Hutti Gold Mines Company Limited Shares Annual Reports

Hutti Gold Mines Company Limited Shares

The Hutti Gold Mines Co. Ltd.'s 77th Annual Report for 2022-23 details the company's financial performance, operations, and future outlook. **Company Overview and Objectives:** The Hutti Gold Mines Company Limited (HGML) is a Karnataka government undertaking with the corporate vision to be a vibrant and self-reliant mining entity. The corporate mission involves improving productivity, profitability, steady growth, providing a safe and healthy mining environment, harmonious industrial relations, and modern management systems. **Board of Directors:** The report lists the Board of Directors, including past and present members. **Operational and Financial Highlights:** - **Production:** Ore treated increased from 478,514 MT in FY 2021-22 to 605,976 MT in FY 2022-23. Gold production increased from 1236.81 kgs to 1411.42 kgs. Net recovery grade decreased from 2.58 Gms/MT to 2.33 Gms/MT. Wind power generation increased from 208.05 lakh KWH to 218.34 lakh KWH. - **Sales:** Gold sales quantity increased from 1200.45 kgs to 1412.29 kgs. Wind power sales increased from 208.05 lakh KWH to 218.34 lakh KWH. - **Income:** Revenue from gold sales increased to Rs. 77057.67 lakhs due to increased quantity and average selling price. Wind power sales increased to Rs. 742.35 lakhs. Income from investments increased to Rs. 4200.52 lakhs with an average interest rate of 4.95%. - **Expenditure:** Material costs increased to Rs. 6045.37 lakhs. Employee benefit expenses increased to Rs. 33678.10 lakhs due to interim relief, salary increases, and welfare expenses. Royalty, DMF, and NMET payments increased to Rs. 3915.08 lakhs. - **Profitability:** Profit Before Tax amounted to Rs. 26786.02 lakhs, and Profit After Tax was Rs. 19783.52 lakhs. Earnings per share were Rs. 6679.02. Book value per share was Rs. 59735.17. - **Segment Performance:** Profit from the gold division was Rs. 22830.64 lakhs and from the windmill division Rs. 177.73 lakhs. - **Reserves:** Rs. 2700.00 lakhs were transferred to reserves. **Dividend:** The Board recommended a dividend of 801.48% on paid-up equity capital, amounting to Rs. 2374.02 lakhs. 10% of profits amounting to Rs 27.00 Crores was transferred to the General Reserve. Unclaimed dividends amounting to Rs. 42.36 lakhs will be remitted to the Central Government. Buyback of equity shares may be facilitated. **Directors' Responsibility Statement:** The directors affirm that applicable accounting standards have been followed, accounting policies have been consistently applied, proper accounting records have been maintained, and the annual accounts have been prepared on a "going concern" basis with adequate internal financial controls. **Auditor's Reports:** Messrs BVC & Co. were appointed as Statutory Auditors. The Accountant General of Karnataka conducted a Supplementary Audit. CS Parameshwar G Bhat was appointed as Secretarial Auditor. The company has adequate internal financial controls. The Financial Statements are prepared according to Indian Accounting Standards (Ind AS). The company complies with Secretarial Standards of ICSI. All Directors are appointed by the Government of Karnataka, so declaration of Independence is not required. There is no separate policy for Directors' appointment and remuneration. **Risk & Environmental Management:** The company has a safety management plan. Tripartite meetings are held annually. The company integrates environmental, social, and economic considerations into its decision-making. **Other Disclosures:** The audit committee includes Sri. Pankaj Kumar Pandey, IAS, Smt Vinothpriya R., IAS and Sri Sanjay B Shettennavar, IAS. CSR activities are underway and earmarked 500 Lakhs. Board meetings are held regularly. Disclosures are made regarding energy conservation, technology absorption, foreign exchange, employee information, corporate governance, and consolidated financial statements. **Manpower:** The company had 3763 employees as of 31.03.2023. They also complied with the Right to Information Act (RTI). **Projects:** The company has 2 Nos. of 50 TPH Ball Mills at Hutti, Construction of 80 quarters, and Implementation of ERP. The Chitradurga Gold Unit revival is proposed. There are also 67 lease applications for exploration and 3 for Deemed Extension of lease areas. **Auditor's Qualified Opinion and Key Matters:** The Independent Auditor's Report by BVC & Co. expresses a qualified opinion due to the company's failure to obtain balance confirmations from Trade payables, Capital creditors, Trade/security deposits, and Creditors for expenses amounting to Rs. 1640.81 Lakhs, Rs. 4518.91 Lakhs, Rs. 3663.68 Lakhs and Rs. 4628.18 lakhs. They were also unable to comment on the accuracy and impact, if any, on the IND AS financial statements. Emphasis is placed on contingent liabilities of Rs. 38,963.08 lakhs and on Rs. 65.49 lakhs spent toward a captive Gold Refinery plant that could not be commissioned and is deemed not economically viable.

Hutti Gold Mines Company Limited Shares

The Hutti Gold Mines Company Limited's 76th Annual Report for FY 2021-22 outlines the company's corporate vision to become a self-reliant mining giant and its mission to improve productivity, profitability, and ensure steady growth. **Operational & Financial Highlights:** * **Production:** Ore treated increased marginally from 453,328 MT to 478,514 MT. Gold production increased from 1,113.58 kgs to 1,236.81 kgs due to an increased recovery grade of the ore from 2.46 Gms/MT to 2.58 Gms/MT. Wind power generation increased from 185.23 lakh KWH to 208.05 lakh KWH, depending on wind velocity. * **Sales:** Sale of gold increased from 1100.42 kgs to 1200.45 kgs, due to increased gold production. Sale of wind power increased from 185.23 lakh KWH to 208.05 lakh KWH, all of which are exported to BESCOM. * **Revenue:** Revenue from operations increased from Rs. 54,713.48 lakhs to Rs. 58,199.75 lakhs, due to an increase in gold sales quantity of 100.03 Kgs, partially offset by a decrease in average selling price. Revenue from wind power increased from Rs. 629.77 lakhs to Rs. 707.38 lakhs, sold to BESCOM at Rs. 3.40/KWH. * **Other Income:** Income from investments decreased from Rs. 4,126.38 lakhs to Rs. 3,224.32 lakhs due to a lower average interest rate and lower average investments. Average investments in FDs, margin money deposits, and flexi accounts for the FY 2021-22 was Rs. 65,367.22 lakhs against Rs. 85,176.85 lakhs during previous year * **Expenditure:** Materials consumed increased from Rs. 3,920.74 lakhs to Rs. 4,183.64 lakhs; the cost per MT was Rs. 874 as against Rs. 865. Employee benefit expenses increased from Rs. 27,121.95 lakhs to Rs. 28,063.99 lakhs. Power and Fuel expenses increased from Rs. 4,936.44 lakhs to Rs. 5,239.52 lakhs. Royalty, DMF & NMET expenses increased from Rs. 2,724.53 lakhs to Rs. 3,084.15 lakhs. * **Inventory Changes:** Inventory changes decreased from (-)4,842.28 to (-)154.31 lakh. * **Profitability:** Profit before tax decreased from Rs. 20,856.33 lakhs to Rs. 15,243.08 lakhs. Profit after tax decreased from Rs. 14,853.05 lakhs to Rs. 11,116.31 lakhs. Earnings per share decreased from Rs. 5,014.48 to Rs. 3,752.93. * **Segment Wise Profitability:** Profit from gold division Rs. 13122.80 lakhs and profit of wind mill Rs.180.08 lakhs for the year. * **Reserves:** Amount transferred to reserves was Rs. 1500.00 lakh. **Future Outlook:** India is the second largest consumer of gold after China, and HGML's production will only meet 1/2% of India's gold demand, suggesting substantial scope for growth. While gold prices in India depend on international prices, HGML reviews gold price movements and will take actions to sustain operations, including cost reduction measures. **Dividend:** The board recommended a dividend of 1125.88% on paid-up equity capital, amounting to Rs. 3334.89 lakhs, pending member approval. Rs. 1500 lakhs were transferred to the General Reserve. Unclaimed dividend amounting to Rs. 21.28 Lakhs as of 31st March 2022 will be remitted to the Central Government. **Directors and Key Managerial Personnel:** A list of directors and their appointment/cessation dates is provided. During the year there were changes in directors. As of the report, the Key Managerial Personnel consisted of 2 members. The board has reviewed the status of Equity Shares of the Company, has considered initial public offering and other modes to facilitate the buyback of Equity Shares. **Directors’ Responsibility Statement:** The directors affirm compliance with Section 134 (5) of the Companies Act, 2013, stating they followed accounting standards, selected reasonable policies, ensured proper maintenance of accounting records, prepared accounts on a 'going concern' basis, and laid down effective internal financial controls. **Audit:** * Messrs B V C and Co., Chartered Accountants, Bangalore were appointed as the Statutory Auditors for the FY 2021-22 * The Accountant General of Karnataka conducted a Supplementary Audit for the year ended 31.03.2022 * M/s Parameshwara G Bhat, Company Secretaries as Secretarial Auditors for FY 2021-22 The company has adequate internal financial controls in place and operates effectively. The financial statements are prepared in accordance with Indian Accounting Standards. **Other Information:** * The mining operations are considered hazardous and the management has formulated a safety management plan. * The company integrates environmental, social, and economic considerations into decision-making. * The Audit Committee consists of three directors, as does the CSR Committee. * The company earmarked Rs. 400 Lakhs towards CSR activities. * The company has established a website, (<https://huttigold.karnataka.gov.in/>). * Annual return in MGT-7 is placed in the website of the Company. * Meetings of the Board are held regularly, with additional meetings when necessary. Four meetings were held during the year. * There are no loans given, investments made, or guarantees provided. * Particulars regarding energy conservation, technology absorption, and foreign exchange earnings/outgo are included in Annexure-V. **Additional Points:** * The total manpower as on 31.03.2022 is 3845. * The company received 87 applications under the Right to Information Act (RTI). * Projects under implementation include construction of a new circular shaft at Hutti (Rs. 232.12 crores), 2 Nos. of 50 TPH Ball Mills at Hutti (Rs. 59.40 crores). * The government has leased 38.04 Hects of land for mining operations at Ajjanahalli, Tumkur District. * The register of members will be closed from 22.09.2022 to 29.09.2022. **Auditor's Report Summary (BVC & Co.):** The independent auditor's report expresses a qualified opinion due to the company's failure to obtain balance confirmations from trade payables, capital creditors, trade/security deposits, and creditors for expenses, and the failure to provide details of relationships with struck-off companies. Emphasis is placed on contingent liabilities related to prior year tax and excise demands and the status of a captive Gold Refinery plant that is neither capitalized nor depreciated. The audit identified significant internal control weaknesses, particularly regarding the failure to obtain balance confirmations, impacting the adequacy of internal financial controls. The auditor also provides statements on compliance with the Companies Act, adherence to accounting standards, and reporting on matters such as fraud and internal financial controls. The company has not deposited the declared dividend in a separate scheduled bank account within the timeline. Therefore, dividend declared or paid during the year by the Company is not in compliance with section 123 of the Companies Act 2013. The report includes annexures detailing specifics on property, plant, and equipment revaluation, statutory dues, and other financial and compliance-related matters.