Shirpur Gold Refinery Ltd

To

The Members of

SHIRPUR GOLD REFINERY LIMITED

Yours Directors take pleasure in presenting the 38th Annual Report of your Company together with Audited Statement of Accounts for the year ended 31st March 2023 prepared as per Indian Accounting Standards prescribed under Section133 of the Companies Act, 2013.

DIRECTORS' RESPONSIBILITY STATEMENT

PursuanttotherequirementunderSection134(3)oftheCompanies Act, 2013, in relation to the Annual Financial Statements for the Financial Year 2022-23, your Directors confirm that:

a) The Financial Statements of the Company - comprising of the Balance Sheet as at 31st March, 2023 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, 2023, and, of the loss 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

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 Company's internal financial controls were adequate and working effectively during financial year 2022-23.

DIVIDEND

In view of the losses incurred by the Company during current year, your Directors do not recommend any dividend for the year under review.

TURNOVER AND COMPANY PERFORMANCE

The total revenue for the financial year under review was Rs. NIL (previous year NIL) on standalone basis. The total revenue on consolidated basis has increased from Rs 52,758.72 Millions to Rs53,624.15 Millions. Your Company has registered the Net Loss after tax of Rs 325.99 Millions as against Rs 961.66 Millions in the previous financial year.

OUTSTANDING DUES OF LENDERS

Three of the banks and a financial institution (‘the lenders') have outstanding dues, as of 25 November 2019 amounting to Rs.38,009.60 Lakhs including amount of bank guarantees invoked, interest and penal interest of Rs.9,692.65 Lakhs as per the records of the Company, classified as Non-performing assets. The said dues are after adjustment of fixed deposits of Rs.14,59.65 Lakhs, 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.6,47.00 lakhs as debited by the lending bank, as contingent liability, since neither accepted nor accounted in the books. During the year, 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 lender's total dues, and hopeful of positive response and of an amicable settlement. A petition under Section 7 of the 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 financial facilities of Rs.91,98.85 Lakhs from the Company. The said petition is pending receipt of a copy thereof, hearing and admission by NCLT.

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.

CREDIT RATING

During the year under review, Long Term and Short-Term credit rating of the Company as earlier issued by CRISIL and CARE remained to ‘D' on account of delay in debt servicing.

INTERNATIONAL OPERATIONS

As at March 31, 2023, your Company had 1 Wholly Owned Subsidiary namely, Shirpur Gold DMCC, Dubai, the name of which changed from ‘Zee Gold DMCC' effective from 23.01.2022 and 2 step down subsidiaries namely ‘Precious Metals Mining and Refining Limited' ("PMMRL"), Papua New Guinea and Metallic Exploration And Mining, Mali.

During the FY 2016-17, "PMMRL" step down subsidiary commenced its operations on trial basis, however it couldn't 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 line with amendments of threshold for determining Material Subsidiary as stated in Regulation 16(1)(c) of Listing Regulations, Shirpur Gold DMCC, a wholly owned overseas subsidiary remains a Material Subsidiary of the Company.

The policy for determining material subsidiaries of the Company is available on the website of the Company www.shirpurgold.com.

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.

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 Ankush Gupta & Associates, Statutory Auditors confirming the compliance of the provisions of the Corporate Governance, is attached and forms part of this Annual Report. Management's 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 Company's corporate website www.shirpurgold.com. Additionally, Directors Familiarisation Programme and Terms and Conditions for appointment of Independent Directors can be viewed on Company's 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 31,2023, Your Board comprised of 6 Directors including 3 Independent Directors and 3 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 the year under review, there is no change in the composition of the Board of Directors of the Company.

Mr. Prakash Chandra Pandey who is liable to retire by rotation at the ensuing AGM and being eligible, offers himself for reappointment. Your Board recommends his re-appointment.

In terms of Regulation 25(8) of the Listing Regulations, Independent Directors have confirmed that they are not aware of any circumstances or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties. Based on the declarations received from the Independent Directors, the Board has confirmed that they meet the criteria of independence as mentioned under Regulation 16(1) (b) of the Listing Regulations and that they are independent of the management.

A declaration on compliance with Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, along with a declaration as provided in the Notification dated October 22, 2019, issued by the Ministry of Corporate Affairs (MCA), regarding the requirement relating to enrolment in the Data Bank for Independent Directors, has been received from all the Independent Directors, along with declaration made under Section 149(6) of the Act.

The Company has not appointed any Independent Director during the year, hence a statement regarding opinion of the Board with regard to integrity, expertise and experience of the independent Directors appointed during the year is not applicable.

During FY 2022-23, your Board met 4 (Four) times details of which are available in Corporate Governance Report annexed to this report.

In compliance with the requirements of Section 203 of Companies Act,2013, as at March 31,2023, Mr. Shyamal Padhiar, Company Secretary continue as Key Managerial Personnel of the Company.

PERFORMANCE 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 it's 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.

Statutory Audit

Pursuant to the provisions of Section 139(8) and other applicable provisions of the Companies Act, 2013 and based on recommendation of the Audit Committee, M/s. Ankush Gupta and Associates, Chartered Accountants (FRN No. 149227W), was appointed as Statutory Auditors of the Company for the FY 2023-22 to fill the casual vacancy caused due to the resignation of M/s. Parikh & Parikh, Chartered Accountants which was approved by the shareholders of the Company at last AGM held on 30th September,2023, on such remuneration as may be fixed by the Board of Directors in consultation with Auditors thereof. Further, in the same AGM, based on the recommendations of Audit Committee and Board, their term as Statutory Auditors of the Company was approved for further period of 2 years to hold office till the conclusion of general meeting of the Company to be held in 2024.

Your Company has received consent and confirmation from the Auditors to the effect that their appointment is 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. The firm also holds valid peer review certificate as required under Listing Regulations.

The reports of the Statutory Audit for the year ended March 31, 2023, do not contain any qualifications. 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.

Emphasis of matter reported by Statutory Auditor

Statutory auditor vide it's Standalone Audit Report for the FY ended 31.03.2023, reported certain Emphasis of matter such as pending Insurance claim, NPA of cash credit and default in repayment to lenders, petition filed against the Company under Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) rules, 2016 with NCLT, provision for deferred tax, valuation loss, provision of doubtful debts and recovery of dues from debtors, going concern etc……. ( Refer Standalone Auditor's Report )

Board's comments on Emphasis of matter reported in the Auditor's Report for the year ended 31.03.2023

As regards pending insurance claim, due to inordinate delay and no action from the Insurance Company to settle the claim, the Company has filed a civil suit before the court of law, pending hearing and disposal. The company is hopeful having the decision of the case in its favour and accordingly the insurance claim.

As regards NPA of cash credit and default in repayment to lenders, the Management had submitted and is in continuous discussions with the lenders for its scheme of restructuring the said over-dues and/or proposal for One Time Settlement and negotiation with the lenders is under way for amicable settlement.

As regards petition filed with NCLT, the said petition is pending hearing and admission by NCLT.

The other matters in respect of provision for deferred tax, valuation loss, provision of doubtful debts and recovery of dues from debtors, going concern are self explanatory and do not require further explanations.

Secretarial Audit

In compliance with the provisions of Section 204 of the Companies Act,2013, the Company has appointed M P Sanghavi & Associates LLP, Practising Company Secretary (CP No. 6364) as secretarial auditor of the Company for the financial year 2022-23. 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 31.03.2023 to the stock exchanges which was issued by M P Sanghavi & Associates LLP, Secretarial Auditor.

The reports of the Secretarial Audit and Annual Secretarial Compliance Certificate for the year ended March 31, 2023, contains certain qualifications / observations and Board's reply for said observations are as under:

The other observations made by the Secretarial Auditor are self explanatory and do not require any further comments.

Cost Audit

The provisions related maintenance of cost records as specified by the Central Government under Section 148 of the Companies Act,2013 and to appoint cost auditor to carry out Audit of Cost Records of the Company are not applicable to the Company.

Corporate Social Responsibility

Due to negative average profits for the preceding 3 financial years of the Company, the provisions related to CSR Spent is not applicable for the financial year ended 31.03.2023. Annual Report on CSR for the FY 2022-23 is annexed to this report.

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 Director's 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 arm's 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 2022-23, 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 2022-23, 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

Pursuant to Section 92 of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014 as amended, the extract of Annual Return in Form MGT-9 is not required to annexed to this report since it is available on the website of the Company www.shirpurgold.com.

V. SEXUAL HARASSMENT

Your 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 thereunder. The company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. 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 Company's 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,2023.

As at March 31, 2023, 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 Company's 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

As at March 31, 2023, the Company do not have any employee. However, in the past, the Company has maintained cordial relations with its employees and workers and 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. 1.02 Crores per annum/ Rs 8.50 Lacs per month or more during the FY 2022-23. The information required under Rule 5 (2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not applicable.

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.

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 company's growth and progress.