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Hindustan Zinc Ltd.

BSE: 500188 Sector: Metals & Mining
NSE: HINDZINC ISIN Code: INE267A01025
BSE LIVE 11:33 | 24 Aug 285.00 -1.70
(-0.59%)
OPEN

288.95

HIGH

288.95

LOW

284.30

NSE 11:19 | 24 Aug 285.10 -1.40
(-0.49%)
OPEN

287.00

HIGH

288.70

LOW

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OPEN 288.95
PREVIOUS CLOSE 286.70
VOLUME 29567
52-Week high 333.40
52-Week low 210.30
P/E 13.15
Mkt Cap.(Rs cr) 120,421
Buy Price 285.00
Buy Qty 52.00
Sell Price 285.35
Sell Qty 309.00
OPEN 288.95
CLOSE 286.70
VOLUME 29567
52-Week high 333.40
52-Week low 210.30
P/E 13.15
Mkt Cap.(Rs cr) 120,421
Buy Price 285.00
Buy Qty 52.00
Sell Price 285.35
Sell Qty 309.00

Hindustan Zinc Ltd. (HINDZINC) - Auditors Report

Company auditors report

To the Members of Hindustan Zinc Limited

Report on the Financial Statements

We have audited the accompanying financial statements of HINDUSTAN ZINC LIMITED(“the Company”) which comprise the Balance Sheet as at 31st March 2016 theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (“the Act”) with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards prescribedunder section 133 of the Act as applicable.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

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 and the Order under section 143 (11)of the Act.

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2016 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the 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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the AccountingStandards prescribed under section 133 of the Act as applicable together with the earlyadoption by the Company of Accounting Standard (AS) 30 Financial Instruments Recognitionand Measurement effective April 1 2007 and the consequential limited revisions as hasbeen announced by the Institute of Chartered Accountants of India to certain AccountingStandards as stated in Note 2 (a) and 39.

e) On the basis of the written representations received from the directors as on 31stMarch 2016taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in terms of Section164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in “Annexure A”. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) 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 financial statements-Refer to Note 26 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order 2016 (“the Order”)issued by the Central Government in terms of Section 143(11) of the Act we give in“Annexure B” a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm’s Registration No. 117366W/W-100018)

Jitendra Agarwal

Partner

(Membership No. 87104)

MUMBAI April 212016

ANNEXURE “A” to the Independent Auditors' Report

(Referred to in paragraph 1(f) under 'Report on Other Legal and RegulatoryRequirements' of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of HindustanZinc Limited (“the Company”) as of March 31 2016 in conjunction with our auditof the standalone 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 control criteria of “the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India”. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor's 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”) issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated 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 judgement including the assessment of the risks ofmaterial misstatement of the 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2016 based oncontrol criteriaof“the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India”.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm’s Registration No. 117366W/W-100018)

Jitendra Agarwal

Partner

(Membership No. 87104)

MUMBAI April 212016

ANNEXURE “B” to the Independent Auditors' Report

(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets.

(b) The Company has a program of verification of fixed assets to cover all the items ina phased manner over a period of three years which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programcertain fixed assets were physically verified by the Management during the year. Accordingto the information and explanations given to us no material discrepancies were noticed onsuch verification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the relevant records provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date. In respect ofimmovable properties of land that have been taken on lease and disclosed as fixed asset inthe financial statements the lease agreements are in the name of the Company where theCompany is the lessee in the agreement.

(ii) In respect of its inventories:

As explained to us the inventories (excluding inventories with third parties) werephysically verified during the year by the Management at reasonable intervals and nomaterial discrepancies were noticed on physical verification

(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 186 of the Companies Act 2013 inrespect of grant of loans making investments and providing guarantees and securities asapplicable. The Company has not granted any loans in terms of Section 185 of the CompaniesAct 2013.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year. In respect of unclaimed deposits the Company hascomplied with the provisions of Sections 73 to 76 or any other relevant provisions of theCompanies Act 2013.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant tothe

Companies (Cost Records and Audit) Rules 2014 as amended prescribed by the CentralGovernment under sub-section (1) of Section 148 of the Companies Act 2013 and are of theopinion that prima facie the prescribed cost records have been made and maintained Wehave however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.

(vii) According to the information and explanations given to us in respect of statutorydues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Income-tax Sales Tax Service Tax Customs duty Excise dutyValue added tax Cess and any other material statutory dues with the appropriateauthorities. We are informed that the provisions of Employees' State Insurance Act 1948are not applicable to the Company.

There were no undisputed statutory dues in arrears as at 31st March 2016for a periodof more than six months from the date they became payable.

(b) Details of dues of Income-tax Sales Tax Wealth Tax Service Tax Customs dutyExcise duty Value added tax and Cess which have not been deposited as on March 31 2016on account of disputes are given below:

Name of Statue Assessment year Nature of dues Forum pending at Amount involved Amount Unpaid
Sales Tax Company's appeals Claims Financial year 1980-81 to 2015-16 Disputes in respect of sales tax rate difference / classification and stock transfers treated as sales/entry tax etc. up to the financial year 2015-16 Deputy Commissioner Joint Commissioner CTOTribunal and High Court Supreme court. 170.32 112.05
Sub Total (i) 170.32 112.05
Central Excise Duty claims
Company's appeals Financial year 1985-86 to 2015-16 Admissibility of CENVAT credit on inputs capital goods alleged duty demand on captive use of intermediate goods reversal of the amount on dispatch of by-products duty on valuation and storage/ handling losses classification of coal Service tax demands etc. upto the FY 2015-16 CommissionerateCES TAT High Court Supreme Court. 476.94 413.28
Sub Total (ii) 476.94 413.28
Income Tax
Company's appeals AY 1992-93 AY 1993-1994 AY 1994-95 AY 1996-97 AY1997-98 AY 1998-99 AY1999-2000 to AY 2004-05 AY 2006-07 AY2008-09 AY2010-11 and AY2011-12 to AY 2012-13 Disputes in respect of appeals pending before CIT (A) Commissioner of Income Tax (Appeals) ITAT High Court and Supreme Court 1801.09 1424.97
Sub Total (iii) 1801.09 1424.97
Department's appeals AY1989-90 to AY1991-92 AY1993-94 AY1998-99 AY2000-01 to AY 2009-10 Relief granted by CIT(A) for differences in computation allowances of certain expenses and enhancement of rebate etc. ITAT 631.83 631.83
AY1990-91 to AY1997-98 AY1999-2000 to AY 2009-10 Relief granted by ITAT for differences in computation allowances of certain expenses and enhancement of rebate etc. High Court/ Supreme Court 113.62 113.62
Sub Total(iv) 745.45 745.45
Total(i+ii+iii+iv) 3193.80 2695.75

(viii) The Company has not taken any borrowings from banks financial institutions orby way of debentures. Hence reporting under clause (viii) of CARO 2016 is not applicableto the Company.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause (ix) ofthe CARO 2016 Order is not applicable.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no fraud on the Company by its officers oremployees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theCARO 2016 Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 188 and 177 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of section 192 of theCompanies Act 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm’s Registration No. 117366W/W-100018)

Jitendra Agarwal

Partner

(Membership No. 87104)

MUMBAI April 212016