Shirpur Gold Refinery Ltd Directors Report.

To

The Members of

SHIRPUR GOLD REFINERY LIMITED

Yours Directors take pleasure in presenting the 34th Annual Report of your Company together with Audited Statement of Accounts for the year ended 31st March, 2019 prepared as per Indian Accounting Standards prescribed under Section 133 of the Companies Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3) of the Companies Act, 2013, in relation to the Annual Financial Statements for the Financial Year 2018-19, your Directors confirm that:

a) The Financial Statements of the Company - comprising of the Balance Sheet as at 31st March, 2019 and the Statement of Profit & Loss for the year ended on that date, have been prepared on a going concern basis following applicable accounting standards and that no material departures have been made from the same;

b) Accounting policies selected were applied consistently and the judgments and estimates related to the financial statements have been made on a prudent and reasonable basis, so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2019, and, of the profit of the Company for the year ended on that date; and

c) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) Requisite Internal Financial Controls had been laid down and that such internal financial controls are adequate and were operating effectively; and e) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that systems were adequate and operating effectively.

FINANCIAL HIGHLIGHTS

The financial performance of your Company for the Financial Year 2018-19 is summarized in the following table: (Rs. in Millions)

Particulars Standalone – Year Ended Consolidated – Year Ended
31.03.2019 31.03.2018 31.03.2019 31.03.2018
Total Revenue 18,959.61 19,564.96 42,745.66 52,973.41
Total Expenses 18,899.49 19,514.98 42,519.39 52,810.52
Profit before Tax 60.12 49.98 226.27 162.89
Less: Exceptional
Item (19.56) - - -
Current Tax (8.35) (10.19) (8.35) (10.19)
Deferred Tax (4.71) (9.39) (4.71) (9.39)
Profit after Tax 27.50 30.40 213.21 143.31

There have been no material changes and commitments that have occurred after close of the financial year till the date of this report, which affect the financial position of the Company. Based on the internal financial control framework and compliance systems established in the Company, the work performed by Statutory, Internal, Secretarial Auditors and reviews performed by the management and/or relevant Audit and other Committees of the Board, your Board is of the opinion that the Companys internal financial controls were adequate and working effectively during financial year 2018-19.

DIVIDEND

With a view to conserve the resources for business requirements, your Directors are of view that the current years profit be ploughed back into the operations and hence no dividend is recommended for the year under review.

TURNOVER AND COMPANY PERFORMANCE

The total revenue for the financial year under review was  Rs. 8,959.61 Millions as against  Rs. 9,564.96 Millions showing decrease of 3% over previous year. Your Company has registered the Net Profit before tax of Rs. 40.56 Millions as against Rs. 49.98 Millions in the previous financial year. The Profit after tax stood at Rs. 27.50 Millions as compared to Rs. 30.40 Millions in the previous financial year.

BUSINESS OVERVIEW

Your companys products viz., Gold Bars and Gold Jewellery are well established in the market. The products of your Company meet the stringent quality standards of purity, weighment, shape, size and aesthetic look.

BUSINESS EXCELLENCE & RECOGNISITON

•  The Company was awarded with Bureau of Indian Standards (BIS) certificate for use BIS hallmark, one of the requirements for participating in the Gold Monetisation Scheme.

•  The Company is holding ISO 9001: 2015, ISO 14001:2015 and  OHSAS 18001:2007 standard certificate for Gold Refinery.

SUBSIDIARIES

INTERNATIONAL OPERATIONS

As at March 31, 2019, your Company had 1 Wholly Owned Subsidiary namely, Zee Gold DMCC, Dubai ("Zee Gold") and2 step down subsidiaries namely ‘Precious Metals Mining and Refining Limited ("PMMRL"), Papua New Guinea and Metallic Exploration And Mining, Mali.

Earlier in the year 2013, the Company had incorporated a Wholly Owned Subsidiary, Shirpur Gold Mining Company Pvt. Ltd., at Singapore. However, in view of the non-commencement of the operations by the above subsidiary, the Board of Directors of the Company decided to close down the same. Accordingly, company had applied to Accounting & Corporate Regulatory Authority (ACRA), Singapore to strike off name of the Singapore subsidiary which has been effected from 07.03.2019. The closed subsidiary was non operative and non-material. During the FY 2016-17, "PMMRL" step down subsidiary commenced its operations on trial basis, however it couldnt continue the same due to limited resources and other difficulties. Hence, the Board of Directors of the Company decided to close down the above subsidiary. The above subsidiary is in process of closure and is non operative and non-material. Metallic Exploration And Mining, Mali, step down subsidiary of the Company is yet to commence its operations. Apart from the above, the Company has neither formed any new subsidiary, associate or Joint venture nor any company ceased to be subsidiary.

In compliance with Section 129 of the Companies Act, 2013, a statement containing requisite details including financial highlights of each of the subsidiaries is annexed to this report. Further as per Section 136 of the Companies Act, 2013, the Audited financial statements including the consolidated financial statements and related information of the Company and audited accounts of each of the subsidiaries are available on the website of the Company www.shirpurgold.com. These documents will also be available for inspection during business hours on all working days (except Saturday) at the Corporate Office of the Company.

CORPORATE GOVERNANCE AND POLICIES

In order to maximize shareholder value on a sustained basis, your Company has adopted Corporate Governance practices strictly complying with the requirements of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), applicable provisions of the Companies Act, 2013 and applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

A detailed Report on Corporate Governance as per requirement of Listing Regulations along with the Certificate issued by the M/s B.S. Sharma & Co., Statutory Auditors confirming the compliance of the provisions of the Corporate Governance, is attached and forms part of this Annual Report. Managements Discussion and Analysis Report for the year under review, as stipulated under Listing Regulations is presented in a separate section forming part of the Annual Report.

In compliance with the requirements of Companies Act, 2013 and Listing Regulations, your Board has approved various Policies including Code of Conduct for Directors & Senior Management, Material Subsidiary Policy, Insider Trading Code,

Document Preservation Policy, Material Event Determination and Disclosure Policy, Fair Disclosure Policy, Corporate Social Responsibility Policy, Whistle Blower and Vigil Mechanism Policy, Related Party Transaction Policy and Remuneration Policy. All these policies and codes have been uploaded on Companys corporate website www.shirpurgold.com. Additionally, Directors Familiarisation Programme and Terms and Conditions for appointment of Independent Directors can be viewed on Companys corporate website www.shirpurgold.com.

In compliance with regulatory requirements, the Nomination and Remuneration Committee of your Board has fixed criteria for nominating a person on the Board which inter alia include desired size and composition of the Board, age limit, qualification / experience, areas of expertise and independence of individual. In line with this the Committee had approved in-principle that the initial term of an Independent Director shall not exceed 5 years.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

As at March 31, 2019, Your Board comprised of 5 Directors including 3 Independent Directors and 2 Non-Executive Directors. Independent Directors provide their declarations both at the time of appointment and annually confirming that they meet the criteria of independence as prescribed under Companies Act, 2013 and Listing Regulations. During FY 2018-19, your Board met 4 (Four) times details of which are available in Corporate Governance Report annexed to this report.

During the year under review, Mr. Mukund Galgali & Mr. Dinesh Kanodia, Non Executive Non Independent Directors resigned with effect from December 17,2018.

Your Board had, based on the recommendation of Nomination and Remuneration Committee, appointed Mr. Amit Goenka as additional Non Executive Promoter Director of the Company effective from 18th December, 2018, liable to retire by rotation. As per 161 of the Companies Act,2013, Mr. Amit Goenka shall hold office till ensuing Annual General Meeting. The Company has received notice from members proposing appointment of Mr. Amit Goenka as Director and requisite proposals seeking your approval for their appointment as Director forms part of the Notice of ensuing Annual General Meeting. Your Board recommends these proposals for approval of shareholders. Further, Mr. Vipin Choudhary was also appointed as Promoter Nominee Director effective from November 14,2018, not liable to retire by rotation.

During the year under review and after seeking requisite shareholders approval, Mr. Anish Goel & Mr. Manoj Agarwal who holds the office of Independent Directors of the Company until March 31, 2019 and in respect of whom the Company has received notice in writing from a member under Section 160 of the Act proposing his re-appointment for second term, re-appointed for the second term as an Independent Directors not liable to retire by rotation for a period of five years from April 1, 2019 until March 31, 2024.

Additionally, the Notice of the ensuing Annual General Meeting, includes proposal, for re-appointment of Ms. Kavita Kapahi, for second term as Independent Director of the Company, not liable to retire by rotation, for a period of 5 years on expiry of her current term on March 30,2020. Based on the performance evaluation and after review of confirmation(s) of continuity of compliance with the criteria of independence under applicable regulations, your Board recommends re-appointment of Ms. Kavita Kapahi as Independent Director for second term for approval of shareholders. In compliance with the requirements of Section 203 of Companies Act, 2013, as at March 31, 2019, Mr. Subash Pareek, Manager, Ms. Archita Kothari, CFO and Mr. Shyamal Padhiar, Company Secretary continue as Key Managerial Personnel of the Company.

Post completion of FY 2019, Ms. Archita Kothari resigned as CFO of the Company and based on recommendations of the Nomination and Remuneration Committee, Mr. Sharvan Kumar Shah was appointed as Acting CFO in her place effective from April 18, 2019.

BOARD EVALUATION

In a separate meeting of Independent Directors, performance of the non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated. Based on such report of the meeting of Independent Directors and taking into account the views of directors, the Board had evaluated its performance on various parameters such as Board composition and structure, effectiveness of board processes, effectiveness of flow of information, attendance, contributions from each directors etc.

The performance of each of the Independent Directors was also evaluated taking into account the time devoted, attention given to professional obligations for independent decision making, contribution towards providing strategic guidance, determining important policies, utilising their expertise.

BOARD COMMITTES

In compliance with the requirements of Companies Act, 2013 and Listing Regulations, your Board had constituted various Board Committees including Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee. Details of the constitution of these Committees, which are in accordance with regulatory requirements, have been uploaded on the website of the Company viz. www.shirpurgold.com. Details of scope, constitution, terms of reference, number of meetings held during the year under review along with attendance of Committee Members therein form part of the Corporate Governance Report annexed to this report.

A detailed report on Corporate Social Responsibility, in compliance with the requirements of Companies Act, 2013, is annexed to this report.

AUDITORS Statutory Audit

The Statutory Auditors M/s B.S. Sharma & Co., Chartered Accounts, Mumbai ( FRN 128249W) was appointed as Statutory Auditors of the Company for the financial year 2018-19 whose terms expires at the ensuing AGM of the Company but not eligible for reappointment as per provisions of Section 139 of the Companies Act, 2013 and Rules there under.

In compliance with rotational requirements of Statutory A uditors of the Company as per Section 139 of Companies Act, 2013 and after reviewing recommendations of the Audit Committee, it is proposed to appoint M/s Parikh & Parikh, Chartered Accountants, Mumbai (FRN 107526W) as Statutory Auditors of the Company in place of retiring auditors M/s B.S. Sharma & Co., Chartered Accountants, to hold office from the expiry of current term of retiring auditors at the ensuing general meeting till the conclusion of general meeting to be held in 2024.

Your Company has received confirmation from the Auditors to the effect that their appointment, if made, will be in accordance with the limits specified under the Companies Act, 2013 and the firm satisfies the criteria specified in Section 141 of the Companies Act, 2013 read with Rule 4 of the Companies (Audit & Auditors) Rules 2014.

Your Board recommends appointment of M/s Parikh & Parikh, Chartered Accountants, Mumbai as Statutory Auditors of the Company for a period of 5 years and seek your approval by passing resolution at the ensuing AGM.

Secretarial Audit

In compliance with the provisions of Section 204 of the Companies Act,2013, the Company has appointed Mrs. Mita Sanghavi, Practising Company Secretary (CP No. 6364) as secretarial auditor of the Company for the financial year 2018-19. A copy of secretarial audit report is annexed to this report.

In compliance with the provisions of SEBI Listing Regulations, the Company had submitted Annual Secretarial Compliance Report for the year ended 31.03.2019 to the stock exchanges which was issued by Mrs. Mita Sanghavi, Secretarial Auditor.

The reports of the Statutory Audit, the Secretarial Audit and Annual Secretarial Compliance Report for the year ended March 31, 2019, do not contain any qualifications / observations. During the year, the Statutory Auditors had not reported any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca)of the Act.

Corporate Social Responsibility

The Company was required to spend Rs. 9.65 Millions (including unspent amount of earlier years) towards Corporate Social Responsibility (CSR) expenditure. However, after analyzing various options and making reasonable efforts to spend the above amount, the Company couldnt find any suitable project due to which the above amount remained unspend as on March 31,2019.

DISCLOSURES :

I. PARTICULARS OF LOANS, GUARANTEES AND

INVESTMENTS U/S 186

The details of loans, investments and guarantee as required u/s 186(4) of the Companies Act, 2013 are annexed to the Directors Report.

II. RELATED PARTY TRANSACTIONS

All related party transactions, specifying the nature, value and terms of the transactions including the arms-length justification, are placed before the Audit Committee for its approval and statement of all related party transactions carried out is placed before the Audit Committee for its review on a quarterly basis.

All the related parties transactions entered by the Company during the financial year under review were on arms length basis, in the ordinary course of business and in compliance with the applicable provisions of the Companies Act, 2013 and Listing Regulations. During FY 2018-19, there were no materially significant Related Party Transactions by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

During the FY 2018-19, there were no materially significant related party transactions as defined under Section 188 of the Act and Regulations 23 the Listing Regulations and accordingly transactions required to be reported in Form AOC-2 as per Section 188 of the Companies Act, 2013 is NIL.

III. INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY

Your Company has adequate internal financial controls and policies/procedures for orderly and efficient conduct of the business including safeguarding of assets, prevention and detection of frauds and errors, ensuring accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Audit Committee evaluates the internal financial control system periodically.

Your Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 of the Companies Act, 2013 read together with the Companies (Indian Accounting Standards) Rules, 2015. These are in accordance with Generally Accepted Accounting Principles in India.

IV. EXTRACT OF THE ANNUAL RETURN

In accordance with recent amendments to the Companies Act, 2013 (Act), Annual Return of the Company for Financial Year ended March 31, 2019 as required under Section 92 of the Act, will be available on the website of the Company www.shirpurgold.com.

V. SEXUAL HARASSMENT

The Company has zero tolerance for sexual harassment at workplace and adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at work place (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. During the year under review, no complaint on sexual harassment was received by the Company.

VI. REGULATORY ORDERS

No significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status and Companys operations in future.

VII. DEPOSITS & UNCLAIMED SHARES

Your Company has not accepted any public deposits and as such no amount on account of principal or interest on public deposits under Section 73 of the Companies Act, 2013, read with Companies (Acceptance of Deposits) Rules, 2014, was remained unpaid or unclaimed as at the end of the year 31st March, 2019.

As at March 31, 2019, your Company do not have any unclaimed shares / dividend hence the provisions of the Investor Education and Protection Fund Rules are not applicable to the company.

VIII. INSURANCE & RISK MANAGEMENT

The Company has obtained adequate insurance on all of its fixed and other assets. The Company has identified the potential risks against the business of the Company and taking proper safeguards to mitigate / minimize the risks.

The detailed analysis of the Risk elements are discussed under the ‘Management analysis and Discussion Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The detailed analysis of the State of Companys affairs / developments is discussed under Management Discussion and Analysis section of Directors report.

HEALTH, SAFETY & ENVIRONMENT PROTECTION

The Company is operating its plant in a manner which endeavors protection of health / safety of workers and environment. The Company is using eco-friendly technology and manufacturing facilities at its plant to ensure workers safety and health. The ‘Green initiatives taken by the Company by plantation of trees at plant site are one of the best examples of protecting environment. The Company is in compliance with all the applicable labour and environmental laws.

PARTICULARS OF EMPLOYEES

The Company has maintained cordial relations with its employees and workers. The Company has taken adequate steps to ensure safety and welfare of all its employees at plant and other places. Requisite disclosures in terms of the provisions of Section 197 of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report. None of the employee of the Company is in receipt of remuneration of  Rs. .02 Crores per annum/ Rs. 8.50 Lacs per month or more during the FY 2018-19. The information required under Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be provided upon request.

In compliance with provisions of section 136(1) of the Companies Act, 2013, the Audited Financial Statements along with other reports are sent to every member of the Company, excluding the information on employees particulars, which is available for inspection at the Corporate Office of the company during working day (except Saturday) upto the date of ensuing Annual

General Meeting. Any member who is interested in obtaining copy thereof, such member may write to the Company Secretary.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO:

The information required u/s. 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is furnished hereunder:

I. Energy Conservation and Technology Absorption:

Details of energy conservation, technology absorption by the Company along with the information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed to this report.

II. Foreign Exchange Earning and Outgo:

Particulars of foreign currency earnings and outgo during the year are given in Note 37 & 38 to Standalone Financial Statement.

ACKNOWLEDGEMENTS

We sincerely thank all our investors, customers, suppliers, bankers, business partners/ associates, financial institutions and government authorities for their continued co-operation, trust, support and guidance. We also take this opportunity to express our deep appreciation for the contribution, hard work, dedication and commitment of all our employees who have been one of the major driving factors for the companys growth and progress.

By order of the Board

Amit Goenka

Chairman

Place: Mumbai

Date: May 18, 2019