constant endeavours to increase use of Hindi
in its Units/Offices. Raj Bhasha Pakhwara and Hindi Diwas were
celebrated in the Units/Offices from 14th to 28th September, 2014. The
messages of Hon'ble Home Minister, Govt of India and CMD, HCL were
circulated /read out in all Offices/Units on this occasion. Various
competitions were organized with a view to enhance interest among
employees towards Official Language. Prizes were distributed to the
winners. Employees are constantly motivated to use Hindi in their
day-to-day official work. Hindi Workshops were conducted in the
Units/Offices at regular intervals. Regular review of progressive use
of Hindi and difficulties faced were carried out in Quarterly meetings
of Official Language Implementation Committee under the Chairmanship
of CMD at Corporate Office and Unit Heads in Units. The progressive use
of Hindi is being reviewed regularly at the Board meetings.
22. Integrity Pact:
The Company enters into an Integrity Pact with the
suppliers/contractors with the threshold value of Rs.20 crores in case of
Purchase Orders and Rs.10 crores for Works contract, in line with the
MoU signed by HCL with TII.
23. Corporate Governance
A report on Corporate Governance as per SEBI directives and stock
exchange listing requirement is given at Annexure-IV forming part of
this report together with statutory auditors' certificate on corporate
governance.
24. Extract of Annual Return:
Extract of Annual Return pursuant to Section 92(3) of the Companies
Act, 2013 is given in Annexure-V.
25. Number of meetings of the Board:
During 2014-15, six meetings of the Board were held on 24.5.2014,
13.8.2014, 13.11.2014, 4.12.2014, 5.2.2015 and 3.3.2015.
26. Directors' Responsibility Statement
In terms of Section 134(5) of Companies Act, 2013, your Directors
confirm:
(i) That in the preparation of the annual accounts for the year ended
31 March, 2015 the applicable accounting standards had been followed
along with proper explanations relating to material departures.
(ii) That such accounting policies have been selected and applied
consistently and made adjustments and estimates which are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of 31 March, 2015 and of the Profit or Loss
of the Company for the year.
(iii) That proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
(iv) That the Directors have prepared the annual accounts on a going
concern basis.
(v) That the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and operating effectively.
(vi) That the Directors have devised proper systems to ensure
compliance with the provisions of all applicable laws and that such
systems are adequate and operating effectively.
27. Declaration by Independent Directors:
Independent Directors of the Company have given declaration to the
effect that they meet the criteria of independence as provided under
Section 149(6) of the Companies Act, 2013.
28. Familiarization Programme for Independent directors as per Clause
49
On joining, Independent directors are familiarized through induction
programme / presentation with the overview of business, operations, new
projects and business model of the Company. Visit to units is also
organized as per their convenience. They are also updated of the
changes / developments including in the relevant statutory / regulatory
requirements from time to time. Detail of Directors' Training /
Familiarization Programme has been posted at the Company's website at
www.hindustancopper.com.
29. Code of Conduct
The Company has in place a Code of Conduct applicable to the Directors
as well as Senior Management and
the same has been circulated to all concerned and posted at the
Company's website www.hindustancopper.com. All Board members and senior
management personnel have affirmed compliance of the code for the year
ended 31 March, 2015.
30. Directors / key managerial Personnel
Shri Avijit Ghosh ceased to be Director (Mining) from the close of
working hours on 31.12.2014 consequent upon his appointment as CMD,
Heavy Engineering Corporation Limited.
S/Shri Gyan P Joshi, Puneesh Kumar Kapoor and Arvind Sahay ceased to be
part-time non-official (Independent) Directors on completion of their
tenure on 6.2.2015.
Shri Virendra Kumar Srivastava resigned from the post of part-time
non-official (Independent) Director due to personal reason from
13.4.2015.
The Board places on record its appreciation for the valuable services
rendered and contribution made by S/Shri Avijit Ghosh, Gyan P Joshi,
Puneesh Kumar Kapoor, Arvind Sahay and Virendra Kumar Srivastaav during
their tenure on the Board.
31. Secretarial Audit Report:
M/s N K Associates, Practicing Company Secretaries, has been appointed
as Secretarial Auditor for FY 2014-15. Report given by the Secretarial
Auditor pursuant to Section 204 (1) of the Companies Act, 2013 and
Management reply on the comments / observations by the Secretarial
Auditor are annexed to this report.
32. Auditors
M/s.A Kayes & Co, Kolkata was appointed as statutory auditors to audit
the accounts of the Company for the year 2014-15.
M/s Chatterjee & Co, Kolkata was appointed as Cost Auditor of the
Company for carrying out the cost audit of Copper Ore, Concentrate,
Processed Copper and articles thereof and Sulphuric Acid for the year
2014-15.
33. Comments of C&AG
The comments of C&AG under the Companies Act on the accounts of the
Company for the year ended 31 March, 2015 are annexed to this report.
34. Particulars of Employees
The Company did not have any employee in the category specified in Rule
5(2) of the Companies (Appointment & Remuneration of Managerial
Personnel) Rules, 2014.
35. Appreciation
In conclusion, your Directors wish to place on record their
appreciation of the hard work put in by all employees of the Company
during the year under review. The Board gratefully acknowledges the
valuable guidance and co-operation received from the Ministry of Mines
and other Ministries/Departments of the Government of India and the
support received from the State Governments of Rajasthan, Jharkhand,
Madhya Pradesh, Maharashtra and West Bengal and the Company's bankers,
auditors, C&AG, customers and office bearers of the recognized trade
unions of different Units / Head Office. The Board also thanks all
shareholders and investors for the trust reposed by them in the
Company.
For and on behalf of the Board of Directors
Place: New Delhi K D Diwan
Date: 28.5.2015 Chairman-cum-Managing Director
Mar 31, 2014
The Shareholders
Hindustan Copper Limited
Kolkata
The Directors have pleasure in presenting the forty-sixth Annual
Report of the Company together with the audited statement of accounts
and Auditors'' Report thereon for the year ended 31 March, 2014.
1. Financial Review
i. Financial Performance
The comparative working results for the FY 2013-14 vis-Ã -vis FY 2012-13
are as under:
(Rs. in crore)
2013-14 2012-13
(a) Turnover 1616 1475
(b) Profit before depreciation, interest & tax 448 426
(c) Less : Depreciation 15 18
(d) Less : Interest & Finance Charges 2 4
(e) Profit before tax 431 404
(f) Less : Provision for Taxes
(including deferred tax) 145 48
(g) Profit after tax 286 356
(h) Add:/(less) Statutory appropriation 0 0
(i) Distributable Profit 286 356
(j) Add: Balance brought forward
from the previous year 903 682
(k) Balance available for appropriation 1189 1038
i) Dividend 93 93
ii) Corporate Dividend Tax 16 16
iii) Amount transferred to General Reserve 22 26
(l) Balance in P&L account to be carried
forward 1059 903
(m) Earnings per Share(Rs.) 3.10 3.84
During financial year (FY) 2013-14 HCL posted a Profit before tax (PBT)
of Rs.431 Crore as against Rs.404 Crore clocked during the previous year
registering a rise of around 6.68%. The turnover of the Company was
Rs.1615.90 Crore during FY 2013-14 as against Rs.1475.27 Crore during FY
2012-13 registering an increase of around 9.53% .The total expenditure
of the Company declined by about 0.70% by posting a number of Rs.1206.82
Crore as against Rs.1214.56 Crore year-on-year. However the Profit After
Tax (PAT) during FY 2013-14 is Rs.286.42 Crore as against Rs.355.64 Crore
in 2012-13.
ii. Dividend
The Board of Directors of your Company have recommended payment of
dividend @ 20% on equity, i.e., Rs.1/- per share of Rs.5/- face value for
the year 2013-14, for approval of shareholders in the Annual General
Meeting. The outgo on this account will be Rs.92.52 Crore for dividend
and Rs.15.72 Crore towards tax on dividend, aggregating to a total outgo
of Rs.108.24 Crore.
iii. Transfer to Reserves
Your Directors have proposed to transfer Rs.21.75 Crore to General
Reserve account from the profits available for appropriation.
2. Physical Performance
The comparative physical performance of production and sales for the
year 2013-14 vis-a-vis 2012-13 is as under:
Particulars 2013-14 2012-13
Ore (''000 Tonnes) 3,827 3,657
Metal in concentrate (MIC)
(Tonnes) 32,276 29,285
Cathode (Tonnes) 22,825 24,210
CC Wire Rod (Tonnes) 22,976 20,368
Sales (Tonnes):
CCRod 14,826 20,729
Cathode 7,386 3,783
MIC 8,361 1,330
Total 30,573 25,842
Highlights:
- Ore production of 38.27 lakh tonnes during the year is the highest in
last 15 years and 5 % higher as compared to the previous year.
- Metal -in-Concentrate (MIC) production of 32,276 MT during the year
is the highest in last 12 years and 10% higher as compared to the
previous year.
- CC Rod production of 22,976 MT during the year is 13% higher as
compared to the previous year.
- Sales performance is about 18% higher as compared to the previous
year.
Factor Affecting Performance
Breakdown of Crusher, loader, loco and hoisting systems at Khetri and
Kolihan underground mines of Khetri Copper Complex (KCC) and backlog of
mine development restricted the achievement of higher ore production.
Remedial Action
Company has made a comprehensive Replacement & Renewal (R & R) plan for
the year 2014-15 to improve the reliability and availability of the
equipment deployed for production in both open cast and underground
mines. An amount of Rs.38.0 Crore has been allocated by the Company under
R&R budget.
Necessary steps have been initiated to enhance excavation at MCP open
pit mine to expose more ore faces.
Major overhauling of ICC Smelter & Refinery has been done during the
year 2013-14 for enhanced cathode production on a sustained basis.
3. Product wise Sales Performance
Sales performance is about 18% higher as compared to previous year.
Item-wise break-up of sales is as follows:
(in MT)
Products 2013-14 2012-13
CC Rod 14,826 20,729
Cathode 7,386 3,783
Metal In Concentrate (MIC) 8,361 1,330
Total 30,573 25,842
4. Status of Disinvestment
During the year, the Government of India, pursuant to SEBI guidelines
for ''Offer for Sale'' through the Stock Exchange mechanism sold
3,71,19,152 equity shares out of its existing shareholding in the
Company on 3rd July,2013 and mobilized an amount of Rs.259.84 Crores.
Consequently, the Government shareholding in the Company has come down
from 94.01% to 90% making the Company compliant with SEBI requirement
of 10% Minimum Public Shareholding in listed Public Sector Companies.
5. Mine Expansion Schemes
The ongoing mine expansion scheme envisages expansion of Malanjkhand,
Khetri, Kolihan and Surda mines, Banwas as an extension of Khetri mine;
re-opening of Rakha and Kendadih mines and development of new mine
namely Chapri-Sideshwar to increase mine production to 12.4 Million
tonne per annum (Mtpa) from present 3.4 Mtpa. The minewise scheme and
status is given below:
i. Malanjkhand Copper Project
It is proposed to expand the production capacity of Malanjkhand mine
from present 3 Mtpa to 5 Mtpa by developing an underground mine below
the existing open cast mine at an estimated cost of Rs.1856.74 Crore.
CCEA approved the investment proposal in September, 2011 and Letter of
Intent (LoI) was issued to the successful bidder. For operation of the
mine up to 5 Mtpa capacities, HCL has taken steps for obtaining fresh
Environment Clearance (EC) as per statute requirement. The Ministry of
Environment & Forests (MoEF) recommended the Project for EC on
17.06.2013 subject to obtaining clearances from the Standing Committee
of National Board for Wild Life (NBWL). On 29.07.2013, State Board for
Wild Life has considered the proposal and forwarded to NBWL for
consideration. The work on the project shall commence as soon as the
statutory clearance from NBWL for the project is in place.
ii. Khetri and Banwas mines
The proposed expansion of Khetri & Kolihan mine and development of
Banwas deposit will increase ore production from existing 1.0 million
tonne to 3.1 million tonne per annum. Mine wise status is given below:
Khetri mine: The Engineering Procurement & Construction (EPC) agency
for executing the Khetri mine expansion project had been appointed on
15.07.2011 and the work at site started from 16.9.2011.
Banwas Mine: Development of Banwas deposit started in May, 2010, and
the work is expected to be completed by 2015.
iii. Surda mine expansion
The plan envisages increase in the depth of the mine and enhancement of
production capacity from 0.4 million tonne per annum to 0.9 million
tonne per annum.
The contract for shaft sinking and allied mine development has been
awarded to the successful bidder on 18.11.2011. For operation of the
mine up to 0.9 Mtpa capacity and lease renewal, HCL has taken steps for
obtaining fresh EC as per statute requirement.
iv. Re-opening of closed mines at ICC
Company initiated action to re-open closed mines at Singhbum Copper
Belt of ICC namely, Kendadih and Rakha mines to produce 1.5 million
tonnes and 0.21 million tonne of ore per annum respectively. Minewise
status is given below:
Kendadih mine: The contract for reopening and allied mine development
for 4 years has been awarded to the successful bidder on 04.02.2012.
Rakha mine: The contract for reopening and expansion of Rakha Copper
mine for 5 years has been awarded to the successful bidder on
02.07.2013.
v. Chapri Sideshwar
The Letter of Intent (LoI) was issued to the successful bidder on
08.11.2011 to develop an underground mine at Chapri-Sideshwar to
produce 1.5 million tonne of ore per annum. The work shall start after
obtaining statutory clearances and restoration of the power facility at
site. Chapri-Sideshwar is part of Rakha and Kedadih mining lease.
6. Green Field Exploration
The Company has applied for prospecting lease (PL), mining lease (ML)
and Reconnaissance Permit (RP) in the States of Rajasthan, Jharkhand,
MP and Haryana. The status of the fresh lease applications is given
below:
i. Mining Lease application submitted for Dhobani Pathargora
Intervening Block and has already been scrutinized in the district
level.
ii. Reconnaissance Permit deed was signed with Government of Madhya
Pradesh on 04.03.2013 for reconnaissance survey for Copper and
associated minerals over an area of 580.73 square kilometers in
Balaghat District of Madhya Pradesh.
iii. The other areas applied for Mining Lease are in the state of
Jharkhand at Dhatkidli Trildih Block in the adjoining district of
Saraikala and Nandup-Talsa Block.
Regular follow up is being done with the concerned authorities for
obtaining the permits and leases.
During the year, the Company has undertaken surface core exploratory
drilling of 9,912 meters & 6072 meters at Chandmari Intervening Block
at Khetri Copper Complex and Surda mine respectively. The results of
the exploration drillings are encouraging.
7. Safety
Safety remains high priority area and the Company is always aiming to
achieve "Zero Accident".
The Company continues to maintain the tradition of attracting
recognition for its safety performance and, like previous years,
received a number of awards in mine safety as indicated below:
i. KCC Group won 1st Prize on "First Aid Competition" on 27th Mine
Safety Week, Ajmer Region in 2013-14.
ii. KCC Group won Two Special Prizes & Seven individual prizes in All
India Rescue Competition in 2013-14.
iii. Nagpur Zone-II, under jurisdiction of DGMS, Malanjkhand Mine won
prizes in Nine categories in Mine Safety Competition 2013 - 2014.
Besides the above, special training, regular refresher training
programmes and on-the-job training are provided to all employees.
Safety Campaigns like "Annual Mines Safety Week", "Fire Services Day",
and "Industrial Safety Day" celebrations are conducted regularly with
active participation of employees in all the Units of HCL.
8. Management Discussion and Analysis
A report on Management discussion and analysis is placed at AnnexureÂI.
9. Corporate Social Responsibility and Sustainability
HCL adheres to the Corporate Governance principles of corporate
citizenship and embraces the principles laid down in United Nations
Global Compact (UNGC). HCL''s Corporate Social Responsibility &
Sustainability (CSR&S) objectives are suitably aligned with that of
Millennium Development Goals (MDGs). HCL''s CSR&S policy encompasses the
Company''s philosophy behind its social initiatives and responsibilities
and outlines the framework for undertaking CSR Projects/ Programs for
welfare and sustainable development of the community at large. As per
the revised DPE guidelines on Corporate Social Responsibility &
Sustainability(CSR&S), the Board approved CSR&S budget of Rs.7.11 crores
( 2 % of PAT of 2012-13) for FY 2013-14 against which an amount of
Rs.7.11 crores have been spent during the year.
The Company''s CSR activities were implemented at 26 selected villages
located in the periphery of each of its three major Units viz., Indian
Copper Complex (ICC) at Ghatshila (Jharkhand), Khetri Copper Complex
(KCC) at Khetri (Rajasthan) and Malanjkhand Copper Project (MCP) at
Malanjkhand (Madhya Pradesh) through Non-Governmental Organizations
(NGOs). The focal areas of CSR activities include Water Management,
Renewable Energy Programmes, Health & Sanitation, Educational
Infrastructure Development, Livelihood Promotion, Agriculture
Development and Animal Husbandry. The Company received the Odisha CSR
Best CSR Practices Award 2014 and Global CSR and Leadership Excellence
Award by the World CSR Congress.
10. Corporate Communications
The Company continued to strengthen its communication with the external
as well as internal stakeholders in adequate measure. Samvad, a Mass
Communication Exercise, has been a new in-house initiative for
dissemination of company information across all levels of the Company.
Samvad has proved to be an effective in-house communication tool
instrumental in enhancing employee motivation and sense of
belongingness, boosting team spirit and bringing in awareness about the
need of cost cutting to enhance production, productivity and
profitability.
11. Awards and Accolades
i. Successful showcasing of the Company through quality presentations
in the national and international forums brought home the Skoch
Renaissance Award for Corporate Leadership and Turnaround, NIPM
National Award (Runner-up trophy) for Best HR Practices
ii. The Company pavilion at the 5th International Mining, Exploration,
Mineral Processing Technology, Metals & Machinery Exhibition in Kolkata
was awarded with the Commendation Trophy for Design and Concept
(National Category).
iii. During the year 2013-14, the Company participated in the
half-yearly meeting of Town Official Language Committee (PSUs), Kolkata
held on 30 August, 2013. The Hindi edition of House Journal "Tamralipi"
of HCL was awarded by Town Official Language Committee (PSUs), Kolkata
under "Rajbhasha Award Scheme-2012-13" on 30th August, 2013.
iv. Two Quality Circle Projects from Indian Copper Complex viz. Dinkar
and Sahyog took part at the National Convention on Quality Concepts -
NCQC 2013, held at the Techno India University, Kolkata, from
20.12.2013 to 23.12.2013 and were respectively ranked "Par Excellence"
(equivalent to Gold Medal) and "Excellent" equivalent to Silver Medal.
v. The World CSR Congress awarded Global CSR Excellence and Leadership
Award to Hindustan Copper Limited for Developing Sustainable Strategies
in an event organized at Taj Lands End, Mumbai, on 18.02.2014.
vi. Shri K D Diwan, CMD, HCL, was felicitated with the CEO of HR
Orientation Award at the IPE Asia pacific HRM Congress 2013 held at
Bengaluru on 05.09.2013
12. Vigilance Activities
Focus is on preventive vigilance through improvement of systems and
procedures, enhancement of transparency and bringing information to
public domain. Surprise checks and inspections were conducted,
contracts critically examined and findings shared with the management
for implementation along with inputs on systems strengthening as is
prevalent in other PSUs.
13. Official Language Implementation
During the year, HCL made constant endeavour to increase use of Hindi
in its Units/Offices. Raj Bhasha Pakhwara and Hindi Diwas were
celebrated in the Units/Offices from 14th to 28th September, 2013. The
messages of Hon''ble Home Minister, Govt of India and CMD, HCL were
circulated / read out in all Offices/Units on this occasion. Various
competitions were organized with a view to enhance interest among
employees towards Official Language. Prizes were distributed to the
winners. Employees are constantly motivated to use Hindi in their
day-to-day official work. Hindi Workshops were conducted in the
Units/Offices at regular intervals. Regular review of progressive use
of Hindi and difficulties faced were carried out in Quarterly meetings
of Official Language Implementation Committee under the Chairmanship of
CMD at Corporate Office and Unit Heads in Units. The progressive use of
Hindi is being reviewed regularly at the Board meetings.
14. Corporate Governance
A report on Corporate Governance as per SEBI directives and stock
exchange listing requirement is given at Annexure-II forming part of
this report together with statutory auditors'' certificate on corporate
governance.
15. Code of Conduct
The Company has in place a Code of Conduct applicable to the Directors
as well as Senior Management and the same has been circulated to all
concerned and posted at the Company''s website www.hindustancopper.com.
All Board members and senior management personnel have affirmed
compliance of the code for the year ended 31 March, 2014.
16. Directors'' Responsibility Statement
In terms of Section 134(5) of Companies Act, 2013, your Directors
confirm:
(i) That in the preparation of the annual accounts for the year ended
31 March, 2014, the applicable accounting standards had been followed
along with proper explanations relating to material departures.
(ii) That such accounting policies have been selected and applied
consistently and made adjustments and estimates which are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of 31 March, 2014 and of the Profit or Loss
of the Company for the year.
(iii) That proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
(iv) That the Directors have prepared the annual accounts on a going
concern basis.
(v) That the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and operating effectively.
(vi) That the Directors have devised proper systems to ensure
compliance with the provisions of all applicable laws and that such
systems are adequate and operating effectively.
17. Directors
S/Shri Raajnish Gossain and Apurba Kumar Sarmah ceased to be Directors
on completion of their tenure on 22 September, 2013.
Shri V V Venugopal Rao appointed as Director (Finance) and joined with
effect from 10 September, 2013.
S/Shri U D Choubey, V K Srivastava and Ashok Kumar Singh appointed as
part time Non- Official Directors with effect from 22 October, 2013.
The Board places on record its appreciation for the valuable services
rendered and contribution made by S/Shri Raajnish Gossain and Apurba
Kumar Sarmah during their tenure on the Board of HCL.
18. Auditors
M/s. A Kayes & Co, Kolkata and M/s. SRI Associates, Kolkata were
appointed as joint statutory auditors to audit the accounts of the
Company for the year 2013-14.
M/s Chatterjee & Co, Kolkata was appointed as Cost Auditor of the
Company for carrying out the cost audit of Copper Ore, Concentrate,
Processed Copper and articles thereof and Sulphuric Acid for the year
2013-14.
19. Comments of C&AG
The comments of C&AG on the accounts of the Company for the year ended
31 March, 2014 under the Companies Act are annexed to this report.
20. Particulars of Employees In terms of Section 217(2A) (a) of the
Companies Act, 1956
There was no employee of the Company who received remuneration in
excess of the limits prescribed under Section 217(2A) (a) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975.
21. Appreciation
In conclusion, your Directors wish to place on record their
appreciation of the hard work put in by all employees of the Company
during the year under review. The Board gratefully acknowledges the
valuable guidance and co-operation received from the Ministry of Mines
and other Ministries/Departments of the Government of India and the
support received from the State Governments of Rajasthan, Jharkhand,
Madhya Pradesh, Maharashtra and West Bengal and the Company''s bankers,
auditors, C&AG, customers and office bearers of the recognized trade
unions of different Units / Head Office. The Board also thanks all
shareholders and investors for the trust reposed by them in the
Company.
For and on behalf of the Board of Directors
K D Diwan
Chairman-cum-Managing Director
(DIN 01829545)
Place: New Delhi
Date : 24.5.2014
Mar 31, 2013
The Shareholders Hindustan Copper Limited Kolkata
The Directors have pleasure in presenting the forty fifth annual report
of the Company together with the audited statement of accounts and
auditors'' report thereon for the year ended 31 March, 2013.
1. Financial Review
i. Financial Performance
The comparative working results for the FY 2012-13 vis-a-vis FY 2011-12
are as under:
(Rs. in crore)
2012-13 2011-12
(a) Turnover 1475 1638
(b) Profit before depreciation, interest & tax 426 492
(c) Less: Depreciation 18 18
(d) Less: Interest & Finance Charges 4 1
(e) Profit before tax 404 473
(f) Less: Provision for Taxes
(including deferred tax) 48 150
(g) Profit after tax 356 323
(h) Add:/(less) Statutory appropriation 0 0
(i) Distributable Profit 356 323
(j) Add: Balance brought forward from
the previous year 682 491
(k) Balance available for appropriation 1038 814
i) Dividend 93 93
ii) Corporate Dividend Tax 16 15
iii) Amount transferred to General Reserve 26 24
(l) Balance in P&L account to be carried forward 903 682
(m) Earnings per Share(Rs.) 3.84 3.50
During FY 2012-13 HCL posted a Profit before tax (PBT) of Rs.404 crore
as against Rs.473 crore clocked during the previous year registering a
fall of around 14.66%. This has been mainly due to a fall in production
of in-house Metal-In-Concentrate as well as lower sales volume of
finished copper products partially offset by selling price gain and
provisions written back. However the Profit after tax (PAT) during FY
2012-13 logged a growth of about 9.95% by achieving a number of Rs.356
crore thereby registering the highest ever net profit in the history of
the Company since inception due to the deferred tax liability amounting
to Rs.57.23 crore written back as pointed out by CAG auditors.
ii. Dividend
Your Company proposes to follow the dividend policy guidelines issued
by the Department of Expenditure. Ministry of Finance which requires
all profit making PSEs to declare a minimum dividend on equity of 20%
or a minimum dividend pay out of 20% of post tax profits, whichever is
higher. In conformity with this policy, the Board of Directors of your
Company have recommended payment of dividend @ 20% on equity i.e. Re
1/- per share of Rs.5/- face value for the year 2012-13, for approval
of shareholders in the annual general meeting. The outgo on this
account will be Rs.92.52 crore for dividend and Rs.15.72 crore towards
tax on dividend, aggregating to a total outgo of Rs.108.24 crore. Your
Directors have proposed to transfer Rs.26.71 crore to General Reserve
account from the profits available for appropriation.
2. Physical Performance
The comparative physical performance of production and sales for the
year 2012-13 vis-a-vis 2011-12 is as under:
Particulars 2012-13 2011-12
Ore (''000 tonnes) 3,657 3,479
Metal- in- concentrate (MIC) (tonnes) 29,285 31,377
Cathode (tonnes) 24,210 28,358
CC Wire Rod (tonnes) 20,368 26,310
Sales(tonnes):
CC Rod 20,729 24,672
Cathode 3,783 2,719
MIC 1,330 4,122
Ore production of 36.57 lakh tonnes during the year is the highest in
last 13 years and 105% of the corresponding production in the previous
year.
Metal-in-Concentrate (MIC) production of 29,285 tonnes during the year
is 93% compared to previous year. Cathode production of 24,210 tonnes
(including tolled cathode) is 86% compared to the previous year.
Wire rod production of 20,368 tonnes during the year is 77% compared to
the previous year.
Factors Affecting Performance
Repeated breakdown of crushing and hoisting systems at Kolihan and
Khetri underground mines of Khetri Copper Complex (KCC) and backlog of
mine development restricted achievement of higher ore production. Ore
production at Malanjkhand Copper Project (MCP) suffered due to
shortfall in excavation work (over burden removal) on account of
breakdown of loading equipment and low availability of hauling
equipment. MIC production during the year suffered due to low grade of
mined ore at MCP and low process recovery of Concentrator Plant at KCC.
Also, delay in providing transport challan from District Mining Office
caused less production of MIC at Indian Copper Complex (ICC).
Cathode production suffered due to collapse of flash furnace roof at
ICC, for which the plant was under shutdown for about 35 days during
the year.
Remedial Action
Since majority of KCC & MCP equipment are more than 30 years of age
therefore they are prone to frequent breakdown, the Company has made a
comprehensive Replacement & Renewal (R&R) plan during the year 2013-14
in order to improve the reliability and availability of the equipment
deployed in both underground and open cast mines, for which an amount
of Rs.38.0 Crore has been allocated by the Company under R&R budget.
Necessary steps have been initiated to enhance excavation at MCP open
pit to expose additional ore face. Also, 124 ML new level at Kolihan
underground mine at KCC is scheduled to be commissioned for production
during 2013-14. Besides, major overhauling of ICC smelter & refinery
has been planned during 2013-14 to improve process efficiency and to
get enhanced cathode production on a sustained basis.
3. Product wise sales Performance
The Company maintained innovative LME price linked multiple pricing
options open to all customers for booking of material on HCL website.
Item wise break up of sales is as follows:
(in MT)
Products 2012-13 2011-12
CC Rod 20,729 24,672
Cathode 3,783 2,719
Metal In Concentrate (MIC) 1,330 4,122
Total 25,842 31,513
4. Status of Disinvestment
During the year, the Government of India, pursuant to SEBI guidelines
for ''Offer for Sale'' through the Stock Exchange mechanism has sold
5,16,04,148 equity shares (5.58%) from out of its existing shareholding
in the Company on 23 November, 2012 and mobilized an amount of
Rs.807.92 crores. Consequent to the above disinvestment of shares, the
Government shareholding in the Company has come down from 99.59% to
94.01%. In order to comply with 10% Minimum Public Shareholding (MPS)
for listed Public Sector Companies as per SEBI guidelines, at least
4.01% Government equity in the Company to be further divested before 8
August, 2013.
5. Mine Expansion Schemes
The Company has rolled out the mine expansion plan to increase mine
production to 12.4 Million tonne from present 3.4 Million Tonne. The
scheme envisages expansion of Malanjkhand, Khetri, Kolihan and Surda
mines, Banwas as an extension of Khetri Mine; re-opening of Rakha and
Kendadih mines and development of new mines namely Chapri-Sidheswar.
The mine wise scheme and status is given below:
i. Malanjkhand Copper Project
It is proposed to expand the production of Malanjkhand mine from 2
million tonne to 5 million tonne per annum by developing an underground
mine below the existing open cast mine at an estimated cost of
Rs.1856.74 crore. CCEA has approved the investment proposal in
September, 2011 and Letter of Intent (LoI) was already issued to the
successful bidder. The work on the project will commence as soon as
environmental clearance for the project is in place. Expert Appraisal
Committee (EAC) of Ministry of Environment & Forests (MoEF) has
recommended the Project for Environmental Clearance in its meeting held
on 29.08.2012 and a formal letter from MoEF in this regard is awaited.
ii. Khetri, Kolihan and Banwas mine
The proposed expansion of Khetri & Kolihan mines and development of
Banwas deposit will increase ore production from 1.0 million tonne to
3.1 million tonne per annum.
Banwas: Work for mine construction & development on Banwas mine has
started in May, 2010. The work is expected to complete by 2014.
Khetri Mine: The EPC agency for executing the work has been appointed
and the work at site has stated from 16.9.2011. The cost of the project
is Rs.96.77 crore.
Kolihan Mine: Tender for Kolihan mine had to be discharged for
technical reasons followed by litigation by the lowest bidder. The
Court case has since been disposed off and fresh two stage bid process
has been started. Request for Qualification (RFQ) was already issued to
shortlist the prospective bidders. Awarding of jobs to prospecting
Bidders is in progress
iii. Surda mine expansion
The plan envisages increase in the depth of the mine and enhancement of
production capacity from 0.4 million tonne per annum to 0.9 million
tonne per annum.
The project cost is Rs 206.34 crore and EPC contract for shaft sinking
and allied mine development has been awarded to the successful bidder
on 18.11.2011.
iv. Re-opening of closed mines at ICC
Company has initiated action to re-open closed mines at Singbhum Copper
Belt of ICC namely, Rakha and Kendadih mines to produce 1.5 million
tonnes and 0.21 million tonne of ore per annum respectively.
v. Kendadih Mine:
EPC contract for reopening and allied mine development for 4 years has
been awarded to the successful bidder on 04.02.2012 at a cost of
Rs.73.84 crore.
vi. Rakha Mine:
Financial bids for the tender have been received. The L-1 bidder is not
a qualified applicant but took part in the RFP on the basis of order of
the Hon''ble Calcutta High Court. The L-1 bidder has gone to Calcutta
High Court for award of the contract to him. As per the direction of
the Hon''ble Calcutta High Court the process of awarding the contract
to L-1 bidder is in progress.
vii. Chapri Sideshwwar
It is proposed to develop an underground mine at Chapri-Sideshwar to
produce 1.5 million tonnes of ore per annum.
The project cost is Rs.256.50 crore and Letter of Intent (LoI) to the
successful bidder has been issued on 08.11.2011. The work will start
after the power facility has been restored at site.
6. Green Field Exploration
The Company has applied for prospecting (PL), mining (ML) and
Reconnaissance Permit (RP) in the State of Rajasthan, Jharkhand, MP and
Haryana. The status of the fresh lease applications is given below:
i) Reconnaissance permit (RP) deed has been signed with Government of
Madhya Pradesh on 04.03.2013 for reconnaissance survey for Copper and
associated minerals over an area of 580.73 square kilometers in
Balaghat District Madhya Pradesh. The Company plans to start the work
during this fiscal.
ii) Mining Lease application has been submitted for Dhobani Pathargora
Intervening Block and has been already scrutinized in the district
level.
iii) The other areas applied for Mining Lease are in the state of
Jharkhand at Dhatkidli Trildih Block in the adjoining district of
Saraikala and Nandup-Talsa Block.
Regular follow up is being done with the concerned authorities for
obtaining the permits and leases.
7. Safety
Safety remains high priority area, and the Company is always aiming to
achieve "Zero Accident".
The Company continues to maintain the tradition of attracting
recognition for its safety performance and, like previous years,
received a number of awards in mine safety.
During the year, Hon''ble President of India gave National Safety
Award (Mines) to Khetri mine on the following categories:
i. For the year 2008, Winners'' Trophy for the lowest injury
frequency rate.
ii. For the year 2009, the Runners Up Trophy for the longest accident
free period.
iii. For the year 2010, the Runners Up trophy for the lowest injury
frequency rate.
Also following awards were received during the Year at Regional level:
i. KCC Group won 1st Prize on "First Aid Competition" on 26th Mine
Safety Week, Ajmer Region in 2012-13
ii. KCC Group won Six Shields & Seven individual prizes in All India
Rescue Competition in 2012-13.
iii. Nagpur Zone-II, under jurisdiction of DGMS, Malanjkhand Mine won
prizes in ten categories in Mine Safety Competition 2012 - 2013.
Besides the above, special training, regular refresher training
programmes and on-the-job training are provided to all employees.
Safety Campaigns like "Annual Mines Safety Week", "Fire Services
Day", and "Industrial Safety Day" celebrations are being
conducted regularly with active participation of employees in all the
Units of HCL.
8. Management Discussion and Analysis
A report on Management discussion and analysis is placed at Annexure-I.
9. Corporate Social Responsibility
The CSR Plan for 2012-13 was firmed up, in accordance with the DPE
guidelines - 2010, in association with M/s National Institute of Rural
Development (NIRD) based on Participatory Rural Appraisal (PRA)
exercises in the villages after focused discussion with the villagers
to assess their felt needs. The plan was approved by the Board in its
339th Meeting, held on 29th May, 2012. The Company''s CSR activities
were implemented at selected villages (total nineteen) located in the
periphery of each of its three major Units viz., Indian Copper Complex
(ICC) at Ghatsila (Jharkhand), Khetri Copper Complex (KCC) at Khetri
(Rajasthan) and Malanjkhand Copper Project (MCP) at Malanjkhand (Madhya
Pradesh) through Non-Governmental Organizations (NGOs). A Third Party
Assessment was conducted by Management Development Institute, Gurgaon
in December 2012 to evaluate the impact of the CSR activities
undertaken. An estimated expenditure of Rs.5.13 Crore has been achieved
for the planned activities till 31st March, 2013, against the approved
budget of Rs.7.11 Crores.
Brief details of the projects undertaken during 2012-13 are as under.
1. Livelihood promotion: Schemes included Vermi Compost production,
System of Rice Intensification (SRI) method of Paddy cultivation, Dona
Pattal Making, Handloom weaving unit, Tassar Spinning Unit, Jute Items,
Mushroom cultivation.
2. Women Empowerment: Integrated Group activities like strengthening
and capacity building of Community based organizations through Self
Help Group, exposure visits of progressive farmers/ women to different
development institution etc.
3. Water (Conservation / Recharge of ground Water & Drinking Water):
Program were pertaining to Water Harvesting, Deepening of existing Pond
with inlet & outlets, Construction of Rain water harvesting Structure
through Central Institute of Mining and Fuel Research(CIMFR) Dhanbad,
Supply of water filter at Anganwari Centre for safe drinking water,
construction of Prototype safe water drinking (Borewell with motor
fitting), Construction of new Borewell with installation of hand pump
were undertaken.
4. Health and Sanitation: Focal areas included Construction/Support
for Household Sanitation (in collaboration with State Sanitation
Program/Total Sanitation Program, provisioning for Individual Toilets,
Health camp with use of existing Mobile unit, Eye/ Dental camps.
5. Plantation / Agriculture / Animal Husbandry: Maintenance of last
year plantation at Surda Mines & River side area, turmeric, ginger
cultivation and Organic farming, while special effort was made to
organize Veterinary camp at KCC and MCP which also included
immunization programmes for vets.
6. Skill / Vocational Training & Education: Reading Skill Improvement
Program for girl child, Inter state skill training at National Academy
of Construction, Hyderabad, Vocational Training on Plumbing and
Sanitation including Skill certification.
7. Village Infrastructure & Construction / Rural Energy supply:
Construction of Boundary wall of CSR Community Centre Building,
Installation of Solar Streetlights at community place/Remote tola to
name a few.
10. Corporate Communications
The Company continued to improve communication with the external
environment as well as with the employees in various measures.
Corporate image building exercises gained momentum through extensive
news and media coverage. The Company has also made its presence felt in
the national and international fora through quality participation.
Internal communication has been bolstered by publication of Tamralipi
and C/o Conscience (Tamralipi supplement on Vigilance), circulation of
the current news items on Copper and Mining Sector through Copper
Commune and hosting them on the Company website.
Both the in-house journals viz. Tamralipi and C/o Conscience have
received the In-house Communication Excellence (ICE) Certificate of
Merit at the ICE Awards 2012 presented by the Shailaja Nair Foundation,
Mumbai.
Tamralipi was awarded by Town Official Language Committee (PSUs),
Kolkata "Rajbhasha Award Scheme-2011-12" on 30.08.2012. The journal
also received the Griha Patrika Puraskar (Vishesh Prasansa Puraskar),
from the Nagar Rajbhasha Karyanwayan Samity (Upkram), Delhi, for the
year 2011-12.
The Company was awarded in recognition of Excellence in Design and
Concept, National Category, at the 9th Minerals, Metals, Metallurgy and
Materials International Exhibition 2012 held at New Delhi from
27.09.2012 to 30.09.2012.
11. Compliance with the RTI Act 2005
All the requirements / provisions of the Right to Information Act 2005
have been complied with during the year 2012-13.
12. Vigilance Activities
Vigilance is an essential management tool to be used to ensure quality
output following the rules of corporate governance to support the
organization on a higher growth trajectory. As part of preventive
vigilance effort corporate management is being advised to take
initiatives towards system strengthening through adherence to set
procedure and guidelines, due diligence, analysis of audit reports and
its incorporation in corporate decision making.
Focus is on preventive vigilance and leveraging of information
technology with a view to minimize scope for corruption and assisting
the management in improving the systems and procedures supplemented
with capacity building initiatives in collaboration with CVC
13. Official Language Implementation
During the year, HCL made constant endeavour to increase use of Hindi
in its Units/Offices. Raj Bhasha Pakhwara and Hindi Diwas were
celebrated in the Units/Offices from 14th to 28th September, 2012. The
messages of Hon''ble Home Minister and CMD were circulated / read out
in all Offices/Units on this occasion. Various competitions were
organized with a view to enhance interest among employees towards
Official Language. Prizes were distributed to the winners. Employees
are constantly motivated to use Hindi in their day-to-day official
work. Hindi Workshops are conducted in the Units/Offices at regular
intervals. Regular review of progressive use of Hindi and difficulties
faced were carried out in Quarterly meetings of Official Language
Implementation Committee under the Chairmanship of CMD at Corporate
Office and Unit Heads in Units.
The meeting of Hindi Salahakar Samiti, Ministry of Mines held on 11th
July, 2012 at Vigyan Bhawan Annexe, New Delhi under the Chairmanship of
Hon''ble Minister of Mines was attended by CMD, HCL. The Hindi
translation of Annual Report, MoU and various other jobs of the Company
were done. Official Language Implementation Committee meeting was held
on 12th September, 2012 under the Chairmanship of Joint Secretary,
Ministry of Mines was attended by CMD. During the year 2012-13, the
Company participated in both the half-yearly meeting of Town Official
Language Committee (PSUs), Kolkata held on 30 August, 2012 and 30
January, 2013. The Corporate Office and House Journal "Tamralipi"
of HCL was awarded by Town Official Language Committee (PSUs), Kolkata
under "Rajbhasha Award Scheme-2011-12" on 30.08.2012.
The progressive use of Hindi is being reviewed regularly at the Board
meetings. Hindi books have also been purchased during the year. The
Company''s in-house journal "Tamralipi" is published in Hindi and
English and distributed among employees regularly and also mailed to
the members of the Hindi Advisory Committee. Effort is continuously
made to ensure that the Company''s advertisements for recruitment/
tenders, etc. are also published bilingually. "One Hindi Word Every
Day" scheme is operational for improving the Hindi vocabulary of
employees. The use of Hindi in computers has been reinforced and
advanced Unicode Software Hindi Open Office has been provided to all
Units/Offices of the Company.
14. Corporate Governance
A report on Corporate Governance as per SEBI directives and stock
exchange listing requirement is given at Annexure-II forming part of
this report together with statutory auditors'' certificate on
corporate governance.
15. Code of Conduct
The Company has in place a Code of Conduct applicable to the Directors
as well as Senior Management and the same has been circulated to all
concerned and posted at the Company''s website www.hindustancopper.
com. All Board members and senior management personnel have affirmed
compliance of the code for the year ended 31 March, 2013.
16. Directors'' Responsibility Statement
In terms of Section 217(2AA) of companies Act, 1956, your Directors
confirm:
i) That in the preparation of the annual accounts for the year ended 31
March, 2013, the applicable accounting standards had been followed
along with proper explanations relating to material departures/
variations.
ii) That such accounting policies have been selected and applied which
are reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company at the end of 31 March, 2013 and of the
Profit or Loss of the Company for the year.
iii) That proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities.
iv) That the Directors have prepared the annual accounts on a going
concern basis.
17. Directors
Shri Shakeel Ahmed ceased to be Chairman-cum- Managing Director upon
attaining the age of superannuation on 31 August, 2012.
Shri Kailash Dhar Diwan appointed as Chairman-cum-Managing Director
with effect from 1 September, 2012. Shri Naresh Kumar appointed as
part time Official Director vice Shri G Srinivas with effect from 4
December, 2012. Shri Arun Kumar appointed as part time Official
Director vice Shri Naresh Kumar with effect from 28 January, 2013.
Shri K K Saberwal ceased to be Director (Finance) from 25 February,
2013 upon acceptance of his resignation by the Ministry of Mines.
Smt Bulbul Sen appointed as part time Non Official Director with effect
from 19 March, 2013.
Smt Sujata Prasad appointed as part time Official Director vice Smt
Anjali Anand Srivastava with effect from 30 April, 2013.
Shri S Nanda appointed as Director (Operation) and joined with effect
from 6 May, 2013 The Board places on record its appreciation for the
valuable services rendered and contribution made by S/ Shri Shakeel
Ahmed, G Srinivas, Naresh Kumar, K K Saberwal and Smt Anjali Anand
Srivastava during their tenure on the Board of HCL.
18. Auditors
M/s. A Kayes & Co, Kolkata and M/s. S Ghose & Co, Kolkata were
appointed as joint statutory auditors to audit the accounts of the
Company for the year 2012-2013.
M/s Guha, Ghosh, Kar & Associates, Kolkata was appointed as Cost
Auditor of the Company for carrying out the cost audit of Copper Ore,
Concentrate, Processed Copper and articles thereof and Sulphuric Acid
for the year 2012-13.
19. Comments of C&AG u/s 619(4) of the Companies Act, 1956
The comments of C&AG under Section 619(4) of the Companies Act, 1956 on
the accounts of the Company for the year ended 31 March, 2013 are
annexed to this report.
20. Particulars of Employees In terms of Section 217(2A) (a) of the
Companies Act, 1956
There was no employee of the Company who received remuneration in
excess of the limits prescribed under Section 217(2A) (a) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975.
21. Appreciation
In conclusion, your Directors wish to place on record their
appreciation of the hard work put in by all employees of the Company
during the year under review. The Board gratefully acknowledges the
valuable guidance and co-operation received from the Ministry of Mines
and other Ministries/Departments of the Government of India and the
support received from the State Governments of Rajasthan, Jharkhand,
Madhya Pradesh, Maharashtra and West Bengal and the Company''s
bankers, auditors, C&AG, customers and office bearers of the recognized
trade unions of different Units / Head Office. The Board also thanks
all shareholders and investors for the trust reposed by them in the
Company.
For and on behalf of the Board of Directors
K D Diwan
Chairman-cum-Managing Director
Place: Mumbai
Date: 23rd May, 2013
Mar 31, 2012
To The Member's of Hindustan Copper Limited Kolkata
The Directors have pleasure in presenting the forty fourth annual
report of the Company together with the audited statement of accounts
and auditors' report thereon for the year ended 31 March, 2012.
1. Financial Review
i. Financial Performance
The comparative working results for the FY 2011-12 vis-a-vis FY 2010-11
are as under:
(Rs. in crore)
2011-12 2010-11
(a) Turnover 1638 1281
(b) Profit before depreciation,
interest & tax 492 360
(c) Less: Depreciation 18 21
(d) Less: Interest & Finance Charges 1 4
(e) Profit before tax 473 335
(f) Less : Provision for Taxes
(including deferred tax) 150 111
(g) Profit after tax 323 224
(h) Add(less): Statutory appropriation 0 0
(i) Distributable Profit 323 224
j) Add: Balance brought forward from
the previous year 491 391
(k) Balance available for appropriation 814 615
i) Dividend (including interin dividend) 93 93
ii) Corporate Dividend Tax (including on
interim dividend) 15 15
iii) Amount transferred to General Reserve 24 17
(1) Balance in P&L account to be carried
forward 682 490
(m) Earnings per Share(Rs) 3.50 2.42
During the year, the Company created a new landmark in its financial
performance by posting highest ever profit before tax (PBT) of Rs 473
crores. The result surpasses previous best by a whopping 41.2%, which
was achieved last year and was the best ever figure in the history of
the Company. Financial performance during the year posted a jump by
sustaining production at or near high figure in more than a decade,
higher physical sales of copper and favorable LME price of copper as
compared to previous year.
ii. Dividend
Your Company proposes to follow the dividend policy guidelines issued
by the Department of Expenditure, Ministry of Finance which requires
all profit making PSEs to declare a minimum dividend on equity of 20%
or a minimum dividend pay out of 20% of post tax profits, whichever is
higher. In conformity with this policy, the Board of Directors of your
Company have recommended payment of dividend @ 20% on equity i.e. Re
1/- per share of Rs. 51- face value for the year 2011-12, for approval
of shareholders in the annual general meeting. The outgo on this
account will be Rs. 92.52 crore for dividend and Rsl5.01 crore towards
tax on dividend, aggregating to a total outgo of Rs. 107.53 crore. Your
Directors have proposed to transfer Rs.24.46 crore to General Reserve
account from the profits available for appropriation.
2. Physical Performance
The comparative physical performance of production and sales for the
year 2011-12 vis-a-vis 2010-11 is as under:
Particulars 2011-12 2010-11
Ore ('000 tonnes) 3,479 3,603
Metal-in-concentrate (tonnes) 31,377 31,683
Cathode (tonnes) 28,358 24,001
CC Wire Rod (tonnes) 26,310 22,993
Sales (tonnes):
Refined Copper 27,391 24,283
MIC 4,122 2,571
Ore production of 34.79 lakh tonnes during the year was 97% of the MoU
target but 2** highest in last 13 years (next only to FY 2010-11).
Metal in concentrates (MIC) production of 31,377 tonnes during the year
was 90% of the MoU target and marginally less as compared to previous
year production.
Cathode production of 28,358 tonnes (including tolled cathode) was 96%
of the MoU target and 118% of the production in the previous year.
Wirerod production of 26,310 tonnes during the year was 95% of the MoU
target which is commensurate with cathode availability.
Factors Affecting Performance
Breakdown of departmental shovels and unsatisfactory performance of
hired loading and hauling equipment at Malanjkhand Copper Project (MCP)
and equipment breakdown at Khetri Copper Complex (KCC) restricted
achievement of higher ore production.
MIC production during the year suffered due to low grade of mined ore
and low process recovery of Concentrator Plant at KCC.
Remedial Action
The Company has a comprehensive Renewal & Replacement (R&R) plan for
improving the reliability and availability of equipment for the
underground mines at KCC and open cast mine at MCP. The Company has
allocated Rs.38 crore under R&R budget during the FY 2012-13 for the
purpose.
The Company has a plan to install additional 20 no. new 300 eft
scavenger cells in the rougher circuit of concentrator plant at KCC to
improve metal recovery during the year 2012-13.
3. Product wise sales Performance
Sale of copper products during FY 2011-12 increased by 17% over the
previous year. The increased sale was achieved with higher realization
per tonne of sale. Bulk discounts for higher tonnage customers was
largely done away with and the customer base was expanded. The Company
introduced innovative LME price linked multiple pricing options open to
all customers for booking of material on HCL website. Item wise break
up of sales is as follows:
(in MT)
Products 2011-12 2010-11
C C Rod 24672 20925
Cathode 2719 3338
Rectangular Conductor - 20
Metal In Concentrate (MIC) 4122 2571
Total 31513 26854
4. Corporate Plan 2020
Your Company has prepared a long term corporate plan for long term
growth strategy and maximization of profit. The plan sets goals and
targets up to the year 2020. Your Company will vigorously pursue the
capacity enhancement of its mines and will develop new copper deposits
in the country and other geographies.
5. Mine Expansion Schemes
The Company has rolled out the mine expansion plan to increase mine
production to 12.4 Million tonne by FY 2017-18. The scheme envisages
expansion of Malanjkhand, Khetri, Kolihan and Surda mines, Banwas as an
extension of Khetri Mine; re-opening of Rakha and Kendadih mines and
development of new mines namely Chapri-Sidheswar. The mine wise scheme
and status is given below:
i. Malanj khand Copper Proj ect
It is proposed to expand the production of Malanjkhand mine from 2
million tonne to 5 million tonne per annum by developing an underground
mine below the existing open cast mine at an estimated cost of Rs
1856.74 crore. CCEAhas approved the investment proposal in September,
2011 and successful EPC contractor has been decided. The work on the
project will commence as soon as environmental clearance for the
project is in place. Final EIA/EMP report in terms of the ToR issued by
MoEF has been submitted for the approval of MoEF and we expect the
environmental clearance shortly.
ii. Khetri, Kolihan and Banwas mine
The proposed expansion of Khetri & Kolihan mines and development of
Banwas deposit will increase ore production from 1.0 million tonne to
3.1 million tonne per annum.
Banwas: Work for mine construction & development on Banwas mine has
started in May, 2010. The work is expected to complete by 2014.
Khetri Mine: The EPC agency for executing the work has been appointed
and the work at site has started from 16.9.2011. The cost of the
project is Rs 96.77 crore.
Kolihan Mine: Tenders for Kolihan mines had to be discharged for
technical reasons followed by litigation by the lowest bidder. The
Court case has since been disposed off and fresh two stage bid process
has been started.
iii. Surda mine expansion
The plan envisages increase in the depth of the mine and enhancement of
production capacity from 0.4 million tonne per annum to 0.9 million
tonne per annum.
The project cost is Rs 206.34 crore and EPC contract for shaft sinking
and allied mine development has been awarded to the successful bidder
on 18.11.2011.
iv. Re-opening of closed mines at ICC
Company has initiated action to re-open closed mines at Singbhum Copper
Belt of ICC namely, Rakha and Kendadih mines to produce 1.5 million
tonnes and 0.21 million tonne of ore per annum respectively.
Kendadih Mine:
EPC contract for reopening and allied mine development for 4 years has
been awarded to the successful bidder on 04.02.2012 at a cost of Rs
73.84 crore.
Rakha Mine:
Financial bids for the tender have been received. The L-l bidder is not
a qualified applicant but took part in the RFP on the basis of Calcutta
High Court order. The bidder has gone to Calcutta High Court for award
of the contract to him. The matter is currently sub-judice.
v. Chapri Sideshwwar
It is proposed to develop an underground mine at Chapri- Sideshwar to
produce 1.5 million tonnes of ore per annum.
The project cost is Rs 256.50 crore and Letter of Intent (Lol) to the
successful bidder has been issued on 08.11.2011. The work will start
after the power facility has been restored at site.
6. Green Field Exploration
The Company has applied for prospecting (PL), mining (ML) and
Reconnaissance Permit (RP) in the State of Rajasthan, Jharkhand, MP and
Haryana. The status of the fresh lease applications is given below:
i. Prospecting License (PL) has been applied for the two areas at
Baniwali-Ki Dhani in Sikar Dist of Rajasthan for an area of 34.3022
square km and another for 8.65 square km. Government of Rajasthan has
granted of PL for the area in favour of HCL to the Ministry of Mines in
September 2010. The Project has met a fresh hurdle as the State Govt,
of Rajasthan has discovered that bulk of the area marked for PL to HCL
falls under Aravalli range where mining (including PL) is banned as per
the judgment of Hon'ble Supreme Court. The case is pending till any
decision is taken by Hon'ble Supreme court.
ii. Mining Lease application has been submitted for Dhobani Pathargora
Intervening Block and has already been scrutinized at the district
level.
iii. RP in the district of Balaghat is in the process of finalization
by the Government of MP.
iv The other areas applied for Mining Lease are in the state of
Jharkhand at Dhatkidli Trildih Block in the adjoining district of
Saraikala and Nandup-Talsa Block.
Regular follow up is being done with the concerned State Govt
authorities for getting the permits and leases.
7. Status of Mining Leases
i. Mining leases in respect of Khetri, Kolihan and Chandmari at KCC are
valid up to 22 February, 2013, 23 November, 2016 and 16 December, 2012
respectively.
ii. Mining lease No. 1 & 2 of Malanjkhand is valid up to 27 August,
2013. The other adjoining mining lease (Mining Lease No. 3) applied
earlier are being pursued.
iii. Mining lease in respect of Surda Mine is valid up to 14 June,
2014.
iv. Kendadih Mining Lease, Ilnd renewal application submitted on 18
April, 2012, is in the final process of approval from State Government
of Jharkhand and Rakha Mine execution of Lease Deeds is in advanced
stage of clearance with the Govt of Jharkhand. NPV and PCA for second
stage forest clearance for Kendadih mine have been deposited and
approval is due.
8. Safety
Safety remains high priority area and the Company is always aiming to
achieve "Zero Accident". Malanjkhand mine reported three reportable
accidents and Surda Mine reported two serious accidents in the year
2011. However, there was one fatal accident in Kolihan Mine in the
year 2011.
The Company continues to maintain the tradition of attracting
recognition for its safety performance and, like previous years,
received a number of awards in mine safety as indicated below:
i. KCC Group won 1 st Prize and "First Aid Competition" and seven (7)
group prizes on 25th Mine Safety Week, Ajmer Region in the year
2011-12.
ii. KCC group won three Shields & seven individual prizes in All India
Rescue Competition in the year 2011-12.
iii. Nagpur Zone-II, under jurisdiction of DGMS, Malanjkhand Mine won
prizes in nine categories in Mine Safety Competition in the year
2011-2012.
Besides the above, special training, regular refresher training
programmes and on-the-job training are provided to all employees.
Safety Campaigns like "Annual Mines Safety Week", "Fire Services Day",
and "Industrial Safety Day" celebrations are being conducted regularly
with active participation of employees in all the Units ofHCL.
9. Management Discussion and Analysis
A report on Management discussion and analysis is placed at Annexure-I
10. Corporate Social Responsibility
The CSR Plan of the Company was prepared on the basis of Need
Assessment Survey based on the principle of Participatory Rural
Appraisal (PRA) carried out by National Institute of Rural Development
(NIRD), an autonomous organization under the Ministry of Rural
Development, Govt, of India for 15 villages (5 each at KCC, MCP and
ICC) for FY 2011-12. It was approved by the Board in its 330th Meeting.
An Amount of Rs.1.62 Crores was spent on CSR activities during 2011-12
as compared with expenditure of Rs.1.22 Crores during the period
2010-11. The following projects were undertaken during 2011-12 which
were implemented through NGOs in accordance with DPE guidelines.
i. Livelihood: Alternative employment schemes through Self Help Groups
in Projects like Bamboo Item Making, Bee Keeping, Tasar Thread
production.
ii. Agriculture / Horticulture / Plantation: Plantation of Fruit
Bearing Trees, Horticulture for Arjun plantation for Sericulture and
Boring of Irrigation well for agricultural purposes.
iii. Health, Hygiene and Sanitation: Construction of individual and
community toilets, regular Health Camps and Eye Camps.
iv Infrastructure Development: Construction of Tube Wells, Village
Roads, Drainage System.
v. Water (Drinking water & Water resource Development Program):
Installation of TATA S WACCH water filter, construction of drinking
water overhead tank, installation of Hand pump/Tube wells.
vi. Livestock Development Program & Veterinary Services: Health
Vaccination Camp and construction of drinking water Hodge for animals
in villages.
11. Corporate Communications
The Company continued to improve communication with the external
environment as well as with the employees in various measures.
Corporate image building exercises gained momentum through extensive
news and media coverage. The Company has also made its presence felt in
the national and international fora through quality participation.
Internal communication has been bolstered by publication of Tamralipi
and C/o Conscience (Tamralipi supplement on Vigilance), circulation of
the current news items on Copper and Mining Sector through Copper
Commune and hosting them on the Company website.
The Company has won the In-house Communication Excellence (ICE) Award
2011 for its house journal Tamralipi on 17 June, 2011. The award was
conferred upon HCL by Sailaja Nair Foundation, Mumbai.
12. Compliance with the RTI Act 2005
All the requirements / provisions of the Right to Information Act 2005
have been complied with during the year 2011-12.
13. Vigilance Activities
Theme of this year's vigilance activities has been pro-active and
participative vigilance by all stake-holders through systems
improvement and laying down transparent policies towards good corporate
governance. Vigilance Department of HCL has been pro-active in
spearheading transparency initiatives in recruitment and promotion,
procurement, finance and marketing policies along with capacity
building efforts to take the team forward. While vigilance activities
should not be used as an excuse to be indecisive in taking key
commercial decisions, care has to be taken to ensure that a
professional working atmosphere prevails both in the shop floor as well
as in the back office that facilitates decision making in the Board
Room as well.
With this direction, a campaign for creating awareness was taken up
during Vigilance Awareness Week celebration between 31 October, 2011 to
5 November, 2011 in all the units, including the Head Office. To create
an awareness about the harmful effect of corruption among general
masses, lecture sessions on anti- corruption topics on administrative
vigilance and on Ethics & Corruption in Corporate Governance were
organized at HCL Corporate Office on 7 October, 2011 and 1 November,
2011 by inviting eminent personalities, viz. Shri Rana Som, CMD/NMDC
and Ms S Shyni, Superintendent of Police, and Head of Branch, Central
Bureau of Investigation (Bank Security & Fraud Cell), Kolkata.
To encourage deliberations and discussions on the issue of corruption
among the youth, an inter-school speech and skit contest was organized
by Hindustan Copper Limited on 10 December, 2011 at the St. Xavier's
College Auditorium as the 1st ever public programme. The Programme -
'Conscience 2011' turned out to be a brainstorming session in which the
youngsters gave voice their take on corruption. They delivered
inspiring speeches and participated in skit competition that enthralled
the audience. The competition was followed by prize distribution and
felicitation ceremony wherein all participants and school coordinators
were felicitated. The event received wide media attention and was
covered by the Doordarshan and Statesman & Times of India.
14. Official Language Implementation
During the year, HCL made constant endeavor to increase use of Hindi in
its Units/Offices. Raj Bhasha Pakhwara and Hindi Diwas were celebrated
in the Units/Offices from 14 to 28 September, 2011. The messages of
Hon'ble Home Minister and CMD were circulated / read out in all
Offices/Units on this occasion. Various competitions were organized
with a view to enhance interest among employees towards Official
Language. Prizes were distributed to the winners. Employees are
constantly motivated to use Hindi in their day-to-day official work.
Hindi Workshops are conducted in the Units/Offices at regular
intervals. Regular review of progressive use of Hindi and difficulties
faced were carried out in Quarterly meetings of Official Language
Implementation Committee under the Chairmanship of CMD at Corporate
Office and Unit Heads in Units.
The meeting of Hindi Salahkar Samiti, Ministry of Mines held on 15
June, 2011 at Vigyan Bhawan Annxie, New Delhi and 17 October, 2011 at
Bangaluru under the Chairmanship of Hon'ble Ministry of Mines was
attended by Shri Shakeel Ahmed, CMD. The Hindi translation of Annual
Report, MoU and various other jobs of the Company were done. During the
year 2011-12, the Company participated in both the half-yearly meetings
of Town Official Language Committee (PSUs), Kolkata held on 30 August,
2011 and 30 January, 2012.
The progressive use of Hindi is being reviewed regularly at the Board
meetings. Hindi books have also been purchased during the year. The
Company's in-house journal "Tamralipi" is published in Hindi and
English and distributed among employees regularly and also mailed to
the members of the Hindi Advisory Committee. Effort is continuously
made to ensure that the Company's advertisements for
recruitment/Tenders, etc. are also published bilingually "One Hindi
Work Every Day" scheme is operational for improving the Hindi
vocabulary of employees. The use of Hindi in Computers has been
reinforced and advanced Unicode Software Hindi Open Office has been
provided to all Units / Offices of the Company.
15. Corporate Governance
A report on Corporate Governance as per SEBI directives and stock
exchange listing requirements is given at Annexure-II forming part of
this report together with statutory auditors' certificate on corporate
governance.
16. Code of Conduct
The Company has in place a Code of Conduct applicable to the Directors
as well as Senior Management and the same has been circulated to all
concerned and posted at the Company's website www.hindustancopper.com.
All Board members and senior management personnel have affirmed
compliance of the code for the year ended 31 March, 2012.
17. Directors' Responsibility Statement
In terms of Section 217(2AA) of Companies Act, 1956, your Directors
confirm:
(i) That in the preparation of the annual accounts for the year ended
31 March, 2012, the applicable accounting standards had been followed
along with proper explanations relating to material
departures/variations.
(ii) That such accounting policies have been selected and applied which
are reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company at the end of 31 March, 2012 and of the
Profit or Loss of the Company for the year.
(iii) That proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
(iv) That the Directors have prepared the annual accounts on a going
concern basis.
18. Directors
S/Shri Arvind Sahay, Gyan Prakash Joshi and Puneesh Kumar Kapoor have
been appointed as part-time non- official Directors of the Company vide
order no.10/2/2010-Met.III dated 7 February, 2012 issued by the
Ministry of Mines, Government of India.
19. Auditors
M/s. Agrawal Anil & Company, New Delhi and M/s. S Ghose & Company,
Kolkata were appointed as joint statutory auditors to audit the
accounts of the Company for the year 2011-2012.
M/s. Ranajit Ghosh, Kolkata was appointed as Cost Auditors of the
Company to audit cost accounts relating to manufacture of sulphuric
acid at ICC for the year 2011-12.
20. Comments of C&AG
The comments of C&AG under Section 619(4) of the Companies Act, 1956 on
the accounts of the Company for the year ended 31 March, 2012 along
with the review of accounts of your Company by C&AG are annexed to this
report.
21. Particulars of Employees in terms of Section 217(2A)(a) of the
Companies Act, 1956
There was no employee of the Company who received remuneration in
excess of the limits prescribed under Section 217(2A)(a) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975.
22. Appreciation
In conclusion, your Directors wish to place on record their
appreciation of the hard work put in by all employees of the Company
during the year under review. The Board gratefully acknowledges the
valuable guidance and co-operation received from the Ministry of Mines
and other Ministries/Departments of the Government of India and the
support received from the State Governments of Rajasthan, Jharkhand,
Madhya Pradesh, Maharashtra and West Bengal and the Company's bankers,
auditors, C&AG, customers and office bearers of the recognized trade
unions of different Units/Head Office. The Board also thanks all
shareholders and investors for the trust reposed by them in the
Company.
For and on behalf of the Board of Directors
Shakeel Ahmed
Chairman-cum-Managing Director
Place: Kolkata
Date : 29th May, 2012
Mar 31, 2011
Dear Members,
The Directors have pleasure in presenting the forty third annual
report of the Company together with the audited statement of accounts
and auditors' report thereon for the year ended 31 March, 2011.
1.0 Financial Review
i. Financial Performance
The comparative working results for the FY 2010-11 vis-a-vis FY 2009-10
are as under:
(Rs in crore)
2010-11 2009-10
(a) Turnover 1258 1430
(b) Profit before depreciation, interest & tax 358 237
(c) Less: Depreciation 21 18
(d) Less: Interest & Finance Charges 2 3
(e) Profit before tax 335 216
(f) Less: Provision for Taxes
(including deferred tax) 111 61
(g) Profit after tax 224 155
(h) Add:/(less) Statutory appropriation 0 0
(i) Distributable Profit 224 155
(j) Add: Balance brought forward
from the previous year 391 236
(k) Balance available for appropriation 615 391
i) Dividend (including interin dividend) 93 0
ii) Corporate Dividend Tax
(incl. on interim dividend) 15 0
iii) Amount transferred to General Reserve 17 0
(1) Balance in P&L account to be carried forward 490 391
(m) Earnings per Share(Rs) 2.42 1.67
During the year the Company achieved its best ever profit before tax.
As compared to previous year profit before tax has increased by 55.3%.
Financial performance during the year improved substantially due to
increase in LME price of copper compared to last year, improvement in
mine production and tolling of surplus concentrate through outside
smelters.
ii. Dividend
Your Company proposes to follow dividend policy as per guidelines
issued by Department of Expenditure, Ministry of Finance in terms of
which all profit making PSEs should declare a minimum dividend on
equity of 20% or a minimum dividend pay out of 20% of post tax profits,
whichever is higher. In sync with the above policy, the Board of
Directors of your Company have recommended payment of dividend @ 20% on
equity (inclusive of interim dividend of 10% already paid in
November,2010) i.e. Re 1 /- per share for the year 2010-11, for
approval of shareholders in the annual general meeting. The outgo on
account of dividend is Rs. 92.52 crore and tax on dividend is Rsl5.19
crore, aggregating to a total outgo of Rs. 107.71 crore. Your Directors
have proposed to transfer Rs. 16.90 crore to General Reserve account
from the profits available for appropriation.
2.0 Physical Performance
The comparative physical performance of production and sales for the
year 2010-11 vis-a-vis 2009-10 is as under:
Particulars 2010-11 2009-10
Ore ('000 tonnes) 3,603 3,205
Metal-in-concentrate (tonnes) 31,683 28,202
Cathode (tonnes) 24,001 17,516
CC Wire Rod (tonnes) 22,993 41,999
Sales (tonnes):
Refined Copper 24,283 30,752
MIC 2,571 10,134
Overall ore production of the Company during the year 2010-11 was the
highest in the last 12 years and is 103% of the MoU target and 112% of
the previous year.
Overall Metal-in-Concentrate (MIC) production of the Company during the
year 2010-11 was the highest in the last 9 years and is 92% of MoU
target and 112% of the previous year.
Overall Cathode production including from tolling was 137% of the
target. Cathode production at Indian Copper Complex (ICC) was 78% of
the target.
Total CC Wire Rod production during the year was 23003 MT which is 94%
of the MoU target and was commensurate with availability of Cathode.
Factors Affecting Performance
During the year the ore production at Khetri Copper Complex (KCC) was
hampered due to unprecedented floods at Khetri and production was
normalized after 15 days. Also, repeated breakdown of crushing systems
at Khetri and Kolihan mine affected the production. Production around
two months was lost respectively at Khetri and Kolihan mine due to
unscheduled maintenance.
MIC production at KCC was affected due to low recovery of metal. Low
grade of copper in mined ore affected the production atMCP.
Cathode production at ICC suffered a setback due to breakdown of 5 MVA
transformers lasting for 113 days.
Remedial Action
The Company has prepared a comprehensive Renewal & Replacement plan for
improving the reliability and availability of equipment in Khetri &
Kolihan Mine. Availability of funds will not be a constraint for this
purpose.
The Company has also initiated steps to improve recovery at KCC in
consultation with Indian Bureau of Mines (IBM) with limited success.
Action is under way for engaging a reputed consultant for advisory in
this regard.
3.0 Product wise sales Performance
Sale of copper products during 2010-11 was lower as compared to
2009-10, due to breakdown of transformer at ICC and Company taking a
conscious decision not to sell concentrate on account of comparatively
higher TcRc charges in global market. Item wise break up is as follows:
_ (in MT)
Products 2010-11 2009-10
CCRod 20925 29475
Cathode 3338 1241
RC Conductor 20 36
MIC 2571 10134
Total 26854 40886
4.0 Corporate Plan 2020
Your Company has prepared a long term corporate plan for long term
growth and profitability of the Company and set goals and targets up to
the year 2020. Your Company will vigorously pursue the capacity
enhancement of its mines and will develop new copper deposits in the
country and other geographies.
5.0 Growth Strategy
The maximum value in copper value-chain is captured at mining stage.
The Company's growth strategy is to expand the mine and concentrate
capacity significantly to sustain profitability even at low copper
prices.
5.1 Mine Expansion Schemes
During FY2010-11 the Company has charted the mine expansion plan to
increase mine production to 12.4 Million tonne by FY2016-17. The scheme
envisages expansion of Malanjkhand, Khetri, Kolihan and Surda mines;
re-opening of Rakha and kendadih mines and development of new mines
namely Banwas and Chapri-Sidheswar. The mine wise scheme and status is
given below:
i. Malanjkhand Copper Project
It is proposed to expand the production of Malanjkhand mine from 2
million tonne to 5 million tonne per annum by developing an underground
mine below the existing open cast mine, at an estimated cost of Rs.
1857 crores. A detailed project report has been prepared; the HCL Board
has approved the proposal. The investment proposal is awaiting the CCEA
approval. Meanwhile, Planning Commission has given in-principle
approval and appraised the project favorably.
The Company has already started the bid process and completed the first
stage of bidding (Request for Qualification) by pre-qualifying the
applicants. The second stage of bidding (Request for Proposal) is
currently underway. The Company hopes to select the successful bidder
in the second quarter of FY 2011-12.
ii. Khetri, Kolihan and Banwas mine
The proposed expansion of Khetri & Kolihan mines and development of
Banwas deposit will increase ore production from 1.0 million tonne to
3.1 million tonne per annum at an estimated cost of around Rs. 538
crores.
Work for mine construction & development on Banwas mine has started in
May 2010. The work is expected to complete by 2014.
Detailed project reports for Khetri & Kolihan mine expansion have been
prepared and approvals are in place.
Letter of award has been issued for the project of Kehtri Mine on
15.7.2011. Tender for Kolihan mine had to be discharged for technical
reasons. Revised Request for Qualification (RFQ) was issued on 1.5.2011
but the tender proceedings have been stayed by Hon'able High court of
Madras on the writ petition filed by one of the bidder.
iii. Surda mine expansion
The plan envisages increase in the depth of the mine and enhancement of
production capacity from 0.4 million tonne per annum to 0.9 million
tonne per annum at an estimated cost of Rs. 215 crore.
Detailed project report for Surda mine expansion has been prepared and
Board has approved the proposal.
Financial bids have been received from short listed pre-qualified
applicants based on global Request for qualification (RFQ) floated and
the bids are under evaluation. The Company hopes to select the
successful bidder in the second quarter of FY2011-12.
iv. Re-opening of closed mines at ICC
Company has also initiated action to re-open closed mines at Singbhum
Copper Belt of ICC namely, Rakha and Kendadih mines to produce 1.5
million tonnes and 0.21 million tonne of ore per annum respectively.
The estimated capital expenditure for Rakha and Kendadih mines are Rs.
346 crore and Rs. 87 crore respectively.
Detailed project reports for re-opening and expansion have been
prepared and Board has approved the proposals.
Financial bids have been received from short listed pre-qualified
applicants based on global Request for qualification (RFQ) floated and
the bids are under evaluation. The Company hopes to select the
successful bidder in the second quarter ofFY2011-12.
v. Chapri Sideshwar
It is proposed to develop an underground mine at Chapri-Sideshwar to
produce 1.5 million tonnes of ore per annum at an estimated capital
expenditure of Rs 468 crore.
Detailed project report for development of Chapri-Sideshwar mine has
been prepared and Board has approved the proposal.
Financial bids have been received from short listed pre-qualified
applicants based on global Request for qualification (RFQ) floated and
the bids are under evaluation. The Company hopes to select the
successful bidder in the second quarterofFY2011-12.
5.2 Green Field Exploration
The Company has applied 20 fresh prospecting, mining and Reconnaissance
Permit (RP) in the State of Rajasthan, Jharkhand and MP. The status of
the fresh lease applications is given below:
i. Prospecting License (PL) has been applied for the two areas at
Baniwali-Ki Dhani in Sikar Dist of Rajasthan for an area of 36.07
square km and another for 8.65 square km. Government of Rajasthan has
granted of PL for the area 36.07 square km in favour of HCL to the
Ministry of Mines in September 2010 and PLis to be executed.
ii. Mining Lease application has been submitted for Dhobani Pathargora
Intervening Block and has already been scrutinized at the district
level.
iii. RP in the district of Balaghat is in the process of finalization
by the Government of MP.
iv. The other areas applied for Mining Lease are in the state of
Jharkhand at Dhatkidli Trildih Block in the adjoining district of
Saraikala and Nandup-Talsa Block.
Regular follow up is being done with the concerned authorities for
obtaining the permits and leases.
5.3 Smelting & Refining
HCL has two Smelter units with matching Electrolytic Refineries located
at Khetri (KCC) & Ghatsila (ICC) having capacity to produce 31,000 MT
and 18,500 MT of refined copper per annum respectively. At present,
only ICC smelter is operative and KCC smelter has been shutdown due to
economic consideration since December, 2008.
Khetri facility requires more than 3.3 million tonnes of ore for
processing and Ghatsila facility requires about 2 million tonnes of ore
for processing. As against this, in-house ore production at Khetri is
about 1 million tone and at Ghatsila it is 0.4 million tone.
For running these plants to full capacity, concentrate has to be
transported partly from Malanjkhand and the balance from other
geogrphies. Both the methods are not financially viable. Import of
concentrate is not viable due to low Treatment charge / Refining charge
(Tc/Rc) charges. The Company on a dynamic basis will take into account
the Tc/Rc in the international market and captive production of ore at
Khetri and availability of water before taking a final decision on its
re- opening.
6. Status of Mining Leases
i. Mining leases in respect of Khetri, Kolihan and Chandmari at KCC are
valid up to 22 February, 2013,23 November, 2016 and 16 December, 2012
respectively.
ii. Mining lease No. 1 & 2 of Malanjkhand is valid up to 27 August,
2013. The other two adjoining mining leases applied earlier are being
pursued.
iii. Mining lease in respect of Surda Mine is valid up to 14
June,2014.
iv. Kendadih Mining Lease renewal is in the final process of approval
from State Government of Jharkhand and Rakha Mine execution of Lease
Deeds is in advanced stage of clearance with the Govt of Jharkhand. The
second stage forest clearance for Kendadih mine has been approved by
the Ministry of Forest & Environment, Government of India, New Delhi
(MoFE) and is valid for 30 years with effect from 24 November, 1992.
7. Status of Further Public Offer
Ministry of Mines, Government of India (Gol) vide letter number
5/46/2003-Met III (Pt) dated 25.6.2010 have conveyed Government
approval for disinvestment of 10% paid up equity capital of HCL out of
Gol's shareholding in the Company along with issue of fresh equity of
equal size by the Company in the domestic market. The Company has taken
necessary action for completion of Further Public Offer (FPO) and filed
Draft Red Herring Prospectus (DRHP) with SEBI on 27.9.2010. Department
of Disinvestment in consultation with Ministry of Mines will take a
view on the timing of FPO.
8. Safety
Safety remains high priority area and the Company is always aiming to
achieve "Zero Accident". The Board is happy to report that there was no
fatal accident in any of the mines operated by the Company. However,
Khetri mine reported one serious accident and Malanjkhand mine reported
three serious accidents. Surda mine operated by HCL contractor IRL
reported one fatal and two serious accidents in calendar year 2009.
Like previous years, the Company received the following reward in mine
safety:
i. National Safety Award for the year 2009 as Runner's up for longest
Accident Free Period for Khetri Mine, awarded by Hon'ble Vice President
of India.
ii. KCC Group awarded as "Best Team in FAB" in all India Rescue
Completion, 2010-11.
iii. Nagpur Zone-II, under jurisdiction of DGMS, Malanjkhand Mine won
prizes in eleven categories in Mine Safety Competition 2010-2011.
Tripartite Safety Committee (TSC) meeting attended by Officials of HCL
Units, DGMS and Trade Union Officials of MCP, KCC & ICC were held at HO
on 17 February, 2011 under the Chairmanship of Director (Mining).
Besides the above, special training, regular refresher training
programmes and on-the-job training are provided to all employees.
Safety Campaigns like "Annual Mines Safety Week", "Fire Services Day",
and "Industrial Safety Day" celebrations are being conducted regularly
with active participation of employees in all the Units of HCL.
9. Management Discussion and Analysis
A report on Management discussion and analysis is placed at Annexure I.
10. Corporate Social Responsibility
The C SR Plan of the Company, in line with the DPE Guidelines on the
subj ect for FY 2010-11 was approved by the Board. An amount of Rs.
1.22 crore was spent on CSR activities compared with total spends of Rs
72.0 lakhs during the period 2007-08 to 2009-10. The following programs
were undertaken during 2010-11:
i. Generating employment opportunities: Silk Production Projects,
Safety Hand-gloves Manufacturing Projects, Setting up Bio-gas plants -
all in association with State Government departments and voluntary
agencies.
ii. Promoting Education with Scholarships for meritorious students in
the region, Computer Training Classes and conducting Vocational
training courses in partnership with regional ITI(s)
iii. Health care support through regular Medical Camps,
Multi-specialty Camps as well as Veterinary Camps in the target
villages.
iv. Environment Protection measures like turfing on tailing dams and
plantations.
v. Infrastructural Support like Construction of Community Centre and
installation of Bore/Open/Dug wells.
For greater emancipation of the beneficiary population, it was
considered necessary to conduct a fresh Need Assessment Study of the
target communities and identify projects suiting their requirements.
This was undertaken during December 2010-January 2011, for updating
Target Baseline information of the five villages, each within 20Km
radius area around the three Mining Units of the Company viz., KCC
(Rajasthan), MCP (MP) and ICC (Jharkhand). M/s. National Institute of
Rural development (NIRD), an autonomous organization under the Ministry
of Rural Development, Government of India, was appointed to assist the
Company to conduct the Need-Assessment Survey, identify feasible CSR
projects for the communities, and provide handholding support for the
selected Projects for FY 2011-12. The CSR Plan for FY 2011 -12 is being
firmed up with their support.
11. Vigilance Activities
Vigilance is to be seen as a part of overall risk management and not a
stand alone activity. All efforts are therefore made by Corporate
Vigilance to focus attention on simplification of rules & procedures
towards minimizing discretionary space, enhancement of transparency and
fostering an e-friendly environment through technology upgradation and
capacity building to match it. While incidence of willful negligence
are to be firmly dealt with through disciplinary proceedings, enough
care is taken to send just the right signal without jeopardizing
commercial decision, taken in company's interest which must be
differentiated from delaying tactics to subvert such decision.
Web based system has been implemented by the Company where complaints
can be registered through website.
Vigilance Department has been proactive in taking initiative towards
system strengthening by enlarging the scope of ERP implementation in
the areas of HR, Finance, Contracts, Mining, etc., updating of
procurement, finance and other manuals, facilitating adequate exposure
to the dealing officials on Integrity Pact and in general streamlining
administrative procedure which often is the source of majority of
complaints.
The primary goal is to have a culture of zero tolerance to corruption
imbibed into the corporate functioning, so as to address the problem
both from demand and supply sides.
12. Official Language Implementation
During the year, HCL has made constant endeavor to increase use of
Hindi in its Units located in different states and in its Corporate
Office at Kolkata. Hindi Fortnight and Hindi Day was celebrated in the
Offices and Units of Company from 14 to 28 September, 2010 The messages
of Hon"ble Home Minister and CMD were circulated/read out in all
Offices/Units on this occasion. Various competitions were organized
with a view to grow interest among employees towards Official Language
Hindi and prizes were distributed to the winners. Employees are
constantly motivated to use Hindi in their day- to-day official work.
Hindi workshops are conducted in the Units and Corporate Office at
regular intervals. Regular review of progressive use of Hindi and
difficulties faced was carried out in Quarterly meetings of Official
Language Implementation Committee under the chairmanship of CMD at
Corporate Office and Unit Heads in Units.
During the year the Third Sub-Committee of Committee of Parliament on
Official Language inspected Delhi Sales Office of HCL on 1 April, 2010
to ascertain the progress made in this regard. In-house use of O. L. at
Indian Copper Complex, Ghatshila & Taloja Copper Project, Taloja was
done by Corporate Office on 30 August, 2010 and 4 September, 2010
respectively. The meeting of Hindi Salahkar Samiti, Ministry of Mines
held on 10 September, 2010 at Gangtok (Sikkim) under the chairmanship
of Hon'ble Minister of Mines was attended by Director (Personnel). The
Hindi translations of Annual Report, MoU, Tripartite Safety Committee,
Outcome Budget and materials for Annual Report of Ministry of Mines and
various other jobs of the Company ware performed. During the year
2010-11 the Company participated in both the half yearly meetings of
Town Official Language Committee (PSUs), Kolkata held on 24 August,
2010 and 25 January, 2011.
The progressive use of Hindi is being reviewed regularly at the Board
meetings. Hindi books have also been purchased during the year. House
journal of the Company "Tamralipi" is published in Hindi and English
and distributed among employees regularly and also mailed to the
members of Hindi Advisory Committee. "One Hindi Word Every Day" scheme
is operational for improving Hindi vocabulary of employees. The use of
Hindi in Computers has been reinforced and advanced Unicode Software
Hindi Open Office has been provided for to all Units/Offices of the
Company.
13. Corporate Governance
A report on Corporate Governance as per SEBI directives and stock
exchange listing requirements is given at Annexure-II forming part of
this report together with statutory auditors' certificate on corporate
governance.
14. Code of Conduct
The Company has in place a Code of Conduct applicable to the Directors
as well as Senior Management and the same has been circulated to all
concerned and posted at the Company's website www.hindustancopper.com.
All Board members and senior management personnel have affirmed
compliance of the code for the year ended 31 March, 2011.
15. Directors' Responsibility Statement
In terms of Section 217(2AA) of companies Act, 1956, your Directors
confirm:
(i) That in the preparation of the annual accounts for the year ended
31 March, 2011, the applicable accounting standards had been followed
along with proper explanations relating to material
departures/variations.
(ii) That such accounting policies have been selected and applied which
are reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company at the end of 31 March, 2011 and of the
Profit or Loss of the Company for the year.
(iii) That proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
(iv) That the Directors have prepared the annual accounts on a going
concern basis.
16. Directors
The following changes took place in the Board of Directors of the
Company since the last report:
Appointment
Shri G Srinivas has been appointed as part time Official Director with
effect from 19 October, 2010.
Smt. Anj ali Anand Srivastava has been appointed as part time Official
Director with effect from 17 January, 2011.
Shri Avijit Ghosh has joined as Director (Mining) with effect from 1
June, 2010
Shri K K Saberwal has joined as Director (Finance) with effect from 1
February, 2011.
Major General (Retd) Raajnish Gossain and Shri Apurba Kumar Sarmah have
been appointed as Independent Director of the Company with effect from
23 September, 2010
Cessation
Shri Sanjiv Kumar Mittal ceased to be a part time Official Director
with effect from 17 January, 2011.
Smt. Aj ita Bajpai Pande ceased to be a part time Official Director
with effect from 19 October, 2010.
S/Shri Arun Kumar Mago, Michael Bastian, S K Banerjee, Santikam
Hazarika and Dr Mukesh Khare ceased to be Directors as they have
completed their three year tenure as independent director of the
Company on 6 January, 2011.
The Board places on record its appreciation for the valuable services
rendered and contribution made by Smt. Ajita Bajpai Pande, S, Shri
Sanjiv Kumar Mittal, Arun Kumar Mago, Michael Bastian, SK Banerjee,
Santikam Hazarika and Dr. Mukesh Khare during their tenure on the
Board of HCL.
17. Auditors
M/s. Agrawal Anil & Company, New Delhi and M/s. Ray & Company, Kolkata
were appointed as joint statutory auditors to audit the accounts of the
Company for the year 2010-2011.
M/s. Ranajit Ghosh, Kolkata was appointed as Cost Auditors of the
Company to audit cost accounts relating to manufacture of sulphuric
acid at ICC for the year 2010-11.
18. Comments of C& AG and Statutory Auditors & Management Replies
thereon
The comments of C& AG under Section 619(4) of the Companies Act, 195 6
on the accounts of the Company for the year ended 31 March, 2011 along
with the review of accounts of your Company by C&AG and statutory
auditors' observations along with management replies thereto are
annexed to this report.
19. Particulars of Employees in terms of Section 217(2A) of the
Companies Act, 1956
There was no employee of the Company who received remuneration in
excess of the limits prescribed under Section 217(2A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975.
20. Appreciation:
In conclusion, your Directors wish to place on record their
appreciation of the hard work put in by all employees of the Company
during the year under review. The Board gratefully acknowledges the
valuable guidance and co-operation received from the Ministry of Mines
and other Ministries/Departments of the Government of India and the
support received from the State Governments of Rajasthan, Jharkhand,
Madhya Pradesh, Maharashtra and West Bengal and the Company's bankers,
auditors, C&AG customers and office bearers of the recognized trade
unions of different units/head office. The Board also thanks all
shareholders and investors for the trust reposed by them in the
Company.
For and on behalf of the Board of Directors
Place: Kolkata Shakeel Ahmed
Date: 11th August, 2011 Chairman-cum-Managing Director
Mar 31, 2010
The Directors have pleasure in presenting the forty second annual
report of the Company together with the audited statement of accounts
and auditors report thereon for the year ended 31 March, 2010.
1. PHYSICAL PERFORMANCE
The comparative physical performance of production and sales for the
year 2009-10 vis-a-vis 2008-09 is as under:
Particulars 2009-10 2008-09
Ore (000 tonnes) 3,205 2,983
Metal-in-concentrate (tonnes) 28,202 27,589
Cathode (tonnes) 17,516 30,036
CC Wire Rod (tonnes) 41,999 51,777
Sales (tonnes)
Refined Copper 30,752 35,714
MIC 10,134 3,540
The physical performance in the mining sector has shown improvement
compared to previous year as Ore and Metal in Concentrates (MIC)
production during the year was higher by 7% and 2% respectively. The
improvement in performance has been achieved despite loss of production
for about one and a half month at Malanjkhand Copper Project (MCP) due
to water shortage.
Shortfall in Cathode production was on account of continued shut-down
of the Smelter Plant at Khetri Copper Complex (KCC) during the entire
financial year on economic considerations.
CC Wire Rod production was as per the availability of in-house raw
material (cathode) as the Company stopped procurement of cathode from
outside for conversion into Wirerod due to change in business model on
economic considerations.
Initiatives for growth of the Company:
Development of Banwas Copper Deposit: North of Khetri mine is the
Banwas Copper Deposit which has an ore reserve of 25 million tonnes
@1.69% Cu. A contract for 5 years has been awarded to develop this
deposit with a decline from surface connecting underground working.
With the exploitation of Banwas deposit, about 6.0 lakh tonne of ore @
1.10% Cu ore per annum will be mined from the 5 year onwards using
existing infrastructure of Khetri mine.
Malanjkhand Copper Mine: MCP open pit has been re-designed by limiting
the depth of the pit to 240 metre from surface against an earlier plan
of 300 metre. The portion of the ore between 240 and 300 metre depth
will be mined out by underground mining method. This will reduce the
cost of mining. The open pit mine will be producing @ 2 million tonnes
of ore per annum till 2017-18.
Khetri mines: To increase production to 1.0 Mta, action is taken for
Khetri Phase - II operation, this would involve deepening of both
service and production shaft from 0 mRL to (-) 300 mRL and
constructing ore and waste handling system along with mine
developments.
Kolihan mine: Two sets higher capacity low profile dump trucks (LPDT) &
loading equipment (LHD) has been provided for improvement of mine
production. To increase production of Kolihan mine to 1.5 Mta,
additional hoisting system along with ore handling system is required
since the present ore hoisting system of Kolihan Mine has a capacity of
around 0.9 Mta. For this, planning is being done to make use the
existing service shaft from 306 mRL to 0 mRL with certain
modification and extending in depth upto (-) 220 mRL and connecting
upto 424 mRL, the present opening of Kolihan mine.
Malanjkhand underground mine: Action has been initiated to develop an
underground mine below the existing open pit as per report of M/s
Bishimetal Exploration Company to produce 5.0 million tonne of ore per
year from 9th year of starting of construction of work. For this,
Pre-Application Conference was conducted to receive the responses from
the prospective bidders.
Re-opening of closed mines at ICC: Company has also initiated action to
re-open closed mines at Singhbhum Copper Belt of ICC along with opening
of Greenfield mine at Chapri-Sideshwar mine through outsourcing.
Company is pursuing vigorously with Government of Jharkhand for renewal
of mining leases for Kendadih mine and execution of lease deed for
Rakha mine.
2. FINANCIAL PERFORMANCE
The comparative working results for the year 2009-10 vis-a-vis 2008-09
are as under:
(Rs in crore)
Particulars 2009-10 2008-09
Turnover 1429.85 1349.10
Profit/(Loss) before tax 215.84 5.48
Net profit/(Loss) after tax 154.68 (10.31)
Financial performance during the year improved substantially due to i)
increase in LME price of copper compared to last year ii) improvement
in performance in mining and iii) sale of surplus metal in concentrate
(MIC).
3. ENERGY CONSERVATION
HCL continued to give priority for energy conservation measures at
various stages of process from mining of ore to extraction of copper
metal. Special efforts were made in making the operations energy
efficient. The achievements made in regard to reduction in specific
energy consumption over previous year are indicated below:
Sl.
No. Specific Consumption Unit 2009-10 2008-09
1 ICC Refinery Power Kwh/T 333 375
2 ICC Smelter fuel Lit/T 531 827
3 ICC Smelter Oxygen m3/T 650 693
4 MCPMine Kwh/T 0.52 0.75
4. ENVIRONMENT & POLLUTION CONTROL MEASURES
The ambient air quality is regularly monitored at mines, process plants
and residential areas at all the units as per pollution control board
guidelines/standards. To further improve the existing environmental
management plan, the environment cells at the units are in the process
of implementing the recommendations arising out of the environmental
audit earlier done through an external agency. Recommendations of the
agency are in the process of implementation in phases taking into
account the availability of funds.
The range of air quality around the various mines of the Company given
in Annexure - I is well within the standards and limits as prescribed
by the pollution control board.
Effluent treatment facilities installed at the units of the Company
have been working satisfactorily during the year and meeting regulatory
norms as prescribed by the Pollution Control Boards. Discharged process
of water is being recycled after treatment thus conserving the water.
Quality of water which is recycled is projected in Annexure - I.
Solid waste from plants and hospitals are also safely disposed off or
stored as per guidelines prescribed by the pollution control boards.
Company promotes several environment friendly activities by planting
trees, improving house- keeping, cleanliness, hygiene and safety
through several programmes round the year. The Company has planted
different types of flora around the mining and township areas at the
units to maintain the green environment.
5. SAFETY
Safety remains high priority area, and the Company is always aiming to
achieve "Zero Accident". The Board is happy to report that there was no
fatal accident in any of the mines operated by the Company. However,
Khetri mine reported one serious accident and Malanjkhand mine reported
three serious accidents. Surda mine operated by HCL contractor IRL
reported one fatal and two serious accidents in calendar year 2009.
Like previous years, the Company received the following reward in mine
safety:
i. National Safety Award for the year 2008 as Winners and Runners up
for longest Accident Free Period for Khetri and Kolihan mine
respectively, awarded by Honble Vice President of India.
ii. KCC Group awarded as "Best Team in Theory" in all India Rescue
Completion, 2009-10.
iii. Nagpur Zone-II, under jurisdiction of DGMS, Malanjkhand Mine won
prizes in eight categories in Mine Safety Competition -2009.
Tripartite Safety Committee (TSC) meeting attended by Officials of HCL
Units, DGMS and Trade Union Officials of MCP, KCC & ICC were held at
MCP on 9th December 2009 under the Chairmanship of Director (Mining).
Besides the above, special training, regular refresher training
programmes and on-the-job training are provided to all employees.
Safety Campaigns like "Annual Mines Safety Week", "Fire Services Day",
and "Industrial Safety Day" celebrations are being conducted regularly
with active participation of employees in all the Units of HCL.
6. RESEARCH & DEVELOPMENT / SCIENCE & TECHNOLOGY / TECHNOLOGY
ABSORPTION
Bio-leaching at MCP: HCL has collaborated with Institute of Minerals &
Materials Technology (IMMT), Bhubneshwar to develop bio leaching
technique at MCP. The experimental bio-heap of 1000 MT of crushed lean
sulphide ore showed a recovery in the range of 1%, efforts are on for
attaining a recovery of 3.3% by changing the operation parameters.
Soil Restoration at MCP: Work has commenced at MCP tailing pond for
plantation of grass turf for soil restoration. The work will be
completed by Sept 10 end. Besides this there is a proposal for the
construction of relief wells on the periphery of the tailing dam and
mines waste dump sites, for recycling of water and pollution control.
Hi-chrome grinding media at MCP: Trial use of Hi-chrome grinding media
at MCP concentrator plant was initiated in January 2009. As a result of
this, cost saving in the grinding media per ton of milling is around
Rs. 20/-. This is also being implemented at KCC.
High Rate Thickener (HRT) for tails at KCC: HRT is in operation at KCC
from mid Dec 2009. As a result of which the Unit is not facing process
water shortage after its installation. The recovery is at the rate of
100 CuM per hour.
Installation of 300 eft cells at KCC concentrator plant: In 2009 new
300 eft cells were installed in place of old Cleaner-I & Scavenger
cells for the improvement in concentrator grade. Concentrator grade of
17.16% Cu was achieved in 2009-10 and in April 2010 it was 18.39% Cu.
Auto level controllers are being fitted in these rows for further
improvement. Two new 300 eft cells for Re-cleaner cells will be
installed and commissioned in mid May 2010. This will help control
insoluble content and maintain the concentrator grade.
New HRT: New HRT for ore concentrate will be commissioned by mid May
2010 at KCC. This will help improve dewatering and increase concentrate
handling capacity to withstand increase in production in the coming
years.
7. IT Initiatives
For bringing about dynamism, transparency and business efficiency,
Company has initiated various IT initiatives spanning all operational
areas. Major initiatives are:
i. ERP implementation
Enterprise Resource Planning (ERP) - ERP solution (Oracle e-biz suite
R12) covering all operational areas - manufacturing, maintenance,
marketing, finance, materials - is working satisfactorily. Real time
and uniform transaction processing and reliable information flow from
ERP has enabled faster decision making along with standardization of
all processes, procedures and management information system.
ii. e-Procurement
The procurement of stores & spares items above a threshold value of Rs
1.0 lakh is done through Enterprise Procurement System (EPS), conducted
by an outside agency. In this system, the suppliers submit their bids
online, and the evaluation of the bids are also done on-line.
iii. e-Payments through RTGS
e-Payment system implemented and working satisfactorily wherein
payments are made directly to Supplier/Contractor bank accounts after
obtaining proper mandate.
iv. Real time LME booking
A web based system is in place to enable customers to place orders with
HCL on-line, based on Real time LME rate. The customers can monitor the
order booking status and can view HCLs price circulars.
v. On-line Vendor registration
The Vendors continue to register themselves on-line with HCL by
submitting the relevant data, which are captured on-line, validated and
stored in the data base.
vi. On-line Vigilance Complaints registration and monitoring
Web based system has been implemented by HCL where complaints can be
registered through website. The complaint status can also be captured
on-line.
vii. Annual Property return submission
A System has been developed for Employees to submit their annual
property returns through Employee Self Service login facility in ERP.
viii. Mine planning software
DATAMINE & SURPAC mine planning software implemented at Khetri &
Malanjkand units respectively are working satisfactorily. The software
helps in Digitized block modeling and grade estimation, Digitized mine
planning and drill design, Accurate reserve & excavated quantity
measuring, Geological data immersion
8. DEVELOPMENT OF SSI AND ANCILLARY UNITS
The Company continued to follow Government guidelines in encouraging
procurement of materials from SSI and ancillary Units. During the year
2009-10, the Company, among other several items, purchased Cast Iron
Grinding Media Balls from SSI consortia Unit of the National Small
Industries Corporation (NSIC) Ltd. SSI Units, registered with NSIC are
exempted from payment of Earnest Money Deposit (EMD) in full, and from
submission of Security Deposit (SD) to the extent of their monetary
limits fixed by NSIC.
9. MANAGEMENT DISCUSSION AND ANALYSIS
9.1 Industry structure and developments
Till 1997, State owned Hindustan Copper Limited (HCL) was the only
Company producing primary refined copper in the country meeting about
25-30% of the countrys refined copper requirement, the balance being
imported. Presently, four major players with total installed production
capacity of around ten lakh tonnes of refined copper dominate the
Indian copper industry. However, HCL with production capacity of 49,500
tonnes per annum continues to be the only vertically integrated primary
copper producer having its own captive mines. The captive mines used to
meet about 60% of Companys requirement for concentrate, the rest being
imported. The two private sector companies, viz. M/s.Hindalco
Industries Ltd. (Unit: Birla Copper) and M/s.Sterlite Industries (I)
Ltd., with production capacities of 5,00,000 tonnes and 4,00,000 tonnes
per annum respectively, have set up shore-based smelters relying on
imported concentrate. The fourth player, M/sJhagadia Copper Ltd. with
plant capacity of 50,000 tonnes per annum produces refined copper
through the secondary route (using copper scrap). While the private
Companies have the benefits of high scale of operation along with
locational advantage, HCL has a competitive advantage by virtue of
ownership of mines.
During the last few years, there has been a paradigm shift in the
Indian copper industry where India has now become a net exporter of
refined copper from the earlier position when bulk of its refined
copper requirements were imported.
9.2 Business scenario
After the drastic fall in the LME copper price during October-
December, 2008, there has been a continuous improvement in the price
situation. Presently the copper price is hovering in the range of US$
7000. Copper price per tonne reckoned for the entire year (2009-10)
averaged to US $ 6101 as compared to previous year (2008-09) average of
US $ 5864.
As a strategic measure, HCL has stopped the import of copper
concentrate (which was previously being done to supplement in-house
production) on economic considerations and as a consequence the smelter
at Khetri Copper Complex (Rajasthan) was shut down with effect from
December08. HCL is now operating only one smelter, i.e. at Ghatsila
(Jharkhand) while giving full thrust on capacity utilization and on
mining at all the mines (located in Madhya Pradesh , Rajasthan &
Jharkhand) . The in-house copper concentrate which is thus produced in
excess of the smelter requirement is being successfully sold in the
open market.
As per the estimate of Indian Copper Development Centre (ICDC), refined
copper usage in India was 5, 35,000 MT during 2008-09. The refined
copper usage in India is estimated to be 5, 70,000 MT during 2009-10
with a growth rate of 6 to 7%.
As per International Copper Study Group (ICSG), the refined copper
market balance for 2010 could show a surplus of about 5, 80,000 MT as
growth in copper supply is expected to exceed projected weak growth in
industrial copper demand. For 2011, a surplus of around 2,40,000 MT is
anticipated as economic activity is expected to boost demand in copper
end-use market. While actual industrial demand in 2010 is expected to
increase in all of the major consuming regions, copper market off-take
is expected to decline slightly from the 2009 level owing to lower
apparent Chinese demand. In 2009, Chinas apparent consumption
increased by 38% significantly exceeding the estimated growth in
Chinas semi-manufacture production. As per ICSG estimate, refined
copper usage during 2009 was 18.20 million MT. The current global
economic crisis has significantly reduced world refined copper usage.
ICSG expects world apparent refined usage in 2010 to decline by 1.5%,
declining to 17.9 million MT. Australia based CRU Group, which is a
reputed analyst for commodities, has predicted copper price of US $
10,000 in the next 3 years. This along with proposed expansion of HCL
mines will considerably add to the profitability of the Company.
9.3 Opportunities and threats
In India, there is under-capacity at the mining stage vis-a-vis the
demand. HCL is the only fully integrated copper producing Company in
the country holding all operating mining leases. Out of 370 million
tonnes of copper ore reserves in the country, HCLs lease rights cover
more than 280 million tonnes. The Company has adequate opportunity to
augment its mining capacity by increasing production from the existing
mines and by developing new mines besides reopening some of the mines
that were closed in the past. HCL has reoriented its business strategy
to take advantage of the situation and has planned to take the mine
production level from the existing 3.15 million tonnes to a level of 12
million tonnes within next 5-7 years.
The threat perception for the Company includes great volatility of
world copper prices and increasing cost of inputs. Further, HCL may
also witness threat to its market share on account of intense
competition from imports and other domestic manufacturers.
9.4 Product wise performance
Sale of copper products during 2009-10 has been slightly higher as
compared to 2008-09. Item wise break up is as follows:-
(in MT)
Products 2009-10 2008-09
CC Rod 29511 33336
Cathode 1241 2359
Wire Bar 0 19
Total Refined copper 30752 35714
MIC 10134 3540
Total 40886 39254
9.5 Future outlook
Leaving behind the recent economic meltdown, Indian economy is on a
buoyant growth path and the GDP growth is expected to be in the range
of 8% while India along with China is predicted to be the future
economic superpower. Along the countrys growth path, emphasis would be
largely on infrastructure developments and copper consumption is likely
to maintain the momentum ensuring demand for the company products.
As per the business strategy adopted by the Company, mining has been
identified as the key thrust area. The Company has proposed to re-open
closed mines, explore / exploit and develop new mining deposits and
optimise production from existing mines.
HCL has made blue prints for expansion of mine production from current
level of 3.2 million tonnes per annum to 12.0 million tonnes per annum
in next 5 to 7 years. The schemes are under finalization and work on
pre-project activities has been started. The identified plans such as
expansion of Khetri and Kolihan mines, development of underground mine
at MCP, re-opening of closed mines (Rakha & Kendadih) & development of
Chapri Sidheswar Copper belt at ICC.
9.6 Risks and concerns
Main business risks faced by HCL continue to be the volatility of LME
price of copper and the hardening of rupee against US$ as these two
factors determine the selling price of copper. As the capacity of the
private players is far in excess of countrys demand, the excess of
production is normally exported by them. With the economic downturn in
the export market, there is a risk that these players would push their
material in the local market bringing the price further down.
9.7 Internal control systems and their adequacy
The Company has provision for an effective internal control system
commensurate with its size. The existing system is being further
strengthened for smooth functioning and adequacy of internal control
systems. As per Government guidelines, the Company has introduced
e-tendering for procurement of materials and e- banking for payments
for greater transparency.
9.8 Vigilance activities
Vigilance is an essential management tool to be used for quality output
enabling an organization to be on a higher growth trajectory. As part
of preventive vigilance effort corporate management is being advised to
take initiatives towards system strengthening through adherence to set
procedure and guidelines, due diligence, analysis of audit reports and
its incorporation in corporate decision making.
A campaign for creating awareness was taken up by organizing the
Vigilance Awareness Week Celebration commencing from 03.11.2009 to
07.11.2009 at all the Units including at Head Office. Stress was given
on preventive vigilance and leveraging of information technology with a
view to minimize scope for corruption and assisting the management in
improving the systems and procedures.
9.9 Discussion on financial performance with respect to operational
performance
The financial performance for 2009-10 vis-a-Vis 2008-09 is summarised
below :
(Rs in crore)
Particulars 2009-10 2008-09
a. Sales 1429.85 1349.10
b. Net of Extraordinary
Income/(Expenses) (46.11) (30.80)
c. Value of Production 1506.04 1344.27
d. Cost of production excluding depreciation,
provisions, write-off
and interest 1217.21 1278.20
e. Profit before depreciation,
provisions,
write-off and interest 242.72 35.27
f. Depreciation, provisions
and write-off 23.39 22.97
g. Interest 3.19 6.82
h. Profit/ (Loss) before tax 215.84 5.48
i. Provision for taxation
- Current 64.77 5.98
- Fringe Benefit - 0.55
- Deferred (3.61) 9.26
j. Profit/ (Loss) after tax 154.68 (10.31)
k. Cash Profit 174.46 21.92
9.9.1 Capital expenditure
During the year, no Government support for capital expenditure was
asked for, nor received, as the Company proposes to meet its capital
expenditure out of internal resources. The approved capital outlay on
account of Replacements & Renewals (R&R) of plant & machinery stands at
Rs 80.78 crore, out of which the actual expenditure incurred during the
year was Rs 80.45 crore.
9.9.2 Loans
During the year, your Company, had virtually no secured and unsecured
loans in its books as it is a debt free Company.
9.9.3 Contribution to exchequer
During the year 2009-10, the Company contributed a sum of Rs 258.76
Crore to the exchequer by way of duties, taxes and royalties, as
against Rs 307.00 Crore in 2008-09, as detailed below:
(Rs in crore)
Particulars 2009-10 2008-09
Excise Duty 106.69 139.48
Customs Duty 1.06 58.09
Sales Tax 38.40 34.58
Royalty and Cess 37.34 26.25
Income Tax 66.88 39.20
Others 8.39 9.40
Total: 258.76 307.00
9.9.4 Expenditure in foreign currency
During the year 2009-10, the Company spent foreign currency towards
import of copper concentrate, components, stores & spares, travelling
and consultation fees, etc. to the tune of Rs 59.54 crore as compared
to Rs 310.61 crore in 2008-09.
9.9.5 Earnings in foreign exchange
During the year 2009-10, the Company earned foreign exchange of Rs
36.10 crore through exports of anode slime, as against Rs 75.22 crore
earned in 2008-09.
9.10 Industrial relations and HR initiatives
9.10.1 Industrial Relations
Industrial Relations in the Company remained peaceful and harmonious.
Various bi-partite fora with representatives of the Management and the
Unions at the Apex, Unit and Shop floor levels functioned well. An MoU
was reached with the recognized Trade Unions after protracted
discussions on Workmens Wage Revision effective from 01/11/2007 which
has since been implemented. The Company also implemented Executive Pay
Revision with effect from 01/01/2007 as per Government guidelines.
9.10.2 Redeployment and Rationalization of Manpower
The Company has been making continuous efforts to redeploy manpower
after suitable re-training wherever necessary to ensure proper
distribution and utilization of manpower and also to minimize idle
manpower on account of plant shutdowns. 118 personnel were redeployed
at KCC.
9.10.3 Training
Based on identified needs, several in-house training programmes were
organized, with wider coverage of employees and issue-based
discussions. The Company selectively nominated employees for
specialized training programmes/Workshops/Seminars/Conferences
organized by reputed professional agencies and Institutes. In the year
2009-10, against a training target of 5225 man days, total of 6028 man
days of training were imparted. The ratio of trained to target man days
of training is 1.15.
9.10.4 Recruitment
The recruitment process initiated in May/June, 2008 for inducting young
professionals at entry level was decided by the Board to be replaced by
limited recruitment in key areas of 136 Executives spread over the 5
years 2010-2014 to meet critical requirements arising out of skill
depletion due to superannuation etc. The proposal is under
implementation.
9.10.5 Employee turnover
Consequent upon raising of superannuation age from 58 years to 60 years
w.e.f. 31/07/2007,100 employees superannuated from the Company during
2009-10, while 40 separated on other accounts including death and
resignation. Thus, total separation during 2009-10 stood at 140, viz.,
Executives 53 and Non-Executive 87. The Company did not operate any
Voluntary Retirement Scheme during this period.
9.10.6 Communication
Company continued to improve communication with the employees through
various measures. Communication programmes relating to safety,
productivity and energy conservation were also organized at the Unit
level. The Companys quarterly House Journal Tamralipi published in
Hindi and English was well circulated. For better dissemination of
information, Personnel Policies/Rules/Amendments were placed on the
Companys website and could be accessed by the employees. The Company
is also using its internal e-mail facilities to improve communication
in general.
Image building exercises gained momentum through extensive news and
media coverage. The Company has also made its presence felt in the
national and international fora through quality participation.
The Company has introduced a system of centralized farewell functions
at all Units for its retiring employees on the last working day of the
month which is held at Unit Head level. Retiring employees are also
paid their payable dues as per rules on their last working day.
9.10.7 Employees Participation in Management
Employee participation in management has been the backbone of
harmonious Industrial Relations in the Company. Successful operation of
various bi-partite fora at all the three level, namely, at the Apex
level, Unit level and the Shop floor level have contributed in a major
way to the smooth functioning of the Company.
9.10.8 Quality Circles
One of the Quality Circles of the Company, viz., Pragati of ICC was
rated Excellent based upon their Case Study presentation at the
National Convention of Quality Circles-2009 at Bengaluru (18-21
December, 2009). There is sustained focus on furthering the Quality
Circle movement in the Company to improve production and productivity
through participation of employees.
9.10.10 Representation of SC/ST/OBC community employees in the Company
Out of the total manpower of 5300, the representation of employees
belonging to SC, ST and OBC communities was 16.55%, 12.47% and 12.43%
respectively as on 31.03.2010.
9.10.11 Communal Harmony and National Integration
In the Companys townships at Khetri, Malanjkhand and Ghatsila as well
as at other places of work, employees and their family members live in
a spirit of harmony and togetherness and joyously celebrate all
religious and social festivals irrespective of caste, creed, religion
and language.
In pursuance of Government directives based on the Judgment of the
Honble Supreme Court in Visakha case, the Company has set up
Committees for Prevention of Sexual Harassment of Women at Work Place
at all the Units/Offices of the Company. A provision in this regard has
also been incorporated (Clause 19.2) in the HCL Conduct, Discipline and
Appeal Rules, 1979.
9.10.13 Status of Implementation of The Persons With Disabilities
(Equal Opportunity, Protection of Rights and Full Participation) Act,
1995
In the last few years, as the Company had been rationalizing its
manpower, there had been no scope of fresh recruitment. The number of
physically challenged persons employed in the Company as on 31.03.2010
was 57.
9.10.14 CSR Initiatives
After the Baseline Survey conducted in 2007 for the purpose of social
mapping to initiate CSR activities, initially, five villages in the
vicinity of each of the three Units at KCC, MCP and ICC were identified
for rolling-off CSR activities, focusing on health, general hygiene,
sanitation, awareness generation and formation of Self Help Groups
(SHGs) with the support of local NGOs and community participation since
April, 2008.
The initial activities have also built up the necessary ground work for
implementing micro-finance projects for the SHGs - towards creation of
alternative employment activities and resource formation. At all the
three Unit locations, Mobile Medical Units equipped with Medical
Personnel conduct weekly Health Camps at the selected villages for
community health check-up.
The Company is committed to providing 0.5 percent of its Net Profit
towards social sector activities on a continuing basis.
9.10.15 Progressive Use of Hindi
The Company continued its thrust on implementation of Official Language
policy of the Government of India. Employees are constantly motivated
to use Hindi in their day-to-day official work for which Hindi
workshops are conducted in the Units and Corporate Office at regular
intervals. Regular review with regard to progressive use of Hindi and
difficulties faced were carried out in quarterly meetings of Official
Language Implementation Committee under the Chairmanship of Unit Heads
in Units and CMD at Corporate Office. Hindi fortnight and Hindi Day
were celebrated in the Offices and Units of Company from 14th to 28th
September 2009, under which various competitions were organized to
generate interest among employees towards use of Official Language
Hindi and winners were awarded. The messages of Honble Home Minister,
Honble Mines Minister, and CMD were circulated / read out in all
Offices/Units on the occasion of Hindi Day.
Inspection regarding implementation of Official Language was conducted
in respect of Corporate Office on 20/11/2009 by Assistant Director (OL)
and 22/02/2010 by Deputy Director (Implementation). The authorities
were satisfied with the steps taken by the Company for progressively
increasing usage of Official Language in official working. During the
year 2009-10 the Company participated in both the half yearly meeting
of Town Official Language Committee (PSUs), Kolkata held on 28/08/2009
and 29/01/2010.
In-house Journal of the Company "Tamralipi" continued to be published
both in Hindi and in English which were regularly distributed among the
employees. These were also sent to the members of Hindi Advisory
Committee. The Annual Report as well as HR Policy Guide of the Company
were also published in Hindi and English. " Every Day One Hindi Word
scheme was operational for improving the Hindi vocabulary among the
employees.
9.10.16 Presidential Directives
For Revision of Scales of Pay for the Board level and Below Board level
Executives with effect from 01/01/2007, Presidential Directive was
received from Govt, of India, Ministry of Mines vide letter no.
10/4/2009-Met.III dated 22nd October, 2009 which has been implemented.
10 STATUS OF MINING LEASES
(i) Mining leases in respect of Khetri, Kolihan and Chandmari at KCC
are valid up to 22.02.2013, 23.11.2016 and 16.12.2012 respectively.
(ii) Mining lease No. 1 & 2 of Malanjkhand is valid upto 27.08.2013.
The other two adjoining mining leases applied earlier are being
pursued.
(iii) Mining lease in respect of Surda Mine is valid upto 14.06.2014.
(iv) Kendadih Mining Lease renewal and Rakha Mine execution of Lease
Deeds are in advance stage of clearance with the Govt of Jharkhand. The
second stage forest clearance for Kendadih mine has been approved by
the Ministry of Forest & Environment, Government of India, New Delhi
(MoFE) and is valid for 30 years w.e.f 24/11/92.
(v) Mining Lease application has been submitted for Dhobani Pathargora
Intervening Block.
(vi) Prospecting License (PL) has been applied for the two areas at
Baniwali-Ki Dhani in Sikar Dist of Rajasthan for an area of 36.116
sq.km and another for 8.65 sq.km. Government of Rajasthan has
recommended grant of PL for the area 36.0738 sq.km in favour of HCL to
the Ministry of Mines in May 2010. Approval of the Ministry of Mines to
the State Government for grant of PL is awaited.
(vii) Dhani Bansri for an area 156.92 Hect has been applied for PL in
May08. Presently this area is under M/s. Geomysore who has been
granted the Reconnaissance Permit (RP). All applications will be
considered after M/s. Geomysore surrenders the RP.
(viii) Prospecting licenses for Jatta, Shitalpani, Dhori, Gidori has
been applied in the state of Madhya Pradesh and is awaiting no due
certificate by the State Government for final submission.
RP in the district of Balaghat is in the process of finalization by the
Government of MP and awaiting response.
(ix) The other areas applied for Mining Lease are in the state of
Jharkhand at Dhatkidli Trildih Block in the adjoining district of
Saraikala.
Regular follow up is being done with the concerned authorities for
obtaining the permits and leases.
11. CORPORATE GOVERNANCE
A report on Corporate Governance as per SEBI directives and stock
exchange listing requirements is given at Annexure-II forming part of
this report together with statutory auditors certificate on corporate
governance.
12. CODE OF CONDUCT
The Company has in place a Code of Conduct applicable to the Directors
as well as Senior Management and the same has been circulated to all
concerned and posted at the Companys website www.hindustancopper.com.
All Board members and senior management personnel have affirmed St
compliance of the code for the year ended 31 March, 2010.
13. DIRECTORS RESPONSIBILITY STATEMENT
On the basis of compliance certificate received MD & CFO and other
executives of the Company and subject to disclosures in annual accounts
as on 31.3.2010 on the basis of discussions with Statutory Auditors of
the Company from time to time- st
(i) Your Directors confirm that in the preparation of the annual
accounts for the year ended 31 March, 2010, the applicable accounting
standards had been followed along with proper explanations relating to
material departures/variations.
(ii) Such accounting policies have been selected and applied which are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of 31 March, 2010 and of the
Profit or Loss of the Company for the year.
(iii) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities.
(iv) The Directors have prepared the annual accounts on a going concern
basis.
14. DIRECTORS
The following changes took place in the Board of Directors of the
Company since the last report:
Sri Shakeel Ahmed has joined as Chairman-cum-Managing Director of the
Company with effect from 28.10.2009.
Sri M Samajpati ceased to be Director (Finance) and Sri R C Singla
ceased to be Director (Mining) of the Company on 21.10.2009 and
31.12.2009 respectively.
The Board places on record its appreciation for the valuable services
rendered and contribution made by S/Sri M Samajpati and R C Singla
during their tenure on the Board of HCL.
15. AUDITORS
M/s. Agrawal Anil & Company, New Delhi and M/s. Ray & Company, Kolkata
were appointed as joint statutory auditors to audit the accounts of the
Company for the year 2009-2010.
M/s. Bandyopadhyaya Bhaumik & Co, Kolkata and M/s. Ranajit Ghosh,
Kolkata were appointed as Cost Auditors of the Company to audit cost
accounts relating to manufacture of sulphuric acid at KCC and ICC,
respectively for the year 2009-2010.
16. COMMENTS OF C&AG AND STATUTORY AUDITORS & MANAGEMENT REPLIES
THEREON
The comments of C&AG under Section 619(4) of the Companies Act, 1956 on
the accounts of the Company for the year ended 31.3.2010 along with the
review of accounts of your Company by C & AG and statutory auditors
observations along with management replies thereto are annexed to this
report.
17. PARTICULARS OF EMPLOYEES IN TERMS OF SECTION 217(2A) OF THE
COMPANIES ACT, 1956
There was no employee of the Company who received remuneration in
excess of the limits prescribed under Section 217(2A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975.
18. APPRECIATION
In conclusion, your Directors wish to place on record their
appreciation of the hard work put in by all employees of the Company
during the year under review. The Board gratefully acknowledge the
valuable guidance and co-operation received from the Ministry of Mines
and other Ministries/ Departments of the Government of India and the
support received from the State Governments of Rajasthan, Jharkhand,
Madhya Pradesh, Maharashtra and West Bengal and the Companys bankers,
auditors, C&AG, customers and office bearers of the recognized trade
unions of different units/head office. The Board also thanks all
shareholders and investors for the trust reposed by them in the
Company.
For and on behalf of the Board of Directors
Shakeel Ahmed
Chairman-cum-Managing Director
Place: Kolkata
Date : 14.05.2010
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