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Hindustan Copper Ltd.

BSE: 513599 Sector: Metals & Mining
NSE: HINDCOPPER ISIN Code: INE531E01026
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VOLUME 313996
52-Week high 165.10
52-Week low 23.50
P/E
Mkt Cap.(Rs cr) 15,144
Buy Price 156.50
Buy Qty 150.00
Sell Price 156.70
Sell Qty 1034.00
OPEN 152.20
CLOSE 151.30
VOLUME 313996
52-Week high 165.10
52-Week low 23.50
P/E
Mkt Cap.(Rs cr) 15,144
Buy Price 156.50
Buy Qty 150.00
Sell Price 156.70
Sell Qty 1034.00

Hindustan Copper Ltd. (HINDCOPPER) - Auditors Report

Company auditors report

To

The Members of Hindustan Copper Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying Standalone Financial Statements of HindustanCopper Limited (“the Company”) which comprise the Balance Sheet as at March31 2020 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and notes to the Standalone Financial Statements including a summary of thesignificant accounting policies and other explanatory information (hereinafter referred toas “the Standalone Financial Statements”).

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Financial Statements give theinformation required by the Companies Act 2013 (“ the Act”) in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended (“Ind AS”) and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2020and its loss (including Other Comprehensive loss) changes in equity and its cash flowsfor the year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone Financial Statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theCompanies Act 2013. Our responsibilities under those Standards are further described inthe Auditor's Responsibilities for the Audit of the Standalone Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of the Standalone Financial Statementsunder the provisions of the Act and the Rules made thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Standalone Financial Statements.

Emphasis of Matters

We draw attention to the following matters:

a) Note No.39 (1) “Contingent liabilities” of theaccompanying Standalone Financial Statements which describes the uncertainty related tothe outcome of the lawsuits filed and demands raised against the Company by variousparties and Government authorities;

b) Note No.39 (6) of the accompanying Standalone Financial Statementswhich states that the title deeds for freehold and leasehold land and building acquired inrespect of Gujarat Copper Project (GCP) with book value of H5578.11 Lakh (PY:- H5859.97Lakh) are yet to be executed in favor of the Company. Title deeds for other leasehold andfreehold lands available with the Company or other evidences of title are pending to bereconciled with the financial records.

c) Note No.39 (8) of the accompanying Standalone Financial Statementswherein balances under the head Claims Recoverable Loans & Advances Deposits fromand with various parties and certain balances of receivables payables and other currentliabilities have not been confirmed as at March 31 2020.Consequential impact upon receiptof such confirmation /reconciliation / adjustments of such balances if any is notascertainable at this stage;

d) Note No.39 (28) the accompanying Standalone Financial Statementsregarding Gujarat Copper project valuing H24536.34 Lakh (PY:- H27214.50 Lakh) as at March31 2020 where the Company has not been able to operate profitably due to variousconstraint viability assessment needs to be done to evaluate and adjust for possibleimpairment loss if any.

e) Note No.39 (31) which states that Closing stock as at 31stMarch 2020 has been reduced aggregately by H25710.39 Lakh due to one-time adjustmentthrough write-off in value of closing stock arising as a result of reconciliation ofmetal content in copper concentrate on inter-unit transfer and sales assessment of metalloss in generation of granulated Dump Slag handling losses and old & oxidizedconcentrate. Further low grade Lean Ore and Mill Scat not presently in use inmanufacturing process for which provision of H18331.80 Lakh has been made in the books ofaccounts as

at March 31 2020 by the management. As mentioned in the referred notethe Company has modified its Standard Operating Procedure on Inventory Management tostrengthen the reconciliation of inventory as an ongoing activity and identification andsegregation of unused stock for better control; and f) Note No.39 (33) which describes theuncertainties and the management assessment of possible impact of COVID-19 pandemic on itsbusiness operations financial assets contractual obligations and its overall liquidityposition as at March 31 2020. Management will continue to monitor in future any materialchanges arising on financial and operational performance of the Company due to the impactof this pandemic and necessary measure to address the situation.

Our opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone Financial Statements of thecurrent period. These matters were addressed in the context of our audit of the StandaloneFinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sl. No. Key Audit Matters Auditor's Response
1. Assessment of Stripping Ratio and charging of overburden expenditure during production stage of surface mines to Mines Development Expenditure and Profit and Loss account Principal Audit Procedures
Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
Referred in Note No.2 (11) and Note No.9 of the Standalone Financial Statements.
• We went through the current status of the mining at different mines
Assessment of Stripping Ratio is technically estimated initially at the beginning of the Mines and later on periodically assessed for which no standards written policy are there. Normally review done within a period of 3 to 4 years as informed to us.
• We discussed with the management about the stripping procedure adopted in the industry as well practice followed by the Company
• Procedure followed by the management towards Identification of expenditures incurred in surface mines during production stage
In case of open cast mines the expenditure on removal of waste and overburden is capitalized and the same is depleted in relation to actual ore production during the year on the stripping ratio which is re-assessed periodically based on the estimated ore reserve as well as the quantity of waste excavation in respect of open cast mines.
• Understanding the computation of Stripping ratio initially made and documents made available to us.
• We have checked the stripping ratio to be charged under amortization for mine development expenditure for balance period of mines
Assessment of Stripping Ratio is uniquely applied under the Mining industries which involves significant judgment to determine the ratio and that also keep on change from time to time. This ratio has been changed subsequently based on the actual output of overburden and Ore exposed during the production stage of the mines.
• Discussion with the core technical team involve in this process
• Reliance is placed on the representations of the management.
We have identified this area as key audit matter due to its nature as industry specific and involvement of technical assumptions and judgments in calculation of stripping ratio. Further it has a material impact on the financial statements being this year the Company has amortized H23904.06 Lakh (PY:-20074.56 Lakh) as Mine development expenditure in respect of open cast mines.
2. Modified Audit Procedures carried out in light of COVID-19 outbreak: Principal Audit Procedures
Due to the outbreak of COVID-19 pandemic that caused nationwide lockdown and other travel restrictions imposed by the Central and State Governments/local administration during the period of our audit we could not travel to the Plants/ Projects/Regional Sales offices and carry out the audit processes physically at the respective Plants/ Projects/Regional Sales offices. Wherever physical access was not possible necessary records/ reports/ documents/ certificates were made available to us by the management of the respective Plants / Projects / Regional Sales offices through E-Mail and to the extent generated from the ORACLE system at Head office Kolkata. To this extent the audit process was carried out on the basis of such documents reports and records made available to us on which were relied upon as audit evidence for conducting the audit and reporting for the current period.
Due to COVID-19 pandemic Nation-wide lockdown and travel restrictions imposed by Central / State Government / Local Authorities during the period of our audit wherever physical access was not possible audit could not be conducted by visiting the Plants/Projects/ Regional Sales offices. As we could not gather audit evidence in person/ physically/ through discussions and personal interactions with the officials at the Plants/ Projects/Regional Sales offices we have identified such modified audit procedures as a Key Audit Matter. Accordingly our audit procedures were modified to carry out the audit remotely.
Accordingly we modified our audit procedures as follows:
a) Conducted verification of necessary records/ documents/Trial Balances and other relevant application software electronically through remote access/emails in respect of Plants/ Projects/Regional Sales offices wherever physical access was not possible.
b) Carried out verification of scanned copies of the documents records certificates deeds etc. made available to us through emails and remote access over secure network of the Company.
c) Making enquiries and gathering necessary audit evidence through telephonic communication and e-mails.

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Report of theBoard of Directors Management Discussion and Analysis Report Report on CSR activitiesBusiness Responsibility Report Corporate Governance Report and other annexure toDirectors Report including Shareholder's Information but does not include theStandalone Financial Statements and our auditor's report thereon. The Report of theBoard of Directors including annexures and other related statements forming part of theCompany's annual report is expected to be made available to us after the date of ourthis auditor report.

Our opinion on the Standalone Financial Statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statementsour responsibility is to read the other information when it becomes available only and indoing so consider whether the other information is materially inconsistent with theStandalone Financial Statements or our knowledge obtained in the audit or otherwiseappears to be materially misstated. If based on the work we have performed we concludethat there is a material misstatement of this other information; we are required to reportthat fact.

When we read the Report of the Board of Directors including annexuresand other related statements form part of the Company's annual report and madeavailable to us after the date of our this auditor report if we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith governance.

Responsibility of Management and Those Charged with Governance for theStandalone Financial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these StandaloneFinancial Statements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards specified under Section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Financial Statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the Standalone Financial Statements the Board ofDirectors is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless the Board of Directors either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

Those Board of Directors is also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether theStandalone Financial Statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis or our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the Standalone Financial Statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of theStandalone Financial Statements including the disclosures and whether the StandaloneFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the StandaloneFinancial Statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the Standalone FinancialStatements may be influenced. We consider quantitative materiality and qualitative factorsin (i) planning the scope of our audit work and in evaluating the results of our work; and(ii) to evaluate the effect of any identified misstatements in the Standalone FinancialStatements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the StandaloneFinancial Statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor's Report) Order 2016(“the Order”) issued by the Central Government of India in terms of sub section(11) of Section 143 of the Act we give in “Annexure A” a statement onthe matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

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

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of our auditexcept as reported in Clause (b) & (c) of the “Emphasis of Matters”paragraph above;

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;

c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flows dealtwith by this Report are in agreement with the books of account.

d) In our opinion the aforesaid Standalone Financial Statements complywith the Ind AS specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

e) In pursuance to the Notification No. G.S.R 463(E) dated 05-06-2015issued by Ministry of Corporate Affairs Section 164(2) of the Act regardingdisqualification of Directors is not applicable to the Company since it is a GovernmentCompany;

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in “Annexure B”.

g) As per Notification No. GSR 463(E) dated 05-06-2015 issued by theMinistry of Corporate Affairs Government of India Section 197 of the Act is notapplicable to the Government Companies. Accordingly reporting in accordance withrequirement of provisions of Section 197(16) of the Act is not applicable on the Company.

h) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 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 litigations on itsfinancial position in its Standalone Financial Statements—[Refer Note No. 39(1) tothe accompanying Standalone Financial Statements];

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

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

3) As required under Section 143(5) of the Act we give in the “AnnexureC” a statement on the directions and subdirections issued by the Comptroller andAuditor General of India in respect of the Company.

For Chaturvedi & Co.
Chartered Accountants
(Firm's Registration No.302137E)
Place: Kolkata CA R.K. Nanda
Date: July 21 2020 Partner
(Membership No.510574)
UDIN: 20510574AAAABH1998

{Referred to in Paragraph (1) of “Report on Other Legal andRegulatory Requirements” section of our

Independent Auditor's Report}

i. In respect of the Company's fixed assets:

(a) The Company has maintained records showing full particularsincluding quantitative details and situation of fixed assets. Further asset identificationnumbers and codification of some movable tangible assets along with make/ model numberneeds to be assigned to the assets and to be updated in Fixed Asset Register. Locationdetails and areas of freehold land and leasehold land held by the Company at differentlocations needs to be updated in the Fixed Asset Register and further needs to bereconciled with financial records. Quantitative details in case of few old assets alongwith their description particulars of depreciation amortization or impairment have alsonot been properly disclosed in the Fixed Asset Register.

(b) According to the information and explanations given to us thefixed assets of the Company has been physically verified by the management every year sothat all the assets of Units/offices are covered once in a block of three years intervalwhich in our opinion is reasonable having regard to the size of the Company and the natureof its business. As per the phased programme during the year the Company had to conductthe physical verification at Malanjkhand Copper Project (MCP) Gujarat Copper Project(GCP) Indian Copper Complex (ICC) and Rakha Copper Project (RCP). However theverification procedure at ICC and RCP is not completed due to PAN INDIA lockdown for COVID19 pandemic. The physical verification procedure is completed at MCP and GCP. According tothe information and explanations given to us no material discrepancies were noticed onsuch verification for adjustment/settlement in the books of account. The process ofphysical verification at Units/offices should be further improved by having the detailedlist of assets with their identification numbers along with Group asset code quantity andvalue as per Fixed Assets Register duly mapped with assets physically verified and alsohaving a well-defined manual of physical verification especially looking into the variouslocations quantum of assets physically available at each of the plant/office locations.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company lands (both freehold andleasehold) and Building acquired in respect of Gujarat Copper Project having book value ofH5578.11 Lakh as at March 31 2020 are yet to be executed in favor of the Company. Thetitle deeds conveyance deeds etc. in respect of certain freehold lands at Indian CopperComplex acquired through nationalization in accordance with Indian Copper Corporation(Acquisition of Undertaking) Act 1972 which as per the management are not in possessionof the Company. Further to as stated above the management has not been able to producetitle deeds/lease deeds/other evidence of title for rest of the lands & buildingssituated at different Plants/ Projects/offices for which the Company has to identify eachof such lands with respect to their measuring areas as per the available records andreconcile the same with the value of the leasehold and freehold lands & buildingsshown under Note No.3A & 3B (for freehold lands) and Note No.9 &17 (for leaseholdlands) of the accompanying Standalone Financial statements.

ii. The physical verification of Semi-Finished and In-Process (WIP)stocks and Finished Goods as per the policy is conducted departmentally in all the units(Indian Copper Complex Khetrinagar Copper Complex Malanjkhand Copper Project TalojaCopper Project & Gujarat Copper Project) at the end of the every financial year by aduly approved committee and again once in a block of three years along with an Independentexternal agency appointed in this regard by duly approved committee.

For this year although work orders were issued to independent agenciesin all the units for carrying out physical stock verification due to PAN INDIA lockdownfor COVID 19 pandemic the same could not be completed at Khetrinagar Copper Complex &Indian Copper Complex since the work orders were issued to out-station parties throughtendering process. The physical verification procedure has been completed at Taloja CopperProject Malanjkhand Copper Project and Gujarat Copper Project by the Independent agencieswhile at ICC and KCC stock was verified and certified by the Unit's management. TheUnit's management has identified the differences in respect of copper content onstock of Inter-unit transfer and differential quantity of metal loss in Granulated DumpSlag and reconciled those differences which were further audited by appointing anIndependent auditor by the Company. By virtue of these exercise closing stock as at March31 2020 has been reduced aggregately by H25710.39 Lakh due to one-time adjustment throughwriteoff in value of closing stock at KCC and ICC arising as a result of reconciliationof metal content in copper concentrate on inter-unit transfer and sales assessment ofmetal loss in generation of Granulated Dump Slag handling losses and

old & oxidized concentrate considered as dead stock. Further lowgrade Lean ore and Mill Scat presently not in use in manufacturing process for whichprovision of H18331.81 Lakh have been made in the books of accounts as at March31 2020 bythe management. The Company has modified its Standard Operating Procedure on InventoryManagement to strengthen the reconciliation of inventory process as an ongoing activityand identification and segregation of unused stock for better control. This has beenfurther described in Note No.39 (31) of the accompanying Standalone Financial Statements.

In respect of stores and spares physical verification has beenconducted by the external agencies located in and around the project site in all theunits during the year. Shortages/ (Excesses) identified on such physical verificationwhich were not material as per the management have been properly dealt with in the booksof account.

iii. The Company has not granted any loans secured or unsecured to anycompanies firms limited liability partnership or other parties covered in the registermaintained under section 189 of the Companies Act 2013.

iv. According the information and explanations given to us the Companyhas not given any loan given any guarantee or provided any security in connection withsuch loan given/Investment made to which provisions of Section 185 of the Act apply. Theprovisions of Section 186 of the Act in our opinion are not applicable to the Company.

v. In our opinion and according to information and explanations givento us the Company has not accepted any deposits as per the provisions of the Act.

vi. According the information and explanations given to us themaintenance of cost records has been specified by the Central Government under section148(1) of the Companies Act 2013 in respect of mining activities of the Company. We havebroadly reviewed such cost records and we are of the opinion that prima facie theprescribed accounts and records have been made and maintained.

vii. (a) According to the information and explanations given to us andon the basis of our examination of books of accounts

the Company has generally been regular in depositing undisputedstatutory dues including Provident Fund Employees' State Insurance Income TaxGoods and Service Tax Customs Duty Cess and other material statutory dues applicable toit with the appropriate authorities.

According to the information and explanations given to us noundisputed amounts payable in respect of aforesaid dues which were outstanding as at 31stMarch 2020 for a period of more than six months for the date of becoming payable.

(b) According to the information and explanations given to us and asper the records of the Company following dues of Income Tax Sales Tax Entry Tax ExciseDuty Cess local body tax and Value Added Tax were in arrears as at March 31 2020 andhave not been deposited on account of dispute:

Name of the Statue Nature of Dues Period to which the amount relates Forum where dispute is pending Gross Dispute Amount (J in Lakh)
Central Excise Act Central Excise 2014-15 to 2016-17 (ICC) High court of Jharkhand 560.60
Madhya Pradesh Value added Tax Act Entry tax 1994-95 (MCP) Commissioner (Appeals) Jabbalpur *5.38
Madhya Pradesh Value added Tax Act State Sales Tax/ VAT 2009-2010 (MCP) Sales tax authority (Bhopal) *34.47
Madhya Pradesh Value added Tax Act State Sales Tax/ VAT 2011-12 (MCP) Sales tax authority (Bhopal) *16.66
Madhya Pradesh Value added Tax Act State Sales Tax/ Vat 2012-13 (MCP) Sales tax authority (Bhopal) *99.89
Name of the Statue Nature of Dues Period to which the amount relates Forum where dispute is pending Gross Dispute Amount (J in Lakh)
Central Excise Act Central Excise 2010-11 to 2013-14 (MCP) CESTAT *627.60
Rajasthan value added tax act Central Excise 2007-08 to 2014-15 (KCC) Hon'ble supreme Court *676.40
Central Excise Act Central Excise 2005-06 2013-14 2014-15 2017-18 & 2018-19 (KCC) Commissioner central excise Bikaner 1392.82
Central Excise Act Central Excise 2018-19 (KCC) CESTAT *361.69
Income tax Act Income tax 2016-17 & 2017-18 (KCC) Commissioner of Income Tax Jaipur *1.15
Madhya Pradesh Value added Tax Act State Sales Tax/ Vat 1994-952011-12 2012-13 & 2013-14 (TCP) Joint commissioner (sales tax) Maharashtra *777.60
Central Excise Act Central Excise 2010-11(TCP) CESTAT 5.26
Panvel Municipal Corporation Act Local body tax 01.01.2017 to 30.06.2017(TCP) Panvel municipal corporation 1906.36
Income tax Act Income tax 2001-02 to 2003-04 200506 to 2007-08(HO) High Court of Kolkata 11508.52
Income tax Act Income tax 2007-08 2011-12 2012-13 2016-17 & 2017-18(HO) ITAT/CIT(Appeals) *11603.76
Water (prevention and control of pollution) Cess act 1977 Water Cess 1999-20 to 2019-20 (HO) Water resources department government of Jharkhand 1799.38

*Aggregate amount of H752.59 Lakh have been deposited against the casesand shown as “Deposit with Government authorities” under Note No.-17 “OtherCurrent Assets”.

viii. According to the information and explanations given to us theCompany has not defaulted in repayment of dues to banks. The Company has not issued anydebentures and also not borrowed any loans from financial institutions or government.

ix. According to the information and explanations given to us theCompany has not raised moneys by way of initial public offer or further public offer(including debt instruments) during the year. Based on the information available the termloans taken by the Company have been applied for the purpose for which they were raised.

x. To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company or no material fraud on the Company byits officers or employees has been noticed or reported during the year.

xi. As per notification no. GSR 463(E) dated 5.06.2015 issued by theMinistry of Corporate Affairs Government of India section 197 for managerialremuneration is not applicable to the Government Company and as such provision ofparagraph 3(xi) of the said order are not applicable to the Company.

xii. In our opinion the Company is not a Nidhi Company and as suchprovisions of paragraph 3(xii) of the said order are not applicable to the Company.

xiii. According to the information and explanations given to us andbased on our examination of books of accounts transactions with the related parties arein compliance with Section 177 and 188 of the Companies Act 2013 where applicable and thedetails of such transactions have been disclosed in the Standalone Financial Statements asrequired by the applicable Indian Accounting Standards.

xiv. According to the information and explanations given to us theCompany has not made any preferential allotment or private placement of shares or fully orpartly paid convertible debentures during the year.

xv. According to the information and explanations given to us and basedon our examination of books of accounts the Company has not entered into any non-cashtransactions specified under Section 192 of the Act with its Directors or personsconnected to them.

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

For Chaturvedi & Co.
Chartered Accountants
(Firm's Registration No.302137E)
Place: Kolkata CA R.K. Nanda
Date: July 21 2020 Partner
(Membership No.510574)
UDIN: 20510574AAAABH1998

{Referred to in Paragraph (2)(f) of “Report on Other Legal andRegulatory Requirements” section of our Independent Auditor's Report}

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 (“theAct”)

We have audited the internal financial controls over financialreporting of Hindustan Copper Limited (hereinafter referred as “theCompany”) as of March 31 2020 in conjunction with our audit of the StandaloneFinancial Statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishingand maintaining internal financial controls based on 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 respective Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the “Guidance Note”) issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting 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 financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained which is sufficientand appropriate to provide a basis for our audit opinion on the internal financialcontrols system over financial reporting of the Company.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial controlover financial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not be

detected. Also projections of any evaluation of the internal financialcontrols over financial reporting to future periods are subject to the risk that theinternal financial control over financial reporting may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were generally operating effectively as at March 31 2020 based onthe 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. However in certain areas where design documentation needfurther improvement like Manual on Fixed Assets verification Implementation ofCentralized data base for Title deeds/lease deeds/ other evidences of titles in respect ofboth freehold and leasehold lands and Buildings Fund Management including Cash and Bankand controls over issuance of Bank Guarantees shown as contingent liabilitiesComprehensive delegation of power adequate departmental work allocation process jobrotation policy etc. Inventory Management Receivable Management Expenditure on CSRPayable Management incorporating the process flow by which the transactions are initiatedauthorized processed recorded and reported at department level at Plants/Projects aswell as for financial reporting process. Modification of finance/accounts manual needs tobe done incorporating the Indian Accounting Standards requirements to have effectiveinternal controls over financial reporting. System integration to capture the transactionsthat relates to financial statements and events/ conditions and other transactionssignificant to the financial statement has to be designed properly so as to fulfill theobjectives of control criteria established by the Company.

Internal controls over financial reporting process as well as testingof such control activities has to be further improved considering the discrepanciesnoticed in physical verification of fixed assets like non availability of prescribedformat of reporting reconciliation of mismatches out of such physical verificationtimely adjustment of discrepancies noticed team structure etc. and maintenance of FixedAsset Register to be further improved. Identification of old account balances and actiontaken to settle/adjust the account balances after due assessments and reconciliation ofaccount balances has to be carried out periodically. Utilization certificate related tofunds disbursed under CSR programme have not been received in proper format explaining thedate wise disbursements by company various mode of spending the amount within a projectdetails of agency involved with their name amount paid etc for better control. Furthervarious control activities in Inventory management have to be established looking into thesize of the Company and nature of its business especially like non-availability of definedformats of reporting upon completion of physical verification fixing any tolerance limitfor stock adjustment Quantification of process stock and assessment of its quality delayidentification of unused stock lying on floor and its segregation process Impropermonitoring and recording of standard and actual average metal loss during manufacturingprocess handling losses during the dispatch of copper concentrate from discharge point tobedding building for storage and reconciliation of metal content in copper concentrate oninter-unit transfer and sales. The Company has modified its Standard Operating Procedureon Inventory Management to strengthen the reconciliation of differences arise in physicalverification process as an ongoing activity and identification and segregation of unusedstock for better control. However our opinion is not qualified in the above respect.

For Chaturvedi & Co.
Chartered Accountants
(Firm's Registration No.302137E)
Place: Kolkata CA R.K. Nanda
Date: July 21 2020 Partner
(Membership No.510574)
UDIN: 20510574AAAABH1998

{Referred to in Paragraph (3) of “Report on Other Legal andRegulatory Requirements” section of our Independent Auditors' Report}

Sl. No. Details/Directions Auditors' Reply Action Taken and Impact on Accounts and Financial statements
1. Whether the Company has system in place to process all the accounting transactions through IT System? If yes the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with financial implications if any may be stated Yes the Company has system in place to process all the accounting transactions through IT System. There is no impact on the accounts and financial statements.
2. Whether there is any restructuring of any existing loan or cases of wavier/write off of debts/loans/ interest etc. made by a lender to the Company due to the Company's inability to repay the loan? If yes the financial impact may be stated. Based on the information available to us there is no restructuring of any existing loan or cases of wavier/write off of debts/ loans/interest etc. made by a lender to the Company during FY 2019-20. However the Company has written back aggregate amount of H2280.83 Lakh towards trade liabilities pending since long and excess provisions made in accounts during the normal course of business as stated under Note No. 39 (11) of the Standalone Financial Statements. Impact on the accounts and financial statements to the tune of H1453.37 Lakh has already been considered. Amount of H827.46 Lakh towards provision against feasibility study of Concentrator Plant at MCP has been written back and equivalent amount of Capital work in progress has also charged to revenue resulting Nil impact in the accounts.
3. Whether funds received/receivable for specific schemes from Central/ State agencies were properly accounted for /utilized as per its term and conditions? List the cases of deviation. No funds received/receivable for specific schemes from Central/State agencies during FY 2019-20. There is no impact on the accounts and financial statements.

 

For Chaturvedi & Co.
Chartered Accountants
(Firm's Registration No.302137E)
Place: Kolkata CA R.K. Nanda
Date: July 21 2020 Partner
(Membership No.510574)
UDIN: 20510574AAAABH1998

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION143(6)(b) OF THE COMPANIES ACT 2013 ON THE FINANCIAL STATEMENTS OF HINDUSTAN COPPERLIMITED FOR THE YEAR ENDED 31 MARCH 2020

'The preparation of financial statements of Hindustan Copper Limitedfor the year ended 31 March 2020 in accordance with the financial reporting frameworkprescribed under the Companies Act 2013 (Act) is the responsibility of the management ofthe company. The statutory auditor appointed by the Comptroller and Auditor General ofIndia under Section 139(5) of the Act is responsible for expressing opinion on thesefinancial statements under Section 143 of the Act based on independent audit in accordancewith the standards on auditing prescribed under section 143(10) of the Act. This is statedto have been done by them vide their Audit Report dated 21 July 2020.

I on behalf of the Comptroller and Auditor General of India haveconducted a supplementary audit of the financial statements of Hindustan Copper Limitedfor the year ended 31 March 2020 under Section 143(6)(a) of the Act. This supplementaryaudit has been carried out independently without access to the working papers of thestatutory auditor and is limited primarily to inquiries of the statutory auditor andcompany personnel and a selective examination of some of the accounting records.

On the basis of my supplementary audit nothing significant has come tomy knowledge which would give rise to any comment upon or supplement to statutoryauditors' report under Section 143(6)(b) of the Act.

For and on the behalf of the
Comptroller & Auditor General of India
(Suparna Deb)
Place : Kolkata Director General Audit (Mines)
Date : 03 September 2020 Kolkata

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