Hindustan Copper Ltd Directors Report.

<dhhead>INDEPENDENT AUDITOR’S REPORT</dhhead>

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 Hindustan Copper Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and notes to the Standalone Financial Statements including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "The Standalone Financial Statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (" the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022 and its profit (including Other Comprehensive Income), changes in equity and its cash flows for the year ended on that date.

 

Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the "Auditor’s Responsibilities for the Audit of the Standalone Financial Statements" section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to 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)(i) of the accompanying Standalone Financial Statements which describes the uncertainty related to the outcome of the lawsuits filed and demands raised against the Company by various parties and Government authorities;

b) Note No. 39(5) of the accompanying Standalone Financial Statements which states that the Lease agreement for Rakha Mining Lease at the Indian Copper Complex was valid up to 28.08.21. Application for renewal has been submitted as per regulations, which is currently under process

c) Note No.39 (7) of the accompanying Standalone Financial Statements which states that the title deeds for freehold and leasehold land and building acquired in respect of Gujarat Copper Project (GCP) with book value of Rs.5026.13 Lakh (PY:-Rs.5296.25 Lakh) as at March 31,2022 are yet to be executed in favor of the Company;

d) Note No.39 (9) of the accompanying Standalone Financial Statements wherein, balances under the head Claims Recoverable, Loans & Advances, Deposits from and with various parties and certain balances of trade receivables, trade payables and other current liabilities have not been confirmed as at March 31, 2022, although letters have been sent by the Company seeking confirmation of balances. Consequential impact upon receipt of such confirmation / reconciliation / adjustments of such balances, if any is not ascertainable at this stage.

e) Note No.39 (28) the accompanying Standalone Financial Statements wherein the Company has made assessment of possible impairment loss during the year with respect to some fixed assets having book value of Rs.21355.85 Lakh allocated to Gujarat Copper Project in accordance with Indian Accounting Standard (Ind AS) 36 "Impairment of

Assets". A provision of Rs.5194.00 Lakh towards impairment loss for the year (as against the total impairment loss computed to the tune of Rs.14902.21 Lakh,) has been accounted for in the books of accounts as on March 31,2022 on conservative basis keeping in mind the possible long-term lease of those Plant and machineries or outright sale of Gujarat Copper Project. f) Note No.39 (36) which describes the uncertainties and the management assessment of possible impact of COVID-19 pandemic on its business operations, financial assets, contractual obligations and its overall liquidity position as at March 31, 2022. Management will continue to monitor in future any material changes arising on financial and operational performance of the Company due to the impact of 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 judgment, were of most significance in our audit of the Standalone Financial Statements of the year ended March 31,2022. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the 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
Referred in Note No.2 (11a) and Note No.9 of the Standalone Financial Statements. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
Assessment of Stripping Ratio, which is an industry specific measurement, is technically estimated initially at the beginning of the Mines and later on periodically assessed for which no standard written policy is there. We went through the current status of the mining at different mines
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. We discussed with the management about the stripping procedure adopted in the industry as well practice followed by the company
Assessment of Stripping Ratio is uniquely applied under the Mining industries which involves significant judgment to determine the ratio by in-house technical experts Procedure followed by the management towards Identification of expenditures incurred in surface mines during the development and production stages
We have checked the stripping ratio to be charged under amortization for mine development expenditure for balance period of mines
Reliance is placed on the representations of the management.
Audit Conclusion
No material exceptions identified
2. Adjustment of revenue and proper application of Ind AS 115 "Revenue from Contracts with Customers" in respect of accuracy of revenue recognition and adjustments for the ore quality variances involving critical estimates Principal Audit Procedure
Referred in Note 2.5 of the Standalone Financial Statements We have assessed the application of the provisions of Ind AS 115, in respect of the Company’s revenue recognition and appropriateness of the estimated adjustments in the process
The revenue recognized by the Company in any particular contract , is as per the contract terms. We have selected transactions on sample basis and tested for identification of contracts, involving disagreements relating to assay of the material sold , evaluation of the satisfaction of the performance obligation , and checking for the adjustment to the revenue due to variation in the transaction price
There are subsequent adjustments made to the initial transaction price for a) the difference in LME rate considered during the initial transaction and the Quotational Period b) for assay of the material sold. Audit Conclusion
The variation in the contract price for assay of the material sold, if not settled as per contract terms between the parties to the contract, is referred to third party testing, also as per contract. No material exceptions identified
The final adjustment to revenue is then made basis the outcome of the findings of the third party
3 Provisions recognized and Contingent liabilities disclosed with respect to certain legal and tax matters Principal Audit Procedures
The Company and its jointly controlled entity is subject to a number of legal, regulatory and tax cases for which final outcome cannot be easily predicted and which could potentially result in significant liabilities. Our audit procedures relating to provisions recognized and contingencies disclosed regarding certain legal and tax matters included the followings:
Management’s disclosures with regards to contingent liabilities are presented in Note No.39 (1) (i) to the Standalone Financial Statements. Understanding and evaluating the design and operating effectiveness of controls over the recognition, measurement, presentation and disclosures made in the Standalone Financial Statements in respect of these matters;
The assessment of the risks associated with the litigations is based on complex assumptions. This requires use of judgment to establish the level of provisioning, increases the risk that provisions and contingent liabilities may not be appropriately provided against or adequately disclosed. Obtaining details of legal and tax matters, inspecting the supporting documents to evaluate management’s assessment of probability of outcome and the magnitude of potential loss, and testing related to provisions and disclosures in the Standalone Financial Statementsc
Reviewing orders and other communication from regulatory authorities and management responses thereto;
Reviewing management expert’s legal advice and opinion as applicable, obtained by the company’s management for evaluating certain legal matters and evaluating competence and capabilities of the experts; and
Using auditor’s own judgment in evaluating certain significant and complex direct and indirect tax matters
Audit Conclusion
No material exceptions identified
4. Assessment of indication of impairment and the recoverable amount of cash generating units (CGUs) Principal Audit Procedures
Refer Note No. 2.17, Note No.36D(Sl 2) of the accompanying Standalone Financial Statements. Our audit procedures related to assessment of indication of impairment and recoverable amounts of these CGUs included the followings: and evaluating the design and
There is an assessment done by the Company at the end of each reporting period for any indication that an asset may be impaired. Basis such assessment, there was a need for additional Impairment of the Plant at GCP as of 31-03-22. Understanding operating effectiveness of controls for identification and assessment of any potential impairment, including determining the carrying amount and recoverable amount of the CGUs;
Based on such indications, impairment testing was performed by the management with the help of an independent third party, in accordance with the requirements of Ind AS 36 "Impairment of Assets" Relying on the report of external agency appointed solely for evaluating the assessment of impairment at plants this year and calculating the recoverable amount and impairment loss
Using auditor’s own judgments/assessment for testing appropriateness of the method and model used for determining the recoverable amount, mathematical accuracy of the models’ calculations and evaluating reasonableness of key assumptions used in future cash flow projections such as future use of those assets or management plan;
Testing related presentation and disclosures in the Standalone Financial Statements.
Audit Conclusion
No material exceptions identified

 

 

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

The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Report of the Board of Directors, Management Discussion and Analysis Report, Report on CSR activities, Business Responsibility Report, Corporate Governance Report and other annexure to Directors Report including Shareholder’s Information, but does not include the Standalone Financial Statements and our auditor’s report thereon. The Report of the Board of Directors including annexures and other related statements forming part of the Company’s annual report is expected to be made available to us after the date of our this auditor report. Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance or conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. If, based on the Report of the Board of Directors including annexures and other related statements which form part of the annual report and made available to us after the date of this audit report, we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance

 

Responsibility of Management and Those Charged with Governance for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the Standalone Financial Statements, the Board of Directors is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company’s financial reporting process.

 

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due 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 audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

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

 

y Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

 

y Obtain an understanding of internal controls relevant to the audit in order to design 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 has adequate internal financial controls system in place and the operating effectiveness of such controls.

 

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

 

y Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

 

y Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (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 Financial Statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be 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, 2020 ("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 on the 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 explanations which to the best of our knowledge and belief were necessary for the purposes of our audit except as reported in Clause (c) of the "Emphasis of Matters" paragraph above;

b) In our opinion, proper books of account as required by law have been kept 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 Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

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

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

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

g) As per Notification No. GSR 463(E) dated 05-06-2015 issued by the Ministry of Corporate Affairs, Government of India, Section 197 of the Act is not applicable to the Government Companies. Accordingly, reporting in accordance with requirement 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 the Auditor’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 the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements–[Refer Note No. 39(1) to the accompanying Standalone Financial Statements];

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

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

3) As required under Section 143(5) of the Act, we give in the "Annexure C", a statement on the directions and sub-directions issued by the Comptroller and Auditor General of India in respect of the Company.

For Ghoshal and Ghosal

Chartered Accountants

(Firm’s Registration No.304013E)

CA Siddhartha Pal

Partner

Place: Kolkata

(Membership No.059017)

Date: 28-05-2022

UDIN: 22059017AJUOLW1740

 

"Annexure A" to the Independent Auditor’s Report

{Referred to in Paragraph (1) of "Report on Other Legal and Regulatory 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 particulars, including quantitative details and situation of fixed assets. Further asset identification numbers and codification of some movable tangible assets along with make/model number needs to be assigned to the assets and particulars like quantitative details in case of few old assets along with their description, particulars of depreciation, amortization or impairment have to be properly disclosed in the Fixed Asset Register. Location details and areas of freehold land and leasehold land held by the Company at different locations needs to be updated in the Fixed Asset Register.

(b) According to the information and explanations given to us, the fixed assets of the Company has been physically verified by the management every year so that all the assets of Units/offices are covered once in a block of three years interval, which in our opinion is reasonable having regard to the size of the Company and the nature of its business. As per the phased programme, physical verification of assets held at the Head Office in Kolkata have been carried out during the year. No material discrepancies were reported on such physical verification.

 

The process of physical verification of Fixed Assets as observed from the HO physical verification report has scope for improvement by having the detailed list of assets with their identification numbers along with group asset code, quantity and value as per Fixed Assets Register duly mapped with assets physically verified and also having a well defined manual of physical verification especially looking into the various locations, quantum of assets physically available at each of the plant/office locations.

(c) On the basis of the information compiled by the Company and considering the voluminous nature and various locations, we report that title/lease deeds and other documents of title in respect of immovable properties as referred in Note No.3A, 3B and 3C of the accompanying Standalone Financial Statements, are held in the name of the Company, except in case of lands (both freehold and leasehold) and building acquired in respect of Gujarat Copper Project having net book value of Rs. 5026.13 Lakh (Previous Year 5296.25Lakh) as at MarchRs. 31, 2022 are yet to be executed in favor of the Company. [Note No.39 (7) of the accompanying Standalone Financial Statements].

Description of Property

Gross carrying value of Land as per FA register

Held in the name of

Whether promoter, director, or their relative or employee

Period held

Reason for not being held in the name of the Company

Plot No: 747, GIDC Mega Estate, Jhagadia, Bharuch, PIN Code- 393110

Rs. 379526288.69

Jhagadia Copper Limited

No

Since Oct 2016

Case filed in Hon’ble High Court, Ahmedabad

 

ii. The physical verification of Semi-Finished and In-Process (WIP) stocks and Finished Goods as per the policy adopted by the Company is conducted departmentally in all the units (Indian Copper Complex, Khetri Copper Complex, Malanjkhand Copper Project, Taloja Copper Project & Gujarat Copper Project) at reasonable intervals during the year by a duly approved committee and again at the end of the every financial year, at least once in a block of three years along with an Independent external agency appointed in this regard by duly approved committee. During the year, the inventory of semi-finished and In-process (WIP) and inventory of Finished Goods have been physically verified and certified by duly appointed external agencies at Indian Copper Complex , Malanjkhand Copper Project, Taloja Copper Project, Khetri Copper Complex and Gujarat Copper Project. In our opinion and according to the information and explanations given to us, discrepancies noticed on such physical verification of inventories, which were not material, have been properly dealt with the books of accounts.

In respect of stores and spares, physical verification has been conducted by the external agencies in all the units during the year. In our opinion and according to the information and explanations provided to us, no material discrepancies were noticed on such physical verification We have also checked the quarterly statements filed by the Company with Banks with whom they hold a sanctioned working capital limit in excess of Rs.5 crores and have not come across any material discrepancies.

iii. In our opinion and according to the information and explanation given to us, the Company has not granted any loans, secured or unsecured to any companies, firms, limited liability partnership or other parties, covered in the register maintained under section 189 of the Companies Act, 2013. Hence, the clauses (iii) (a), (iii) (b), (iii) (c), (iii) (d), (iii) (e) and (iii) (f) of the paragraph 3 of the order are not applicable to the Company. iv. According the information and explanations given to us, the Company has not given any loan or made any investment, given any guarantee or provided any security in connection with such loan given/Investment made to which provisions of Section 185 of the Act apply. The provisions 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 given to us, the Company has not accepted any deposits from public within the meaning of Sections 73 to 76 of the Companies Act 2013 and rules framed there-under during the year. vi. According the information and explanations given to us, the maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013 in respect of mining activities of the Company. We have broadly reviewed the same and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether these are accurate and complete.

vii. (a) According to the information and explanations given to us and on the basis of our examination of books of accounts, the Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income Tax, Goods and Service Tax, Customs Duty, Cess and other material statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, there is no arrear of undisputed statutory dues as at March 31, 2022 outstanding for a period of more than six months from the date of becoming payable except water cess aggregating of Rs.2034.28 Lakh payable to Water Resources Department, Government of Jharkhand accrued from the financialyear 1999-00 to 2021-22.

(b) According to the information and explanations given to us and as per the records of the Company, there are disputed statutory dues, which have not been deposited as on March 31,2022 as given herein below:-

 

Statement of Disputed Statutory Dues as on 31.03.2022 ( FY 2021-22)

Name of the Statue

Nature of Dues

Period to which the amount relates

Forum where dispute is pending

Gross Dispute Amount (Rs. in lakh)

Amount Deposited under protest / Provisions made (Rs. in lakh)

Balance Amount not paid (Rs. in lakh)

Central Excise Act

Central Excise

2014-15 to 2016- 17(ICC)

High Court of Jharkhand

560.60

-

560.60

Madhya Pradesh

Entry Tax

1994-95 (MCP)

Commissioner (Appeals)

5.38

5.38

-

Value Added Tax Act.

Jabalpur

Madhya Pradesh

State Sales

2009-2010

Sales Tax Authority

34.47

13.40

21.07

Value Added Tax Act.

Tax/ VAT

(MCP)

(Bhopal)

Madhya Pradesh

State Sales

2011-12 (MCP)

Sales Tax Authority

16.66

8.03

8.63

Value Added Tax Act.

Tax/ VAT

(Bhopal)

Madhya Pradesh

State Sales

2012-13 (MCP)

Sales Tax Authority

99.89

39.96

59.93

Value Added Tax Act.

Tax/ VAT

(Bhopal)

Central Excise Act

Central Excise

2010-11 TO 2013-14(ICC)

CESTAT

627.60

68.37

559.23

Rajasthan Value Added Tax Act.

Central Excise

2007.08 TO 2014-15(KCC)

Hon’ble High Court, Jaipur

676.40

364.73

311.67

Central Excise Act

Central Excise

2014-15 & 2018- 19(KCC)

CESTAT

1310.70

-

1310.70

Central Excise Act

Central Excise

2018-19(KCC)

CESTAT

398.10

9.57

388.53

Maharashtra Value Added Tax Act.

State Sales Tax/ VAT

1994-95(TCP)

Appellate Authority

18.81

2.00

16.81

Panvel Municipal

Local Body

01.01.2017 TO

Panvel Municipal

5789.42

-

5789.42

Corporation Act

Tax

30.06.2017 (TCP)

Corporation

Income Tax Act

Income Tax

2004-05 & 2007- 08(HO)

High Court of Kolkata

1306.18

-

1306.18

Income Tax Act

Income Tax

2002-03,2003- 04,2004-05, 2006-07, 2007- 08, 2008-09, 2012-13, 2013- 14,2017-18 & 2018-19(HO)

ITAT/ Commissioner of Income Tax (Appeal)

21763.45

683.92

21079.53

Water (Prevention and Control of Pollution) Cess Act, 1977

Water Cess

1999-20 TO 2020-21(ICC)

Water Resources Department, Government of Jharkhand

2034.28

2034.28

-

GRAND TOTAL

34641.94

3229.64

31412.30

 

viii. According to the information and explanation provided to us, we did not come across any instance of any transactions not recorded being disclosed or surrendered before the tax authorities as income during the year ix. According to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks. Term loans were applied for the purpose for which the loans were obtained.The Company has not issued any debentures and also not borrowed any loans from financial institutions or government. We did not come across any data to suggest that funds raised for short term purposes were used for long term purpose. There were no loans raised during the year by pledging of securities held in its subsidiaries, joint ventures or associate companies.

x. According to the information and explanations given to us, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year. There was a preferential allotment of shares during the year in compliance with section 42 and section 62 of the Companies Act 2013, for which the proceeds were utilized for the purpose for which the funds were raised, The unutilized portion of the funds raised have been kept separately in the form of fixed deposits for utilization in the subsequent financial year.

xi. To the best of our knowledge and according to the information and explanations given to us and based on the audit procedure performed, we report that no cases of fraud by the Company or no material fraud on the Company by its officers or employees has been noticed or reported during the year. Consequently, the requirement to file a report under sub-section (12) of section 143 of the Companies Act 2013 did not arise. The register for whistle-blower complaints have been reviewed during the year.

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

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

xiv. In our view, the company has an internal audit system commensurate with the size and nature of the business. The reports of the Internal Auditors for the period under audit were considered by us, while conducting our audit.

xv. According to the information and explanations given to us and based on our examination of books of accounts, the Company has not entered into any non-cash transactions specified under Section 192 of the Act with its Directors or persons connected to them. Accordingly provisions of paragraph 3(xv) of the said order are not applicable to the Company.

xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and as such, reporting under this clause is not applicable to the Company. xvii.According to the information and explanations given to us and based on our examination of books of accounts, the company has not incurred cash losses in the financial year and in the immediately preceding financial year.

xviii. We have checked with the outgoing auditors for any issues and concerns and obtained a no-objection certificate from them before commencing our audit procedures for the year.

xix. Basis the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, and our understanding of the Board of Director and Management plans, we are of the opinion that no material uncertainty exists as on the date of the audit report that the company is capable of meeting its liabilities existing at the date of the Balance Sheet, as and when they fall due within a period of one year from the Balance Sheet date.

xx. According to the information and explanations given to us and based on our examination of books of accounts, the unspent amount of CSR funds were transferred into a separate account in compliance with second proviso to subsection (5) of section 135 of the Companies Act . Amount remaining unspent under sub-section (5) of section 135 of the Companies Act, pursuant to any on-going project has been transferred to special account in compliance with the provision of sub-section (6) of section 135 of the said Act.

For Ghoshal and Ghosal.

Chartered Accountants

(Firm’s Registration No.304013E)

CA Siddhartha Pal

Partner

Place: Kolkata

(Membership No.059017)

Date: 28-05-2022

UDIN: 22059017AJUOLW1740

 

"Annexure B" to the Independent Auditor’s Report

{Referred to in Paragraph (2) (f) of "Report on Other Legal and Regulatory Requirements" section of our Independent Auditor’s Report}

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Hindustan Copper Limited (hereinafter referred as "the Company") as of March 31, 2022 in conjunction with our audit of the Standalone Financial 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 establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

 

Auditor’s Responsibility

Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies 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 and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

 

Meaning of Internal Financial Controls over Financial Reporting

A Company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

 

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, internal financial controls system over financial reporting and such internal financial controls over financial reporting were generally operating effectively as at March 31, 2022, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. However further improvement is required in strengthening of the monitoring of the controls in respect of accounting for expenses and fixed assets, confirmation/reconciliation of balances for current and non-current assets, trade payables and other current liabilities. The internal control system for inventories of stores and spares with regard to receipt, issue for production and generation of report from ERP is required to be further strengthened.

There is scope to leverage the ERP to strengthen some of the existing controls, more specifically around Fixed Assets, and posting of Journal Vouchers.

However, our opinion is not qualified in respect of the above matters

For Ghoshal and Ghosal,

Chartered Accountants

(Firm’s Registration No.304013E)

CA Siddhartha Pal

Partner

Place: Kolkata

(Membership No.059017)

Date: 28-05-22

UDIN: 22059017AJUOLW1740