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Notes to Accounts of Hindustan Copper Ltd.

Mar 31, 2023

40 GENERAL NOTES ON ACCOUNTS
1.	CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)
(i)		Contingent Liabilities: -
a.		Claims against the company not acknowledged as debt:	2022-23 ('' in lakh)		2021-22 (? in lakh)
		Disputed VAT / CST / Entry Tax / Other Taxes	8494.74		6641.03
ii.		Disputed Excise Duty	5282.31		2897.00
iii.		Disputed Income Tax	23084.40		23069.63
iv.		Other Demand	114870.12		571 27.38
SUB-TOTAL (A)			151731.57		89735.04
b.		Other money for which the company is contingently liable :
		Bank Guarantee	4723.39		4087.02
ii.		Letter of Credit	177.47		413.77
iii.		Bill discounting		-	-
SUB-TOTAL (B)			4900.86		4500.79
GRAND TOTAL (A B)			156632.43		94235.83
(ii)		Commitments: -			('' in lakh)
	Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advance and deposit)		108030.72	49660.97

Details of Claims against the Company not acknowledged as debt (of 1(i)(a) above)VAT/CST/ENTRY TAX & OTHER TAXES

There are demand notices totaling to Gross Demand of '' 8494.74 lakh (Previous Year '' 6641.03 lakh) from various State Revenue Authorities regarding VAT/CST/Entry Tax/Other Taxes against which the company has deposited under protest '' 433.50 lakh (Previous Year '' 433.50 lakh) shown under Note No. 17 Other Current Assets. The company is contesting the demand and the management as well as the legal advisors/consultants are of the opinion that its contention will likely to be upheld by the Appellate Authorities. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

EXCISE DUTY

There are demand notices totaling to Gross Demand of '' 5282.31 lakh (Previous Year '' 2897.00 lakh) from Central Excise Authorities regarding Excise Duty against which the company has deposited under protest '' 77.94 lakh (Previous Year '' 77.94 lakh) shown under Note No. 17 Other Current Assets. The company is contesting the demand and the management as well as the legal advisors/consultants are of the opinion that its contention will likely to be upheld by the Appellate Authorities. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

INCOME TAX

There are Income Tax demand notices totaling to Gross Demand of '' 23084.40 lakh (Previous Year '' 23069.63 lakh) against which the company has deposited under protest '' Nil (Previous Year '' 683.92 lakh) shown under Note No. 29 Current Tax Liabilities (Net of Current Tax Assets). The management as well as the income tax consultant are of the opinion that its contention will likely to be upheld by the Appellate Authorities/High Court. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

OTHER DEMAND

1. The pending litigation cases totaling to '' 1 14870.12 lakh (Previous Year '' 571 27.38 lakh) which the company is contesting before different Legal Forums / Courts. The management as well as the legal advisors/consultants are of the opinion that its position will likely to be upheld in the appellate proceedings. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

2. During the year, the company has made a provision amounting to '' 1930.00 lakh (Previous year '' 1941.00) in terms of DPE guidelines towards Performance Related Pay payable to the executives for F.Y. 2022-23 which is shown under âEmployee Benefits Expense''.

3. During the year, wage revision of workmen of the company has been finalized on 03.01.2023 for the period 10 years w.e.f 01.11.2017 to 31.10.2027.

4. Lease premium paid for land for mining purposes including payment for Net Present Value (NPV) of forest area paid to forest department and amount paid towards wildlife conservation plan are capitalized under the head âOther Intangible Assetsâ shown under Note No. 3(C&D)

5. Surda Mining Lease period has been extended by Directorate of Mines & Geology; Govt. of Jharkhand vide order dated 06.01.2022 for a period of 20 years w.e.f 01.04.2020 to 31.03.2040. Validity of Kendadih Mining Lease period is till 02.06.2023 and Rakha Mining Lease was till 28.08.2021. However, application for extension of Mining Lease period for a period of 20 years for both Kendadih and Rakha Mining Leases have been submitted to Govt. of Jharkhand on 16.03.2022 and 30.04.2020 respectively. Presently both the applications are in process as per regulation. The mined-out ore kept at pit-top of Surda Mine could not be transported to the concentrator plant because of nonissuance of challan/permit by State Authorities, Jharkhand due to non-receipt of Surda Lease Deed, which is under process. HCL has taken exploration activity in Rakha mine in phase wise manner to complete G2 exploration within the Mine lease area.

6. KCC : The commercial operation of Smelter, Refinery and Sulphuric Acid Plant at Khetri Copper Complex (KCC) were suspended since December 2008. The Company suffered loss on account of impairment of the said plants valued by an independent consultant in earlier years and consequently a total sum of '' 464.01 lakh was provided in the accounts for impairment loss in compliance with the guidelines of IND AS 36 on âImpairment of Assetsâ, out of which some impaired assets has been sold/written off and net impairment of '' 461.88 lakh is appearing in books of accounts as on 31.03.2023.

ICC : The company has recently carried out valuation work of Moubhandar Plant & Nikel Plant at ICC by an external Agency and as per valuation report ,the carrying value of assets are more than the net book value of the assets

7. The title deeds for Freehold and Leasehold Land and Building acquired in respect of Gujarat Copper Project (GCP) with book value of '' 4756.01 lakh is yet to be executed (Previous year '' 5026.13 lakh).

8. At ICC, Pollution Control Plant under Package I & III amounting to '' 2100.50 lakh have not been capitalized for want of completion of trial / guarantee run as per terms of contract. As a matter of prudence, full provision for the same has been made in the accounts to take care of efflux of time over the years.

9. Confirmation letters of majority of balances under the heads Trade Payables, Claims Recoverable, Loans & Advances, Trade Receivables and Deposits from and with various parties/ Government Departments have been sent but in number of cases such confirmation letters from the parties are yet to be received.

10. During the year, the company has spent a sum of '' 1 26.67 lakh on account of Corporate Social Responsibility (CSR) expenses. Refund amount of '' 8.37 lakh received towards unspent balance for the Skill Training Project (Kaushal Vikash Yojana) implemented with HCL under CSR at three mining Units of HCL has been adjusted with CSR expenses of the current year. Since the company is not liable to incurred CSR Expenses for FY 2022-23 , the amount spent '' 118.30 lakh in FY 2022-23 will be set off /carry forward against subsequent year CSR liability.

The information has been given of such vendors to the extent they could be identified as âMicro and Smallâ enterprises on the basis of information available to the Company.

b) The Company has accepted and paid all invoices of Goods & Services raised on HCL through TREDS Portal.

12. Management has not become aware of any instance of fraud by the company or any fraud on the company by its officers and employees during the current financial year.

13. Since the company is primarily engaged in the business of manufacture and sale of copper products, the same is considered to be the only primary reportable business segment and accordingly has been reported. As the Company operates predominantly within the geographical limits of India, no secondary segment reporting has been considered as per IND AS 108 âOperating Segmentsâ.

19. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS IN TERMS OF Ind AS 19 :

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through Life Insurance Corporation of India, SBI Life Insurance Co. Ltd. and India First Life Insurance and are managed by separate trust. The Company has also funded through Life Insurance Corporation of India and SBI Life Insurance Co. Ltd towards leave encashment. Expenses recognized in Statement of Profit & Loss and Other Comprehensive Income amounting to '' 4053.00 lakh in respect of Gratuity, Leave Encashment and Leave Travel Concession which have been provided for as stated below.

The following tables summarize the components of net benefit expense recognized in the Statement of Profit and Loss, Other Comprehensive Income and Mine Development Expenditure and the funded status and amounts recognized in the balance sheet for the respective plans.

The estimates of future salary increases were considered in actuarial valuation after considering inflation, seniority, promotion and other relevant factors. Further, the expected return on plan assets is determined considering several applicable factors mainly the composition of plan assets held, assessed risk of asset management and historical returns from plan assets.

20. The Company as Lessee has taken certain vehicles on lease for a period of four years, which can be further extended at mutually agreed terms. There are no escalations in the lease rentals as per terms of the agreement. However, the Company has purchase option for such vehicles at the end of the lease term. Accordingly the Company has adopted Ind AS 116 during the current financial year & accounted for the leasing entries as per IND AS 116.

21. The physical verification of Semi-Finished and In-Process (WIP) and Finished Goods has been conducted departmentally in all the units (ICC, KCC, MCP, TCP & GCP) at the end of the current year by a duly approved internal committee.

In respect of stores and spares, physical verification has been conducted by the external agencies in all the units during the year. Shortages/ (Excesses) identified on such physical verification have been duly adjusted in the books of accounts.

22. The physical verification of fixed assets which is required to be conducted every year so that all the units/offices are covered once in a block of three years interval. During the year, physical verification of fixed assets has been conducted by external agencies for MCP, GCP and ICC& RCP.

23. Financial Instrument1. Derivatives not designated as hedging instruments

The Company uses Commodity Futures Contracts to manage its commodity price risk . The Commodity Futures Contracts are not designated as hedging instrumnets and are entered into for periods consistent with commodity price risk exposure of the underlying transactions, generally from one to four months. However in the year FY 22-23, the Company has not entered into any Commodity Futures Contract.

The Company uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange forward contracts are not designated as cash flow hedges and are entered into for periods consistent with foreign currency exposure of the underlying transactions, generally from one to four months. Commodity price risk

In the year FY 22-23, the Company has not purchased any such copper blister/ anode for its plant in GCP. Hedging the price volatility of copper purchases is in accordance with the Risk Management Policy approved by the Board of Directors. The hedging relationships are for a period between 1 and 4 months based on existing purchase agreements. The Company designated only the spot-to-spot movement of the entire commodity purchase price as the hedged risk. It has been decided by the company not to follow the hedge accounting for these instruments.

As at 31 March 2023, the fair value of the open position of commodity future contracts is nil.

2 . Financial Instruments by Categories

The carrying value and fair value of financial instruments by categories were as follows:

Set out below, is a comparison by class of the carrying amounts and fair value of the Company''s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

3. The Management considered the Service fees of Rs 15 lakh paid on the Exim Bank Term loan amounting to Rs. 30000 lakh drawn on 29.05.2018 as immaterial, as the amount of service fee was only 0.009% of the Turnover (FY 2022-23) of the company and hence the same was not considered as a transaction cost in terms of fair valuation at initial recognition under INDAS 109. Further, the Management assessed that for the purpose of IND AS 109, the carrying value of loan is considered as its fair value as no loan could be provided at a rate lower that the rate of interest of Exim Bank loan for similar terms and conditions of the loan at that point of time. Similarly, the Management considered the total of Upfront fees & Other charges of '' 245.33 lakh paid on the SBI ECB loan amounting to '' 17734.75 lakh drawn during July 2018 to January 2019 as immaterial, as the amount of such fees/ charges was only 0.15% of the Turnover (FY 2022-23) of the company and hence the same was not considered as a transaction cost in terms of fair valuation at initial recognition under INDAS 109. Further, the Management assessed that for the purpose of IND AS 109, the carrying value of loan is considered as its fair value as no loan could be provided at a rate lower that the rate of interest of SBI ECB loan for similar terms and conditions of the loan at that point of time.

The Management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

The Company enters into derivative financial instruments with various counterparties, principally with financial institutions having Investment grade credit ratings. Foreign exchange forward contracts and commodity futures contracts are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques include forward pricing.

4. Fair Value Hierarchy

Level 1 - Level 1 hierarchy includes financial instruments measured using quoted prices (unadjusted) in active markets.

Level 2 - Level 2 hierarchy includes financial instruments measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Level 3 hierarchy includes financial instruments measured using inputs that are not based on observable market data (unobservable inputs).

ii) Commodity Price Risk

The company''s exposure to Commodity price from copper price fluctuation in international market does not arise as the company hedges all its imports through Future contracts at LME. b) Credit Risk

Credit risk refers to the risk of default on its obligation by the Debtors resulting in a financial loss. The company sells majority of its products either against Advance from Customers or Letters of Credit. Accordingly, credit risk from Trade receivables has not been cosidered as credit risk.

The maximum exposure to credit risk at the reporting date is '' 983.82 lakh for which full provision has been made in the accounts as disclosed in Note No 12.

Other financial assets

Credit risk relating to cash and cash equivalents is considered negligible because our counterparties are scheduled banks. We consider the credit quality of Term deposits with such banks as good as these banks are under the regulartory framework of Reserve Bank of India. We review these banking relationships on an ongoing basis. c) Liquidity Risk

Our liquidity needs are monitored on the basis of monthly and yearly projections. The company''s principal sources of liquidity are cash and cash equivalents and cash generated from operations.

We manage our liquidity needs by continuously monitoring cash inflows and by striving to maintain adequate cash and cash equivalents. Net cash requirements are compared to available cash in order to determine any shortfall. Short term liquidity requirements consists mainly of Loans, Sundry creditors, Expense payable, Employee dues arising during the normal course of business as of each reporting date. We strive to maintain a sufficient balance in cash and cash equivalents to meet our short term liquidity requirements.

The table below provides details regarding the contractual maturities of financial liabilities. The table has been drawn up based on the undisclosed cash flows of financial liabilities based on the earliest date on which the company can be required to pay.

26. The value of assets, other than fixed assets and non-current assets, have realizable value at least equal to the amount at which they are stated.

27. Gujarat Copper Project of the Company consists of three units namely, Anode furnace (Smelter), Refinery and Kaldo Furnace along with land, buildings & other assets having aggregate book value of '' 21355.85 lakh as at March 31,2022. The commercial operation of Gujarat Copper Project was suspended since August 2019 due to non-availability of feed material at economical price. Accordingly, the company had assessed the loss on account of impairment of the said plant excluding land, building, roads etc. valued by an Independent consultant & consequently a sum of '' 9708.21 lakh had been provided in the accounts of FY 2020-21. During the FY 2021-22, the Company had further re-assessed the impairment study of the said plant excluding land, building, roads etc by an independent consultant and a sum of '' 5194.00 lakh had been booked as impairment loss. Total cumulative amount of '' 14902.21 lakh has been provided in the accounts for impairment loss in compliance with the guidelines of IndAS-36 on âImpairment of Assetsâ as per notification under section 133 of the Companies Act, 2013. The Asset Monetization plan (AMP) has been sent to Ministry vide e mail dated 27.11.2021 which include Assets of GCP in addition to other assets for approval. Since only value of the assets at GCP is more than '' 100.00 crore, the company can initiate further action on AMP after obtaining approval from DIPAM.The Net Book value as on 31.03.2023 is '' 6138.73 lakh.

28. During the financial year 2021-22, Provident Fund (PF) Trusts maintained for the employees of the Company namely ICC PF Trust and KCC PF Trust have incurred a total loss of ''116.06 lakh. As per Accounting Policy of the Company, deficit in PF Trusts ascertained on the basis of last audited accounts of the Trust is accounted for as a charge to Revenue. Accordingly, the Company has made a provision of ''116.06 lakh during the current financial year towards total deficit in PF Trust of FY 2021-22.

29. The Board of Directors of the Company has recommended payment of dividend at rate of '' 0.92 per share on '' 5/- face value for the year 2022-23 for approval of shareholders in the Annual General Meeting. The outgo on this account will be '' 8896.62 lakh (approx.)

30. Consequent upon the Judgment of Common Cause dated 02.08.2017, which is applicable only to the mining leases of iron and manganese ore, passed by the Apex court in the case of Common Cause Vs UOI and others, a demand of '' 4353.78 lakh was raised by the District Mining Officer of Jamshedpur for running the Surda mine without valid environment clearance (EC) although Surda mine has a valid mining lease, forest clearance and it has adhered to the terms of approved mining plan and it was working on valid Consent to Operate. Based on the Revision Application filed by the Company, the Revisional Authority of the Ministry of Mines, after hearing at length both parties had issued specific direction against the demand of District Mining Officer (DMO) not to take any coercive measures in terms of recovery of the said demand. On revision of demand from '' 4353.78 lakh to '' 12690.49 lakh by the office of the District Mining Officer and subsequently revised to '' 92940.06 lakh by the State Government, the Company again appealed before the Revisional Authority and the last hearing was held on 29.09.2022 through video conferencing and interim stay, granted earlier, is continued by the Revisional Authority till the next date of hearing. Further, MMDR Amendment Act, 2021 has come into force w.e.f. 28.03.2021 which clearly explained the expression âraising, transporting or causing to raise or transport any mineral without any lawful authorityâ shall mean raising, transporting or causing to raise or transport any mineral by a person without prospecting license, mining lease or composite license. Based on the clarification, the Company believes that the judgement of the case will be in favour of the Company and is of the view that the same has not to be shown as Contingent Liability as on 31.03.2023.

31. The previous year''s figures have been regrouped / rearranged, wherever necessary.

Mar 31, 2022

1.	CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)
(i) Contingent Liabilities: -
a. Claims against the company not acknowledged as debt:		2021-22 ('' in lakh)		2020-21 ('' in lakh)
i. Disputed VAT / CST / Entry Tax		6641.03		7399.82
ii. Disputed Excise Duty		2897.00		2898.96
iii. Disputed Income Tax		23069.63		23112.28
iv. Other Demand		59161.66		48878.66
SUB-TOTAL (A)		91769.32		82289.72
b. Other money for which the company is contingently liable :
i. Bank Guarantee		4087.02		2890.65
ii. Letter of Credit		413.77		93.63
iii. Bill discounting			-	3732.36
SUB-TOTAL (B)		4500.79		2820.80
GRAND TOTAL (A B)		96270.11		71509.66
(ii) Commitments: -
	Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advance and deposit)	49660.97	56709.30

Details of Claims against the Company not acknowledged as debt (of 1(i)(a) above)VAT/CST/ENTRY TAX

There are demand notices totaling to Gross Demand of '' 6641.03 lakh (Previous Year '' 7399.82 lakh) from various State Revenue Authorities regarding VAT/CST/Entry Tax against which the company has deposited under protest '' 433.50 lakh (Previous Year '' 673.50 lakh) shown under Note No. 17 Other Current Assets. The company is contesting the demand and the management as well as the legal advisors/consultants are of the opinion that its contention will likely to be upheld by the Appellate Authorities. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

EXCISE DUTY

There are demand notices totaling to Gross Demand of '' 2897.00 lakh (Previous Year '' 2898.96 lakh) from Central Excise Authorities regarding Excise Duty against which the company has deposited under protest '' 77.94 lakh (Previous Year ''164.06 lakh) shown under Note No. 17 Other Current Assets. The company is contesting the demand and the management as well as the legal advisors/consultants are of the opinion that its contention will likely to be upheld by the Appellate Authorities. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

INCOME TAX

There are Income Tax demand notices totaling to Gross Demand of '' 23069.63 lakh (Previous Year '' 231 1 2.28 lakh) against which the company has deposited under protest '' 683.92 lakh (Previous Year '' 1092.36 lakh) shown under Note No. 16 Current Tax Assets. The management as well as the income tax consultant are of the opinion that its contention will likely to be upheld by the Appellate Authorities/High Court. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

OTHER DEMAND

1. The pending litigation cases totaling to '' 59161.66 lakh (Previous Year '' 48878.66 lakh) which the company is contesting before different Legal Forums / Courts. The management as well as the legal advisors/consultants are of the opinion that its position will likely to be upheld in the appellate proceedings. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

2. During the year, the company has made a provision amounting to '' 1941.00 lakh (Previous year '' 249.00 lakh) in terms of DPE guidelines towards Performance Related Pay payable to the executives for F.Y. 2021-22 which is shown under âEmployee Benefits Expense''.

3. During the year, the company has provided a sum of '' 8064.87 lakh (Previous year '' Nil) towards wage revision of workmen for the period 01.11.2017 to 31.03.2022 which is shown under âEmployee Benefits Expense''

4. Lease premium paid for land for mining purposes including payment for Net Present Value (NPV) of forest area paid to forest department are capitalized under the head âOther Intangible Assetsâ shown under Note No. 3(C)

5. The lease agreements of Kendadih Mining Lease at Indian Copper Complex has been renewed and executed by the Govt of Jharkhand in respect of leasehold lands valid upto 02.06.2023. Surda Mining Lease has been extended on 06.01.2022 by Mines & Geology Department, Govt of Jharkhand, Ranchi w.e.f. 01.04.2020 to 31.03. 2040.Rakha Mining lease was valid upto 28.08.2021 Application for renewal of Rakha Mining Lease has been submitted to the Govt. of Jharkhand, as per regulations which is under process.

6. The commercial operation of Smelter, Refinery and Sulphuric Acid Plant at Khetri Copper Complex (KCC) were suspended since December 2008. The Company suffered loss on account of impairment of the said plants valued by an independent consultant in earlier years and consequently a total sum of '' 464.01 lakh was provided in the accounts for impairment loss in compliance with the guidelines of IND AS 36 on âImpairment of Assetsâ, out of which some impaired assets has been sold/written off and net impairment of ? 461.88 lakh is appearing in books of accounts as on 31.03.2022.

7. The title deeds for Freehold and Leasehold Land and Building acquired in respect of Gujarat Copper Project (GCP) with book value of '' 5026.13 lakh are yet to be executed (Previous year '' 5296.25 lakh).

Description of a property

Gross carrying value of Land

(? in lakh)

Title deeds held in the name of

Whether title deed holder is promoter, director or their relatives or employee of promoter/director

Property held since which date

Reasons for not being held in the name of the company

Plot No. 747, GIDC Mega Estate, Jhagadia, Bharuch, Gujarat, Pin -393110.

3795.26

Jhagadia

Copper

Limited

Asset Capitalized date :

01-Oct-2016

Case Filled in Hon''ble High Court, Ahmedabad

10. During the year, the company has spent a sum of '' 79.61 lakh on account of Corporate Social Responsibility (CSR) expenses. Refund amount of '' 2.42 lakh received towards unspent balance for the Skill Training Project (Kaushal Vikash Yojana) implemented with HCL under CSR at three mining Units of HCL has been adjusted with CSR expenses of the current year. Accordingly CSR Expenses balance shown in Statement of Profit /(Loss) is '' 77.19 lakh.

Amount spent during the year on:

The information has been given of such vendors to the extent they could be identified as âMicro and Smallâ enterprises on the basis of information available to the Company.

12. Management has not become aware of any instance of fraud by the company or any fraud on the company by its officers and employees during the current financial year.

13. The Company has closed / suspended many of its mining operations located at various places, Fertilizer Plant at Khetri in different years due to their uneconomic operations. As per requirement of IND AS 105 on âNon-current Assets Held for Sale and Discontinued Operationsâ the following information for the year are furnished:

14. Since the company is primarily engaged in the business of manufacture and sale of copper products, the same is considered to be the only primary reportable business segment and accordingly has been reported. As the Company operates predominantly within the geographical limits of India, no secondary segment reporting has been considered as per IND AS 108 âOperating Segmentsâ.

GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS IN TERMS OF Ind AS 19 :

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through Life Insurance Corporation of India, SBI Life Insurance Co. Ltd. and India First Life Insurance and are managed by separate trust. The Company has also funded through Life Insurance Corporation of India and SBI Life Insurance Co. Ltd towards leave encashment. Expenses recognized in Statement of Profit & Loss and Other Comprehensive Income amounting to '' 4084.87 lakh in respect of Gratuity, Leave Encashment and Leave Travel Concession which have been provided for as stated below.

21. The Company as Lessee has taken certain vehicles on lease for a period of four years, which can be further extended at mutually agreed terms. There are no escalations in the lease rentals as per terms of the agreement. However, the Company has purchase option for such vehicles at the end of the lease term. Accordingly the Company has adopted Ind AS 116 during the current financial year & accounted for the leasing entries as per IND AS 116.

22. The physical verification of Semi-Finished and In-Process (WIP) and Finished Goods has been conducted departmentally as well as external agency in all the units (ICC, KCC, MCP, TCP & GCP) at the end of the current year by a duly approved internal committee and also with an independent agency to cover the period once in a block of three years interval.

23. The physical verification of fixed assets which is required to be conducted every year so that all the units/offices are covered once in a block of three years interval. During the year, physical verification of fixed assets has been conducted by external agencies for Corporate Office (CO).

24. Financial Instrument1. Derivatives not designated as hedging instruments

The Company uses Commodity Futures Contracts to manage its commodity price risk . The Commodity Futures Contracts are not designated as hedging instrumnets and are entered into for periods consistent with commodity price risk exposure of the underlying transactions, generally from one to four months. However in the year FY 21-22, the Company has not entered into any Commodity Futures Contract.

In the year FY 21-22, the Company has not purchased any such copper blister/ anode for its plant in GCP. Hedging the price volatility of copper purchases is in accordance with the Risk Management Policy approved by the Board of Directors. The hedging relationships are for a period between 1 and 4 months based on existing purchase agreements. The Company designated only the spot-to-spot movement of the entire commodity purchase price as the hedged risk. It has been decided by the company not to follow the hedge accounting for these instruments.

As at 31 March 2022, the fair value of the open position of commodity future contracts is nil.

2 . Financial Instruments by Categories

The carrying value and fair value of financial instruments by categories were as follows:

3. The Management considered the Service fees of '' 15 lakh paid on the Exim Bank Term loan amounting to '' 30000 lakh drawn on 29.05.2018 as immaterial, as the amount of service fee was only 0.008% of the Turnover (FY 2021-22) of the company and hence the same was not considered as a transaction cost in terms of fair valuation at initial recognition under INDAS 109. Further, the Management assessed that for the purpose of IND AS 109, the carrying value of loan is considered as its fair value as no loan could be provided at a rate lower that the rate of interest of Exim Bank loan for similar terms and conditions of the loan at that point of time.

Similarly, the Management considered the total of Upfront fees & Other charges of '' 245.33 lakh paid on the SBI ECB loan amounting to '' 17734.75 lakh drawn during July 2018 to January 2019 as immaterial, as the amount of such fees/charges was only 0.135% of the Turnover (FY 2021-22) of the company and hence the same was not considered as a transaction cost in terms of fair valuation at initial recognition under INDAS 109. Further, the Management assessed that for the purpose of IND AS 109, the carrying value of loan is considered as its fair value as no loan could be provided at a rate lower that the rate of interest of SBI ECB loan for similar terms and conditions of the loan at that point of time.

4. Fair Value Hierarchy

Level 1 - Level 1 hierarchy includes financial instruments measured using quoted prices (unadjusted) in active markets.

Level 3 - Level 3 hierarchy includes financial instruments measured using inputs that are not based on observable market data (unobservable inputs).

a) Market Riski) Foreign Currency Risk

The Company operates at international level which exposes the company to foreign currency risk arising from foriegn currency transaction primarily from Imports,exports and foreign currency borrowing. Foreign currency risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency other than INR as on reporting date.

ii) Commodity Price Risk

The company''s exposure to Commodity price from copper price fluctuation in international market does not arise as the company hedges all its imports through Future contracts at LME.

b) Credit Risk

Customer credit risk is managed by each business unit subject to the Company''s established Marketing policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of credit insurance.

The maximum exposure to credit risk at the reporting date is Rs 1990.28 lakh for which full provision has been made in the accounts as disclosed in Note No 12.

Other financial assets

c) Liquidity Risk

Our liquidity needs are monitored on the basis of monthly and yearly projections. The company''s principal sources of liquidity are cash and cash equivalents and cash generated from operations.

1. KABIL is yet to commence operations.

2. The associate/joint venture has neither been liquidated nor sold during the year.

Pursuant to Section 186(4) of the Companies Act, 2013, details of investment made and advance given to subsidiary & joint venture have been shown under Note No. 5 & 17 respectively. However, no loan has been given to the subsidiary and joint venture during the year.

2/. Ihe value of assets, other than fixed assets and non-current assets, have realizable value at least equal to the amount at which they are stated.

28. Gujarat Copper Project of the Company consists of three units namely, Anode furnace (Smelter), Refinery and Kaldo Furnace along with land, buildings & other assets having aggregate book value of '' 21355.85 lakh as at March 31,2022. The commercial operation of Gujarat Copper Project was suspended since August 2019 due to non-availability of feed material at economical price. Accordingly, the company had assessed the loss on account of impairment of the said plant excluding land, building, roads etc. valued by an Independent consultant & consequently a sum of ? 9708.21 lakh had been provided in the accounts of FY 2020-21. During the current year, the Company has further reassessed the impairment study of the said plant excluding land, building, roads etc by an independent consultant and a sum of '' 5194.00 lakh has been booked as impairment loss. Total cumulative amount of ? 14902.21 lakh has been provided in the accounts for impairment loss in compliance with the guidelines of IndAS-36 on âImpairment of Assetsâ

as per notification under section 133 of the Companies Act, 2013. The Asset Monetization plan (AMP) has been sent to Ministry vide e mail dated 27.1 1.2021 which include Assets of GCP in addition to other assets for approval. Since only value of the assets at GCP is more than ? 100.00 crore, the company can initiate further action on AMP after obtaining approval from DIPAM.

29. The UG mines at MCP level 296 mRL to 240 mRL has been declared to commence production from 01.01.2022 with

due Clearance from statutory authority.

30. During the financial year 2020-21, all three Provident Fund (PF) Trusts maintained for the employees of the Company namely HCL HO PF Trust, ICC PF Trust and KCC PF Trust have incurred a total loss of '' 938.54 lakh. As per Accounting Policy of the Company, deficit in PF Trusts ascertained on the basis of last audited accounts of the Trust is accounted for as a charge to Revenue. Accordingly, the Company has made a provision of '' 938.54 lakh during the current financial year towards total deficit in PF Trust of FY 2020-21.

31. During April 2021, the Company has issued 4,18,06,020 nos. of Equity Shares with par value of Rs 5.00 per share and premium of '' 114.60 per share amounting to '' 50000.00 lakh through Qualified Institutional Placement (QIP) to fund the ongoing capital expenditure and mine expansion plan of the Company as more so detailed in Placement Document approved by the Board.

32. During the current financial year, Bank Guarantees (BG) amounting to ? 6080.65 lakh have been encashed as per terms of the contract, due to non-performance of contractors at MCP & ICC and the same amount has been adjusted from Capital Work in Progress .

33. The Board of Directors of the Company has recommended payment of dividend at rate of ? 1.16 per share on ''5/- face value for the year 2021-22 for approval of shareholders in the Annual General Meeting. The outgo on this account will be ''11217.00 lakh(approx.)

34. Current Tax has been calculated after considering the adjustment of tax provided in earlier periods.

35. Consequent upon the Judgment of Common Cause dated 02.08.2017, which is applicable only to the mining leases of iron and manganese ore, passed by the Apex court in the case of Common Cause Vs UOI and others, a demand of '' 4353.78 lakh was raised by the District Mining Officer of Jamshedpur for running the Surda mine without valid environment clearance (EC) although Surda mine has a valid mining lease, forest clearance and it has adhered to the terms of approved mining plan and it was working on valid Consent to Operate. Based on the Revision Application filed by the Company, the Revisional Authority of the Ministry of Mines, after hearing at length both parties had issued specific direction against the demand of District Mining Officer (DMO) not to take any coercive measures in terms of recovery of the said demand. On revision of demand from '' 4353.78 lakh to '' 12690.49 lakh by the office of the District Mining Officer and subsequently revised to '' 92940.06 lakh by the State Government, the Company again appealed before the Revisional Authority and the last hearing was held on 30.09.2020 through video conferencing and interim stay, granted earlier, is continued by the Revisional Authority till the next date of hearing. Further, MMDR Amendment Act, 2021 has come into force w.e.f. 28.03.2021 which clearly explained the expression âraising, transporting or causing to raise or transport any mineral without any lawful authorityâ shall mean raising, transporting or causing to raise or transport any mineral by a person without prospecting license, mining lease or composite license. Based on the clarification, the Company believes that the judgement of the case will be in favour of the Company and is of the view that the same has not to be shown as Contingent Liability as on 31.03.2022.

36. The company has considered the possible effects that may result from COVID-19 in the preparation of these financial results including recoverability of carrying amounts of financial and non-financial assets. The company will continue to closely monitor any material changes arising out of future economic conditions and the resultant impact on its business.

37. The previous year''s figures have been regrouped / rearranged, wherever necessary.

Mar 31, 2021

VAT/CST/ENTRY TAX

There are demand notices totaling to Gross Demand of H7399.82 lakh (Previous Year H3516.76 lakh) from various State Revenue Authorities regarding VAT/CST/Entry Tax against which the company has deposited under protest H673.50 lakh (Previous Year H620.44 lakh) shown under Note No. 17 Other Current Assets. The company is contesting the demand and the management as well as the legal advisors/consultants are of the opinion that its contention will likely to be upheld by the Appellate Authorities. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

EXCISE DUTY

There are demand notices totaling to Gross Demand of H2898.96 lakh (Previous Year H2947.97 lakh) from Central Excise Authorities regarding Excise Duty against which the company has deposited under protest H164.06 lakh (Previous Year H68.37 lakh) shown under Note No. 17 Other Current Assets. The company is contesting the demand and the management as well as the legal advisors/consultants are of the opinion that its contention will likely to be upheld by the Appellate Authorities. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

INCOME TAX

There are Income Tax demand notices totaling to Gross Demand of H23112.28 lakh (Previous Year H23113.43 lakh) against which the company has deposited under protest H1092.36 lakh (Previous Year H1.15 lakh) shown under Note No. 16 Current Tax Assets. The management as well as the income tax consultant are of the opinion that its contention will likely to be upheld by the Appellate Authorities/High Court. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

OTHER DEMAND

The pending litigation cases totaling to H48878.66 lakh (Previous Year H39110.70 lakh) which the company is contesting

before different Legal Forums / Courts. The management as well as the legal advisors/consultants are of the opinion

that its position will likely to be upheld in the appellate proceedings. The company also believes that ultimate outcome

of these proceedings will not have a material adverse impact on the financial position of the company.

2. During the year, the company has made a provision amounting to H249.00 lakh (Previous year HNil) in terms of DPE guidelines towards Performance Related Pay payable to the executives for F.Y. 2020-21 which is shown under âEmployeesâ Benefit Expensesâ.

3. Lease premium paid for land for mining purposes including payment for Net Present Value (NPV) of forest area paid to forest department are capitalized under the head âOther Intangible Assetsâ shown under Note No. 3(C)

4. The lease agreements of Kendadih and Rakha Mining Lease at Indian Copper Complex has been renewed and executed by the Govt of Jharkhand in respect of leasehold lands valid upto 02.06.2023 and 28.08.2021 respectively. In respect of Surda Mining Lease, the lease agreement has expired on 31.03.2020 and the company has applied for extension of the lease agreement with the Govt of Jharkhand. Govt of Jharkhand has issued Letter of Intent (LOI) for extension of the lease vide letter dated 05.08.2020. Formal letter of extension of the lease is under active consideration of the Department of Mines & Geology, Govt of Jharkhand, Ranchi.

5. The commercial operation of Smelter, Refinery and Sulphuric Acid Plant at Khetri Copper Complex (KCC) were suspended since December 2008. The Company suffered loss on account of impairment of the said plants valued by an independent consultant in earlier years and consequently a total sum of H464.01 lakh was provided in the accounts for impairment loss in compliance with the guidelines of IND AS 36 on âImpairment of Assetsâ as on 31.03.2021.

6. The title deeds for Freehold and Leasehold Land and Building acquired in respect of Gujarat Copper Project (GCP) with book value of H5296.25 lakh are yet to be executed (Previous year H5578.11 lakh).

7. At ICC, Pollution Control Plant under Package I & III amounting to H2100.50 lakh have not been capitalized for want of completion of trial / guarantee run as per terms of contract. As a matter of prudence, full provision for the same has been made in the accounts to take care of efflux of time over the years.

8. Confirmation letters of majority of balances under the heads Trade Payables, Claims Recoverable, Loans & Advances, Trade Receivables and Deposits from and with various parties/ Government Departments have been sent but in number of cases such confirmation letters from the parties are yet to be received.

9. During the year, the company has spent a sum of H73.69 lakh on account of Corporate Social Responsibility (CSR) expenses.

19. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS IN TERMS OF Ind AS 19 :

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through Life Insurance Corporation of India, SBI Life Insurance Co. Ltd. and India First Life Insurance and are managed by separate trust. The Company has also funded through Life Insurance Corporation of India and SBI Life Insurance Co. Ltd towards leave encashment. Expenses recognized in Statement of Profit & Loss and Other Comprehensive Income amounting to H1613.80 lakh in respect of Gratuity, Leave Encashment and Leave Travel Concession which have been provided for as stated below.

1. Derivatives not designated as hedging instruments

The Company uses Commodity Futures Contracts to manage its commodity price risk . The Commodity Futures Contracts are not designated as hedging instruments and are entered into for periods consistent with commodity price risk exposure of the underlying transactions, generally from one to four months. However in the year FY 2021, the Company has not entered into any Commodity Futures Contract.

Commodity price risk

The Company purchases copper blister/ anode on an ongoing basis for its operating activities in its Gujarat Copper Project (GCP) plant for the production of cathode. To hedge itself against the volatility in LME copper prices in the international market has led to the decision to enter into commodity future contracts. However in the year FY 2020-21, the Company has not purchased any such copper blister/ anode for its plant in GCP.

These contracts, which commenced in August 2016, are expected to reduce the volatility attributable to price fluctuations of copper. Hedging the price volatility of copper purchases is in accordance with the Risk Management Policy approved by the Board of Directors. The hedging relationships are for a period between 1 and 4 months based on existing purchase agreements. The Company designated only the spot-to-spot movement of the entire commodity purchase price as the hedged risk. It has been decided by the company not to follow the hedge accounting for these instruments.

As at 31 March 2021, the fair value of the open position of commodity future contracts is nil.

2. Financial Instruments by Categories

The carrying value and fair value of financial instruments by categories were as follows:

3. The Management considered the Service fees of ''15 lakh paid on the Exim Bank Term loan amounting to ''30000 lakh drawn on 29.05.2018 as immaterial, as the amount of service fee was only 0.009% of the Turnover (FY 202021) of the company and hence the same was not considered as a transaction cost in terms of fair valuation at initial recognition under INDAS 109. Further, the Management assessed that for the purpose of IND AS 109, the carrying value of loan is considered as its fair value as no loan could be provided at a rate lower that the rate of interest of Exim Bank loan for similar terms and conditions of the loan at that point of time.

Similarly, the Management considered the total of Upfront fees & Other charges of ''245.33 lakh paid on the SBI ECB loan amounting to ''17734.75 lakh drawn during July 2018 to January 2019 as immaterial, as the amount of such fees/charges was only 0.139% of the Turnover (FY 2020-21) of the company and hence the same was not considered as a transaction cost in terms of fair valuation at initial recognition under INDAS 109. Further, the Management assessed that for the purpose of IND AS 109, the carrying value of loan is considered as its fair value as no loan could be provided at a rate lower that the rate of interest of SBI ECB loan for similar terms and conditions of the loan at that point of time.

4. Fair Value Hierarchy

â¢ Level 1 - Level 1 hierarchy includes financial instruments measured using quoted prices (unadjusted) in active markets.

â¢ Level 2 - Level 2 hierarchy includes financial instruments measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

â¢ Level 3 - Level 3 hierarchy includes financial instruments measured using inputs that are not based on observable market data (unobservable inputs).

The maximum exposure to credit risk at the reporting date is ''1066.87 lakh for which full provision has been made in the accounts as disclosed in Note No 12.

Other financial assets

Credit risk relating to cash and cash equivalents is considered negligible because our counterparties are scheduled banks. We consider the credit quality of Term deposits with such banks as good as these banks are under the regulatory framework of Reserve Bank of India. We review these banking relationships on an ongoing basis.

c) Liquidity Risk

Our liquidity needs are monitored on the basis of monthly and yearly projections. The company''s principal sources of liquidity are cash and cash equivalents and cash generated from operations.

Short term liquidity requirements consists mainly of Loans, Sundry creditors, Expense payable, Employee dues arising during the normal course of business as of each reporting date. We strive to maintain a sufficient balance in cash and cash equivalents to meet our short term liquidity requirements.

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

21. With effect from April, 2019, the company has adopted Ind AS 116. However, since the company has no lease liabilities at present, Ind AS 116 has no financial impact on the accounts of the company during the current financial year.

22. The physical verification of Semi-Finished and In-Process (WIP) and Finished Goods is conducted departmentally in all the units (ICC, KCC, MCP, TCP & GCP) at the end of the current year by a duly approved committee.

24. INFORMATION IN RESPECT OF SUBSIDIARY, ASSOCIATE & JOINT VENTURE (FORM AOC 1)

(Pursuant to Section 129(3) of Companies Act 2013 read with Rule 5 of Companies (Accounts) Rules, 2014)

26. The value of assets, other than fixed assets and non-current assets, have realizable value at least equal to the amount at which they are stated.

27. Gujarat Copper Project of the Company consists of three units namely, Anode furnace (Smelter), Refinery and Kaldo Furnace having aggregate book value of H23471.86 lakh as at March 31,2021. The commercial operation of Gujarat Copper Project was suspended since August 2019 due to non-availability of feed material at economical price. During the current year, the Company has assessed the loss on account of impairment of the said plant excluding land, building, roads etc. valued by an independent consultant and consequently a sum of H9708.21 lakh has been provided in the accounts for impairment loss in compliance with the guidelines of IndAS-36 on âImpairment of Assetsâ as per notification under section 133 of the Companies Act, 2013. Based on the outcome of the possible long lease out or complete sale of the plant during FY 2021-22, the balance impairment loss along with normal depreciation, if any, will be considered.

28. Copper ore tailing (COT) beneficiation plant was set up at MCP unit for extraction of valuable minerals and metals from copper ore tails with a capacity of 10000 tonnes per day (TPD) based on the sole technology provider. The intermittent trial run failed on number of occasions and the quality and quantity of products achieved at various stages are not as per the parameters envisaged in contract agreement. A preliminary notice was issued to the party to complete the project and commission the same. The party agreed to commission the plant, but the progress of the work at site was stopped due to lockdown for COVID-19 pandemic. The Company had extended the timeline upto August 31, 2020 for supply, erection of the thickener and commission of the plant. But the party failed to execute the contract and the contract got terminated with efflux of time. The present cost of the COT plant appearing in books of accounts as on 31.03.2021 under Capital Work In Progress (CWIP) is H15805.03 lakh after forfeiture of security deposit under the contract amounting to H849.27 lakh. The Company has appointed an independent registered valuer to evaluate the salvage value of the plant. The total salvage value assessed as per valuation report is H3027.09 lakh. Since the party has failed to execute the project under sole technology provider, the management thinks it prudent to create a provision amounting to H12777.94 lakh, being present cost of the plant under CWIP less salvage value.

29. During the financial year 2019-20, all three Provident Fund (PF) Trusts maintained for the employees of the Company namely HCL HO PF Trust, ICC PF Trust and KCC PF Trust have incurred a total loss of H1915.54 lakh. After adjustment of opening surplus reserve of ''385.99 lakh, the deficit in the accounts of PF Trusts is ascertained as H1529.55 lakh. As per Accounting Policy of the Company, deficit in PF Trusts ascertained on the basis of last audited accounts of the Trust is accounted for as a charge to Revenue. Accordingly, the Company has made a provision of H1529.55 lakh during the current financial year towards total deficit in PF Trust of FY 2019-20.

30. During April 2021, the Company has issued 4,18,06,020 nos. of Equity Shares with par value of ''5.00 per share and premium of ''114.60 per share amounting to ''50000.00 lakh through Qualified Institutional Placement (QIP) to fund the ongoing capital expenditure and mine expansion plan of the Company.

31. Consequent upon the Judgment of Common Cause dated 02.08.2017, which is applicable only to the mining leases of iron and manganese ore, passed by the Apex court in the case of Common Cause Vs UOI and others, a demand of H4353.78 lakh was raised by the District Mining Officer of Jamshedpur for running the Surda mine without valid environment clearance (EC) although Surda mine has a valid mining lease, forest clearance and it has adhered to the terms of approved mining plan and it was working on valid Consent to Operate. Based on the Revision Application filed by the company, the Revisional Authority of the Ministry of Mines, after hearing at length both parties had issued specific direction against the demand of District Mining Officer (DMO) not to take any coercive measures in terms of recovery of the said demand. On revision of demand from H4353.78 lakh to H12690.49 lakh by the office of the District Mining Officer and subsequently revised to H92940.06 lakh by the State Government, the company again appealed before the Revisional Authority and the last hearing was held on 30.09.2020 through video conferencing and interim stay, granted earlier, is continued by the Revisional Authority till the next date of hearing. Further, MMDR Amendment Act, 2021 has come into force w.e.f. 28.03.2021 which clearly explained the expression âraising, transporting or causing to raise or transport any mineral without any lawful authorityâ shall mean raising, transporting or causing to raise or transport any mineral by a person without prospecting license, mining lease or composite license. Based on the clarification, the company believes that the judgement of the case will be in favour of the company and is of the view that the same has not to be shown as Contingent Liability as on 31.03.2021.

32. The spread of Covid 19 has affected the business operations of the company in all the units due to lock down declared by the Government. The company has taken various measures in consonance with the Government advisories to contain the pandemic, which included closing of mining and operational activities across the company. However, Government has allowed to resume its operation in all the units during April 2020 & May 2020. Post unlocking of the lockdown, the Company''s operations are gradually stabilizing.

Given the uncertainty of quick turnaround to normalcy, post lifting of the closure, the company has carried out a comprehensive assessment of possible impact on its business operations, financial assets, contractual obligations and its overall liquidity position, based on the internal and external sources of information and application of reasonable estimates. Management will continue to monitor any material changes arising due to the impact of this pandemic on financial and operational performance of the company and take necessary measures to address the situation.

33. The previous yearâs figures have been regrouped / rearranged, wherever necessary.

Mar 31, 2018

24 Financial Instrument

1. Derivatives not designated as hedging instruments

Commodity price risk

The Company purchases copper blister/ anode on an ongoing basis for its operating activities in its Gujarat Copper Project plant for the production of cathode. To hedge itself against the volatility in LME copper prices in the international market has led to the decision to enter into commodity future contracts.

These contracts, which commenced in August 2016, are expected to reduce the volatility attributable to price fluctuations of copper. Hedging the price volatility of copper purchases is in accordance with the Rsk Management Policy approved by the Board of Directors. The hedging relationships are for a period between 1 and 4 months based on existing purchase agreements. The Company designated only the spot-to-spot movement of the entire commodity purchase price as the hedged risk. It has been decided by the company not to follow the hedge accounting for these instruments.

As at 31 March 2018, the fair value of the open position of commodity future contracts is insignificant.

2. Financial Instruments by Categories

The carrying value and fair value of financial instruments by categories were as follows:

Set out below, is a comparison by class of the carrying amounts and fair value of the Companyâs financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

3. The Management considers the Service fees of Rs, 200.00 lac paid on the Exim bank Term loan amounting to Rs, 20000.00 lac drawn in June 2015 as immaterial, as the amount of service fee was only 0.16% of the Turnover (FY 2016-17)of the company and hence the same was not considered as a transaction cost in terms of fair valuation at initial recognition under INDAS 109. Further, the Management assessed that for the purpose of IND AS 109, the carrying value of loan is considered as its fair value as no loan could be provided at a rate lower that the rate of interest of EXIM BANK loan for similar terms and conditions of the loan at that point of time.

4. Fair Value Hierarchy

Level 1 -Level 1 hierarchy includes financial instruments measured using quoted prices (unadjusted) in active markets.

Level 3 - Level 3 hierarchy includes financial instruments measured using inputs that are not based on observable market data (unobservable inputs).

The following table presents fair value hierarchy of assets and liabilities measured at fair value

5. Financial Risk Management Financial risk factors

The Companyâs activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Companyâs primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

The maximum exposure to credit risk at the reporting date is Rs, 935.89 lac for which full provision has been made in the accounts as disclosed in Note No 12.

Other financial assets

Credit risk relating to cash and cash equivalents is considered negligible because our counterparties are scheduled banks. We consider the credit quality of Term deposits with such banks as good as these banks are under the regulatory framework of Reserve Bank of India. We review these banking relationships on an ongoing basis.

c) Liquidity Risk

Our liquidity needs are monitored on the basis of monthly and yearly projections. The companyâs principal sources of liquidity are cash and cash equivalents, cash generated from operations.

We manage our liquidity needs by continuously monitoring cash inflows and by maintaining adequate cash and cash equivalents. Net cash requirements are compared to available cash in order to determine any shortfall.

Short term liquidity requirements consists mainly of Sundry creditors, Expense payable, Employee dues arising during the normal course of business as of each reporting date. We maintain a sufficient balance in cash and cash equivalents to meet our short term liquidity requirements.

6. Capital Management

For the purpose of the Companyâs capital management, capital includes issued equity capital and all other equity reserves attributable to the Company. The primary objective of the Companyâs capital management is to maximize the shareholder value.

26. The physical verification of fixed assets which is required to be conducted every year so that all the units/offices are covered once in every three years interval. Physical verification of fixed assets has been conducted by external agencies in ICC, RCP, MCP, GCP, Bangalore Sales Office &H.O. during FY 2016-17 and in KCC & Delhi Sales Office during the year. Shortages/(Excesses) identified on such physical verification have been duly adjusted in the books of accounts.

1.00 The Company has overstated the Mine Development Expenditure by Rs,13570 Lacs (T10170 Lacs in respect of Malanjkhand Copper Project and Rs,3433 Lacs in respect of Khetri Copper Complex) appearing as Non-Current Assets.

1.01 Malanjkhand Copper Project

As per letter dated 13.04.2017 of DGM (Mines), as on 01.04.2015, the net reserve for excavation for open pit mining was 13.811 million Cubic Meters, equivalent to 37.152 Million Ton. Out of this quantity, ore was estimated at 12.568 million tonnes and overburden (OB) was estimated at 24.583 million Ton.. Stripping ratio on the basis of such estimation comes to 1.96 in respect of OB: Ore. From 01.04.2015 to 31.03.2018, Rs, 53319 lakhs was incurred for excavation (including unamortized opening balance as on 01.04.2015). From 01.04.2015 to 31.03.2018, 10.096 million Cubic Meters was excavated, representing 73% of the estimated excavation during the balance period of MCP mine. Against this, the ore production was recorded at 7.291 million Ton representing 58% of the estimated ore to be mined. Therefore, proportionate amount representing 58% out of Rs, 53319 lakhs, amounting to Rs, 42312 lakhs was required to be amortized, leaving the balance of Rs, 11007 lakhs as unamortized amount to be amortized against future production. However, during the financial years ended 31.03.2016 to 31.03.2018, only Rs, 32142 lakhs (including Rs, 11998 lakhs during the current year) has been amortized. Therefore, Rs, 10170 lakhs has been short amortized as on

31.03.2018. Therefore, the Unamortized Mine Development Expenditure has been overstated by Rs, 10170 lakhs.

Our attention has been invited by the management to the Mine Development Expenditure under Significant Accounting Policies. As per the policy, in respect 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" and the stripping ratio of the mine as determined by the company at the weighted average rate. The management has interpreted that the expenditure during year on overburden is to be amortised on the basis of standard stripping ratio arrived at at the time of revised estimation of reserve although the actual stripping ratio varies with the originally estimated stripping ratio. This gives absurd results as is evident from the following table:

* before write off of Rs,474.41 crores in the accounts for the year ended 31.03.17 with effect from 01.04.2015.

From the above table, it would be evident that in future, actual stripping ratio would be 0.91 ratio of overburden amortization would be 1.40. Apart from that, there would still be Rs,151.94 Cr on overburden of 5,54 million MT of overburden. All these point out the major fallacy in the computation of amortization of mine development expenditure appearing in Balance Sheet and Profit & Loss Account.

Moreover, in the audited accounts for the year ended 31.03.2017, item 16 ofNote 39 states, "It implies that as against an amount of Rs,47441.27 lac pertaining to OB quantity there is no identifiable component of the ore body to which that predecessor stripping asset related. In the given circumstances and in compliance with the mandatory accounting standards IndAS coupled with the fact that the company has already initiated development activity for underground mining and the life of the open cast mine is limited to 6-7 years, the Company has written off an amount of Rs,47441.27 lac relating to OB quantity against Retained Earnings as on 01.04.2015 in order to give effect to IndAS. Accordingly, the stripping rate of open cast (surface) mine has been re-assessed with reference to identifiable component of the ore body."

In the above Note, the Company had written off Rs, 47441.27 lacs on the pretext of IndAS Implementation and Underground Mines Development Activities. The actual fact was that the Mine Development Activity was overstated by Rs,47441.27 lacs as on 31.03.2015. Therefore, in order to give a comparative previous years'' figures, these are required to be disclosed in Profit & Loss Account so that previous years'' figures will also result in Loss for the Year.

As per significant Accounting Policies, 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 depleted on the basis of ore raised during the year and the mineable ore reserves estimated from time to time.

2.00 The Company has overstated the inventory of Semi-Finished and In-Process material by valuing non-moving/ slow moving/ defective/ old/ unusable/ redundant inventory, the evidence of the existence whereof has also not been furnished to us. The existence of such non-moving/ slow moving/ defective/ old/ unusable/ redundant inventory has been determined by us on the basis of trends of daily production and daily dispatches, whereby it is evident that the current production is being dispatched, while there is negligible movement of brought forward inventory. The value of such stock is estimated to be not less than Rs, 37408 lakhs as summarised below. Book stock in respect of such stocks was not available and/or the book stock was taken to be the physical stock, thereby no discrepancy between book stock and physical stock was determined. Even volumetric measurements forming the basis of physical stock was changed so that the weight thereof comes to a predetermined quantity by weight. Apparently, the stock level of MIC is 7 month''s production, which is unrealistic that such a voluminous material would remain unsold or unconsumed for a such a long time.

3.00 The Company has not complied with several IndAS Accounting Standards as below.

3.01 As per paragraph 51(b) of IndAS-1 on Presentation of Financial Statements, an entity shall display whether the financial statements are of an individual entity or a group of entities. The Financial Statements do not disclose this information. Thus, this IndAS has not been complied.

3.02 As per paragraph 138(a) of IndAS-1 on Presentation of Financial Statements, an entity shall disclose legal form of the entity, its country of incorporation, if not disclosed elsewhere in information published with the financial statements. This information has not been disclosed. Thus, this IndAS has not been complied.

3.03 As per paragraph 17 of IndAS-10 on Events after Reporting Period, an entity shall disclose the date when the financial statements were approved for issue and who gave that approval. The entity shall also disclose if the entity''s owners or others have the power to amend the financial statements after issue. This has not been disclosed. Thus, this IndAS has not been complied.

3.04 As per paragraph 54(j) of IndAS-1 on Presentation of Financial Statements," the balance sheet shall include line items that present the total of assets classified as held for sale and assets included in disposal groups classified as held for sale in accordance with IndAS 105 as Non-current Assets Held for Sale and Discontinued Operations". As at the year end, there were fixed assets and stores and spares etc. lying at KCC and RCP Units, namely, Sulphuric Acid Plant, Smelter, Refinery, CCR Plant etc..These have not been disclosed as such. Thus, this IndAS has not been complied.

3.05 As per paragraph 54(o) of IndAS-1 on Presentation of Financial Statements, the balance sheet shall include line items that present the deferred tax liabilities and deferred tax assets, as defined in Ind AS 12 on Income Taxes. The gross amount of liabilities and assets are required to be disclosed separately instead on netting off. This has resulted in the non-compliance of the IndAS-1. Paragraph 74 of IndAS-12 states that an entity shall offset deferred tax assets and deferred tax liabilities if, and only if the entity has a legally enforceable right to set off current tax assets against current tax liabilities. These have not been disclosed as such. Thus this IndAS has not been complied.

3.06 The cost may be treated as part of the Purchase Value of the Inventory in accordance with paragraph 6.5.11 (d)(i) of IndAS-109 on Financial Instruments. As long as a cash flow hedge meets the qualifying criteria in paragraph 6.4.1, the amount that has been accumulated in the cash flow hedge reserve shall be accounted by removing that amount from the cash flow hedge reserve and include it directly in the initial cost or other carrying amount of the asset or the liability since the hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability, or a hedged forecast transaction for a non-financial asset or a non-financial liability becomes a firm commitment for which fair value hedge accounting is applied. This is not a reclassification adjustment (IndAS 1) and hence it does not affect other comprehensive income.

Paragraph B6.5.34 of Appendix B of the IndAS-109 clarifies the point as below:

A forward contract can be considered as being related to a time period because its forward element represents charges for a period of time (which is the tenor for which it is determined). However, the relevant aspect for the purpose of assessing whether a hedging instrument hedges a transaction or time-period related hedged item are the characteristics of that hedged item, including how and when it affects profit or loss. Hence, an entity shall assess the type of hedged item (see paragraphs 6.5.16 and

6.5.15(a)) on the basis of the nature of the hedged item (regardless of whether the hedging relationship is a cash flow hedge or a fair value hedge):

(a) the forward element of a forward contract relates to a transaction related hedged item if the nature of the hedged item is a transaction for which the forward element has the character of costs of that transaction. An example is when the forward element relates to a hedged item that results in the recognition of an item whose initial measurement includes transaction costs (for example, an entity hedges an inventory purchase denominated in a foreign currency, whether it is a forecast transaction or a firm commitment, against foreign currency risk and includes the transaction costs in the initial measurement of the inventory). As a consequence of including the forward element in the initial measurement of the particular hedged item, the forward element affects profit or loss at the same time as that hedged item. Similarly, an entity that hedges a sale of a commodity denominated in a foreign currency against foreign currency risk, whether it is a forecast transaction or a firm commitment, would include the forward element as part of the cost that is related to that sale (hence, the forward element would be recognized in profit or loss in the same period as the revenue from the hedged sale).

Therefore, it should be disclosed as part of the cost of that material. Thus this IndAS has not been complied.

3.07 As per paragraph 14 of IndAS-18 on Revenue, revenue from the sale of goods shall be recognized when the entity has transferred to the buyer the significant risks and rewards of ownership of the goods. Therefore, sales to customers on FOR Destination basis are required to be recognized on the basis of delivery. However, the sale is recognized on the basis of dispatch. We have not been informed the extent of such goods dispatched upto the year end but delivered after the year end. Similar information for previous year is also not available. Hence, the requirement of the aforesaid Ind-AS 18 has not been complied.

3.08 As per paragraph 8 of IndAS-16 on Property, Plant and Equipment, spare parts and servicing equipment are usually carried as inventory and recognized in profit or loss as consumed. However, major spare parts, stand-by equipment and servicing equipment qualify as property, plant and equipment when an entity expects to use them during more than one period. Therefore major spare parts need to be classified as PPE and accordingly need to be depreciated. We have not been informed about the amount of such major spare parts identified by the management and the depreciation to be provided thereon and no adjustment has been made for the same. Therefore, there is non-compliance of IndAS-16.

3.09 As per paragraph 106(d)(ii) of IndAS-1 on Presentation of Financial Statements, an entity shall present a statement of changes in equity as a part of balance sheet as required by paragraph 10 of that Standard. The statement of changes in equity includes, reconciliation between the carrying amount at the beginning and the end of the period, separately disclosing each changes resulting from, inter alia, each item of other comprehensive income. For each component of equity an entity shall present, either in the statement of changes in equity or in the notes, an analysis of other comprehensive income by item. This has not been complied with.

3.10 As per paragraph 16(e) and 16(f) of IndAS-7 on Statement of Cash Flows, "expenditures that result in a recognized asset in the balance sheet are eligible for classification as investing activities. Examples of cash flows arising from investing activities are:

(e) cash advances and loans made to other parties (other than advances and loans made by a financial institution):

(f) cash receipts from the repayment of advances and loans made to other parties (other than advances and loans of a financial institution):

Therefore, loans to employees and repayment of loans from employees needs to be separately disclosed, which has not been done. Thus, this IndAS has not been complied.

3.11 As per paragraph 35(a) of IndAS-18 on Revenue, an entity shall disclose the accounting policies adopted for the recognition of revenue, including the methods adopted to determine the stage of completion of transactions. This has not been disclosed in case of sale of Wire Rod and Cathode, which constitutes the major part of the revenue. Thus this IndAS has not been complied.

3.12 As per paragraph 41 of IndAS-105 on Non-Current Assets held for sale and discontinued Operations, an entity shall disclose a description of the facts and circumstances of the sale, or leading to the expected disposal, and the expected manner and timing of that disposal.

This has not been disclosed. Thus this IndAS has not been complied.

3.13 As per paragraph 113 of IndAS-1 on Presentation of Financial Statements, an entity shall present notes in a systematic manner. An entity shall cross-reference each item in the balance sheet, in the statement of changes in equity which is apart of the balance sheet and in the statement of profit and loss, and statement of cash flows to any related information in the notes. This has not been done. Thus, this IndAS has not been complied.

3.14 As per paragraph 29 of IndAS-1 on Presentation of Financial Statements, an entity shall present separately each material class of similar items. An entity shall present separately items of a dissimilar nature or function unless they are immaterial except when required by law. The company has some major items of its products, namely MIO, MIC, Anode and Cathode, which are classified as Semi Finished and In-Process material. Some of these materials, viz., Anode, are classified as Raw Material when the same is purchased from third parties instead of own production. Further, each of these products has independent market and these can be freely traded. More than 80% of the Inventory of the Company is constituted by these Semi Finished and In-Process material. In Schedule 39 to the Accounts, quantitative details of production and consumption of MIO has not been disclosed, which forms single largest item of Inventory. Thus, this IndAS has not been complied.

3.15 The Company is engaged in two distinct activities, namely Mining and Processing. Mining constitutes more than 50% of the activities of the Company. The outcome of the mining activities is the extraction of copper ore from the mines. Since the ore cannot be transported too far from the mines in its original form just because of sheer volume of the product compared to the metal content therein, the ore is processed to reduce the volume of the ore by increasing the metal content in the processed ore to make the same transportable and such processed ore is called Metal in Concentrate (MIC) and as such, Concentrator Plant is integral part of mining activities. There is ready market for MIC. During the year, sale of MIC constitutes substantial part of the revenue from operations. The asset deployed for MIC also constitutes substantial part of the total assets deployed by the Company.

Paragraph 5 of IndAS-108 on Operating Segments describes three characteristics of Operating segments, namely, (a) that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), (b) whose operating results are regularly reviewed by the entity''s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and (c) for which discrete financial information is available. As such the production of MIC fulfils all the three characteristics of Operating segments.

Paragraph 11 of IndAS-108 states that Reportable Segments are (a) identified in accordance with paragraphs 5 and(b) exceeds the quantitative thresholds in paragraph 13. As per paragraph 13, an entity shall report separately information about an operating segment that meets any of the following quantitative thresholds, namely, (a) Its reported revenue, including both sales to external customers and intersegment sales or transfers, is 10 per cent or more of the combined revenue, internal and external, of all operating segments, (b) the absolute amount of its reported profit or loss is 10 per cent or more of the greater, in absolute amount, of (i) the combined reported profit of all operating segments that did not report a loss and (ii) the combined reported loss of all operating segments that reported a loss, and (c) Its assets are 10 per cent or more of the combined assets of all operating segments. As such the production of MIC fulfils all the three characteristics of Operating segments.

As such, the company is obliged to disclose the segment information in respect of two distinct activities, viz., mining and processing. Thus, this IndAS has not been complied.

3.16 During the previous year, the company adopted IndAS. The company made a write off of Rs, 47441 lakhs from the Mine Development Expenditure of Rs, 81188 lakhs appearing in Note 16.to the audited accounts for the year ended 31.03.2016. In Item 16 of Note No.39 of the audited accounts for the year ended 31.03.2017, the company stated that, "It implies that as against an amount of Rs, 47441 lakhs pertaining to OB quantity, there is no identifiable component of the ore body to which that predecessor stripping ratio related."

Paragraph 14 & 15 prescribes the exceptions to the retrospective application of other Ind-ASs. Paragraph 14 states that the estimates in accordance with Ind-ASs at the date of transition to Ind-ASs shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. In case, there was an error in estimates as per previous GAAP, paragraph

15, such information shall be treated in the same way as non-adjusting events after the reporting period in accordance with Ind

AS 10 Events after the Reporting Period. The paragraph claries with an example stating that, "assume that an entity''s date of transition to Ind-ASs is 1 April 2011 and new information on 15 May 2011 requires the revision of an estimate made in accordance with previous GAAP at 31 March 2011. The entity shall not reflect that new information in its opening Balance Sheet (unless the estimates need adjustment for anv differences in accounting policies or there is objective evidence that the estimates were in error). Instead, the entity shall reflect that new information in profit or loss for, if appropriate, other comprehensive income) for the year ended 31 March 2012."

Therefore, there was revision of estimation and the change in estimation was not necessitated to write off solely because of transition to IndAS. The adjustment due to revision of estimation cannot be retrospectively. This write off was not done to comply with the mandatory accounting standards IndAS. There was consistency with estimates, both under IndAS and previous GAAP and the revision will be non-adjusting retrospectively in accordance with IndASlO Events after the Reporting Period. As such, the write could not be adjusted retrospectively and it was to be reflected in profit or loss for, if appropriate, other comprehensive income). Even in the reconciliation to provide the effect of transition to IndAS from IGAAP, adjustment Therefore, the profit appearing in the previous has been overstated by Rs. 47441 lakhs and therefore, not comparable with the results this year.

As per paragraph 36 of the IndAS 8 on Accounting Policies, Changes in Accounting Estimates and Errors, "the effect of change in an accounting estimate, other than a change to which paragraph 37 applies, shall be recognized prospectively by including it in profit or loss in:

(a) the period of the change, if the change affects that period only; or

(b) the period of the change and future periods, if the change affects both." We presume that the write off was due to changes in estimates. In any case, the write off cannot be termed as error since the Company has not complied with the disclosure requirements of paragraph 49 of the IndAS 8, which reads as below:

"In applying paragraph 42, an entity shall disclose, if retrospective restatement is impracticable for a particular prior period, the circumstances that led to the existence of that condition and a description of how and from when the error has been corrected."

The Company has not disclosed as provided above. Thus, this IndAS has not been complied.

3.17 The Company is obliged to assess the impairment in respect of the carrying amount of its Gujarat Copper Project in terms of paragraph 9 Na dl2 of the IndAS-36 on Impairment of Assets. The carrying cost of a newly acquired manufacturing Unit at Gujarat has not been tested for impairment in view of the significant variation of actual performance (loss) compared to the projected performance (ROI of 15%), on the basis of which the same was acquired at a cost of Rs, 210 Cr with additional capital cost incurred/committed for Rs, 110 Cr., totaling Rs, 320 Cr.

4.00 We were denied independent access to the books of account maintained on ERP package based on Oracle by not providing the VIEW authorization of different modules, like Material, Marketing, Production etc. except providing limited access only to some portion of Finance Module Only limited access to Finance Module, e.g, the list of Receivables etc. was not available in auditors'' authorization although the Finance Department personnel had access to the same. In respect of other modues, the same was accessed through the ID and Password of an employee who did not make himself available frequently. We were informed that the VIEW option was not available in Oracle based ERP.

5.00 There were several old receivables, payables, unused stores and spares, Capital Work in Progress. We are unaware about the status as to how those would-be adjusted. As such, we have not verified whether carrying amount thereof is correct or not.

6.00 CWIP includes items amounting to at least Rs, 2557 lakhs lying since long without any activity. We have not been provided the age wise and contract wise details. Therefore, these assets should be fully provided for. Therefore, the CWIP has been overstated by at least Rs, 2557 lakhs.

7.00 Age wise details and the list of balances circularized for confirmation in respect of receivables and payables have not been furnished to us. In view of negligible response received from parties in respect of confirmation of balances, it seems that the balances have not been circularized in all the cases.

8.00 All the activities are undertaken based on POs, whether it is acquisition of assets or disposal of assets etc. However, we have not been provided the value of work done and the value of work accounted for upto the year end against each POs. As such, we are unaware if any liability has been omitted to have been provided for or the pending commitments for sale of goods at the already contracted prices.

9.00 Reasons for variation exceeding 10% as compared to previous year, in respect of various accounts appearing in the financial statements have not been informed to us.

10.00 The stock of stores and spares includes 44 items with aggregate negative balances of Rs.l 11.65 lakhs and netting the same from other items having positive values. Therefore, the stock of stores and spares has been overstated by Rs.l 11.65 lakhs.

Therefore, the Fixed Assets has been overstated by Rs.759 lakhs and the Assets awaiting disposal has been understated by similar amount.

12.00 Sale of Finished Goods are sold on FOR Destination basis, i.e., sale is required to be recognized when the goods are delivered to the customers. Liability for transportation cost is borne by the Company. In case, the customer lifts the goods from the premises of the Company, a discount is allowed to the customer for freight at a predetermined rate. However, the invoices raised for the goods dispatched during the year but delivered to the customer are not required to be reversed as per IndAS since the risks and rewards till the delivery of the goods lies with the Company. We have not been informed the quantum of such sales.

13.00 There has been refund of penalty and liquidated damages realized more than the realization thereof.

15.00 50 Nos. of items of Freehold and leasehold Land with WDV of Rs,35.36 lakhs pertain to Land Development Expenses incurred for building, which needs to be classified as Building. Further, Leasehold Land at Taloja, Mumbai on which the Taloja Copper Project is locate, was purchased from MIDC vide Lease Deed dated 14.02.2001 for 95 years starting from 01.09.87 for Rs,47.51 lakhs. This does not appear in the Fixed Assets.

16.00 Conversion of third party scrap into finished product at TCP has not been accounted for as production although the product attracted excise duty.

17.00 Reasons for not modifying the previous year''s figures since those are not comparable with current year as there were material discrepancies, write off of Rs,475 Cr. in respect of Mine Development Expenditure was debited directly to Retained Earnings instead of Profit & Loss Account or Other Comprehensive income as required by paragraph 14 of Appendix B to the IndAS 101 and also IndAS-8.

18.00 Current Tax Assets

We have not been furnished the year wise breakup of the payments and their status. Further, except for the current year, advances pertain to earlier years and as such, should be disclosed as Non-Current Assets. Therefore, the Non-Current Tax Assets/ NonCurrent Tax Liabilities and Current Tax Assets/ Current Tax Liabilities have been understated and overstated respectively by approximately Rs, 4639.68 lakhs.

19.00 Party wise and agewise list and details have not been provided except for ICC Unit in respect of all the Debit and Credit balances in respect of Receivables and Payables (including Advances, Deposits, SD, EMD etc.)

Item 2 represents the balance of Rs, 2168 lakhs received from Hindalco on 28.01.2017 out of which Rs, 1844 lakhs had been adjusted and the remaining amount is still lying unadjusted even after a year. It seems that the additional amount received might be on account of unrecorded supplies and the same needs to be charged to revenue. Therefore, the Advances from Customers is overstated by at least Rs, 224 lakhs. For the remaining items the partywise details and reasons for non-adjustment has not been furnished to us.

21.00 Revenue from Operations

22.01 Credit for sale return has been given during the year by reducing the revenue from operations by Rs, 192 lakh, which includes Rs, 179 lakhs to a single customer. However, the quantity thereof has not been reduced from the total sold quantity during the year.

22.02 There has been negative sales revenue of Rs, 38 lakhs from the sale of Anode Slime from KCC against positive sales revenue of Rs, 717 lakhs last year, reasons for such variation has not been explained to us.

22.03 Apart from the quantity discount to customers of Rs, 1035 lakhs (Previous year 414 lakhs), there was additional discount of Rs, 487 lakhs which has been netted from the revenue from operations (sales).

22.04 Discount and Rebate includes Rs, 184 lakhs (Previous Year Rs, 253 lakhs) being Sales Tax Rebate. It should be adjusted with the Sales Tax Liability.

22.05 Rs, 169 lakhs has been debited to Sales by crediting Transamine Trading SA, to whom material was sold in earlier years. The reasons for such adjustment has not been explained.

22.06 In the Significant Accounting Policies on Revenue Recognition, it has been stated that the sale of Copper Concentrate, Copper Reverts, Anode Slime etc. and tolling of Copper Concentrate of Khetri and Malanjkhand origin at the end of the accounting period are recorded on provisional basis as per standard parameters for want of actual specifications and differential sales value are recorded only on receipt of actual as per consistent practice followed by the Company. However, the extent of such provisional recognition and the actual and resulting adjustment has not been informed to us.

22.07 The Company has entered into a contract for barter exchange of its KCC MIC with Anode to be supplied by the that party. The exchange ratio has been worked out on the basis of tolling charges quoted by the party and the contract was executed with the LI bidder. Therefore, the transaction is in the nature of tolling. However, both the legs of transaction have been accounted for separately as Export and Import of Raw Material. During the year, export to the said party was for Rs, 39397 lakhs. The Company incurred Rs, 3262 lakh on transportation of MIC. Against this, the import from that party has been for Rs, 38950 lakhs. Therefore, the revenue from operations and raw material consumption, both are overstated by approximately Rs, 39397 lakhs and Rs, 38950 lakhs respectively.

23.00 Other Income

23.01 Rs, 166 lakhs being the liquidated damages imposed on Shriram EPC Ltd has not been accounted for as Income (Account Code 34448) for the year. Due to this profit for the year has be understated by Rs, 166 lakhs and Creditors-Expenses (Account Code 15127) has been overstated by similar amount.

23.02 We have not been given the details of interest from customers during the year, i.e., name, period, amount, rate of interest etc.

23.03 We have not been furnished with the details of dividend and interest from and Profit/Loss on sale of Investments.

In view of the substantial information not available, which will have material impact on the accounts, in addition to the adjustments identified by us as to various understatements and overstatements stated above, we are not in the position to quantify the cumulative effect of the adjustment required to be made to make the accounts to present true and fair view of the state of affairs of the Company as on 31.03.2018.

Mar 31, 2017

1.GENERAL NOTES ON ACCOUNTS 1. FIRST TIME ADOPTION OF IND AS

This financial statement of the Company for the year ended 31.03.2017 have been prepared in accordance with Ind AS. For the purpose of transition to Ind AS, the Company has followed the guidance prescribed in Ind AS 101 - First time adoption of Indian Accounting Standard with 01.04.2015 as the transition date. The transition to Ind AS has resulted in changes in the presentation of the financial statements, disclosure in notes thereto and accounting policies and principles. The accounting policies set out in Note No. 2 have been applied in preparing this financial statement for the year ended 31.03.2017 and the comparative information. Some exemptions on first time adoption of Ind AS have been availed by the Company in accordance with Ind AS 101.

Details of Claims against the Company not acknowledged as debt (of 2(i)(a) above)

VAT/CST/ENTRY TAX

There are demand notices totaling to Gross Demand of Rs,892.57 lac (Previous Year Rs,972.27 lac) from various State Revenue Authorities regarding VAT/CST/Entry Tax. The company is contesting the demand and the management as well as the legal advisors/consultants are of the opinion that its contention will likely to be upheld by the Appellate Authorities. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

EXCISE DUTY

There are demand notices totaling to Gross Demand of Rs,3833.68 lac (Previous Year Rs,4797.14 lac) from Central Excise Authorities regarding Excise Duty. The company is contesting the demand and the management as well as the legal advisors/consultants are of the opinion that its contention will likely to be upheld by the Appellate Authorities. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

INCOME TAX

There are Income Tax demand notices totaling to Gross Demand of Rs,360.67 lac (Previous Year Rs,404.42 lac). The company is contesting the said demands before the Appellate Authorities. The management as well as the income tax consultant are of the opinion that its contention will likely to be upheld by the Appellate Authorities. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

OTHER DEMAND of Rs,33447.86 lac (Previous Year Rs,36484.00 lac)

The major pending litigation cases are as follows:

a. The Municipal Council, Malanjkhand, raised a demand on Malanjkhand Copper Project (MCP) amounting to Rs,7046.64 lac on account of penalty on Terminal Tax for the periods from financial year 2000-01 to 2005-06 on the ground of short payment of Terminal Tax by adopting higher assessable value as well as higher of Metal in Ore (MIO) produced and Metal in Concentrate (MIC) despatched. The matter was contested by the company before the HonRs,ble High Court, Jabalpur, M.P. and the company paid ''352.33 lac towards penalty Terminal Tax as per the order of Hon''ble High Court, Jabalpur, M.P. Subsequently the matter was turned down by the Hon''ble High Court, Jabalpur, M.P. The Company filed writ petition before the Hon''ble Supreme Court of India. The Hon''ble Supreme Court vide its order dated 29.07.2011 directed the Company to deposit an ad-hoc amount of Rs,1000.00 lac to Municipal Council, Malanjkhand which has since been deposited by the company and shown as ''Deposits with Court'' and also ordered that the matter may be heard on the ground of merit by the Civil Court, Baihar. Further a demand of Rs,18867.56 lac for the periods from 2006-07 to 2011-12 was also raised on the above ground for which the appeal by the company is pending before the Hon''ble Supreme Court. Pending final decision, the full amount of Rs,25914.20 lac has been disclosed under ''Contingent Liability''.

b. The Municipal Council, Malanjkhand, Madhya Pradesh issued demands on MCP for Rs,1253.32 lac on account of Property Tax for several years against which the company filed writ petitions before the Hon''ble Madhya Pradesh High Court, Jabalpur challenging the demand notice. Out of the above demand, a sum of Rs,220.85 lac has been paid by the Company based on self assessment from time to time as per interim measure as directed by the Hon''ble Madhya Pradesh High Court, Jabalpur. The net amount of Rs,1032.47 lac (Rs,1253.32 lac -Rs, 220.85 lac) has been included under ''Contingent Liability''.

c. The State Deputy Registrar, Khetri, Rajasthan issued demands on KCC for Rs,3310.32 lac on account of Property/ Land Tax for the years 2006-07 to 2012-13 against which the company filed writ petitions before the Hon''ble Rajasthan High Court, Jaipur challenging the demand notice. Out of the above demand, a sum of Rs,1655.16 lac has been paid by the Company as directed by the Hon''ble Rajasthan High Court, Jaipur. The net amount of Rs,1655.16 lac (Rs,3310.32 lac - Rs,1655.16 lac) has been included under ''Contingent Liability''.

d. There was a trade dispute with M/S Bhagawati Gases Ltd (BGL) in connection with an agreement to supply of gaseous oxygen at Khetri Copper Complex. The dispute was referred to Arbitration. The claim of BGL is for an amount of Rs,1079.80 lac with a corresponding counter claim of Rs,534.62 lac by the company. The arbitral award went against the company. The company had filed an appeal before the Hon''ble High Court of Rajasthan and the same was admitted for hearing. The Company preferred appeal before the Hon''ble Rajasthan High Court regarding interim deposit of arbitral award pending disposal of original appeal, but the same was dismissed. Thereafter the Company had preferred appeal before Hon''ble Supreme Court and the Hon''ble Supreme Court passed the order directing the Company to deposit the entire decrial amount along with interest amounting to Rs,1733.50 lac in the form of Fixed Deposit. The Company deposited the said amount and shown the same as Deposit in Current assets. Pending decision of the original appeal against arbitral award before the Hon''ble Rajasthan High Court, the said amount of Rs,1733.50 lac has been disclosed under ''Contingent Liability''.

e. There was a demand from M/S Uttkal Moulders amounting to Rs,1662.72 lac regarding interest for delayed payment against supply of grinding media balls at Malanjkhand Copper Project. The case is pending before the Sole Arbitrator. Pending final decision, the said amount of Rs,1662.72 lac has been disclosed under ''Contingent Liability''.

f. In addition there are number of pending litigation cases against the company claiming demand of Rs,1449.81 lac by retired employees, third parties etc. which the company is contesting before different Legal Forums / Courts.

The management as well as the legal advisors/consultants are of the opinion that its position will likely to be upheld in the appellate proceedings. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

2. During the year, the company has made a provision amounting to Rs,300.00 lac in terms of DPE guidelines towards Performance Related Pay payable to the executives for F.Y. 2016-17 which is shown under ''Employees'' Benefit Expenses''.

3. In the absence of lease agreements with the State Government in respect of certain leasehold lands, the amortization has been made against the adhoc payment made so far. In case of certain freehold lands acquired through nationalization in accordance with Indian Copper Corporation (Acquisition of Undertaking) Act, 1972, title deeds, conveyance deeds etc. are not in the possession of the company.

4. Lease premium paid for land for mining purposes including payment for Net Present Value (NPV) of forest area paid to forest department is capitalized under the head Prepaid Expenses.

5. The commercial operation of Smelter, Refinery and Sulphuric Acid Plant at Khetri Copper Complex (KCC) were suspended since December 2008. The Company suferred loss on account of impairment of the said plants valued by an independent consultant and consequently a total sum of Rs,482.97 lac was provided in the accounts in the preceeding years for impairment loss in compliance with the guidelines of IND AS 36 on "Impairment of Assets". Total inventory valued Rs,527.57 lac after provision of Rs,17.79 lac which remained as process material in the above Plant is included in the Inventory of the company. The management is of the opinion that such inventories consisting mainly of metal content are realizable at least at the book value.

6. The title deeds in respect of office flat at SCOPE Complex, Delhi & Jaipur office with total book value of Rs,68.06 lac (Previous year Rs,73.32 lac) as well as for Freehold and Leasehold Land and Building acquired in respect of Gujarat Copper Project (GCP) with book value of Rs,6300.54 lac are yet to be executed (Previous year Rs,6037.30 lac).

7. At ICC, Pollution Control Plant under Package I & III amounting to Rs,2100.50 lac have not been capitalized for want of completion of trial / guarantee run as per terms of contract. As a matter of prudence, full provision for the same has been made in the accounts to take care of efflux of time over the years.

8. During the previous financial year, in terms of the order of the Hon''ble High Court of Gujarat at Ahmedabad dated 27.01.2015, the company acquired old unit namely M/S Jhagadia Copper Limited (JCL) situated at Jhagadia Industrial Estate, District Bharuch, Gujarat (renamed as Gujarat Copper Project), with installed capacity to manufacture 50,000 tonnes per annum of LME ''A'' grade Copper Cathodes by secondary smelting process, through auction process from Asset Reconstruction Company (India) Limited (Arcil) at a consolidated auction price of Rs,21000.00 lac comprising of Leasehold Land for Rs,3005.00 lac, Building for Rs,1838.00 lac and Plant & Machinery for Rs,16157.00 lac. The Company after acquisition of the said unit incurred and capitalized a sum of Rs,18531.86 lac (net of recoveries) before the start of the commercial production on 01.10.2016 except KALDO furnace which is under major refurbishment till the end of the year.

The unit thus started commercial production on and from 01.10.2016 and all expenses and incomes are treated as revenue account from that date onwards.

9. Confirmation letters of majority of balances under the heads Sundry Creditors, Claims Recoverable, Loans & Advances, Sundry Debtors and Deposits from and with various parties/ Government Departments have been sent but in number of cases such confirmation letters from the parties are yet to be received.

10. Like last year, considering the present scenario of MCP mines and to sustain the planned production, management during the year also decided to process the lean ore along with the normal ore produced from the mine. At the end of the year, the value of closing lean ore was Rs,5475.00 lac (Previous Year Rs,4973.62 lac). The physical verification of lean ore has been conducted by the Malanjkhand Mining Department.

11. During the year, the company has spent a sum of Rs,514.66 lac on account of Corporate Social Responsibility (CSR) expenses out of which Rs,370.98 lac is charged to Statement of Profit & Loss and the balance amount of Rs,143.68 lac has been utilized out of unspent balance of CSR Fund.

The information has been given of such vendors to the extent they could be identified as "Micro and Small" enterprises on the basis of information available to the Company.

12. Consequent to the decision of the Hon''ble Supreme Court vide its order dated 10.11.2016 in favour of the Company in respect of appeal filed, a total amount of Rs,12315.10 lac is receivable from M.P. State Electricity Board (now renamed as MPVVNL) on account of excess charge of electricity bills paid in earlier periods. However, on conservative basis, against such excess charge of electricity bills receivable, the Company initially took credit of Rs,2822.26 lac from April 2016 to October 2016 in its books. Thereafter the Company has taken a credit of Rs,2124.07 lac on the basis of adjustment against bills raised by MPVVNL after October 2016 till 31st March, 2017.

13. As the life of open pit mine at MCP is limited, the Company, in addition to the open pit mine, has started developing underground mine for its sustainability. Based on the ore estimates from time to time, calculation of ore reserve and re-designing of mine pit is being done based on certain technical parameters and assumptions. At the beginning of the financial year 2015-16, Unamortized Mine Development Expenditure (MDE) of MCP open cast (surface) mine was Rs,50086.41 lac. The company used to capitalize the total mining cost under the head MDE and annual amortization amount was used to have been derived by applying the stripping rate with the ore produced at average annual rate/ MT at the end of the year.

From the current financial year, accounting standards - IndAS has become mandatory on the company. It provides that a first-time adopter of Indian Accounting Standards (Ind AS) may apply the Appendix B of Ind AS 16 Stripping Costs in the Production Phase of a Surface Mine from the date of transition to Ind AS i.e. on 01.04.2015. It further provides that at the transition date to Ind ASs, any previously recognized asset balance arising out of the stripping activity undertaken during the production phase (''predecessor stripping asset'') shall be reclassified as a part of an existing asset to which the stripping activity related to the extent there remains an identifiable component of the ore body with which the predecessor stripping asset can be associated. Such balances shall be depreciated or amortized over the remaining expected useful life of the identified component of the ore body to which each predecessor stripping asset balance relates. If there is no identifiable component of the ore body to which predecessor stripping asset relates, it shall be recognized in opening retained earnings at the transition date to Ind ASs as per exemption provided in other Ind ASs - Appendix B of First-time adoption of Indian Accounting Standards (IndAS-101).

Keeping in view of Ind AS on the issue of Unamortized Mine Development Expenditure at MCP it is evident from the accounting records as on 01.04.2015 that Unamortized MDE of MCP open cast (surface) mine was Rs, 50086.41 lac with Overburden (OB) quantity of 48493188.79 MT. It is also observed that the opening OB quantity of 48493188.79 MT consists of45932188.79 MT of OB quantity valuing Rs,47441.27 lac and 2561000.00 MT of Lean Ore valuing Rs,2645.14. It implies that as against an amount of Rs,47441.27 lac pertaining to OB quantity there is no identifiable component of the ore body to which that predecessor stripping asset related.

In the given circumstances and in compliance with the mandatory accounting standards Ind AS coupled with the fact that the company has already initiated development activity for underground mining and the life of the open cast mine is limited to 6-7 years, the Company has written off an amount of Rs,47441.27 lac relating to OB quantity against Retained Earnings as on 01.04.2015 in order to give effect to Ind AS.

Accordingly, the stripping rate of open cast (surface) mine has been re-assessed with reference to identifiable component of the ore body.

14. No fraud by the company or any fraud on the company by its officers and employees has been noticed or reported during the current financial year.

15. The Company has closed / suspended many of its mining operations located at various places, Fertilizer Plant at Khetri in different years due to their uneconomic operations. As per requirement of IND AS 105 on "Noncurrent Assets Held for Sale and Discontinued Operations" the following information for the year are furnished:

16. Since the company is primarily engaged in the business of manufacture and sale of copper products, the same is considered to be the only primary reportable business segment and accordingly has been reported. As the Company operates predominantly within the geographical limits of India, no secondary segment reporting has been considered as per IND AS 108 "Operating Segments".

17. Financial Instrument

18. Derivatives not designated as hedging instruments

Commodity price risk

As at 31 March 2017, the fair value of the open position of commodity future contracts is insignificant.

19 . Financial Instruments by Categories

The carrying value and fair value of financial instruments by categories were as follows:

20. The management considers the Service fees of Rs,200.00 lac paid on the Exim bank Term loan amounting to Rs,20000.00 lac drawn in June 2015 as immaterial, as the amount of service fee is only 0.16% of the Turnover of the company and hence the same has not been considered as a transaction cost in terms of fair valuation at initial recognition under INDAS 109. Further, the Management assessed that for the purpose of IND AS 109, the carrying value of loan is considered as its fair value as no loan could be provided at a rate lower that the rate of interest of EXIM BANK loan for similar terms and conditions of the loan.

The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

21. Fair Value Hierarchy

Level 1 - Level 1 hierarchy includes financial instruments measured using quoted prices (unadjusted) in active markets.

Level 2 - Level 2 hierarchy includes financial instruments measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Level 3 hierarchy includes financial instruments measured using inputs that are not based on observable market data (unobservable inputs).

The following table present fair value hierarchy of assets and liabilities measured at fair value

ii) Commodity Price Risk

The company''s exposure to security price from copper price fluctuation in international market does not arise as the company hedges all its imports through Future contracts at LME.

b) Credit Risk

Credit risk refers to the risk of default on its obligation by the Debtors resulting in a financial loss. The company sells majority its products either against advance from Customers or Letters of Credit. Accordingly, credit risk from trade receivables has not been considered as credit risk.

The maximum exposure to credit risk at the reporting date is '' 934.59 lac for which full provision has been made in the accounts as disclosed in Note No 12.

Other financial assets

Credit risk relating to cash and cash equivalents is considered negligible because our counterparties are scheduled banks. We consider the credit quality of term deposits with such banks as good as these banks are under the regulatory framework of Reserve Bank of India. We review these banking relationships on an ongoing basis.

c) Liquidity Risk

Our liquidity needs are monitored on the basis of monthly and yearly projections. The company''s principal sources of liquidity are cash and cash equivalents, cash generated from operations.

Short term liquidity requirements consists mainly of sundry creditors, expense payable, employee dues arising during the normal course of business as of each reporting date. We maintain a sufficient balance in cash and cash equivalents to meet our short term liquidity requirements.

The table below provides details regarding the contractual maturities of financial liabilities. The table have been drawn up based on the undisclosed cash flows of financial liabilities based on the earliest date on which the company can be required to pay.

6. Capital Management

22. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS IN TERMS OF IND AS 19 :

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through Life Insurance Corporation of India and SBI Life Insurance Co. Ltd. and are managed by separate trust. During the year, the Company has also funded through Life Insurance Corporation of India and SBI Life Insurance Co. Ltd towards leave encashment. Expenses recognized in Statement of Profit & Loss, Other Comprehensive Income and Mine Development Expenditure amounting to Rs,5427.45 lac in respect of Gratuity, Leave Encashment and Leave Travel Concession which have been provided for as stated below.

The estimates of future salary increases were considered in actuarial valuation after taking into account inflation, seniority, promotion and other relevant factors. Further, the expected return on plan assets is determined considering several applicable factors mainly the composition of plan assets held, assessed risk of asset management and historical returns from plan assets.

22. The physical verification of raw materials, WIP and finished goods have been conducted departmentally at reasonable intervals during the year. In respect of stores and spares, physical verification has been conducted by the external agencies once during the year. Shortages/ (Excesses) identified on such physical verification have been duly adjusted in the books of accounts.

23. The physical verification of fixed assets which is required to be conducted every year so that all the units/ offices are covered once in every three years interval. Physical verification of fixed assets has been conducted by external agencies in ICC, RCP, MCP, Bangalore Sales Office & H.O. during the year. Shortages/(Excesses) identified on such physical verification have been duly adjusted in the books of accounts.

24. Work in process includes stock of concentrate valued Rs,Nil lac (Previous Year Rs,1.64 lac) lying with third party at the end of the year.

* For the purpose of this clause, the term "Specified Bank Notes" shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.

25. The previous year''s figures have been regrouped / rearranged, wherever necessary.

Mar 31, 2016

OTHER DEMAND of Rs.36484.00 lac (Previous Year Rs.42722.14 lac)

The major pending litigation cases are as follows:

a. The Municipal Council, Malanjkhand, raised a demand on Malanjkhand Copper Project (MCP) amounting to Rs.7046.64 lac on account of penalty on Terminal Tax for the periods from 2000-01 to 2005-06 on the ground of short payment of Terminal Tax by adopting higher assessable value as well as higher of Metal in Ore (MIO) produced and Metal in Concentrate (MIC) dispatched. The matter was contested by the company before the Hon''ble High Court, Jabalpur, M.P. and the company paid Rs.352.33 lac towards penalty Terminal Tax as per the order of Hon''ble High Court, Jabalpur, M.P. Subsequently the matter was turned down by the Hon''ble High Court, Jabalpur, M.P. The Company filed writ petition before the Hon''ble Supreme Court of India. The Hon''ble Supreme Court vide its order dated 29.07.2011 directed the Company to deposit an ad-hoc amount of Rs.1000.00 lac to Municipal Council, Malanjkhand which has since been deposited by the company and shown as ''Deposits with Court'' and also ordered that the matter may be heard on the ground of merit by the Civil Court, Baihar. Further a demand of Rs.18867.56 lac for the periods from 2006-07 to 2011-12 was also raised on the above ground for which the appeal by the company is pending before the Hon''ble Supreme Court. Pending final decision, the full amount of Rs.25914.20 lac has been disclosed under ''Contingent Liability''.

b. The Municipal Council, Malanjkhand, Madhya Pradesh issued demands on MCP for Rs.1253.32 lac on account of Property Tax for several years against which the company filed writ petitions before the Hon''ble Madhya Pradesh High Court, Jabalpur challenging the demand notice. Out of the above demand, a sum of Rs.220.85 lac has been paid by the Company based on self assessment from time to time as per interim measure as directed by the Hon''ble Madhya Pradesh High Court, Jabalpur. The net amount of Rs.1032.47 lac Rs.1253.32 lac - Rs.220.85 lac) has been included under ''Contingent Liability''.

c. The State Deputy Registrar, Khetri, Rajasthan issued demands on KCC for Rs.3310.32 lac on account of Property/Land Tax for the years 2006-07 to 2012-13 against which the company filed writ petitions before the Hon''ble Rajasthan High Court, Jaipur challenging the demand notice. Out of the above demand, a sum of Rs.1655.16 lac has been paid by the Company as directed by the Hon''ble Rajasthan High Court, Jaipur. The net amount of Rs.1655.16 lac Rs.3310.32 lac-Rs.1655.16 lac) has been included under ''Contingent Liability''.

d. There was a trade dispute with M/S Bhagawati Gases Ltd (BGL) in connection with an agreement to supply of gaseous oxygen at Khetri Copper Complex. The dispute was referred to Arbitration. The claim of BGL is for an amount of Rs.1079.80 lac with a corresponding counter claim of Rs.534.62 lac by the company.

The arbitral award went against the company. The company had filed an appeal before the Hon''ble High Court of Rajasthan, and the same was admitted for hearing. Pending final decision, the said amount of Rs.1079.80 lac has been disclosed under ''Contingent Liability''.

e. There was a demand from M/S Uttkal Moulders amounting to Rs.1662.72 lac regarding interest for delayed payment against supply of grinding media balls at Malanjkhand Copper Project. The case is pending before the Sole Arbitrator. Pending final decision, the said amount of Rs.1662.72 lac has been disclosed under ''Contingent Liability''.

f. In addition there are number of pending litigation cases against the company claiming demand of Rs.5139.65 lac by retired employees, third parties etc. which the company is contesting before different Legal Forums / Courts.

The management as well as the legal advisors/consultants are of the opinion that its position will likely to be upheld in the appellate proceedings. The company also believes that ultimate outcome of these proceedings will not have a material adverse impact on the financial position of the company.

2. During the year, the company has made a provision amounting to Rs.75.00 lac in terms of DPE guidelines towards Performance Related Pay payable to the executives for F.Y. 2015-16 which is shown under ''Employees'' Benefit Expenses''.

3. In the absence of lease agreements with the State Government in respect of certain leasehold lands, the amortization has been made against the adhoc payment made so far. In case of certain freehold lands acquired through nationalization in accordance with Indian Copper Corporation (Acquisition of Undertaking) Act, 1972, title deeds, conveyance deeds etc. are not in the possession of the company.

4. Lease premium paid for land for mining purposes including payment for Net Present Value (NPV) of forest area paid to forest department is capitalized under the head Leasehold Land.

5. The commercial operation of Smelter, Refinery and Sulphuric Acid Plant at Khetri Copper Complex (KCC) were suspended since December 2008. The Company got the loss on account of impairment of the said plants valued by an independent consultant and consequently a total sum of Rs.482.97 lac was provided in the accounts in the preceeding years for impairment loss in compliance with the guidelines of AS-28 on "Impairment of Assets" issued by the Institute of Chartered Accountants of India. Total inventory valued Rs.841.52 lac after provision of Rs.17.79 lac which remained as process material in the above Plant is included in the Inventory of the company. The management is of the opinion that such inventories consisting mainly of metal content are realizable at least at the book value.

6. The title deeds in respect of office flat at SCOPE Complex, Delhi & Jaipur office with total book value of Rs.73.32 lac (Previous year Rs.78.59 lac) as well as for Leasehold Land and Building acquired during the year in respect of Gujarat Copper Project (GCP) with book value of Rs.6037.30 lac are yet to be executed (Previous year Rs. Nil).

7. At ICC, Pollution Control Plant under Package I & III amounting to Rs.2100.50 lac have not been capitalized for want of completion of trial / guarantee run as per terms of contract. As a matter of prudence, full provision for the same has been made in the accounts to take care of efflux of time over the years.

8. Consequent to the order of the Hon''ble High Court of Gujarat at Ahmedabad dated 27.01.2015, the company acquired existing unit namely M/S Jhagadia Copper Limited (JCL) situated at Jhagadia Industrial Estate, District Bharuch, Gujarat (renamed as Gujarat Copper Project, with installed capacity to manufacture 50,000 tonnes per annum of LME ''A'' grade Copper Cathodes by secondary smelting process, through auction process from Asset Reconstruction Company (India) Limited (Arcil) at a consolidated auction price of Rs.21000.00 lac comprising of Leasehold Land - Rs.3005.00 lac, Building - Rs.1838.00 lac and Plant & Machinery - Rs.16157.00 lac. In giving effect to the Hon''ble High Court order, sale certificate for sale of Leasehold Land and Building (immovable property) amounting to Rs.4843.00 lac was executed by Arcil on 30.04.2015 pending registration of title deed in favour of the company by incurring stamp duty and registration charges as applicable. Similarly, sale certificate for sale of movable items of Plant & Machinery amounting to Rs.16157.00 lac was executed by Arcil on 30.04.2015. The company paid Rs.10500.00 lac during the preceeding F.Y. 2014-15 and the balance amount of Rs.10500.00 lac has been paid in the current financial year.

The vendor Arcil has, in the meantime, raised a further demand of Rs.868.83 lac on the company towards reimbursement of VAT pertaining to sale/transfer of movable assets (Plant & Machinery) in addition to the total auction price of Rs.21000.00 lac approved by the H''onble High Court of Gujarat. The company approached the State Govt. of Gujarat seeking relief/concessions on the payment of VAT and other charges applicable in view of the State Government Industrial Policy 2015 which provides for financial support to the new promoter to revive the sick units to make it viable. The Ministry of Mines, Govt. of India has supported the request of the company and has taken up the matter with the State Govt. The matter is under active consideration of the State Govt. Therefore the company believes that State Govt. will accept the company''s plea of waiver of the applicable VAT and other charges. Pending receipt of the approval/concession of waiver of VAT from the State Govt., the VAT liability on the part of the company is therefore denied and is treated as Contingent Liability.

Since the unit was not in a working condition and needs to be thoroughly refurbished in order to bring the unit to its working condition, the auction price of Rs.21000 lac and subsequent amount incurred in this regard amounting to Rs.3688.93 lac has been shown under Capital Work in Progress (Total CWIP as on 31.03.2016 - Rs.24688.93 lac). The above closing CWIP at GCP includes borrowing cost of Rs.1642.04 lac comprising of exchange rate fluctuation, interest on borrowed fund and service fees capitalized during the year. Pending receipt of necessary details regarding arrear lease rent as well as current year lease rent from the lessor of the aforesaid Leasehold Land i.e. Gujarat Industrial Development Corporation (GIDC), provision for lease rent could not be made during the current year.

After taking over possession of the unit, the company made physical verification of Stores & Spares as available in the said unit by an independent CA firm. As per valuation report, net amount of Rs.987.81 lac (Gross amount Rs.1098.27 lac - Provision for Obsolescence Rs.110.46 lac) has been found. Since the company did not pay any extra amount for such surplus Stores & Spares, the said amount of Rs.987.81 lac has been credited to Capital Reserve Account.

9. Confirmation letters of majority of balances under the heads Sundry Creditors, Claims Recoverable, Loans & Advances, Sundry Debtors and Deposits from and with various parties/ Government Departments have been sent but in number of cases such confirmation letters from the parties are yet to be received.

10. Like last year, considering the present scenario of MCP mines and to sustain the planned production, management during the year also decided to process the lean ore along with the normal ore produced from the mine. At the end of the year, the value of closing lean ore was Rs.4321.96 lac (Previous Year Rs.5446.19 lac). The physical verification of lean ore has been conducted by the Malanjkhand Mining Department.

11. During the year, the company has utilized a sum of Rs.767.92 lac on account of Corporate Social Responsibility (CSR) expenses out of which Rs.609.81 lac is charged to Statement of Profit & Loss and the balance amount of Rs.158.11 lac has been appropriated out of unspent balance of CSR Fund.

13. Earlier there was a dispute with Madhya Pradesh State Electricity Board (MPSEB) (now renamed as M.P. Poorv Kshetra Vidyut Vitaran Co. Ltd.) regarding demand of interest on electricity dues amounting to Rs.7008.00 lac payable by MCP which has been pending for long time. The Hon''ble Supreme Court vide its judgement dated 19.11.2008 restrained MPSEB from making any recovery of interest. During the current year, it is apparent that MPSEB has ceased to show such demand of interest in their bills. Considering the above facts, the aforesaid sum of Rs.7008.00 lac, earlier shown as ''Contingent Liability'' is not being considered as ''Contingent Liability'' from this year.

14. Para 4 under Part C of Schedule II to the Companies Act, 2013 provides for mandatory componentization from the current financial year. Accordingly, during the year the management of the company, in line with the Guidance Note issued by the Institute of Chartered Accountants of India formed in-house technical committees in its four major units namely, KCC, ICC, MCP and TCP to assess and record material/significant components of the assets with same or different useful life than that of the main assets. However, the assets where component wise break up is possible, the life of the components are similar to the main assets based on the report of the in-house technical committees in its four major units. Hence componentization of assets are not required and there is no effect of such componentization to the revenue of the company during the year.

15. No fraud by the company or any fraud on the company by its officers and employees has been noticed or reported during the current financial year.

16. In giving effect to the wage agreement between Company Management and Workmen Union, in addition to the earlier provision made upto last year, the company made further provision of Rs.3355.00 lac towards wage revision of workmen upto 28th February 2016 and from the month of March 2016, the company has decided to disburse the actual revised pay as per wage revision agreement and accordingly the same has also been charged to revenue.

17. The Company has closed / suspended many of its mining operations located at various places, Fertilizer Plant at Khetri in different years due to their uneconomic operations. As per requirement of AS-24 on "Discontinuing Operations" the following information for the year are furnished:

18. Since the company is primarily engaged in the business of manufacture and sale of copper products, the same is considered to be the only primary reportable business segment and accordingly has been reported. As the Company operates predominantly within the geographical limits of India, no secondary segment reporting has been considered as per Accounting Standard "Segment Reporting (AS-17)".

19. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS IN TERMS OF AS-15 (REVISED) :

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through Life Insurance Corporation of India and SBI Life Insurance Co. Ltd. and are managed by separate trust. During the year, the Company has also funded through Life Insurance Corporation of India and SBI Life Insurance Co. Ltd towards leave encashment. Expenses recognized in Statement of Profit & Loss and Mine Development Expenditure amounts to Rs.4163.07 lac in respect of Gratuity, Leave Encashment and Leave Travel Concession has been made as stated below.

The estimates of future salary increases were considered in actuarial valuation after taking into account inflation, seniority, promotion and other relevant factors. Further, the expected return on plan assets is determined considering several applicable factors mainly the composition of plan assets held, assessed risk of asset management and historical returns from plan assets.

20. The physical verification of raw materials, WIP and finished goods have been conducted departmentally at reasonable intervals during the year. In respect of stores and spares, physical verification has been conducted by the external agencies once in a year during the year. Shortages/ (Excesses) identified on such physical verification which were not material in nature have been duly adjusted in the books of accounts.

21. Excise duty deducted from Gross Sales is the excise duty on Gross Turnover for the year under review. However, the excise duty related to the difference between the closing stock and opening stock is recognized separately in the statement of Profit & Loss as follows:

22. As per Accounting Policy No.3.6, the physical verification of fixed assets which is required to be conducted once in every three years has not been conducted during the year under review since such verification was last conducted in F.Y.2013-14.

23. Work in process includes stock of concentrate valued Rs.1.64 lac (Previous Year Rs.3222.83 lac) lying with third party at the end of the year.

24. Domestic sales during the year include debits of Rs.582.65 lac being rectification of sale of anode slime arising out of tolling of concentrate from the third party wrongly credited to the sales account in the preceeding F.Y. 2014-15.

31. The previous year''s figures have been regrouped / rearranged, wherever necessary.

Mar 31, 2015

CORPORATE INFORMATION

1. Hindustan Copper Limited is a public limited company domiciled in India and earlier incorporated under the provisions of Companies Act, 1956 now governed by Companies Act 2013. Its Shares are listed and traded on Stock Exchanges in India. The company is engaged in exploration, exploitation, mining of copper and copper ore including beneficiation of minerals, smelting and refining.

Year Year 2014-15 2013-14

2. (i) Contingent Liabilities not provided for in respect of

a. Estimated amount of commitments

i. Unexecuted Capital Contract 178366.00 895.60

(Net of advances and deposits)

b. Other money for which the company is contingently liable (Claim against the company not acknowledged as debt)

i. Disputed VAT / CST / Entry Tax / Property Tax Demand 2838.59 2949.05

ii. Disputed Excise Duty 4746.84 3533.88

iii. Disputed Income Tax 4538.86 3767.36

iv. Other Demand 41066.98 40855.54

TOTAL 53191.27 51105.83

(ii) LITIGATION

VAT/CST/ENTRY TAX/PROPERTY TAX

There are 13 demand notices totaling to Gross Demand of Rs. 2838.59 lac (Previous Year Rs. 2949.05 lac) from various State Tax Authorities regarding VAT/CST/Entry Tax/Property Tax. The company is contesting the demand and the management including the legal advisor believes that its position will likely be upheld in the appellate process. The company also believes that ultimate outcome of these proceedings will not have a material adverse effect on the financial position of the company.

EXCISE DUTY

There are 24 demand notices totaling to Gross Demand of Rs. 4746.84 lac (Previous Year Rs. 3533.88 lac) from Central Excise Authorities regarding Excise Duty. The company is contesting the demand and the management including the legal advisor believes that its position will likely be upheld in the appellate process. The company also believes that ultimate outcome of these proceedings will not have a material adverse effect on the financial position of the company.

INCOME TAX

There are 6 Income Tax demand notices totaling to Gross Demand of Rs. 4538.86 lac (Previous Year Rs. 3767.36 lac) before the Commissioner of Income Tax (Appeal). The company is contesting the demand and the management including the income tax consultant believes that its position will likely be upheld in the appellate process. The company also believes that ultimate outcome of these proceedings will not have a material adverse effect on the financial position of the company.

OTHER DEMAND of Rs. 41066.98 lac (Previous Year Rs. 40855.54 lac)

The major pending litigation cases are as follows :

a. The Municipal Council, Malanjkhand, raised a demand on MCP/HCL amounting to Rs. 7046.64 lac on account of penalty on Terminal Tax for the period 2000-01 to 2005-06 on the ground of short payment of Terminal Tax by adopting higher assessable value as well as higher of Metal in Ore (MIO) produced and Metal in Concentrate (MIC) despatched. The matter was contested by the company before the Hon'ble High Court, Jabalpur, M.P. and the company paid Rs. 352.33 lac towards penalty Terminal Tax as per the order of Hon'ble High Court, Jabalpur, M.P. Subsequently the matter was turned down by the Hon'ble High Court, Jabalpur, M.P. The Company filed writ petition with Hon'ble Supreme Court of India. The Hon'ble Supreme Court vide its order dated 29.07. 2011 directed the Company to deposit an ad-hoc amount of Rs. 1000.00 lac to Municipal Council, Malanjkhand which has since been deposited by the company and shown as 'Deposits with Court' and also ordered that the matter may be heard on the ground of merit by the Civil Court, Baihar. Further a demand of Rs. 18867.56 lac for the period 2006- 07 to 2011-12 was also raised on the above ground for which case is pending before the Hon'ble Supreme Court. Pending final decision, the full amount of Rs. 25914.20 lac has been disclosed under 'Contingent Liability'.

b. There was a dispute with Madhya Pradesh State Electricity Board regarding interest on electricity tariff amounting to Rs. 7008.00 lac payable by MCP/HCL which is pending for long time. Jabalpur High Court vide its order dated 01.12.2011 dismissed the writ petition filed by the company. Thereafter, the company preferred SLP before the Hon'ble Supreme Court praying for stay and the Hon'ble Supreme Court vide its judgment dated 13.04.2012 has granted ad-interim stay of the judgment / order dated 01.12.2011 of the Hon'ble High Court of Madhya Pradesh at Jabalpur. Pending final decision, the said amount of Rs. 7008.00 lac has been disclosed under 'Contingent Liability'.

c. The Municipal Council, Malanjkhand, Madhya Pradesh issued demands on MCP/HCL for Rs. 1253.32 lac on account of Property Tax for several years against which the company filed writ petitions with the Madhya Pradesh High Court, Jabalpur challenging the demand notice. Out of the above, an amount of Rs. 220.85 lac has been paid by the Company based on self assessment from time to time and also as per interim measure as directed by The Madhya Pradesh High Court, Jabalpur. The net amount of Rs. 1032.47 lac has been included under 'Contingent Liability'.

d. There was a trade dispute with M/S Bhagawati Gases Ltd (BGL) in connection with an agreement to supply of gaseous oxygen at Khetri Copper Complex. The dispute was referred to Arbitration. The claim of BGL is for an amount of Rs. 1079.80 lac with a corresponding counter claim of Rs. 534.62 lac on the part of the company. The arbitral award has gone against the company. The company has filed an appeal before the Jhun-Jhunu District Court, Rajasthan, and the same was admitted for hearing. Pending final decision, the said amount of Rs. 1079.80 lac has been disclosed under 'Contingent Liability'.

e. There was a demand from M/S Uttkal Moulders amounting to Rs. 1662.72 lac regarding interest for delayed payment against supply of grinding media balls at Malanjkhand Copper Project. The case is pending before Sole Arbitrator. Pending final decision, the said amount of Rs. 1662.72 lac has been disclosed under 'Contingent Liability'.

f. In addition there are number of pending litigation cases against the company claiming demand of Rs. 4369.79 lac by retired employees, third parties etc. which the company is contesting before different Legal Forums / Courts.

The company is contesting the above demands and the management including the legal advisor believes that its position will likely be upheld in the appellate process. The company also believes that ultimate outcome of these proceedings will not have a material adverse effect on the financial position of the company.

3. During the year, the company has made a provision amounting to Rs. 75.00 lac towards Performance Related Pay payable to the executives for F.Y. 2014-15 which is shown under 'Employees' Benefit Expenses'.

4. In the absence of lease agreements with the State Government in respect of certain leasehold lands, the amortization has been done against the adhoc payment made so far. In case of certain freehold lands acquired through nationalization in accordance with Indian Copper Corporation (Acquisition of Undertaking) Act, 1972, title deeds, conveyance deed etc. is not under the possession of the company.

5. Lease premium paid for land for mining purposes including payment for Net Present Value (NPV) of forest area paid to forest department is capitalized under the head Leasehold Land.

6. The commercial operation of Smelter, Refinery and Sulphuric Acid Plant at Khetri Copper Complex were suspended since December 2008. The Company has got the loss on account of impairment of the said plants valued by an independent consultant and consequently a total sum of Rs. 482.97 lac including Rs. 14.39 lac during the year has been provided in the accounts for impairment loss in compliance with the guidelines of AS-28 on "Impairment of Assets" issued by the Institute of Chartered Accountants of India. Total inventory valued Rs. 834.34 lac after provision of Rs. 17.79 lac which remained as process material in the above Plant is included in the Inventory of the company. The management is of the opinion that such inventories consisting mainly of metal content are realizable at least at the book value.

7. The title deeds are yet to be executed in respect of office flat at SCOPE Complex, Delhi and Jaipur office having book value of Rs. 78.59 lac (Previous year Rs. 83.85 lac).

8. At ICC, Pollution Control Plant under Package I & III amounting to Rs. 2100.50 lac have not been capitalized for want of completion of trial / guarantee run as per terms of contract. As a matter of prudence, full provision for the same has been made in the accounts to take care of efflux of time over the years.

9. During the year, the company has entered into an agreement of acquiring Plant & Machinery including Leasehold Land of Jhagadia Copper Limited (JCL) through Asset Reconstruction Company (India) Ltd. (ARCIL) at a value of Rs. 21000.00 lac through auction process out of which the company has paid Rs. 10500.00 lac during the year and the balance amount is agreed to be paid in next financial year. The JCL Plant has facilities for manufacture of 50,000 tonnes per annum of LME 'A' grade Copper Cathodes by secondary smelting process.

10. Confirmation letters of majority of balances under the heads Sundry Creditors, Claims Recoverable, Loans & Advances and Sundry Debtors have been sent but in number of cases such confirmation letters from the parties are awaited.

11. Like last year, considering the present scenario of MCP mines and to sustain the planned production, management during the year also decided to process the lean ore along with the normal ore produced from the mine. At the end of the year, the value of closing lean ore was Rs. 5446.19 lac, (Quantity 25.61 lac tonne) (Previous Year Quantity 27.50 lac tonne valuing Rs. 6543.29 lac). The physical verification of lean ore has been conducted by the Malanjkhand Mining Department.

12. During the year, the company has utilized a sum of Rs. 726.44 lac on account of Corporate Social Responsibility (CSR) expenses out of which Rs. 643.67 lac is charged to Statement of Profit & Loss and the balance amount of Rs. 82.77 lac has been appropriated out of unspent balance of CSR Fund.

13. Information related to Micro, Small and Medium Enterprises Development Act, 2006 is disclosed hereunder

a) i) Principal amount remaining unpaid to any supplier at the end of the accounting year - Rs 2057.36 lac

ii) Interest due on above - Rs 98.71 lac

b) Amount of interest paid by the buyer in terms of Section 16 of the Act, along with amount of payment made beyond the appointed date during the year - Rs NIL

c) Amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the due date during the year) but without adding the interest specified under the Act - Rs NIL

d) Amount of interest accrued and remaining unpaid at the end of the financial year - Rs NIL

e) Amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the Small enterprise, for the purpose of disallowance as a deductible expenditure under Section 23 of the Act - Rs NIL

The information has been given of such vendors to the extent they could be identified as "Micro and Small" enterprises on the basis of information available to the Company.

14. During the year the Company has written back old liabilities / provisions amounting to Rs. 306.21 lac (Previous Year Rs. 1510.51 lac) in the accounts, the details of which are as under :-

15. Export sales during the year include debits of Rs. 3581.17 lac arising out of final settlement of Copper Concentrate for which sales made earlier during F.Y.2013-14.

16. Consequent to enactment of the Companies Act, 2013 (the Act) and its applicability for accounting periods commencing on or after 01st April, 2014, the company has reworked depreciation with reference to the estimated economic life of fixed assets prescribed by Part C of Schedule II to the Act or actual useful life of assets, whichever is lower. In case of asset whose life has completed as above, the carrying value as at 01st April, 2014 amounting to Rs. 1780.46 lac has been adjusted against the opening balance of the Retained Earnings and in other cases the carrying value has been depreciated over the remaining of the revised life of the assets and recognized in the financial statements for the current period.

17. Special audit was conducted during the previous financial year 2013-14 in respect of financial irregularities in sales and customers records committed in earlier years regarding extending financial benefits to some customers which included allowing delivery of materials without receipt of payment for the same. Necessary provision was made for uncovered portion of interest and penal interest on overdue interest amounting to Rs. 50.59 lac in the financial year 2013-14. As the company has already recovered the principal amount and some portion of the interest, the management taking into account all relevant facts and circumstances of the case at that time did not categorize such occurrence as fraud.

Moreover such financial irregularities were further examined by a special committee constituted by the Management of the company. The same issue was also raised by C & AG and reported to Ministry of Mines. Appropriate action was initiated by Management to bring out the facts so that needful action can be taken accordingly.

However, no fraud on or by the company has been noticed or reported during the current financial year.

18. In giving effect to the bi-partite agreement between Company Management and Workmens' Union, the company has provided a sum of Rs. 2598.00 lac towards wage revision of workmen for the period 01st November 2012 to 31st March 2015.

19. The mining activities of Surda mines at ICC which was running on deemed extension basis was stopped w.e.f. 08th September, 2014 in terms of order issued by Government of Jharkhand on the contention that the mining lease period was not officially extended. However, Government of Jharkhand vide its order dated 18.03.2015, has extended the mining lease till 31.03.2020 and the company is legally entitled to carry on normal mining activities.

20. The Company has closed / suspended many of its mining operations located at various places, Fertilizer Plant at Khetri in different years due to their uneconomic operations. As per requirement of AS-24 on "Discontinuing Operations" the following information for the year are furnished:

21. Since the company is primarily engaged in the business of manufacture and sale of copper products, the same is considered to be the only primary reportable business segment and accordingly reported. As the Company operates predominantly within the geographical limits of India no secondary segment reporting has been considered as per Accounting Standard "Segment Reporting (AS-17)".

22. Sales for the period include FOB value of Export Sale:-

23. The Company has accounted for Deferred Tax in accordance with the guidelines of AS-22 on "Accounting for Taxes on Income" issued by The Institute of Chartered Accountants of India. The Deferred tax balances are set out below:-

24. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS IN TERMS OF AS-15 (REVISED) :

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through Life Insurance Corporation of India and SBI Life Insurance Ltd. and are managed by separate trust. During the year, the Company has also funded through Life Insurance Corporation of India and SBI Life Insurance towards leave encashment. Expenses recognized in Statement of Profit & Loss and Mine Development Expenditure amounts to Rs. 5008.21 lac in respect of Gratuity, Leave Encashment and Leave Travel Concession has been made as stated below.

The following tables summarize the components of net benefit expense recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet for the respective plans.

Actual Return on Plan Assets during the year - Rs. 2327.44 lac. The principal assumptions used for actuarial valuation are :

The estimates of future salary increases were considered in actuarial valuation after taking into account inflation, seniority, promotion and other relevant factors. Further, the expected return on plan assets is determined considering several applicable factors mainly the composition of plan assets held, assessed risk of asset management and historical returns from plan assets.

25. The physical verification of raw materials, WIP and finished goods have been conducted departmentally at reasonable intervals during the year. In respect of stores and spares, physical verification has been conducted by the external agencies once in a year during the year. Shortages/ (Excesses) identified on such physical verification which were not material in nature have been duly adjusted in the books of accounts.

26. Excise duty deducted from Gross Sales is the excise duty on Gross Turnover for the year under review. However, the excise duty related to the difference between the closing stock and opening stock is recognized separately in the statement of Profit & Loss Account as follows:

27. As per Accounting Policy No.3.6, the physical verification of fixed assets which are required to be conducted once in every three years has not been conducted during the year under review since such verification was conducted in F.Y.2013-14.

28. Work in process includes stock of concentrate valued Rs. 3222.83 lac (Previous Year Rs. 3460.06 lac) lying with third party at the end of the year for which confirmation from the party has been obtained.

29. Closing inventory of stores & spares includes a sum of Rs. 552.57 lac, arising out of physical verification conducted, being the stores earlier issued from the stores godown and shown as consumed remaining unused/unconsumed at the end of the year

30. The previous year's figures have been regrouped / rearranged, wherever necessary.

Mar 31, 2014

1. CORPORATE INFORMATION

Hindustan Copper Limited is a public limited company domiciled in India and earlier incorporated under the provisions of Companies Act, 1956 since replaced by Companies Act 2013. Its Shares are listed and traded on Stock Exchanges in India. The Company is engaged in exploration, exploitation, mining of copper and copper ore including beneficiation of minerals, smelting, refining of copper.

2 GENERAL NOTES ON ACCOUNTS (Rs. in lac)

Year Year 2013-14 2012-13

1. Contingent Liabilities not provided for in respect of :-

a. Estimated amount of commitments

i. Capital 895.60 1168.82

b. Other money for which the company is contingently liable

i. VAT / CST / Entry Tax / Property Tax 2949.05 511.11

ii. Excise Duty / Income Tax 7301.24 5069.97

iii. Others 40855.54 21756.94

TOTAL 52001.43 28506.94

2. The Municipal Council, Malanjkhand, raised a demand on MCP/HCL amounting to Rs.7046.64 lac on account of penalty on Terminal Tax for the period 2000-01 to 2005-06 on the ground of short payment of Terminal Tax by adopting higher assessable value as well as higher of Metal in Ore (MIO) produced and Metal in Concentrate (MIC) despatched. The matter was contested by the company before the Hon''ble High Court, Jabalpur, M.P. and the company paid Rs.352.33 lac towards penalty Terminal Tax as per the order of Hon''ble High Court, Jabalpur, M.P. Subsequently the matter was turned down by the Hon''ble High Court, Jabalpur, M.P. The Company filed writ petition with Hon''ble Supreme Court of India. The Hon''ble Supreme Court vide its order dated 29.07.2011 directed the Company to deposit an ad-hoc amount of Rs.1000.00 lac to Municipal Council, Malanjkhand which has since been deposited by the company and also ordered that the matter may be heard on the ground of merit by the Civil Court, Baihar. Further a demand of Rs.18867.56 lac for the period 2006-07 to 2011-12 was also raised on the above ground for which case is pending before the Hon''ble Supreme Court. Pending final decision, the full of Rs.25914.20 lac amount has been disclosed under ''Contingent Liability''

3. During the year, the company has made a provision amounting to Rs.500.00 lac towards Performance Related Pay payable to the executives for F.Y. 2013-14 which is shown under ''Employees'' Benefit Expenses''.

4. There was a dispute with Madhya Pradesh State Electricity Board regarding interest on electricity tariff amounting to Rs.7008.00 lac payable by MCP/HCL which is pending for long time. Jabalpur High Court vide its order dated 01.12.2011 dismissed the writ petition filed by the company. Thereafter, the company preferred SLP before the Hon''ble Supreme Court praying for stay and the Hon''ble Supreme Court vide its judgment dated 13.04.2012 has granted ad-interim stay of the judgment / order dated 01.12.2011 of the Hon''ble High Court of Madhya Pradesh at Jabalpur. Pending final decision, the said amount has been disclosed as a ''Contingent Liability''.

5. The Municipal Council, Malanjkhand, Madhya Pradesh issued demands on MCP/HCL for Rs.1253.32 lac on account of Property Tax for several years against which the company filed writ petitions with the Madhya Pradesh High Court, Jabalpur challenging the demand notice. Out of the above, an amount of Rs.220.85 lac has been paid by the Company based on self assessment from time to time and also as per interim measure as directed by The Madhya Pradesh High Court, Jabalpur. The net amount of Rs.1032.47 lac has been included under ''Contingent Liability''.

6. In absence of lease agreement with the State Government in respect of certain leasehold lands, the amortization has been done against the adhoc payment made so far. In case of certain freehold lands acquired through nationalization in accordance with Indian Copper Corporation (Acquisition of Undertaking) Act, 1972, title deeds, conveyance deed etc. is not under the possession of the company.

7. Lease premium paid for land for mining purposes including payment for Net Present Value (NPV) of forest area paid to forest department is capitalized under the head Leasehold Land.

8. The mining lease for 479.90 hectare of land in respect of Malanjkhand Copper Project had expired on 26.08.2013. However, the Company applied for renewal of the same for a further period of 20 years from 27.08.2013 to 26.08.2033 vide renewal application dt 30.07.2012 before the Collector, Balaghat who has forwarded the same with recommendation for renewal on 12.07.2013 to the Secretary, Mineral Resources Department, Govt. of M.P, Bhopal. As per Sub Section (6) of Rule 24A of Mineral Concession Rules, 1960 if application is made for renewal of lease at least 12 months before the date of expiry of lease & the land is not disposed off by the State Government before the date of expiry of the lease, the period of that lease shall be deemed to have been renewed.

9. The commercial operation of Smelter, Refinery and Sulphuric Acid Plant at Khetri Copper Complex were suspended since December 2008. The Company has got the loss on account of impairment of the said plants valued by an independent consultant and consequently a sum of Rs.468.58 lac has been provided in the accounts for impairment loss in compliance with the guidelines of AS-28 on "Impairment of Assets" issued by the Institute of Chartered Accountants of India.

10. The title deeds are yet to be executed in respect of office flat at SCOPE Complex, Delhi and Jaipur office having book value of Rs.83.85 lac (Previous year Rs.85.58 lac).

11. At ICC, Pollution Control Plant under Package I & III amounting to Rs.2100.50 lac have not been capitalized for want of completion of trial / guarantee run as per terms of contract. As a matter of prudence, adequate provision for the same has been made in the accounts to take care of efflux of time over the years.

12. Considering the present scenario of MCP mines and to sustain the planned production, management decided to process the lean ore along with normal ore produced from the mine. Therefore 27.50 lac tonne of already excavated copper bearing Lean Ore amounting to Rs.6543.29 lac is considered as closing work in progress as on 31.03.2014. The physical verification of lean ore has been verified by the Malanjkhand Mining Department. This has eventually increased the profit of the company by equivalent amount.

13. Majority of balances under the heads Sundry Creditors, Claims Recoverable, Loans, Advances, Sundry Debtors and bank balances are confirmed and wherever necessary, reconciliation process is in progress.

14. Information related to Micro, Small and Medium Enterprises Development Act, 2006 is disclosed hereunder

a) i) Principal amount remaining unpaid to any supplier at the end of the accounting year - Rs. 286.81 lac

ii) Interest due on above - Rs. 29.09 lac

b) Amount of interest paid by the buyer in terms of Section 16 of the Act, along with amount of payment made beyond the appointed date during the year - Rs. NIL

The information has been given of such vendors to the extent they could be identified as "Micro and Small" enterprises on the basis of information available to the Company.

16. Special audit was conducted during the current year in respect of financial irregularities in debtors and sales ledger committed in earlier years regarding extending financial benefits to some customers which included allowing delivery of materials without receipt of payment for the same. Appropriate provision have been made in the accounts for uncovered portion of interest and penal interest on interest amounting to Rs.50.59 lac. As the Company has already recovered the principal amount and some portion of the interest, the management therefore has decided not to categorize the said occurrence as fraud. Therefore no fraud was committed in the preceding year.

As regard the current year 2013-14, there have been financial irregularities committed regarding fraudulent encashment of cheques at ICC to the tune of Rs.19.87 lac at SBI, Ghatsila. Considering the said fraudulent encashment of cheque allowed by SBI Ghatsila as a lapse on their part, they refunded Rs.9.46 lac and balance amount is also receivable by the company subject to completion of in Bank Reconciliation Statement and will be accounted for on actual receipt. Thus the above financial irregularities were committed against the company by outside agency and were beyond the control of the company. This occurrence was not due to any failure of internal control mechanism of the company. Accordingly, the company has not declared such fraudulent encashment of cheques as fraud.

17. In ICC unit, a sum of Rs.150.53 lac has been shown as advance with the suppliers though materials were received before the end of the year. Reconciliation is in progress and on being reconciled, the same will be transferred to the natural head of accounts.

18. The Company has closed / suspended many of its mining operations located at various places, Fertilizer Plant at Khetri in different years due to their uneconomic operations. As per requirement of AS-24 on "Discontinuing Operations" the following information for the year are furnished:

19. Since the company is primarily engaged in the business of manufacture and sale of copper products, the same is considered to be the only primary reportable business segment and accordingly reported. As the Company operates predominantly within the geographical limits of India no secondary segment reporting has been considered as per Accounting Standard "Segment Reporting (AS-17)".

20. Sales for the period include FOB value of Export Sale:-

21. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS IN TERMS OF AS-15 (REVISED) :

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through Life Insurance Corporation of India, SBI Life Insurance Ltd and Birla Sun Life Asset Management Co.Ltd. and are managed by separate trust. During the year, the Company has also funded through Life Insurance Corporation of India and SBI Life Insurance towards leave encashment. Expenses recognized in Profit & Loss Account and Mine Development Expenditure amounts to Rs.9062.35 lac in respect of Gratuity, Leave Encashment and Leave Travel Concession has been made as stated below.

The following tables summarize the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plans.

The estimates of future salary increases considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors. Further, the expected return on plan assets is determined considering several applicable factors mainly the composition of plan assets held, assessed risk of asset management and historical returns from plan assets.

22. The physical verification of stores and spares has been carried out during the year under review. Shortage/ (Excess) identified on physical verification have been duly adjusted in the books of accounts.

23. As per Accounting Policy (Note No. 2.c.5), the physical verification of fixed assets has been carried out during the year under review. Shortage/(Excess) identified on physical verification have been duly adjusted in the books of accounts.

24. Work in process includes stock worth Rs.3460.06 lac lying with third party.

25. The Accounts have been prepared as per Revised Schedule VI of the Companies Act, 1956 and the previous year''s figures have been regrouped / rearranged / restated accordingly.

Mar 31, 2013

1. CORPORATE INFORMATION

Hindustan Copper Limited is a public limited company domiciled in India and incorporated under the provisions of Companies Act, 1956. Its Shares are listed and traded on Stock Exchanges in India. The Company is engaged in exploration, exploitation, mining of copper and copper ore including beneficiation of minerals, smelting, refining of copper.

(Rs. in lac) Year Year 2012-13 2011-12

2. Contingent Liabilities not provided for in respect of :-

(a) Estimated amount of commitments

i. Capital 1168.82 29649.07

(b) Other money for which the company is contingently liable

i. Value Added Tax / Central Sales Tax/ Entry Tax 511.11 477.01

ii. Excise Duty / Income Tax 5069.97 3457.29

iii. Others 21756.94 19639.23

TOTAL 28506.94 53222.60

3. The Municipal Council, Malanjkhand, raised a demand on MCP/HCL amounting to Rs.7046.64 lac on account of penalty on Terminal Tax for the period 2000-01 to 2005-06 on the ground of short payment of Terminal Tax by adopting higher assessable value as well as higher of Metal in Ore (MIO) produced and Metal in Concentrate (MIC) despatched. The matter was contested by the company before the Hon''ble High Court, Jabalpur,M.P. and the company paid Rs.352.33 lac towards penalty Terminal Tax as per the order of Hon''ble High Court, Jabalpur,M.P. Subsequently the matter was turned down by the Hon''ble High Court, Jabalpur,M.P. The Company filed writ petition with Hon''ble Supreme Court of India. The Hon''ble Supreme Court vide its order dated 29.07.2011 directed the Company to deposit an ad-hoc amount of Rs.1000.00 lac to Municipal Council, Malanjkhand which has since been deposited by the company and also ordered that the matter may be heard on the ground of merit by the Civil Court, Baihar. Pending final decision, the said amount has been disclosed under ''Contingent Liability''.

4. During the year, the company has made a provision amounting to Rs.600.00 lac towards Performance Related Pay payable to the executives for F.Y. 2012-13 which is shown under '' Employees'' Benefit Expenses''.

5. There was a dispute with Madhya Pradesh State Electricity Board regarding interest on electricity tariff amounting to Rs.7008.00 lac payable by MCP/HCL which is pending for long time. Jabalpur High Court vide its order dated 01.12.2011 dismissed the writ petition filed by the company. Thereafter, the company preferred SLP before the Hon''ble Supreme Court praying for stay and the Hon''ble Supreme Court vide its judgement dated 13.04.2012 has granted ad-interim stay of the judgement / order dated 01.12.2011 of the Hon''ble High Court of Madhya Pradesh at Jabalpur. Pending final decision, the said amount has been disclosed as a ''Contingent Liability''.

6. The Municipal Council, Malanjkhand, Madhya Pradesh issued demands on MCP/HCL for Rs.1253.32 lac on account of Property Tax for several years against which the company filed writ petitions with the Madhya Pradesh High Court, Jabalpur challenging the demand notice. Out of the above, an amount of Rs.220.85 lac has been paid by the Company based on self assessment from time to time and also as per interim measure as directed by The Madhya Pradesh High Court, Jabalpur. The net amount of Rs.1032.47 lac has been included under ''Contingent Liability''.

7. In absence of lease agreement with the State Government in respect of certain leasehold lands, the amortization has been done against the adhoc payment made so far. In case of certain freehold lands acquired through nationalization in accordance with Indian Copper Corporation (Acquisition of Undertaking) Act, 1972, title deeds, conveyance deed etc. are not under the possession of the company.

8. In accordance with the guidelines of AS-28 on "Impairment of Assets" issued by the Institute of Chartered Accountants of India, the Company assessed the recoverable value of its Cash Generating Units during preceding F.Y. 2011-12. Due to economic consideration, the Company had suspended KCC Smelter, Refinery and Sulphuric Acid Plant from December 2008. During the preceding financial year the Company had ascertained the recoverable value of the fixed assets of all the units including Smelter, Refinery and Sulphuric Acid Plant at KCC. The written down value of such plants were lower than the recoverable value. In the opinion of the management, there is no impairment of assets requiring provision to be made in the accounts during the year under review.

9. The title deeds are yet to be executed in respect of office flat at SCOPE Complex, Delhi and Jaipur office having book value of Rs.85.58 lac (Previous year Rs.87.31 lac).

10. The Company entered into derivative contract in the nature of forward contract for sale with an intention to hedge sale of copper in the Commodity Exchange Market to minimize LME price fluctuation. The company has made a net gain of Rs.5.62 lac during the year under review which is shown under ''Other Income'' (Previous Year - a net gain of Rs.49.34 lac).

11. At ICC, Pollution Control Plant under Package I & III amounting to Rs.2100.50 lac have not been capitalized for want of completion of trial / guarantee run as per terms of contract. As a matter of prudence, adequate provision for the same has been made in the accounts to take care of efflux of time over the years.

12. Majority of balances under the heads Sundry Creditors, Claims Recoverable, Loans, Advances, Sundry Debtors and bank balances are confirmed and wherever necessary, reconciliation process is in progress.

13. In terms of Accounting Policy (Note No. 2.h.2) a sum of Rs. 1868.82 lac incurred in respect of working mines in Khetri Copper Complex have been apportioned and debited to Capital Expenditure in the year under the head "Mine Development Expenditure" on the basis of in-house technical estimates.

14. Irregularities committed in debtors and sales ledger since earlier years with an intention to extend financial benefits to some handful customers have been detected during the current year and all possible steps have been taken to stop the recurrence of the same during the current financial year itself. Financial benefits to some customers includes allowing delivery of materials without receipt of payments for the same. Total financial implications for such benefits have been tentatively determined from the available records. The determined amount includes total cost of materials and interest thereon from the date of delivery of materials. In the detected cases the cost of materials have been recovered till the finalization of accounts for the year ended 31.03.2013 and interest amounting to Rs. 81.38 lac are yet to be recovered. Necessary legal action will be initiated on the basis of legal advice on non-payment of interest.

15. The Company has closed / suspended many of its mining operations located at various places, Fertilizer Plant at Khetri in different years due to their uneconomic operations. As per requirement of AS-24 on "Discontinuing Operations" the following information for the year are furnished:

16. Since the company is primarily engaged in the business of manufacture and sale of copper products, the same is considered to be the only primary reportable business segment and accordingly reported. As the Company operates predominantly within the geographical limits of India no secondary segment reporting have been considered as per Accounting Standard "Segment Reporting (AS-17)".

17. The Company has accounted for Deferred Tax in accordance with the guidelines of AS-22 on "Accounting for Taxes on Income" issued by The Institute of Chartered Accountants of India. The Deferred tax balances are set out below:-

18. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS IN TERMS OF AS-15 (REVISED

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through Life Insurance Corporation of India, SBI Life Insurance Ltd and Birla Sun Life Asset Management Co.Ltd. and are managed by separate trust. During the year, the Company has for the first time funded through Life Insurance Corporation of India and SBI Life Insurance towards leave encashment. Expenses recognized in Profit & Loss Account and Mine Development Expenditure amounts to Rs. 9359.51 lac in respect of Gratuity, Leave Encashment and Leave Travel Concession has been made as stated below.

The following tables summarize the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plans.

19. The physical verification of stores and spares has been carried out during the year under review. Discrepancies identified on physical verification have been duly adjusted in the books of account.

20. Excise duty deducted from Gross Sales is the excise duty on Gross Turnover for the year under review. However, the excise duty related to the difference between the closing stock and opening stock is recognized separately in the statement of Profit & Loss Account as follows:

21. As per Accounting Policy (Note No. 2.c.5) the physical verification of fixed assets has not been carried out during the financial year 2012-13.

22. The Accounts have been prepared as per Revised Schedule VI of the Companies Act, 1956 and the previous year''s figures have been regrouped / rearranged / restated accordingly.

Mar 31, 2012

(Rs. in lac)

Year Year 2011-12 2010-11

1. Contingent Liabilities not provided for in respect of :-

a. Estimated amount of commitments

i. Capital 29649.07 1147.16

ii. Others 27964.85 15617.00

b. Other money for which the company is contingently liable

i. Sales Tax 477.01 575.39

ii. Excise Duty 3457.29 3307.41

iii. Others 19639.23 20033.85

TOTAL 81187.45 40680.81

2. There was a trade dispute with M/s Bhagawati Gases Ltd (BGL) in connection with an agreement to supply of gaseous oxygen at Khetri Copper Complex. The dispute was referred to arbitration. The claim of M/s BGL is for an amount of Rs 1079.80 lac including interest with a corresponding counter claim of Rs 534.62 lac on the part of the company. The arbitral award has gone against the company. The company has filed an appeal before the Jhun-Jhunu Court, Rajasthan. and the same was admitted for hearing. There was no further development during the year under review. Out of the total claim of Rs 1079.80 lac of M/s BGL, the principal amount for Rs 688.20 lac has been duly provided in the books of accounts for the year under review. The balance amount of Rs 391.60 lac has been disclosed under 'Contingent Liabilities'.

3. The Municipal Council, Malanjkhand, has raised a demand on MCP/HCL amounting to Rs 7046.64 lac on account of penalty on Terminal Tax for the period 2000-01 to 2005-06 on the ground of short payment of Terminal Tax by adopting higher assessable value as well as higher of Metal in Ore (MIO) produced and Metal in Concentrate (MIC) despatched. The matter has been contested by the company before the Hon'ble High Court, Jabalpur,M.P. and the company paid Rs 352.33 lac towards penalty Terminal Tax as per the order of Hon'ble High Court, Jabalpur,M.P. Subsequently the matter has been turned down by the Hon'ble High Court, Jabalpur,M.P. The Company has filed writ petition with Hon'ble Supreme Court of India. The Hon'ble Supreme Court vide its order dated 29.07.2011 directed to deposit an ad-hoc amount of Rs 1000.00 lac to Municipal Council, Malanjkhand which has since been deposited by the company and also ordered that the matter may be heard on the ground of merit by the Civil Court, Baihar. Pending final decision, the said amount has been disclosed under 'Contingent Liability'.

4. During the year, the company has made a provision amounting to Rs 800.00 lac towards Performance Related Pay payable to the executives for F.Y. 2011-12 which is shown under 'Employees' Benefit Expenses'.

5. There is a dispute with Madhya Pradesh State Electricity Board regarding interest on electricity tariff amounting to Rs 7008.00 lac payable at MCP which is pending for long time. Jabalpur High Court vide its order dated 01.12.2011 have dismissed the writ petition filed by the company. Thereafter, the company has preferred SLP before the Hon'ble Supreme Court praying for stay and the Hon'ble Supreme Court vide its judgement dated 13.04.2012 has granted ad-interim stay of the judgement / order dated 01.12.2011 of the Hon'ble High Court of Madhya Pradesh at Jabalpur. Pending final decision, the said amount has been disclosed as a 'Contingent Liability'.

6. The Municipal Council, Malanjkhand, Madhya Pradesh issued demands on HCL/MCP for Rs 1253.32 lac on account of Property Tax for several years against which the company filed writ petitions with the Madhya Pradesh High Court, Jabalpur challenging the demand notice. Out of the above, an amount of Rs 220.85 lac has been paid by the Company based on self assessment from time to time and also as per interim measure as directed by The Madhya Pradesh High Court, Jabalpur. The net amount of Rs 1032.47 lac has been included under 'Contingent Liability'.

7. In absence of lease agreement with the State Government in respect of certain leasehold lands, the amortization has been done for the adhoc payment made so far. In case of certain freehold lands acquired through nationalization in accordance with Indian Copper Corporation (Acquisition of Undertaking) Act, 1972, title deeds, conveyance deed etc. are not under possession of the company.

8. In accordance with the guidelines of AS-28 on "Impairment of Assets" issued by the Institute of Chartered Accountants of India, the Company has assessed the recoverable value of its Cash Generating Units during F.Y. 2011-12. Due to economic consideration, the Company suspended KCC Smelter, Refinery and Sulphuric Acid Plant from December 2008. During the year the Company has ascertained the recoverable value of the fixed assets of all the units including Smelter, Refinery and Sulphuric Acid Plant at KCC. The written down value of such plants are lower than the recoverable value. Hence, in the opinion of the management, there is no impairment of assets that require provision to be made in the accounts for the year under review.

9. The title deeds are yet to be executed in respect of office flat at SCOPE Complex, Delhi and Jaipur office having book value of Rs 87.31 lac (Previous year Rs 89.05 lac).

10. The Company entered into derivative contract in the nature of forward contract for sale with an intention to hedge sale of copper in the Commodity Exchange Market to minimize LME price fluctuation. The company has made a net gain of Rs 49.34 lac during the year under review which is shown under 'Other Income' (Previous Year - a net loss of Rs 164.65 lac which is shown under 'General, Administration and Other Expenses').

11. At ICC, Pollution Control Plant under Package I & III amounting to Rs 2100.50 lac have not been capitalized for want of completion of trial / guarantee run as per terms of contract. As a matter of prudence, a provision for the same has been made in the accounts to take care of efflux of time during previous periods/years.

12. The balances under the heads Sundry Creditors, Claims Recoverable, Loans, Advances and Sundry Debtors are confirmed and reconciled as per book balance.

13.Since the company is primarily engaged in the business of manufacture and sale of copper products, the same is considered to be the only primary reportable business segment and accordingly reported. As the Company operates predominantly within the geographical limits of India no secondary segment reporting have been considered as per Accounting Standard "Segment Reporting (AS-17)".

14. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through Life Insurance Corporation of India, SBI Life Insurance Ltd and Birla Sun Life Asset Management Co.Ltd. and are managed by separate trust. A provision of Rs 7410.46 thousand in respect of Gratuity Leave Encashment and Leave Travel Concession has been made as stated below.

The following tables summarize the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plans.

15. The physical verification of stores and spares has been carried out during the year under review. Discrepancies identified on physical verification have been duly adjusted in the books of accounts.

16. Excise duty deducted from Gross Sales is the excise duty on Gross Turnover for the year under review. However, the excise duty related to the difference between the closing stock and opening stock is recognized separately in the statement of Profit & Loss Account as follows :

17. As per Accounting Policy No. 3.5, the physical verification of fixed assets is carried out. Discrepancies identified on physical verification, if any, are duly adjusted in the accounts.

18. The Accounts have been prepared as per Revised Schedule VI of the Companies Act, 1956 and the previous year's figures have been regrouped / rearranged / restated accordingly.

Mar 31, 2011

(Rs in '000)

Year ended Year ended 2010-11 2009-10

1. Contingent Liabilities not provided for in respect of :-

a. Estimated amount of capital commitments 114716 104839

b. Other money for which the company is contingently liable

i. Arrear Salary & Allowances Ã 60400

ii. Sales Tax 57539 58135

iii. Excise Duty 330741 784872

iv. Others 2521265 2569483

2. There was a trade dispute with M/s Bhagawati Gases Ltd (BGL) in connection with an agreement to supply of gaseous oxygen at Khetri Copper Complex. The dispute was referred to arbitration. The claim of M/s BGL is for an amount of Rs 107980 thousand including interest with a corresponding counter claim of Rs 53462 thousand on the part of the company. The arbitral award has gone against the company. The company has filed an appeal before the Jhun-Jhunu Court, Rajasthan, and the same was admitted for hearing. There was no further development during the year under review. Out of the total claim of Rs 107980 thousand of M/s BGL, the principal amount for Rs 68820 thousand has been duly provided in the books of accounts for the year under review. The balance amount of Rs 39160 thousand has been disclosed under 'Contingent Liabilities'

3. 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 by adopting higher assessable value as well as higher of Metal in Ore (MIO) produced and Metal in Concentrate (MIC) despatched. The matter has been contested by the company before the Hon'ble High Court, Jabalpur, M.P. and the company paid Rs 35233 thousand towards penalty Terminal Tax as per the order of Hon'ble High Court, Jabalpur, M.R Subsequently the matter has been turned down by the Hon'ble High Court, Jabalpur, M.R The Company has filed writ petition with Hon'ble Supreme Court of India. The said amount has been disclosed under 'Contingent Liability'

4. During the year the company paid Performance Related Pay to the executives amounting to Rs 91416 thousand, Rs 1629 thousand and Rs 103890 thousand for F.Y. 2007-08,2008-09 and 2009-10 respectively totaling to Rs 196935 thousand as approved by the Board of Directors. The net amount of Rs 155108 thousand has been charged to revenue account and Rs 10351 thousand is transferred to Mine Development Expenditure during the year after adjustment of ex-gratia and production incentive paid in earlier years for Rs 31476 thousand.

5. There is a dispute with Madhya Pradesh State Electricity Board regarding interest on electricity tariff amount to Rs 1218680 thousand payable at MCP which is pending for 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 been disclosed as a Contingent Liability'.

6. The Municipal Council, Malanjkhand, issued demands on HCL/MCP for Rs 128736 thousand, on account of Property Tax for several years against which the company filed writ petitions with the Madhya Pradesh High Court, Jabalpur, challenging the demand notice. Rs 45050 thousand has been paid by the Company based on self assessment and interim measure as directed by The Madhya Pradesh High Court, Jabalpur, from time to time. However, the net amount of Rs 83686 thousand has been included under 'Contingent Liability'

7. In absence of lease agreement with the State Government in respect of certain leasehold lands, the amortization has been done for the adhoc payment made so far. In case of certain freehold lands acquired through nationalization in accordance with Indian Copper Corporation (Acquisition of Undertaking) Act, 1972, title deeds, conveyance deed etc. is not under possession of the company.

8. In accordance with the guidelines of AS-28 on "Impairment of Assets" issued by the Institute of Chartered Accountants of India, the Company has assessed the recoverable value of its Cash Generating Units during F.Y. 2010-11. Due to economic consideration, the Company suspended KCC Smelter, Refinery and Sulphuric Acid Plant from December 2008. During the year the Company has ascertained the recoverable value of all its fixed assets including Smelter, Refinery and Sulphuric Acid Plant at KCC by a registered valuer. The written down value of such plants are lower than the recoverable value assessed by the said valuer. Hence, in the opinion of the management, there is no impairment of assets that require provision to be made in the accounts for the year under review.

9. The title deeds are yet to be executed in respect of office flat at SCOPE Complex, Delhi and Jaipur office having book value of Rs 8905 thousand (Previous year Rs 9078 thousand).

10. The Company entered into derivative contract in the nature of forward contract for sale with an intention to hedge sale of copper in the Commodity Exchange Market to minimize LME price fluctuation. The company incurs a net loss of Rs 16465 thousand during the year under review which is shown under Miscellaneous Expenses.

11. At ICC, Pollution Control Plant under Package I & III amounting to Rs 210050 thousand have not been capitalized for want of completion of trial / guarantee run as per terms of the contract. As a matter of prudence, a provision amounting to Rs 203750 thousand upto 2009-10 has been made in the accounts to take care of efflux of time. Since the Plant has not been capitalized till now, a further provision against Capital WIP of Rs 6300 thousand has been made in the year under review resulting in full provision in the accounts.

12. The balances under the heads Sundry Creditors, Claims Recoverable, Loans, Advances and some Sundry Debtors are subject to confirmations.

13. Since the company is primarily engaged in the business of manufacture and sale of copper products, the same is considered to be the only primary reportable business segment and accordingly reported. As the Company operates predominantly within the geographical limits of India no secondary segment reporting have been considered as per Accounting Standard "Segment Reporting (AS-17)".

14. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through Life Insurance Corporation of India, SBI Life Insurance Ltd and Birla Sun Life Asset Management Co.Ltd. A provision of Rs 447881 thousand in respect of Gratuity, Leave Encashment and Leave Travel Concession has been made as stated below.

15. In pursuance of the pay revision of executives, the Company has made a provision towards perquisites payable to executives for the period 22nd October,2009 to 31st March,2011 amounting to Rs 119500 thousand which is shown under "Salaries, Wages & Allowances".

16. The physical verification of stores and spares is carried out during the year under review. Discrepancies identified on physical verification has been duly adjusted in the books of accounts.

17. As per Accounting Policy No. 3.5, the physical verification of fixed assets have been carried out during the year. Discrepancies identified on physical verification, are not of material nature, and duly adjusted in the accounts.

18. During the year the company proposed to go for Further Public Offer of 185,043,600 Equity Shares of Rs 5/- each for cash which has subsequently been deferred in absence of the final approval from the Government of India. The related expenditure in this connection incurred during the year amounting to Rs 6533 thousand has been charged to the respective revenue head of accounts.

19. Previous year's figures have been regrouped / rearranged wherever considered necessary.

Mar 31, 2010

(Rs. in crore)

2009-10 2008-09

1. Contingent liabilities not provided for in respect of :-

a. Estimated amount of capital commitments 10.48 32.40

b. Other money for which the company - - is contingently liable

i. Arrear Salary & Allowances 6.04 113.26

ii. Sales Tax 5.81 5.41

iii. Excise Duty 78.49 76.41

iv. Others 256.95 273.05

2. There was a trade dispute with M/s Bhagawati Gases Ltd (BGL) in connection with an agreement to supply of gaseous oxygen at Khetri Copper Complex. The dispute was referred to arbitration. The claim of M/s BGL is for an amount of Rs 10.80 crore including interest with a corresponding counter claim of Rs 5.34 crore on the part of the company. The arbitral award has gone against the company. The company has filed an appeal before the Jhun-Jhunu Court and the same was admitted for hearing. There was no further development during the period under review. Based upon legal opinion obtained from a senior Supreme Court advocate and the Additional Solicitor General of West Bengal, the management considers the arbitral award is not binding on the company. Hence, in accordance with AS 29 on "Provisions, Contingent Liabilities and Contingent Assets" issued by the Institute of Chartered Accountants of India, M/s BGLs claim has been disclosed under Contingent liabilities.

3. Pursuant to letter no. 10/4/2009-Met.III dated 22nd October 2009 regarding revision of pay scales for Executives of Board level and below Board level with effect from 1st January 2007 and a MOU signed between Management and Recognized Unions on 6th January 2010 regarding Revision of Pay with effect from 1st November 2007, the Company paid the dues to the employees during the year under Salary, Wages & Allowance which includes an arrear payment for Rs 46.11 crore and Rs 5.80 crore for Contribution towards Provident Fund & Other funds.

4. There is a dispute with MP State Electricity Board regarding interest on electricity tariff amounting to Rs.121.87 crore payable at MCP which is pending for long time and the matter is presently referred back to Honorable High Court, Jabbalpur by Honorable Supreme Court of India for reconsideration. The said amount has not been provided as liability in the accounts but disclosed as a contingent liability.

5. In absence of lease agreement with the State Government in respect of certain leasehold lands, the amortization has been done for the adhoc payment made so far. In case of certain freehold lands acquired through nationalization in accordance with Indian Copper Corporation (Acquisition of Undertaking) Act, 1972, title deeds, conveyance deed etc. are not under possession of the company.

6. In accordance with the guidelines of AS-28 on "Impairment of Assets" issued by the Institute of Chartered Accountants of India, the Company has assessed the recoverable value of its Cash Generating Units. Due to economic consideration, the Company suspended KCC Smelter, Refinery and Sulphuric Acid Plant from December 2008 and during the year the revaluation of Smelter, Refinery and Sulphuric Acid Plant has been conducted on recoverable value basis as on 31.03.2010 by a Registered valuer. The written down value of such plants are lower than the recoverable value assessed by the said valuer. In the opinion of the management, there is no impairment of assets that require a provision to be made in the accounts for the year under review.

7. The title deeds are yet to be executed in respect of office flat at SCOPE Complex, Delhi and Jaipur office having book value of Rs 0.91 crore. (Previous year Rs. 0.92 crore).

8. Government of India sanctioned Grant-in-aids from time to time for reimbursement to Council of Scientific & Industrial Research, Bhubaneswar, out of which Rs 1.77 crore remains unadjusted since 1994. In absence of specific claim, the same has been credited to Miscellaneous Income under Prior Period Account. However, future claim, if any, arising out of such will be paid by the company.

9. The Company entered into derivative contract in the nature of forward contract for sale with an intention to hedge sale of copper in the Commodity Exchange Market to minimize LME price fluctuation. The company incurs a net loss of Rs 2.34 crore during the year without having any open contract at the end of the year which is shown under Miscellaneous Expenses.

10. At ICC, Pollution Control Plant under Package I & III amounting to Rs 21.00 crore have not been capitalized for want of completion of trial / guarantee run as per terms of the contract. As a matter of prudence, a provision amounting to Rs 18.27 crore upto 2008-09 has been made in the accounts to take care of efflux of time. Since the Plant has not been capitalized till now, a further provision against Capital WIP of Rs.2.10 crore has been made in 2009-10.

11. The balances under the heads Sundry Creditors, Claims Recoverable, Loans, Advances and some of the Sundry Debtors are subject to confirmations.

12. None of the creditors has been reported as registered under Micro, Small and Medium Enterprise Development Act 2006.

13. Since the company is primarily engaged in the business of manufacture and sale of copper products, the same is considered to be the only primary reportable business segment and accordingly reported. As the Company operates predominantly within the geographical limits of India no secondary segment report- ing have been considered as per Accounting Standard "Segment Reporting (AS-17)".

14. Sales for the year include Export Sale of Rs.36.10 crore.

15. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through Life Insurance Corporation of India, SBI Life Insurance Ltd and Birla Sun Life Asset Management Co.Ltd. A provision of Rs.40.10 crores in respect of Gratuity, Leave Encashment and Leave Travel Concession has been made as stated below.

The following tables summarize the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plans.

16. The physical verification of stores and spares have been carried out during the year as a perpetual process. Discrepancies identified on physical verification are duly adjusted in the books of accounts.

17. Previous years figures have been regrouped / rearranged wherever considered necessary.

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