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Hindustan Copper Ltd.

BSE: 513599 Sector: Metals & Mining
NSE: HINDCOPPER ISIN Code: INE531E01026
BSE LIVE 15:54 | 17 Nov 96.65 -0.45
(-0.46%)
OPEN

99.80

HIGH

101.50

LOW

95.65

NSE 15:54 | 17 Nov 96.95 -0.25
(-0.26%)
OPEN

99.70

HIGH

101.30

LOW

95.50

OPEN 99.80
PREVIOUS CLOSE 97.10
VOLUME 1938293
52-Week high 110.55
52-Week low 54.10
P/E 92.93
Mkt Cap.(Rs cr) 8,942
Buy Price 0.00
Buy Qty 0.00
Sell Price 96.50
Sell Qty 713.00
OPEN 99.80
CLOSE 97.10
VOLUME 1938293
52-Week high 110.55
52-Week low 54.10
P/E 92.93
Mkt Cap.(Rs cr) 8,942
Buy Price 0.00
Buy Qty 0.00
Sell Price 96.50
Sell Qty 713.00

Hindustan Copper Ltd. (HINDCOPPER) - Auditors Report

Company auditors report

To the Members of Hindustan Copper Limited

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of Hindustan CopperLimited ("the Company") which comprise the Balance Sheet as at 31st March2017 and the Statement of Profit and Loss (including other comprehensive income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information (hereinafter referred to as "Ind AS financial statements").

Management's Responsibility for the Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Ind AS financial statements that give a true and fair view of the state of affairs(financial position) profit or loss (financial performance including other comprehensiveincome) cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.

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

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement. An audit involves performing procedures to obtain audit evidence about theamounts and the disclosures in the Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Ind AS financial statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theCompany's preparation of the Ind AS financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the Ind AS financial statements. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including the Ind AS of the state ofaffairs (financial position) of the Company as at 31st March 2017 and its profit(financial performance including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.

Emphasis of Matter

We draw attention to the following matters in the Note No 39-General Notes on Accountsto the Ind AS financial statements:

1) Vide Clause No. 2 (i) which describes the uncertainty related to the outcome ofvarious lawsuits filed and claims of demand raised against the Company by variousauthorities/parties and its financial impact on the Ind AS financial statements of thecompany. The Company has treated those demands as disputed and not acknowledged as debt inthe books and treated the same as Contingent Liabilities the total amount of which comesto Rs38566.91Lac

2) Vide Clause No. 10 which describes the balances under the head Sundry CreditorsClaims Recoverable Loans & Advances Sundry Debtors and Deposits from and withvarious parties/Govt. Dept. etc. have not been confirmed in number of cases.

Our opinion is not modified in respect of these matters.

Other Matter

The financial information of the Company for the year ended 31st March 2016 and thetransition date opening Balance Sheet as at 01st April 2015 included in these Ind ASfinancial statements are based on the previously issued statutory financial statements forthe years ended 31st March 2016 and 31st March 2015 prepared in accordance with theCompany's (Accounting Standards) Rules 2006 (as amended) which were audited by us onwhich we expressed an unmodified opinion dated 30th May 2016 and 28th May 2015respectively. The adjustments to those financial statements for the differences inaccounting principles adopted by the Company on transition to Ind AS have been audited byus.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein the Annexure-I a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

3. As required by section 143(3) of the Act we report to the extent applicable that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss the Cash Flow Statement andthe Statement of Change in Equity dealt with by this Report are in agreement with thebooks of account;

(d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act to the extent applicable.

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

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

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditor's) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements (vide Clause No. 2(i) of Note No. 39 - GeneralNotes on Accounts) and our comments made in paragraph 'Emphasis of Matter'.

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

iii. According to the information and explanations given to us there were no amountswhich were required to be transferred to Investor Education and Protection Fund by thecompany.

iv. The company has provided requisite disclosures in its Ind AS financial statementsas to holdings as well as dealings in Specified Bank Notes during the period from 8thNovember 2016 to 30th December 2016 and these are in accordance with the books ofaccounts maintained by the company (vide Clause No. 31 of Note No. 39 - General Notes onAccounts).

(Referred to in our report of even date)

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

(b) The company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of three years. (VideClause No.29 of Note No. 39 - General Notes on Accounts). Accordingly fixed assets ofsome units/offices of the Company were verified by external agencies during the year andno material discrepancies were noticed on such verification. In our opinion theperiodicity of physical verification is reasonable having regard to the size of thecompany and the nature of its assets.

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

In the absence of complete maintenance of such Register we could not comment whethertitle deeds of all the immovable properties are held in the name of the Company orotherwise.

However as stated in Clause No. 4 of Note No. 39 - General Notes on Accounts thetitle deed for leasehold land received from the State Government and certain freeholdlands acquired through nationalization in accordance with Indian Copper Corporation(Acquisition of Undertaking) Act 1972 in respect of Indian Copper Complex (ICC) have notyet been executed in favour of the Company and in Clause No 7 of Note No 39 -General Noteson Accounts title deeds were not obtained/held in the name of the company in respect ofoffice flat at SCOPE Complex Delhi and Jaipur office for book value of Rs68.06 Lac(Previous year Rs73.32 Lac) as well as Land & Building for book value of Rs6300.54 Lac(Previous year Rs6037.30 Lac) of Gujarat Copper Project (GCP).

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

(ii) (a) According to the information and explanations given to us the inventories ofFinished Goods Raw Materials and Store & Spares have been physically verified by themanagement / external agencies during the year. In our opinion the periodicity ofphysical verification is reasonable having regard to the size of the company and thenature of its business. However certain discrepancies arising out of verification ofStore & Spares between the physical stocks and book records were noticed which werenot material considering size of the Company and the nature of its business and the samehave been properly dealt with in the books of account.

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

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

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

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

(vii) (a) According to the records of the Company and information and explanationsgiven to us the Company is generally regular in depositing undisputed statutory duesincluding provident fund employee state insurance income tax sales tax service taxduty of custom duty of excise value added tax Cess and other statutory dues with theappropriate authorities where applicable. There is no arrear of outstanding statutory duesas at 31st March 2017 for a period of more than six months from the date they becamepayable excepting Rs1081.96 Lac towards Water Cess payable to Water Resources DepartmentGovt. of Jharkhand since the financial year 1999-2000.

(b) According to the records of the Company and information and explanations given tous the following are the details of disputed dues in respect of income tax sales taxentry tax service tax duty of custom duty of excise value added tax and Cess as on31st March 2017:

Name of the Statue Nature of Dues Period to which the amount relates Forum where dispute is pending Amount (Rs in lac)
West Bengal Value Added State Sales Tax/ VAT 2004-05 (RSOE) Dy. Commissioner (Appeal) 10.46
Tax Act West Bengal Value Added State Sales Tax/ VAT 2008-09 (RSOE) Sr. Jt. Commissioner ( Appeal) 50.12
Tax Act
Central Sales Tax Act Central Sales Tax 2007.08 (ICC) Commissioner of Commercial Taxes Jamshedpur 345.11
Central Excise Act Central Excise 1985-86 (ICC) CESTAT 60.60
Central Excise Act Central Excise 1997-98 TO 1999-00 (ICC) CESTAT 203.52
Central Excise Act Central Excise 1995-96 (ICC) CESTAT 15.65
Central Excise Act Central Excise 2000-01 TO 2003-2004 (ICC) CESTAT 1501.76
Central Excise Act Central Excise 2000-2001 TO 2001-2002(ICC) CESTAT 283.40
Central Excise Act Central Excise 1996-97 (ICC) CESTAT 1.46
Central Excise Act Central Excise 1998 (ICC) Supreme Court of India 16.00
Madhya Pradesh Entry Tax 1994-95 Commissioner (Appeals) 5.38
Value Added Tax Act (MCP) Jabbalpur
Madhya Pradesh State Sales Tax/ VAT 2009-2010 (MCP) Sales tax Authority (Bhopal) 34.47
Value Added Tax Act Madhya Pradesh State Sales Tax/ VAT 2011-12 Sales tax Authority 16.66
Value Added Tax Act (MCP) (Bhopal)
Madhya Pradesh State Sales Tax/ VAT 2012-13 Sales tax Authority 99.89
Value Added Tax Act (MCP) (Bhopal)
Central Excise Act Central Excise 2006-07 TO 2011-12 (MCP) CustomesExcise & Service Tax Appalate Tribunal New Delhi 394.97
Central Excise Act Central Excise 2005-06 TO 2007-08 (MCP) Commissioner Central Excise 64.19
Central Excise Act Central Excise 1998-99 TO 2014-15 (KCC) Commissioner Central 697.22
Excise
Rajasthan Entry Tax 2007-08 TO 2014-15 Dy. Commissioner 311.67
Value Added Tax Act (KCC) Appeal (Bikaner)
Central Excise Act Central Excise 2007-08 TO 2015-16 CESTAT 594.91
(TCP)
Maharashtra Value Added Tax Act State Sales Tax/ VAT 1994-95 (TCP) Appellate Authority 18.81
Income Tax Act Income Tax 2007-08 2009-10 & 2011-12 (CO) Commissioner of Income Tax (Appeal) 360.67
TOTAL 5086.92

*RSOE - Regional Sales Office East *ICC - Indian Copper Complex *MCP -MalanjkhandCopper Project *TCP -Taloja Copper Project * KCC - Khetri Copper Complex *CO - CorporateOffice

(viii) According to information and explanations given to us the Company has notdefaulted in repayment of loan or borrowing to financial institutions banks or governmentand dues to debenture holders.

(ix) According to information and explanations given to us the company did not raiseany money by way of initial public offer or further public offer (including debtinstruments) or term loan during the year.

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

(xi) According to the information and explanations give to us provisions of section197 of the Companies Act 2013 regarding managerial remuneration are not applicable to theGovernment Company in terms of Notification No G.S.R. 463(E) dated 05.06.2015 issued byMinistry of Corporate Affairs and as such reporting under this clause is not applicableto the Company.

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

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Companies Act 2013 where applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the applicable accounting standards where applicable.

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

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with him/her and as such reporting underthis clause is not applicable to the Company.

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

(Referred to in our report of even date)

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

Sl No. Directions Actions Taken Impact on the Accounts & Financial Statements
1. Whether the company has clear/title/ lease deeds for freehold land and leasehold land respectively? If not please state the area of freehold and leasehold land for which title/ lease deeds are not available? In the absence of Register of Land showing details of freehold and leasehold land vis--vis title/lease deeds of those lands being reconciled with each other we are unable to state the area of freehold and leasehold land for which title/ lease deeds are not available with the Company. However as stated in Clause No. 4 and 7 to Note No. 39 - General Notes on Accounts leasehold land received from State Government as well as freehold land acquired through nationalization in accordance with Indian Copper Corporation (Acquisition of Undertaking) Act 1972 in respect of Indian Copper Complex (ICC) and freehold & leasehold land of Rs3709.55 Lac in respect of Gujarat Copper Project (GCP) have not yet been executed in favour of the Company. Gross Block & Net Block of Leasehold/ Freehold Land wherever applicable have been duly shown in the accounts and financial statements. Hence there is no impact on the accounts and financial statements.
2. Whether there are any cases of waiver /write off of debts/loans/interest etc. if yes the reasons there for and the amount involved. As per information and explanations given to us there was no case of waiver of debts/loans/ interest etc. during the year under audit. No such cases hence there is no impact on the accounts and financial statements.
3. Whether proper records are maintained for inventories lying with third parties & assets received as gift from Government or other authorities. As per information and explanation given to us proper records are maintained for inventory lying with third parties. However there is no inventory lying with third parties as on 31.03.2017 There is no impact on the accounts and financial statements.
The company has not received any gift from Government or other authorities during the year. No such cases hence there is no impact on the accounts and financial statements.

ANNEXURE- III TO THE INDEPENDENT AUDITORRsS REPORT

(Referred to in our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of HindustanCopper Limited ("the Company") as of 31st March 2017 in conjunction with ouraudit of the Ind AS financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the Ind AS financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in place in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March2017 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For A. Kayes & Co
Chartered Accountants
Firm Registration No. 311149E
CA.A.K.GHOSH
Place : New Delhi Partner
Date: 17. 5. 2017 Membership No. 052933