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Auditor Report of Shirpur Gold Refinery Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Shirpur Gold Refinery Limited, ("the Company") which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information, which have been signed under reference to this report.

2. MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act and the Rules made thereunder including the accounting and auditing standards and matters which are required to be included in the audit report.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements, issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit

to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company had in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

4. OPINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the State of Affairs of the Company as at March 31,2015;

(b) In the case of the Statement of Profit and Loss, of the Profit of the Company for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date.

5. Report on other Legal and Regulatory Requirements

As required by'The Companies (Auditor's Report) Order, 2015', issued by the Central Government of India in terms of sub- section (11) of section 143 of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

6. 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 best 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 the Company so far as appears from our examination of those books.

c) In our opinion, the Balance Sheet, the Statement of Profit & Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of accounts.

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards 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 March 31, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2015, from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to our best of our knowledge and belief, and according to the information and explanations given to us :

i. The Company has no pending litigations as at March 31, 2015 having impact on its financial position as stated in the financial statements.

ii. The Company has made in the financial statements provisions as at March 31,2015, as required under the applicable law or accounting standards, for material foreseeable gains or losses, if any, on long term contracts including derivative contracts.

iii. There was no amount, required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31,2015.

Referred to in Paragraph 5 of the Independent Auditors'Report of even date to the members of SHIRPUR GOLD REFINERY LIMITED on the standalone financial statements as of and for the year ended March 31, 2015

i) a) The company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

b) According to the information and explanation given to us by the Management majority of the fixed assets are physically verified by the management according to a phased program design to cover all the items during the year which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the program, the fixed assets have been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

ii) a) The inventory, including stocks with certain third

parties for job work, had been physically verified by the Management at reasonable intervals during the year. In respect of an inventory lying with the third parties, these have been confirmed by them. In our opinion, the frequency of verification is reasonable. b) In our opinion the procedures of such physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. No material discrepancies were noticed on such physical verification of inventory as compared to book records.

iii) a) Based on our verification of the books and records and

as per information and explanations provided to us by the management, the company has not granted Secured or unsecured loans to persons covered in the Registers maintained under section 189 of the Act.

b) Since no loans or advances in the nature of loans are given to parties covered under Section 189 of the Act and as detailed herein above, the rest of the provisions in sub-clause iii(a) and iii (b) are not applicable.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and its nature of business for the inventory and fixed assets and for sale of goods. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

v) a) In our opinion and according to the information and

explanations given to us, the Company has not accepted deposits as covered under the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under, hence this clause is not applicable.

b) In view of our comments at Sr no.v (a) above, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal, is not applicable.

vi) We have been informed by the management that the maintenance of cost records is not prescribed by the Central Govt. under sub-section (1) of section 148 of the Act.

vii) a) According to the books and records as produced

and examined by us in accordance with Generally Accepted Auditing Practices in India and also based on management representations, undisputed statutory dues in respect of provident fund, employee state insurance, income tax, wealth tax, service tax, sales tax, value added tax, excise duty, cess and other material statutory dues have generally been regularly deposited by the company.

b) According to information and explanations given to us and the records of company examined by us, details of dues of Income tax, Sales tax, MVAT and export obligations under EPCG Scheme, which have not been deposited as on 31st March, 2015 on account of disputes/ under the Schemes are given below:

(i) MVAT deferred of '/Million 496.02 till the year end under Sales Tax Incentive Scheme of 1993 by the Government of Maharashtra, (Scheme PSI-1993) is considered in the Accounts as Deferred Sales Tax Liability and stated in Note 3. The Deferred Sales Tax Liability for the years ended 31st March 2011 to 31st March 2015 aggregating to Rs./Millions 496.02 is repayable in five respective equal annual installments starting from financial year 2021-22 to 2025-26.

(ii) Sales Tax Demand for F.Y. 2004-05 of Rs./Millions 0.87 and F.Y. 2007-08 of Rs./Millions 0.59 against which Rs./Millions 0.10 and Rs./Millions 0.20 is deposited respectively and stay obtained pending hearing of the appeal and disposal.

(iii) Export Obligation under EPCG Scheme remaining to be fulfilled by exports is Rs./Millions 1930.85 as per Note No. 29.

(iv) Disputed Liabilities under Income tax Act 1961:

Asst Year Forum where pending In Million

2001-02 Income Tax Appellate Tribunal

i. Regular Assessment demand 0.62

ii. Penalty u/s 271(1)(c) 3.32

2008-09 Commissioner of Income Tax (Appeals) Penalty u/s 271(1)(c) 157.92

(v) The Income tax department's appeal before Hon'ble Bombay High Court against the order of the Income Tax Appellate Tribunal in favour of the Company setting aside the penalty of Rs./Millions 111.36 levied under section 271(1)(c) of the Income Tax Act 1961 by Assessing Officer, for the Assessment year 2007- 08, has been dismissed by the apex court, resulting in remission of the said demand of Rs.111.36 millions.

c) As per the records of the company, there is no amount required to be transferred to Investor's Education and Protection Fund in accordance with the relevant provisions of the Companies Act 1956 (1 of 1956) and rules made there under.

viii) The Company has accumulated losses at the end of the financial year. The Company has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

ix) According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at balance sheet date.

x) As per the information and explanations given to us, records as produced, the company has not given any guarantee for loans taken by others from any bank or financial institutions.

xi) As per the information and explanations given, the company has not applied for any term loans during the year, hence we have no comment to make of their purpose and applications.

xii) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance material of fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

For B. S. SHARMA & Co., CHARTERED ACCOUNTANTS, FR No. 128249W

CA B. S. SHARMA, PROPRIETOR. Membership No. 031578

Place: Mumbai Dated: 19th May 2015


Mar 31, 2014

1. We have audited the accompanying financial statements of Shirpur Gold Refi nery Limited ("the Company") which comprise the Balance Sheet as at 31 March, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information, which have been signed under reference to this report.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

2. The Management is responsible for the preparation of these fi nancial statements that give a true and fair view of the financial position, financial performance and cash fl ows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITORS'' RESPONSIBILITY

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements, plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control . An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

OPINION

6. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31 March, 2014;

b) In the case of the Statement of Profit and Loss, of the Profit of the Company for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

7. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the Order.

8. As required by Section 227(3) of the Act, we report that:

(i) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(ii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act,1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013; and

(v) On the basis of written representation received from the directors as on 31 March 2014 and taken on record by the Board of Directors, none of the directors is disqualifi ed as at 31 March 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

STATEMENT REFERRED TO IN PARAGRAPH (7) UNDER THE HEADING OF "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE.

A. FIXED ASSETS:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets, except for furniture and fittings.

(b) Fixed assets were physically verifi ed by the management during the year. In our opinion, the periodicity of verification is reasonable, having regard to the size of the Company and nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such verifi cation.

(c) None of the fixed asset had been disposed off during the year.

B. INVENTORIES:

(ii) (a) The inventories have been physically verifi ed by the management, at reasonable intervals during the year. In our opinion, the frequency of verifi cation is reasonable, having regard to the size of the company and nature of its business.

(b) As per the information and explanations given to us, the procedures of physical verifi cation of inventories followed by the management, in our opinion, are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The company has maintained proper records of inventories. No material discrepancies were noticed on physical verifi cation of inventories as compared to the book records.

C. LOANS & ADVANCES:

(iii) In respect of the loans, advances in the nature of loans, secured or unsecured, granted or taken by the Company to/from companies, fi rms or other parties covered in the register maintained under Section 301 of the Companies Act 1956 (the Act) we report:

(a) As per the information and explanations given, the company has not granted any loans, secured or unsecured, to companies, fi rms or other entities covered in the register maintained under Section 301 of the Act.

(b) As per information and explanation given, the Company has taken unsecured loan from a Company covered in the register maintained under section 301 of the Act. The amount received is Rs./Millions 120.00 and repaid is Rs./Millions 60.00 during the year. The balance at the year end is Rs./Millions 60.00. The terms and conditions of such loan are resonable having regard to prevailing market terms and conditions for such unsecured loans and are not prejudicial to the interest of the Company.

D. INTERNAL CONTROLS:

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures and systems commensurate with the size of the Company and the nature of its business, with regard to the purchases of inventory, fi xed assets and for sale of goods. We have not observed any continuing failure to correct major weaknesses in internal control system of the company.

E. TRANSACTIONS U/S 301:

(v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act 1956, to the best of our information and explanations given to us:

(a) These particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the register maintained under the said Section, have been so entered.

(b) In our opinion and according to the information and explanations given to us, where each of such transactions for cash is in excess of Rs. 5,00,000/- in respect of any party, the transactions have been made at the prevailing market prices at relevant time for cash, which prima facie appears to be reasonable

F. PUBLIC DEPOSITS:

(vi) The Company has not accepted any deposits from the public under the provisions of Section 58A, 58AA or other relevant provisions of the Companies Act 1956 and rules made thereunder. Therefore,

the provisions of Clause (vi) of Paragraph 4 of the Order are not applicable to the Company.

G. INTERNAL AUDIT:

(vii) In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business

H. COST RECORDS:

(viii) In our opinion and according to the information and explanations given to us, the Central Government vide order dated 6h November 2012 has directed the company to maintain the cost records with effect from financial year 2013-14 and obtain Cost Auditor''s Report thereon as prescribed under the Companies (Cost Accounting Records) Rules 2011, read with Section 209(1)(d) of the Act. We have broadly examined the books of accounts maintained by the Company pursuant to the said rules and section 209(1) (d)of the Act, in respect of the products mentioned therein and are of the opinion that prima-facie, the prescribed accounts and records have been made and maintained.However, we have not carried out a detailed examination of the records with a view to determine whether these are accurate or complete

I. STATUTORY DUES:

(ix) According to the records of the company examined by us and information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing with appropriate authorities, undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Custom duty, Excise duty, Cess and other material statutory dues applicable to it.

(b) There were no undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Custom duty, Excise duty, Cess and other material statutory dues in arrears as at 31st March 2014 for a period of more than six months from the date they became payable.

(c) Details of dues of Income tax, Sales tax, MVAT and export obligations under EPCG Scheme, which have not been deposited as on 31st March 2014 on account of disputes / under the Schemes are given below:

(i) MVAT collected till the year end under Sales Tax Incentive Scheme of 1993 by the Government of Maharashtra, (Scheme PSI-1993) is considered in the Accounts as Deferred Sales Tax Liability and stated in Note 3. The Deferred Sales Tax Liability for the years ended from 31st March 2011 to 31st March 2014 aggregating to Rs./Millions 278.61 is repayable in five respective equal annual installments starting from financial year 2021-22 to 2024-25.

(ii) Sales Tax Demand for F.Y 2004-05 of Rs./Millions 0.87 and F.Y 2007-08 of Rs./Millions 0.59 against which Rs./Millions 0.10 and Rs./Millions 0.20 is deposited respectively and stay obtained pending hearing of the appeal and disposal.

(iii) Export Obligations under EPCG Scheme remaining to be fulfilled by exports is Rs./Millons 4034.21 as per Note no.29.

(iv) Disputed Liabilities under Income tax Act 1961:

Assessment Year Forum where pending Rs in Millions

2001-02 Income tax Appellate Tribunal

i. Regular Assessment demand Rs. 0.62

ii. Penalty u/s 271(1) (c) Rs. 3.32

2008-09 Commissioner of Income tax (Appeals)

Penalty u/s 271(1) (c) Rs.157.92

(v) The Income tax department has filed an Appeal before Hon''ble Bombay High Court against the order of the Income Tax Appellate Tribunal in favour of the Company setting aside the penalty of Rs./Millions 111.36 levied under section 271(1)(c) of the Income Tax Act 1961 by

Assessing officer, for the Assessment year 2007-08 and is pending admission and hearing.

J. ACCUMULATED OR CASH LOSSES:

(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the Financial year under Audit and in the immediately preceding financial year.

K. OTHER CLAUSES:

(xi) The company has not defaulted in repayment of dues to banks and fi nancial institutions during the year.

(xii) The Company has not granted any loans and advances by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund/nidhi/mutual benefit fund/society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

(xiv) The Company is not dealing or trading in shares, securities, debentures or other investments.

(xv) According to information and explanation given to us, the Company has not given any guarantee/s to banks or financial institutions for loans taken by others.

(xvi) In our opinion and according to the information and explanations given to us, the term loan has been utilized by the Company for the purpose, wherever stipulated, for which it was obtained.

(xvii) In our opinion and according to the information and explanations given to us, on an overall examination of the Balance Sheet of the Company, we report that funds raised on short term basis have, prima facie, not been used for long-term investments.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act.

(xix) During the year the Company has not issued any debentures. Hence the provisions of clause (xix) of the said Order is not applicable.

(xx) The Company has not raised any money by public issue during the year.

(xxi) Based on the audit procedures performed and according to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the year.

For B.S. SHARMA & Co.,

Chartered Accountants,

FRN No.128249W

CA B. S. SHARMA

PROPRIETOR,

Membership No. 031578

Place: Mumbai Date : 23rd May 2014


Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

1. We have audited the accompanying financial statements of Shirpur Gold Refinery Limited ("the Company") which comprise the Balance Sheet as at 31st March 2013, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

2. The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR''S RESPONSIBILITY

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION

6. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements together with the notes thereon, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2013;

b) In the case of the Statement of Profit and Loss, of the Profit of the Company for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

7. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), issued by the Central Government, in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

8. As required by Section 227(3) of the Act, we reportthat:

(i) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(ii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3 C) of Section 211 of the Act; and

(v) On the basis of written representation received from the directors as on 31 st March 2013 and taken on record by the Board of Directors, none of the directors is disqualified as at 31 st March 2013, from being appointed as a director in terms of clause (g) of sub-section(l) of Section274 oftheAct

ANNEXURE TO THE AUDITORS'' REPORT

STATEMENT REFERRED TO IN PARAGRAPH (7) UNDER THE HEADING OF "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE.

A. FIXED ASSETS:

1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets, except for furniture and fittings.

(b) Fixed assets were physically verified by the management during the year. In our opinion, the periodicity of verification is reasonable, having regard to the size of the Company and nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) None of the fixed asset had been disposed off during the year.

B. INVENTORIES:

2. (a) The inventories have been physically verified by the management, at reasonable intervals during the year. In our opinion, the frequency of verification is reasonable, having regard to the size of the company and nature of its business.

(b) As per the information and explanations given to us, the procedures of physical verification of inventories followed by the management, in our opinion, are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventories. No material discrepancies were noticed on physical verification of inventories as compared to the book records.

LOANS & ADVANCES:

3. In respect of the loans, advances in the nature of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act 1956 (the Act) we report:

(a) As per the information and explanations given, the Company has not granted any loans, secured or unsecured, to companies, firms or other entities covered in the register maintained under Section 301 of the Act.

(b) As per information and explanation given, the Company has not taken any loans, secured or unsecured,

D. INTERNAL CONTROLS:

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures and systems commensurate with the size of the Company and the nature of its business, with regard to the purchases of inventory, fixed assets and for sale of goods. We have not observed any continuing failure to correct maj or weaknesses in internal control system of the company.

E. TRANSACTIONS U/S 301:

5. In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act 1956, to the best of our information and explanations given to us:

(a) These particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the register maintained under the said Section, have been so entered.

(b) In our opinion and according to the information and explanations given to us, where each of such transactions is in excess of T500,000/- in respect of any party, the transactions have been made at the prevailing market prices at relevant time for cash, which prima facie appears to be reasonable.

F. PUBLIC DEPOSITS:

6. The Company has not accepted any deposits from the public under the provisions of Section 58A, 58AA or other relevant provisions of the Companies Act 1956 and rules made there under. Therefore, the provisions of Clause (vi) of Paragraph 4 of the Order are not applicable to the Company.

G. INTERNAL AUDIT:

7. In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business

H. COST RECORDS:

8. In our opinion and according to the information and explanations given to us, the Central Government vide Order dated 6th November 2012 has directed the company to maintain the cost records with effect from Financial Year 2013-14 and obtain CostAuditor''s Report thereon as prescribed under the Companies (CostAccounting Records) Rules 2011, read with Section 209(1 )(d) of the Act. The company has appointed a qualified Cost Accountant as required under the said Rules. However, for the financial years ended 31st March 2012 and 2013, the company has to file Compliance Report, as prescribed in the Order dated 4th June 2012. The company has filed such Compliance Report for the year ended 31 st March 2012.

I. STATUTORY DUES:

9. According to the records of the Company examined by us and information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Custom duty, Excise duty, Cess and other material statutory dues applicable to it, with appropriate authorities.

(b) There were no undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Custom duty, Excise duty, Cess and other material statutory dues in arrears as at 31 st March 2013 for a period of more than six months from the date they became payable.

(c) Details of dues of Income tax, Sales tax, MVAT and export obligations under EPCG Scheme which have not been deposited as on 31 st March 2013 on account of disputes are given below:

(I) MVAT collected till the year end under Sales Tax Incentive Scheme of 1993 by the Government of

Maharashtra, Scheme PSI-1993 is considered in the Accounts as Deferred Sales Tax Liability and stated in Note 3. The Deferred Sales Tax Liability for the year ended 31st March 2013,31st March 2012 and 31st March 2011 of ^/Millions 110.09, (/ Millions 67.73 and ?/MiUi°m 19.80 respectively is repayable in five equal annual installments starting from financial year 2023-24,2022-23 and financial year 2021-22 respectively.

(ii) Sales Tax Demand for 2007-08 of ?/Millions0.59 against which ^/Millions 0.20 is deposited and stay obtained and pending filing of an appeal.

(iii) Export Obligations under EPCG Scheme remaining to be fulfilled by exports of ?. /Millons 8709.80 as Detailed in Note no.29.

(iv) Income tax matters under Income tax Act 1961:

Assessment Year Forum where pending Amt in ? in Millions

2001 -02 Income tax Appellate Tribunal Rs. 0.06

i. Regular Assessment demand Rs. 3.32

ii. Penalty u/s.271(l)(c)

2008-09 Commissioner of Income tax (Appeals) Rs.15.79 Penalty u/s.271(l)(c)

J. ACCUMULATED OR CASH LOSSES:

10. The Company has accumulated losses of * /Millons 441.78 ((/Millons 464.58) at the end of the financial year. The Company has not incurred cash losses in current financial year and in the immediately preceding financial year.

K. OTHER CLAUSES:

11. The company has not defaulted in repayment of dues to banks and financial institutions during the year.

12. The Company has not granted any loans and advances by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund/nidhi/mutual benefit fund/society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14. The Company is not dealing or trading in shares, securities, debentures or other investments.

15. According to information and explanation given to us, the Company has not given any guarantee/s to banks or financial institutions for loans taken by others.

16. In our opinion and according to the information and explanations given to us, the term loan has been utilized by the Company for the purpose, wherever stipulated, for which it was obtained.

17. In our opinion and according to the information and explanations given to us, on an overall examination of the Balance Sheet of the Company, we report that funds raised on short term basis have, prima facie, not been used for long-term investments.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 ofthe Act.

19. During the year the Company has not issued any debentures, Hence the provisions of clause (xix) ofthe said Order is not applicable.

20. The Company has not raised any money by public issues during the year.

21. Based on the audit procedures performed and according to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the year.

For B.S. SHARMA & Co.,

Chartered Accountants,

FRN No.l28249W

CA B. S. SHARMA PROPRIETOR,

Membership No. 031578

Place: Mumbai

Dated 30th May 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of Shirpur Gold Refinery Limited ("the Company") as at 31st March, 2012, the Statement of Profit & Loss in the Revised form, as prescribed by the Central Government vide Notification S0.447(E) at February 28, 2011 and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of any material misstatement. An audit includes, examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, (the 'Order') issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 ("the Act") and on the basis of such checks as we considered appropriate, and according to the information and explanations given to us, we give in the Annexure a statement of the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable to the Company.

4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet and the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211 (3C) of the Act;

e) On the basis of the written representations received from the Directors, as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the Director of the Company is disqualified as on 31st March, 2012 from being appointed as a Director in terms of clause (g) of sub- section (1) of Section 274 of the Act.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and Notes thereon, give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2012;

(ii) in the case of the Statement of Profit and Loss of the, Loss of the company for the year ended on that date and

(iii) in the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

Statement referred to in paragraph 3 of our report of even date on the accounts of Shirpur Gold Refinery limited for the year ended on 31st March, 2012.

A. FIXED ASSETS:

1) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets, except for furniture and fittings, as per available information.

(b) Fixed assets were physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) None of the fixed asset had been disposed off during the year.

B. INVENTORIES:

2) (a) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable, having regard to the size of the company and nature of its business.

(b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The company has maintained proper records of inventories. No material discrepancies were noticed on physical verification of inventories as compared to the book records.

C. LOANS & ADVANCES:

3) In respect of the loans, advances in the nature of loans, secured or unsecured, granted or taken by the Company to/from companies, frms or other parties covered in the register maintained under Section 301 of the Companies Act 1956:

(a) As per the information and explanations given, the company has not granted any loans, secured or unsecured, to companies, frms or other entities covered in the register maintained under Section 301 of the Act.

(b) As per the information and explanations given, the company has not taken any loans, secured or unsecured, from companies, frms or other entities covered in the register maintained under Section 301 of the Act.

D. INTERNAL CONTROLS:

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures and systems commensurate with the size of the Company and the nature of its business, with regard to the purchases of inventories, fxed assets and for sale of goods. We have not observed any continuing failure to correct major weaknesses in internal controls systems of the company.

E. TRANSACTIONS U/S 301:

5) (a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act 1956, have been so entered.

(b) In our opinion and according to the information and explanations given to us, there are transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs.500,000/- in respect of each party during the year and had been done at the prevailing market prices for cash, hence appears to be reasonable as per the information available with the company.

F. PUBLIC DEPOSITS:

6) The Company has not accepted any deposits from the public under the provisions of Section 58A, 58AA or other relevant provisions of the Companies Act 1956 and rules made there under. Therefore, the provisions of Clause (vi) of Paragraph 4 of the Order are not applicable to the Company.

G. INTERNAL AUDIT:

7) In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

H. COST RECORDS:

8) In our opinion and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost accounting records under Section 209(1)(d) of the Act.

I. STATUTORY DUES:

9) (a) According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth tax, Custom duty, Excise duty, cess and material statutory dues applicable to it, except for delay in payments of provident fund in few cases. And undisputed Income Tax demand of Rs./Millions 3.94 for the Assessment year 2001-02.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2012 for a period of more than six months from the date of becoming payable, except the following:

(c) MVAT collected of Rs./Millions 87.53 (19.80) till the year end, under Sales Tax Incentive Scheme of 1993 by the Government of Maharashtra, Scheme PSI-1993 is considered in the Accounts as Deferred Sales Tax Liability and stated in Note no. 3 to the Financial Statements under report, is to be repayable as per the terms and conditions contained in the scheme.

(d) Sales Tax Demand for 2007-08 of Rs./Millions 0.59 against which Rs./Millions 0.20 is deposited and stay obtained and pending fling of an appeal.

(e) The Income tax Department has fled an appeal to the Hon'ble Bombay High Court against the Order of the Income Tax Appellate Tribunal in favour of the company setting aside the penalty levied by the Assessing officer of Rs./Millions111.36 under Section 271(1) (c) of the Income Tax Act 1961, for the Assessment year 2007-08, is pending admission, as referred to in Note no.29;

(f) In connection with fulfllment of Export Obligations under EPCG Scheme of Rs./Millions 12271.64 as detailed in Note no.29;

J. ACCUMULATED OR CASH LOSSES:

10) The Company has accumulated losses of Rs./Millions 464.58(323.01) at the end of the financial year and has earned cash Profit of Rs./Millions 5.55 during the year under report compared to cash loss of Rs./Millions 69.85 in the preceding year.

K. OTHER CLAUSES:

11) The Company has not defaulted in repayment of dues to banks and financial institutions during the year.

12) The Company has not granted any loans and advances by way of pledge of shares, debentures and other securities.

13) The Company is not a chit fund/nidhi/mutual benefit fund/society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14) The Company is not dealing or trading in shares, securities, debentures or other investments.

15) According to information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16) The Company has not raised any term loan during the year from any nationalized banks or any financial institution. Hence, the provisions of the said clause (xvi) of the Order are not applicable.

17) According to the Cash Flow statement and other records examined by us and the information and explanations given, on an overall basis, funds raised on short term basis have not, prima facie, been used for long-term investments.

18) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained Under section 301 of the Companies Act, 1956.

19) The Company has not issued any debentures, hence the provisions of clause (xix) of the said Order is not applicable.

20) The Company has not raised any money by public issues during the year.

21) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For B. S. SHARMA & Co.,

Chartered Accountants

FRN N0.128249W

Place : Mumbai (CA B. S. SHARMA)

Date : 9th May, 2012 Proprietor

FCA 031578


Mar 31, 2011

1. We have audited the attached Balance Sheet of SHIRPUR GOLD REFINERY LIMITED, as at 31st March, 2011, the related Profit and Loss Account for the year ended on that date annexed thereto and the cash flow statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of any material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate, and according to the information and explanations given to us, we give in the Annexure a statement of the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable to the Company.

4. Attention is invited to the following Notes in Schedule 18 :

Note no.1(a) regarding non fulfillment of export commitment under EPCG scheme and application for extention of time;

5. Further to our comments in the annexure referred to in paragraph 4 above, we report that :

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956.

e) On the basis of the written representations received from the Directors as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the Director of the Company is disqualified as on 31st March, 2011 from being appointed as a Director in terms of Section 274 (1) (g) of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read together with the significant accounting policies and Notes to Accounts as per Schedule 18, give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

(ii) in the case of the Profit and Loss Account, of the loss for the year ended on that date; and

(iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

Statement referred to in paragraph 3 of our report of even date on the accounts of SHIRPUR GOLD REFINERY LIMITED for the year ended on 31st March, 2011.

A. FIXED ASSETS :

1) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets, except for furniture and fittings.

(b) Some of the fixed assets were physically verified by the management in accordance with the program of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals, having regard to the size of the Company. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year, as reported in Note no.8 to Schedule 18, in our opinion, do not constitute substantial part of the Fixed Assets and such disposal has not affected the going concern status of the Company.

B. INVENTORIES :

2) (a) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.

(b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanation given, the Company has maintained proper records of inventories. No material discrepancies were noticed on physical verification.

C. LOANS & ADVANCES :

3) The Company has neither taken nor granted any loans, secured or unsecured, to companies, firms or other entities covered in the register maintained under Section 301 of the Companies Act 1956. Accordingly clauses (iii)(b) to (iii)(d) of paragraph 4 of the the Order are not applicable to the Company.

D. INTERNAL CONTROLS:

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, with regard to the purchases of inventories, fixed assets and for sale of goods. We have not observed any continuing failure to correct major weaknesses in internal controls systems of the Company.

E. TRANSACTIONS U/S 301 OF THE COMPINES ACT, 1956 :

5) (a) According to the information and explanations given to us, transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered, in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs.500,000/- in respect of each party during the year, hence the details relating to the reasonability or otherwise of the prices having regard to prevailing market prices, is not applicable.

F. PUBLIC DEPOSITS :

6) The Company has not accepted any deposits from the public as per the provisions of Section 58A, 58AA or other relevant provisions of the Companies Act, 1956 and rules made thereunder.

G. INTERNAL AUDIT :

7) In our opinion, the Company has an internal audit system, commensurate with the size and nature of its business.

H. COST RECORDS :

8) On the basis of the records produced, we are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 have been maintained. However, we are not required to and have not carried out any detailed examination of such accounts and records.

I. STATUTORY DUES :

9) (a) According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth tax, Custom duty, Excise duty, cess and material statutory dues applicable to it, except for delays in payments of provident fund etc.

MVAT collected of Rs.197.98 lacs under the Deferred Sales Tax Liability Scheme PSI-1993 of Government of Maharashtra, as appearing in Schedule 3 to the Financial statements under report, is to be repayable as per the terms and conditions contained in the scheme.

(b) According to the information and explanation given to us, at the last day of the financial year, there was no undisputed amount outstanding in respect of such statutory dues which were due for more than six months from the date they become payable.

(c) According to the information and explanations given to us, there are no dues in respect of sales tax, income tax, customs duty, wealth tax, excise duty, and cess that have not been deposited with the appropriate authorities on account of any dispute.

J. ACCUMULATED OR CASH LOSSES :

10) The Company has accumulated losses of Rs.32,30.12 lacs (`10,14.32 lacs) at the end of the financial year and has incurred cash loss of Rs.7,11.14 lacs (Rs.Nil) in the financial year under report. There is no cash loss in the immediately preceding financial year.

K. OTHER CLAUSES :

11) As per the information and explanation given to us, the Company has not defaulted in repayment of dues to a bank. The Company has not issued any debentures.

12) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and advances on the basis of securities by way of pledge of shares, debentures and other securities.

13) In our opinion, the provisions of any special Statute applicable to Chit Fund, Nidhi or Mutual Benefits Fund/Societies are not applicable to the Company.

14) According to the information and explanations given, the Company is not dealing or trading in shares, securities, debentures or other investments and hence requirements of Para 4(xiv) are not applicable to the Company.

15) According to information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16) The Company has been sanctioned term loan during the year by a nationalized bank but has not availed the same, hence the clause relating to default on repayment etc., is not applicable.

17) According to the Cash Flow statement and other records examined by us, and the information and explanations given, on an overall basis, funds raised on short term basis have not, prima facie, been used for long-term investments.

18) During the year the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained U/s. 301 of the Companies Act, 1956.

19) During the year the Company has not issued any debentures and hence, question of creating securities in respect thereof does not arise.

20) The Company has not raised any money by public issues during the year.

21) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For B. S. SHARMA & Co., Chartered Accountants FRN No.128249W

(CA B. S. SHARMA) Proprietor FCA 031578

MUMBAI Dated : 06th July, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of SHIRPUR GOLD REFINERY LIMITED, as at March 31, 2010, the related Profit and Loss Account for the year ended on that date annexed thereto and the cash flow statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of any material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Act and on the basis of such checks as we considered appropriate, and according to the information and explanations given to us, we give in the Annexure a statement of the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable to the Company.

4. Attention is invited to the following Notes in Schedule 15:

a) Note No. 2 regarding amalgamation of erstwhile Kala Kosh Auctions Pvt. Ltd., a fully owned subsidiary of Jayneer Capital Pvt. Ltd., with the Company under the Scheme of arrangement sanctioned by the Honble Bombay High court and its effect given in the financial statements for the year under review;

b) Note No. 3 regarding adoption of the deferred tax (DT) policy in the year under report and consequential accounting of DT Assets;

c) Note No. 11 (a) relating to Non fulfillment of export commitment under EPCG scheme;

5. Further to our comments in the annexure referred to in paragraph 3 above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the accounting standards referred to in Section 211 (3C) of the act;

e) On the basis of the written representations received from the directors, as on March 31, 2010 and taken on record by the board of Directors, we report that none of the director of the Company is disqualified as on March 31, 2010 from being appointed as a director in terms of Section 274 (1) (g) of the act.

f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read together with the significant accounting policies and Notes to Accounts as per Schedule 15 and Note No. 4 hereinbefore, give the information required by the Act, in the manner so required and give, a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

(ii) in the case of the Profit and Loss Account, of the loss for the year ended on that date; and

(iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure referred to in Paragraph (3) of Auditors Report to the members of SHIRPUR GOLD REFINERY LTD. on the accounts for the year ended March 31, 2010

A. FIXED ASSETS:

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets, except for furniture and fittings.

(b) As per information and explanations given, the management has carried out physical verification of substantial part of fixed assets in a phased program, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year, there was no disposal of fixed assets.

B. INVENTORIES:

2. (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of such verification is reasonable having regard to the nature of inventory.

(b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of inventories and no discrepancies were noticed on physical verification of the inventories as compared to book records.

C. LOANS AND ADVANCES:

3. (a) According to the information and explanations given to us, no secured or unsecured loans or advances in the nature of loans, has been granted to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) According to the information and explanations given to us, the Company has not taken any loan or advances in the nature of loans, secured or unsecured from Companies, firms or other parties covered in the register maintained under Section 301 of the Act.

During the year secured loan of RsVthousands 227,23,22 (Rs./thousands 227,23,22) assigned to erstwhile Kala Kosh Auctions Pvt. Ltd., (KKAPL) stood cancelled on its amalgamation with the Company w.e.f., April 1, 2009, pursuant to the Order dated 11th June 2010 of the Honble Bombay High Court, in the Scheme of Arrangement under Section 391 to 394 of the Act, as per Note No. 2 to Schedule 15 hereto.

INTERNAL CONTROL:

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and sale of scrap goods. We have not observed any continuing failure to correct major weaknesses in internal controls.

TRANSACTIONS U/S 301:

5. (a) According to the information and explanations given to us, transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 500,000/- in respect of each party during the year.

PUBLIC DEPOSITS:

6. According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year.

INTERNAL AUDIT SYSTEM:

7. The Company has an internal audit system commensurate with the size of the Company and nature of its business.

COST RECORDS:

8. We are informed that the Central Government has not prescribed maintenance of cost accounting records under Section 209 (1) (d) of the Act in respect of the Companys activities.

STATUTORY DUES:

9. According to the information and explanations given to us and the records of the Company examined by us in our opinion

a) The Company is generally regular, in depositing its Statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax (except delay in few instances in depositing Income Tax deducted at source), VAT, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable with the appropriate authority.

b) There are no undisputed amounts payable in respect of the aforesaid dues which have remained outstanding as at March 31, 2010 for a period of more than six months from the date they became payable.

c) There are disputed dues on account of Income Tax and VAT which have not been deposited since appeal before authorities concerned in respect of:

Name of the Statute Period Amount pending before Rs./thousands

Income tax Act, 1961 AY 2007-08 11,13,60 CIT Appeals

Sales Tax (MVAT) FY 2004-05 15,05 Dy. Commissioner of Sales Tax

ACCUMULATED OR CASH LOSSES:

10. The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses during the current financial year. The accumulated losses of Rs./thousands 15,05,110 at the beginning of the financial year had been adjusted against the surplus of Rs./thousand 21,25,406 arising out of Scheme of Arrangement as per Note No. 2 to Schedule 15 to financial statements, resulting in net worth turning positive. On the basis of the financial statements under review, in the immediate preceding financial year there was a cash loss of Rs./Thousand 98,78.

OTHER CLAUSES:

11. There are no dues to any banks or financial institutions, as informed. The dues to the banks of Rs./thousands 227,23,22, which were assigned to erstwhile Kala Kosh Auctions Pvt. Ltd., (amalgamated with the company), stood cancelled pursuant to the order dated June 11, 2010 of the Honble Bombay High Court sanctioning the Scheme of Arrangement as per the Note No. 2 to Schedule 15, hence the clause relating to default in repayment of dues to banks and/or financial institutions is not applicable.

12. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not chit fund or a nidhi/ mutual benefit fund/ society.

14. The Company is not dealing in or trading in shares, securities, debentures and other Investments.

15. According to information and explanation given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. The Company has not raised any term loans during the year.

17. On the basis of review of utilization of funds which is based on an overall examination of the Balance Sheet of the Company and related information as made available to us, we report that no short term funds have been used for long-term investments.

18. The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. The Company has not issued any secured debentures during the year.

20. The Company has not raised any money by public issue during the year.

21. On the basis of our examination and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For B.S. SHARMA & Co.

Chartered Accountants FRNo.128249W

(CA B. S. SHARMA)

Proprietor

Membership No. 031578

Mumbai

Dated : October 14, 2010

 
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