The Audit Committee of Sparkle Gold Rock Limited has accepted the resignation of M/s G.R. Gupta & Company as its statutory auditors, effective August 11, 2026. The decision, taken during a meeting on August 10, 2026, aligns with the reasons cited by the outgoing firm regarding commercial non-viability at the previously agreed fee. This governance update ensures continuity in audit oversight while the company prepares for shareholder approval of a new appointee.

M/s G.R. Gupta & Company (FRN: 006201C) tendered its resignation after issuing the Audit Report dated May 29, 2026, for the standalone financial statements ended March 31, 2026, and the Limited Review Report for the quarter ended June 30, 2026. The Audit Committee members confirmed there were no other material reasons for the departure and expressed appreciation for the firm’s contribution to the company’s audit processes and standards.

Auditor Transition Details

To fill the casual vacancy, the Board of Directors has approved the appointment of M/s Dhadda and Associates (FRN: 013807S) as the new statutory auditors, effective August 11, 2026. This appointment is subject to shareholder approval at the ensuing General Meeting, in compliance with Section 139 of the Companies Act, 2013. Harsha Ramnani, a partner at Dhadda and Associates, has provided consent to act, certifying eligibility under the Act.

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 changes in statutory auditors. The intimation was signed by Mansha Ghiya, Compliance Officer and Company Secretary.

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