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Notes to Accounts of Shirpur Gold Refinery Ltd.

Mar 31, 2015

CORPORATE INFORMATION

Shirpur Gold Refinery Limited is incorporated in the state of Maharashtra, India. The Company has been in the business of manufacturing and trading of gold bars, gold coins, gold jewellery and export of gold jewellery.

(a) Terms/Rights attached to Equity Shares

The company has only one class of shares referred to as equity shares having a par value of Rs. 10 per share. All the shares are ranking pari- passu in all respect. Each holder of equity share is entitled to one vote per share. As per the Companies Act, 1956, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts in the event of liquidation of the company. However no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.

(b) 13,574,202 Equity Shares of Rs. 10/- each fully paid up out of issued, subscribed and paid up share capital were alloted are without payments being received in cash in the preceding five years pursuant to the Scheme of amalgamation as approved by the Hon'ble Bombay High Court vide order dated 11th June, 2010.

(c) Neither bonus shares are issued nor any shares bought back during the five years preceding 31st March 2015.

2. CONTINGENT LIABILITIES AND COMMITMENTS

Contingent Liabilities (Rs Millions)

Particulars 2015 2014

1 Estimated amount of Export obligation to be fulfilled in terms of Duty saved value against 1,930.85 4034.21 Import of Plant and Machinery under EPCG up to 2014, 2020 & 2019

2 Claims against the Company not acknowledged as debt Sales Tax Matters in Dispute under appeal 1.46 1.46 for the FY- 2004-05 & FY- 2007-08 and stay granted against demand of Rs./Millions 1.46 on payment of Rs./Millions 0.30 is deposited.

a) *The company had imported at concessional rate of duty Plant & Machineries during 2000, 2001 and 2002 against three licenses issued under Export & Import Policy 1997-2002 by the Government of India, with an obligation to export five times of the CIF value of Capital Goods under EPCG Scheme on FOB basis within a period of eight years from the date of issue of such licenses. However, in view of discontinuation of manufacturing operations during financial years 2004-05 till 10th July 2010 the said obligations could not be fulfilled. The company had been sanctioned changed method of quantification of such obligations from CIF Value to FOB value to total duty saved method and has also received extension of time for fulfillment of such obligations in respect of all licenses from the competent authority. Such export obligations are now required to be fulfilled during the period from 2012 to 2014, as stipulated in the respective licenses. The Company has applied for the further extension of export obligation for the period of one year from 2014 to 2015.

The company has fulfilled the export obligation by exporting gold jewellery in respect of two of the licenses (issued during 2001 and 2002) as on date of signing of the Balance Sheet where it was required to be completed by 2012 and 2013.

The export obligation under other licenses is being fulfilled by continuing exports. Considering the above, export obligation remaining to be fulfilled as on date of signing of Financial Statement is Rs./Millions 315.87.

** (1) The company had imported at concessional rate of duty Plant & Machineries during 2012 against two licenses issued under Foreign Trade Policy 2009-2014 by the Govt. of India, with an obligation to export eight times of the duty saved value of Capital Goods under EPCG Scheme on FOB basis within a period of eight years from the date of issue of such licenses. Such export obligations are now required to be fulfilled during the period from 2012 to 2020, as stipulated in the respective licenses. Export obligation remaining to be fulfilled as on date of signing of Financial Statement is Rs./ Millions 49.06.

(2) on 29.12.2014 and 01.01.2015 the company has obtained two EPCG Licenses under Foreign Trade Policy 2009-2014 to import Plant and Machineries at Nil rate of duty , with an obligation to export six times of the duty saved value of capital Goods under EPCG Scheme on FOB basis within a period of six years from the date of issue of such licenses. Such export obligations are now required to be fulfilled during the period from 2014 to 2020, as stipulated in the respective licenses. Export obligation remaining to be fulfilled as on date of signing of Financial Statement is Rs./Millions 47.39.

***The company had imported at concessional rate of duty Plant & Machineries during 2013 against one licenses issued under Foreign Trade Policy 2009-2014 by the Government of India, with an obligation to export six times of the duty saved value of Capital Goods under EPCG Scheme on FOB basis within a period of six years from the date of issue of such licenses. Such export obligations are now required to be fulfilled during the period from 2012 to 2019, as stipulated in the respective licenses. Export obligation remaining to be fulfilled as on date of signing of Financial Statement is Rs./ Millions 8.25.

b) 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 by the said High Court.

c) Income tax Assessment has been completed up to Assessment Year 2012-13 and there are no demand pending, except disputed demand of Rs./Millions 3.94 for Assessment year 2001-02 and Rs./Millions 157.92 for Assessment year 2008-09 pending hearing and disposal by appellate authorities.

3. a. IMPAIRMENT OF FIXED ASSETS

The Company has assessed at Balance Sheet date, the assets pertaining to manufacturing facilities at Shirpur, Dhule in Maharashtra, as to their impairment. On the basis of such assessment, it is opined that the recoverable amount or fair value of such assets are more than their carrying values, hence there is no impairment of assets, to be provided for.

b. DEPRECIATION AND AMORTISATION

Tangible assets

Consequent to the enactment of the Companies Act, 2013 and its applicability for accounting periods commencing after April 1, 2014, depreciation on tangible fixed assets is provided on straight line method as per the useful life prescribed by Schedule II to the Companies Act, 2013 and or otherwise as stated herein before. The said change has resulted in reduction of assets by Rs.7.55 millions and has also affected reserves of the company. Effect in the reserves was given as per the transitional provisions specified in the Companies Act, 2013.

The company has ascertained useful lives based on technological upgradation, practical experience and replacement cycle, in the following cases where actual estimated useful life of assets as determined by the management is different than as prescribed by Schedule II to the Companies Act, 2013 :

Depreciation on additions to assets or on sale/discardment of assets, is calculated pro-rata from the month of such addition or upto the month of such sale/ discardment, as the case may be.

Intangible assets

Intangible assets are amortised on straight line basis over the economic useful life estimated by the management.

4. CURRENT ASSETS, LOANS AND ADVANCES

Inventories have been valued at lower of cost or realizable value and are taken, verified, certified by the management. In the opinion of the Management, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and provision for all known liabilities have been made in the accounts as at March 31,2015.

5. CURRENT LIABILITIES AND PROVISIONS

The current liabilities are stated at carrying cost, irrespective of their period of outstanding and in some of the cases pending confirmation and provision for all known liabilities have been made in the accounts as at 31st March 2015.

Provision for retirement benefits viz., gratuity and leave encashment have been made on the basis of actuarial valuation and for other benefits as per the policy of the company for such benefits.

6. 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, 2011,31st March, 2012, 31st March, 2013, 31st March, 2014 and 31st March, 2015 of Rs./Millions 19.80, Rs./Millions 67.73, Rs./ Millions 110.09, Rs./Millions 81.67 and Rs./Millions 216.72 respectively is repayable in five equal annual installments starting from financial year 2021-22, 2022-23, 2023-24, 2024-25 and 2025-26 respectively."

7. Other Operating Revenues includes profit realized on gold contract, forward exchange contract and forex gain on trade receivable & trade payable.

8. Interest expense is net of interest income of Rs./ Millions 59.75 (53.42).

9. The Company uses Gold Forward exchange contracts to hedge against its foreign currency exposure relating to the underlying transactions and firm commitments. The foreign currency exposure not hedge at the year end is as under.

10. SEGMENT REPORTING

The Company is in the business of refining, manufacturing and marketing of precious metal which is considered as the only reportable segment. The Company does not have any geographical segments. Hence, there are no separate reportable segments as per AS-17 on "Segment Reporting" notified under the Companies (Accounting Standards) Rules, 2006.

11. The amount due to Micro and Small Enterprises as defines in "The Micro, Small and Medium Enterprises Development Act, 2006" is Nil as no suppliers has intimated the Company about its status as a Micro, Small or Medium Enterprise or its registration under "The Micro, Small and Medium Enterprises Development Act, 2006"

12. EMPLOYEE BENEFITS

The liability towards short term employee benefits and post employment benefits for the year ended 31st March 2015 has been recognized in statement of Profit & Loss account. The Following disclosures are made as per actuarial certificate in accordance with AS-15 (Revised) pertaining to Defined Benefit Plans :

13. RELATED PARTY DISCLOSURES List of Related Parties Holding Company

Jayneer Capital Pvt. Ltd.

Wholly Owned Subsidiary Company

Shirpur Gold Mining Company Pvt Ltd incorporated on 27th February 2013 Shirpur Gold Trading DMCC incorporated on 02nd April 2013

Other related parties with whom transaction have been taken place and balance outstanding as on the last day of the year

Diligent Media Corporation Limited

14. ROBBERY OF UNREFINED GOLD IN TRANSIT

One of the vehicles of the transporters, hired on 24th April, 2015 by the Company was carrying 60 kgs of gold material out of which 58 KG of unrefined gold having approximate value of Rs. 15.68 crores was looted by some unidentified persons at the place Wadiwar, near Nashik, Maharashtra and the balance 2 KG of gold is currently under police custody. The Company has filed FIR and is taking appropriate steps to recover the material. The Company has adequate insurance against the loss of material.

15. PRIOR YEAR COMPARATIVES

Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classifications / disclosures.

16. Figures in brackets are for previous year unless otherwise stated.


Mar 31, 2013

BACKGROUND

Shirpur Gold Refinery Limited is incorporated in the state of Maharashtra, India. The Company has been mainly in the business of manufacturing and trading of gold bars, gold coins, gold jewellery and export of gold jewellery.

1. CONTINGENT LIABILITIES AND COMMITMENTS

Contingent Liabilities (Rs.Millions)

Particulars

2013 2012

1 Estimated amount of Export obligation to be fulfilled 8,709.80 12,271.64 in terms of Duty saved value against Import of Plant and Machinery under EPCG up to 2014* & 2020**.

2 Claims against the Company not acknowledged as 0.59 0.59 debt Sales Tax Matters in Dispute under appeal and stay granted against demand of T /Millions 0.59 on payment of T/Millions 0.20 is deposited.

a) *The company had imported at concessional rate of duty Plant & Machineries during 2000, 2001 and

2002 against three licenses issued under Export & Import Policy 1997-2002 by the Government of India, with an obligation to export five times of the CIF value of Capital Goods under EPCG Scheme on FOB basis within a period of eight years from the date of issue of such licenses. However, in view of discontinuation of manufacturing operations during financial years 2004-05 till 10th July 2010 the said obligations could not be fulfilled. The company had been sanctioned changed method of quantification of such obligations from CIF Value to FOB value to total duty saved method and has also received extension of time for fulfillment of such obligations in respect of all licenses from the competent authority. Such export obligations are now required to be fulfilled during the period from 2012 to 2014, as stipulated in the respective licenses.

The company has fulfilled the export obligation by exporting gold jewellery in respect of two of the licenses (issued during 2001 and 2002) as on date of signing of the Balance Sheet where it was required to be completed by 2012 and 2013.The export obligation under other licenses is being fulfilled by continuing exports. Considering the above, export obligation remaining to be fulfilled as on date of signing of Financial Statement is ^/Millions 7,908.27.

**The company had imported at concessional rate of duty Plant & Machineries during 2012 against two licenses issued under Foreign Trade Policy 2009-2014 by the Government oflndia, with an obligation to export eight times of the duty saved value of Capital Goods under EPCG Scheme on FOB basis within period of eight years from the date of issue of such licenses. Such export obligations are now required to be fulfilled during the period from 2012 to 2020, as stipulated in the respective licenses. Export obligation remaining to be fulfilled as on date of signing of Financial Statement is 7/Millions 49.06.

b) 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 7 /Millions 111.36 levied under section 271(l)(c) of the Income Tax Act 1961 by Assessing Officer, for the Assessment year 2007-08 and is pending admission by the said High Court.

c) Income tax Assessment has been completed up to Assessment Year 2009-10 and there are no demand pending, except disputed demand of 7/Millions 3.94 for Assessment year 2001-02 and T/Millions 157.92 for Assessment year 2008-09 pending hearing and disposal by appellate authorities.

2. IMPAIRMENT OF FIXED ASSETS

The Company has assessed at Balance Sheet date, the assets pertaining to manufacturing facilities at Shirpur, Dhule in Maharashtra, as to their impairment. On the basis of such assessment, it is opined that the recoverable amount or fair value of such assets are more than their carrying values, hence there is no impairment of assets, to be provided for.

3. CURRENT ASSETS, LOANS AND ADVANCES

Inventories have been valued at lower of cost or realizable value and are taken, verified, certified by the management. In the opinion of the Management, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and provision for all known liabilities have been made in the accounts as at March 31,2013.

4. CURRENT LIABILITIES AND PROVISIONS

The current liabilities are stated at carrying cost, irrespective of their period of outstanding and in some of the cases pending confirmation.

Provision for retirement benefits viz., gratuity and leave encashment have been made on the basis of actuarial valuation and for other benefits as per the policy of the company for such benefits.

5. MANAGERIAL REMUNERATION

Remuneration paid or provided in accordance with Section 198 of the Companies Act, 1956 to Manager is included in Employee benefit expense is as under:

6. 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 110.09,7 /Millions 67.73 and T/Millions 19.80 respectively is repayable in five equal annual installments starting from financial year 2023-24, 2022-23 and financial year 2021-22 respectively."

7. Other Operating Revenues is a profit realized on gold contract.

8. Interest expense is net of interest income of %/ Millions 41.96 (36.29).

9. The Company uses Gold Forward exchange contracts to hedge against its foreign currency exposure relating to the underlying transactions and firm commitments. The foreign currency exposure not hedged at the year end is asunder:

10. SEGMENT REPORTING

The Company is in the business of refining, manufacturing and marketing of precious metal which is considered as the only reportable segment. The Company does not have any geographical segments. Hence, there are no separate reportable segments as per AS-17 on "Segment Reporting" notified under the Companies (Accounting Standards) Rules, 2006.

11. The amount due to Micro and Small Enterprises as defines in "The Micro, Small and Medium Enterprises Development Act, 2006" is Nil as no suppliers has intimated the Company about its status as a Micro, Small or Medium Enterprise or its registration under "The Micro, Small and Medium Enterprises Development Act, 2006".

12. EMPLOYEE BENEFITS

The liability towards short term employee benefits and post employment benefits for the year ended 31st March 2013 has been recognized in statement of Profit & Loss account. The Following disclosures are made as per actuarial certificate in accordance with AS-15 (Revised) pertaining to Defined Benefit Plans:

13. Disclosures as per clause 32 of Listing Agreement is not applicable, as the Company has not given any loan/advances/investments to subsidiaries, Associates etc., as per the information available on records.

14. RELATED PARTY DISCLOSURES

List of Related Parties Holding Company

Jayneer Capital Pvt. Ltd.

Wholly Owned Subsidiary Company

Shirpur Gold Mining Company Pvt Ltd incorporated on 27th February 2013 Shirpur Gold Trading DMCC incorporated on 02nd April 2013

Other related parties with whom transaction have been taken place and balance outstanding as on the last day of the year

Essel Corporate Resources Pvt. Ltd., Jay Properties Pvt. Ltd., Agarani Telecommunication Ltd., Pan India Network Infravest Pvt. Ltd., Mr. Amit Goenka, Mrs. Sushila Goenka, Mr. Milind Pradhan upto 12th October 2012, Mr. Subhash Pareek from 05th November 2012.

15. PRIOR YEAR COMPARATIVES

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classifications / disclosures.

16. Figures in brackets are for previous year unless otherwise stated.


Mar 31, 2012

BACKGROUND

Shirpur Gold Refinery Limited ('the Company') is incorporated on November 9, 1984 under Registration Number L51900MH1984PLC034501 and Certificate of Commencement issued on December 6, 1984 under the name and styled as "Skipper Mercantile Limited" by the Registrar of Companies, Mumbai, Maharashtra. Subsequently the name was changed to Autoriders Mercantile & Finance Ltd., on July 1, 1991, then to Agee Gold Refiners Limited on May 19, 2000 and now Shirpur Gold Refinery Limited w.e.f. March 18, 2002. Objectives with which the Company is incorporated are to carry on the business of manufactures, refiners, smelters, processor, fabricators, processors, stockiest, agents, distributors, assayers, importers, exporters of and generally dealers and traders in precious and semiprecious metals, stones, earth, ores, alloys and minerals of all kinds, classes, nature and description, and further in all their branches, and jewellery thereof or otherwise and also to carry on business of mining and refining and other activities as detailed in the object clause of the Memorandum of Association of the Company. The Company is a part of Essel Group of Industries, since December 2008. At present company is carrying on business of refining gold of 995 purity from 999 purity, trading in gold and has commenced Export of jewellery during the year under report.

1. CONTINGENT LIABILITIES AND COMMITMENTS

- Contingent Liabilities (Rs.in Millions)

Particulars 2012 2011

1 Estimated amount of Export obligation to be fulfilled in 12,271.64 6,075.08 terms of Duty saved value against Import of Plant and Machinery under EPCG during 2001 *.

2 Claims against the Company not acknowledged as debt 0.59 - Sales Tax Matters in Dispute under appeal and stay granted against demand of Rs.Millions 0.59 on payment of Rs./Millions 0.20 is deposited

a) *The company had imported duty free Plant & Machineries during 2001 against three licenses issued under Export & Import Policy 1997-2002 by the Government of India, with an obligation to export five times of the CIF value of Capital Goods under EPCG Scheme on FOB basis within a period of eight years from the date of issue of such licenses. However, in view of discontinuation of manufacturing operations during financial years 2004-05 to 2010-11, the said obligations could not be fulfilled. The company had been sanctioned changed method of quantification of such obligations from CIF Value on FOB basis to Total Duty saved method and has also received extension of time for fulfillment of such obligations in respect of all licenses from the competent authority. Such export obligations are now required to be fulfilled during the period from 2012 to 2014, as stipulated in the respective licenses.

The company has fulfilled the export obligation by exporting gold jewellery in respect of one of the licenses as on date of signing of the Balance Sheet where it is required to be completed by 2012. The export obligation under other two licenses is being fulfilled by continuing exports. Considering the above the export obligation remaining to be fulfilled as on date of signing of Financial Statement is Rs./Millions11,653.73.

b) The Income tax department has filed 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 Assessing Officer of Rs./Millions 111.36 u/s 271(1)(c) of the Income Tax Act 1961, for the Assessment year 2007-08 is pending admission.

c) Income tax Assessment has been completed upto Assessment Year 2009-10 and there are no demand pending appeal or payment, except for Rs. 3.94 Millions for Assessment year 2001-02 pending filing of appeal.

2. IMPAIRMENT OF FIXED ASSETS

The Company has assessed at Balance Sheet date, the assets pertaining to manufacturing facilities at Shirpur, Dhule in Maharashtra, as to their impairment. On the basis of such assessment, it is opined that the recoverable amount or fair value of such assets are more than their carrying values, hence there is no impairment of assets, to be provided for.

3. CURRENT ASSETS, LOANS AND ADVANCES

Inventories have been valued at lower of cost or realizable value and are taken, verified, certified by the management. In the opinion of the Management, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and provision for all known liabilities have been made in the accounts as at March 31, 2012. However they are pending reconciliation and confirmation parties concerned.

4. CURRENT LIABILITIES AND PROVISIONS

The Current liabilities are stated at carrying cost, irrespective of their period of outstanding and are pending reconciliation and confirmation.

Provision for retirement benefits viz., gratuity and leave encashment have been made on the basis of actuarial valuation and for other benefits as per the policy of the company for such benefits.

In accordance with principles of prudence, other applicable guidelines and as per Accounting Standards 30 under the Companies (Accounting Standards) Rules, 2006, the Company has charged Rs./Millions Nil(0.94) to the Statement of Profit and Loss Account in respect of unsettled derivative contracts which are effective hedges.

5. 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,2012 and 31st March, 2011 of Rs./Millions 67.73 and Rs./Millions 19.80 respectively is to be repayable in five equal annual installments starting from financial year 2023-24 and financial year 2022-23 respectively.

6. Other Operating Revenues is a profit realized on gold contract.

7. Other income include interest received from Inter-corporate deposits, margin and fixed deposits in banks Rs./Millions 36.29.

8. The Company uses Forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The foreign currency exposure not hedged as at the year end is as under:

9. SEGMENT REPORTING

The Company is in the business of refining, manufacturing and marketing of precious metal which is considered as the only reportable segment. The Company does not have any geographical segments. Hence, there are no separate reportable segments as per AS-17 on "Segment Reporting" notified under the Companies (Accounting Standards) Rules, 2006.

10. The amount due to Micro and Small Enterprises as defined in "The Micro, Small and Medium Enterprises Development Act, 2006" is Nil as no supplier has intimated the Company about its status as a Micro, Small or Medium Enterprise or its registration under "The Micro, Small and Medium Enterprises Development Act, 2006".

11. EMPLOYEE BENEFITS

The liability towards short term employee benefits and post employment benefits for the year ended 31st March 2012 has been recognized in statement of Profit and Loss account. The Following disclosures are made in accordance with AS-15 (Revised) pertaining to Defined Benefit Plans:

12. Disclosures as per clause 32 of Listing Agreement is not applicable, as the Company has not given any loan/advances/investments to subsidiaries, Associates etc., as per the information available on records.

13. RELATED PARTY DISCLOSURES (a) List of Related Parties

Key management personnel of the Company Directors

1. Shri Anish Goel

2. Shri V K Agarawal

3. Shri Amit Goenka (Appointed w.e.f. 26.04.2011)

4. Shri Himanshu Mody (Resigned w.e.f. 26.04.2011)

5. Shri Sriprakash Goenka (Resigned w.e.f. 09.05.2012)

6. Late Hemendra N. Shah (From 09.05.2012 till 12.05.2012 as an Additional Director) Holding company: Jayneer Capital Pvt. Ltd. (JCPL).

Other related parties with whom transaction have taken place and balance outstanding as on last day of the year

Essel Corporate Resources Pvt. Ltd., Jay Properties Pvt. Ltd., Agarani Telecommunication Ltd., Pan India Network Infravest Pvt.Ltd.,Mr. Punit Goenka, Mr.Amit Goenka, Mrs. Sushila Goenka, Mrs. Navyata Goenka & Mrs. Nirmala Agarawal.

During the year, 1.9kg gold bars were sold to directors and their relatives and consideration had been received at the prevailing market price amounting to Rs./Millions 4.23. No amount in respect of related parties have been written off/ written back during the period, nor has any provision been made for doubtful debts/receivables.

14. Undisputed Income Tax demand of Rs./Millions 3.94 for the Assessment year 2001-02 and pending filling of an Appeal.

15. PRIOR YEAR COMPARATIVES

Schedule VI to the Companies Act, 1956 is revised effective from 1 April 2011 and has significantly impacted the disclosures and presentation made in the financial statements. Previous year's fgures have been regrouped / reclassified wherever necessary to correspond with the current year's classifications / disclosures.


Mar 31, 2010

Background:

(a) SHIRPUR GOLD REFINERY LIMITED (the Company) is incorporated on November 9, 1984 under Registration Number U51900MH1984PLC034501 and Certificate of Commencement issued on December 6, 1984 under the name and styled as "SKIPPER MERCANTILE LIMITED" by the Registrar of Companies, Mumbai, Maharashtra. Subsequently the name waschanged to AUTORIDERSMEMRCANTILE & FINANCE LTD., on July 1, 1991, then to AGEE GOLD REFINERS LIMITED on May 19, 2000 and now SHIRPUR GOLD REFINERY LIMITED w.e.f. March 18, 2002. The Company is in the business of refiners, smelters, processor etc., of metals and other activities as detailed in the object clause of the Memorandum of Association.

(b) The Company has become a subsidiary of Jayneer Capital Pvt. Ltd., from September 10, 2010 on allotment of 1,35,74,702 Equity shares of Rs. 10/- each fully paid-up pursuant to the Scheme of Arrangement sanctioned on June 11, 2010 by the Honble Bombay High Court, Mumbai, w.e.f., April 1, 2009, being the appointed date. The Company is a part of Essel Group of Industries since December 2008.

Use of Estimates:

The preparation of financial statements, in accordance with the Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of financial statements and the reported amounts of revenue and expenses during the year. Actual results could differ from estimates. Any revision to estimates is recognized prospectively in current and future period.

1. Increase in Authorized Share Capital:

The Authorized Share Capital of the Company, automatically increased by Rs./Thousand 10,00,00 divided into 1,00,00,000 Equity share of Rs. 10/- each i. e., from Rs./Thousand 25,00,00 to Rs./Thousand 35,00,00 pursuant to order dt. 11.06.2010 of the Honble Bombay High Court under the said Scheme of Arrangement under Section 391 to Section 394 of The Companies Act, 1956 between Kala Kosh Auctions Pvt. Ltd., (KKAPL) and the Company, sanctioned by the apex court.

2. Amalgamation of erstwhile Kala Kosh Auctions Pvt Ltd., (KKAPL) with the company:

The Scheme of Arrangement between erstwhile KKAPL, the Company and their respective shareholders and creditors (the Scheme), was sanctioned by the Honble Bombay High Court, Mumbai, vide its order dt June 11, 2010 and the said order is filed on July 7, 2010 and taken on record on September 9, 2010 by the Registrar of Companies (ROC). Pursuant to the said scheme, all the debts, liabilities, entire business and the whole of the undertaking of the erstwhile KKAPL is to be amalgamated and vested in the Company at their fair value from the appointed date i.e., April 1, 2009.

b) The Company has, as per the sanctioned Scheme of Arrangement, allotted on September 10, 2010, 1,35,74,702 Equity shares of Rs.10/- each fully paid-up to the shareholders of erstwhile KKAPL in the ratio of 152 (One Hundred Fifty Two) fully paid-up equity shares of Rs.10/- each of the Company for every 100 (One Hundred) Equity shares of Rs.10/- each fully paid-up of KKAPL., pursuant to the said Scheme.

c) The Authorised Share Capital of the Company increased by the amount of authorized capital of the KKAPL of Rs./Thousand 1,00,000 as stated herein before Note 1.

d) The erstwhile KKAPL was a fully owned subsidiary of the Jayneer Capital Pvt. Ltd., (JCPL). JCPL was holding 48.91% of the Subscribed and Paid-up Equity Capital of the Company before the sanction of the Scheme. Pursuant to the Scheme of Arrangement, the shareholding of JCPL., in the Company has gone up from 48.91% to 72.71% on allotment of 1,35,74,702 Equity Shares of Rs.10/- each fully paid-up, as per Note No. 2 (b) herein, thereby making the Company its subsidiary.

3. Secured Loans:

Secured loans of Rs./Thousand 2272,322 assigned, under Deed of Assignment dt February 25, 2009, to erstwhile KKAPL (transferee company), by the lenders to earlier assignors, to the Company as referred to in the respective Agreements, stood cancelled, irrespective of carrying value in the books of both the companies, in terms of the sanction received to the Scheme from the Honble Bombay High Court vide its order dt June 11, 2010. The details of the same are given in Note No. 2 herein before.

The loan was secured by first charge on all the fixed assets including Plant and Machineries and second charge on current assets of the Company. However, at the year end, the said loan stood cancelled as per details given herein above.

4. Unsecured Loans:

Unsecured Inter-corporate deposit from a body corporate is interest free and is repayable on demand.

5. Impairment of Fixed Assets:

The Company has assessed at Balance Sheet date the assets pertaining to manufacturing facilities at Shirpur, Dhule in Maharashtra, as to their impairment. On the basis of such assessment, it is opined that the recoverable amount or fair value of such assets are more than their carrying values, hence there is no impairment of assets to be provided for. The Company has commenced its business activities since July 2010.

6. Investments:

The investment held by the Company in a co-operative bank is unquoted, long-term and fall if any, other than of temporary nature, in book value or fair value is not accounted based on the Accounting Standard (AS)-13. Hence are stated at cost.

7. Current Assets, Loans and Advances:

Inventories have been valued at lower of cost or realizable value, as taken, verified, certified by the management.

However, in the opinion of the Board the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and provision for all known liabilities have been made in the accounts as at March 31, 2010. However they are subject to confirmation from parties concerned.

Amounts due from companies under the same management or in which directors etc are/were interested Rs./Thousand 39,08 (Rs. 15,66) Maximum due Rs./Thousand 38,70 (Rs. 15,86).

8. Current Liabilities and Provisions:

The Current liabilities are stated at carrying cost, irrespective of their period of outstanding and are subject to confirmation. Remission of liabilities by write backs of Rs./thousand 2,29,88 and are beyond limitation period under Limitation Act, 1963.

Provision for retirement benefits is made as per companys policy for such benefits and on the basis of available details.

No provision for either Minimum Alternate Tax u/s 115JB or Income tax is made in view of the losses.

Due to companies in which directors are interest or under the same management Rs./Thousand 21,81 (Rs. 10,30) Maximum Due Rs./Thousand 23,12 (Rs. 13,58), including due and maximum due to holding company i.e., Jayneer Capital Pvt. Ltd., Rs./Thousand 12,00 (Nil) in current accounts.

9. The proceedings in the Case No. 58 of 2008 before Special Court for Greater Bombay against the Company in connection with the Credit facilities/loans taken from the banks in earlier years had been returned to the plaintiff for presentation before the appropriate court. Hence, the case stands dismissed by the Honble Court on jurisdictional ground. The management is of the opinion that no financial liability will arise out of the said case.

10. Contingent Liabilities;

(Amt in Rs. In thousand)

a) Estimated amount of FOB value of export commitment against the Import of Plant and Machinery under EPCG Scheme which was not fulfilled as on March 31, 2010 is Rs. 385,49,40 (Rs. 151,64,44).

b) Sales tax liability under dispute Rs. 15,05.

c) Disputed demand of Maharashtra Pollution Control Board Rs. 21,06.

d) Income tax demand (Penalty) for AY 2007-08 Rs.11,13,60

e) Claims against the Company not acknowledged as debt: - NIL (Previous Year NIL), certified by the management.

11. Sundry Creditors include Rs.NIL (Rs./thousand 556/-) due to Small Scale Industrial Undertakings to the extent such parties have been identified from available information. There is no outstanding amount as on March 31, 2010 exceeding 30 days and over Rs. 1 lakh.

12. Verification Principles, Objectives, Scope, Documentation Evidences etc.:

a) Verification on Test check basis, of the records as produced before us, has been carried out on the basis of well settled principles, guidelines objectives as per applicable laws.

b) The Scope covered all aspect of accounting system except as mentioned elsewhere herein.

c) Wherever, evidences for services rendered or expenses are not available, they have been relied upon on certification by the management exclusively and necessarily for business purposes.

13. Segment Reporting:

The Company operates only in one Segment hence the reporting as per AS-17 is not applicable.

14. Related Party transactions

Key personnel of the Company: Directors:

CONTINUING DIRECTORS:

1. Shri Anish M. Goel

2. Shri Sriprakash S. Goenka APPOINTMENT:

3. Shri Himanshu Mody, w.e.f. 18.01.2010

4. Shri V K Agarawal, w.e.f. 18.01.2010 RESIGNED:

1. Shri Sanjay Gupta - Resigned w.e.f. 15.05.2010

2. Shri Sanjay Jain - Resigned w.e.f. 05.01.2010 None of the directors are in receipt of any Remuneration. Holding company: Jayneer Capital Pvt Ltd.

Other related parties:

Autoriders International Ltd., Autoriders India Pvt. Ltd., Autoriders Finance Ltd., Churu Trading Company Pvt. Ltd., Deesan Tex Fab Pvt. Ltd., Deesan Exports Pvt. Ltd., Meha Trading Pvt. Ltd., Essel Corporate Resources Pvt. Ltd.,

15. There are no employees drawing remuneration in excess of the prescribed limits under Section 217(2A) of the Companies Act 1956, hence not reported.

16. Figures in the brackets are for previous years unless otherwise stated.

17. Previous years figures are regrouped, rearranged, or recast wherever necessary and the figures are not comparable with current year in view of the amalgamation of KKAPL with the Company and its effect considered in the financial statements under report.

 
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