1) We have audited the accompanying financial statements of HINDALCO
INDUSTRIES LIMITED (the Company), which comprise the Balance Sheet as
at 31st March, 2014, and the Statement of Profi t and Loss and Cash
Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
2) Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash fl ows of the company in accordance
with the accounting principles generally accepted in India, including
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 (the Act) read with the General Circular
15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs
in respect of section 133 of the Companies Act, 2013 and Accounting
Standard (AS)-30 to the extent it relates to Derivative Accounting , as
prescribed by The Institute of Chartered Accountants of India. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the fi
nancial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
3) Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. 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. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the company''s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that the audit evidence we have obtained is
suffi cient and appropriate to provide a basis for our audit opinion.
4) In our opinion and to the best of our information and according to
the explanations given to us, the financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2014.
b) In the case of the Statement of Profi t and Loss, of the profi t for
the year ended on that date, and
c) In the case of the Cash Flow Statement, of the cash fl ows for the
year ended on that date.
Emphasis of Matter
5) Attention is invited to Note No. 38 of Notes to Financial Statements
explaining that in compliance to scheme of arrangement u/s 391 to 394
of the Companies Act 1956 approved by the Hon''ble Bombay High Court
vide order dated 29th June 2009, the management of the Company during
the year has identifi ed and adjusted provision for diminution in the
carrying value of Investment in one of the Subsidiary, amounting to Rs.
86.06 Crore against Business Reconstruction Reserve. This has resulted
in the profi t before tax and profi t after tax for the year being
higher by Rs. 86.06 Crore. Our opinion is not qualifi ed on this matter.
Report on other Legal and Regulatory Requirements
6) As required by the Companies (Auditor''s Report) Order, 2003 (the
Order) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specifi ed in paragraphs 4 and 5 of the Order.
7) As required by section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which, to the
best of our knowledge and belief were necessary for the purpose of our
b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
c) The Balance Sheet, Statement of Profi t and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
d) In our opinion, the Balance Sheet, Statement of Profi t and Loss and
Cash Flow Statement comply with the accounting standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956 (the Act)
read with the General Circular 15/2013 dated 13th September 2013 of the
Ministry of Corporate Affairs in respect of Section 133 of the
Companies Act, 2013 and Accounting Standard (AS)-30 to the extent it
relates to Derivative Accounting , as prescribed by The Institute of
Chartered Accountants of India..
e) On the basis of written representations received from the directors
as on 31st March 2014, and taken on record by the Board of Directors,
none of the directors is disqualifi ed as on 31st March 2014, from
being appointed as a director in terms of clause (g) of sub-section (1)
of section 274 of the Companies Act, 1956.
Annexure referred to in paragraph 6 under the heading Report on other
legal and regulatory requirements of our report of even date. Re:
Hindalco Industries Ltd. (the Company)
I. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of Fixed
(b) Fixed Assets have been physically verifi ed by the management
according to a phased program designated to cover all items over a
period of three years, which in our opinion is reasonable having regard
to size of the Company and the nature of its assets. Pursuant to the
program, a portion of fi xed assets has been physically verifi ed by
the management during the year and no material discrepancies between
book record and physical inventory has been noticed.
(c) No substantial part of fi xed assets has been disposed of during
the year, which has bearing on the going concern assumption.
II. (a) Physical verifi cation of inventory, (except stocks in transit
and stocks lying with third parties, confirmation for which has been
obtained) have been conducted at reasonable intervals during the year,
by the management/ outside agencies.
(b) In our opinion, the procedures of physical verifi cation of
inventory followed by the management are reasonable and adequate in
relation to the size of the Company and nature of its business.
(c) The Company has maintained proper records of inventory. No material
discrepancies were noticed on physical verifi cation of inventory as
compared to book records except for shortage in coal amounting to
Rs.12.51 Crore and the same has been properly dealt with in the books of
III. (a) The Company has not granted any loans, secured or unsecured
to companies, firms or other parties listed in the register maintained
under Section 301 of the Companies Act, 1956.
(b) The Company has not taken any loans, secured or unsecured from
companies, firms or other parties listed in the register maintained
under Section 301 of the Companies Act, 1956.
IV. On the basis of checks carried out during the course of audit and
as per explanations given to us, we are of the opinion that there is
adequate internal control system commensurate with the size of the
Company and the nature of its business; for the purchase of inventory
and fi xed assets and for the sale of goods and services. Further, on
the basis of our examination of the records of the Company and
according to the information and explanation given to us, no major
weakness has been noticed or reported in the internal controls except
as disclosed in the paragraph XXI of this report.
V. (a) In our opinion and according to the information and explanation
given to us, the transactions that need to be entered into register
maintained under section 301 of the Companies Act, 1956 have been so
(b) As per the information and explanations give to us and the records
of the Company examined by us, there are no contract or arrangements
made for transactions exceeding Rupees 5,00,000 in respect of each
party, for sale and purchase of goods and services in pursuance of
section 301 of the Company''s Act,1956.
VI. The Company has not accepted any deposit from the public within
the meaning of section 58A and 58AA of the Companies Act 1956 and the
rules framed there under.
VII. The Company has an internal audit system, which in our opinion is
commensurate with the size and nature of its business.
VIII. We have broadly reviewed the books of accounts maintained by
Company in respect of product, where pursuant to the rule made by the
Central Government of India the maintenance of cost records has been
prescribed under section 209 (1) (d) of the Companies Act 1956 and are
of the opinion that, prima facie, the prescribed records have been
maintained. We have, however, not made a detailed examination of the
records with a view to determine whether they are accurate or complete.
IX. (a) According to the information and explanations given to us and
on the basis of our examination of the books of account, the Company is
generally regular in depositing undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employee''s
State Insurance, Income Tax,
Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and
other statutory dues with the appropriate authorities. According to the
information and explanations given to us and the records of the Company
examined by us, no undisputed statutory dues as above were outstanding
as at 31st March, 2014 for a period of more than 6 months from the date
they became payable.
(b) According to the information and explanations given to us, the dues
of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty,
Service Tax and Cess which have not been deposited on account of any
dispute and the forum where the dispute is pending as on 31st March
2014 are as under:
Name of the Statute Nature of Dues Amount
(Rs. in Crore)
Central Sales Act and Local Sales Tax 0.40
Sales Tax Act
The Central Excise Act,
1994 Excise Duty 155.31
The Service Tax under the Service Tax 0.67
Finance Act, 1994
The Income Tax Act, 1961 Income Tax 691.24
Adhosanrachna Vikas Chhattisgarh 0.26
Evam Parayavaran Upkar Development and
Adhiniyam, 2005 Environment Cess
Shakti Nagar Special Area Cess on Col 11.17
The Building and Other Cess 100.00
(Regulation of Employment
and Conditions of Service) Act
& Rules (BOCW Act)
Name of the Statue Period to which the
amount relates Forum where the
Central Sales Act and Local
Sales Tax Act 2003-2004 The Supreme Court
1992-1993, 1995- The High Court
1996, 2003-204, 2004
to 2000-2001, Tribunal
2001-2002 to 2008-2009
to 2012-2013 Asst Commissioner/
The Central Excise Act,
1994 1999-2000 to 2007-
2008 The Supreme Court
2007-2008 to The High Court
1993-1994, 1999- Customs, Excise and
2000 to 2011-2012 Appeellate Tribunal
to 2009-2010, Asst Commissioner/
2011-2012, 2012-2013 Commissioner/
The Service Tax under the
Finance Act, 1994 1997-2000, 2002-2008 The High Court
2002-2003 to 2011-
2012 Customs, Excise and
Service Tax Appeellate
to 2006-2007, Asst Commissioner/
2008-2009 to 2011-
2012 Commissioner/ Revisionnery
The Income Tax Act, 1961 2008-2009, 2009-2010 CIT (Appeals)
Evam Parayavaran Upkar
Shakti Nagar Special Area
Development Authority 2005-2006 to 2011-
2012 The Supreme Court
1997-1998 to 2013-2014 The Supreme Court
The Building and Other
(Regulation of Employment
and Conditions of Service)
Act & Rules (BOCW Act) 2011-2012 The Supreme Court
X. The Company does not have any accumulated losses and has not
incurred cash losses in the current financial year and in the
immediately preceding financial year.
XI. The Company has not defaulted in repayment of dues to Financial
Institutions or Banks or Debenture holders.
XII. According to the information and explanations given to us, the
Company has not granted any loans or advances on the basis of security
by way of pledge of Shares, Debentures and other Securities.
XIII. The provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the
XIV. The Company is not in the business of dealing or trading in
Shares, Securities, Debentures and other Investments.
XV. In our opinion and according to the information and explanations
given to us, the terms and conditions on which the Company has given
corporate guarantees for loans taken by its Subsidiary from Banks and
Financial Institutions are not prima facie prejudicial to the interest
of the Company.
XVI. Based on information and explanations given to us and records of
the Company examined by us, in our opinion, the term loans have been
applied for the purpose for which they were obtained. Though unutilized
funds which were not required for immediate use for capital expenditure
have been temporarily invested in mutual funds / bank deposit.
XVII. According to the information and explanations given to us and on
the basis of our overall examination of the Balance Sheet and Cash Flow
Statement, we report that no funds raised on short term basis have been
used for long term investment of the Company.
XVIII. During the year under Audit, the Company has made preferential
allotment of shares to parties and companies covered in the register
maintained under section 301 of the Companies Act 1956. The price at
which shares have been issued on conversion of warrants, has been
determined as per the Securities and Exchange board of India (Issue of
Capital and Disclosure Requirement) Regulation, 2009, which in our
opinion is not prejudicial to the interest of the Company.
XIX. The Company has created securities / charges in respect of
secured debentures issued.
XX. The Company has not raised any money by Public Issues during the
XXI. During the course of our examination of the books and records of
the Company, carried out in accordance with the Generally Accepted
Auditing Practice in India, and according to the information and
explanations given to us, we report that the following fraud on the
Company was detected during the year-:
In the matter of weighment and recording of receipt of coal purchased
at one of its unit where contractor/ transporter and some of the
Company''s employees were involved. As explained by the management, the
impact of this could not be ascertained /quantifi ed at this stage as
the matter is under investigation. However, the shortage observed in
coal inventory on physical verifi cation amounting to Rs. 12.51 Crore has
been fully provided for in the books of accounts.
As explained by the management, necessary steps have been taken to
strengthen the internal control systems in these regard and it is not
expected to have any impact on the financial results of the Company
For SINGHI & CO.
Firm Registration No.302049E
Place: Mumbai Partner
Date: 29th day of May, 2014 Membership No. 53518