You are here » Home » Companies » Company Overview » Hindalco Industries Ltd

Hindalco Industries Ltd.

BSE: 500440 Sector: Metals & Mining
NSE: HINDALCO ISIN Code: INE038A01020
BSE LIVE 14:46 | 24 Aug 232.80 1.80
(0.78%)
OPEN

231.05

HIGH

234.40

LOW

230.65

NSE 14:30 | 24 Aug 233.40 2.50
(1.08%)
OPEN

232.00

HIGH

234.65

LOW

230.30

OPEN 231.05
PREVIOUS CLOSE 231.00
VOLUME 702642
52-Week high 244.80
52-Week low 138.75
P/E 33.40
Mkt Cap.(Rs cr) 52,229
Buy Price 232.80
Buy Qty 29.00
Sell Price 232.95
Sell Qty 216.00
OPEN 231.05
CLOSE 231.00
VOLUME 702642
52-Week high 244.80
52-Week low 138.75
P/E 33.40
Mkt Cap.(Rs cr) 52,229
Buy Price 232.80
Buy Qty 29.00
Sell Price 232.95
Sell Qty 216.00

Hindalco Industries Ltd. (HINDALCO) - Auditors Report

Company auditors report

ON THE STANDALONE FINANCIAL STATEMENTS

TO THE MEMBERS OF HINDALCO INDUSTRIES LIMITED

We have audited the accompanying standalone financial statements of HINDALCOINDUSTRIES LIMITED ("the Company") which comprise the Balance Sheet as at31st March 2016 the Statement of Profit and Loss the Cash Flow Statement forthe year then ended and a summary of the significant accounting policies and otherexplanatory information.

Management's Responsibility for the Standalone 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 preparationof these standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding 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 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 standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe 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 standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2016 and its profit and its cash flows for the year ended onthat date.

Emphasis of Matters

We draw attention to

Note No. 43 of the Financial Statement explaining that in compliance to the scheme ofarrangement under Sections 391 to 394 of the Companies Act 1956 approved by the Hon'bleBombay High Court vide order dated 29th June 2009 the management of theCompany has during the year identified and adjusted following against BusinessReconstruction Reserve:

a. provision for diminution in the carrying value of Investments in one of itsSubsidiaries and of a Jointly Controlled Entity aggregating to ' 35.50 crore

b. impairment loss of ' 561.70 crore (deferred tax of ' 194.39 crore) related to one ofits cash generating units

c. expenses of ' 279.46 crore for exited project against Business ReconstructionReserve.

Had the above impact be considered the reported profit before tax and profit after taxof ' 732.61 crore and ' 607.25 crore respectively would have been converted in to lossbefore tax of ' 144.05 crore and loss after tax of ' 75.02 crore.

Our report is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016; issued by the CentralGovernment of India in terms of Sub-section (11) of Section 143 of the Act ("theorder") and on the basis of examination of the books and records of the Company andaccording to the information and explanations given to us we give in the Annexure Astatement on the matters specified in the paragraph 3 and 4 of the Order.

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

a) we have sought and obtained all the information and explanations which to the 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 standalone financial statements comply with theapplicable Accounting Standards specified under Section 133 of the Act read with Rule 7of the Companies (Accounts) Rules 2014;

e) on the basis of the written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director interms of Section 164(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 ‘B'; 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 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 litigation on its financial positionin its financial statements - Refer Note 50A(a) c(iii) and c(iv) to the financialstatements.

ii. the Company has long-term contracts including derivative contracts as at 31stMarch 2016 for which there were no 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 except ' 0.09 crore which areheld in abeyance due to pending legal cases.

For SINGHI & CO.
Chartered Accountants
Firm Registration No. 302049E
(RAJIV SINGHI)
Place : Mumbai Partner
Date : 28th May 2016 Membership No. 53518

Annexure A referred to in paragraph 1 under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date

Re: Hindalco Industries Limited (the Company)

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

(b) As per the information and explanations given to us physical verification of fixedassets has been carried out in terms of the phased program designed to cover all itemsover a period of three years which in our opinion is reasonable having regard to sizeof the Company and nature of its assets. Pursuant to the program a portion of fixedassets has been physically verified by the management during the year and no materialdiscrepancies between books record and physical inventory has been noticed.

(c) According to the information and explanations given to us and on the basis of theexamination of the records of the Company the title deeds of the immovable properties areheld in the name of the Company except in the following cases:

Particulars Total Number of Cases Whether Leasehold/ Freehold Gross Block (as at 31st March 2016) Amount Remarks
Unit - Birla Copper Dahej Industrial Area Lakhigam Dahej Taluka: Vagra Dist: Bharuch (199.68 acre) 4 Leasehold ' 21.30 crore Lease deed is pending
Unit - Birla Copper Block No: 42 Kesrol Dist: Bharuch (6.13 acre) 1 Freehold ' 0.06 crore Registration in the name of the Company is pending
Unit - Aditya Aluminium 12 Villages of Aditya Aluminium Project (253.29 acre) 1 Leasehold ' 57.94 crore Lease deed is pending

II. As per the information and explanations given to us the inventories have beenphysically verified at reasonable intervals during the year by the management exceptmaterials lying with third parties where confirmations are obtained. The discrepanciesnoticed on the physical verification of inventory as compared to book stock were notmaterial.

III. The Company has not granted any loans secured or unsecured to companies firmslimited liability partnership or other parties listed in the register maintained underSection 189 of the Companies Act 2013. Accordingly the provisions of paragraphs 3(III)3(III)(a) to 3(III)(c) of the said order are not applicable.

IV. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act with respectto Loans and Advances made guarantee given and investments made.

V. The Company has not accepted any deposit from the public within the meaning ofSections 73 74 75 and 76 of the Act and Rules framed thereunder to the extent notified.

VI. We have broadly reviewed the books of account maintained by the Company in respectof product where pursuant to the rule made by the Central Government of India themaintenance of cost records has been prescribed under Section 148(1) of the Companies Act2013 and are of the opinion that prima facie the prescribed records have beenmaintained. We have however not made a detailed examination of the records with a view todetermine whether they are accurate or complete.

VII. (a) According to the information and explanations given to us and on the basis ofour examination of the books of account the Company is generally regular in depositingundisputed statutory dues including Provident Fund Employee's State Insurance IncomeTax Sales Tax Wealth Tax Service Tax Duty of Customs Duty of Excise Value Added TaxCess and other statutory dues with the appropriate authorities. According to theinformation and explanations given to us and the records of the Company examined by us noundisputed amounts payable in respect of Provident Fund Employee's State InsuranceIncome Tax Sales Tax Wealth Tax Service Tax Duty of Customs Duty of Excise ValueAdded Tax Cess and other material statutory dues were in arrears as at 31stMarch 2016 for a period of more than six months from the date they became payable .

(b) According to the information and explanation given to us the dues of Sales TaxIncome Tax Duty of Custom Wealth Tax Duty of Excise Service Tax and Cess which havenot been deposited on account of any dispute and the forum where the dispute is pending ason 31st March 2016 are as under:

Name of the Statute Nature of Dues Amount (' in Crore) Period to which the amount relates Forum where the disputes are pending
Central Sales Tax Act and Sales Tax 3.94 2003-2004 2012-2013 to 2015-2016 The Hon'ble Supreme Court of India
Local Sales Tax Act 8.87 1986-1987 1989-1990 1991-1992 1992-1993 1999-2000 to 2003-2004 2005-2006 2006-2007 The Hon'ble High Court
1.37 2002-2003 2005-2006 Tribunal
59.70 1991-1992 1996-1997 to 2002-2003 2005-2006 to 2012-2013 Asst Commissioner/Commissioner/ Revisionary Authorities Level
The Central Excise Act 1944 Excise Duty 2.45 1989-1990 to 1995-1996 2000-2001 2009-2010 2011-2012 The Hon'ble High Court
157.74 1988-1990 to 2014-2015 Customs Excise and Service Tax Appellate Tribunal (CESTAT)
178.94 2001-2002 to 2013-2014 Asst Commissioner/Commissioner/ Revisionary Authorities Level
The Service Tax under the Service Tax 0.35 2009-2010 The Hon'ble High Court
Finance Act 1994 73.69 2002-2003 to 2013-2014 Customs Excise and Service Tax Appellate Tribunal (CESTAT)
22.96 2004-2005 to 2013-2014 Asst Commissioner/Commissioner/ Revisionary Authorities Level
The Customs Act 1962 Customs Act 22.78 2009-2010 and 2010-2011 Customs Excise and Service Tax Appellate Tribunal (CESTAT)
5.29 2006-2007 Asst Commissioner/Commissioner/ Revisionary Authorities Level
The Income-tax Act 1961 Income Tax 1396.30 2008-2009 to 2011-2012 Commissioner of Income Tax (Appeals)
Adhosanrachna Vikas Evam Parayavaran Upkar Adhiniyam 2005 Chhattisgarh Development and Environment Cess 0.27 2005-2006 to 2011-2012 The Hon'ble Supreme Court of India
Shakti Nagar Special Area Development Authority Cess on Coal 3.98 1997-1998 to 2011-2012 The Hon'ble Supreme Court of India
The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act & Rules ("BOCW Act") Cess 100.00 2011-2012 The Hon'ble Supreme Court of India
Green Cess Cess 6.16 2012-2013 to 2015-2016 The Hon'ble Supreme Court of India

VIII. According to the records of the Company examined by us and the information andexplanations provided to us the Company has not defaulted in repayment of loans orborrowings to any Financial Institutions or Banks or dues to debenture holders. Furtheras at the Balance Sheet date the Company does not have any loans or borrowing from theGovernment.

IX. In our opinion and according to the information and explanations given to us themoney raised by way of term loans have been applied for the purpose for which they wereobtained. The Company has not raised any money by way of initial public offer or furtherpublic offer including debt instruments during the year.

X. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practice in India andaccording to the information and explanations given to us we have neither come across anyinstances of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during year nor have been informed of any such case by the Management.

XI. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V of the Act.

XII. The Company is not a Nidhi Company. Accordingly paragraph 3(XII) of the Order isnot applicable.

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 Act where applicable and details of suchtransactions have been disclosed in the financial statements as required under AccountingStandard (AS)-18 Related Party Transactions.

XIV. The Company has not made any preferential allotment or private placement of sharesor fully or partly converted debentures during the year. Accordingly paragraph 3(XIV) ofthe Order 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 non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(XV) ofthe Order is not applicable.

XVI. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3(XVI) of the Order is not applicable tothe Company.

For SINGHI & CO.
Chartered Accountants
Firm Registration No. 302049E
(RAJIV SINGHI)
Place : Mumbai Partner
Date : 28th May 2016 Membership No. 53518

ANNEXURE - B TO THE INDEPENDENT AUDITOR'S REPORT

Report on the Internal Financial Controls under Clause

(i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of HINDALCOINDUSTRIES LIMITED ("the Company") as of 31st March 2016 in conjunctionwith our audit of the 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 the 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'). 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") and the Standards on Auditing issued by the ICAI anddeemed to 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 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with the authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For SINGHI & CO.
Chartered Accountants
Firm Registration No. 302049E
(RAJIV SINGHI)
Place : Mumbai Partner
Date : 28th May 2016 Membership No. 53518