DIRECTORS’ REPORT TO THE MEMBERS OF SHIRPUR GOLD REFINERY LIMITED Yours Directors take pleasure in presenting the 30th Annual Report of your Company together with Audited Statement of Accounts for the year ended 31st March 2015. DIVIDEND With a view to conserve the resources for future business requirements and expansion plans, your Directors are of view that the current year's 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. 32,222.10 Millions as against Rs. 17,444.07 Millions showing a increase of 84.71 % over previous year. Your Company has witnessed healthy growth during this financial year and registered operating profit of Rs. 795.65 Millions as against Rs. 570.76 Millions, showing an increase of 39.40 % over the previous financial year. The Profit before tax stood at Rs. 216.78 Millions as against Rs. 63.11 Millions in the previous financial year. The Profit after tax stood at Rs. 154.36 Millions as against Rs. 58.00 Millions in the previous year showing a remarkable growth of 166.13 % as compared to previous year. The Company's exports stood at Rs. 6579.63 Millions as against Rs.4749.39 Millions which showed increase of 38.53 % as compared to previous year. BUSINESS OVERVIEW Your company's products viz., Gold Bars and Gold Jewellery are well established in the market. The Company is selling products under 'Zee Gold' which is well known brand. The products of your Company meet the stringent quality standards of purity, weighment, shape, size and aesthetic look. BUSINESS EXCELLEANCE & RECOGNISITON In recognition for its excellent achievements, Dun and Bradstreet (D&B) in 'India's Top 500 Companies 2015' has ranked your company as under : • 350th in terms of Total Income, • 457th in terms of Net Profit • 471th in terms of Return on Net Worth, SUBSIDIARIES & ASSOCIATES As on March 31, 2015, your Company had two 100 % Wholly Owned Subsidiaries namely, Shirpur Gold Trading DMCC, Dubai and Shirpur Gold Mining Company Private Limited, Singapore. Both the subsidiaries of the Company are yet to commence their business operations. The Company has neither formed any new subsidiary, associate or Joint venture nor any company ceased to be subsidiary during the year under review. 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. The audited financials of each of the subsidiary will be placed on the website of the Company, www.shirpurgold.com. The Company will provide a copy of separate annual accounts in respect of each of its subsidiary to any shareholder of the Company who asks for it and the said annual accounts will also be kept open for inspection at the Registered Office of the Company during working hours for a period of 21 days before the date of the annual general meeting. The Company on 11th April,2015 incorporated a step down subsidiary namely 'Precious Metals Mining and Refining Limited' ("PMMRL") with Registrar of Companies, PNG having it's Registered Office at Boroko, National Capital District, Papua New Guinea. The Company is incorporated as Wholly Owned Subsidiary of Dubai Subsidiary Company i.e. Shirpur Gold Trading DMCC. PMMRL is incorporated with the main objects of carrying out activities of Mining and Refining of Precious Metals. CONSOLIDATED FINANCIAL STATEMENT In accordance with the Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates in Consolidated Financial Statements and AS - 27 on Financial Reporting of Interests in Joint Ventures, the audited consolidated financial statement is provided in the Annual Report. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) During the year, Mrs. Kavita Kapahi was appointed as an Additional Director in the category of Independent Director with effect from 31st March,2015. You are requested to confirm her appointment as Independent Director for a period of five years at the ensuing Annual General Meeting. Mr. V. K. Agarawal, Non-Executive Director is liable to retire by rotation at the ensuing Annual General Meeting and, being eligible he has offered himself for re-appointment. Your Board has recommended his re-appointment. In compliance with the provisions of Companies Act,2013 read with Companies ( Appointment & Remuneration of Managerial Personnel ), Rules, 2014, as at March 31, 2015, Mr. Subash Pareek, Manager, Mrs. Archia Kothari, CFO and Mr. Shyamal Padihar, Company Secretary are Key Managerial Personnel of the Company. Mrs. Hemangi Patil, Company Secretary resigned from the Company w.e.f. 6th February, 2015 and Mr. Shyamal Padhiar was appointed in her place as Company Secretary of the Company w.e.f. 7th February, 2015. REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES In accordance with Section 178 and other applicable provisions, if any, of the Companies Act, 2013 read with Clause 49 of the Listing Agreement, the Board of Directors of the Company at their meeting held on 5th February, 2 015,based on the recommendations made by the Nomination and Remuneration Committee, adopted a Remuneration Policy for it's Directors and Key Managerial Personnel of the Company. The extracts of the Remuneration Policy is annexed to this Report. None of the Directors of the Company draws any remuneration from the Company except receipt of sitting fees for attending Board / Committee meetings and reimbursement of expenses for attending such meetings. Shri Subhash Pareek,'Manager' of the Company has drawn remuneration of Rs.0.99 Millions during the year under review. The disclosure required to be given as per Section 197 of the Companies Act,2013 read with Companies (Appointment & Remuneration of Managerial Personnel ) Rules, 2014 is attached as 'Annexure A' which forms part of this report. None of the employee of the Company is in receipt of remuneration of Rs.60 Lacs per annum/ Rs 5 Lacs per month or more during the FY 2014-15. 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 it's performance on various parameters such as Board composition and structure, effectiveness of board processes, effectiveness of flow of information, contributions from each directors etc.. DECLARATION OF INDEPENDENCE In compliance with the provisions of Section 149(6) of the Companies Act, 2013, the Company has received declarations from all the Independent Directors signifying his / her eligibility to continue / appoint as Independent Directors as on 31st March, 2015. NUMBER OF BOARD MEETINGS During the year four (4) meetings of the Board of Directors of the Company were held on 23rd May,2014, 12th August,2014, 14th November,2014 and 5th February,2015. CORPORATE GOVERNANCE Your Company is committed to maintain the highest standards of Corporate Governance. Your Directors adhere to the stipulations set out in the Listing Agreement(s) with the Stock Exchanges. A separate detailed report on Corporate Governance together with the Statutory Auditors' Certificate on compliance is attached to this Annual Report. Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges is presented in a separate section forming part of the Annual Report. CORPORATE SOCIAL RESPONSIBILITY (CSR) Your directors have constituted the Corporate Social Responsibility Committee (CSR Committee) comprising Mr. Amit Goenka as the Chairman and Mr. Manoj Agarwal, Independent Director and Mr. V K Agarawal, Non-Executive Director as members. The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities. The Company was not required to spend any amount on CSR activities during the FY 2014-15. However, in compliance with the provisions of the Act, the Company may in future implement it's CSR activities in different sectors such as Healthcare, Education, Rural Development, Environment protection, Go green initiatives or any other area as may be prescribed under the Act. AUDIT Statutory Audit The Statutory Auditors M/s B.S.Sharma and Co., Chartered Accountants, Mumbai, having Firm Registration No 128249W, has carried out Statutory Audit of the Company for the financial year 2014-15 who holds office until the conclusion of the ensuing Annual General Meeting and is eligible for reappointment. 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 is of the opinion that continuation of M/s. B. S. Sharma and Co., Statutory Auditors for the FY 2015-16 will be in the best interests of the Company and therefore, Members are requested to ratify their re-appointment as Statutory Auditors of the Company from the conclusion of ensuing Annual General Meeting till next Annual General Meeting at remuneration as may be decided by the Board. 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 as secretarial auditor of the Company for the financial year 2014-15. A copy of secretarial audit report is enclosed as Annexure B to this report. The Statutory Audit & the Secretarial Audit Report for the year ended March 31, 2015, do not contain any qualifications / reservations. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY Your Company has adequate systems and process of internal controls which are commensurate with it's size and nature of business. They have been designed to provide reasonable assurance with regard to recording and providing reliable financial information, complying with applicable statutes, safeguarding of assets, authorization of transactions and adherence to the Company's policies and practices. The internal control and governance process are duly reviewed for their adequacy and effectiveness through periodic audits by independent internal auditors . The internal audits are carried out as per risk-based audit plan. The Audit Committee periodically reviews the findings and suggestions made in the internal audit reports for improvement. Effective steps are taken by management to enable continuous monitoring of lead control indicators and action taken towards correcting identified gaps. DISCLOSURES : I. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/S 186 The details of loans, investments and guarantee as required u/s 186 of the Companies Act,2013 read with the Companies ( Meetings of Board and its Powers ) Rules, 2014 are annexed to this report. II. RELATED PARTY TRANSACTIONS All transactions entered with the Related Parties during the year under review were on arm's length basis and in the ordinary course of business and that the provisions of the Section 188 of the Companies Act,2013 are not attracted. Further, there are no material related party transactions during the year under review. Accordingly, the disclosure in Form AOC 2 is not required. The Policy on the Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company. None of the Directors has any pecuniary relationship or transactions vis-a-vis the Company. All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. Omnibus approval was obtained for transactions which are of repetitive nature. The details of Related Party Transactions are attached as Note 49 to the financial statements forming part of this annual report. III. EXTRACTS OF THE ANNUAL RETURN The extract of the Annual Return for the year 31st March, 2015 is being attached as Annexure C and forming part of this Director's Report. IV. REGULATORY ORDERS No regulatory authority or Courts or Tribunals has passed any significant or material orders against the Company. V. MATERIAL CHANGES / COMMITMENT There were no material changes or commitment which affected the financial position of the Company. However, recently, in the month of April, 2015, there was a theft incident of 58 KG Gold Materials of the Company having approx. value of Rs.15.68 Crores while the materials was in transit from Mumbai to Plant. This incident has affected the working capital of the Company. The materials were adequately insured and the Company has filed FIR to recover the materials. VI. PUBLIC DEPOSITS 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,2015. 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. 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 2014-2015, your Directors confirm that: a) The Financial Statements of the Company comprising of the Balance Sheet as at 31st March, 2015 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 read with the requirements specified in Schedule III of the Companies Act, 2013 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, 2015, 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) Internal Financial Controls had been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively. e) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that systems were adequate and operating effectively. INSURANCE & RISK MANAGEMENT The Company has obtained adequate insurance on all of it's 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'. HEALTH, SAFETY & ENVIRONMENT PROTECTION The Company is operating it's 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 it's 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. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: 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 has been given in Annexure- D forming part of this Annual Report HUMAN RESOURCES The Company has maintained cordial relations with it's employees and workers. The Company has taken adequate steps to ensure safety and welfare of all it's employees at plant and other places. The number employees as on March 31,2015 was 85. ACKNOWLEDGEMENT 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. For and on behalf of the Board Amit Goenka Chairman Date : 19th May, 2015 Place : Mumbai |