The Members of
SHIRPUR GOLD REFINERY LIMITED
1. Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of SHIRPUR GOLDREFINERY LIMITED ("the company") which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss Cash Flow Statement for the year then endedand a summary of significant accounting policies notes and other explanatory informationwhich have been signed under reference to this report.
2. Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters in section 134(5) ofthe Companies Act 2013 ("the Act") with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.
This responsibility also includes the maintenance of adequate accounting records inaccordance with the provision of the Act for safeguarding of the assets of the Company andfor preventing and detecting the frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of internal financialcontrol that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
3. Auditors' Responsibility
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence and evaluating theappropriateness of accounting policies used for the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor's judgment includingthe assessment of the risks of material misstatement of the financial statements whetherdue to fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Company's preparation of the financial statements thatgive true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also include evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
4. Emphasis of Matter
a. Reference is invited to Note no. 47 relating to assignment of Sales Tax incentive ofRs. Millions 49.74 (Rs. Millions 904.89) to a body corporate for a consideration ofRs. Millions 17.06 (Rs. Millions 352.06) and the transfer of the balance of Rs. Millions32.68 (Rs./ Millions 552.83) to capital reserve.
b. We draw attention to Note No 48 in continuation of the preceding year's note No. 47wherein details of the robbery of gold weighing 60 kgs during transit had been given. Ofthe said 60 Kgs Gold the seizure made was 13.6939 kgs including 2 kgs from site ofrobbery and other assets of the robbers were in Police Custody had been taken possessionby the Company on 19th April 2017 pursuant to the Order of the SessionCourt. For the balance gold of 46.3061 Kgs valued at Rs. Millions 124.34 includingexpenses of Rs. Millions 1.83 is pending for settlement with the Insurance company
Our Opinion is not modified in respect of the above matter.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:
(a) In the case of the Balance Sheet of the state of affairs of the Company as at 31stMarch 2017;
(b) In the case of the Statement of Profit and Loss of the Profit of the Company forthe year ended on that date; and
(c) In the case of the Cash Flow Statement of the cash flows of the Company for theyear ended on that date.
6. Report on other Legal and Regulatory Requirements
a. As required by the Companies (Auditor's Report) Order 2017' issued by theCentral Government of India in terms of Section 143 (11) of the Act (hereinafter referredto as the "Order") and on the basis of such checks of the books and records ofthe Company as we considered appropriate and according to the information and explanationsgiven to us we give in the Annexure "A" a statement on the matters specified inparagraphs 3 and 4 of the Order.
b. 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 thebest 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 thecompany so far as appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss and the Cash FlowStatement dealt with by this Report are in agreement with the books of accounts.
(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
(e) On the basis of written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director interms of Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial Controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B" and
(g) With respect to the other matters included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements Refer Note 30 .
ii. The Company has made provision wherever required under the applicable law oraccounting standards for material foreseeable losses/ gains if any on long termcontracts including derivative contracts.
iii. There has been no amount required to be transferred to the Investor Educationand Protection Fund by the Company during the year ended 31st March 2017.
iv. The Company has provided requisite disclosures in the financial statements asto holdings as well as dealings in Specified Bank Notes as defined in the NotificationS.O. 3407(E) dated 08.11.2016 of the Ministry of Finance during the period from 8thNovember 2016 to 30th December 2016. Based on the audit procedures performedand relying on the management representation we report that the disclosures are inaccordance with books of account maintained by the Company and as produced before us bythe Management Refer to Note 50 to the financial statements.
For B S SHARMA & CO.
FR No. 128249W
CA B S SHARMA
Dated: 28th April 2017
ANNEXURE "A" TO INDEPENDENT AUDITOR'S REPORT
(Referred to in para 6(a) of the Independent Auditor's Report of even date to themembers of SHIRPUR GOLD REFINERY LIMITED on the standalone financial statements for theyear ended 31 March 2017)
i) Fixed Assets:
a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The Company has a regular program of physical verification of its fixed assets inphased manner designed to cover all the items during the year. In accordance with thisprogram fixed assets have been physically verified by the Management during the year andas per the information and explanations given records produced we observe that nomaterial discrepancies were noticed on such verification. In our opinion this program andperiodicity is reasonable having regard to the size of the company and the nature of itsassets.
c) In our opinion and according to information and explanations given to us and on thebasis of an examination of the records of the Company title deeds of immovableproperties as disclosed in Note no.10 on fixed assets to the financial statements areheld in the name of the Company.
As per the information and explanations given the inventories have been physicallyverified by the Management at reasonable intervals during the year. In our opinion theprocedure of such physical verification of inventories followed by the management isreasonable and adequate in relation to the size of the company and nature of its business.No material discrepancies were noticed on such physical verification of inventories ascompared to book records
iii) Loans secured or unsecured granted covered u/s 189 of the Act:
According to the information and explanations given to us the Company has not grantedany secured or unsecured loans except to its wholly owned subsidiary covered in theRegister maintained under Section 189 of the Act.
iv) Loan to directors investment and guarantees u/s 185 & 186 of the Act:
In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act with respectto the loan/guarantees given and investments made.
v) Public Deposits:
In our opinion and according to the information and explanations given to us thecompany has not accepted deposits from the public in accordance with the provision ofSections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder.
vi) Cost Records:
According to information and explanation given to us the Central Government has notprescribed under sub-section (1) of section 148 the Act the maintenance of cost recordsunder the Companies (Cost Records and Audit) Rules 2014 hence this clause is notapplicable to the Company.
vii) Payment of statutory dues:
a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company undisputed statutory dues including providentfund employees' state insurance income-tax sales-tax service tax duty of customsduty of excise value added tax cess and material statutory dues have generally beenregularly deposited during the year with the appropriate authorities.
There are no undisputed amounts payable in respect of the aforesaid dues which were inarrears as at 31st March 2017 for a period of more than six months from thedate they became payable.
b) According to information and explanations given to us and the records of companyexamined by us details of dues of Income tax Sales tax which have not been deposited ason 31st March 2017 on account of dispute and/or under the State Government MVAT DeferralScheme and as per the export obligations to be fulfilled as per the terms of the importlicenses detailed hereunder:
i. In continuation of the preceding year's Note the Company during the year 2016-17(2011-12 to 2015-16) had collected MVAT of Rs. Millions 49.74 (Rs. Millions 904.89)under Sales Tax Incentive Scheme of 1993 by the Government of Maharashtra (SchemePSI-1993) and is required to be repaid in five respective equal annual installmentsstarting from financial year 2026-27 to 2031-32 (2021-22 to 2026-27). However during theyear the said liability has been assigned on the same terms and conditions as contained inan Agreement for Debt Defeasancing dated 31.03.2016 executed by and between the companyand a body corporate in respect of assignment of Deferred Sales Tax (MVAT entitlement)collection of Rs. Millions 49.74 (Rs. Millions 904.89) for a consideration at Net Presentvalue of Rs. Millions 17.06 (Rs. Millions 352.06). The difference of Rs. Millions 32.68(Rs./Millions552.83) between collection and consideration paid has been credited toCapital Reserve'.
ii. Sales Tax Demand for F.Y. 2004-05 of Rs./Millions 0.87 and F.Y. 2007-08 ofRs./Millions 0.59 against which Rs./Millions 0.10 and Rs. /Millions 0.20 is depositedrespectively and stay obtained pending hearing of the appeal and disposal.
iii. Export Obligation under EPCG Scheme remaining to be fulfilled by financial year upto Year 2020-21 2019-20 & 2020-21 respectively as stipulated in the licenses isRs./Millions Nil (Rs./Millions 68.69).
iv. Disputed Liabilities under Income tax Act 1961:
|Nature of Statute ||Amount (in Million) ||Period to which the amount relate (Assessment Year) ||Forum where dispute is pending |
|Income Tax ||0.62 ||2001 02 ||Income Tax Appellate Tribunal Mumbai |
viii) Default on dues of the financial institutions banks and government:
In our opinion and according to the information and explanations given to us theCompany has not defaulted during the year in repayments of dues to its financialinstitutions bankers and Government. The Company did not have any outstanding debenturesduring the year.
ix) Application of term loans and public offer:
The Company did not have any term loans outstanding during the year. The Company hasnot raised money by way of initial public offer or further public offer (including debtinstruments) or borrowed any Term Loan during the year. Hence this clause is notapplicable.
During the course of our examination of books of account and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to information and explanation given to us we have neither come across anyinstance of material fraud on the Company or by the Company noticed or reported duringthe year nor have been informed of such cases by the management.
xi) Managerial remuneration:
According to information & explanations given to us managerial remuneration hasbeen paid or provided in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V of the Act.
xii) Nidhi Companies:
According to the information and explanations given to us the Company is not a NidhiCompany as prescribed under section 406 of the Act. Accordingly paragraph 3(xii) of theorder and the Nidhi Rules 2014 are not applicable.
xiii) Transactions with related parties:
According to information and explanations given to us all transactions with therelated parties are in compliance with the section 177 & 188 of the Act and thedetails have been disclosed in the financial statements as required by the applicableaccounting standards.
xiv) Preferential allotment or private placement of securities:
According to information and explanations given to us and based on our examination ofthe records of the Company the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year.
xv) Non-cash transactions with Directors:
According to information and explanations given to us and based on our examination ofthe records of the Company the Company has not entered into non-cash transactions withdirectors or person connected with him.
xvi) Registration with Reserve Bank of India:
According to information & explanations given to us Company is not required to beregistered under section 45-IA of the Reserve Bank of India Act1934.
For B S SHARMA & CO.
FR No. 128249W
CA B S SHARMA
Dated: 28th April 2017
ANNEXURE "B" TO INDEPENDENT AUDITOR'S REPORT
(R eferred to in para 6(b)(f) of the Independent Auditor's Report of even date to themembers of SHIRPUR GOLD REFINERY LIMITED on the standalone financial statements for theyear ended 31 March 2017)
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 SHIRPURGOLD RE FINERY LIMITED ("the Company") as at 31st March 2017 inconjunction with our audit of the Standalone financial statements of the Company for theyear ended on that date.
1. 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 statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.
2. Auditor's Responsibility
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due 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 Company's internal financial controls systemover financial reporting.
3. Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that
(a) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(b) 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 authorizations of management and directors of the company; and
(c) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
4. Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting read with the notes to financial statements hereto andsuch internal financial controls over financial reporting were checked on test basisconsidering the size and nature of business operations is operating effectively as atMarch 31 2017 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India.
For B S SHARMA & CO.
FR No. 128249W
CA B S SHARMA
Dated: 28th April 2017