Sparkle Gold Rock Limited (formerly Sree Jayalakshmi Autospin Limited) has appointed M/s Dhadda and Associates as its new statutory auditors, effective August 11, 2026. The Board of Directors approved the appointment to fill the casual vacancy created by the resignation of its previous auditor, M/s G.R. Gupta & Company, who cited commercial non-viability at the previously paid fee as the reason for stepping down. This governance update coincides with the company’s Q1FY27 results, which reported a net profit of ₹24.92 lakh.

The Board accepted the resignation of M/s G.R. Gupta & Company (FRN: 006201C) during a meeting held on August 11, 2026. The outgoing firm confirmed it had issued its limited review report for the quarter ended June 30, 2026, prior to resigning and stated there were no other material reasons for the departure. The appointment of M/s Dhadda and Associates (FRN: 013807S) is subject to shareholder approval at the ensuing General Meeting, in compliance with Section 139 of the Companies Act, 2013.

Auditor Transition Details

M/s G.R. Gupta & Company was originally appointed for a five-year term starting from FY25 (Financial Year 2024-25) at the Annual General Meeting held on September 30, 2024. Their resignation was communicated via an intention letter dated July 27, 2026, with immediate effect from August 11, 2026. The firm declared that it was not commercially viable to continue services at the fee previously agreed upon.

M/s Dhadda and Associates, a peer-reviewed Chartered Accountancy firm established in 2012 with a pan-India presence, was recommended by the Audit Committee. The new auditors provide services including Audit & Assurance, Valuation, Forensic Audit, Financial Advisory, Ind AS, ESG/BRSR, and Impact Assessment. Harsha Ramnani, a partner at Dhadda and Associates, provided consent to act as statutory auditor, certifying eligibility under the Companies Act, 2013.

Regulatory Compliance

The disclosure was made pursuant to Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company also referenced SEBI Master Circular No. Ho/49/14/14(7)2025-CFDPOD2/I/3762/2026, last updated on January 30, 2026, regarding the change in statutory auditors. The Audit Committee and Board members expressed appreciation for the contribution of M/s G.R. Gupta & Company during their tenure.

What the Numbers Show

The change in auditors occurs alongside a significant financial turnaround for Sparkle Gold Rock. In Q1FY27, the company reported a net profit of ₹24.92 lakh, a 206% year-on-year increase from ₹8.15 lakh in Q1FY26. Revenue from operations surged to ₹1,277.90 lakh from ₹185.28 lakh in the same period last year. While the auditor change is procedural, the timing highlights the company’s focus on stabilizing governance structures as it scales operations and reduces leverage, with borrowings falling to ₹489.07 lakh from ₹1,604.61 lakh as of March 31, 2026.

Sparkle Gold Rock Limited reported its financial results for the quarter and year ended March 31, 2026, disclosing multiple audit qualifications that highlight compliance and governance risks. The auditors flagged significant related party transactions amounting to ₹1971.40 lakhs in sales and ₹3308.16 lakhs in purchases with Sparkle Gold Mine Private Limited. The report indicates that while the company asserts these transactions were conducted at arm's length prices, the auditors were unable to verify this claim due to fluctuating bullion prices and industry practices, leaving the exact financial impact unascertained.

Governance and Compliance Gaps

The audit report draws attention to non-compliance with Section 188 of the Companies Act, 2013. While the company obtained shareholder approval for purchase transactions up to ₹2104.53 lakhs, other related party transactions lacked mandatory prior approvals. The auditors noted that the legal validity and financial consequences of these unauthorized transactions cannot be ascertained. Management stated that transactions exceeding the approved limit will be ratified by the required authority and affirmed that there is no financial impact on the financial statements.

MSME and Tax Liabilities

Auditors identified lapses regarding the Micro, Small and Medium Enterprises (MSME) Act. The company has not implemented a comprehensive MSME mapping system, making it impossible to ascertain the full financial impact of unrecorded penal interest liabilities and consequential tax disallowances under Section 23 of the MSMED Act and Section 43B(h) of the Income Tax Act, 1961. Furthermore, the company availed Input Tax Credit (ITC) on trade payables outstanding for more than 180 days. While a liability of ₹46.22 lakh towards ITC reversal has been recorded, the interest on this liability has not been provided for, affecting the profit and loss and shareholder's funds.

Credit Loss Provisions

The company has not calculated or recognized the provision for Expected Credit Loss (ECL) on outstanding trade receivables of ₹5459.92 lakhs as required by Ind AS 109. Management has not established a provision matrix for lifetime expected credit losses. However, the company claims to have received confirmations from parties confirming that the balances are fully recoverable and will be settled in the normal course of business, hence no provision is considered necessary.

Summary of Audit Qualifications