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 31st March 2016the Statement of Profit and Loss Cash Flow Statement for the year then ended and asummary of significant accounting policies notes and other explanatory information whichhave 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. Thisresponsibility also includes the maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting the frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of internal financial control thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
3. Auditor's Responsibility
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions 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 about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the
auditor considers internal financial control relevant to the Company's preparation ofthe financial statements that give true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by Company's Directors as well as evaluating the overall presentation ofthe 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. 39 relating to assignment of Sales Tax incentive of'/ Millions 904.89 to a body corporate for a consideration of '/Millions 352.06 and thetransfer of the balance of '/Millions 552.83 to capital reserve.
b. We draw attention to Note No. 47 wherein details about robbery of gold weighing 60kgs during transit have been given. Gold in the possession of the police has been shown inclosing inventory. As regards the balance of gold for which investigation by Law EnforcingAgencies is in progress adjustment has been made in the accounts in respect of insuranceclaim of '/ Millions 112.29 and shown under "claim receivable". The loss if anyon finalization of the claim will be adjusted in the statement of Profit and Loss of thesubsequent years.
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 2016;
(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 2016 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 mattersspecified in paragraphs 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 the bestof 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 Flow Statementdealt 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 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st march 2016 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 our separate Report in "Annexure B" and
(g) With respect to the other matters included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest 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 did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no amount required to be transferred to the investor Education andProtection Fund by the Company during the year ended 31st March 2016.
For B s sHARMA & CO.
FR No. 128249W
CA B s sHARMA
Dated: 19th May 2016
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 2016)
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 bywhich fixed assets are verified in phased manner designed to cover all the items duringthe year. in accordance with this program fixed assets have been physically verified bythe Management during the year and no material discrepancies were noticed on suchverification. in our opinion this program and periodicity is reasonable having regard tothe size of the company and the nature of its assets.
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 the 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 and 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 respect to the loan/guaranteesgiven 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 the information and explanation given to us the Central Government hasnot prescribed under subsection (1) of section 148 the Act the maintenance of costrecords under the Companies (Cost Records and Audit) Rules 2014 hence this clause is notapplicable.
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 2016 for a period of more than six months from thedate they became payable.
b) According to the 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 2016 on account of dispute and/or under the State Government's MVATDeferral Scheme and the export obligations to be fulfilled as per the terms of the importlicenses detailed hereunder:
i. MVAT collected till the year end under Sales Tax incentive Scheme of 1993 by theGovernment of maharashtra (Scheme PSI-1993) is considered in the Accounts as deferredSales Tax Liability and stated in Note 39 . for the years ended 31st March 2011 to 31stmarch 2016 aggregating to '/millions 904.89 is repayable in five respective equal annualinstallments starting from financial year 202122 to 2026-27. However during the year thesaid liability has been assigned under an Agreement for debt defeasancing dated 31.03.2016in respect of assignment of deferred Sales Tax (MVAT entitlement) collection of '/millions 904.89 to a body corporate for a consideration at Net Present value of '/millions352.06 and the difference of '/ millions 552.83 between the such collection and
consideration paid has been credited to 'Capital Reserve'.
ii. Sales Tax demand for F.Y. 2004-05 of '/millions 0.87 and F.Y. 2007-08 of '/millions0.59 against which '/millions 0.10 and '/millions 0.20 is deposited respectively and stayobtained pending hearing of the appeal and disposal.
iii. Export Obligation under EPCG Scheme remaining to be fulfilled by financial year upto 2020-21 2019-20 & 2020-21 respectively as stipulated in the licenses is '/millions68.69.
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 |
|Income tax ||157.92 ||2008 - 09 ||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 repayment 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 offers:
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.
in our opinion and according to the information and explanations given to us nomaterial fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the course of our Audit.
xi) Managerial remuneration:
According to the information & explanations given to us managerial remunerationhas been 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 the 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 the information and explanations given to us and based on our examinationof the records of the Company the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year.
xv) non-cash transactions with Directors:
According to the information and explanations given to us and based on our examinationof the records the Company has not entered into non-cash transactions with directors orperson connected with them.
xvi) Registration with Reserve Bank of India:
According to the information and explanations given to us Company is not required tobe registered under section 45- iA of the Reserve Bank of india Act1934.
For B S SHARMA & CO.
FR No. 128249W
CA B S SHARMA
Dated: 19th May 2016
annexure "B" to independent auditor's report
(referred 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 2016)
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 REFINERY LIMITED ("the Company") as at 31st March 2016 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 procedures
selected 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 and such internal financial controls over financialreporting were operating effectively as at 31st March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofinternal Financial Controls Over financial Reporting issued by the institute of CharteredAccountants of india.
For B s sHARMA & Co.
FR No. 128249W
CA B s sHARMA
Dated: 19th may 2016