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Hindustan Copper Ltd.

BSE: 513599 Sector: Metals & Mining
NSE: HINDCOPPER ISIN Code: INE531E01026
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OPEN 63.50
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VOLUME 220933
52-Week high 74.70
52-Week low 50.10
P/E 77.41
Mkt Cap.(Rs cr) 5,801
Buy Price 0.00
Buy Qty 0.00
Sell Price 62.70
Sell Qty 293.00
OPEN 63.50
CLOSE 62.55
VOLUME 220933
52-Week high 74.70
52-Week low 50.10
P/E 77.41
Mkt Cap.(Rs cr) 5,801
Buy Price 0.00
Buy Qty 0.00
Sell Price 62.70
Sell Qty 293.00

Hindustan Copper Ltd. (HINDCOPPER) - Director Report

Company director report

The Shareholders

Hindustan Copper Limited Kolkata

Your Directors have pleasure in presenting the forty-ninth Annual Report of HindustanCopper Ltd. (HCL/the Company) together with the audited statement of accounts andAuditors' Report thereon for the year ended 31.3.2017.

HCL incorporated on 9.11.1967 has entered in 50th year of its existence. As HCL stepinto the golden jubilee year the Company is committed to keep marching ahead and delivergrowth to its shareholders.

Gujarat Copper Project the fifth unit of HCL located at Bharuch Gujarat wasdedicated to the nation on its commissioning on 6.10.2016.

1. Performance

Financial Summary or highlights

The comparative working results for the FY 2016-17 vis--vis FY 2015-16 are as under:

(Rs in Crore)
Particulars 2016-17 2015-16
(a) Turnover 1216.94 1068.95
(b) Profit before depreciation amortization finance charges & tax 245.46 159.10
(c) Less : Depreciation & Amortization 141.90 119.01
(d) Less : Finance Charges 9.01 0.13
(e) Profit/ (Loss) Before Tax from continuing operation 94.55 39.96
(f) Profit/(Loss) Before Tax from discontinuing operation (0.35) (0.35)
(g) Profit/(Loss) Before Tax from continuing & discontinuing operation 94.20 39.61
(h) Less : Provision for Taxation (Current & Deferred Tax) 32.26 1.87
(i) Profit after tax from Continuing & Discontinuing Operation 61.94 37.74
(j) Other Comprehensive Income (4.10) 5.92
(k) Distributable Profit 57.84 43.66
(l) Add: Balance brought forward from the previous year 642.96 626.24
(m) Balance available for appropriation 700.80 669.90
(n) Earnings per Share(Rs) (Both Basic & Diluted) 0.67 0.41

During 2016-17 the turnover of the Company was Rs1216.94 crore as against Rs1068.95crore during FY 2015-16 registering an increase of around 13.84%. The Company posted aProfit Before Tax from continuing & discontinuing operation of Rs 94.20 crore duringthe year as against Rs39.61 crore clocked during the previous year registering an increaseof around 137.82%. The Profit After Tax from continuing & discontinuing operationduring FY 2016-17 is Rs61.94 crore as against Rs 37.74 crore in FY 2015-16 registering anincrease of around 64.12%.

Physical performance:

The comparative physical performance of production and sales in FY 2016-17 vis--visFY 2015-16 are as under:

Particulars 2016-17 2015-16
Ore (Lakh Tonnes) 38.45 39.08
Metal in concentrate (MIC) (Tonnes) 30587 31578
Cathode (Tonnes) 18602 23024
CC Wire Rod (Tonnes) 18167 26062
Sales (Tonnes):
CC Rod 16817 21125
Cathode 1532 285
MIC 10539 2702
Total 28888 24112

Shortfall in physical performance of the Company during 2016-17 is due to thefollowing: a. Planned shutdown of primary crusher of Malanjkhand mine was taken up for 14days. b. Less availability of high grade ore due to widening of open pit. Delay in U/Gproject requires widening of the open pit to sustain production up to 2020. c. LondonMetal Exchange (LME) prices of copper remained under pressure during most of the period ofFY-2016-17.

The average LME price during the year was 5154 USD/T against 5215 USD/T in 2015-16. d.Surda Mine (Jharkhand) operation affected due to poor performance of the contractor. e.ICC smelter furnace is in the last leg of its current campaign life. Last shutdown formajor overhauling was undertaken in May 2013. Repeated failure of the refractory andwaste heat boiler of the furnace has affected the production of cathode.

Remedial actions taken to improve the performance are as under:

a. Increased thrust on excavation at Malanjkhand mine to widen upper benches to sustainproduction upto the year 2020.

b. Construction of Banwas mine at Khetri Copper Complex has been completed andproduction ramp up from the mine will commence in 2017-18.

c. Action has been initiated for award of new contract for the operation andmaintenance of Surda Mine. Thereafter the production from Surda mine will improve.

d. Cathode production will improve as production ramp up from newly acquired GujaratCopper Project (GCP) will improve further. The Kaldo furnace of the Unit will be madeoperational in the second quarter of fiscal year 2017-18.

2. Dividend

The Board of Directors of your Company has recommended payment of dividend @ 4% onequity i.e. Re 0.20 per share of Rs5/- face value for the year 2016-17 for approval ofshareholders in the Annual General Meeting. The outgo on this account will be Rs18.50crore for dividend and Rs3.77 crore towards tax on dividend aggregating to a total outgoof Rs22.27 crore.

3. Material Changes if any

No material change and commitment affecting the financial position of the Companyoccurred between the end of the financial year to which the financial statements relateand the date of the report.

4. Projects:

i. Malanjkhand Copper Project (M.P)

Work is under progress to expand the production capacity of Malanjkhand mine frompresent 2 Mtpa to 5 Mtpa by developing an underground mine below the existing open castmine at an estimated cost of Rs1856.74 Crore. All the approvals are in place EnvironmentClearance and approved of National Board for Wild Life has been obtained in 2014-15 andEPC contractor for implementation of the project has been appointed. Infrastructurefacilities required for sinking of the shafts are in place at site. The activities areprogressing to complete the project on schedule time of March 2020.

ii. Khetri Kolihan and Banwas mine (Rajasthan) The proposed expansion of Khetri& Kolihan mine and development of Banwas deposit will increase ore production fromexisting 1.0 million tonne to 3.1 million tonne per annum. Mine wise status is givenbelow:

Kolihan Mine: For additional shaft sinking & creation of ore handling facilitiesbelow 0 mRL environmental clearance obtained on 2.2.2015. Further 2000 m of Diamonddrilling work has been under taken to establish the ore body at depth.

Khetri mine: The Engineering Procurement & Construction agency for executing theKhetri mine expansion project had started the work on 16.9.2011. Independent wastehandling system commissioned deepening of production and service shaft had beeninitiated. During execution bad ground / fault plane encountered at (-) 120 mRL nearproduction shaft. Contract period ended on 14.1.2017. New contract for tacking bad groundfor deepening of the existing shaft and other related activities are under process.

Banwas Mine: Mine construction work has been completed in Feb 2017. The Company hasappointed Mine Developer and operation agency for long term operation of the Banwas Mine.

iii. Surda mine expansion (Jharkhand) The plan envisages increase in the depthof the mine and enhancement of production capacity from 0.4 million tonne per annum to 0.9million tonne per annum. On 19-20 September 2016 Expert Appraisal Committee of Ministryof Environment Forest and Climate Change (MoEFCC) has recommended the proposal forEnvironment Clearance subject to clarification regarding forest clearance for forest landinvolved in underground mining. Matter is under scrutiny at Forest Clearance division ofMoEFCC.

iv. Re-opening of closed mines at ICC Ghatsila (Jharkhand) Company initiatedaction to re-open closed mines at Singhbum Copper Belt of ICC namely Kendadih and Rakhamines to produce 0.21 million tonne and 1.5 million tonne of ore per annum respectively.Mine wise status is given below:

• Kendadih mine: The contract for reopening and allied mine development has beenawarded to the successful bidder on 4.2.2012. Environmental clearance from MoEFCC obtainedon 20.1.2015 Stage II FC for the project has been obtained on 28.11.2016.

• Rakha mine: Considering the change in market scenario the Company willimplement the project through a mine-developer-and-operator route. Environmental clearanceof Rakha mining lease obtained on 1.8.2014 Stage II Forest Clearance for the project hasbeen obtained on 15.9.2016.

v. Chapri Sideshwar (Jharkhand) Considering the change in market scenario theCompany will implement the project through a mine-developer-and-operator route.Environmental clearance has been obtained on 1.8.2014 stage -II forest clearanceobtained. Chapri-Sideshwar mine fall within the Rakha and Kedadih mining lease.

vi. Manufacturing of Copper through Hydrometallurgy Technology - The Company hasplans to set up a plant of capacity 1.0 lakh tonne per annum to manufacture copper cathodethrough cost effective hydro-metallurgy technology. The site of the project has beenfinalized and investment in the project is Rs 3025 crore. The investment proposal afterapproval of the Board has been sent to the Ministry to obtain CCEA approval.

vii. Extraction of minerals from copper ore tails (MP)- The Company has awardedcontract to install and commission a commercial scale plant of capacity 3.3 million tonneper annum at Malanjkhand at cost of Rs200 crore to extract valuable minerals and metalsfrom copper ore tails.

5. Significant or material orders passed by the Regulators or Courts or Tribunals:

Malanjkhand Copper Project (MCP) of the Company operates Copper Mines and ConcentratorPlant at its project site with electricity obtained from M.P. State Electricity Board. Theelectricity duty charged from HCL/MCP for both Mines and Concentrator Plant was at therate applicable to mines although the Concentrator Plant was registered as a 'Factory'with the State Government on 19.12.1986. As per applicable laws the electricity dutychargeable for 'Factory' was at a lower rate than that applicable to mines. HCL/MCPrepresented the matter before the State Government Authorities in this regard but thematter was not resolved. Thereafter the issue was agitated by HCL/MCP in the Courts ofLaw between 1998 to 2016 namely MP High Court at Jabalpur by way of Writ and the Hon'bleSupreme Court by way of SLPs from time-to-time.

The moot issues to be decided in the matter were as under.

1. Interpretation of the word "Adjacent" occurring in the Explanation (b) toSection 3 of the M.P. Electricity Duty Act 1949.

2. Whether 'concentrate' is a 'mineral' and whether explanation to Part-B of the M.P.Electricity Duty Act 1949 applied even through the manufacturing process is involved tobring it into existence.

In the finality the Hon'ble Supreme Court while examining our SLP No. 10643-10645 of2012 in the matter by its Order dated 10.11.2016 examined the aforesaid issue and thusordered.

The Court in its judgment gave the word 'adjoining' a wider connotation. It wouldinclude close proximity such as being in the same locality. The Court in its findings alsonoted that the word 'processing' used in the Explanation has to be interpreted in thecontext and for the purpose of the said item. Process can be given either a wide or anarrow meaning. The learned judges applied the rule of noscitur a sociis which means thatthe meaning of the word is to be judged by the company it keeps. It relied on severalprecedents and by giving it a narrow meaning in the present case it ruled that theprocess to create concentrate and alloy comes under manufacturing and not under processingwhich is an allied activity to mining. The Court also held that Copper Concentrate is nota mineral but a manufactured product. Summing up its judgment the Court held that theHigh Court was not correct in its analysis. The said High Court judgment was set aside andthe Hon'ble Supreme Court directed to levy the tariff as meant for the manufacturing unit.It further stated that if any amount had already been paid by HCL to the revenue the sameshould be adjusted towards future demands.

6. Management Discussion and Analysis

A report on Management discussion and analysis of the performance of the Company isgiven at Annexure-I.

7. Awards and Accolades

i. HCL received the Industry Leadership Award - Base Metals at the 2016 Platts GlobalMetals Awards held in London on 19.5.2016. The annual awards program honours exemplaryperformance in fifteen categories spanning the entire steel metals and mining fraternity.

ii. The Quality Circle teams 'Sanjivani' and 'Sahyog' of Indian Copper Complex (ICC)won in Gold Category during the Chapter Convention on Quality Concepts (CCQC) 2016 on27.9.2016 at Kolkata.

iii. The Quality Circle teams 'Sahyog' and 'Sanjiwani' of ICC were placed in 'ParExcellence' and 'Excellence' Category respectively during the National Convention onQuality Concepts (NCQC) 2016 held from16th to19th December 2016 at Raipur.

iv. The Jury of Employer Branding Institute & World HRD Congress conferred upon HCLthe 'Best Employer Brands Award' on 18.12.2016 at IPE Hyderabad.

v. HCL was declared the Winner of 'Golden Peacock Award for Corporate SocialResponsibility' for the year 2016 by the Awards Jury and was presented the Award on20.1.2017 in the "11th International Conference on Corporate SocialResponsibility" held at Bangaluru.

vi. HCL received the 'ABP NEWS - CSR Leadership Awards' on 17.2.2017 at Mumbai.

vii. Jury and Council of Board members conferred HR Leadership Award (PSU Focus) toShri Anupam Anand D(P)/ HCL during the Award Ceremony on 16.2.2017 at Mumbai.

viii. HCL was recognised as one of the 50 Top PSUs with Innovative HR Practices by ASIAPACIFIC HRM CONGRESS-2016.

ix. Tamralipi the in-house journal of the Company won the In-house CommunicationExcellence (ICE) Award 2016 in three categories viz. Most Creative Name (Winner); BestMagazines Among Government and Other Organizations (First Runner Up) and Best Magazine ina Regional Language (First Runner Up) at the ICE Awards Ceremony 2016 organized in Mumbaion 4.6.2016 by the Shailaja Nair Foundation.

x. HCL received the 'Griha Patrika Protsahan Puraskar' for the year 2015-16 from NagarRajbhasha Karyanwayan Samity (Upkram) Kolkata for the Hindi version of House JournalTamralipi.

8. Particulars of Loan Guarantees or Investments u/s 186 of the Companies Act 2013

During the year from 1.4.2016 to 31.3.2017: NIL

9. Deposits

The Company has not taken any Deposits covered under or which are not in compliancewith the requirements of Chapter V of the Companies Act 2013.

10. Related Party Transactions (RPTs):

The Company has not entered into any contracts or arrangements with related partiesreferred to in section 188(1) of the Companies Act 2013. Policy on RPTs and dealing withRPTs has been formulated and put up at the Company's website at www.hindustancopper.com.

11. Establishment of Vigil mechanism:

The Company has in place a Whistle Blower Policy which provide adequate safeguardsagainst victimization of employees / directors who avail of the mechanism and also providefor direct access to the chairman of the Audit Committee in exceptional cases. The Policyhas been posted at the Company's website at www.hindustancopper.com.

12. Risk Management Policy

The Board of Directors of the Company has developed and implemented a risk managementpolicy for the Company including identification therein of elements of risk which in theopinion of the Board may threaten the existence of the Company.

13. Internal Financial Controls

The Company has in place adequate internal financial control with reference tofinancial statements commensurate with its size and operations to be followed by theCompany detailing the policies and procedures to be followed.

14. Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

Information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is given as Annexure-II forming part ofthis report.

15. Safety

Safety remains high priority area and the Company is always aiming to achieve"Zero Accident". The Company continues to maintain the tradition of attractingrecognition for its safety performance and like previous years received a number ofawards in mine safety as indicated below: Malanjkhand open cast mine had won the followingsafety performance award in large opencast mine category in 2016-17 under the aegis ofDGMS (Nagpur region I&II): 2nd Prize on Use of explosives 2nd Prize on Transport inMines & Dust Suppression Malanjkhand open cast mine had won the following award underthe aegis of IBM in 2016-17 (Jabalpur Region): 2nd Prize on Mineral Beneficiation KhetriCopper Mine and Kolihan Copper Mine have received 1st Prize in all India RescueCompetition 2016 in First Aid competition practical.

Besides the above special training regular refresher training programmes andon-the-job training are provided to all employees. Safety Campaigns like "AnnualMines Safety Week" "Fire Services Day" "Fire services week" and"Industrial Safety Day" celebrations are conducted regularly with activeparticipation of employees in all the Units of HCL.

16. Corporate Social Responsibility (CSR)

The CSR Report in the prescribed format as per the Companies (Corporate SocialResponsibility Policy) Rules 2014 is given in Annexure-III.

17. Vigilance Activities

The focus of the Vigilance Department is on preventive / proactive measures throughimprovement of systems and procedures ensuring transparency adherence to establishedpolicies and guidelines etc. Systems improvement measures are being regularly brought tothe notice of Management which has implemented most of the suggestions. During theVigilance Awareness Week-2016 a booklet was published outlining the various systemimprovements suggested by the Vigilance Department in recent past.

The emphasis is on developing proper checks and balances in the working systems. At thesame time since punitive action is also required in case of misconduct to maintaindiscipline in the organization and to ensure fairness and probity in public life promptaction is taken towards disposal of those cases also. Efforts are also continuing tocreate more and more awareness about vigilance amongst the employees of the organization.

18. Official Language Implementation

During 2016-17 HCL made constant endeavour to increase use of Hindi in itsUnits/Offices. Raj Bhasha Pakhwara and Hindi Diwas were celebrated in the Units/Officesfrom 14.9.2016 to 28.9.2016. The messages of Hon'ble Home Minister Govt. of India andCMD HCL were circulated/ read out in all Offices/Units on this occasion. Variouscompetitions were organized to enhance interest of the employees towards Official Languageand winners awarded. The employees are constantly motivated to use Hindi in theirday-to-day official work. Hindi Workshops were conducted in the Units/Offices at regularintervals. Regular review of progressive use of Hindi and difficulties faced were carriedout in Quarterly meetings of Official Language Implementation Committee under theChairmanship of CMD at Corporate Office and Unit Heads in Units. The Company participatedin the half-yearly meeting of Town Official Language Committee (PSUs) Kolkata held on11.8.2016. The Hindi edition of House Journal 'Tamralipi' of HCL was awarded by TownOfficial Language Committee (PSUs) Kolkata under 'Rajbhasha Award Scheme-2015-16' on11.8.2016. The progressive use of Hindi is reviewed regularly at the Board meetings.

19. Business Responsibility Report:

Pursuant to Regulation 34 (2) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 {SEBI (LODR) 2015} Business Responsibility Report for 2016-17describing various initiatives taken by the Company on social environmental andgovernance perspective is attached at Annexure-IV which forms part of this report.

20. Extract of Annual Return:

Extract of Annual Return pursuant to Section 92(3) of the Companies Act 2013 is givenin Annexure-V.

21. Corporate Governance

Corporate Governance Report as per SEBI (LODR) 2015 is given at Annexure-VI formingpart of this report together with Statutory Auditors' Certificate on Corporate Governance.

22. Number of meetings of the Board:

During 2016-17 eight Board meetings were held on 30.5.2016 22.8.2016 26.9.201613.12.2016 16.1.2017 10.2.2017 27.2.2017 and 29.3.2017.

23. Directors' Responsibility Statement

In terms of Section 134(5) of Companies Act 2013 your Directors confirm:

(i) That in the preparation of the annual accounts for the year ended 31st March 2017the applicable accounting standards had been followed along with proper explanationsrelating to material departures.

(ii) That such accounting policies have been selected and applied consistently and madeadjustments and estimates which are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of 31st March 2017 and of theProfit and Loss of the Company for the year.

(iii) That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.

(iv) That the Directors have prepared the annual accounts on a going concern basis.

(v) That the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and operating effectively.

(vi) That the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.

24. Declaration by Independent Directors:

Independent Directors of the Company have given declaration to the effect that theymeet the criteria of independence as provided under Section 149(6) of the Companies Act2013.

25. Familiarization Programme for Independent directors

On joining Independent directors are familiarized through induction programme /presentation with the overview of business operations new projects and business model ofthe Company. Visit to Units is also organized as per their convenience. They are alsoupdated on the changes / developments including in the relevant statutory / regulatoryrequirements from time-to-time. Detail of Directors' Training / Familiarization Programmehas been hosted at the Company's website at www.hindustancopper.com.

26. Code of Conduct

The Company has in place a Code of Conduct applicable to the Directors as well asSenior Management and the same has been circulated to all concerned and posted at theCompany's website www.hindustancopper.com. All Board members and senior managementpersonnel have affirmed compliance of the code for the year ended 31st March 2017.

27. Directors

Ms Sujata Prasad ceased to be part time official Director from 21.6.2016.

Shri Subhash Chandra was appointed in place of Shri Nikunja Bihari Dhal as part timeofficial Director with effect from 20.10.2016.

S/Shri U D Choubey and Ashok Kumar Singh ceased to be Independent Directors from21.10.2016 on completion of their tenure.

Ms T C A Kalyani was appointed as part time official Director from 25.10.2016.

Shri N K Singh was appointed as part time official Director from 15.3.2017 in place ofMs T C A Kalyani who ceased to be Director from 7.12.2016.

The Board places on record its appreciation for the valuable services rendered andcontribution made by Ms Sujata Prasad Shri Nikunja Bihari Dhal Shri U D Choubey ShriAshok Kumar Singh and Ms T C A Kalyani during their tenure on the Board.

28. Secretarial Audit Report

M/s N K Associates Practicing Company Secretaries has been appointed as SecretarialAuditor for FY 2016-17. Report given by the Secretarial Auditor is given at Annexure -VIIto this report. With regard to the observations of the Secretarial Auditor aboutcomposition of the Board of Directors of the Company it is stated that during 2016-17three posts of part time non-official (Independent) Directors were laying vacant (one postsince 19.3.2016 and two posts since 22.10.2016). HCL being a Government Company and interms of its Articles of Association appointment of all Directors on its Board is made bythe President of India through orders issued by the Ministry of Mines (MoM). The Companyhas requested MoM to fill up the vacant posts of three Independent Directors.

29. Auditors

M/s. A Kayes & Co Kolkata was appointed as statutory auditors to audit theaccounts of the Company for the year 2016-17.

M/s Chatterjee & Co Kolkata was appointed as Cost Auditor of the Company forcarrying out the cost audit of Copper Ore Concentrate Cathode Continuous Cast CopperRods other Processed Copper and articles along with Sulphuric acid for the year 2016-17.

30. Comments of C&AG

The comments of C&AG under the Companies Act on the accounts of the Company for theyear ended 31st March 2017 are annexed to this report.

31. Appreciation

In conclusion your Directors wish to place on record their appreciation of the hardwork put in by all employees of the Company during the year under review. The Boardgratefully acknowledges the valuable guidance and co-operation received from the Ministryof Mines and other Ministries/ Departments of the Government of India and the supportreceived from the State Governments of Rajasthan Jharkhand Madhya Pradesh MaharashtraGujarat and West Bengal and the Company's bankers customers and office bearers of therecognized trade unions of different Units / Head Office. The Board also thanks allshareholders and investors for the trust reposed by them in the Company.

For and on behalf of the Board of Directors
K D Diwan
Chairman-cum-Managing Director
(DIN-01829545)
Place: Kolkata
Date : 17.5.2017

ANNEXURE - IV TO THE DIRECTORS' REPORT

BUSINESS RESPONSIBILITY REPORT

Section A: General Information about the Company

1. Corporate Identity Number (CIN) of the Company: L27201WB1967GOI028825

2. Name of the Company: Hindustan Copper Limited

3. Registered Address: "Tamra Bhavan"

1 Ashutosh Chowdhury Avenue Kolkata 700019 Tel. No.: 033-2283 2226/2529 Fax no.:033-2283 2478/2640

4. Website: www.hindustancopper.com

5. E-mail: investors_cs@hindustancopper.com

6. Financial Year Period: 2016-2017

7. Sector(s) that company is engaged in (industrial activity code-wise):

Industrial Group Description
07291 Mining of copper ore
24201 Manufacture of Copper from ore and other copper products and alloys
24320 Casting of non-ferrous metals

As per National Industrial Classification - Ministry of Statistics and ProgrammeImplementation

8. List three key products/services that the Company manufactures/ provides (as inbalance sheet):

Hindustan Copper Limited (HCL) is the only vertically integrated copper mining companyin India having its own captive mines. Following are the key products manufactured by theCompany:

• Copper Cathode

• Continuous Cast Copper Wire Rod

• Metal in Concentrate

9. Total number of locations where business activity is undertaken by the Company:

a) Number of International locations : None
b) Number of National locations : 15

Offices

Corporate and Eastern Regional

Sales Office Kolkata

Western Regional Sales Office Mumbai

Southern Regional Sales Office Bangalore

Northern Regional Sales Office Delhi

Plants

Khetri Copper Complex (KCC) Khetrinagar

Rajasthan

Indian Copper Complex (ICC) Ghatsila

Jharkhand

Malanjkhand Copper Project (MCP) Malanjkhand

Madhya Pradesh

Taloja Copper Project (TCP) Taloja Maharashtra

Gujarat Copper Project (GCP) Gujarat

Godowns

Jaipur Rajasthan

Sahibabad Uttar Pradesh

Bangalore Karnataka

Kolkata West Bengal

Hyderabad Andhra Pradesh

Hosur Tamilnadu

10.Markets served by the Company (Local / State / National / International): National/International

Section B: Financial Details of the Company

1. Paid up Capital: Rs462.61 crore

2. Total Turnover: Rs1216.94 crore

3. Total Profit after Taxes from continuing and discontinuing operation: Rs61.94 crore

4. Total spending on Corporate Social Responsibility (CSR) as percentage of profitafter tax (%): 8.31%

5. List of activities in which expenditure in 4 above has been incurred:

a. Drinking water Health and Sanitation

b. Education Vocational Skills and livelihood

c. Environment and Animal Welfare

d. Promotion of sports in rural areas

e. Rural development projects

Section C: Other Details

1. Does the Company have any Subsidiary Company / Companies?

No

2. Do the Subsidiary Company / Companies participate in the BR Initiatives ofthe parent Company? If yes then indicate the number of such subsidiary company(s).

Not Applicable

3. Do any other entity / entities (e.g. suppliers distributors etc.) that theCompany does business with; participate in the BR initiatives of the Company? If yes thenindicate the percentage of such entity / entities? [Less than 30% 30-60% More than 60%]

Yes currently less than 30%.

Section D: BR Information

1. Details of Director / Directors responsible for BR: a) Details of the Director /Directors responsible for implementation of the BR policy / policies:

DIN 02752767
Name Anupam Anand
Designation Director(Personnel)
Phone 033-2281 6221
Mail Id anupamanand@hindustancopper.com
DIN 02950920
Name V V Venugopal Rao
Designation Director (Finance)
Phone 033-22832741
Mail Id vvvenugopalrao@hindustancopper.com
DIN 07276836
Name Sanjay Kumar Bhattacharya
Designation Director (Mining)
Phone 033-2281-7138
Mail Id bhattacharya_sk@hindustancopper.com
DIN 07431945
Name Santosh Sharma
Designation Director (Operations)
Phone 033-22870325
Mail Id santoshsharma@hindustancopper.com
b) Detail of the BR head
DIN 01829545
Name Kailash Dhar Diwan
Designation Chairman -cum-Managing Director
Phone 033-2283 2725
Mail Id diwan_kd@hindustancopper.com

2.Principle-wise (as per NVGs) BR Policy / policies (Reply in Y / N)

The National Voluntary Guidelines on Social Environmental and EconomicResponsibilities of Business (NVGs) released by the Ministry of Corporate Affairs hasadopted nine areas of Business Responsibility. These briefly are as under: P1 - Businessesshould conduct and govern themselves with Ethics Transparency and Accountability.

P2 - Businesses should provide goods and services that are safe and contribute tosustainability throughout their life cycle.

P3 - Businesses should promote the well-being of all employees.

P4 - Businesses should respect the interests of and be responsive towards allstakeholders especially those who are disadvantaged vulnerable and marginalized.

P5 - Businesses should respect and promote human rights.

P6 - Businesses should respect protect and make efforts to restore the environment.

P7 - Businesses when engaged in influencing public and regulatory policy should do soin a responsible manner. P8 - Businesses should support inclusive growth and equitabledevelopment.

P9 - Businesses should engage with and provide value to their customers and consumersin a responsible manner.

Sr. No. Questions
Business Ethics Product Responsibility Welfare of Employees Stakeholder Engagement Human Rights Environment Public Policy CSR Value to customers
P1 P2 P3 P4 P5 P6 P7 P8 P9
1 Do you have a policy / policies for... Y* Y* Y* Y* Y* Y* Y* Y* Y*
2 Has the policy been formulated in consultation with the relevant stakeholders? Y Y Y Y Y Y Y Y Y
3 Does the policy conform to any national / international standards? If yes specify? Y Y Y Y Y Y N Y N
4 Has the policy being approved by the Board? Is yes has it been signed by MD/owner/CEO/ appropriate Board Director? Y N Y N Y Y N Y N
5 Does the company have a specified committee of the Board/ Director/Official to oversee the implementation of the policy? Y N Y N N N N Y N
6 Indicate the link for the policy to be viewed online? Y** Y** Y** N N N N Y** Y**
7 Has the policy been formally communicated to all relevant internal and external stakeholders? Communicated to key stakeholders of HCL. The communication is an on- going process to cover all internal and external stakeholders.
8 Does the Company have in-house structure to implement the policy/policies? Y Y Y Y Y Y Y Y Y
9 Does the Company have a grievance redressal mechanism related to the policy/policies to address stakeholders' grievances related to the policy/policies? Y Y Y Y Y Y N Y Y
10 Has the Company carried out independent audit/evaluation of the working of this policy by an internal or external agency? N N N N N Y N Y N

*The Company follows DPE other applicable Government guidelines/ laws and the policiesapproved by the Board. **Company's Website: www.hindustancopper.com

2a. If answer to Sr. No 1 against any principle is 'No' please explain why: (Tick upto 2 options)

Sr. No. Questions
Business Ethics Product Responsibility Welfare of Employees Stakeholder Engagement Human Rights Environment Public Policy CSR Value to customers
P1 P2 P3 P4 P5 P6 P7 P8 P9
1 The Company has not understood the Principles
2 The Company is not at a stage where it finds itself in a position to formulate and implement the policies on specified principles Not Applicable
3 The Company does not have financial or manpower resources available for the task
4 It is planned to be done within next 6 months
5 It is planned to be done within the next 1 year
6 Any other reason (please specify)

3. Governance related to BR:

Indicate the frequency with which the Board of Directors Committee of theBoard or CEO assess the BR performance of the Company. Within 3 months 3-6 monthsAnnually More than 1 year.

The BR performance of the Company is assessed on a need basis and in accordance withstatutory requirements.

Does the Company publish a BR or a Sustainability Report? What is thehyperlink for viewing this report? How frequently it is published?

The Company publishes annually its BR report as per SEBI guidelines and it can beviewed at the Company's website www.hindustancopper.com.

Section E: Section Wise Performance

Principle 1: Ethics Transparency and Accountability

Businesses should conduct and govern themselves with Ethics Transparency andAccountability

1. Does the policy relating to ethics bribery and corruption cover only theCompany?

No. The Company is making continuous efforts in improving the systems and procedures sothat they are transparent and in conformity with the extant rules & proceduresthereby ensuring that the working atmosphere and Company's dealings / transactions withother entities are relatively free from corruption. The Company has developed its Code ofEthics and Whistle Blower Policy which pertain to ethics bribery and corruption. Its Codeof Business Ethics governs the manner in which the Company carries out its activities andinteracts with its stakeholders.

2. Does it extend to the Group / Joint Ventures / Suppliers / Contractors / NGOs/ Others?

Yes. It extends to the Suppliers Contractors Business Partners and all otherassociated entities. The Company is a signatory of 'Integrity Pact' with TransparencyInternational India wherein the Integrity Pact is signed between the bidders and theCompany for all service contracts valuing Rs20 crore and above and for all purchasecontracts valuing Rs10 crore and above.

3. How many stakeholder complaints have been received in the past financial yearand what percentage was satisfactorily resolved by the management? If so provide detailsthereof in about 50 words or so.

i) Investor Grievances: 2 Investor grievances were received and resolved during2016-17 and there was no outstanding complaint as on 31.3.2017.

ii) Public Grievances: 48 cases were received during FY2016-17 of which 46 wereredressed.

iii) Customer Grievance: 3 Customer grievances were received and resolved during2016-17 and there was no outstanding complaint as on 31.3.2017

iv) Stakeholder grievances pertaining to any other issue are forwarded to therespective department for redressal.

The stakeholders may address their complaints via platforms given below:

Employee Grievance • Grievance Redressal System
• Whistle Blower Policy
Shareholder Grievance At dedicated email id- investors_cs@hindustancopper.com
Trade Union Grievance Bipartite Forum at Unit/National level for the Company
Consumers/Customers Grievance Grievance Redressal through Marketing Department
Public in General Public Grievance System of the Ministry

Principle 2: Products contributing to sustainability

Businesses should provide goods and services that are safe and contribute tosustainability throughout their life cycle.

1. List up to 3 of your products or services whose design has incorporatedsocial or environmental concerns risks and / or opportunities.

The Company operates and manufactures its products (e.g. refined copper cathodecontinuous cast wire rods copper concentrate) in such a manner as to protect theenvironment interests of employees and general public.

2. For each such product provide the following details in respect of resourceuse (energy water raw material etc.) per unit of product (optional): i. Reduction duringsourcing / production / distribution achieved since the previous year throughout the valuechain ii. Reduction during usage by consumers (energy water) has been achieved since theprevious year

The Company is committed to increase levels of recovery and recycling as well asmaking investments in environment friendly technology/process to reduce energy intensitytoxicity and waste.

Energy Conservation: Energy consumption is constantly monitored at the mines plantsand townships with a view to achieve overall reduction. Energy audit has been completed infour Units and the recommendations are under implementation.

Water use efficiency: Used water is reclaimed and re-used in order to conserve water.Used water is treated in effluent treatment plants before reuse. The processes are alsoreviewed and modified so as to reduce the requirement of water from time to time. Treatedeffluent water is used in horticultural purposes.

3. Does the Company have procedures in place for sustainable sourcing (includingtransportation)? If yes what percentage of your inputs was sourced sustainably? Alsoprovide details thereof in about 50 words or so.

Sustainable sourcing: Before registering / approving any party the Company scrutinizescarefully relevant documents to verify compliances of all pre-set norms including theenvironmental norms by the party. In case of major items Company Officials visits theirpremises to evaluate all their capabilities including the environmental and social issues.

Logistics improvements: The Company continued to follow multi-modal transportationwhich is not only efficient & cost effective but also environmental friendly.Further improvements over the years through sealing of containers has successfullyreduced the amount of dust emitted thus reducing the pollution level as well as wastage.

4. Has the Company taken any steps to procure goods and services from local andsmall producers including communities surrounding their place of work? If yes what stepshave been taken to improve the capacity and capability of local and small vendors?

Yes the Company procures products and services from local producers and communitiessurrounding its operations. Suppliers vendors participate in awareness creation programscapacity building workshops that include sharing technical expertise skill up-gradationand shop floor visits. Company trained the local unemployed person to produce goods likehand gloves which is consumed in the factory regularly.

5. Does the Company have a mechanism to recycle products and waste? If yes whatis the percentage of recycling of products and waste? (Separately as <5% 5-10%>10%). Also provide details thereof in about 50 words or so.

Currently the Company recycles less than 5% of its waste generated internally.

A good amount of copper bearing waste generated in TCP unit is recycled to HCL smelterplant. The copper waste of refinery and electrical workshop is also recycled back tosmelter. The tailing of concentrator plant is partly backfilled in the mines. The Companysells the used oil rubber scrap to the Government approved recyclers and these recyclersaddress environmental concerns while recycling or disposing the waste. A good amount ofgranulated copper slag (i.e. a waste of smelter plant) is sold for using as an alternativeof sand blasting.

New Technology to recover nickel pure copper and acid from the spent electrolyte ofICC refinery - a waste stream has been commissioned in August 2016.

The Company has planned to install a plant at MCP to recover valuable metals &minerals from the copper ore tailing a waste generated from the concentrator plant.

Principle 3: Welfare of Employees

Businesses should promote the well-being of all employees.

1. Please indicate the total number of employees.

2843 as on 31st March 2017.

2. Please indicate the total number of employees hired on temporary /contractual / casual basis.

The number of employees hired on contract during FY 2016-17 was 32. There was noemployee hired on temporary/ casual basis.

3. Please indicate the number of permanent women employees.

200 as on 31st March 2017.

4. Please indicate the number of permanent employees with disabilities.

24 as on 31st March 2017.

5. Do you have an employee association that is recognized by Management?

Yes.

6. What percentage of your permanent employees is members of this recognisedemployee association?

Almost all the workmen are members of the different registered Trade Unions operatingin the Units / Offices

7. Please indicate the number of complaints relating to child labour forcedlabour involuntary labour sexual harassment in the last financial year and pending as onthe end of the financial year.

Sl. No. Category Complaints filed during the FY 2016-17 Complaints pending the end of FY 2016-17
1 Child labour/ forced labour/ involuntary labour Nil Nil
2 Sexual harassment Nil Nil
3 Discriminatory Employment Nil Nil

8. What percentage of your under mentioned employees were given safety and skillup-gradation training in the last year? i. Permanent Employees ii. Permanent WomenEmployees iii. Casual/Temporary/Contractual Employees iv. Employees with Disabilities

Category %
Permanent Employees 79.5
Permanent Women Employees 11
Casual/Temporary/Contractual Employees 51
Employees with Disabilities 45

Based on identified needs of employees training and development at all levels isgiven due priority by the Company for growth of individual as well as companyeffectiveness. The Company selectively nominates its employees for specialized trainingProgrammes / Workshops / Seminars / Conferences organized by reputed professionalorganizations and Institutes.

Principle 4: Stakeholder Engagement

Businesses should respect the interests of and be responsive towards all stakeholdersespecially those who are disadvantaged vulnerable and marginalized.

1. Has the Company mapped its internal and external stakeholders? Yes / No

Yes

2. Out of the above has the Company identified the disadvantaged vulnerableand marginalized stakeholders?

Yes

3. Are there any special initiatives taken by the Company to engage with thedisadvantaged vulnerable and marginalized stakeholders? If so provide details thereofin about 50 words or so.

Yes the Company takes various initiatives to engage with disadvantaged or marginalisedstakeholders such as employees with special needs employees from disadvantaged sectionsof society. All decisions that impact such stakeholders are taken only post deliberations.

The Company conducted Base-line Surveys within 20 Kms radii around the plant and miningareas to identify feasible need-based CSR projects for the respective communities from theperipheral villages. The needs of the Community especially disadvantaged and marginalisedamongst them were prioritised.

Principle 5: Human Rights

Businesses should respect and promote human rights.

1. Does the policy of the Company on human rights cover only the Company orextend to the Group/Joint Venture/ Suppliers/ Contractors/NGO/ Others?

The Company respects human rights and addresses human rights through its own codes andprocedures and compliance with applicable laws. HCL adheres to the statutes of India suchas Mines Act Factories Act which embody some of human rights principles such asprevention of child labour forced labour.

The Company has a structured mechanism in place to address the human rights issues suchas equal opportunity to all non-discrimination removing pay anomaly etc. Adequateefforts are undertaken to eliminate discrimination and harassment such as workers'participation from shop floor to corporate level concessions to persons with disabilityprohibition of sexual harassment of women at workplace.

HCL is an equal opportunity employer and does not discriminate among employees based oncolour caste race region religion gender etc. The Company implements directives ofGovernment of India for reservation for SC/ST/ OBC/ PWD/Ex-Servicemen in recruitment andpromotion whenever specified.

2. How many stakeholder complaints have been received in the past financial yearand what percent was satisfactorily resolved by the Management?

Nil

Principle 6: Environment

Businesses should respect protect and make efforts to restore the environment.

1. Does the policy related to Principle 6 cover only the Company or extends tothe Group / Joint Ventures/ Suppliers/ Contractors / NGOs / Others?

Yes the Company expects its suppliers and contractors to be compliant with allapplicable laws including those related to environment.

2. Does the Company have strategies / initiatives to address globalenvironmental issues such as climate change global warming etc.? Y / N. If yes pleasegive hyperlink for webpage etc.

The Company does not have a process in place yet to map its Green House Gas (GHG)emissions and mitigate such emissions. However its technology up gradation and energyefficiency initiatives contribute to mitigation of GHG emissions. The Company understandsthe importance of climate change risk mitigation by adapting to likely climate changes andits impact on business operations.

3. Does the company identify and assess potential environmental risks? Y/N

Yes

4. Does the Company have any project related to Clean Development Mechanism? Ifso provide details thereof in about 50 words or so. Also if yes whether anyenvironmental compliance report is filed?

The Company does not have any project related to the Clean Development Mechanism.

5. Has the Company undertaken any other initiatives on - clean technologyenergy efficiency renewable energy etc.? Y / N. If yes please give hyperlink to web pageetc.

Yes the Company has taken following initiatives: Energy Conservation:

• Best practices of energy conservation are adopted across the organisation whichresulted reduction in energy consumption.

• 35 KWp roof top solar power plant commissioned in MCP MP.

• Power factor improved and maintained near to unity.

• High wattage conventional lights were replaced by low power consuming LED lights

• 3 nos. old thyrister drive have been replaced by variable frequency drive atMCP.

• 11 nos. oil circuit breaker replaced with vaccum circuit breaker at MCP

• 8 nos. of Mechanical type Belt Weighers and 8 nos. of Thyrister Drives (total 16nos.) of machines have been replaced with only 8 nos. of Weigh Feeders which is acombination of both weighers and feeders introduced in ball mill feed circuit at MCP.

• The mill discharge spillage has come down from 2.24% of milling to less than 1%with minor modification in mill discharge sleeve spiral and the spillage is fed back toball mills.

• 17 nos. old motors (375KW) replaced with premium class IE3 energy efficiencymotors at ICC.

New Technologies:

• Technology has been established for extraction of valuable metals and mineralsfrom Copper ore tailings- a plant will be installed at Malanjkhand copper project with acapacity to process 10000 MT/ day copper ore tailing.

• New Technology to recover nickel pure copper and acid from the spentelectrolyte of ICC Ghatsila refinery plant has been commissioned on 31.7.2016.

R&D Projects:

• Recovery of copper through leaching from ESP dust of flash smelter has beentaken up.

• Recovery of nickel metal from nickel waste produced at customer refinery.

• Malanjkhand Concentrator plant uses pine oil as a frother in Concentrator plantprocess being natural product extracted from pine trees its availability and quality isnot consistent. The Company has taken R&D initiatives to find a suitable substitute.During the year the Company has undertaken R&D test of the other probable chemicalsin the plant and found one of the chemical product suitable for the application as well ascost effective. Thus pine oil will be replaced by the above item in phased manner.

• Combination of both sized (80 mm and 90mm) hi-chrome grinding media was studiedand specific consumption of grinding media was brought down to 0.78 Kg/MT of milling. Nowall the four ball mills are being run with the combined grinding media in 1:1 ratio.

Environment:

The Company has an Environment Management Plan approved by the Board and it coversprevention mitigation and control of environmental damages and disasters. An externalparty was engaged to conduct environmental audit and adherence to the recommendations areimplemented and monitored by environmental cells on a periodic basis. The Company hasresorted to extensive plantation around the mining and township areas at the units tomaintain the green environment.

An environmental friendly technology has been adopted at Ghatsila Smelter in 2016-17 toreduce acidic effluent load and thereby minimizing solid waste generation.

Mine water and dump seepage has been completely used for processing in concentratorplant by installing matching pumps in reclamation pond and WTP this has brought down theconsumption of fresh water. It has also paved way for using mine waste dump seepage waterand tailing seepage water for usage in plant operation.

Waste management:

The Company sells its scrap/obsolete/surplus items through e-auction from time to time.Solid waste like granulated slag waste bricks and boiler ash are sold to the intendedparty whereas tailings and waste rock are safely stored. The waste thus stored is reusedrecycled or disposed in an environmentally acceptable manner.

Copper ore tailing processing plant & nickel recovery project are waste to wealthproject of the company.

6. Are the Emissions / Waste generated by the Company within the permissiblelimits given by CPCB / SPCB for the financial year being reported?

The ambient air quality is regularly monitored at mines all process plants andresidential areas at all the units. The air quality levels are well within the standardsand limits prescribed by the Pollution Control Boards. Effluent treatment facilitiesinstalled at the Units of the Company have been working satisfactorily and meetingregulatory norms as prescribed by the Pollution Control Boards. Discharged process wateris being recycled after treatment thus conserving the water.

Solid waste from plants and hospitals is also safely disposed-off or stored as perguidelines prescribed by the Pollution Control Boards.

7. Number of show cause / legal notices received from CPCB / SPCB which arepending (i.e. not resolved to satisfaction) as of end of financial year.

Nil

Principle 7: Public Advocacy

Businesses when engaged in influencing public and regulatory policy should do so in aresponsible manner.

1. Is your Company a member of any trade and chambers or association? If yesname only those major ones that your business deals with.

Yes e.g. the Standing Conference of Public Enterprises Indian Society of Training& Development Indian Copper Development Centre All India Management AssociationNational Institute of Personnel Management Confederation of Indian Industry Federationof Indian Mineral Industries Indian Chamber of Commerce.

2. Have you advocated / lobbied through above associations for the advancementor improvement of public good? Yes/ No; if yes specify the broad areas (drop box:Governance and Administration Economic Reforms Inclusive Development Polices EnergySecurity Water Food Security Sustainable Business Principles Others)

No

Principle 8: Inclusive Growth

Businesses should support inclusive growth and equitable development.

1. Does the Company have specified programmes / initiatives / projects inpursuit of the policy related to Principle 8? If yes details thereof.

Yes. The Company is committed to social economic and environmental development ofcommunities at all its operations and is committed to long term mutually beneficialpartnership between the communities Government & the stakeholders. The CorporateSocial Responsibility (CSR) plan of the Company is prepared based on the Baseline Surveyand using Participatory Rural Appraisal Method.

2. Are the programmes / projects undertaken through in-house team / ownfoundation / external NGO / government structures / any other organization?

The programmes and projects are undertaken through both in-house teams and externalGovernment structures and implemented with the assistance of NGOs with requisite sectorexpertise wherever required.

3. Have you done impact assessment of your initiative?

Yes.

4. What is the Company's direct contribution to community development projects -Amount in INR and the details of the projects undertaken?

In 2016-17 an amount of Rs5.15 crores was contributed towards community developmentprojects. The details of the project undertaken are given in Point no. 5 below.

5. Have you taken steps to ensure that this community development initiative issuccessfully adopted by the community? Please explain in 50 words or so.

All projects were planned after Baseline Surveys conducted among the target communitiesthrough Participatory Rural Appraisal (PRA) methods; formation of user-groups for thePanchayats who finally own the projects. Additionally formation of user-groups for thefacilities ensures that the community development initiatives are successfully adopted bythe community. The continuation of the CSR initiatives i.e. Handloom Weaving Units orthe functioning of the Solar Street Lights and Hand-Pumps indicates that the community hasadopted them wholeheartedly.

Also the third party assessment study which is conducted after the financial yearreviews the extent of community ownership and success of the planned projects.

Feedback of communities is factored into selecting CSR projects for the next financialyear.

Principle 9: Value to Customers

Businesses should engage with and provide value to their customers and consumers in aresponsible manner.

1. What percentage of customer complaints / consumer cases is pending as on theend of financial year?

Nil

2. Does the Company display product information on the product label over andabove what is mandated as per local laws? Yes / No / N.A. / Remarks (additionalinformation)

Yes

3. Is there any case filed by any stakeholder against the Company regardingunfair trade practices irresponsible advertising and / or anti-competitive behaviourduring the last five years and pending as of end of financial year? If so provide detailsthereof in about 50 words or so.

Nil

4. Did your Company carry out any consumer survey / consumer satisfactiontrends?

Yes. Consumer satisfaction survey is an integral part of the Company in line with ISO9001:2008 QMS certification with effect from January 2014.