Shirpur Gold Refinery Ltd Auditor Reports

The Members,

SHIRPUR GOLD REFINERY LIMITED

Report on the audit of the Ind AS Financial Statement

1. Opinion

We have audited the accompanying standalone financial statements of Shirpur Gold Refinery Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date and a summary of significant accounting policies and other explanatory information (hereinafter referred to as the "standalone financial statements").

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 Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023 and its loss, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

2. Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing ("SA"s) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

3. Emphasis of matters:

RReference is invited to the following notes to the financial statements: (i) Note no. 29 & 41 related to Finance Cost of Rs.390.31 Million is net of interest income of Rs.2.38 Million for the year ended 31 March 2023 and is accounted on accrual basis in the books as per contracted rate of interest with the lenders.

(ii) Note no.48 related to pending claims from Insurance Company towards recovery of Rs.124.17 million including expenses of Rs.1.65 million against loss of gold in the robbery which occurred on 24th April 2015. The Company has informed that it has filed a case before the Court of Law against the Insurance Company, pending hearing and disposal and expects to have the claim settled in its favor on completion of hearings.

(iii) Note no. 49 relating to the balances appearing in the financial results are pending reconciliations and confirmations, and difference if any, arising in the year of reconciliation will be adjusted in the books of accounts in that year. However, the impact thereof cannot be determined, on the Statement of Profit and Loss for the year ended 31 March 2023, in absence of quantification thereof.

(iv) Note no.61 relating to Provision for doubtful debts is made in respect of receivables from three of the bodies corporate amounting to Rs. NIL in the current year as against Rs.507.50 million during the previous year and aggregate of such provisions so far made is Rs.3633.71 million (out of the receivables of standalone Rs.4044.00 million from such bodies corporate) included in other expenses in the financial statements. The Company has initiated effective steps against other debtors and is hopeful of recovering the same. Of the said provision includes Rs.2422.52 millions against gross receivable from a body corporate, against whom petition has been filed by a third party and an order for commencement of a Corporate Insolvency Resolution Process has been issued by National Company Law Tribunal, New Delhi, and the same is pending hearing and disposal. Trade receivables outstanding on date is Rs.411.78 million (including Rs.1.49 million from a trust), after making in preceding years the provisions for doubtful debt of Rs.36,33.71 million. The Management is assured of recoveries of dues from the parties concerned.

(v) Note no. 50 relating to CSR Provision of Rs.10.80 millions made in the preceding years has not been spent on the objects as prescribed under Section 135 of Companies Act, 2013

(vi) Note No. 55 as has been Continuing reported from preceding years, three of the lender banks and a financial institution (‘the lenders) have outstanding dues, amounting to Rs.3,800.96 million including amount of bank guarantees invoked, interest and penal interest of Rs.9,69.26 million as per the records of the Company, classified as Non-performing assets. The said dues are after adjustment of fixed deposits of Rs.145.97 million, including interest thereon, kept as margin against bank guarantees with Axis Bank Ltd., due to defaults in the repayment and non-compliance of the terms and conditions. The Company has considered differential interest of Rs.64.7 million as debited by the leading bank, as contingent liability, since neither accepted nor accounted in the books. During the preceding year/s, one of the Lenders had issued E-Auction notices for Sale of immovable properties of the Company at its Shirpur factory, on as and where is basis, under SARFAESI Act 2002 read with Rule 8(6) of the Security

Interest (Enforcement) Rules 2002, to recover the outstanding dues in terms of the said notice. It is reported that there was no response to the said E-auction by the said lender, hence status quo remained unchanged. Also, the Company has been in consistent dialogue with the lenders by responding to their notices and recently vide its offer letter dated 06 May 2023 had submitted the revised proposal for One Time Settlement of the lenders total dues, and hopeful of positive response and of an amicable settlement. Since the one time settlement is still pending, we are unable to comment in the above statement.

(vii) Note no. 56: As per information received, a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, has been filed by IFCI Ltd., one of the lenders, before the National Company Law Tribunal, Mumbai, ("NCLT") allegedly claiming recovery of dues of Rs.919.88 millions from the Company. The Company has filed on 20 June 2022 its Affidavit of even date in response thereto, opposing the petition of the financial creditor on various grounds as detailed therein. The status of the petition remains unchanged viz., pending admission by NCLT, as the matter is sub-judice vide Order sheet of the hearing of Mumbai Bench of the NCLT on 09.01.2023.

(viii) Note No.57: relating to that No provision for deferred tax is made in view of the temporary suspension of the manufacturing operations and cession of trading activities, resulting in losses during the current and preceding years with no immediate probability of any future profits to absorb such deferred tax. In absence of quantification thereof, we are unable to comment on its implication on the Statement of Profit & Loss account

(ix) Note no.58: As reported in the previous year, the Company had carried out valuation of its Property, plant & Equipment as detailed in Approved Valuers Report dated 05 July 2021 and has accounted for decrease between Book value as at 30 June 2021 of Rs.1369.26 million to Fair value as per said Report of Rs.1134.92 million resulting in valuation loss of Rs.234.34 million debited under Exceptional Items in Statement of Profit & Loss Account for the year ended 31 March 2022.

(x) Note no.61 relating to the Provision for doubtful debts is made in respect of receivables from three of the bodies corporate, amounting to Rs. NIL in the current year and Rs.507.50 million during the previous year and aggregate of such provisions so far made is of Rs.3,633.71 million (out of the receivables of Rs.4,044.00 million from such bodies corporate) included in other expenses in the financial statements. The Company has initiated effective steps against other debtors and is hopeful of recovering the same.

Of the said provision includes Rs.2,422.52 million against gross receivable from a body corporate, against whom petition has been filed by a third party and an order for commencement of a Corporate Insolvency Resolution Process has been issued by National Company Law Tribunal, New Delhi, and the same is pending hearing and disposal. Trade receivables outstanding on date is Rs.411.78 million (including Rs. 1.49 million from a trust), after making in preceding year/s provisions for doubtful debt of Rs.3633.71 million. The Management is assured of recoveries of dues from the parties concerned. However, we are unable to comment on the same as there is no sufficient appropriate audit evidence produced before us to show the Managements contentions of such recovery.

(xi) Note no. 62 The Company has filed a petition bearing CP (IB) No 506/MB-IV/2021 ("the Operational Creditor"), [CIN: L51900MH1984PLC034501] under section 9 of the IBC read with rule 4(1) of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiating Corporate Insolvency Resolution Process (CIRP) against Balmukh Goldjewel & Multitrading Private Limited ("the Corporate Debtor"), from whom Rs.937.7 million, as appearing in the books of accounts of the Company, is recoverable alongwith interest thereon as claimed, being the Corporate Debtor. The said petition has been admitted by NCLT and Resolution Professional has been appointed. Subsequently the Company has filed its claim of dues including interest with Resolution Professional.

(xii) Note no. 63 relating to that as reported in the previous year, the manufacturing activities of the Company were temporarily stopped since February 2020 due to non–availability of finance, borrowings from lenders turning NPA and adverse actions from them, detailed herein above. The said overdue borrowings are recalled by the lenders. The Company has been consistently in dialogue with lenders for an amicable settlement and has submitted in May 2023 a proposal for One Time Settlement (OTS) with ongoing negotiations. Considering the above, the management has considered it appropriate to prepare financial results on going concern basis with the impact of the above being of temporary nature and will come out of the present crisis in near future. Since the one-time settlement is still pending and absence of further progress in the matter, we are unable to comment on the managements action cited above

(xiii) Note no.64 relating to Going Concern, the Company has incurred losses during the current year due to temporary cessation of manufacturing and trading business operations.

Further, it had been served with Notices by the lender banks/ institution, for repayment of the loans taken with interest and even have served notice for constructive handing over of the factory premises. These may create a doubt regarding the Companys ability to continue as a going concern. However, the financial statements have been prepared on a going concern basis with an expectation by the Management that they will amicably settle with the lender banks/institutions, as negotiations are on. Once settled, the manufacturing and trading operations may re-commence, with the financial support from the promoter company etc., and/or the managements plan to generate cash flows through operations which would enable the Company to meet its financial obligations as and when they fall due. However, we are unable to comment on the same as there is no sufficient appropriate audit evidence produced before us to show the Managements contentions on the Going Concern basis of preparation of financial statements.

(xiv) Note no. 68 relating to the Company and others have been issued an Interim Order cum Show Cause Notice ("Interim Order") under Section 11(1), 11(4), 11(4A), 11B(1) and 11B(2) of the Securities and Exchange Board of India Act, 1992 read with Rule 4(1) of the SEBI (Procedure for holding Inquiry and Imposing Penalties) Rules, 1995 dated 25.04.2023 relating to diversion of funds, and other allegations. However, the Company denied the same and has approached making application to SEBI for one time settlement, pending hearing and disposal by the said authority. Further the Company is taking steps to appropriately deal with it in accordance with the law as well.

Our report on the Statement is not modified in respect of the above matter with respect to our reliance on the financial information certified by the Board of the Directors.

4. Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter	Going Concern Assumption by Management
Criteria for disclosure as key Audit matter	Assumptions based on Managements opinion on Going Concern basis for preparation of Standalone Financial Statements
Present status	Audit approach
1. Assessment of Going Concern as a basis of accounting: (Refer note 64 to the financial statements)	Our procedures included the following:
The Company has incurred losses during the current year and preceding years due to cessation of manufacturing and trading activities. Further, it had been served with Notices by the lender banks/institution, for repayment of the loans taken with interest and even have served notice and taken constructive possession of the factory premises, which is put on block. These may create a doubt regarding the Companys ability to continue as a going concern. However, the financial statements have been prepared on a going concern basis considering the expectation of the Management that proposal for One Time Settlement of the dues has been submitted and are in the process of negotiating for an amicable settlement with the lender banks/ institutions. Once settled, the manufacturing and trading operations may re-commence, with the financial support from the promoter company etc., and/ or the managements plan to recover aggressively the dues from receivables, generate cash flows through operations which would enable the Company to meet its financial obligations as and when they fall due. We considered this to be a key audit matter because managements assessment is largely dependent on the support letter obtained from its Promoter Company, expected recoveries from vendors and other advances etc.	Obtained the management assessment of appropriateness of Going Concern basis of accounting.
	Discussed with the management on-going proceedings in relation to various notices received, recovery actions taken by the lender banks/ financial institutions, and the One Time Settlement proposal submitted as a way forward to settlement with them.
	Discussed with the management future business and their plans to ensure that the Company is able to meet its financial obligations in the foreseeable future.
	Read the minutes of board of directors meeting for discussion on future business plans and on liquidating certain assets to ensure availability of liquid funds.
	Verified based on discussions in Minutes the support from its Promoter indicating that Promoter and group companies will take necessary actions to organize for any shortfall in liquidity in Company that may arise to meet its financial obligations and will in future, will try to generate sufficient revenue and cash flows to enable timely repayment of debt during the period of 12 months from the balance sheet date.
	Based on the above procedures, read with Note no.64 to the financial statements we noted the management assessment of going concern basis of accounting is followed.

 

Key audit matter	Amounts recoverable claims, receivables, loans & advances given, provision for expected credit losses and related balances
Criteria for disclosure as key Audit matter	Assessed the credit period by the Company vis-?-vis customers, insurance claims status and loans & advances given and managements assessment of realizability of such dues;
Present status	Audit approach
2. Refer Note 61 and Note no.44 (a) (ii) for credit risk disclosers.	Our audit procedures to address this key audit matter included, but were not limited to the following:
Trade receivables and other amounts recoverable comprise a significant portion of the trade receivables and current financial assets of the Company. As at 31 March 2023 Trade Receivables (Refer Note no.9) aggregate to Rs 4,11.78 million and other Current Assets amounts recoverable (Refer Note no.14) of Rs.1,66.60 million.	a. We discussed with the management the present situation of lenders recovery proceedings of term loans, and about the conditions leading to, and their assessment of recoverability of dues from the parties and referred to the available communications, if any, between them.
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss for financial assets. The Company has analyzed Trade Receivables considering ageing etc. and calculated estimated credit loss on the basis of ageing. Accordingly the provision for Rs.507.50 million was made as credit loss during the previous year thereby the aggregate provision has gone upto Rs.3,633.71 million till the year end.	b. We referred to the ageing of trade and other receivables and discussed the key balances to establish the managements assessment of recoverability of such dues.
Other amount recoverable of Rs.166.60 million include Rs.157.02 million for insurance claim lodged with the insurance company (Refer Note no.48) pending since April 2015 for settlement.	c. We analyzed the methodology used by the management and considered the credit and payment history of specific parties to determine the trend used for arriving at the expected credit loss, if any.
On the basis of such workings and negotiations with the insurance company, the Company do not foresee any ECL for provisions to be made for doubtful or bad debts. Estimation of provisions and assessment of recoverability of amounts involves significant degree of judgement and evaluation basis for ongoing communications with the respective parties and is therefore considered as a key audit matter.	d. We referred to the terms and conditions, verbal and/or in writing wherever available, stipulated in the settlement arrangement with respect to amounts recoverable from a vendor.
	e. We have assessed the adequacy of disclosures made by the management in the financial statements to reflect the expected credit loss provision, trade and other receivables and related balances.
	f. In one of the debtors case having outstanding receivables of Rs.24,22.52 million, one of its creditors had filed insolvency petition before NCLT, Delhi pending hearing and disposal. The Company has lodged its claim of Rs.24,22.52 million before NCLT. However, the Company has made provision of Rs.36,33.71 million including Rs.24,22.52 million for the said debtor.

5. Information Other than the Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexures to Boards Report, Business Responsibility Report, Corporate Governance and Shareholders Information, but does not include the consolidated financial statements, standalone financial statements, and our auditors report thereon. Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements, or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

6. Managements Responsibilities for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting 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 controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the standalone financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Companys financial reporting process.

7. Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.

Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

8. Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit we report that:

a. 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 it appears from our examination of those books.

c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

e. On the basis of the written representations received from the directors as on March 31, 2023, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164(2) of the Act.

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting.

g. With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended: In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

h. 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, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

iii. There has been no amount required to be transferred to the Investor Education and Protection Fund by the Company.

iv. (a) The Management has represented that, during the year, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented that, during the year, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement. v. Since the Company has not declared or paid any dividend during the year, the question of commenting on whether dividend declared or paid is in accordance with Section 123 of the Companies Act, 2013 does not arise.

2. As required by the Companies (Auditors Report) Order, 2020 (the "Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

Annexure "A" to Independent Auditors Report

(Referred to in para 8(1)(f) of the Independent Auditors Report of even date to the members of SHIRPUR GOLD REFINERY LIMITED on the standalone Ind AS financial statements for the year ended 31 March 2023) Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SHIRPUR GOLD REFINERY LIMITED ("the Company") as at 31st March, 2023 in conjunction with our audit of the Standalone Ind AS financial statements of the Company for the year ended on that date.

1. Managements Responsibility for Internal Financial Controls

The Management of the Company is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the "ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

2. Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the ICAI and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

3. Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

4. Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

5. Disclaimer Opinion

The system of internal financial controls over financial reporting with regard to the Company were not available to us, since the operations of the Company have come to standstill, pursuant to the various recovery proceedings initiated by the lenders against the Company, including the taking constructive possession of the factory premises at Shirpur, Dhule District, Maharashtra. Therefore, we are not able to determine if the Company has established adequate internal financial control over financial reporting and whether such internal financial controls were operating effectively as at 31st March, 2023, based on the criteria for internal financial control over financial reporting established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Annexure "B" to Independent Auditors Report

(Referred to in para 8(2) of the Independent Auditors Report on the Standalone Ind AS financial statements for the year ended 31st March 2023)

Report on the Companies (Auditors Report) Order, 2020 (the "Order") issued by the Central Government in terms of Section 143(11) of the Act, a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable of SHIRPUR GOLD REFINERY LIMITED (the Company)

i) In respect of Fixed Assets

(a) (A)The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment. (B) The Company does not hold any intangible assets as at March 31, 2023 hence the clause 1 a (B) is not applicable.

(b) The Company has a program of physical verification of Property, Plant and Equipment in a phased manner designed to cover all the items and in our opinion the same is reasonable having regard to the size of the Company and the nature of its assets.

However, in view of the constructive possession of the factory premises at Shirpur, Dist Dhule, Maharashtra, for their disputed dues of Rs.30,27.53 million, as detailed in Note no.19 to the financial statements by the lenders to the Company, no physical verification of assets located therein could be carried out, during the year. However, pursuant to the program, Property, Plant and Equipment at Shirpur factory, other than what is stated herein before, were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification of such assets.

(c) Based on what has been reported in earlier years reports and confirmed by the Management, we report that, the title in respect of the title deeds of freehold immovable property of land and building, as disclosed in Note no. 2 of the financial statement viz., – Property, Plant and Equipment, to the standalone financial statements, are held in the name of the Company as at the balance sheet date.

(d) The Company has not carried out revaluation of its Property, Plant and Equipment during the year.

(e) The Company does not hold Benami Property as at March 31, 2023 hence reporting under the clause 1(e) is not applicable.

ii) Inventory

(a) As per the information and explanations given, the inventories have not been physically verified by the Management in view of constructive possession of the factory premises at Shirpur, taken over by the lenders to the Company to recover the overdue NPA loans including cash credits etc., as detailed herein the above para and the report. Hence, the rest of the provision of this clause is not applicable.

(b) The Company has not been sanctioned, at any points of time during the year, any working capital limits. However during the preceding years the Company had been sanctioned and disbursed such limits in excess of 5 crore, in aggregate, by the banks on the basis of security of current assets. Since the operations of the Company is discontinued since February 2020, in view of the actions for recovery of dues as stated herein above and constructive possession of the factory premises by the lenders, due to defaults by the Company resulting into loans turning into NPA and subsequent actions by the lenders against the Company. Therefore, considering the actions of the lenders, as stated herein above, and no manufacturing or trading operations since February 2020, the Company has not filed any current asset statements of inventories or book debts as appearing in Note no.8 to the financial statements, with the lenders on quarterly basis or otherwise. In view of the above, we are unable to comment upon as to the compliance of the terms and conditions of the Loan agreements and/or sanction letters for such cash credit facilities.

iii) Investments, Guarantees, Security given and/or Loans secured or unsecured granted

(a) The Company, during the year, has not provided loans or advances in the nature of loans or stood guarantee or provided security to any other entity except by way of renewal/extension of facilities, to its wholly owned foreign subsidiary as detailed in Note no.47-Related parties Transactions, to the financial statements, covered in the Register maintained under Section 189 of the Act. Accordingly, except to the extent stated herein before, paragraph 3(iii) of the Order is not applicable and hence reporting under clause 3(iii)(a) of the Order is not applicable.

(b) In our opinion, the Company has not made any investments or given loans or advances in the nature of loans, during the year, hence rest of the clauses (c, d, e and f) is not applicable.

(g) The Company has not granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment during the year. Hence, reporting under clause 3(iii)(f) is not applicable. The Company has not provided any guarantee or security or granted any advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties.

iv) Loan to directors and investment by the Company

The Company, during the year, has not granted any loans or made any investments or given any guarantee or provided any security, hence provisions of Sections 185 and 186 of the Companies Act, 2013 are not applicable, and thereby clause (iv) of the said Order.

v) Public Deposits

The Company has not accepted any deposit or amounts which are deemed to be deposits. Hence, reporting under clause 3(v) of the Order is not applicable.

vi) Cost Accounting Records

The maintenance of cost records has not been specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 for the business activities carried out by the Company. Hence, reporting under clause (vi) of the Order is not applicable to the Company. vii) Payment of statutory dues:

(a) In our opinion, the Company has generally been regular in depositing undisputed statutory dues, including Goods and Services tax, Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, duty of Custom, duty of Excise, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities. There were no undisputed amounts payable in respect of Goods and Service tax, Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, duty of Custom, duty of Excise, Value Added Tax, Cess and other material statutory dues in arrears as at March 31, 2023 for a period of more than six months from the date they became payable.

(b) Details of statutory dues referred to in sub-clause (a) above which have not been deposited as on March 31, 2023 by the Company on account of disputes, except for the following.

Disputed Liabilities under Income tax Act 1961:

Nature of Statute	Amount (in Million)	Period to which the amount relate (Assessment Year)	Forum where dispute is pending
Income Tax Act 1961	210.62*	2001 - 02 & 2015 - 16	Income Tax Appellate Tribunal, Mumbai

viii) Proceedings under Tax Assessment & Income disclosed thereunder

There were no transactions relating to previously unrecorded income that have been Surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).

ix) Defaults in repayment of loans etc., from lenders

(a) In our opinion and according to the information and explanations given to us, and based on the records, the Company has defaulted since preceding years, which continues during the year, in repayments of term loans or borrowings from financial institution and banks as detailed in Emphasis of Matters, Para no.3 (iv) of the Independent Auditors Report of even date, annexed hereto and reproduced hereinbelow.

(b) Note No. 55 as has been Continuing reported from preceding years, three of the lender banks and a financial institution (‘the lenders) have outstanding dues, amounting to Rs.3,800.96 million including amount of bank guarantees invoked, interest and penal interest of Rs.9,69.26 million as per the records of the Company, classified as Non-performing assets. The said dues are after adjustment of fixed deposits of Rs.145.97 million, including interest thereon, kept as margin against bank guarantees with Axis Bank Ltd., due to defaults in the repayment and non-compliance of the terms and conditions. The Company has considered differential interest of Rs.64.7 million as debited by the leading bank, as contingent liability, since neither accepted nor accounted in the books.

During the preceding year/s, one of the Lenders had issued E-Auction notices for Sale of immovable properties of the Company at its Shirpur factory, on as and where is basis, under SARFAESI Act 2002 read with Rule 8(6) of the Security Interest (Enforcement) Rules 2002, to recover the outstanding dues in terms of the said notice. It is reported that there was no response to the said E-auction by the said lender, hence status quo remained unchanged. Also, the Company has been in consistent dialogue with the lenders by responding to their notices and recently vide its offer letter dated 06 May 2023 had submitted the revised proposal for One Time Settlement of the lenders total dues, and hopeful of positive response and of an amicable settlement. Since the one time settlement is still pending, we are unable to comment in the above statement".

Note no. 56 As per information received, a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority)

Rules, 2016, has been filed by IFCI Ltd., one of the lenders, before the National Company Law Tribunal, Mumbai, ("NCLT") allegedly claiming recovery of dues of Rs.919.88 million from the Company. The Company has filed on 20 June 2022 its Affidavit of even date in response thereto, opposing the petition of the financial creditor on various grounds as detailed therein. The status of the petition remains unchanged viz., pending admission by NCLT, as the matter is sub-judice vide Order sheet of the hearing of Mumbai Bench of the NCLT on 09.01.2023.

There are no dues to the Government, as per records produced.

(c) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(d) The Company has not taken any term loan during the year and there are outstanding overdue term loans as detailed in para (a) above at the beginning of the year.

Considering the reporting for the year under audit reporting as required in clause 3(ix)(c) of the Order is not applicable.

(e) On an overall examination of the financial statements of the Company, the Company has not raised funds during the year hence the rest of the matter relating to use of short-term funds, prima facie, for long-term purposes by the Company, is not applicable.

(f) On an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries.

(g) The Company has not raised any loans during the year and hence reporting on clause 3(ix)(f) of the Order is not applicable.

x) Application Of Money Received From Equity Or Loan

(a) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year and hence reporting under clause 3(x) (a) of the Order is not applicable.

(b) During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) and hence reporting under clause 3(x) (b) of the Order is not applicable.

xi) Fraud Reporting

(a) No fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

(b) No report under sub-section (12) of section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and upto the date of this report.

(c) As per information and explanation received, there are no whistle blower complaints received by the Company during the year (and upto the date of this report), while determining the nature, timing and extent of our audit procedures.

xii) Nidhi Company - Compliance With Deposits

The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.

xiii) Related Party Transactions

In our opinion, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 with respect to applicable transactions with the related parties and the details of related party transactions have been disclosed in Note no. 47 to the standalone financial statements as required by the applicable accounting standards.

xiv) Internal Audit System

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

(b) No internal audit reports are produced before us for our verification hence are not able to comment thereon.

xv) Transaction with Director/s

In our opinion during the year the Company has not entered into any non-cash transactions with its directors or persons connected with its directors and hence provisions of section 192 of the Companies Act, 2013 and the Clause 3(xv) of the Order are not applicable to the Company. x

vi) Registration with Reserve Bank of India

(a) In our opinion, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Hence, reporting under clause 3(xvi) (a), (b) and (c) of the Order is not applicable. (b) In our opinion, there is no core investment company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly reporting under clause 3(xvi) (d) of the Order is not applicable.

xvii) Cash Losses

The Company has incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

xviii) Resignation of Statutory Auditor

There has been no instance of any resignation of the statutory auditors occurred during the year. Hence the clause 3 (xviii) relating to considering the issues, objections or concerns raised by the outgoing auditors is not applicable.

xix) Material uncertainty on meeting liabilities

We draw attention to Note no.65 of the Standalone financial statements, which states that the Company has incurred losses during the current year and has accumulated losses as at 31 March 2023, due to cessation of manufacturing and trading business operations and its net worth is fully eroded as at that date. The Companys current liabilities exceed its current assets as at 31 March 2023. Further the Company had been served with Notices and initiated recovery proceedings by the lender banks/institution, for repayment of the loans with interest and even have taken constructive possession of the factory premises and other recovery of dues proceedings. These may create a doubt regarding the Companys ability to continue as a going concern. However, the financial statements have been prepared on a going concern basis with an expectation by the Management that they will amicably settle with the lender banks/institutions, as it has submitted ONE TIME SETTLEMENT PROPOSAL to the lenders and the negotiations are on. On the basis of the above, and according to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

xx) Transfer to fund specified under Schedule VII of Companies Act, 2013

As per Section 135 of the Act no provision for CSR is made for the year under report, in view of losses during the year and in the preceding years hence not applicable. However, the accumulated balance of Rs. 9.65 Million (Rs.10.80 Million) of the preceding years viz., 31 March 2015 to 31 March 2020 remained unspent till year end. The CSR stated above had been charged in the respective years to the statement of profit and loss under Miscellaneous Expenses.

For Ankush Gupta & Associates.,

Chartered Accountants

Firm registration Number 149227W

CA Ankush Gupta

Proprietor

Membership No. 120478

UDIN NO. 23120478BGWCUS3510

Place : Mumbai

Date : 29th May 2023