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Hindustan Zinc Ltd.

BSE: 500188 Sector: Metals & Mining
NSE: HINDZINC ISIN Code: INE267A01025
BSE 00:00 | 21 Oct 342.70 -17.00
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NSE 00:00 | 21 Oct 342.05 -17.85
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OPEN 360.00
PREVIOUS CLOSE 359.70
VOLUME 97927
52-Week high 407.90
52-Week low 200.40
P/E 16.66
Mkt Cap.(Rs cr) 144,801
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 360.00
CLOSE 359.70
VOLUME 97927
52-Week high 407.90
52-Week low 200.40
P/E 16.66
Mkt Cap.(Rs cr) 144,801
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Hindustan Zinc Ltd. (HINDZINC) - Auditors Report

Company auditors report

To the Members of Hindustan Zinc Limited

REPORT ON THE AUDIT OF THE IND AS FINANCIAL STATEMENTS

Opinion

We have audited the accompanying Ind AS financial statements of Hindustan Zinc Limited("the Company") which comprise the Balance sheet as at March 31 2021 theStatement of Profit and Loss including the statement of Other Comprehensive Income theCash Flow Statement and the Statement of Changes in Equity for the year then ended andnotes to the Ind AS financial statements including a summary of significant accountingpolicies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to usthe aforesaid Ind AS financial statements give the information required by theCompanies Act_ 2013 as amended ("the Act") in the manner so required and givea true and fair view in conformity with the accounting principles generally accepted inIndia of the state of affairs of the Company as at March 31 _2021 its profit includingother comprehensive income its cash flows and the changes in equity for the year ended onthat date.

Basis for Opinion

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the ‘Auditor’sResponsibilities for the Audit of the Ind AS Financial Statements’ section of ourreport. We are independent of the Company in accordance with the ‘Code ofEthics’ issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the Ind AS financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements for the financial year endedMarch 312021. These matters were addressed in the context of our audit of the Ind ASfinancial statements as a wholeand in forming our opinion thereon and we do not providea separate opinion on these matters. For each matter below our description of how ouraudit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor’s responsibilities for the audit of the Ind AS financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the Ind AS financial statements. The results of our auditprocedures including the procedures performed to address the matters below provide thebasis for our audit opinion on the accompanying Ind AS financial statements.

Key audit matters How our audit addressed the key audit matter
(a) Claims and exposure relating to taxation and litigation (as described in Note 3(III)(B) 29 and 31 of the Ind AS financial statements) Our audit procedures included the following:
The Company is subject to several legal and tax related claims which have been either been disclosed or accounted for in the accompanying financial statements. Gained an understanding of the process of identification of claims litigations and contingent liabilities and identified key controls in the process. For selected controls we have performed test of controls.
Taxation and litigation exposures have been identified as a key audit matter due to complexities involved in these matters timescales involved for resolution and the potential financial impact of these on the financial statements. Further significant management judgement is involved in assessing the exposure of each case and thus a risk that such cases may not be adequately provided for or disclosed. Obtained the summary of Company’s legal and tax cases and critically assessed management’s position through discussions with the Legal Counsel Head of Tax and operational management on both the probability of success in significant cases and the magnitude of any potential loss.
Accordingly this matter has been identified as a key audit matter. Inspected external legal opinions and/or past judicial orders wherever considered necessary and other evidence to corroborate management’s assessment in respect of legal claims.
Engaged tax specialists to technically assess the management’s positions on tax disputes
Assessed the relevant disclosures made within the financial statements to address whether they reflect the facts and circumstances of the respective tax and legal exposures as per the requirements of relevant accounting standards.

We have determined that there are no other key audit matters to communicate in ourreport.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company’s Board of Directors is responsible for the other information. Theother information comprises the information included in the Annual report but does notinclude the Ind AS financial statements and our auditor’s report thereon.

Our opinion on the Ind AS financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.

In connection with our audit of the Ind AS financial statements our responsibility isto read the other information and in doing so consider whether such other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management for the Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Ind AS financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accounting recordsrelevant to the preparation and presentation of the Ind AS financial statements that givea true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the Ind AS financial statements management is responsible for assessingthe Company’s ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company’sfinancial reporting process.

Auditor’s Responsibilities for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the Ind AS financialstatementswhether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor’s report to therelated disclosures in the financial statements orif such disclosures are inadequatetomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor’s report. However future events or conditions may cause theCompany to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findingsincluding anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Ind AS financial statements forthe financial year ended March

31 2021 and are therefore the key audit matters. We describe these matters in ourauditor’s report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure_1" a statement on the mattersspecified in paragraphs 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 including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors isdisqualified as on March 31 _2021 from being appointed as a director in terms of Section164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Ind AS financial statements and theoperating effectiveness of such controls refer to our separate Report in "Annexure2" to this report;

(g) In our opinion the managerial remuneration for the year ended March 31 2021 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;

(h) 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements – Refer Note 29 and 31 to the Ind ASfinancial statements;

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

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

For S.R. Batliboi & CO. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005

per Sudhir Soni

Partner

Membership Number: 41870

UDIN: 21041870AAAAAL8314

Place of Signature: Mumbai

Date: April 27 2021

Annexure 1

referred to in paragraph 1 under the heading "Report on other legal and regulatoryRequirement’s of our report of even date"

Re: Hindustan Zinc Limited (‘the Company’)

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

(b) All fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.

(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are held in thename of the Company.

(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. No material discrepancies werenoticed on such physical verification. Inventories lying with third parties have beenconfirmed by them as at March 31 2021 and no material discrepancies were noticed inrespect of such confirmations.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the provisions of clause 3(iii)(a) (b) and (c) of theOrder are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to usthere are no loans investments guarantees and securities given in respect of whichprovisions of sections 185 and 186 of the Companies Act 2013 are applicable and hence notcommented upon.

(v) The Company has not accepted any deposits within the meaning of sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable and hence notcommented upon.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Act related to the manufacture of products and generation ofelectricity and are of the opinion that prima faciethe specified accounts and recordshave been made and maintained. We have not however made a detailed examination of thesame.

(vii) (a) Undisputed statutory dues including provident fund income-tax sales-taxservice tax duty of custom duty of excise value added tax goods and service tax cess and other statutory dues have generally been regularly deposited with the appropriateauthorities though there has been a slight delay in a few cases. The provisions relatingto employees’ state insurance are not applicable to the Company.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income-tax sales-tax duty of custom goods andservices tax cess and other statutory dues were outstanding at the year end for aperiod of more than six months from the date they became payable. The provisions relatingto employees’ state insurance are not applicable to the Company.

(c) According to the records of the Company the dues outstanding of income-taxsales-tax duty of custom duty of excise and cess on account of any dispute are asfollows:

Name of the statute Nature of the dues Amount (Rs. in crore)* Period (Financial year) to which amount relates Forum where the dispute is pending
Income tax act 1961 Income tax 1 526 1998-99 to 2003-2004 2013-14 2015-2016 Commissioner of Income Tax (Appeals)
Income tax act 1961 Income tax 5 405 1988-1989 to 1990-1991 1992-1993 1997-98 1999- 00 to 2001-02 2004-05 to 2010-2011 2012-13 to 2014-15 Income Tax Appellate Tribunal
Income tax act 1961 Income tax 2 765 1989-90 to 2011-12 High Court / Supreme Court
Customs Act 1962 Customs duty 48.39 2008-2014 CESTAT
Customs Act 1962 Customs duty 0.02 2015-16 Commissioner Appeal
Customs Act 1962 Customs duty 0.00 2017-18 AC/DC
Central Excise Act 1944 Excise duty 129.60 1989-2018 CESTAT
Central Excise Act 1944 Excise duty 7.38 1991 to 1992 1998 to 2005 and 2007 to 2018 Commissioner and Commissioner Appeal
Central Excise Act 1944 Excise duty 143.98 1995 to 1996 and 1997 to 2013 High Court
Finance Act 1994 Service Tax 22.05 1997 to 1999 and 2004 to 2016 CESTAT
Finance Act 1994 Service Tax 15.19 2002 to 2005 and 2007-18 Commissioner and Commissioner Appeal
Finance Act 1994 Rajasthan sales tax act 1994 Service Tax Sales tax 200.65 3.94 2004-14 and 2016-2018 2009 to 2011 and 2012 to 2019 High Court Commissioner and Assistant Commissioner
Rajasthan sales tax act 1994 Sales tax 0.49 2007 to 2008 High Court
Rajasthan sales tax act 1994 Sales tax 5.55 1985 to 1986 Supreme Court
Rajasthan sales tax act 1994 Sales tax 83.65 1998 to 2000 2001 to 2004 and 2009 to 2014 Tax Board
Central Goods and Services Tax Act 2017 GST 0.44 2019 to 2020 Commissioner

*Net of amount paid under protest / adjusted against refunds

(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowing to afinancial institutionbank or dues to debenture holders. The Company did not have anyoutstanding loans or borrowing dues in respect of a government during the year.

(ix) In our opinion and according to the information and explanations given by themanagement the Company has utilized the monies raised by way of debt instruments in thenature of Non-Convertible Debentures and term loans for the purposes for which they wereraised.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no material fraud on the Company by the officersand employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion the Company is not a Nidhi company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with sections 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and accordingly reporting requirements under clause 3(xiv) of the Order arenot applicable to the Company and hence not commented upon.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act 2013.

(xvi) According to the information and explanations given to usthe provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For S.R. Batliboi & CO. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005

per Sudhir Soni

Partner

Membership Number: 41870

UDIN: 21041870AAAAAL8314

Place of Signature: Mumbai

Date: April 27 2021

Annexure 2

To the Independent Auditor’s Report of even date on the Financial Statements ofHindustan Zinc Limited

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 financial controls over financial reporting of HindustanZinc Limited ("the Company") as of March 31 2021 in conjunction with our auditof 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 internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedunder the Committee of Sponsoring Organisations of the Treadway Commission (2013framework) ("COSO 2013"). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to the Company’s policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting with reference to these financial statements based onour audit. We conducted our audit in accordance with the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting (the "Guidance Note") andthe Standards on Auditing as specified under section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting with reference to these standalone financial statements 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 over financial reporting with reference to thesestandalone financial statements and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting with reference to these standalonefinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor’s judgement includingthe assessment of the risks of material misstatement of the financial statements whetherdue 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 internal financial controls over financialreporting with reference to these standalone financial statements.

Meaning of Internal Financial Controls Over Financial Reporting With Reference to theseFinancial Statements

A company’s internal financial control over financial reporting with reference tothese financial statements is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. Acompany’s internal financial control over financial reporting with reference to thesefinancial statements 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 authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company’s assets that could havea material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting WithReference to these Financial Statements

Because of the inherent limitations of internal financial controls over financialreporting with reference to these financial statements including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of theinternal financial controls over financial reporting with reference to these financialstatements to future periods are subject to the risk that the internal financial controlover financial reporting with reference to these financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequate internal financialcontrols over financial reporting with reference to these standalone financial statementsand such internal financial controls over financial reporting with reference to thesestandalone financial statements were operating effectively as at March 31 2021 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in COSO 2013.

For S.R. Batliboi & CO. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005

per Sudhir Soni

Partner

Membership Number: 41870

UDIN: 21041870AAAAAL8314

Place of Signature: Mumbai

Date: April 27 2021

.