Shirpur Gold Refinery Ltd.
|BSE: 512289||Sector: Metals & Mining|
|NSE: SHIRPUR-G||ISIN Code: INE196B01016|
|BSE 00:00 | 13 Dec||Shirpur Gold Refinery Ltd|
|NSE 05:30 | 01 Jan||Shirpur Gold Refinery Ltd|
|BSE: 512289||Sector: Metals & Mining|
|NSE: SHIRPUR-G||ISIN Code: INE196B01016|
|BSE 00:00 | 13 Dec||Shirpur Gold Refinery Ltd|
|NSE 05:30 | 01 Jan||Shirpur Gold Refinery Ltd|
SHIRPUR GOLD REFINERY LIMITED
Report on the audit of the Ind AS Financial Statement
We have audited the accompanying standalone Ind AS Financial Statements of Shirpur GoldRefinery Limited ("the Company") which comprise the Balance sheet as at 31stMarch 2020 the Statement of Profit and Loss (including Other comprehensive income) theStatement of Changes in Equity and the statement of Cash Flows for the year ended on thatdate and Notes to the Ind AS financial statements including a summary of SignificantAccounting Policies and other explanatory information (hereinafter referred to as"Ind AS Financial Statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS Financial Statements give the information required bythe Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under Section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31st March 2020 and total comprehensive loss(comprising of loss and other comprehensive income changes in equity and its cash flowsfor the year ended on that date.
2. Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial StatementsSection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the Financial Statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Ind AS financial statements.
3. Emphasis of matters:
Reference is invited to the following notes to the financial statements:
(i) Note No. 60 relating to NPA of cash credit and loans from lenders:
During the year three of the lender banks and a financial institution (thelenders') have outstanding dues classified as Non-performing assets amounting toRs.3153.94 Millions including amount of bank guarantees invoked interest and penalinterest of Rs.182.30 Millions due to defaults in the repayment and non-compliance of theterms and conditions.
Of the said lenders one of the bankers and a financial institution has recalled theloan outstanding of Rs.1982.69 Millions including interest at the year end. The banker haseven issued notice for constructive possession of the factory on as is where is basis atShirpur Dhule District Maharashtra. However no further action has been taken by thesaid bank in this connection.
An independent auditor is appointed by the lenders to carry out audit of the books ofaccounts of the Company. The Management had informed that it had submitted its scheme ofrestructuring the said overdues and negotiation with the lenders is under way for amicablesettlement. However we are unable to comment thereon in absence of sufficient appropriateevidences to the above submission.
(ii) Note No. 61 relating to Deferred tax : No provision for deferred tax ismade in view of the temporary suspension of the manufacturing operations and slowdown inthe trading activities resulting in no immediate probability of any future profits toabsorb such deferred tax.
(iii) Note No. 62 relating to Trade Receivables : Trade receivables net ofRs.2981.65 Millions is after making provisions for doubtful debt of Rs.1061.19 Millions inrespect of aggregate dues of Rs.3356.23 Millions from the two of the parties. TheManagement has informed that it is assured of recoveries of dues from these partieshowever we are unable to comment on the same as there is no sufficient appropriate auditevidences produced before us to show the Management's contentions of such recovery.
(iv) Note No. 63 relating to impact of COVID 19: The Management of the companyhas assessed that there is no material impact due to countrywide lockdown on account ofCOVID-19 pandemic and considering the business segment (Precious Metals) in which companyoperates there was no material impact which require any adjustment in financial statementas the Company did temporarily stop manufacturing and trading operations due to paucity offunds the notice from lenders for possession of the factory premises and various legaland regulatory actions against the company.
(v) Note No. 64 relating to Going Concern in view of notices served by thelending bank for constructive possession of the Company's factory premises temporarycloser of production. However the financial statements have been prepared on a goingconcern basis in view of the financial support from the promoter companies and themanagement's plan to generate cash flows through furture operations after expectedsettlement of the claims of the lenders banks/financial institutions as detailed hereinabove which would enable the Company to meet its financial obligations as and when theyfall due. The management's assessment is largely dependent on the support from itsPromoter Companies and other matters referred to herein.
(vi) Note No. 65 relating to previous report: Further the comparative financialinformation of the Company for the year ended 31st March 2019 prepared in accordance withInd AS included in this Statement have been reviewed/audited by the predecessor auditor.The report dated 18th May 2019 of the predecessor auditor on this comparative financialinformation respectively expressed an unmodified conclusion/opinion.
Our report is not modified in respect of this matter.
4. Key Audit Matters
Key Audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the standalone Ind AS financial statements of the currentperiod. These matters were addressed in the context of our audit of the Ind AS financialstatements and in forming our opinion thereon and we do not provide a separate opinionon these matters.
We have determined the matters described below to be the key audit matters to becommunicated in our report:
5. Information Other than the Ind AS Financial Statements and Auditor's ReportThereon
The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the Annual Report but does notinclude the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
6. Management's Responsibility for the Ind AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these Ind AS Financial Statementsthat give a true and fair view of the state of affairs (financial position) profit orloss (financial performance including total comprehensive income) changes in equity andcash flows of the Company in accordance with accounting principles generally accepted inIndia including the Ind AS specified under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating 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.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors are also responsible for overseeing the Company's financialreporting process.
7. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for explaining our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
8. Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit we report that: a) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit except that due tolockdown and social distancing guidelines for containment of spread of Covid-19 certainevidences documents registers records forms etc. could not be verified physically byus as the same were maintained by the Company at their corporate and/or registeredoffice. While all possible steps were taken to verify records made available by theCompany after the year end through electronic medium and requisite confirmations weretaken from the Company wherever required the audit was done subject to limitation ofavailability and physical verification of certain documents. b) In our opinion properbooks of account as required by law have been kept by the Company so far as it appearsfrom our examination of those books. c) The Balance Sheet the Statement of Profit andLoss including Other comprehensive income Statement of changes in Equity and theStatement of Cash Flow dealt with by this Report are in agreement with the relevant booksof account. d) In our opinion the aforesaid Ind AS Financial Statements comply with theInd AS 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 thedirectors as on 31st March 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2020 from being appointed as a director interms of Section 164 (2) of the Act. f) With respect to the adequacy of the internalfinancial controls over financial reporting (IFCoFR) of the Company and the operatingeffectiveness of such controls refer to our separate report in "Annexure A".Our report expresses an unmodified opinion on the adequacy and operating effectiveness ofthe Company's internal financial controls over financial reporting. g) With respect to theother matters to be included in the Auditor's Report in accordance with the requirementsof Section 197(16) of the Act as amended. The Company has paid or provided for anymanagerial remuneration during the year and such remuneration so paid is in accordancewith the provisions of Section 197 of the Act. f) With respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 as amended in our opinion and to the best of our information andaccording to the explanations given to us: i. The Company does not have any pendinglitigations which would impact its financial position except as otherwise stated inAnnexure to Auditors' Report and Auditor's Report and Note no.34 of the and of Notes toInd AS Financial statements. ii. Provision has been made in these Ind AS financialstatement as required under the applicable law or Ind AS for material foreseeable losseson long term contracts including derivative contracts in the Ind AS financial statement.iii. There has been no amount required to be transferred to the Investor Education andProtection Fund since the same is not applicable to the Company.
2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-Section (11) of Section 143 ofthe Act we give in the "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
Annexure "A" to Independent Auditor's Report
(Referred to in para 7(1)(f) of the Independent Auditor's Report of even date to themembers of SHIRPUR GOLD REFINERY LIMITED on the standalone Ind AS financial statements forthe year ended 31 March 2020) Report on the Internal Financial Controls under Clause (i)of Sub-Section 3 of Section 143 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 2020 in conjunction withour audit of the Standalone Ind AS financial statements of the Company for the year endedon that date.
1. Mnagement'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 and such internal financial controls over financialreporting were operating effectively as at 31st March 2020 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
Annexure "B" to Independent Auditor's Report
(Referred to in para 7(2) of the Independent Auditor's Report on the Standalone Ind ASfinancial statements for the year ended 31st March 2020)
Report on the Companies(Auditor's Report)Order 2016 (the Order) issued by the CentralGovernment in terms of Section 143(11) of the Companies Act 2013 (the Act) of SHIRPURGOLD REFINERY LIMITED (the Company)
i) In respect of Fixed Assets: a) The company has maintained proper records showingfull particulars including quantitative details and situation of fixed assets. b) TheCompany has a regular program of physical verification of its fixed assets in phasedmanner designed to cover all the items during the year. In our opinion this program andperiodicity is reasonable having regard to the size of the company and the nature of itsassets. In accordance with this program fixed assets have been physically verified by theManagement during the year and as per the information and explanations given recordsproduced we observe that no material discrepancies were noticed on such verification. c)In our opinion and according to information and explanations given to us and on the basisof our examination of the records of the Company the title deeds of freehold immovableproperty of land and building as disclosed in Note no. 2 Property Plant andEquipment to the standalone financial statements are held 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 thefrequency and the procedure of such verification followed by the management is reasonableand adequate in relation to the size of the company and nature of its business. Thediscrepancies noticed on verification between the physical stocks and the book recordswere not material and accordingly dealt with in the books of account.
iii) Loans secured or unsecured granted covered under Section 189 of the Act:
According to the information and explanations given to us the Company has not grantedany secured or unsecured loans to companies firms Limited Liability Partnerships orother parties except to its wholly owned foreign subsidiary covered in the Registermaintained under Section 189 of the Act. Accordingly paragraph 3(iii) of the Order is notapplicable to the Company.
iv) Loan to directors investment and guarantees under Sections 185 and 186 of theAct:
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 and/or guarantees given and investments made as applicable. No security hasbeen provided.
v) Public Deposits:
In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public during the year in terms of theprovisions of Sections 73 to 76 or any other relevant provisions of the Act and the rulesframed there under. Accordingly paragraph 3(v) of the Order is not applicable to theCompany.
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 paragraph (vi) of thisOrder is not applicable 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 Goods and Service Tax (GST) sales-taxservice tax duty of customs duty of excise value added tax cess and material statutorydues have generally been regularly deposited during the year with the appropriateauthorities.
There are no undisputed amounts payable in respect of the aforesaid dues which were inarrears as at 31st March 2020 for a period of more than six months from the date theybecame payable.
b) According to information and explanations given to us and the records of companyexamined by us there are no other dues of Income Tax or Sales Tax or Service Tax or Goodsand Service Tax (GST) or duty of Customs or duty of Excise or Value added tax which havenot been deposited by the Company on account of disputes except for the following:
Disputed Liabilities under Income tax Act 1961:
*Adjusted against the refund of Rs.1.00 Million balance refundable.
viii) Default on dues of the financial institutions banks and government:
In our opinion and according to the information and explanations given to us and basedon the records of the Company the Company has defaulted during the year in repayment ofloans or borrowings to banks and financial instituion as detailed in Note no.3(i) of theIndependent Auditor's Report of even date annexed hereto and the default continues tillthe date of our reporting. There are no dues to the Government as per records produced.The Company did not have any outstanding debentures during the year.
ix) Application Of term loans and public offers:
According to the information and explanation given to us the Company has not raisedany new loans or working capital hence the rest of the details required to be reported inthis clause is not applicable. The Company has not raised any money by way of initialpublic offer or further public offer (including debt instruments) during the year.
During the course of our examination of books of accounts and records of the companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations 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 the information and explanations given to us and based on our examinationof the records of the Company the Company has paid/provided for managerial remunerationin accordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to 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 and based on our examinationof the records of the Company transactions with the related parties are in compliancewith Sections 177 and 188 of the Act where applicable. The details of such related partytransactions have been disclosed at Note No. 50 to the standalone Ind AS financialstatements as required under Indian Accounting Standard (Ind AS) 24 Related PartyDisclosures specified under Section 133 of the Act read with Rule 3 of the Companies(Indian Accounting Standards) Rules 2015.
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.Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.
xv) Non-cash transactions with Directors:
According to the information and explanations given to us and based on our examinationof the records of the Company the Company has not entered into non-cash transactions withdirectors or persons connected with them. Accordingly paragraph 3(xv) of the Order is notapplicable to the Company.
xvi) Registration with Reserve Bank of India:
In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3(xvi) of the Order is not applicable to the Company.