A PROJECT REPORT ON

Analysis of Audit Report of Hindalco

SUBMITTED BY
MR YOGESH ARJUN SAHANI
ROLL NO: 166052
M.Com. SEM- IV
(ADVANCE ACCOUNTANCY)
ACADEMIC YEAR: 2016-17

UNDER THE GUIDANCE OF PROJECT GUIDE

PROF. NIKHIL KARKHANIS

SUBMITTED TO UNIVERSITY OF MUMBAI

MULUND COLLEGE OF COMMERCE
S N ROAD, MULUND (WEST)
MUMBAI - 400080
 Declaration from the Student

I, Yogesh Sahani Roll. No 166052 Student of Mulund College Of Commerce, S. N. Road,

Mulund (West) 400080, studying in M.Com Part- II hereby declare that I have completed the

project on Analysis of Audit Report of Hindalco under the guidance of project guide Prof.

Nikhil Karkhanis during the academic year 2016-17. The information submitted is true to the

best of my knowledge.

Date: Signature

Place:
 CERTIFICATE

I, Prof. Nikhil Karkhanis, hereby certify that Mr Yogesh Sahani Roll No. 166052 of Mulund

College of Commerce, S. N. Road, and Mulund (West), Mumbai 400080 of M.com Part II

(Advanced Accountancy) has completed his project on Analysis of Audit Report of

Hindalco during the academic year 2016-17. The information submitted is true and original

to the best of my knowledge.

____________________ ___________________

Project Guide External guide

_____________________ ___________________

Co-coordinator Principal

Date:
 ACKNOWLEDGEMENT

I would like to express my sincere gratitude to Principal of Mulund College of

Commerce DR. (Mrs.) Parvathi Venkatesh, Course - Coordinator Prof. Rane and our

project guide Prof. Nikhil Karkhanis, for providing me an opportunity to do my project

work on Analysis of Audit Report of Hindalco. I also wish to express my sincere

gratitude to the non - teaching staff of our college. I sincerely thank to all of them

in helping me to carrying out this project work. Last but not the least, I wish to avail

myself of this opportunity, to express a sense of gratitude and love to my friends and

my beloved parents for their mutual support, strength, help and for everything.

PLACE: Signature

DATE:
 TABLE OF CONTENTS

HISTORY OF HINDALCO........................................6

GROUP COMPANIES................................................7

INDEPENDENT AUDITORS' REPORT................22

 HISTORY OF HINDALCO

Hindalco Industries, the metals flagship company of the Aditya Birla Group, is
an industry leader in aluminium and copper. Its headquarters are at Mumbai,
Maharashtra, India A metals powerhouse with a consolidated turnover of Rs
600, 128 million ($ 15 billion), Hindalco is the world's largest aluminium
rolling company and one of the biggest producers of primary aluminium in
Asia. Its copper smelter is the world's largest custom smelter at a single
location.

Established in 1958, Hindalco commissioned its aluminium facility at Renukoot

in Eastern U.P. in 1962. Later acquisitions and mergers, with Indal, Birla
Copper and the Nifty and Mt.Gordon copper mines in Australia, strengthened
the company's position in valueadded alumina, aluminium and copper
products, with vertical integration through access to captive copper
concentrates.

In 2007, the acquisition of Novelis Inc. a world leader in aluminium rolling and
can recycling marked a significant milestone in the history of the aluminium
industry in India. With Novelis under its fold Hindalco ranks among the global
top five aluminium majors, as an integrated producer with lowcost alumina and
aluminium facilities combined with highend rolling capabilities and a global
footprint in 12 countries outside India. Its combined turnover of US$ 15 billion,
places it in the Fortune 500 league.
Hindalco in India enjoys a leadership position in aluminium and copper. The
company's aluminium units across the country encompass the entire gamut of
operations from bauxite mining, alumina refining, aluminium smelting to
downstream rolling, extrusions, foils and alloy wheels, along with captive
power plants and coal mines. The Birla Copper unit produces copper cathodes,
continuous cast copper rods along with other byproducts, including gold, silver
and DAP fertilisers.

Group Companies

Novelis Inc Novelis Inc. is the world's leading aluminium rolled products
producer based on shipment volume. The company produces an estimated 19
per cent of the world's flatrolled aluminium products and is the number one
producer in Europe and South America, and the second largest in North America
and Asia. In its 2009 fiscal year, the company shipped 2.9 million tonnes of
aluminium products and reported net sales of approximately $10.2 billion.

Aditya Birla Minerals Ltd Aditya Birla Minerals Ltd. is the largest pure
copper company listed on the Australian Stock Exchange.Hindalco Industries
Ltd owns 51 per cent of Aditya Birla Minerals Ltd (ABML), a company having
100 per cent holding in Birla Nifty Pty Limited and Birla Mt. Gordon Pty
Limited located in Western Australia and Queensland, respectively. ABML, an
S&P ASX 300 Index company, is the largest pure copper company listed on the
Australian Stock Exchange.

HindalcoAlmex Aerospace Ltd HindalcoAlmex Aerospace Limited

(HAAL) is a joint venture between Hindalco Industries Limited and Almex
USA Incorporated. The company manufactures highstrength aluminium alloys
 for applications in the aerospace, sporting goods and surface transport
industries. Hindalco holds 70 per cent equity while the balance 30 per cent is
held by Almex.

Product range of the company includes:

Alumina chemicals.
Aluminas and hydrates
Minerals.
Primary aluminium
Ingots.
Wire rods
Billets.
Aluminium extrusions. Aluminium rolled products. Aluminium foil &
packaging. Aluminium alloy wheels.
Copper products:
Copper cathodes
Continuous cast copper rods.
DAP/NPK complexes.
Other:
Sulphuric acid.
Phosphoric acid.
Phospho gypsum.
Copper slag.
 INDEPENDENT AUDITORS' REPORT

ON THE STANDALONE FINANCIAL STATEMENTS

TO THE MEMBERS OF HINDALCO INDUSTRIES LIMITED

We have audited the accompanying standalone financial statements

of HINDALCO INDUSTRIES LIMITED ("the Company"), which comprise
the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the
Cash Flow Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in
Section 134(5) of the Companies Act, 2013 ("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 and cash flows of the
Company in accordance with the accounting principles generally accepted in
India, including the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, Accounting
Standard (AS)30 to the extent it relates to Derivative Accounting, as prescribed
by the Institute of Chartered Accountants of India and other accounting
principles generally accepted in India. 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 financial statements that give a true and fair view and are
free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial

statements based on our audit. We have taken into account the provisions of the
Act, the accounting and auditing standards and matters which are required to be
included in the audit report under the provisions of the Act and the Rules made
there under.

We conducted our audit in accordance with the Standards on Auditing specified

under Section 143(10) of the Act. 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 the 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
financial control relevant to the Company's preparation of the financial
statements that give a true and fair view in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on whether the Company has in place an adequate internal financial
controls system over financial reporting and the operating effectiveness of such
controls. An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of the accounting estimates made by the
Company's Directors, as well as evaluating the overall presentation of the
financial statements. 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.

Opinion
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 Act in the manner so required and give a true and
fair view in conformity with the accounting principles generally accepted in
India, of the state of affairs of the Company as at 31st March, 2015, and its
profit and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to Note No. 44 to the Financial Statements explaining that in

compliance to the scheme of arrangement under Sections 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
identified and adjusted provision for diminution in the carrying value of
Investment in one of its Subsidiaries and in a Jointly controlled entity,
amounting to Rs. 35 crore and impairment loss of Rs. 62.29 crore (net of
deferred tax of Rs. 32.97 crore) related to one of its cash generating units,
against Business Reconstruction Reserve. This has resulted in the profit before
tax and profit after tax for the year being higher by Rs. 130.26 crore and Rs.
97.29 crore respectively. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order")
issued by the Central Government of India in terms of subsection (11) of
Section 143 of the Act, we give in the Annexure 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.

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, and the Cash Flow
Statement 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
applicable Accounting Standards specified under Section 133 of the Act, read
with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on

31st March, 2015, taken on record by the Board of Directors, none of the
directors is disqualified as on 31st March, 2015, from being appointed as a
director in terms of Section 164(2) of the Act.

f) With respect to the other matters to be included in the Auditors' 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 litigation on its financial
position in its financial statements Refer Note Nos. 50A(a), c(iii), c(iv) and
c(v) to the financial statements.
ii. The Company has longterm contracts including derivative contracts as at
31st March, 2015, for which there were no 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, except a sum of
Rs. 0.09 crore which are held in abeyance due to pending legal cases.
Annexure referred to in paragraph 1 under the heading "Report on Other Legal
and Regulatory Requirements" of our report of even date

Re: Hindalco Industries Limited (the Company)

I. (a) The Company has maintained proper records showing full particulars
including quantitative details and situation of Fixed Assets.
(b) As per the information and explanations given to us, physical verification of
fixed assets has been carried out in terms of the phased program designed to
cover all items over a period of three years, which, in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets. Pursuant
to the program, a portion of fixed assets has been physically verified by the
Management during the year and no material discrepancies between books
record and physical inventory has been noticed.
II. (a) Physical verification of inventory (except stocks in transit and stocks
lying with third parties, confirmation for which has been obtained) has been
conducted at reasonable intervals during the year, by the Management/outside
agencies.
(b) In our opinion, the procedure of physical verification of inventories followed
by the Management is reasonable and adequate in relation to the size of the
Company and the nature of its business.

(c) The Company has maintained proper records of inventories. The

discrepancies between the physical stock and book stocks, which are not
significant, have been properly dealt with in the books of accounts.
III. The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties listed in the register maintained under Section
189 of the Companies Act, 2013.

IV. On the basis of checks carried out during the course of audit and as per the
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 fixed 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 explanations given to us, we
have not observed any continuing failure to correct major weakness in such
internal control system.

V. The Company has not accepted any deposit from the public.

VI. We have broadly reviewed the books of account maintained by the

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 148(1) of the Companies Act, 2013, 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.
VII. (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 material statutory dues accrued in the accounts,
including Provident Fund, Employee's State Insurance, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, 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, 2015, for a period of more than six months from the date they
became payable

(b) According to the information and explanations given to us, the dues of Sales
Tax, Income Tax, Custom Duty, Wealth Tax, Excise Duty, Service Tax, Value
Added 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, 2015 are as under
:
(c) According to the information and explanations given to us, the amounts
which were required to be transferred to the investor education and protection
fund in accordance with the relevant provisions of the Companies Act, 1956 (1
of 1956), and rules thereunder have been transferred to such fund within time,
except a sum of Rs. 0.09 crore which are held in abeyance due to pending legal
cases.

VIII. The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year and in the
immediately preceding financial year.
IX. The Company has not defaulted in repayment of dues to Financial
Institutions or Banks or Debenture holders.

X. In our opinion, the terms and conditions on which the Company has given
guarantees for loan taken by others from banks or financial institutions are not
prejudicial to the interest of the Company.
XI. According to the information and explanations given to us, the Company
has applied term loans for the purpose for which they were obtained during the
year.

XII. 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,
no fraud by the Company and no material fraud on the Company has been
noticed or reported during the year.