The Members of
SHIRPUR GOLD REFINERY LIMITED
Yours Directors take pleasure in presenting the 32nd Annual Report of yourCompany together with Audited Statement of Accounts for the year ended 31stMarch 2017.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3) of the Companies Act 2013 inrelation to the Annual Financial Statements for the Financial Year 2016-2017 yourDirectors confirm that:
a) The Financial Statements of the Company - comprising of the Balance Sheet as at 31stMarch 2017 and the Statement of Profit & Loss for the year ended on that date havebeen prepared on a going concern basis following applicable accounting standards and thatno material departures have been made from the same;
b) Accounting policies selected were applied consistently and the judgments andestimates related to the financial statements have been made on a prudent and reasonablebasis so as to give a true and fair view of the state of affairs of the Company as at 31stMarch 2017 and of the Profit of the Company for the year ended on that date; and
c) Proper and sufficient care has been taken for maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) Requisite Internal Financial Controls had been laid down and that such internalfinancial controls are adequate and were operating effectively; and
e) Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that systems were adequate and operating effectively.
The financial performance of your Company for the Financial Year 2016-17 is summarizedin the following table:
| || || |
(Rs. in Millions)
|Particulars ||Standalone Year Ended ||Consolidated Year Ended |
| ||31.03.2017 ||31.03.2016 ||31.03.2017 ||31.03.2016 |
|Total Revenue ||17069 ||38993 ||49558 ||39529 |
|Total Expenses ||16685 ||38175 ||49071 ||38767 |
|Operating Profit ||384 ||818 ||487 ||763 |
|Finance Cost ||232 ||547 ||346 ||578 |
|Depreciation and ||68 ||67 ||79 ||67 |
|Amortisation Expenses || || || || |
|Profit before Tax ||84 ||204 ||62 ||117 |
|Less : Current Tax ||(18) ||(45) ||(18) ||(45) |
|Deferred Tax Liability ||(16) ||(22) ||(16) ||(22) |
|Profit after Tax ||50 ||137 ||28 ||50 |
There have been no material changes and commitments that have occurred after close ofthe financial year till the date of this report which affect the financial position ofthe Company. Based on the internal financial control framework and compliance systemsestablished in the Company the work performed by Statutory Internal SecretarialAuditors and reviews performed by the management and/or relevant Audit and otherCommittees of the Board your Board is of the opinion that the Company's internalfinancial controls were adequate and working effectively during financial year 2016-17.
With a view to conserve the resources for future business requirements and expansionplans your Directors are of view that the current year's Profit be ploughed back into theoperations and hence no dividend is recommended for the year under review.
TURNOVER AND COMPANY PERFORMANCE
The total revenue for the financial year under review was Rs. 17069.31 Millions asagainst Rs. 38993.17 Millions showing decrease of 56 % over previous year. Your Companyhas registered operating Profit of Rs. 384.01 Millions as against Rs. 818.64 Millionsshowing decrease of 53 % over the previous financial year. The Profit before tax stood atRs. 83.63 Millions as against Rs.204.51 Millions in the previous financial year. TheProfit after tax stood at Rs. 49.96 Millions as compared to Rs. 137.50 Millions in theprevious financial year.
Your company's products viz. Gold Bars and Gold Jewellery are well established in themarket. The Company is selling products under Zee Gold' which is well known brand.The products of your Company meet the stringent quality standards of purity weighmentshape size and aesthetic look.
As reported in the preceding year's Note No. 47 of the Annual Report on 24th April2015 60 Kgs of Gold during transit to factory at Shirpur was robbed near NashikMaharashtra of which the seizure made was 13.6939 kgs including 2 kgs from site ofrobbery and other assets of the robbers were in Police Custody. On 19th April 2017 thecompany has taken possession of the said seized 13.6939 Kgs of Gold pursuant to the Orderof the Hon'ble Session Court. The said seized gold was accounted in the preceding year aspart of inventories and is valued as per Ind AS 2.The Claim for balance gold of 46.3061Kgs valued at Rs. Millions 124.34 including expenses of Rs. Millions1.83 is pending forsettlement with the Insurance company and is accounted as "Claims Receivables"under Other Current Assets. On Finalization of Claim by the insurance company thedifference if any between the amount claimed and the actual claim received which themanagement does not expect to be material will be charged to Statement of Profit &Loss.
BUSINESS EXCELLENCE & RECOGNISITON
In recognition for its excellent achievements the Company was ranked infollowing manner by Dun and Bradstreet (D&B) in India's Top 500 Companies 2017':
204th in terms of Total Income
453rd in terms of Net Profit
471th in terms of Return on Net Worth
The Company was selected as authorised Refinery for the Gold Monetization Scheme(GMS) by the Government of India.
The Company was awarded with Bureau of Indian Standards (BIS) certificate for use BIShallmark one of the requirements for participating in the Gold Monetisation Scheme.
The Company is holding ISO 9001: 2015 ISO 14001:2015 and OHSAS 18001:2007standard certificate for Gold Refinery.
As on March 31 2017 your Company has two Wholly Owned Subsidiaries namely Zee GoldDMCC Dubai ("Zee Gold") and Shirpur Gold Mining Company Private LimitedSingapore ("Shirpur Gold Mining"). and one step down subsidiary namelyPrecious Metals Mining and Refining Limited' ("PMMRL") Papua New Guinea.During the year under review the Company has neither formed any new subsidiary associateor Joint venture nor any company ceased to be subsidiary
As part of expansion plan Zee Gold' Dubai subsidiary is in process of acquiring70 % of the shareholding rights of Metallic Exploration And Mining Mali ("MEAM"or "Target Company") for Gold Mines located at Mali from Midas Gems &Jewellery DMCC Dubai ("Midas") and expected to complete the above acquisitionin fiscal 2017-18.
Shirpur Gold Mining' subsidiary is yet to commence it's operations. During theyear under review PMMRL' step down subsidiary has commenced it's trial operationsand the 1st trial shipment of gold dore bar was sent to the Company in India.
In compliance with Section 129 of the Companies Act 2013 a statement containingrequisite details including financial highlights of each of the subsidiaries is annexed tothis report. Further as per Section 136 of the Companies Act2013 the audited financialsof the each of the subsidiary have been placed on the website of the Companywww.shirpurgold.com.
In accordance with the Accounting Standard (AS) 21 on Consolidated FinancialStatements the Audited Consolidated Financial Statements is provided in and forms part ofthis Annual Report.
REGISTRAR AND SHARE TRANSFER AGENT
During the year under review M/s Link Intime India Private Limited the Registrar &Share Transfer Agent (RTA') of the Company shifted their registered office fromC-13 Pannalal Silk Mills Compound LBS Marg Bhandup (West) Mumbai 400 078 to their ownpremises at C 101 247 Park LBS Marg Vikhroli (West) Mumbai 400 083.
Requisite proposal seeking shareholders' approval for maintaining Register & Indexof Equity / Preference Shareholders Register of Transfer and other Registers includingAnnual Return at the new office of the RTA forms part of Notice of ensuing Annual GeneralMeeting.
CORPORATE GOVERNANCE AND POLICIES
In order to maximize shareholder value on a sustained basis your Company has adoptedCorporate Governance practices strictly complying with the requirements of SEBI(ListingObligations and Disclosure Requirements) Regulations2015 ("ListingRegulations") and applicable provisions of the Companies Act2013.
In terms of Schedule V of Listing Regulations a separate report on CorporateGovernance together with the Statutory Auditors' Certificate on compliance is attached tothis Annual Report. Management's Discussion and Analysis Report for the year under reviewas stipulated under Listing Regulations is presented in a separate section forming part ofthe Annual Report.
In compliance with the requirements of Companies Act 2013 and Listing Regulationsyour Board has approved various Policies including Code of Conduct for Directors &Senior Management Material Subsidiary Policy Insider Trading Code Document PreservationPolicy Material Event Determination and Disclosure Policy Fair Disclosure PolicyCorporate Social Responsibility Policy Whistle Blower and Vigil Mechanism Policy RelatedParty Transaction Policy and Remuneration Policy. All these policies and codes have beenuploaded on Company's corporate website www.shirpurgold.com. Additionally DirectorsFamiliarisation Programme and Terms and Conditions for appointment of IndependentDirectors can be viewed on Company's corporate website www.shirpurgold.com.
In compliance with regulatory requirements the Nomination and Remuneration Committeeof your Board has fixed criteria for nominating a person on the Board which inter aliainclude desired size and composition of the Board age limit qualification / experienceareas of expertise and independence of individual.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
Your Board currently comprises of 4 Directors including 3 Independent Directors and 1Non-Executive Director. Independent Directors provide their declarations both at the timeof appointment and annually confirming that they meet the criteria of independence asprescribed under Companies Act 2013 and Listing Regulations. During FY 2016-17 your Boardmet 5 (Five) times details of which are available in Corporate Governance Report annexedto this report.
Mr.Vimal Kumar Agarawal Non Executive Non Independent Director resigned from the postof Director with effect from 31st January 2017. Further Consequent to theresignation from the Board of Company he had also vacated his position as ManagingDirector of Zee Gold DMCC Dubai and as Director of Shirpur Gold Mining Company Pvt. Ltd.Singapore and Precious Metals Mining and Refining Limited Papua New Guiana overseassubsidiaries of the Company with effect from 31st January 2017.
In compliance with Sections 196197 198 and 203 read with Schedule V and otherapplicable provisions of the Companies Act 2013 ("Act") and shareholders'approval sought at the 30th Annual General Meeting of the Company held on 15thSeptember2015 Mr. Subhash Pareek was re-appointed as Manager' of the Company for aperiod of three years w.e.f. 5th November2015.
Mr. Amit Goenka Non-Executive Chairman is liable to retire by rotation at the ensuingAnnual General Meeting and being eligible he has offered himself for re-appointment. YourBoard has recommended his re-appointment.
In compliance with the requirements of Section 203 of Companies Act2013 Mr.SubashPareek Manager Ms. Archita Kothari CFO and Mr. Shyamal Padhiar Company Secretarycontinue as Key Managerial Personnel of the Company.
Apart from the resignation of Mr.Vimal Kumar Agarawal there is no changes in theDirectorship or Key Managerial Personnel of the Company during the financial year underreview.
In a separate meeting of Independent Directors performance of the non-independentdirectors performance of the board as a whole and performance of the Chairman wasevaluated. Based on such report of the meeting of Independent Directors and taking intoaccount the views of directors the Board had evaluated it's performance on variousparameters such as Board composition and structure effectiveness of board processeseffectiveness of flow of information attendance contributions from each directors etc.
In compliance with the requirements of Companies Act 2013 and Listing Regulationsyour Board had constituted various Board Committees including Audit Committee Nomination& Remuneration Committee Stakeholders Relationship Committee and Corporate SocialResponsibility Committee. Details of the constitution of these Committees which are inaccordance with regulatory requirements have been uploaded on the website of the Companyviz. www.shirpurgold.com. Details of scope constitution terms of reference number ofmeetings held during the year under review along with attendance of Committee Memberstherein form part of the Corporate Governance Report annexed to this report.
A detailed report on Corporate Social Responsibility in compliance with therequirements of Companies Act 2013 is annexed to this report.
The Statutory Auditors M/s B.S.Sharma and Co. Chartered Accountants Mumbai havingFirm Registration No 128249W has carried out Statutory Audit of the Company for thefinancial year 2016-17 who holds office until the conclusion of the ensuing Annual GeneralMeeting and is eligible for reappointment. Your Company has received confirmation from theAuditors to the effect that their appointment if made will be in accordance with thelimits specified under the Companies Act 2013 and the firm satisfies the criteriaspecified in Section 141 of the Companies Act 2013 read with Rule 4 of the Companies(Audit & Auditors) Rules 2014.
Your Board is of the opinion that continuation of M/s. B. S. Sharma and Co. StatutoryAuditors for the FY 2017-18 will be in the best interests of the Company and thereforeMembers are requested to ratify their re-appointment to carry out the statutory audit forthe financial year ended on March 312018. The re-appointment proposed is within thetransition period prescribed under the provisions of sub-section (2) of Section 139 of theCompanies Act2013.
In compliance with the provisions of Section 204 of the Companies Act2013 the Companyhas appointed Mrs. Mita Sanghavi Practising Company Secretary (CP No. 6364) assecretarial auditor of the Company for the financial year 2016-17. A copy of secretarialaudit report is annexed to this report.
The reports of the Statutory Audit & the Secretarial Audit for the year ended March31 2017 do not contain any qualifications / reservations. During the year the StatutoryAuditors had not reported any matter under Section 143(12) of the Act therefore no detailis required to be disclosed under Section 134(3)(ca)of the Act.
I. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS U/S 186
The details of loans investments and guarantee as required u/s 186 of the CompaniesAct2013 read with the Companies (Meetings of Board and its Powers) Rules 2014 areannexed to the Directors report.
II. RELATED PARTY TRANSACTIONS
All the related parties transactions entered by the Company during the financial yearunder review were on arm's length basis in the ordinary course of business and incompliance with the applicable provisions of the Companies Act2013 and ListingRegulations. During FY 2016-17 there are no materially significant Related PartyTransactions by the Company with Promoters Directors Key Managerial Personnel or otherdesignated persons which may have a potential conflict with the interest of the Company atlarge.
During the year under review there have been no materially significant related partytransactions as defined under Section 188 of the Act and Regulations 23 the ListingRegulations and accordingly no transactions are required to be reported in Form AOC-2 asper Section 188 of the Companies Act 2013.
III. INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY
Your Company has approved internal financial controls and policies/procedures to beadopted by the Company for orderly and efficient conduct of the business includingsafeguarding of assets prevention and detection of frauds and errors ensuring accuracyand completeness of the accounting records and the timely preparation of reliablefinancial information. The Audit Committee evaluates the internal financial control systemperiodically.
IV. EXTRACT OF THE ANNUAL RETURN
The extract of Annual Return in Form MGT-9 as required under Section 92(3) of the Actread with Companies (Management & Administration) Rules 2014 is annexed to thisreport.
V. SEXUAL HARASSMENT
The Company has zero tolerance for sexual harassment at workplace and adopted a policyon prevention prohibition and redressal of sexual harassment at workplace in line withthe provisions of the Sexual Harassment of Women at work place (Prevention Prohibitionand Redressal) Act2013 and the Rules thereunder. During the year under review nocomplaint on sexual harassment was received during the financial year under review.
VI. REGULATORY ORDERS
No significant or material orders were passed by the regulators or courts or tribunalswhich impact the going concern status and Company's operations in future.
VII. PUBLIC DEPOSITS
Your Company has not accepted any public deposits and as such no amount on account ofprincipal or interest on public deposits under Section 73 of the Companies Act 2013 readwith Companies (Acceptance of Deposits) Rules 2014 was remained unpaid or unclaimed asat the end of the year 31st March2017.
VIII. INSURANCE & RISK MANAGEMENT
The Company has obtained adequate insurance on all of it's fixed and other assets. TheCompany has identified the potential risks against the business of the Company and takingproper safeguards to mitigate / minimize the risks. The detailed analysis of the Riskelements are discussed under the Management analysis and Discussion Report'.
MANAGEMENT DISCUSSION AND ANALYSIS
The detailed analysis of the State of Company's affairs / developments is discussedunder Management Discussion and Analysis section of Directors' report.
HEALTH SAFETY & ENVIRONMENT PROTECTION
The Company is operating it's plant in a manner which endeavors protection of health /safety of workers and environment. The Company is using eco-friendly technology andmanufacturing facilities at it's plant to ensure workers safety and health. TheGreen' initiatives taken by the Company by plantation of trees at plant site are oneof the best examples of protecting environment. The Company is in compliance with all theapplicable labour and environmental laws.
HUMAN RESORCES AND PARTICULARS OF EMPLOYEES
The Company has maintained cordial relations with it's employees and workers. TheCompany has taken adequate steps to ensure safety and welfare of all it's employees atplant and other places. Requisite disclosures in terms of the provisions of Section 197 ofthe Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed to this report. None of the employee of the Company isin receipt of remuneration of Rs. 1.02 Crores per annum/ Rs 8.50 Lacs per month or moreduring the FY 2016-17. The information required under Rule 5 (2) & 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 will beprovided upon request.
In compliance with provisions of section 136(1) of the Companies Act 2013 the Reportand Accounts are sent to the every member of the Company and other entitled theretoexcluding the information on employees' particulars which is available for inspection atthe Corporate office of the company during business day & working hours up to the dateof ensuing Annual General Meeting. Any member who is interested in obtaining copy thereofsuch member may write to the Company Secretary.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information required u/s. 217(1)(e) of the Companies Act 1956 read with Rule 2 ofthe Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988is furnished hereunder :
I. Energy Conservation and Technology Absorption:
Details of energy conservation technology absorption by the Company along with theinformation in accordance with the provisions of Section 134(3)(m) of the CompaniesAct2013 read with Rule 8(3) of the Companies (Accounts) Rules2014 is annexed to thisreport.
II. Foreign Exchange Earning and Outgo :
Particulars of foreign currency earnings and outgo during the year are given in Note 34to 35 to Standalone Financial Statement.
We sincerely thank all our investors customers suppliers bankers business partners/associates financial institutions and government authorities for their continuedco-operation trust support and guidance. We also take this opportunity to express ourdeep appreciation for the contribution hard work dedication and commitment of all ouremployees who have been one of the major driving factors for the company's growth andprogress.
| ||For and on behalf of the Board |
|Place : Mumbai ||Amit Goenka |
|Date : 28th April 2017 ||Chairman |