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Hindalco Industries Ltd.

BSE: 500440 Sector: Metals & Mining
NSE: HINDALCO ISIN Code: INE038A01020
BSE LIVE 19:03 | 19 Oct 274.50 -0.85
(-0.31%)
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275.00

HIGH

276.50

LOW

274.20

NSE 18:53 | 19 Oct 274.50 -0.80
(-0.29%)
OPEN

275.00

HIGH

275.25

LOW

274.00

OPEN 275.00
PREVIOUS CLOSE 275.35
VOLUME 25006
52-Week high 278.00
52-Week low 147.30
P/E 39.38
Mkt Cap.(Rs cr) 61,606
Buy Price 274.50
Buy Qty 560.00
Sell Price 274.75
Sell Qty 370.00
OPEN 275.00
CLOSE 275.35
VOLUME 25006
52-Week high 278.00
52-Week low 147.30
P/E 39.38
Mkt Cap.(Rs cr) 61,606
Buy Price 274.50
Buy Qty 560.00
Sell Price 274.75
Sell Qty 370.00

Hindalco Industries Ltd. (HINDALCO) - Auditors Report

Company auditors report

TO THE MEMBERS OF HINDALCO INDUSTRIES LIMITED

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements.

We have audited the Standalone Ind AS fi nancial statements of HINDALCO INDUSTRIESLIMITED ("the Company") which comprise the Balance Sheet as at March 312017 the Statement of Profi t and Loss (including Other Comprehensive Income) the CashFlow Statement and the Statement of Changes in Equity for the year then ended and asummary of the signifi cant accounting policies and other explanatory 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 preparation ofthese Standalone Ind AS fi nancial statements that give a true and fair view of the financial position fi nancial performance (including other comprehensive income) cash flows and changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards specifi ed in theCompanies (Indian accounting Standard ) Rules 2015 (as amended) under Section 133 of theAct. 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 fi nancialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Standalone IndAS fi nancial 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 Ind AS fi nancialstatements based on our audit. We have taken into account the provisions of the Act andthe Rules made thereunder including the accounting and auditing standards and matterswhich are required to be included in the audit report under the provisions of the Act andthe Rules made thereunder.

We conducted our audit of the Standalone Ind AS fi nancial Statements in accordancewith the Standards on Auditing specifi ed under Section 143(10) of the Act and otherapplicable authoritative pronouncements issued by the Institute of Chartered Accountantsof India. Those Standards and pronouncements require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe Standalone Ind AS fi nancial statements is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Standalone Ind AS fi nancial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Standalone Ind AS fi nancial statements whether due to fraud orerror. In making those risk assessments the auditor considers internal fi nancial controlrelevant to the Company's preparation of the Standalone Ind AS fi nancial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the Standalone Ind AS financial statements. We believe that the audit evidence we have obtained is suffi cient andappropriate to provide a basis for our audit opinion on the Standalone Ind AS fi nancialstatements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS fi nancial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2017 and its profi t (including other comprehensive income) itscash fl ows and the changes in equity for the year ended on that date.

Other Matter

The corresponding fi nancial information of the Company as at and for the year endedMarch 31 2016 and the transition date opening balance sheet as at April 1 2015 includedin these Standalone Ind AS fi nancial statements are based on the previously issued financial statements for the years ended March 31 2016 and March 31 2015 prepared inaccordance with the Companies (Accounting Standards) Rules 2006 (as amended) which wereaudited by us on which we expressed an unmodifi ed opinion read with our observation onwhich attention drawn under emphasis of matter paragraph of our audit report dated May 282016 and May 28 2015 respectively which is also explained in Note no. 43 to the attachedfi nancial statements. These fi nancial statements have been adjusted for differences inaccounting principles to comply with Ind AS and such adjustments on transition to Ind ASwhich has been approved by the Company's Board of Directors have been audited by us. Ouropinion is not modifi ed 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 aswe considered appropriate and according to the information and explanations given to uswe give in the Annexure ‘A' statement on the matters specifi ed in the paragraph 3and 4 of the Order.

2. As required by Section 143(3) of the Act we report that: a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit. b) In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books; c) The Balance Sheet the Statement of Profi t and Loss(including other comprehensive income) the cash fl ow statement and the Statement ofChanges in Equity dealt with by this report are in agreement with the books of account; d)In our opinion the aforesaid Standalone Ind AS fi nancial statements comply with theIndian Accounting Standards specifi ed under Section 133 of the Act. e) On the basis ofthe written representations received from the directors as on 31st March 2017taken on record by the Board of Directors none of the directors is disqualifi ed as on 31stMarch 2017 from being appointed as a director in terms of Section 164 (2) of the Act. f)With respect to the adequacy of the internal fi nancial controls over fi nancial reportingof the Company and the operating effectiveness of such controls refer to our separateReport in Annexure ‘B' g) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014 (as amended) in our opinion and to the best of our information and according to theexplanations given to us: i. the Company has disclosed the impact of pending litigation asat March 31 2017 on its fi nancial position in its Standalone Ind AS fi nancialstatements – Refer Note 47 (a) and 47(b)(iv) to (vi). ii. the Company has long-termcontracts including derivative contracts as at 31st March 2017 for which there were nomaterial foreseeable losses. iii. there has been no delay in transferring amountsrequired to be transferred to the Investor Education and Protection Fund by the Companyexcept ` 0.02 crore which are held in abeyance due to pending legal cases. iv. The Companyhas provided requisite disclosures in the Standalone Ind AS fi nancial statements as toholdings as well as dealings in Specifi ed Bank Notes during the period from November 82016 to December 30 2016. Based on the audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and produced to us by the Management. Refer Note No 55(C).

For SINGHI & CO.
Chartered Accountants
Firm Registration No. 302049E
(RAJIV SINGHI)
Place : Mumbai Partner
Date : 30th May 2017 Membership No. 53518

Annexure A referred to in paragraph 1 of the Independent Auditors Report of the evendate to the members of Hindalco Industries Limited in the Standalone Ind AS fi nancialstatements as of and for the year ended March 31 2017 under the heading "Report onother legal and regulatory requirements"

Re: Hindalco Industries Limited (the Company)

I. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fi xed assets. (b) Physical verifi cation of fi xedassets have been carried out in terms of the phased program designed to cover all itemsover a period of 3 years which in our opinion is reasonable having regard to size of theCompany and nature of its assets. Pursuant to the program a portion of fi xed assets havebeen physically verifi ed by the management during the year and no material discrepanciesbetween 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 propertiesincluded in fi xed assets are held in the name of the company except in the followingcases.

Particulars Total number of cases Nature of Assets Gross block (as at March 31 2017)
Amount
Unit:- Birla Copper 6.13 acre Unit:- Muri 9 Freehold Land ` 4.09 crore
1.22 acre Unit:- Mahan 37.79 acre
Unit:- Delhi Branch Residential Property 3 Residential ` 0.35 crore
of Area 1808 sq Built up Area 2690 sq ft Property
Built up and Area 3644 sq ft Built up

II. As per the information and explanations given to us the inventories (excludinginventories in transit) have been physically verifi ed at reasonable intervals during theyear by the management except materials lying with third parties where confi rmations areobtained. The discrepancies noticed on the physical verifi cation of inventory as comparedto book stock were not material. III. The Company has not granted any loans secured orunsecured to Companies Firms Limited Liability Partnership or other parties listed inthe register maintained under Section 189 of the Companies Act 2013. Accordingly theprovisions of paragraph 3(III) 3(III)(a) to 3(III)(c) of the said order are notapplicable to the Company.

IV. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013with respect to Loans and Advances made guarantee given and investments made.

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

VI. We have broadly reviewed the books of accounts maintained by Company in respect ofproduct 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 not however made a detailed examination of the records with a viewto determine whether they are accurate or complete. VII. (a) According to the informationand explanations given to us and on the basis of our examination of the books of accountthe Company is generally regular in depositing undisputed statutory dues includingProvident Fund Employee's State Insurance Income Tax Sales Tax Service Tax duty ofcustoms duty of excise Value Added Tax Cess and other statutory dues with theappropriate authorities. According to the information and explanations given to us and therecords of the Company examined by us no undisputed amounts payable in respect ofProvident Fund Employee's State Insurance Income Tax Sales Tax Service Tax Duty ofCustoms Duty of Excise Value Added Tax Cess and other material statutory dues were inarrears as at March 31 2017 for a period of more than six months from the date theybecame payable.

(b) According to the information and explanations given to us the dues of Sales TaxIncome Tax Duty of Customs Duty of Excise Service Tax and Cess which have not beendeposited on account of any dispute and the forum where the dispute is pending as on 31stMarch 2017 are as under :-

Name of the Statue Nature of Dues Amount Period to which the amount relates Forum where the disputes are pending
( ` in Crore)
Central Sales Tax Act Sales Tax 3.57 2003-2004 2012-2013 to 2015- The Supreme Court
and Local Sales Tax Act 2016
8.97 1986-1987 1989-1990 The High Court
1991-1992 1992-1993
1999-2000 to 2003-2004
2005-2006 2006-2007
1.33 2002-2003 2005-2006 Tribunal
43.42 1991-1992 1996-1997 to Asst Commissioner/
2002-2003 2005-2006 Commissioner/ Revisionary
to 2012-2013 Authorities Level
The Central Excise Act
1944
Excise Duty
1.14 1989-1990 to 1995-1996 2000- The High Court
2001 2009-2010 2011-2012
236.64 1998-1999 to 2014-2015 Customs Excise and Service Tax
Appellate Tribunal ( CESTAT)
186.82 2001-2002 to 2013-2014 Asst Commissioner/
Commissioner/ Revisionary
Authorities Level
The Service Tax under Service Tax 0.35 2009-2010 The High Court
the Finance Act 1994
148.90 2002- 2003 to 2015-2016 Customs Excise and Service Tax
Appellate Tribunal ( CESTAT)
93.09 2004-2005 to 2015-2016 Asst Commissioner/
Commissioner/ Revisionary
Authorities Level
The Customs Act Customs Act
1962
22.78 2009-10 and 2010-11 Customs Excise and Service Tax
Appellate Tribunal ( CESTAT)
5.34 2006-07 Asst Commissioner/
Commissioner/ Revisionary
Authorities Level
The Income Tax Act 1961 Income Tax 912.30 2008-2009 to 2011-2012 CIT ( Appeals)
Adhosanrachna Vikas Chhattisgarh 0.38 2005- 2006 to 2011-2012 The Supreme Court
Evam Parayavaran Development
Upkar Adhiniyam 2005 and
Environment
Cess
Shakti Nagar Special Cess on Coal 3.98 1997- 1998 to 2011-2012 The Supreme Court
Area Development
Authority
The Building and Cess 123.60 2011-12 The Supreme Court
Other Construction
Workers (Regulation
of Employment and
Conditions of Service)
Act & Rules ("BOCW
Act")
Green Cess Cess 7.56 2012-2013 to 2015-2016 The Supreme Court

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 as at theBalance Sheet date. The Company does not have any loans or borrowing from the Governmentas at the balance sheet date.

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 offi cers oremployees noticed or reported during year nor have been informed of any such case by theManagement.

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 to the Act. XII. The company is not a Nidhi Company andthe Nidhi Rules 2014 are not applicable to it accordingly the provisions of clause3(XII) of the Order are not applicable.

XIII. The Company has entered into transactions with related parties in compliance withsections 177 and 188 of the Act. The details of such related party transactions have beendisclosed in the Standalone Ind AS fi nancial statements as required under Ind AS 24Related Party Disclosures specifi ed under section 133 of the Act read with Rule 7 ofthe Companies ( Accounts) Rules 2014. XIV. The Company has not made any preferentialallotment of shares or fully or partly converted debentures during the year. However theCompany has raised ` 3350 crore through Qualifi ed Institutions Placement("QIP") by allotting 176827659 Equity Shares at a price of ` 189.45 pershare. The QIP placement is in compliance with section 42 of the Companies Act 2013.Further the Company has disclosed the end use of money received from QIP in Note No. 16(d)of notes to the Standalone Ind AS fi nancial statements and the same has been verifi ed byus. 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 them. Accordingly paragraph 3(xv)of the 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 : 30th May 2017 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 Section143 of the Companies Act 2013 ("the Act")

We have audited the internal fi nancial controls over fi nancial reporting of HINDALCOINDUSTRIES LIMITED ("the Company") as of March 31 2017 in conjunction with ouraudit of the Standalone Ind AS fi nancial statements of the Company for the year ended onthat date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management is responsible for establishing and maintaining internal financial controls based on the internal control over fi nancial 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 internalfi nancial controls that were operating effectively for ensuring the orderly and efficient conduct of its business including adherence to company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable fi nancialinformation as required under the Act.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal fi nancialcontrols over fi nancial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Act to the extent applicable toan audit of internal fi nancial controls both applicable to an audit of InternalFinancial Controls and both issued by the ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal fi nancial controls over fi nancialreporting was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal fi nancial controls system over fi nancial reporting and their operatingeffectiveness. Our audit of internal fi nancial controls over fi nancial reportingincluded obtaining an understanding of internal fi nancial controls over fi nancialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the Standalone Ind AS fi nancial statements whether dueto fraud or error.

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

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company's internal fi nancial control over fi nancial reporting is a process designedto provide reasonable assurance regarding the reliability of fi nancial reporting and thepreparation of Standalone Ind AS fi nancial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal fi nancial controlover fi nancial reporting includes those policies and procedures that: (1) pertain to themaintenance of records that in reasonable detail accurately and fairly refl ect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of StandaloneInd AS fi nancial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the StandaloneInd AS fi nancial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal fi nancial controls over fi nancialreporting 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 fi nancial controls over fi nancialreporting to future periods are subject to the risk that the internal fi nancial controlover fi nancial 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 internal financial controls system over fi nancial reporting and such internal fi nancial controlsover fi nancial reporting were operating effectively as at March 31 2017 based on theinternal control over fi nancial 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 : 30th May 2017 Membership No. 53518