Mar 31, 2023
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying Standalone Financial Statements of Hindustan Copper Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31,2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and notes to the Standalone Financial Statements including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe Standalone Financial Statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2023 and its profit (including Other Comprehensive Income), changes in equity and its cash flows for the year ended on that date.
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the âAuditor''s Responsibilities for the Audit of the Standalone Financial Statementsâ section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
We draw attention to the following matters:
a) Note No. 40 (1)(i) of the accompanying Standalone Financial Statements which describes the uncertainty related to the outcome of the lawsuits filed and demands raised against the Company by various parties and Government authorities;
b) Note No. 40(5) of the accompanying Standalone Financial Statements which states that the Lease agreement for Rakha Mining Lease at the Indian Copper Complex was valid up to 28.08.21. It is also to be noted that the Lease agreement for Kendadih mines expire on 02.06.23. Application for renewal for both the lease agreements have been submitted as per regulations, and is currently under process.
c) Note 40(5) of the Standalone Financial Statements which states that the mined-out ore kept at pit top of Surda mine has not been transported to the Concentrator Plant since July 2022, due to non-issuance of challan/permit by State Authorities, Jharkhand due to non-receipt of Surda Lease Deed, which is under process. Consequently the vendor bills are lying unprocessed and further extraction of ore is currently not happening.
d) Note No.40(6) the accompanying Consolidated Financial Statements wherein the Company has made assessment of possible impairment loss during the year with respect to Plant and Machinery at the Nickel Plant and Moubhandar Plant, having book value of ''5,649.07. The study revealed that the fair market value of the specified Plant and Machinery as on 31st March 2023, was higher than their Book value and consequently there was no requirement to recognize any Impairment Loss during the year, as per provisions of Ind AS 36
e) Note No.40 (7) of the accompanying Standalone Financial Statements which states that the title deeds for freehold
and leasehold land and building acquired in respect of Gujarat Copper Project (GCP) with book value of ''4,756.01 Lakh (PY:-''5,026.13 Lakh) as at March 31,2023 are yet to be executed in favor of the Company;
f) Note No.40 (9) of the accompanying Standalone Financial Statements wherein, balances under the head Claims Recoverable, Loans & Advances, Deposits from and with various parties and certain balances of trade receivables, trade payables and other current liabilities have not been confirmed as at March 31,2023, although letters have been sent by the Company seeking confirmation of balances. Consequential impact upon receipt of such confirmation / reconciliation / adjustments of such balances, if any is not ascertainable at this stage.
Our opinion is not modified in respect of these matters.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the year ended March 31,2023. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
Sl No. |
Key Audit Matters |
Auditorâs Response |
1. |
Adjustment of revenue and DroDer aDDlication of Ind AS 115 âRevenue from Contracts with Customersâ |
Principal Audit Procedures We have assessed the application of the provisions of Ind AS 115, in respect of the Company''s revenue recognition and appropriateness of the estimated adjustments in the process We have selected transactions on sample basis and tested for identification of contracts, involving disagreements relating to grade mismatch , evaluation of the satisfaction of the performance obligation , and checking for the adjustment to the revenue due to variation in the transaction price Audit Conclusion No material exceptions identified. |
in respect of accuracy of revenue recognition and adjustments for the ore quality variances involving critical estimates Referred in Note 2.5 of the Standalone Financial Statements The revenue recognized by the Company in any particular contract , is as per the contract terms. There are subsequent adjustments made to the initial transaction price for a) the difference in LME rate considered during the initial transaction and the Quotational Period b) for mismatch in the grade of the Ore. The variation in the contract price for mismatch of grade of the ore, if not settled mutually between the parties to the contract is referred to third party testing. The final adjustment to revenue is then made basis the outcome of the findings of the third party |
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2. |
Provisions recognized and Contingent liabilities |
Principal Audit Procedure |
disclosed with respect to certain legal and tax |
Our audit procedures relating to provisions recognized and contingencies disclosed regarding certain legal and tax matters included the followings: ¦ Understanding and evaluating the design and operating effectiveness of controls over the recognition, measurement, presentation and disclosures made in the Standalone Financial Statements in respect of these matters; ¦ Obtaining details of legal and tax matters, inspecting the supporting documents to evaluate management''s assessment of probability of outcome and the magnitude of potential loss, and testing related to provisions and disclosures in the Standalone Financial Statements |
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matters The Company and its jointly controlled entity is subject to a number of legal, regulatory and tax cases for which final outcome cannot be easily predicted and which could potentially result in significant liabilities. Management''s disclosures with regards to contingent liabilities are presented in Note No.40 (1) (i) to the Standalone Financial Statements. |
Sl No. |
Key Audit Matters |
Auditorâs Response |
The assessment of the risks associated with the litigations is based on complex assumptions. This requires use of judgment to establish the level of provisioning, increases the risk that provisions and contingent liabilites may not be approprlately provided against or adequately disclosed. |
¦ Reviewing orders and other communication from regulatory authorities and management responses thereto; ¦ Reviewing management expert''s legal advice and opinion as applicable, obtained by the company''s management for evaluating certain legal matters and evaluating competence and capabilities of the experts; and ¦ Using auditor''s own judgment in evaluating certain significant and complex direct and indirect tax matters Audit Conclusion No material exceptions identified |
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3. |
Assessment of indication of impairment and the |
Principal Audit Procedures Our audit procedures related to assessment of indication of impairment and recoverable amounts of these CGUs included the followings: ⢠Understanding and evaluating the design and operating effectiveness of controls for identification and assessment of any potential impairment, including determining the carrying amount and recoverable amount of the CGUs; ⢠Relying on the report of external agency appointed solely for evaluating the assessment of impairment at plants this year and ⢠Using auditor''s own judgments/assessment for testing appropriateness of the method and model used for determining the recoverable amount, and mathematical accuracy of the models'' calculations ⢠Testing related presentation and disclosures in the Standalone Financial Statements. Audit Conclusion No material exceptions identified |
recoverable amount of cash aeneratina units |
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(CGUs) Refer Note40(6) of the accompanying Standalone Financial Statements. There is an assessment done by the Company at the end of each reporting period for any indication that an asset may be impaired. Based on such indications, impairment testing was performed by the management with the help of an independent third party, in accordance with the requirements of Ind AS 36 âImpairment of Assetsâ for their Nickel Plant and the Moubhandar Plant situated in Ghatshila Based on the report submitted by the independent third party, no need was identified for making any Impairment Provisions for the FY 2022-23 |
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4. |
Valuation of employeesâ defined benefit obligations and other lona term benefits The company has recognized long-term employee benefit liabilities and defined benefit obligations, (net of planned plan asset against funded gratuity obligation) in the Standalone Financial Statements. The valuation of employee benefit obligations is dependent on market conditions and assumptions made. The key audit matter specifically relates to the following key assumptions, like Discount rate, Life expectancy and Inflation forecasts. The setting of these assumptions is complex, and involves the exercise of significant judgment on the part of the Management along with the external Actuarial Specialists. |
Our audit procedures relating to the valuation of employees defined benefit obligations and other long term benefits included the following : ⢠In testing the valuation, we have examined the reports of external actuarial specialists to review the key actuarial assumptions, and the methodology adopted for the calculation of the liability ⢠We evaluated the assumption made by the management and the Actuary to ensure that they are consistent with the principles of Ind AS 19 Audit Conclusion Based on the above procedures, we are satisfied that the methodology and assumptions applied in relation to determining the liabilities are acceptable |
Information Other than the Standalone Financial Statements and Auditorâs Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Report of the Board of Directors, Management Discussion and Analysis Report, Report on CSR activities, Business Responsibility Report, Corporate Governance Report and other annexure to Directors Report including Shareholder''s Information, but does not include the Standalone Financial Statements and our auditor''s report thereon. The Report of the Board of Directors including annexures and other related statements forming part of the Company''s annual report is expected to be made available to us after the date of our this auditor report.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance or conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
If, based on the Report of the Board of Directors including annexures and other related statements which form part of the annual report and made available to us after the date of this audit report, we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance
Responsibility of Management and Those Charged with Governance for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the Standalone Financial Statements, the Board of Directors is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on
whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ) issued by the Central Government of India in terms of sub section (11) of Section 143 of the Act, we give in âAnnexure Aâ, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2) As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit except as reported in Clause (c) of the âEmphasis of Mattersâ paragraph above;
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
e) In pursuance to the Notification No. G.S.R 463(E) dated 05-06-2015 issued by Ministry of Corporate Affairs, Section 164(2) of the Act regarding disqualification of Directors, is not applicable to the Company, since it is a Government Company;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
g) As per Notification No. GSR 463(E) dated 05-06-2015 issued by the Ministry of Corporate Affairs, Government of India, Section 197 of the Act is not applicable to the Government Companies.
Accordingly, reporting in accordance with requirement of provisions of Section 197(16) of the Act is not applicable on the Company.
h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements-[Refer Note No. 40(1) to the accompanying Standalone Financial Statements];
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (a) The management has represented that, to the best of their knowledge and belief, other than as disclosed in the notes to accounts, no funds have been have been advanced or loaned or invested ( either from borrowed funds or share premium or any other source or kind of funds) by the Company to or any other person(s) or entity(ies) , including foreign entities (âIntermediaries), with the understanding , whether recorded in writing or otherwise, that the intermediary shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company(â Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The management has represented, that to the best of its knowledge and belief, other than as disclosed in the notes to accounts, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ) , with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities, identified in any manner whatsoever by, or on behalf of the Funding Party, (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
(c) Based on such audit procedures, we have considered reasonable and appropriate in the circumstances , nothing has come to our notice that has caused us to believe that the representation under sub-clause (a) and (b) contain any mutual misstatement,
3) As required under Section 143(5) of the Act, we give in the âAnnexure Câ, a statement on the directions and subdirections issued by the Comptroller and Auditor General of India in respect of the Company.
4) The dividend declared or paid during the year by the Company is in compliance with Section 123 of the Companies Act 2013,
Chartered Accountants (Firm''s Registration No.FRN 304013E)
CA Siddhartha Pal Partner
Place: Kolkata (Membership No.059017)
Date: 19-05-2023 UDIN: 23059017BGXJVS1641
Mar 31, 2022
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying Standalone Financial Statements of Hindustan Copper Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31,2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and notes to the Standalone Financial Statements including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âThe Standalone Financial Statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (â the Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2022 and its profit (including Other Comprehensive Income), changes in equity and its cash flows for the year ended on that date.
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the âAuditor''s Responsibilities for the Audit of the Standalone Financial Statementsâ section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
We draw attention to the following matters:
a) Note No. 39 (1)(i) of the accompanying Standalone Financial Statements which describes the uncertainty related to the outcome of the lawsuits filed and demands raised against the Company by various parties and Government authorities;
b) Note No. 39(5) of the accompanying Standalone Financial Statements which states that the Lease agreement for Rakha Mining Lease at the Indian Copper Complex was valid up to 28.08.21. Application for renewal has been submitted as per regulations, which is currently under process
c) Note No.39 (7) of the accompanying Standalone Financial Statements which states that the title deeds for freehold and leasehold land and building acquired in respect of Gujarat Copper Project (GCP) with book value of Rs.5026.13 Lakh (PY:-Rs.5296.25 Lakh) as at March 31,2022 are yet to be executed in favor of the Company;
d) Note No.39 (9) of the accompanying Standalone Financial Statements wherein, balances under the head Claims Recoverable, Loans & Advances, Deposits from and with various parties and certain balances of trade receivables, trade payables and other current liabilities have not been confirmed as at March 31,2022, although letters have been sent by the Company seeking confirmation of balances. Consequential impact upon receipt of such confirmation / reconciliation / adjustments of such balances, if any is not ascertainable at this stage.
e) Note No.39 (28) the accompanying Standalone Financial Statements wherein the Company has made assessment of possible impairment loss during the year with respect to some fixed assets having book value of Rs.21355.85 Lakh allocated to Gujarat Copper Project in accordance with Indian Accounting Standard (Ind AS) 36 âImpairment of
Assetsâ. A provision of Rs.5194.00 Lakh towards impairment loss for the year (as against the total impairment loss computed to the tune of Rs.14902.21 Lakh,) has been accounted for in the books of accounts as on March 31,2022 on conservative basis keeping in mind the possible long-term lease of those Plant and machineries or outright sale of Gujarat Copper Project.
f) Note No.39 (36) which describes the uncertainties and the management assessment of possible impact of COVID-19 pandemic on its business operations, financial assets, contractual obligations and its overall liquidity position as at March 31, 2022. Management will continue to monitor in future any material changes arising on financial and operational performance of the Company due to the impact of this pandemic and necessary measure to address the situation.
Our opinion is not modified in respect of these matters.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the year ended March 31,2022. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
Sl No. |
Key Audit Matters |
Auditorâs Response |
1 |
Assessment of StriDDina Ratio and charaina of |
Principal Audit Procedures |
overburden expenditure durina production staae of surface mines to Mines Development Expenditure and Profit and Loss account Referred in Note No.2 (11a) and Note No.9 of the Standalone Financial Statements. Assessment of Stripping Ratio, which is an industry specific measurement, is technically estimated initially at the beginning of the Mines and later on periodically assessed for which no standard written policy is there. In case of open cast mines, the expenditure on removal of waste and overburden, is capitalized and the same is depleted in relation to actual ore production during the year on the stripping ratio which is re-assessed periodically based on the estimated ore reserve as well as the quantity of waste excavation in respect of open cast mines. Assessment of Stripping Ratio is uniquely applied under the Mining industries which involves significant judgment to determine the ratio by in-house technical experts |
Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: ? We went through the current status of the mining at different mines ? We discussed with the management about the stripping procedure adopted in the industry as well practice followed by the company >- Procedure followed by the management towards Identification of expenditures incurred in surface mines during the development and production stages ? We have checked the stripping ratio to be charged under amortization for mine development expenditure for balance period of mines ? Reliance is placed on the representations of the management. Audit Conclusion No material exceptions identified |
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2. |
Adjustment of revenue and proper application of Ind AS 115 âRevenue from Contracts with Customersâ |
Principal Audit Procedure We have assessed the application of the provisions of Ind AS 115, in respect of the Company''s revenue recognition and appropriateness of the estimated adjustments in the process We have selected transactions on sample basis and tested for identification of contracts, involving disagreements relating to assay of the material sold , evaluation of the satisfaction of the performance obligation , and checking for the adjustment to the revenue due to variation in the transaction price |
in respect of accuracy of revenue recoanition and adjustments for the ore aualitv variances involvina critical estimates Referred in Note 2.5 of the Standalone Financial Statements The revenue recognized by the Company in any particular contract , is as per the contract terms. There are subsequent adjustments made to the initial transaction price for a) the difference in LME rate |
Sl No. |
Key Audit Matters |
Auditorâs Response |
considered during the initial transaction and the Quotational Period b) for assay of the material sold. The variation in the contract price for assay of the material sold, if not settled as per contract terms between the parties to the contract, is referred to third party testing, also as per contract. The final adjustment to revenue is then made basis the outcome of the findings of the third party |
Audit Conclusion No material exceptions identified |
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3 |
Provisions recoanized and Contingent liabilities |
Principal Audit Procedures |
disclosed with resoect to certain leaal and tax |
Our audit procedures relating to provisions recognized and contingencies disclosed regarding certain legal and tax matters included the followings: ? Understanding and evaluating the design and operating effectiveness of controls over the recognition, measurement, presentation and disclosures made in the Standalone Financial Statements in respect of these matters; ? Obtaining details of legal and tax matters, inspecting the supporting documents to evaluate management''s assessment of probability of outcome and the magnitude of potential loss, and testing related to provisions and disclosures in the Standalone Financial Statements >- Reviewing orders and other communication from regulatory authorities and management responses thereto; ? Reviewing management expert''s legal advice and opinion as applicable, obtained by the company''s management for evaluating certain legal matters and evaluating competence and capabilities of the experts; and ? Using auditor''s own judgment in evaluating certain significant and complex direct and indirect tax matters Audit Conclusion No material exceptions identified |
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matters The Company and its jointly controlled entity is subject to a number of legal, regulatory and tax cases for which final outcome cannot be easily predicted and which could potentially result in significant liabilities. Management''s disclosures with regards to contingent liabilities are presented in Note No.39 (1) (i) to the Standalone Financial Statements. The assessment of the risks associated with the litigations is based on complex assumptions. This requires use of judgment to establish the level of provisioning, increases the risk that provisions and contingent liabilities may not be appropriately provided against or adequately disclosed. |
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4. |
Assessment of indication of impairment and the |
Principal Audit Procedures Our audit procedures related to assessment of indication of impairment and recoverable amounts of these CGUs included the followings: ? Understanding and evaluating the design and operating effectiveness of controls for identification and assessment of any potential impairment, including determining the carrying amount and recoverable amount of the CGUs; ? Relying on the report of external agency appointed solely for evaluating the assessment of impairment |
recoverable amount of cash generating units |
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(CGUs) Refer Note No. 2.17, Note No.36D(Sl 2) of the accompanying Standalone Financial Statements. There is an assessment done by the Company at the end of each reporting period for any indication that an asset may be impaired. Basis such assessment, there was a need for additional Impairment of the Plant at GCP as of 31-03-22. |
Sl No. |
Key Audit Matters |
Auditorâs Response |
Based on such indications, impairment testing was performed by the management with the help of an independent third party, in accordance with the requirements of Ind AS 36 âImpairment of Assetsâ |
at plants this year and calculating the recoverable amount and impairment loss ? Using auditor''s own judgments/assessment for testing appropriateness of the method and model used for determining the recoverable amount, mathematical accuracy of the models'' calculations and evaluating reasonableness of key assumptions used in future cash flow projections such as future use of those assets or management plan; >- Testing related presentation and disclosures in the Standalone Financial Statements. Audit Conclusion No material exceptions identified |
Information Other than the Standalone Financial Statements and Auditorâs Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Report of the Board of Directors, Management Discussion and Analysis Report, Report on CSR activities, Business Responsibility Report, Corporate Governance Report and other annexure to Directors Report including Shareholder''s Information, but does not include the Standalone Financial Statements and our auditor''s report thereon. The Report of the Board of Directors including annexures and other related statements forming part of the Company''s annual report is expected to be made available to us after the date of our this auditor report. Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance or conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact.
If, based on the Report of the Board of Directors including annexures and other related statements which form part of the annual report and made available to us after the date of this audit report, we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance
Responsibility of Management and Those Charged with Governance for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the Standalone Financial Statements, the Board of Directors is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ) issued by the Central Government of India in terms of sub section (11) of Section 143 of the Act, we give in âAnnexure Aâ, a statement on the matters
specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2) As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit except as reported in Clause (c) of the âEmphasis of Mattersâ paragraph above;
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
e) In pursuance to the Notification No. G.S.R 463(E) dated 05-06-2015 issued by Ministry of Corporate Affairs, Section 164(2) of the Act regarding disqualification of Directors, is not applicable to the Company, since it is a Government Company;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
g) As per Notification No. GSR 463(E) dated 05-06-2015 issued by the Ministry of Corporate Affairs, Government of India, Section 197 of the Act is not applicable to the Government Companies.
Accordingly, reporting in accordance with requirement of provisions of Section 197(16) of the Act is not applicable on the Company.
h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements-[Refer Note No. 39(1) to the accompanying Standalone Financial Statements];
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
3) As required under Section 143(5) of the Act, we give in the âAnnexure Câ, a statement on the directions and subdirections issued by the Comptroller and Auditor General of India in respect of the Company.
Chartered Accountants (Firm''s Registration No.304013E)
CA Siddhartha Pal Partner
Place: Kolkata (Membership No.059017)
Date: 28-05-2022 UDIN: 22059017AJUOLW1740
Mar 31, 2021
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying Standalone Financial Statements of Hindustan Copper Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2021, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and notes to the Standalone Financial Statements including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe Standalone Financial Statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (â the Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2021 and its profit (including Other Comprehensive Income), changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the âAuditorâs Responsibilities for the Audit of the Standalone Financial Statementsâ section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
Emphasis of Matters
We draw attention to the following matters:
a) Note No. 39 (1)(i) & 39 (31) of the accompanying Standalone Financial Statements which describes the uncertainty related to the outcome of the lawsuits filed and demands raised against the Company by various parties and Government authorities;
b) Note No.39 (6) of the accompanying Standalone Financial Statements which states that the title deeds for freehold and leasehold land and building acquired in respect of Gujarat Copper Project (GCP) with book value of ''5296.25 Lakh (PY:-''5578.11 Lakh) as at March 31,2021 are yet to be executed in favor of the Company;
c) Note No.39 (8) of the accompanying Standalone Financial Statements wherein, balances under the head Claims Recoverable, Loans & Advances, Deposits from and with various parties and certain balances of trade receivables, trade payables and other current liabilities have not been confirmed as at March 31, 2021.Consequential impact upon receipt of such confirmation /reconciliation / adjustments of such balances, if any is not ascertainable at this stage.
d) Note No.39 (27) the accompanying Standalone Financial Statements wherein the Company has made assessment of possible impairment loss during the year with respect to some fixed assets having original cost of ''22028.59 Lakh allocated to Gujarat Copper Project in accordance with Indian Accounting Standard (Ind AS) 36 âImpairment of Assetsâ. Provision of ''9708.21 Lakh towards impairment loss as against the total impairment loss computed, has been accounted for in the books of accounts as on March 31,2021 on conservative basis keeping in mind the possible longterm lease of those Plant and machineries or outright sale of Gujarat Copper Project;
e) Note No.39 (32) which describes the uncertainties and the management assessment of possible impact of COVID-19 pandemic on its business operations, financial assets, contractual obligations and its overall liquidity position as at March 31, 2021. Management will continue to monitor in future any material changes arising on financial and operational performance of the Company due to the impact of this pandemic and necessary measure to address the situation.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the year ended March 31, 2021. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
Sl. No. |
Key Audit Matters |
Auditorâs Response |
1. |
Assessment of Stripping Ratio and charging |
Principal Audit Procedures |
of overburden expenditure during production |
Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: ⢠We went through the current status of the mining at different mines ⢠We discussed with the management about the stripping procedure adopted in the industry as well practice followed by the Company ⢠Procedure followed by the management towards Identification of expenditures incurred in surface mines during production stage ⢠Understanding the computation of Stripping ratio initially made and documents made available to us. ⢠We have checked the stripping ratio to be charged under amortization for mine development expenditure for balance period of mines ⢠Discussion with the core technical team involve in this process ⢠Reliance is placed on the representations of the management. |
|
stage of surface mines to Mines Development |
||
Expenditure and Profit and Loss account Referred in Note No.2 (11) and Note No.9 of the Standalone Financial Statements. Assessment of Stripping Ratio is technically estimated initially at the beginning of the Mines and later on periodically assessed for which no standards written policy are there. Normally review done within a period of 3 to 4 years as informed to us. In case of open cast mines, the expenditure on removal of waste and overburden, is capitalized and the same is depleted in relation to actual ore production during the year on the stripping ratio which is re-assessed periodically based on the estimated ore reserve as well as the quantity of waste excavation in respect of open cast mines. Assessment of Stripping Ratio is uniquely applied under the Mining industries which involves significant judgment to determine the ratio and that also keep on change from time to time. This ratio has been changed subsequently based on the actual output of overburden and Ore exposed during the production stage of the mines. We have identified this area as key audit matter due to its nature as industry specific and involvement of technical assumptions and judgments in calculation of stripping ratio. Further it has a material impact on the financial statements being this year the Company has amortized ''24006.83 Lakh (PY:-Rs.23904.06 Lakh) as Mine development expenditure in respect of open cast mines. |
2. |
Provisions recognized and Contingent liabilities |
Principal Audit Procedures |
disclosed with resnect to certain legal and tax |
Our audit procedures relating to provisions |
|
matters |
||
recognized and contingencies disclosed regarding |
||
The Company is subject to a number of legal, regulatory and tax cases for which final outcome cannot be easily |
certain legal and tax matters included the followings: |
|
predicted and which could potentially result in significant liabilities. |
⢠Understanding and evaluating the design and operating effectiveness of controls over the |
|
Managementâs disclosures with regards to contingent |
recognition, measurement, presentation and disclosures made in the Standalone Financial |
|
liabilities are presented in Note No.39 (1) (i) to the |
Statements in respect of these matters; |
|
Standalone Financial Statements. |
⢠Obtaining details of legal and tax matters, |
|
The assessment of the risks associated with the litigations |
inspecting the supporting documents to |
|
is based on complex assumptions. This requires use of |
evaluate managementâs assessment of |
|
judgment to establish the level of provisioning, increases |
probability of outcome and the magnitude of |
|
the risk that provisions and contingent liabilities may |
potential loss, and testing related to provisions |
|
not be appropriately provided against or adequately |
and disclosures in the Standalone Financial |
|
disclosed. Accordingly, this matter is considered to be a |
Statements; |
|
Key Audit Matter. |
⢠Reviewing orders and other communication |
|
from regulatory authorities and management responses thereto; |
||
⢠Reviewing management expertâs legal advice |
||
and opinion as applicable, obtained by the Companyâs management for evaluating certain legal matters and evaluating competence and capabilities of the experts; and |
||
⢠Using auditorâs own judgement in evaluating |
||
certain significant and complex direct and indirect tax matters |
||
Based on the above procedures performed, we did not identify any material exceptions in the provision recognized and contingent liabilities disclosed in the Standalone Financial Statements with regard to such legal and tax matters. |
3. |
Assessment of indication of impairment and the |
Principal Audit Procedures |
recoverable amount of cash generating units |
Our audit procedures related to assessment of indication of impairment and recoverable amounts of these CGUs included the followings: ⢠Understanding and evaluating the design and operating effectiveness of controls for identification and assessment of any potential impairment, including determining the carrying amount and recoverable amount of the CGUs; ⢠Replying on the report of external agency appointed solely for evaluating the assessment of impairment at plants this year and calculating the recoverable amount and impairment loss ⢠Using auditorâs own judgements/assessment for testing appropriateness of the method and model used for determining the recoverable amount, mathematical accuracy of the modelsâ calculations and evaluating reasonableness of key assumptions used in future cash flow projections such as future use of those assets or management plan; ⢠Performing sensitivity analysis over key assumptions to corroborate that recoverable amount of these CGUs is within a reasonable range, including the impact of Covid-19 pandemic assessment; and ⢠Testing related presentation and disclosures in the Standalone Financial Statements. Based on the above procedures performed, we did not note any exceptions in the managementâs assessment of the indication of impairment and conclusion that the recoverable amount of these CGUs was not lower than their respective carrying amounts as at March 31, 2021. |
|
(CGUs) Refer Note No. 2.17, Note No.39 (27) and (28) of the accompanying Standalone Financial Statements. External sources of information such as changes in the market and economic environment, including the carrying amount of the net assets of the Company being more than its market capitalization as at March 31, 2021, Idle plant and machineries for quite long time, decline in the demand and production process and impact of Covid-19 pandemic required Companyâs management to assess whether there is any indication of impairment and therefore make a formal estimate of recoverable amounts of certain plants and machineries at Gujarat Copper Project and COT plant at Malanjkhand Copper Project as at March 31, 2021. Based on such indications, impairment testing was performed by the management in accordance with the requirements of Ind AS 36 âImpairment of Assetsâ. Management has calculated the recoverable amount of those plant and machineries using value-in-use method. This is a key audit matter, because of the significant carrying value of these CGUs and the estimation or uncertainty in assumptions used for calculating the recoverable amounts. |
4. |
Modified Audit Procedures carried out in light of |
Principal Audit Procedures |
COVID-19 outbreak: |
Due to the outbreak of COVID-19 pandemic that |
|
Due to COVID-19 pandemic, nation-wide lockdown |
caused nationwide lockdown and other travel |
|
and travel restrictions imposed by Central / State |
restrictions imposed by the Central and State |
|
Government / Local Authorities during the period of our |
Governments/local administration during the |
|
audit. Wherever physical access was not possible, audit |
period of our audit, we could not travel to the Plants/ |
|
could not be conducted by visiting the Plants/Projects/ |
Projects/Regional Sales offices and carry out the audit processes physically at the respective Plants/ |
|
Regional Sales offices. As we could not gather audit |
Projects/Regional Sales offices. Wherever physical |
|
evidence in person/ physically/ through discussions and |
access was not possible, necessary records/ reports/ |
|
personal interactions with the officials at the Plants/ |
documents/ certificates were made available to |
|
Projects/Regional Sales offices, we have identified such |
us by the management of the respective Plants / |
|
modified audit procedures as a Key Audit Matter. |
Projects / Regional Sales offices through E-Mail and |
|
Accordingly, our audit procedures were modified to carry |
to the extent generated from the ORACLE system |
|
out the audit remotely. |
at Head office, Kolkata. Audit was carried out on the basis of such documents, reports and records made available to us on which were relied upon as audit evidence by us for conducting the audit and reporting for the current period. Accordingly, we modified our audit procedures as follows: a) Conducted verification of necessary records/ documents/Trial Balances and other relevant application software electronically through remote access/emails in respect of Plants/ Projects/Regional Sales offices wherever physical access was not possible. b) Carried out verification of scanned copies of the documents, records, certificates, deeds etc. made available to us through emails and remote access over secure network of the Company. c) Making enquiries and gathering necessary audit evidence through telephonic communication and e-mails. |
Information Other than the Standalone Financial Statements and Auditorâs Report Thereon
The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Report of the Board of Directors, Management Discussion and Analysis Report, Report on CSR activities, Business Responsibility Report, Corporate Governance Report and other annexure to Directors Report including Shareholderâs Information, but does not include the Standalone Financial Statements and our auditorâs report thereon. The Report of the Board of Directors including annexures and other related statements forming part of the Companyâs annual report is expected to be made available to us after the date of our this auditor report. Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information when it becomes available only and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
When we read the Report of the Board of Directors including annexures and other related statements form part of the Companyâs annual report and made available to us after the date of our this auditor report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
Responsibility of Management and Those Charged with Governance for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, the Board of Directors is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis or our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub section (11) of Section 143 of the Act, we give in âAnnexure Aâ, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2) As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit except as reported in Clause (c) of the âEmphasis of Mattersâ paragraph above;
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
e) In pursuance to the Notification No. G.S.R 463(E) dated 05-06-2015 issued by Ministry of Corporate Affairs, Section 164(2) of the Act regarding disqualification of Directors, is not applicable to the Company, since it is a Government Company;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
g) As per Notification No. GSR 463(E) dated 05-06-2015 issued by the Ministry of Corporate Affairs, Government of India, Section 197 of the Act is not applicable to the Government Companies.
Accordingly, reporting in accordance with requirement of provisions of Section 197(16) of the Act is not applicable on the Company.
h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statementsâ[Refer Note No. 39(1) to the accompanying Standalone Financial Statements];
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
3) As required under Section 143(5) of the Act, we give in the âAnnexure Câ, a statement on the directions and subdirections issued by the Comptroller and Auditor General of India in respect of the Company.
Chartered Accountants (Firmâs Registration No.302137E)
Place: Kolkata CA R.K. Nanda
Date: 25th June, 2021 Partner
(Membership No.510574)
UDIN: 21510574AAAACA8224
Mar 31, 2018
To the Members of Hindustan Copper Limited Report on the Financial Statements
We have audited the accompanying Financial Statements of Hindustan Copper Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2018, and the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements:
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these financial statements that give a true and fair view of the state of affairs(financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence, we have obtained is sufficient and appropriate, to provide a basis for our audit opinion on the Financial Statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Financial Statements, give the information required by the Act in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India including the IndAS, of
i) the state of affairs (financial position) of the Company as at 31st March, 2018, and
ii) its profit (financial performance including other comprehensive income),
iii) its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
We draw attention to the following matters in the Note No 39-General Notes on Accounts to the Financial Statements:
1) Our observations as per Annexure Ato the Clause No. 28, which may have material impact on the state of affairs as well as the profit for the year and the comparative previous years'' figures. However, the company will review the observations during the current year and make the accounting adjustments, if needed.
2) Vide Clause No. 1 (i) which describes the uncertainty related to the outcome of various lawsuits filed and claims of demand raised against the Company by various authorities/parties and its financial impact on the Financial Statements of the company. The Company has treated those demands as disputed and not acknowledged as debt in the books and treated the same as Contingent Liabilities, the total amount of which comes to Rs.51765.56 lacs.
3) Vide Clause No. 8 which describes the balances under the head Sundry Creditors, Claims Recoverable, Loans & Advances, Sundry Debtors and Deposits from and with various parties/Govt. Dept. etc. have not been confirmed in number of cases.
4) As stated in Clause No. 3 of Note No. 39 - General Notes on Accounts, the title deed for leasehold land received from the State Government and certain freehold lands acquired through nationalization in accordance with Indian Copper Corporation (Acquisition of Undertaking) Act, 1972 in respect of Indian Copper Complex (ICC) have not yet been executed in favour of the Company and in Clause No 6 of Note No 39 - General Notes on Accounts, title deeds were not obtained/held in the name of the company in respect of office flat at SCOPE Complex, Delhi and Jaipur office for book value of Rs 62.88 Lac (Previous year Rs 68.06 Lac) as well as Land& Building for book value of Rs 6138.52Lac (Previous year Rs 6300.54Lac) of Gujarat Copper Project (GCP).
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure-I, a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143(5) of the Act, we give in the Annexure-II a statement of our replies to the directions /additional directions issued by the Comptroller and Auditor General of India (C&AG)
3. As required by section 143(3) of the Act, we report, to the extent applicable, that:
(a) We have sought and obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company, so far as it appears from our examination ofthose books.;
(c) The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and the Statement of Change in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid Financial Statements comply with the Indian Accounting Standards specified under Section 133 of the Act, to the extent applicable.
(e) In our opinion, provisions under section 164(2) of the Act, regarding disqualification of Directors are not applicable to a Government company in terms of NotificationNo. G.S.R. 463(E) dated 05.06.2015 issued by Ministry of Corporate Affairs.
(f) With respect to the adequacy of internal financial control over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in the Annexure-III, and
(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditor''s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Financial Statements (vide Clause No. 1
(i) of Note No. 39 - General Notes on Accounts) and our comments made in paragraph ''Emphasis of Matter''.
ii. The Company did not have any material foreseeable losses on long-term contract including derivative contracts.
iii. According to the information and explanations given to us, there were no amounts which were required to be transferred to Investor Education and Protection Fund by the company.
(Referred to in our report of even date)
(i) (a) The Company has not maintained proper records so as to show full particulars including quantitative details and situation of its Fixed Assets. The summary of discrepancies in the records are as below:
1. Fixed Asset Register does not show the following particulars in most of the cases:
a) Location/situation
b) Identification (Land may be identified by survey numbers and by deeds of conveyance, Railway sidings can be identified by length and location, Vehicles can be identified by reference to the registration books.). At the point of identification, a code number may be affixed on the asset which would give sufficient details for future identification.
c) Quantity
d) Component wise break up (Plant and Machinery may be sub-divided into fixed and movable)
e) adjustment for revaluation or for any increase or decrease in cost
f) particulars regarding impairment
g) particulars regarding sale, discarding, demolition, destruction, etc
h) particulars in respect of those items of fixed assets that have been fully depreciated or amortized or have been retired from active use and held for disposal.
i) particulars in respect of items of fixed assets that have been fully impaired during the period covered by the audit report.
j) name& designation of the person who has custody of the asset for the time being.
k) Deemed Cost, being the WDV as on 01.04.2015, which has been substituted in place of Gross Block.
(b) The company has a laid down programme of physical verification of its fixed assets by which all fixed assets are required to be verified in aphased manner over aperiod of three years. (Vide Clause No.26 of Note No. 39 - General Notes on Accounts). At TCP, GCP, ROSW and ROSE, the assets have not been verified during last 4 years. At KCC, the external agency engaged for physical verification has ascertained that 16 Nos. of Fixed Assets in 14 Assets Code, consisting of mainly heavy vehicles, having original cost of Rs.191 lakhs (WDV on 31.12.17 Rs.96 lakhs) were physically not available. However, in the same report, it has been mentioned that the same were lying at the Administration Office âas discussed during audit and over the phoneâ. This evidences that there is total lack of control on the safeguard and proper use of the assets.
(c) As such, we are not aware about the extent of material discrepancies, if any, of physical balance with book balance. In our opinion, the periodicity of physical verification having regard to the size of the company and the nature of its assets, is not reasonable.
(d) The Company, in spite of repeated assurances in the past few years as reported in the past audit reports, has not taken any steps to maintain Register of Land and Building (Immovable Property) showing the details of title deeds held in the name of the Company or otherwise including total number of such cases and whether the same are leasehold/freehold.
(e) Title deeds of all the immovable properties (except as specified on Emphasis of Matter paragraph as above) are held in the name of the Company. However, original title deeds are not made available to us except 11 flats at Panvel, Mumbai with original costofRs.11.27 lakhs (at present not being used).
(ii) (a) According to the information and explanations given to us, the inventories of Store & Spares have been physically verified by the management/ external agencies during the year. However, in the case of physical stock of Raw Material, Finished Goods and Semi Finished and In-Process Stock, is stated to have been physically verified at the yearend by the management and the same exactly tallies with the Book Stock. Therefore, no discrepancy between physical stock with the book stock has been determined. However, in view of the nature, volume and frequency of transaction, such NIL discrepancy in the Stock is not acceptable. In view of lack of authenticity of physical stock, we disclaim to express any opinion as to whether the periodicity of physical verification is reasonable having regard to the size of the company and the nature of its business. However, certain discrepancies arising out of verification of Store & Spares between the physical stocks and book records were noticed, which were material considering size of the Company and the nature of its business and the same have not been properly dealt with in the books of account. For example at KCC, shortage amounting to Rs.146 lakhs (which includes 192485 Ltrs of HSD valued at Rs.127 lakhs) was found apart from observation about several discrepancies in the maintenance of records. In the remarks, it is mentioned that,âFor the HSD Tank at Central Stores the move orders pending for transactions viz. .were entered and transacted. The physical qnty and book qnty is tallying. HSD qntyl61700 is available at KPOWER-K15 ORGas confirmed by Elec Dept.â There was opening provision ofRs.114 lakh and additional provision of Rs.33 lakh has been made to disclose the closing provision is of Rs.147 lakhs. Therefore, the discrepancy has not been properly accounted for. This evidences that there is lack of control on the safeguard and proper use of the assets.
(iii) The Company has not furnished us any register, if any, maintained under section 189 of the Companies Act, 2013. However, the Company has not granted any loans, secured or unsecured, during the year, to any companies, firms, limited liability partnerships or other parties. In view of above, the clauses 3 (iii)(a), 3 (iii)(b) and 3 (iii)(c) of the Order are not applicable.
(iv) According to information and explanations given to us, the company has not advanced any loan, given any guarantee or provided any security in connection with such loan and given/made any loan/investment within the meaning of section 185 and 186 of the Companies Act, 2013.However, since the Company has not provided the details of parties covered under section 185 of the Act, we are unable to comment on the matter of granting any loans or providing any guarantees or security to such parties, if any. The Company has made investments in the Mutual Funds, which is not the business activity of the Company. The reasons of such market risk bearing investment has not been explained to us.
(v) According to the information and explanations given to us, the company has not accepted any deposit from the public within the meaning of Section 73 to 76 or any other relevant provision of the Companies Act, 2013 and the rules framed there under and as such, reporting under this clause is not applicable to the Company.
(vi) According to the information and explanations given to us, maintenance of cost records by the Company has been specified by Central Government under sub section (1) of section 148 of the Companies Act, 2013. We have broadly reviewed such cost records and we are of the opinion that, prima facie, such accounts and records have been made and maintained.
(vii) (a) According to the records of the Company and information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues including provident fund, employee state insurance, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax, Cess and other statutory dues with the appropriate authorities where applicable. There is no arrear of outstanding statutory dues as at 31st March 2018 for a period of more than six months from the date they became payable excepting Rs.1207.41 Lac(Rs.l081.96 Lac) towards Water Cess payable to Water Resources Department, Govt, of Jharkhand since the financial year 1999-2000.
(b) According to the records of the Company and information and explanations given to us, the following are the details of disputed dues in respect of income tax, sales tax, entry tax, service tax, duty of custom, duty of excise, value added tax and Cess as on 31st March 2018:
Statement of Disputed Statutory Dues as on 31.03.2018 |
||||
Name of the Statue |
Nature of Dues |
Period to which the amount relates |
Forum where dispute is pending |
Amount (Rs, in lacs) |
West Bengal Value Added Tax Act, |
State Sales Tax/ VAT |
2004-05 (RSOE) |
Dy. Commissioner (Appeal) |
10.46 |
West Bengal Value Added Tax Act, |
State Sales Tax/ VAT |
2008-09 (RSOE) |
Sr. Jt. Commissioner (Appeal) |
50.12 |
West Bengal Value Added Tax Act, |
State Sales Tax/ VAT |
2010-11 (RSOE) |
Addl. Commissioner (Appeal) |
4.73 |
Central Sales Tax Act |
Central Sales Tax |
2007-08, 2008-09 & 2010-11 (ICC) |
Commissioner of Commercial Taxes, Jamshedpur |
1679.47 |
Central Excise Act |
Central Excise |
1985-86 (ICC) |
CESTAT |
60.60 |
Central Excise Act |
Central Excise |
1997-98 TO 1999-00 (ICC) |
CESTAT |
203.52 |
Central Excise Act |
Central Excise |
1995-96 (ICC) |
CESTAT |
15.65 |
Central Excise Act |
Central Excise |
2000-01 TO 2003-2004 (ICC) |
CESTAT |
1501.76 |
Central Excise Act |
Central Excise |
2000-2001 TO 2001-2002 (ICC) |
CESTAT |
283.40 |
Central Excise Act |
Central Excise |
1996-97 (ICC) |
CESTAT |
1.46 |
Central Excise Act |
Central Excise |
1998 (ICC) |
Supreme Court of India |
16.00 |
Madhya Pradesh Value Added Tax Act, |
Entry Tax |
1994-95 (MCP) |
Commissioner (Appeals) Jabbalpur |
5.38 |
Madhya Pradesh Value Added Tax Act, |
State Sales Tax/ VAT |
2009-2010 (MCP) |
Sales tax Authority (Bhopal) |
34.47 |
Madhya Pradesh Value Added Tax Act, |
State Sales Tax/ VAT |
2011-12 (MCP) |
Sales tax Authority (Bhopal) |
16.66 |
Madhya Pradesh Value Added Tax Act, |
State Sales Tax/ VAT |
2012-13 (MCP) |
Sales tax Authority (Bhopal) |
99.89 |
Central Excise Act |
Central Excise |
2005-06 TO 2007-08 (MCP) |
Commissioner Central Excise |
64.19 |
Name of the Statue |
Nature of Dues |
Period to which the amount relates |
Forum where dispute is pending |
Amount (Rs, in lacs) |
Central Excise Act |
Central Excise |
1998-99 TO 2017-18 (KCC) |
Commissioner Central Excise |
1693.66 |
Rajasthan Value Added Tax Act, |
Central Excise |
2007-08 TO 2014-15 (KCC) |
Dy. Commissioner Appeal (Bikaner) |
311.67 |
Income Tax Act |
Income Tax |
2016-17 & 2017-18 (KCC) |
Commissioner of Income Tax ,Jaipur |
13.20 |
Central Excise Act |
Central Excise |
2007-08 TO 2017-18 (TCP) |
CESTAT |
828.38 |
Maharashtra Value Added Tax Act, |
State Sales Tax/ VAT |
1994-95,2011-12 & 2012-13 (TCP) |
Appellate Authority |
171.14 |
Income Tax Act |
Income Tax |
2001-02,2002-03, 2003-04,2005-06, 2006-07,2007-08, 2011-12 & 2012-13 (HO) |
High Court, ITAT & Commissioner of Income Tax (Appeal) |
10547.08 |
GR TOTAL |
17612.89 |
*RSOE - Regional Sales Office East, *ICC - Indian Copper Complex *MCP -Malanjkhand Copper Project *TCP âTaloja Copper Project, * KCC - Khetri Copper Complex, *CO - Corporate Office
c) According to the information and explanations given to us, there are no dues of sales tax, income tax, wealth tax, excise duty, service tax and cess, which have not been deposited on account of any dispute.
(viii) According to information and explanations given to us, the Company has not defaulted in repayment of loan or borrowing to financial institutions, banks or government and dues to debenture holders.
(ix) According to the information and explanations given to us, the Company has applied the term loans for the purpose for which they were obtained. During the year the Company has not raised any amount through initial public offer or further public offer.
(x) We have not been furnished any information and explanation whether there were any fraud by the Company or any fraud on the Company by its officers and employees noticed or reported during the year.
(xi) According to the information and explanations give to us, provisions of section 197 of the Companies Act, 2013 regarding managerial remuneration are not applicable to the Government Company in terms of Notification No G.S.R. 463(E) dated 05.06.2015 issued by Ministry of Corporate Affairs and as such, reporting under this clause is not applicable to the Company.
(xii) In our opinion and according to the information and explanations given to us, the company is not a Nidhi company and as such, reporting under this clause is not applicable to the Company.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013 where applicable and details of such transactions have been disclosed in the Financial Statements as required by the applicable accounting standards, where applicable.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year and as such, reporting under this clause is not applicable to the Company.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with him/her and as such, reporting under this clause is not applicable to the Company.
(xvi) In our opinion, the Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934 and as such, reporting under this clause is not applicable to the Company.
For J.Gupta & Co.,
Chartered Accountants
Firm Reg.No 314010E
CA Abhishek Raj
Partner
M.No.302648
Place: New Delhi
Date : 30.05.2018
Mar 31, 2017
To the Members of Hindustan Copper Limited Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of Hindustan Copper Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2017, and the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (herein after referred to as "Ind AS financial statements").
Management''s Responsibility for the Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of affairs (financial position) of the Company as at 31st March, 2017, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
We draw attention to the following matters in the Note No 39-General Notes on Accounts to the Ind AS financial statements:
1) Vide Clause No. 2 (i) which describes the uncertainty related to the outcome of various lawsuits filed and claims of demand raised against the Company by various authorities/parties and its financial impact on the Ind AS financial statements of the company. The Company has treated those demands as disputed and not acknowledged as debt in the books and treated the same as Contingent Liabilities, the total amount of which comes to ''38566.91Lac
2) Vide Clause No. 10 which describes the balances under the head Sundry Creditors, Claims Recoverable, Loans & Advances, Sundry Debtors and Deposits from and with various parties/Govt. Dept. etc. have not been confirmed in number of cases.
Our opinion is not modified in respect of these matters.
Other Matter
The financial information of the Company for the year ended 31st March, 2016 and the transition date opening Balance Sheet as at 01st April, 2015 included in these Ind AS financial statements are based on the previously issued statutory financial statements for the years ended 31st March, 2016 and 31st March, 2015 prepared in accordance with the Company''s (Accounting Standards) Rules, 2006 (as amended) which were audited by us, on which we expressed an unmodified opinion dated 30th May, 2016 and 28th May, 2015 respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to Ind AS have been audited by us.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure-I a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143(5) of the Act, we give in the Annexure-II a statement of our replies to the directions /additional directions issued by the Comptroller and Auditor General of India (C & AG)
3. As required by section 143(3) of the Act, we report, to the extent applicable, that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
(c) The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and the Statement of Change in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, to the extent applicable.
(e) In our opinion, provisions under section 164(2) of the Act, regarding disqualification of Directors are not applicable to a Government company in terms of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by Ministry of Corporate Affairs.
(f) With respect to the adequacy of internal financial control over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in the Annexure-III, and
(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditor''s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements (vide Clause No. 2(i) of Note No. 39 - General Notes on Accounts) and our comments made in paragraph ''Emphasis of Matter''.
ii. The Company did not have any material foreseeable losses on long-term contract including derivative contracts.
iii. According to the information and explanations given to us, there were no amounts which were required to be transferred to Investor Education and Protection Fund by the company.
iv. The company has provided requisite disclosures in its Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and these are in accordance with the books of accounts maintained by the company (vide Clause No. 31 of Note No. 39 - General Notes on Accounts).
(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of its Fixed Assets.
(b) The company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. (Vide Clause No.29 of Note No. 39 - General Notes on Accounts). Accordingly, fixed assets of some units/offices of the Company were verified by external agencies during the year and no material discrepancies were noticed on such verification. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the company and the nature of its assets.
(c) The Company has taken steps to maintain Register of Land and Building (Immovable Property) showing the details of title deeds held in the name of the Company or otherwise including total number of such cases and whether the same are leasehold/freehold.
In the absence of complete maintenance of such Register, we could not comment whether title deeds of all the immovable properties are held in the name of the Company or otherwise.
However, as stated in Clause No. 4 of Note No. 39 - General Notes on Accounts, the title deed for leasehold land received from the State Government and certain freehold lands acquired through nationalization in accordance with Indian Copper Corporation (Acquisition of Undertaking) Act, 1972 in respect of Indian Copper Complex (ICC) have not yet been executed in favour of the Company and in Clause No 7 of Note No 39 -General Notes on Accounts, title deeds were not obtained/held in the name of the company in respect of office flat at SCOPE Complex, Delhi and Jaipur office for book value of ''68.06 Lac (Previous year ''73.32 Lac) as well as Land & Building for book value of ''6300.54 Lac (Previous year ''6037.30 Lac) of Gujarat Copper Project (GCP).
However, the amount of gross block and net block of immovable property as on the balance sheet date have been shown in the financial records.
(ii) (a) According to the information and explanations given to us, the inventories of Finished Goods, Raw Materials and Store & Spares have been physically verified by the management / external agencies during the year. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the company and the nature of its business. However, certain discrepancies arising out of verification of Store & Spares between the physical stocks and book records were noticed, which were not material considering size of the Company and the nature of its business and the same have been properly dealt with in the books of account.
(iii) According to information and explanations given to us, the company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnership or other parties covered in the register maintained under section 189 of the Companies Act, 2013 and as such, reporting under this clause is not applicable to the Company.
(iv) According to information and explanations given to us, the company has not advanced any loan, given any guarantee or provided any security in connection with such loan and given/made any loan/investment within the meaning of section 185 and 186 of the Companies Act, 2013 and as such, reporting under this clause is not applicable to the Company.
(v) According to the information and explanations given to us, the company has not accepted any deposit from the public within the meaning of Section 73 to 76 or any other relevant provision of the Companies Act, 2013 and the rules framed there under and as such, reporting under this clause is not applicable to the Company.
(vi) According to the information and explanations given to us, maintenance of cost records by the Company has been specified by Central Government under sub section (1) of section 148 of the Companies Act, 2013. We have broadly reviewed such cost records and we are of the opinion that, prima facie, such accounts and records have been made and maintained.
(vii) (a) According to the records of the Company and information and explanations given to us, the Company is
generally regular in depositing undisputed statutory dues including provident fund, employee state insurance, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax, Cess and other statutory dues with the appropriate authorities where applicable. There is no arrear of outstanding statutory dues as at 31st March 2017 for a period of more than six months from the date they became payable excepting ''1081.96 Lac towards Water Cess payable to Water Resources Department, Govt. of Jharkhand since the financial year 1999-2000.
(b) According to the records of the Company and information and explanations given to us, the following are the details of disputed dues in respect of income tax, sales tax, entry tax, service tax, duty of custom, duty of excise, value added tax and Cess as on 31st March 2017:
Name of the Statue |
Nature of Dues |
Period to which the amount relates |
Forum where dispute is pending |
Amount (Rs, in lac) |
West Bengal Value Added Tax Act, |
State Sales Tax/ VAT |
2004-05 (RSOE) |
Dy. Commissioner (Appeal) |
10.46 |
West Bengal Value Added Tax Act, |
State Sales Tax/ VAT |
2008-09 (RSOE) |
Sr. Jt. Commissioner ( Appeal) |
50.12 |
Central Sales Tax Act |
Central Sales Tax |
2007.08 (ICC) |
Commissioner of Commercial Taxes, Jamshedpur |
345.11 |
Central Excise Act |
Central Excise |
1985-86 (ICC) |
CESTAT |
60.60 |
Central Excise Act |
Central Excise |
1997-98 TO 1999-00 (ICC) |
CESTAT |
203.52 |
Central Excise Act |
Central Excise |
1995-96 (ICC) |
CESTAT |
15.65 |
Central Excise Act |
Central Excise |
2000-01 TO 2003-2004 (ICC) |
CESTAT |
1501.76 |
Central Excise Act |
Central Excise |
2000-2001 TO 2001-2002(ICC) |
CESTAT |
283.40 |
Central Excise Act |
Central Excise |
1996-97 (ICC) |
CESTAT |
1.46 |
Central Excise Act |
Central Excise |
1998 (ICC) |
Supreme Court of India |
16.00 |
Madhya Pradesh Value Added Tax Act, |
Entry Tax |
1994-95 (MCP) |
Commissioner (Appeals) Jabbalpur |
5.38 |
Madhya Pradesh Value Added Tax Act, |
State Sales Tax/ VAT |
2009-2010 (MCP) |
Sales tax Authority (Bhopal) |
34.47 |
Madhya Pradesh Value Added Tax Act, |
State Sales Tax/ VAT |
2011-12 (MCP) |
Sales tax Authority (Bhopal) |
16.66 |
Madhya Pradesh Value Added Tax Act, |
State Sales Tax/ VAT |
2012-13 (MCP) |
Sales tax Authority (Bhopal) |
99.89 |
Central Excise Act |
Central Excise |
2006-07 TO 2011-12 (MCP) |
Customes,Excise & Service Tax Appalate Tribunal, New Delhi |
394.97 |
Central Excise Act |
Central Excise |
2005-06 TO 2007-08 (MCP) |
Commissioner Central Excise |
64.19 |
Central Excise Act |
Central Excise |
1998-99 TO 2014-15 (KCC) |
Commissioner Central Excise |
697.22 |
Rajasthan Value Added Tax Act, |
Entry Tax |
2007-08 TO 2014-15 (KCC) |
Dy. Commissioner Appeal (Bikaner) |
311.67 |
Central Excise Act |
Central Excise |
2007-08 TO 2015-16 (TCP) |
CESTAT |
594.91 |
Maharashtra Value Added Tax Act, |
State Sales Tax/ VAT |
1994-95 (TCP) |
Appellate Authority |
18.81 |
Income Tax Act |
Income Tax |
2007-08, 2009-10 & 2011-12 (CO) |
Commissioner of Income Tax (Appeal) |
360.67 |
1 TOTAL |
5086.92 J |
*RSOE - Regional Sales Office East, *ICC - Indian Copper Complex *MCP -Malanjkhand Copper Project *TCP -Taloja Copper Project, * KCC - Khetri Copper Complex, *CO - Corporate Office
(viii) According to information and explanations given to us, the Company has not defaulted in repayment of loan or borrowing to financial institutions, banks or government and dues to debenture holders.
(ix) According to information and explanations given to us, the company did not raise any money by way of initial public offer or further public offer (including debt instruments) or term loan during the year.
(x) According to information and explanations given to us, no fraud by the company or any fraud on the Company by its officers and employees has been noticed or reported during the year.
(xi) According to the information and explanations give to us, provisions of section 197 of the Companies Act, 2013 regarding managerial remuneration are not applicable to the Government Company in terms of Notification No G.S.R. 463(E) dated 05.06.2015 issued by Ministry of Corporate Affairs and as such, reporting under this clause is not applicable to the Company.
(xii) In our opinion and according to the information and explanations given to us, the company is not a Nidhi company and as such, reporting under this clause is not applicable to the Company.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013 where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards, where applicable.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year and as such, reporting under this clause is not applicable to the Company.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with him/her and as such, reporting under this clause is not applicable to the Company.
(xvi) In our opinion, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934 and as such, reporting under this clause is not applicable to the Company.
Report pursuant to directions/additional company specific directions issued by office of the Comptroller and Auditor General of India (C& AG) under Section 143(5) of the Companies Act, 2013
Sl No. |
Directions |
Actions Taken |
Impact on the Accounts & Financial Statements |
1. |
Whether the company has clear/title/ lease deeds for freehold land and leasehold land respectively? If not, please state the area of freehold and leasehold land for which title/ lease deeds are not available? |
In the absence of Register of Land showing details of freehold and leasehold land vis-a-vis title/lease deeds of those lands being reconciled with each other, we are unable to state the area of freehold and leasehold land for which title/ lease deeds are not available with the Company. However, as stated in Clause No. 4 and 7 to Note No. 39 - General Notes on Accounts, leasehold land received from State Government as well as freehold land acquired through nationalization in accordance with Indian Copper Corporation (Acquisition of Undertaking) Act, 1972, in respect of Indian Copper Complex (ICC) and freehold & leasehold land of Rs,3709.55 Lac in respect of Gujarat Copper Project (GCP), have not yet been executed in favour of the Company. |
Gross Block & Net Block of Leasehold/ Freehold Land, wherever applicable, have been duly shown in the accounts and financial statements. Hence there is no impact on the accounts and financial statements. |
2. |
Whether there are any cases of waiver /write off of debts/loans/interest etc., if yes, the reasons there for and the amount involved. |
As per information and explanations given to us, there was no case of waiver of debts/loans/ interest etc. during the year under audit. |
No such cases, hence there is no impact on the accounts and financial statements. |
3. V |
Whether proper records are maintained for inventories lying with third parties & assets received as gift from Government or other authorities. |
As per information and explanation given to us, proper records are maintained for inventory lying with third parties. However there is no inventory lying with third parties as on 31.03.2017 The company has not received any gift from Government or other authorities during the year. |
There is no impact on the accounts and financial statements. No such cases, hence there is no impact on the accounts and financial statements. |
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Hindustan Copper Limited ("the Company") as of 31st March 2017 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has in place, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For A. Kayes & Co
Chartered Accountants
Firm Registration No. 311149E
CA.A.K.GHOSH
Place : New Delhi Partner
Date: 17. 5. 2017 Membership No. 052933
Mar 31, 2016
We have audited the accompanying financial statements of Hindustan
Copper Limited ("the Company"), which comprise the Balance Sheet as at
31st March, 2016, the Statement of Profit and Loss, the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March, 2016, and its profit and its cash flows for the year
ended on that date.
Emphasis of Matter
We draw attention to the following matters in the Note No 35 of General
Notes on Accounts to the financial statements:
1) Vide Clause No. 1(i)(a) & (b) which describes the uncertainty
related to the outcome of various lawsuits filed and claims of demand
raised against the Company by various authorities/parties and its
financial impact on the financial statements of the company. The
Company has treated those demands as disputed and not acknowledged as
debt in the books and treated the same as Contingent Liabilities, the
total amount of which comes to Rs.43526.66 Lac
2) Vide Clause No. 9 which describes the balances under the head Sundry
Creditors, Claims Recoverable, Loans & Advances, Sundry Debtors and
Deposits from and with various parties/Govt. Dept. etc. have not been
confirmed in number of cases.
3) Vide Clause No. 30 which describes that domestic sales during the
year have been reduced by Rs.582.65 lac being rectification of sales of
anode slime wrongly credited to the sales account in the preceding F.Y.
2014-15.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required under the Companies (Auditor''s Report) Order, 2016
("the Order"), issued by the Central Government of India in terms of
sub-section (11) of Section 143 of the Act, we give in the Annexure-I a
statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
2. As required under section 143(5) of the Act, we give in the
Annexure-II a statement of our replies to the directions /additional
directions issued by the Comptroller and Auditor General of India (C &
AG)
3. As required under section 143(3) of the Act, we report, to the
extent applicable, that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books;
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
(d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014;
(e) In our opinion, provisions under section 164(2) of the Act,
regarding disqualification of Directors are not applicable to a
Government company in terms of Notification No. G.S.R. 463(E) dated
05.06.2015 issued by Ministry of Corporate Affairs.
(f) With respect to the adequacy of internal financial control over
financial reporting of the company and the operating effectiveness of
such controls, refer to our separate report in the Annexure-III, and
(g) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and
Auditor''s) Rules, 2014, in our opinion and to the best of our
information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements (vide Clause No. 1(i)
(a) of Note No. 35 of General Notes on Accounts) and our comments made
in paragraph ''Emphasis of Matter''.
ii. The Company did not have any material foreseeable losses on long
term contract including derivative contracts.
iii. According to the information and explanations given to us, there
were no amounts which were required to be transferred to Investor
Education and Protection Fund by the company.
(Referred to in our report of even date)
(i) (a) The Company has generally maintained proper records showing
full particulars including quantitative details and situation of its
Fixed Assets.
(b) Fixed Assets of the company have not been physically verified by
the management during the year pursuant to company''s accounting
policies (Vide Clause No.3.6 of Note No. 2 of Significant Accounting
Policies read with Clause No 28 of Note No. 35 of General Notes on
Accounts) and as such, question of material discrepancies, if any, and
its treatment in the books of account does not arise this year.
However in terms of aforesaid policy, the fixed assets were last
physically verified in the preceding financial year 2013-14.
(c) The Company has taken steps to maintain Register of Land and
Building (Immovable Property) showing the details of title deeds held
in the name of the Company or otherwise including total number of such
cases and whether the same are leasehold/freehold.
In the absence of complete maintenance of such Register, we could not
comment whether title deeds of all the immovable properties are held in
the name of the Company or otherwise However, as stated in Clause No. 3
of Note No. 35 of General Notes on Accounts, the title deed for
leasehold land received from the State Government and certain freehold
lands acquired through nationalization in accordance with Indian Copper
Corporation (Acquisition of Undertaking) Act, 1972 in respect of Indian
Copper Complex (ICC) have not yet been executed in favour of the
Company and in Clause No 6 of Note No 35 of General Notes on Accounts,
title deeds were not obtained/held in the name of the company in
respect of office flat at SCOPE Complex, Delhi and Jaipur office for
book value of Rs.73.32 Lac (Previous year Rs.78.59 Lac) as well as Land
& Building for book value of Rs.6037.30 Lac (Previous year Nil ) of
Gujarat Copper Project (GCP).
However, the amount of gross block and net block of immovable property
as on the balance sheet date have been shown in the financial records.
(ii) (a) According to the information and explanations given to us, the
inventories of Finished Goods, Raw Materials and Store & Spares except
those lying with contractors/ third parties have been physically
verified by the management during the year. In our opinion, the
periodicity of physical verification of inventory is reasonable. The
company has noticed certain discrepancies on such verification of Store
& Spares between the physical stock and book record, which were not
material considering the size of the company and the nature of its
business, and the same has been properly dealt with in the books of
account.
(iii) According to information and explanations given to us, the
company has not granted any loans, secured or unsecured to companies,
firms, Limited Liability Partnership or other parties covered in the
register maintained under section 189 of the Companies Act, 2013 and as
such, reporting under this clause is not applicable to the Company.
(iv) According to information and explanations given to us, the company
has not advanced any loan, given any guarantee or provided any security
in connection with such loan and given/made any loan/ investment within
the meaning of section 185 and 186 of the Companies Act, 2013 and as
such, reporting under this clause is not applicable to the Company.
(v) According to the information and explanations given to us, the
company has not accepted any deposit from the public within the meaning
of Section 73 to 76 or any other relevant provision of the Companies
Act, 2013 and the rules framed thereunder and as such, reporting under
this clause is not applicable to the Company.
(vi) According to the information and explanations given to us,
maintenance of cost records by the Company has been specified by
Central Government under sub section (1) of section 148 of the
Companies Act, 2013. We have broadly reviewed such cost records and we
are of the opinion that, prima facie, such accounts and records have
been made and maintained.
(vii) (a) According to the records of the Company and information and
explanations given to us, the Company is generally regular in
depositing undisputed statutory dues including provident fund, employee
state insurance, income tax, sales tax, service tax, duty of custom,
duty of excise, value added tax, Cess and other statutory dues with the
appropriate authorities where applicable. There is no arrear of
outstanding statutory dues as at 31st March 2016 for a period of more
than six months from the date they became payable excepting Rs.1019.46
Lac towards Water Cess payable to Water Resources Department, Govt. of
Jharkhand since the financial year 1999-2000.
(b) According to the records of the Company and information and
explanations given to us, the following are the details of disputed
dues in respect of income tax, sales tax, entry tax, service tax, duty
of custom, duty of excise, value added tax and Cess as on 31st March
2016:
Name of Nature of
Dues Period to which Forum where Amount
the Statue the amount dispute is (Rs. in
lac)
relates pending
West Bengal State Sales
Tax/ 2004-05 Dy.Commissioner 10.46
Value Added VAT * (RSOE) (Appeal)
Tax Act,
West Bengal State Sales
Tax/ 2006-07 FAST TRACK 20.96
Value Added VAT * (RSOE) COURT
Tax Act, BENCH-V
West Bengal State Sales
Tax/ 2008-09 Sr. Jt.
Commissioner 50.12
Value Added VAT * (RSOE) (Appeal)
Tax Act,
West Bengal State Sales
Tax/ 2010-11 Additional 4.73
Value Added VAT * (RSOE) Commissioner
Tax Act, (Appeal)
Central
Sales Central
Sales Tax 2007.08 Commissioner 345.11
Tax Act * (ICC) of Commercial
Taxes,
Jamshedpur
Central
Excise Central
Excise 1985-86 CESTAT 60.60
Act * (ICC)
Central
Excise Central
Excise 1997-98 TO CESTAT 203.52
Act 1999-00
* (ICC)
Central
Excise Central
Excise 1995-96 CESTAT 15.65
* (ICC)
Central
Excise Central
Excise 2000-01 TO CESTAT 1501.76
Act 2003-2004
* (ICC)
Central
Excise Central
Excise 2000-2001 TO CESTAT 283.40
Act 2001-2002
* (ICC)
Central
Excise Central
Excise 1996-97 CESTAT 1.46
Act * (ICC)
Central
Excise Central
Excise 1998 Supreme Court 16.00
Act * (ICC) of India
Madhya
Pradesh Entry Tax 1994-95 Commissioner 5.38
Value Added * (MCP) (Appeals)
Tax Act, Jabbalpur
Madhya
Pradesh State Sales
Tax/ 2009-2010 Sales tax
Authority 34.47
Value
Added VAT * (MCP) (Bhopal)
Tax Act,
Madhya
Pradesh State Sales
Tax/ 2011-12 Sales tax
Authority 16.66
Value
Added VAT * (MCP) (Bhopal)
Tax Act,
Madhya
Pradesh State Sales
Tax/ 2012-13 Sales tax
Authority 99.89
Value
Added VAT * (MCP) (Bhopal)
Tax Act,
Central
Excise Central
Excise 2006-07 TO Customes, Excise 394.97
Act 2011-12 & Service Tax
* (MCP) Appalate
Tribunal,
New Delhi
Central
Excise Central
Excise 2005-06 TO Commissioner 64.19
Act 2007-08 Central Excise
* (MCP)
Central
Excise Central
Excise 1998-99 TO Commissioner 1717.24
Act 2014-15 Central Excise
* (KCC)
Central
Sales State
Sales Tax/ 2007-08 Rajasthan Tax 2.84
Tax Act VAT * (KCC) Board,Ajmer
Rajasthan
Value Entry Tax 2007-08 TO Dy.Commissioner 311.67
Added Tax
Act, 2014-15 Appeal (Bikaner)
*(KCC)
Central
Excise Central
Excise 2007-08 TO CESTAT 538.35
Act 2014-15
* (TCP)
Maharashtra State Sales
Tax/ 1994-95 Appellate
Authority 18.81
Value Added VAT * (TCP)
Tax Act,
Maharashtra State Sales
Tax/ 2008-09 Joint
Commissioner, 51.17
Value
Added VAT * (TCP) Sales Tax
Tax Act,
Income
Tax Act Income Tax 2005-06, Commissioner of 404.42
2007-08,2009-10 Income Tax
& 2011-12 (Appeal)
* (CO)
GRAND TOTAL 6173.83
*RSOE - Regional Sales Office East, *ICC - Indian Copper Complex *MCP
-Malanjkhand Copper Project
*TCP -Taloja Copper Project, * KCC - Khetri Copper Complex, *CO -
Corporate Office
(viii) According to information and explanations given to us, the
Company has no due for repayment of loans or borrowings to financial
institutions, banks or government and dues to debenture holders.
However, the company has obtained term loan from Export Import Bank of
India (EXIM Bank) during the year. The repayment of installment of
principal amount is not due in the year under audit and payment of
interest thereon is being made regularly.
(ix) According to information and explanations given to us, the company
did not raise any money by way of initial public offer or further
public offer (including debt instruments) during the year. However, the
Company has obtained term loan from EXIM Bank and such term loan was
applied for the purpose for which the same was raised.
(x) According to information and explanations given to us, no fraud by
the company or any fraud on the Company by its officers and employees
has been noticed or reported during the year.
(xi) According to the information and explanations give to us,
provisions of section 197 of the Companies Act, 2013 regarding
managerial remuneration are not applicable to the Government Company in
terms of Notification No G.S.R. 463(E) dated 05.06.2015 issued by
Ministry of Corporate Affairs and as such, reporting under this clause
is not applicable to the Company.
(xii) In our opinion and according to the information and explanations
given to us, the company is not a Nidhi company and as such, reporting
under this clause is not applicable to the Company.
(xiii) According to the information and explanations given to us and
based on our examination of the records of the Company, transactions
with the related parties are in compliance with sections 177 and 188 of
the Companies Act, 2013 where applicable and details of such
transactions have been disclosed in the financial statements as
required by the applicable accounting standards, where applicable.
(xiv) According to the information and explanations given to us and
based on our examination of the records of the Company, the Company has
not made any preferential allotment or private placement of shares or
fully or partly convertible debentures during the year and as such,
reporting under this clause is not applicable to the Company.
(xv) According to the information and explanations given to us and
based on our examination of the records of the Company, the Company has
not entered into any non-cash transactions with directors or persons
connected with him/her and as such, reporting under this clause is not
applicable to the Company.
(xvi) In our opinion, the Company is not required to be registered
under section 45-IA of the Reserve Bank of India Act 1934 and as such,
reporting under this clause is not applicable to the Company.
(Referred to in our report of even date)
Report pursuant to directions/additional company specific directions
issued by office of the Comptroller and Auditor General of India (C&
AG) under Section 143(5) of the Companies Act, 2013
Impact on the Accounts &
Sl Directions Actions Taken
No. Financial Statements
1. Whether the In the absence of
Register of Land showing Gross Block & Net Block
of
company has
clear/ details of freehold and
leasehold land vis-a- Leasehold/ Freehold
Land,
title/ lease
deeds for vis title/lease deeds
of those lands being wherever applicable, have
freehold land
and reconciled with each
other, we are unable to been duly shown in the
leasehold land state the area of
freehold and leasehold
land accounts and financial
respectively?
If not, for which title/lease
deeds are not available statements. Hence there
is no
please state
the area with the Company.
However, as stated in impact on the accounts
and
of freehold
and Clause No. 3 & 6 to Note
No. 35 of General financial statements.
leasehold land
for Notes on Accounts,
leasehold land received
which title/
lease from State Government
as well as freehold
deeds are not land acquired through
nationalization in
available? accordance with Indian
Copper Corporation
(Acquisition of
Undertaking) Act, 1972,
in respect of Indian
Copper Complex (ICC)
and leasehold land of
Rs.3461.23 lac in respect
of Gujarat Copper Project
(GCP), have not yet been
executed in favour of
the Company.
2. Whether there
are According to the
information and No such cases, hence
there is
any cases of
waiver / explanations given to
us, there was no case no impact on the accounts
and
write off of
debts/ of waiver of debts/loans/
interest etc. during financial statements.
loans/interest
etc., if the year under audit.
yes, the
reasons there
for and the
amount involved.
3 Whether proper Proper records are
maintained for the Inventories of Rs.1.64
lac as on
records are
main- inventories lying with
third parties. 31.03.2016 are lying
with third
tained for
inventories party and there is no
impact
lying with
third par- on the accounts and
financial
ties & assets
received statements.
as gift from
Government
or other au The company has not
received any gift from No such cases, hence
there is
thorities. Government or other
authorities during the no impact on the accounts
and
year. financial statements.
Additional Company Specific Directions
1. Whether the
account- The accounting treatment
of mine Since the accounting
ing treatment
of mine development expenditure
in respect of open treatment of mine
development
expendi- cast mines as well as
underground mine, in development expenditure
in
ture in respect
of open our opinion, is adequate
as summarized respect of open cast
mines as
cast mines as
well as below well as underground
mine is
underground
mine is adequate, there is no
impact
adequate? on the accounts and
financial statements.
Impact on the Accounts &
Sl Directions Actions Taken
No. Financial Statements
1. In respect of open
cast mines: The
expenditure on removal
of waste and overburden
is capitalized and the
same is amortized in
relation to actual ore
production during the
year and the stripping
ratio of the mine as
determined by the company
at the weighted
average rate.
Subsequently, if any ore
is reclaimed from
overburden, the same is
valued on the basis of
opening rate of mine
development expenditure.
2. In case of underground
mines: The expenditure on
development of a new mine
in all cases and on
subsequent development of
a working mine is
capitalized and amortized
on the basis of ore raised
during the year and the
mineable ore reserves
estimated from time to time.
The ore obtained during
development activity is
adjusted against such
expenditure at its derived
realizable value.
For A. Kayes & Co
Place : Kolkata Chartered Accountants
Date: 30th May,2016 Firm Registration No. 311149E
CA.A.K.GHOSH
Partner
Membership No. 052933
Mar 31, 2015
We have audited the accompanying financial statements of Hindustan
Copper Limited (hereinafter referred to as "the Company"), which
comprise the Balance Sheet as at 31st March, 2015, the Statement of
Profit and Loss, the Cash Flow Statement for the year then ended, and a
summary of the significant accounting policies and other explanatory
information (hereinafter referred to as "the financial statements").
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 (hereinafter referred to
as "the Act") with respect to the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Board of Directors,
as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence obtained by us is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March, 2015, and its profit and its cash flows for the year
ended on that date.
Emphasis of Matter
We draw attention to Clause no.:- 1(i)(b) and 1(ii) of Note No.:- 35 of
General Notes on Accounts to the financial statements which describes
the uncertainty related to the outcome of various pending legal cases
filed against the Company by various parties as also tax related appeal
cases filed by the company and its financial impact in the financial
statement of the company. The Company has treated those demands as
disputed and not acknowledged as debt in the books and treated the same
as Contingent Liabilities. The total amount of such pending disputed
litigations comes to Rs. 53191.27 lac.
Our opinion is not modified in respect of this matter.
Other Matters
a) Total sales turnover during the year was reduced by reversal of
export sales of Rs. 3581.17 lac and also of Sundry Debtors relating to
export sales accounted for in the previous year 2013-14, (Refer Clause
No.:- 14 of Note-35 General Notes on Accounts).
b) Balances under the head Sundry Debtors, Sundry Creditors, Loans &
Advances from and to various parties, Claims Recoverable, Deposit from
and to various parties etc. have not been confirmed in number of cases
( Refer Clause No.:- 9 of Note-35 General Notes on Accounts).
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order"), issued by the Central Government of India in terms of
sub-section (11) of Section 143 of the Act, we give in the Annexure-I a
statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
2. As required by the Companies Act, 2013 under section 143(5), we give
in the Annexure-II a statement on the matters directed by C& AG.
3. As required by Section 143(3) of the Act, we report, to the extent
applicable, that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books;
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
relevant books of account;
(d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014;
(e) On the basis of the written representations received from the
management, none of the directors is disqualified as on 31st March,
2015 from being appointed as a director in terms of Section 164 (2) of
the Act; and
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and
Auditor's) Rules, 2014, in our opinion and to the best of our
information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statement (Refer Clause no.: 1(i)
(b) and 1(ii) of Note No.: 35 of General Notes on Accounts) and our
comments made in first paragraph of this report under "Emphasis of
Matter".
ii. The Company did not have any material foreseeable losses on long
term contract including derivative contracts.
iii. According to the information and explanations given to us the
Company is not required to transfer any amount to the investor
education and protection fund in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and rules made there
under.
(Referred to in our report of even date attached)
(i) (a) The Company has generally maintained proper records showing
full particulars including quantitative details and situation of Fixed
Assets.
(b) Fixed Assets of the company have not been physically verified by
the management during the year under audit pursuant to company's
Accounting policy (Clause No. 3.6 of Note No. 2 of Significant
Accounting Policies read with Clause no.:- 29 of Note No.:- 35 of
General Notes on Accounts) and as such question of major discrepancies
and it's treatment in books of account does not arise this year.
However in terms of aforesaid policy, the fixed assets were physically
verified during the previous year 2013-14.
(ii) (a) As explained to us, the inventories of Finished Goods, Raw
Materials and Store and spares except those lying with contractors/
third parties have been physically verified by the management during
the year. In our opinion, the frequency of verification is reasonable.
(b) According to information and explanations given to us, the
procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
company and nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the company is maintaining proper records of inventory and the
discrepancies noticed on verification between the physical stock and
book record were not material considering the size of the company and
the nature of its business, and the same has been properly dealt with
in the books of account.
(iii) According to information and explanations given to us, the
company has not granted any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under section
189 of the Companies Act, 2013. Therefore, reporting under sub clauses
(a) and (b) are not applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, the internal control system needs to be strengthened in
order to be commensurate with the size of the company and nature of its
business for the purchase of inventory and fixed assets and for the
sale of goods and services. We have not observed any major continuing
failure to correct major weakness in internal control system.
(v) According to the information and explanations given to us, the
company has not accepted any deposit from the public within the meaning
of Section 73 to 76 or any other relevant provision of the Companies
Act and the rules framed there under.
(vi) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of Cost Records under sub section 1 of section 148 of the
Companies Act, 2013 and we are of the opinion that, prima facie, such
accounts and records have been made and maintained.
(vii) (a) According to the records of the Company and information and
explanations given to us, the
Company is generally regular in depositing undisputed statutory dues
including Provident Fund, Income Tax, Sales Tax, Wealth tax, Service
Tax, Custom duty, Excise duty, Value Added Tax, Cess and other
statutory dues with the appropriate authorities. Employees State
Insurance is not applicable on the Company. There is no arrear of
outstanding statutory dues as at 31st March 2015 for a period of more
than six months from the date they became payable excepting Rs.951.60
lacs towards Water Cess.
(b) According to the records of the Company and information and
explanations given to us, the following are the details of disputed
dues in respect of Income Tax, Sales Tax, Wealth Tax, Entry Tax,
Service Tax, Custom Duty, Value Added Tax, Excise Duty and Cess as on
31st March 2015:
Name of Nature of Dues Period to which
the Statue the amount relates
West Bengal State Sales Tax/VAT 2004-05
Value Added ( Regional Sales
Tax Act, Office-East)
West Bengal State Sales Tax / VAT 2006-07
Value Added (Regional Sales
Tax Act, Office-East)
West Bengal State Sales Tax/ VAT 2008-09
Value Added (Regional Sales
Tax Act, Office-East)
West Bengal State Sales Tax/ VAT 2010-11
Value Added (Regional Sales
Tax Act, Office-East)
Central Sales Central Sales Tax 2007-08
Tax Act (Indian Copper Complex,
Ghatsila Unit)
Central Central Excise 1985-86
Excise Act (Indian copper Complex,
Ghatsila Unit)
Central Central Excise 1997-98 TO 1999-00
Excise Act (Indian copper Complex,
Ghatsila Unit)
Central Central Excise 1995-96
Excise Act (Indian copper Complex,
Ghatsila Unit)
Central Central Excise 2000-01 TO 2003-2004
Excise Act (Indian copper Complex,
Ghatsila Unit)
Central Central Excise 2000-2001 TO 2001-2002
Excise Act (Indian copper Complex,
Ghatsila Unit)
Central Central Excise 1996-97
Excise Act (Indian copper Complex,
Ghatsila Unit)
Name of the Statute Forum where Amount
dispute is pending (Rs.in lacs)
West Bengal Value Added Tax Act, Dy. Commissioner
(Appeal) 10.46
West Bengal Value Added Tax Act, Sr. Jt. Commissioner 0.96
( Appeal)
West Bengal Value Added Tax Act, Sr. Jt. Commissioner 50.12
( Appeal)
West Bengal Value Added Tax Act, Additional Commissioner 4.73
(Appeal)
Central Sales Tax Act Commissioner of 345.11
Commercial Taxes,
Jamshedpur
Central Excise Act CESTAT 60.60
Central Excise Act CESTAT 203.52
Central Excise Act CESTAT 15.65
Central Excise Act CESTAT 1501.76
Central Excise Act CESTAT 283.40
Central Excise Act CESTAT 1.46
Name of Nature of Dues Period to which
the Statue the amount relates
Central Central Excise 1998
Excise Act (Indian copper
Complex,
Ghatsila Unit)
Madhya Entry Tax 1994-95
Pradesh (Malanjkhand
Value Added Copper Project)
Tax Act,
Madhya State Sales Tax/ VAT 2009-2010
Pradesh (Malanjkhand
Value Added Copper Project)
Tax Act,
Madhya State Sales Tax/ VAT 2011-12
Pradesh (Malanjkhand
Value Added Copper Project)
Tax Act,
Central Central Excise 2006-07 TO 2011-12
Excise Act (Malanjkhand
Copper Project)
Central Central Excise 2005-06 To 2007-08
Excise Act (Malanjkhand Copper
Project)
Central Central Excise 1998-99 TO 2014-15
Excise Act (Khetri Copper Complex)
Service Service Tax 1998-99 TO 2013-14
Tax Act (Khetri Copper Complex)
Rajasthan Central Sales Tax 2007-08
Value Added (Khetri Copper Complex)
Tax Act,
Rajasthan Central Sales Tax 2009-10
Value Added (Khetri Copper Complex)
Tax Act,
Rajasthan Central Sales Tax 2010-11
Value Added (Khetri Copper Complex)
Tax Act,
Rajasthan Entry Tax 2004-05 TO 2014-15
Value Added (Khetri Copper Complex)
Tax Act,
Property Tax Property Tax 2006-07 TO 2012-13
Act (Khetri Copper Complex)
Name of the Statute Forum where Amount
dispute is pending (Rs.in lacs)
Central Excise Act CESTAT 16.00
Madhya Pradesh Value Added
Tax Act Commissioner 5.38
(Appeals) Jabbalpur
Madhya Pradesh Value Added
Tax Act, Sales tax Authority 34.47
(Bhopal)
Madhya Pradesh Value Added
Tax Act, Sales tax Authority 16.66
(Bhopal)
Central Excise Act Customs, Excise & 394.97
Service Tax Appellate
tribunal, New Delhi
Central Excise Act Commissioner 64.19
Central Excise
Central Excise Act Asst. / Joint/ 1647.13
Dy.Commissioner
Central Excise
Service Tax Act CESTAT/ 76.53
Asst. Commissioner/
Commissioner/
Rajasthan Value Added Tax Act, Rajasthan Tax 2.84
Board, Ajmer
Rajasthan Value Added Tax Act, Dy. Commissioner 15.58
(Appeal), Bikaner
Rajasthan Value Added Tax Act, Dy. Commissioner 16.35
(Appeal), Bikaner
Rajasthan Value Added Tax Act, Supreme Court, 661.96
New Delhi
Property Tax Act High Court, Jaipur 1655.16
Name of Nature of Dues Period to which
the Statue the amount relates
Income Income Tax 2004-05, 2006-07,
Tax Act 2008-09, 2010-11
& 2011-12 (Head
Office)
Central Central Excise 2007-08 TO 2014-15
Excise Act (Taloja Copper Project)
Maharashtra State Sales Tax/ VAT 1994-95
Value Added (Taloja Copper Project)
Tax Act,
Name of the Statute Forum where Amount
dispute is pending (Rs.in lacs)
Income Tax Act Commissioner of 4538.86
Income Tax (Appeal)
Central Excise Act CESTAT 481.63
Maharashtra Value Added Tax Act, Appellate Authority 18.81
Total: 12124.29
(c) According to the information and explanations given to us the
Company is not required to transfer any amount to the investor education
and protection fund in accordance with the relevant provisions of the
Companies Act,1956 (1 of 1956) and rules made there under.
(viii) The Company has no accumulated losses as at 31st March 2015 and
it has not incurred any cash losses in the financial year ended on that
date and in the immediately preceding financial year.
(ix) According to information and explanations given to us, the Company
has not defaulted in repayment of dues to any financial institution or
bank or debenture holders.
(x) According to the information and the explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
(xi) According to information and explanations given to us, the Company
has not obtained any term loan during the year.
(xii) As reported by the management , certain financial
irregularities/fraudulent transactions in Sales and Debtors records
were committed in earlier years as stated vide Clause No.16 of Note
No.:- 35 -General Notes on Accounts of financial statement. The
management did not declare the same as fraud at that time. The
principal amount and some portion of the interest involved has since
been recovered by the company. Necessary provision was made for
uncovered portion of interest and penal interest on overdue interest
amounting to Rs.50.59 lac in the previous financial year 2013-14. Further
investigations with regard to other issues are still going on. However,
during the course of our audit, no fraud on or by the company has been
noticed or reported in respect of the current financial year 2014-15.
Place : New Delhi For A.Kayes & Co.
Date : 28th May, 2015 Chartered Accountants.
Firm's registration No. 311149E
CA. R.N.Chattopadhyay
Partner
Membership No. 066774
Mar 31, 2014
We have audited the accompanying financial statements of Hindustan
Copper Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2014, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act") read with the general Circular
15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in
respect of Section 133 of the Companies Act, 2013. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion.
Basis for Qualified Opinion
The Company''s inventories include Rs.6543.29 lakh being the amount
computed by the company for the first time as cost of 27.50 lakh tonnes
of Lean Ore as disclosed vide Clause 12 of Note No. 35 to the accounts
(General Notes on Accounts). Prior to this year, Such Lean Ore was
never taken into valuation of inventory by the company. This is a
change in Accounting of Inventories of the company during the year
under review.
Had the above change not been made, the cost of sales (change in
inventory) would have been increased by Rs.6543.29 lakh and income tax,
Net Profit and Shareholders'' fund would have been reduced by Rs.2224.06
lakh, Rs.6543.29 lakh, and Rs.4319.23lakh respectively.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph, the financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and (c)in the case of the Cash Flow Statement,
of the cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to Clause 15 of Note no. 35 to the accounts (General
Notes on Accounts) referred to in the financial statements which
describe the Old Liabilities and Provisions Not Required being Written
Back during the year under review amounting to Rs.1510.51 lakh.
Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required under provisions of section 227(3) of the Companies
Act, 1956, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books.
c. the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account .
d. except for the matter described in the Basis for Qualified Opinion
paragraph, in our opinion, the Balance Sheet, Statement of Profit and
Loss and Cash Flow Statement comply with the accounting standards
referred to in sub-section (3C) of section 211 of the Companies Act,
1956 read with the General Circular 15/2013 dated 13 September 2013 of
the Ministry of Corporate Affairs in respect of Section 133 of the
Companies Act, 2013;
e. on the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act.
f. Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
(Referred to in our report of even date attached)
1 (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of Fixed
Assets.
(b) The fixed assets have been physically verified by the management
during the year under audit pursuant to company''s Accounting policy
(Clause c.5 of Note No. 2 to the Accounts of Significant Accounting
Policies) and discrepancies, if any, have been properly dealt with in
the books of account.
(c) In our opinion, the disposals of fixed assets during the year are
not of significant value and do not affect the going concern basis.
2 (a) As explained to us, the inventories of Finished Goods, Raw
Materials and Store and spares except those lying with contractors/
third parties have been physically verified by the manage- ment during
the year. In our opinion, the frequency of verification is reasonable.
(b) According to information and explanations given to us, the
procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
company and nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the company is main- taining proper records of inventory and
the discrepancies noticed on verification between the physical stock
and book record were not material considering the size of the company
and the nature of its business, and the same has been properly adjusted
in the accounts, save and except that the company has for the first
time taken into inventory account 27.50 lakh tonnes of Lean Ore valued
at Rs.6543.29 lakh vide Clause No. 12 of Note No. 35 to the Accounts
(General Notes on Accounts).
3 (a) According to information and explanations given to us the company
has not granted any loans, secured or unsecured to or from companies,
firms or other parties covered in the register main- tained under
section 301 of the Companies Act, 1956. Therefore, reporting under
other related sub clauses is not applicable to the company.
(b) According to information and explanations given to us the company
has not taken any loans, secured or unsecured to or from companies,
firms or other parties covered in the register main- tained under
section 301 of the Companies Act, 1956. Therefore, reporting under
other related sub clauses is not applicable to the company.
4 In our opinion and according to the information and explanations
given to us, the internal control system needs to be strengthened in
order to be commensurate with the size of the company and nature of its
business for the purchase of inventory and fixed assets and for the
sale of goods and services. We have not observed any major weaknesses
continuing in the internal control system.
5 Based on the audit procedures applied by us and according to the
information and explanations given to us, there was no transaction that
needed to be entered in the Register required to be maintained under
section 301 of the Companies Act, 1956 and exceeding the value of
rupees five lacs in respect of any party in the financial year.
6 According to the information and explanations given to us, the
company has not accepted any deposit from the public within the meaning
of Section 58A, 58AA of the Companies Act, 1956 and the Companies
(Acceptance of Deposit) Rules, 1975 are not applicable to the Company.
7 The company has its Internal Audit System commensurate with the size
and nature of its business.
8 We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of Cost Records under section 209 (1) (d) of the Companies
Act, 1956 and we are of the opinion that, prima facie, the prescribed
accounts and records have been maintained.
9 (a) According to the records of the Company and information and
explanations given to us, the Company is generally regular in
depositing undisputed statutory dues including Provident Fund, Income
Tax, Sales Tax/VAT, Wealth tax, Service Tax, Custom duty, Excise duty,
Cess and other statutory dues with the appropriate authorities wherever
applicable and there is no undisputed amount payable in respect of the
aforesaid statutory dues as at 31st March 2014 for a period of more
than six months from the date they became payable, excepting Rs.890.03
Lakhs towards Water Cess.
(b) According to the records of the Company and information and
explanations given to us, the following are the details of disputed
dues in respect of Income Tax, Sales Tax, Entry Tax, Service Tax,
Custom Duty, Wealth Tax, Excise Duty and Cess as on 31st March 2014:
Name of Nature of Dues Period to which
the Statue the amount relates
West Bengal State Sales Tax/ 2004-05
Value Added VAT (RSOE)
Tax Act
West Bengal State Sales Tax/ VAT 2006-07
Value Added (RSOE)
Tax Act
West Bengal State Sales Tax/ VAT 2008-09
Value Added (RSOE)
Tax Act
West Bengal State Sales Tax/ VAT 2010-11
Value Added (RSOE)
Tax Act
Jharkhand State Sales Tax/ VAT 2002-03
Value Added (ICC)
Tax Act
Jharkhand State Sales Tax/ VAT 2003-04
Value Added (ICC)
Tax Act
Central Sales Central Sales Tax 2003-04
Tax Act (ICC)
Name of the Statue Forum where Amount
dispute is pending (Rupees in lacs)
West Bengal
Value Added
Tax Act Dy. Commissioner 10.46
(Appeal)
West Bengal
Value Added
Tax Act Sr. Jt. Commissioner 0.96
(Appeal)
West Bengal
Value Added
Tax Act Sr. Jt. Commissioner 50.12
(Appeal)
West Bengal
Value Added
Tax Act Additional Commissioner 4.73
(Appeal)
Jharkhand
Value Added
Tax Act Dy. Commissioner of
Commercial Taxes, 40.55
(Adj.) Jamshedpur
Jharkhand
Value Added
Tax Act Dy. Commissioner of 16.81
Commercial Taxes(Adj.),
Jamshedpur
Central Sales
Tax Act Dy. Commissioner of 3.21
Commercial Taxes(Adj.),
Jamshedpur
Name of Nature of Dues Period to which
the Statue the amount relates
Jharkhand State Sales Tax/ VAT 2004-05
Value Added (ICC)
Tax Act
Central Sales Central Sales Tax 2004-05
Tax Act (ICC)
Jharkhand State Sales Tax/ VAT 2005-06
Value Added (ICC)
Tax Act
Central Sales Central Sales Tax 2005-06
Tax Act (ICC)
Central Central Excise 1985-86
Excise Act (ICC)
Central Excise Central Excise 1997-98 TO
Act 1998-99
(ICC)
Central Excise Central Excise 1995-96
Act (ICC)
Central Excise Central Excise 2000-01 TO
Act 2003-2004
(ICC)
Central Excise Central Excise 2000-2001 TO
Act 2001-2002
(ICC)
Central Excise Central Excise 1996-97
Act (ICC)
Madhya Pradesh Entry Tax 1994-95
Value Added (MCP)
Tax Act
Madhya Pradesh State Sales Tax/ VAT 2009-2010
Value Added (MCP)
Tax Act
Central Excise Central Excise 2007-08 TO
Act 2010-11
(MCP)
Central Excise Central Excise 2013-14
Act (MCP)
Central Excise Central Excise 2007-08
Act (MCP)
Name of the Statue Forum where Amount
dispute is pending (Rupees in lacs)
Jharkhand
Value Added
Tax Act Jharkhand High Court 68.67
Central Sales
Tax Act Jharkhand High Court 4.41
Jharkhand
Value Added
Tax Act Dy. Commissioner of 86.34
Commercial Taxes (Adj.),
Jamshedpur
Central Sales
Tax Act Dy. Commissioner of 4.34
Commercial Taxes(Adj.),
Jamshedpur
Central
Excise Act CESTAT 60.60
Central Excise
Act CESTAT 203.52
Central Excise
Act CESTAT 15.65
Central Excise
Act CESTAT 1501.76
Central Excise
Act CESTAT 283.40
Central Excise
Act CESTAT 1.46
Madhya Pradesh
Value Added
Tax Act Commissioner (Appeals) 5.38
Jabbalpur
Madhya Pradesh
Value Added
Tax Act Sales tax Authority 34.47
(Balaghat)
Central Excise
Act Asst. Commissioner 394.97
Central Excise
Central Excise
Act Commissioner Central 117.63
Excise
Central Excise Commissioner Central 64.19
Excise
Name of Nature of Dues Period to which
the Statue the amount relates
Central Excise Central Excise 1998-99 TO
Act 2013-14
(KCC)
Rajasthan Value State Sales Tax/ VAT 2009-10 TO
Added Tax Act 2010-11
(KCC)
Rajasthan Value Entry Tax 2004-05 TO 2013-14
Added Tax Act (KCC)
Property Tax Property Tax 2006-07 TO 2012-13
Act
Income Tax Income Tax 2008-09 & 2011-12
Act (HO)
Central Excise Central Excise 2007-08 TO 2013-14
Act (TCP)
Maharashtra State Sales Tax/ VAT 1994-95
Value Added (TCP)
Tax Act
Name of the Statue Forum where Amount
dispute is pending (Rupees in lacs)
Central Excise
Act Asst. / Joint/ Dy.
Commissioner
Central Excise 442.69
Rajasthan Value
Added Tax Act Dy. Commissioner 28.74
Appeal (Bikaner)
Rajasthan Value
Added Tax Act Dy. Commissioner 502.79
Appeal (Bikaner)
Property Tax
Act High Court, Jaipur 2070.26
Income Tax
Act Commissioner of 3767.36
Income Tax (Appeal)
Central Excise
Act CESTAT 448.01
Maharashtra
Value Added
Tax Act Appellate Authority 16.81
Total: 10250.29
10 According to information and explanations provided to us, the
Company has no accumulated losses as at 31st March 2014 and it has not
incurred any cash losses in the financial year ended on that date and
in the immediately preceding financial year.
11 Based on our audit procedures and the information and explanations
given to us, the Company has not defaulted in repayment of dues to any
financial institution or bank or debenture holders.
12 Based on our of records, we are of the opinion that the Company has
not granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
13 According to information and explanations provided to us, in our
opinion the Company is not a chit fund or a nidhi / mutual benefit fund
/ society.
14 According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
15 According to information and explanations given to us, the company
has not given any guarantee for loans taken by others from banks or
financial institutions.
16 According to information and explanations given to us, the Company
has not obtained any term loan during the year under audit.
17 According to the information and explanations given to us and on an
overall examination of the balance sheet of the company we report that
no funds raised on short term basis have been used for long term
investment.
18 The company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under section
301 of the Companies Act, 1956.
19 The Company has not issued any debentures during the year under
audit. Therefore, reporting under this clause is not applicable to the
company.
20 The Company has not raised any money during the year covered by
audit by way of public issue.
21 According to information and explanations given to us, certain
financial irregularities were committed as stated vide Clause No. 16 of
Note No.35 to the accounts (General Notes on Accounts). Since the
management has not declared the same as fraud, we could not state
whether the same as fraud pending decision of legal proceedings / FIR
filed in this regard.
For A.KAYES & CO. For S R I ASSOCIATES
Chartered Accountants Chartered Accountants
Firm Registration No. 311149E Firm Registration No. 305109E
CA.A.KAYES CA I. PASHA
Partner Partner
Membership No. 050363 Membership No. 013280
Place : New Delhi
Dated : 24th May, 2014
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Hindustan
Copper Ltd ("the Company"), which comprise the Balance Sheet as at
March 31, 2013, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
ofthe Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment
of the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the Company''s
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of the accounting estimates made
by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) In the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order,2003
("the order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by Sec 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d. in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of section 211 of the Companies Act, 1956, and
e. in our opinion, reporting in terms of clause (g) of sub-section (1)
of section 274 of the Companies Act, 1956 is not applicable to the
company, being a government company, as per Notification No. GSR 829(E)
dated October 21, 2003 issued by the Department of Company Affairs.
(Referred to in our report of even date attached)
1. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of Fixed
Assets.
(b) The fixed assets of the Company have not been physically verified
by the management during the year under audit pursuant to company''s
Accounting Policy (Note no.2.c.5) and as such, major discrepancies, if
any, could not be ascertained and not commented upon. Last physical
verification of fixed asset was done in the Financial Year 2010-2011.
In our opinion it should be done in a phased manner so as to cover
entire fixed assets atleast once in every three years and the
company''s Accounting Policy should be suitably modified.
(c) In our opinion, the disposals of fixed assets during the year are
not of significant value and do not affect the going concern concept.
2. (a) As explained to us, the inventories of Finished Goods, Raw
Materials and Stores and Spares except those lying with contractors /
third parties have been physically verified by the management during
the year. In our opinion, the frequency of verification is reasonable.
(b) According to information and explanations given to us, the
procedures of physical verification of inventory followed by the
management appear to be reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company has maintained proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material considering the size of the company
and the nature of its business and the same have been properly adjusted
in the accounts.
3. (a) According to information and explanations given to us, the
Company has not granted any loan, secured or unsecured, to companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Therefore, reporting under other
related sub clauses is not applicable to the company.
(b) According to information and explanations given to us, the Company
has not taken any loan, secured or unsecured, from companies, firms or
other parties covered in the register maintained under Section 301 of
the Companies Act, 1956. Therefore, reporting under other related sub
clauses is not applicable to the company.
4. In our opinion and according to the information and explanations
given to us, the internal control system needs to be strengthened in
order to be commensurate with the size of the Company and the nature of
its business for the purchase of inventory, fixed assets and for the
sale of goods and services. We have not observed any major weakness
continuing in the internal control system.
5. Based on the audit procedures applied by us and according to the
information and explanations given to us, there was no transaction that
needed to be entered in the Register required to be maintained under
Section 301 of Companies Act, 1956, exceeding the value of Rs. five
lacs in respect of any party in the financial year.
6. According to information and explanations given to us, the Company
has not accepted any deposits from the public. Hence, the provisions of
Sections 58A and 58AA of the Companies Act, 1956 and the Companies
(Acceptance of Deposit) Rules, 1975 are not applicable to the Company.
7. The Company has its Internal Audit System commensurate with its
size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of Cost Records under section 209 (1)(d) of the Companies
Act, 1956 and we are of the opinion that, prima facie, the prescribed
accounts and records have been maintained.
9. (a) According to the records of the Company and information and
explanations given to us, the Company is generally regular in
depositing undisputed statutory dues including Provident Fund, Income
Tax, Sales Tax/ Vat, Wealth Tax, Service Tax, Customs Duty, Excise
Duty, Cess and other statutory dues with the appropriate authorities,
and there is no undisputed amount payable in respect of the aforesaid
statutory dues as at 31st March, 2013 for a period of more than six
months from the date they became payable, excepting Rs. 833.82 Lacs
towards Water Cess.
(b) According to the records of the Company and the information and
explanations given to us, the following are the details of disputed
dues in respect of Income Tax, Sales Tax, Entry Tax, Wealth Tax,
Service Tax, Customs Duty, Excise Duty and Cess as on 31st March, 2013:
STATEMENT OF DISPUTED STATUTORY LIABILITIES (Rs. in lac)
Name of Nature of Period to which the
the Statue the Dues amount relates
1985-86
1995-96
1996-97
FROM 1997-98 TO 1999-00
1998-99
The Central EXCISE 1999-00
Excise Act, DUTY
1944 2000-01
FROM 2000-01 TO 2001-02
FROM 2000-01 TO 2003-04
2002-03
2003-04
2005-06
2006-07
2007-08
2007-08 TO 2010-11
2008-09
2009-10
2009-10 & 2010-11
2010-11
2011-12
2012-13
Income Tax INCOME
Act 1961 TAX 2006-2007
2008-2009
1994-95
1994-95
SALES
State Value TAX/VAT 2002-03
Added Tax
Acts 2003-04
2004-05
2005-06
2007-08
2009-10
Entry Tax ENTRY FROM 2004-05 TO 2012-13
Act TAX
TOTAL
Name of the Statute Forum where dispute is AMOUNT
pending
The Central Excise
Act, 1944 CESTAT 60.60
CESTAT 15.65
CESTAT 1.46
CESTAT 203.52
ASST COMMISSIONER 51.40
ASST COMMISSIONER 40.20
DY COMMISSIONER 35.40
CESTAT 283.40
CESTAT 1501.76
ASST COMMISSIONER/COMMISSIONER/CESTAT 83.70
ASST COMMISSIONER/JOINT COMMISSIONER 63.90
ASST COMMISSIONER 36.56
JOINT COMMISSIONER 8.47
ASST COMMISSIONER / COMMISSIONER 74.01
ASST COMMISSIONER 3.95
ASST / ADDL / DY COMMISSIONER / 447.22
COMMISSIONER / CESTAT
DY COMMISSIONER / COMMISSIONER 59.85
COMMISSIONER 103.40
ADDL COMMISSIONER / COMMISSIONER 140.96
COMMISSIONER 22.03
ASST COMMISSIONER / COMMISSIONER 77.12
Income Tax Act 1961 COMMISSIONER OF INCOME TAX(APPEALS) 1750.71
COMMISSIONER OF 4 INCOME TAX (APPEALS) 4.70
COMMISSIONER (APPEALS) / JABALPUR 5.38
APPELATE AUTHORITY / MAHARASHTRA 16.81
DY.COMMISSIONER (ADJUDICATION) / 40.55
JHARKHAND
State Value Added
Tax Acts DY.COMMISSIONER (ADJUDICATION) / 20.01
JHARKHAND
DY.COMMISSIONER (ADJUDICATION) / 73.09
JHARKHAND
DY.COMMISSIONER (ADJUDICATION) / 90.68
JHARKHAND
DY.COMMISSIONER (APPEALS) / BIKANER 0.06
DY.COMMISSIONER (APPEALS) / BIKANER 14.03
Entry Tax Act DY.COMMISSIONER (APPEALS) / BIKANER 250.50
TOTAL 5581.08
10. According to the information and explanation provided to us, the
Company has no accumulated losses as at 31st March, 2013 and it has not
incurred any cash losses in the financial year ended on that date and
in the immediately preceding financial year.
11. Based on our audit procedures and the information and explanations
given to us, the Company has not defaulted in repayment of dues to any
financial institution or bank or debenture holders.
12. Based on our examination of records, we are of the opinion that
the Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. According to the information and explanation provided to us, in
our opinion, the Company is not a chit fund / nidhi / mutual benefit
fund / society.
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
15. According to the information and explanations given to us, the
Company has not given any Guarantee for loans taken by others from
banks or financial institution.
16. According to the information and explanations given to us, the
company has not taken any term loan during the year under audit.
17. On an overall examination of the Balance Sheet of the Company and
according to information and explanations given to us, we report that
funds raised by the company on short term basis have not been used for
long term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Companies Act, 1956.
19. The Company has not issued any debenture during the year under
audit. Therefore, reporting under this clause is not applicable to the
company.
20. The Company has not raised any money during the year covered by
audit by way of public issue
21. According to the information and explanations given to us, the
financial irregularities stated vide Clause 15 of Note No.35 are under
the initial stage of investigation. Since the management has not yet
reported the same as fraud pending final investigation, we state that
no fraud on or by the company has been reported during the course of
audit.
For S. Ghose & Co. For A. Kayes & Co.
Chartered Accountants Chartered Accountants
Firm Registration No.302184E Firm RegistrationNo.311149E
CA.Chandan Chattopadhay CA. Amrul Kayes
Partner Partner
Membership No. 051254 Membership No. 050363
Place: Mumbai
Date: 23rd May, 2013
Mar 31, 2012
1) We have audited the attached Balance Sheet of M/s. Hindustan Copper
Limited as at 31st March 2012, the Profit & Loss Account and the Cash
Flow Statement of the company for the year ended on that date annexed
hereto. These financial statements are the responsibility of the
Company's Management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2) We conducted our audit in accordance with auditing standards
generally accepted in India. These standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement. An audit
includes examining on a test basis, evidences supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3) As required by the Companies (Auditors' Report) Order, 2003 (as
amended), issued by the Central Government under Section 227(4A) of the
Companies Act, 1956 and on the basis of such checks of the books and
records of the Company as we considered appropriate, we enclose in the
Annexure hereto a statement on the matters specified in paragraphs 4 &
5 of the said order.
4) The financial statements have been drawn up on the basis of in-house
estimates referred to in paragraph 2 of Accounting Policies, being a
technical matter; we have relied upon the same.
5) Further to our comments in the Annexure referred to in Paragraph 3
here-in-above we report that:
a. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b. In our opinion, proper books of account as required by law have
been kept by the company so far as it appears from our examination of
such books;
c. The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d. In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
e. Section 274(l)(g) of the Companies Act, 1956, requiring disclosure
of disqualification of directors is not applicable to Government
Companies vide notification no GSR 829(E) Dated 21.10.03 issued by
Department of Corporate Affairs, Ministry of Finance, Government of
India.
In our opinion and to the best of our information and according to the
explanations given to us, the said financial statements, read together
with notes thereon, give in the prescribed manner the information
required by the Companies Act, 1956, and give a true and fair view in
conformity with the accounting principles generally accepted in India
:-
(i) in the case of the Balance Sheet, of the state of affarrs of the
company as at 31st March, 2012 ;
(ii) in the case of the Profit & Loss Account, of the Profit of the
company for the year ended on that date and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
company for the year ended on that date.
(Referred to in paragraph 3 of our report of even date)
1 In respect of its Fixed Assets :
(a) The company has in general maintained proper records showing full
particulars including quantitative details and location of fixed
assets.
(b) The fixed assets have not been physically verified during the
current year pursuant to Accounting Policy No. 3.5. In our opinion, it
should be done in a phase wise manner so as to complete and cover the
entire fixed assets verification at least once in every three years.
(c) During the year, the company has not disposed off any fixed assets
of substantial nature which would affect the going concern status of
the company.
2 In respect of its Inventories :
(a) Physical verification of the inventory has been carried out during
the year by Management. In our opinion frequency of verification is
reasonable.
(b) In our opinion and according to the information and explanations
made available to us, the procedure of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the company has maintained proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records have been properly dealt with in the books of account.
3 The company has neither granted nor taken any loans to/ from
companies, firms or other parties listed in the register maintained
under Sec. 301 of the Companies Act, 1956. In view of the same, the
question of the terms and conditions including rates of interest being
prima facie prejudicial to the interest of the company does not arise.
4 In our opinion and according to the explanations given to us, there
is an adequate internal control system with regard to purchase of
inventory, fixed assets including high value contracts, transportation
contracts and sale of goods commensurate with the size of the company.
Further, on the explanations given to us, we have neither come across
nor have been informed of any continuing failure to correct major
weakness in the aforesaid internal control system.
5 (a) According to the information and explanations given to us, there
is no transaction which needs to be entered in the register maintained
under Section 301 of the Companies Act, 1956. b) In our opinion and
according to the information and explanations given to us, the company
has not entered into any contracts or arrangements exceeding rupees
five lakhs in value in respect of any party in pursuance of contracts
or arrangements entered in the register to be maintained under Section
301 of the Companies Act, 1956.
6 In our opinion and according to the information and explanations made
available to us by the management, the company has not accepted any
deposit from public within the meaning of Section 58A and 58AA or any
other relevant provisions of the Companies Act, 1956 and the rules
framed there under.
7 The company has adequate Internal Audit system commensurate with the
size and nature of its business.
8 We have broadly reviewed the cost records maintained by the company
for the items prescribed by the Central Government under clause (d) of
sub-section (1) of Section 209 of the Companies Act, 1956 and are of
the opinion that prima facie, the prescribed records and accounts have
been maintained. However, we have not made a detailed examination of
such accounts and records.
9 In respect of statutory dues:
(a) According to the information and explanations given to us, the
company has been generally regular in depositing undisputed statutory
dues payable in respect of provident fund, Investors education fund and
Protection fund, Employees' state Insurance, Income tax, Sales tax,
Wealth tax, Service tax, Custom Duty, Entry tax, Excise Duty, Royalty,
Land Tax, Electricity Duty and Cess and any other material statutory
dues applicable to it with appropriate authority during the year.
According to the information and explanations given to us, undisputed
amounts payable in respect of Royalty and Water Cess outstanding for a
period of more than six months from the date they become payable were
in aggregate of Rs 1445.49 lac as at 31* March 2012 (As given in
annexure attached)
(b) According to the information and explanations given to us, details
of dues of Sales Tax, Excise Duty, Entry Tax, Property Tax, Terminal
Tax and Export / Municipality Tax amounting to Rs 14006.26 lac net of
deposits made have not been deposited on account of disputes pending at
various forum. (As given in annexure attached)
10. The Company does not have accumulated losses as at 31st March 2012
and has not incurred cash losses during the financial year covered by
our audit and the immediately preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
Banks and Financial Institution.
12. According to the information and explanations given to us, the
company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
13. In our opinion, the provision of any special statute applicable to
chit fund / nidhi/ mutual benefit fund/societies is not applicable to
the company.
14. In our opinion, the company is not dealing or trading in shares,
securities, debentures and other investments.
15. According to the information and explanations given to us, the
company has not given guarantees for loans taken by others from banks
or financial institutions.
16. In our opinion and according to the information and explanations
given to us, the company has not availed any term loan during the year.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the company, we are of
the opinion that the funds raised on short-term basis have not been
used for long-term investment of the Company.
18. According to the information and explanations given to us, the
company has not made preferential allotment of shares to parties and
companies covered in the Register maintained under Section 301 of the
Companies Act, 1956.
19. According to the information and explanations given to us, the
company has not issued any debentures during the year.
20. The company has not raised any funds by way of public issue during
the year.
21. According to the information and explanations given to us, no
fraud on or by the company was noticed or reported during the year.
UNDISPUTED LIABILITIES FOR MORE THAN SIX MONTHS
(Rs. in lac)
PARTICULARS AMOUNT
ROYALTY 672.69
WATER CESS 772.80
TOTAL 1445.49
STATEMENT OF DISPUTED STATUTORY LIABILITIES (Rs. in lac)
SL. PARTICULAR YEAR FORUM AT WHICH AMOUNT
NO. MATTER IS PENDING
1 EXCISE DUTY 1985-86 CESTAT 60.60
1995-96 CESTAT 15.65
1996-97 CESTAT 1.46
FROM
1997-98
TO
1999-00 CESTAT 203.52
1998-99 ASST COMMISSIONER/
HIGH COURT 135.23
1999-00 ASST/ADDL COMMISSIONER 116.52
2000-01 ASST COMMISSIONER 21.94
FROM
2000-01
TO
2003-04 COMMISSIONER (ADJUDICATION) 1501.76
FROM 2000
-01 TO
2001-02 COMMISSIONER (ADJUDICATION) 283.40
2001-02 DY COMMISSIONER 70.80
2002-03 ASST COMMISSIONER 3.25
2002-03 CESTAT 69.50
2003-04 ASST /ADDL /JOINT COMMISSIONER 91.79
2005-06 ADDL/JOINT COMMISSIONER 43.94
2007-08 ASST COMMISSIONER 9.86
2007-08
TO
2010-11 ASST COMMISSIONER 82.52
2008-09 ADDL/DY COMMISSIONER 28.05
2008-09 CESTAT 253.92
2008-09 ASST COMMISSIONER 17.08
2009-10 DY COMMISSIONER 1.01
2009-10 ASST COMMISSIONER 196.27
2009-10
&
2010-11 ASST COMMISSIONER 103.41
2010-11 ADDL COMMISSIONER 14.01
2010-11 ASST COMMISSIONER 126.95
2010-11 TRIBUNAL 3.51
2011-12 COMMISSIONER (APPEAL) 1.34
2 PROPERTY TAX FROM
1994-95
TO
1998-99 &
FROM 2005
-06 TO
2009-10 HIGH COURT, JABALPUR 1032.47
FROM 2006
-07 TO
2011-12 HIGH COURT, JAIPUR 1707.55
3 SALES TAX 1991-92 TRIBUNAL / MAHARASHTRA 7.34
1994-95 COMMISSIONER (APPEALS) /
JABALPUR 5.38
1994-95 DYCOMMISSIONER (APPEALS) /
BIKANER 2.14
1994-95 TRIBUNAL/MAHARASHTRA 17.81
1995-96 DYCOMMISSIONER (APPEALS) /
BIKANER 1.80
1996-97 DY COMMISSIONER (APPEALS) /
BIKANER 34.06
1997-98 DY COMMISSIONER (APPEALS) /
BIKANER 33.83
2000-01 DY COMMISSIONER (APPEALS) /
BIKANER 0.95
2001-02 DY COMMISSIONER (APPEALS) /
BIKANER 6.00
2002-03 DY COMMISSIONER (APPEALS) &
CTO / BIKANER 109.74
2002-03 DY COMMISSIONER (ADJUDICATION)
/ JHARKHAND 40.55
2003-04 DY COMMISSIONER (ADJUDICATION)
/ JHARKHAND 20.01
2004-05 DY COMMISSIONER (ADJUDICATION)
/ JHARKHAND 73.08
2005-06 DY COMMISSIONER (ADJUDICATION)
/ JHARKHAND 90.69
2006-07 DY COMMISSIONER (APPEALS) /
BIKANER 33.57
2007-08 DY COMMISSIONER (APPEALS) /
BIKANER 0.06
4 TERMINAL TAX FROM 2000
-01 TO
2005-06 HIGH COURT, JABALPUR 7046.00
5 EXPORT/ FROM 2005-06
TO 2011
-12 HIGH COURT, JABALPUR 52.84
MUNICIPALITY TAX
6 ENTRY TAX 2007-08 DY COMMISSIONER (APPEAL) /
BIKANER 233.10
TOTAL 14006.26
For AGARWAL ANIL & CO. For S GHOSE & CO.
FRN No. 003222N FRN No.302184E
Chartered Accountants Chartered Accountants
ANIL AGRAWAL CHANDAN CHATTOPADHAY
(M No. 82103) (M No. 51254)
Partner Partner
Place: Kolkata
Date :29th May, 2012
Mar 31, 2011
1) We have audited the attached Balance Sheet of M/s. Hindustan Copper
Limited as at 31 st March 2011, the Profit & Loss Account and the Cash
Flow Statement of the company for the year ended on that date annexed
hereto. These financial statements are the responsibility of the
Company's Management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2) We conducted our audit in accordance with auditing standards
generally accepted in India. These standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement. An audit
includes examining on a test basis, evidences supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3) As required by the Companies (Auditors' Report) Order, 2003 (as
amended), issued by the Central Government under Section 227(4A) of the
Companies Act, 1956 and on the basis of such checks of the books and
records of the Company as we considered appropriate, we enclose in the
Annexure hereto a statement on the matters specified in paragraphs 4 &
5 of the said order.
4) Without qualifying our opinion, we draw attention to :-
a) Note 5 of schedule 24 forming part of the financial statement
relating to a dispute with MP State Electricity Board regarding demand
of interest on electricity tariff amounting to Rs. 1218680 thousand
payable at MCP which is pending for a long time and the matter is
presently referred back to Hon'ble High Court, Jabbalpur by Hon'ble
Supreme Court of India for reconsideration. The said amount has not
been provided as liability in the accounts and disclosed as a
contingent liability.
b) Note 3 of schedule 24 forming part of the financial statement
relating to a dispute with the Municipal Council, Malanjkhand, has
raised a demand on MCP/HCL amounting to Rs 704664 thousand on account
of penalty on Terminal Tax for the period 2000-01 to 2005-06 on the
ground of short payment of Terminal Tax. The matter has been contested
by the company before Hon'ble District Court, Balaghat and the company
paid Rs.35233 thousand towards Terminal Tax as per order of Hon'ble
High Court, Jabalpur,M.P where the decision was given in favour
Municipal Council. The company referred the matter to Hon'ble Supreme
Court of India. The said amount has not been provided as liability in
the accounts and disclosed as a contingent liability.
c) The financial statements have been drawn up on the basis of in-house
estimates referred to in paragraph 2 of Accounting Policies, being a
technical matter; we have relied upon the same.
5) Further to our comments in the Annexure referred to in Paragraph 3
here-inabove we report that:
a. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b. In our opinion, proper books of account as required by law have
been kept by the company so far as it appears from our examination of
such books;
c. The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d. In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement, subject to what is stated herein below in paragraph 6
dealt with by this report comply with the Accounting Standards referred
to in sub-section (3C) ofsection211 of the Companies Act, 1956;
e. Section 274( 1 )(g) of the Companies Act, 1956, requiring
disclosure of disqualification of directors is not applicable to
Government Companies vide notification no GSR 829(E) Dated 21.10.03
issued by Department of Corporate Affairs, Ministry of Finance,
Government of India.
6) We further report that:-
A) Pending confirmations and reconciliation, in case of some of the
balances under the heads Sundry Creditors, Claims Recoverable, Loans,
Advances and Sundry Debtors remain as per book balance the impact of
which can not be quantified at this stage. (Ref.NoteNo. 12 on Schedule
No. 24 of Notes to Accounts).
b) The effect of qualifications given above on the profit as well as
assets and liabilities of the company could not be ascertained for want
of details.
Subject to the matter referred to in paragraph 6(a) & (b) above, in our
opinion and to the best of our information and according to the
explanations given to us, the said financial statements, read together
with notes thereon, give in the prescribed manner the information
required by the Companies Act, 1956, and, give a true and fair view in
conformity with the accounting principles generally accepted in India
:-
(i) in the case of the Balance Sheet, of the state of affairs of the
company as at 31 st March, 2011;
(ii) in the case of the Profit & Loss Account, of the Profit of the
company for the year ended on that date and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
company for the year ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
(Referred to in paragraph 3 of our report of even date)
1 In respect of its Fixed Assets:
(a) The company has in general maintained proper records showing full
particulars including quantitative details and location of fixed
assets.
(b) The fixed assets have been physically verified during the current
year. In our opinion, it should be done in a phase wise manner so as to
complete and cover the entire fixed as sets verification at least in
every three years.
(c) During the year, the company has not disposed off any fixed assets
of substantial nature which would affect the going concern status of
the company.
2 In respect of its Inventories:
(a) Physical verification of the inventory has been carried out during
the year by Management. In our opinion frequency of verification is
reasonable. In our opinion, non-moving store should be ascertained
every year.
(b) In our opinion and according to the information and explanations
made available to us, the procedure of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the company has maintained proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records have been properly dealt with in the books of account.
3 The company has neither granted nor taken any loans to/ from
companies, firms or other parties listed in the register maintained
under Sec. 301 of the Companies Act, 1956. In view of the same, the
question of the terms and conditions including rates of interest being
prima facie prejudicial to the interest of the company does not arise.
4 In our opinion and according to the explanations given to us, there
is an adequate internal control system with regard to purchase of
inventory, fixed assets including high value contracts, transportation
contracts and sale of goods commensurate with the size of the company.
Further, on the explanations given to us, we have neither come across
nor have been informed of any continuing failure to correct major
weakness in the aforesaid internal control system.
5 (a) According to the information and explanations given to us, there
is no transaction which needs to be entered in the
register maintained under Section 301 ofthe Companies Act, 1956.
b) In our opinion and according to the information and explanations
given to us, the company has not entered into any contracts or
arrangements exceeding rupees five lakhs in value in respect of any
party in pursuance of contracts or arrangements entered in the register
to be maintained under Section 301 ofthe Companies Act, 1956.
6 In our opinion and according to the information and explanations made
available to us by the management, the company has not accepted any
deposit from public within the meaning of Section 58 A and 58AA or any
other relevant provisions ofthe Companies Act, 1956 and the rules
framed there under.
7 Company has Internal Audit system commensurate with its size and
nature of business. However, in our opinion, it needs to be reviewed,
monitored strengthened further.
8 We have broadly reviewed the cost records maintained by the company
for the items prescribed by the Central Government under clause (d) of
sub-section (1) of Section 209 ofthe Companies Act, 1956 and are ofthe
opinion that prima facie, the prescribed records and accounts have been
maintained. However, we have not made a detailed examination of such
accounts and records.
9 In respect of statutory dues:
(a) According to the information and explanations given to us, the
company has been generally regular in depositing undisputed statutory
dues payable in respect of provident fund, Investors education fund and
Protection fund, Employees' state Insurance, Income tax, Sales tax,
Wealth tax, Service tax, Custom Duty, Entry tax, Excise Duty, Royalty,
Land Tax, Electricity Duty and Cess and any other material statutory
dues applicable to it with appropriate authority during the year.
According to the information and explanations given to us, undisputed
amounts payable in respect of Sales Tax, Royalty, Forest land,
Electricity Duty, Excise Duty and Water Cess outstanding for a period
of more than six months from the date they become payable were in
aggregate ofRs. 174466 thousand as at 31st March 2011 (As given in
annexure attached)
(b) According to the information and explanations given to us, details
of dues of Sales Tax, Excise Duty, Entry Tax, and Property Tax
amounting to Rs.1271316 thousand net of deposits made have not been
deposited on account of disputes pending at various forum. (As given in
annexure attached)
10 The Company does not have accumulated losses as at 31st March 2011
and has not incurred cash losses during the financial year covered by
our audit and the immediately preceding financial year.
11 In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
Banks and Financial Institution.
12 According to the information and explanations given to us, the
company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
13 In our opinion, the provision of any special statute applicable to
chit fund / nidhi/ mutual benefit fund/societies is not applicable to
the company.
14 In our opinion, the company is not dealing or trading in shares,
securities, debentures and other investments.
15 According to the information and explanations given to us, the
company has not given guarantees for loans taken by others from banks
or financial institutions.
16 In our opinion and according to the information and explanations
given to us, the company has not availed any term loan during the year.
17 According to the information and explanations given to us and on an
overall examination of the Balance Sheet of the company, we are of the
opinion that the funds raised on short-term basis have not been used
for long-term investment of the Company.
18 According to the information and explanations given to us, the
company has not made preferential allotment of shares to parties and
companies covered in the Register maintained under Section 301 of the
Companies Act, 1956.
19 According to the information and explanations given to us, the
company has not issued any debentures during the year.
20 The company has not raised any funds by way of public issue during
the year.
21 According to the information and explanations given to us, no fraud
on or by the company was noticed or reported during the year
For RAY & CO. For AGARWAL ANIL& CO.
FRN: 313124E FRN : 003222N
Chartered Accountants Chartered Accountants
S P BASU ANIL AGRAWAL
Partner Partner
(M.No. 50209) (M.No. 82103)
Place : Kolkata
Date: 28th May, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of M/s. Hindustan Copper
Limited as at 31st March 2010, the Profit & Loss Account and the Cash
Flow Statement of the company for the year ended on that date annexed
hereto. These financial statements are the responsibility of the
Companys Management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. These standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement. An audit
includes examining on a test basis, evidences supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (as
amended), issued by the Central Government under Section 227(4A) of the
Companies Act, 1956 and on the basis of such checks of the books and
records of the Company as we considered appropriate, we enclose in the
Annexure hereto a statement on the matters specified in paragraphs 4 &
5 of the said order.
4. Without qualifying our opinion, we draw attention to :-
(a) Note 2 of schedule 24 forming part of the financial statement
relating to trade dispute with M/s Bhagawati Gases Ltd (BGL) in
connection with an agreement to supply of gaseous oxygen at Khetri
Copper Complex. A claim for Rs.10.80 Crores has been awarded against
the company by the arbitrator. The company has filed an appeal before
the Jhun Jhunu Court and the same was admitted for hearing. Based upon
legal opinion obtained from a senior Supreme Court advocate and the
Additional Solicitor General of India, the management considers the
arbitration award is not binding on the company. Hence, claim has been
disclosed under Contingent liabilities.
(b) Note 4 of schedule 24 forming part of the financial statement
relating to a dispute with MP State Electricity Board regarding demand
of interest on electricity tariff amounting to Rs.121.87 crores payable
at MCP which is pending for a long time and the matter is presently
referred back to Honble High Court, Jabalpur by Honble Supreme Court
of India for reconsideration. The said amount has not been provided as
liability in the accounts and disclosed as a contingent liability.
(c) The financial statements have been drawn up on the basis of
in-house estimates referred to in paragraph 2 of Accounting Policies,
being a technical matter; we have relied upon the same.
5. Further to our comments in the Annexure referred to in Paragraph 3
here-in-above we report that:
(a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the company so far as it appears from our examination of
such books;
(c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement, subject to what is stated herein below in paragraph 6
dealt with by this report comply with the Accounting Standards referred
to in sub-section (3C) of section 211 of the Companies Act, 1956;
(e) Section 274(l)(g) of the Companies Act, 1956, requiring disclosure
of disqualification of directors is not applicable to Government
Companies vide notification no GSR 829(E) Dated 21.10.03 issued by
Department of Corporate Affairs;
6. We further report that :-
(a) Pending confirmations and reconciliation, the balances under the
heads Sundry Creditors, Claims Recoverable, Loans, Advances and some of
the Sundry Debtors remain as per book balance the impact of which can
not be quantified at this stage. (Re/. Note No. 11 on Schedule No. 24
of Notes to Accounts).
(b) The Grant-in-Aid received from Government of India from time to
time for reimbursement to Council of Scientific & Industrial Research,
Bhubaneswar, out of which Rs.1.77 crores remain undisbursed since 1994,
has been credited to other income for which we have not received any
documentary evidence based on which the above amount has been taken as
income. (Refer to note no. 8 of Schedule 24).
(c) The effect of qualifications given above on the profit as well as
assets and liabilities of the company could not be ascertained for want
of details in respect of (a) above and the profit has been over stated
to the extent ofRs. 1.77 crores as regard (b) above.
Subject to the matter referred to in paragraph 6(a) & (b) above, in our
opinion and to the best of our information and according to the
explanations given to us, the said financial statements, read together
with notes thereon, give in the prescribed manner the information
required by the Companies Act, 1956, and, give a true and fair view in
conformity with the accounting principles generally accepted in India
:-
(i) in the case of the Balance Sheet, of the state of affairs of the
company as at 31st March, 2010 ;
(ii) in the case of the Profit & Loss Account, of the Profit of the
company for the year ended on that date and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
company for the year ended on that date.
ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our
report of even date)
1. In respect of its Fixed Assets :
(a) The company has in general maintained proper records showing full
particulars including quantitative details and location of fixed
assets.
(b) The fixed assets have not been physically verified during the
current year pursuant to Accounting Policy No.3.5. In our opinion, it
should be done in a phase wise manner so as to complete and cover the
entire fixed assets verification at least in every three years.
(c) During the year, the company has not disposed off any fixed assets
of substantial nature which would affect the going concern status of
the company.
2. In respect of its Inventories :
(a) Physical verification of the inventory has been carried out during
the year by Management. In our opinion frequency of verification is
reasonable. In our opinion, non-moving store should be ascertained
every year.
(b) In our opinion and according to the information and explanations
made available to us, the procedure of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the company has maintained proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records have been properly dealt with in the books of account.
3. The company has neither granted nor taken any loans to/from
companies, firms or other parties listed in the register maintained
under Sec. 301 of the Companies Act, 1956. In view of the same, the
question of the terms and conditions including rates of interest being
prima facie prejudicial to the interest of the company does not arise.
4 In our opinion and according to the explanations given to us, there
is an adequate internal control system with regard to purchase of
inventory, fixed assets including high value contracts, transportation
contracts and sale of goods commensurate with the size of the company.
Further, on the explanations given to us, we have neither come across
nor have been informed of any continuing failure to correct major
weakness in the aforesaid internal control system.
5 (a) According to the information and explanations given to us, there
is no transaction which needs to be entered in the register maintained
under Section 301 of the Companies Act, 1956.
(b) In our opinion and according to the information and explanations
given to us, the company has not entered into any contracts or
arrangements exceeding rupees five lakhs in value in respect of any
party in pursuance of contracts or arrangements entered in the register
to be maintained under Section 301 of the Companies Act, 1956.
6 In our opinion and according to the information and explanations made
available to us by the management, the company has not accepted any
deposit from public within the meaning of Section 58A and 58AA or any
other relevant provisions of the Companies Act, 1956 and the rules
framed there under.
7 Company has appointed an out side agency as Internal Auditor of the
Company during the year. We have not come across any Internal audit
Report in course of our audit. As a result we are not in position to
comment on whether the Internal Audit system is commensurate with size
and nature of its business.
8 We have broadly reviewed the cost records maintained by the company
for the items prescribed by the Central Government under clause (d) of
sub-section (1) of Section 209 of the Companies Act, 1956 and are of
the opinion that prima facie, the prescribed records and accounts have
been maintained. However, we have not made a detailed examination of
such accounts and records.
9 In respect of statutory dues:
(a) According to the information and explanations given to us, the
company has been generally regular in depositing undisputed statutory
dues payable in respect of provident fund, Investors education fund and
Protection fund , Employees State Insurance, Income tax, Sales tax,
Wealth tax, Service tax, Custom Duty, Entry tax, Excise Duty, Royalty,
Land Tax, Electricity Duty and Cess and any other material statutory
dues applicable to it with appropriate authority during the year.
According to the information and explanations given to us, undisputed
amounts payable in respect of Sales Tax, Royalty, Forest land,
Electricity Duty, Excise Duty and Water Cess outstanding for a period
of more than six months from the date they become payable were in
aggregate of Rs.849.05 lakhs as at 31 March 2010 (As given in annexure
attached)
(b) According to the information and explanations given to us, details
of dues of Sales Tax, Excise Duty, Entry Tax, and Property Tax
amounting to Rs.16118.68 lakhs net of deposits made have not been
deposited on account of disputes pending at various forum. (As given in
annexure attached)
10. The Company does not have accumulated losses as at 31 March 2010
and has not incurred cash losses during the financial year covered by
our audit and the immediately preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
Banks and Financial Institution.
12. According to the information and explanations given to us, the
company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
13. In our opinion, the provision of any special statute applicable to
chit fund / nidhi/ mutual benefit fund/ societies is not applicable to
the company.
14. In our opinion, the company is not dealing or trading in shares,
securities, debentures and other investments.
15. According to the information and explanations given to us, the
company has not given guarantees for loans taken by others from banks
or financial institutions.
16. In our opinion and according to the information and explanations
given to us, the company has not availed any term loan during the year.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the company, we are of
the opinion that the funds raised on short-term basis that have not
been used for long-term investment.
18. According to the information and explanations given to us, the
company has not made preferential allotment of shares to parties and
companies covered in the Register maintained under Section 301 of the
Companies Act, 1956.
19. According to the information and explanations given to us, the
company has not issued any debentures during the year.
20. The company has not raised any funds by way of public issue during
the year.
21. According to the information and explanations given to us, no
fraud on or by the company was noticed or reported during the year
For RAY & Co. For AGARWAL ANIL & CO.
FRN : 313124E FRN : 003222N
Chartered Accountants Chartered Accountants
SUBRATA ROY ANIL AGRAWAL
Partner Partner
(M.No. 51205) (M.No. 82103)
Place : Kolkata
Date : 14th May, 2010
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