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GSL Nova Petrochemicals Ltd.

BSE: 530605 Sector: Industrials
NSE: GSLNOVA ISIN Code: INE787A01022
BSE LIVE 14:26 | 06 Nov Stock Is Not Traded.
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OPEN 1.35
PREVIOUS CLOSE 1.42
VOLUME 6000
52-Week high 2.43
52-Week low 1.35
P/E
Mkt Cap.(Rs cr) 4
Buy Price 0.00
Buy Qty 0.00
Sell Price 1.35
Sell Qty 100.00
OPEN 1.35
CLOSE 1.42
VOLUME 6000
52-Week high 2.43
52-Week low 1.35
P/E
Mkt Cap.(Rs cr) 4
Buy Price 0.00
Buy Qty 0.00
Sell Price 1.35
Sell Qty 100.00

GSL Nova Petrochemicals Ltd. (GSLNOVA) - Auditors Report

Company auditors report

INDEPENDENT AUDITORS' REPORT

To The Members of

GSL NOVA PETROCHEMICALS LIMITED

Ahmedabad

1. Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of GSL NOVAPETROCHEMICALS LIMITED ("the Company") which comprise the Balance Sheet as at31st March 2017 the Statement Profit and Loss the Cash Flow Statement for theyear then ended and a summary of the significant accounting policies and otherexplanatory information.

2. Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand irregularities; for preventing and detecting frauds and other selection andapplication of appropriate accounting policies; making judgments tes estima and that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the standalone financial statements.

4. Basis for Qualified Opinion

i. The accounts of the Company have been prepared on a going concern basis though thecompany has stopped its manufacturing activities for more than a year and entire net worthof the company has been eroded. The Financial statements do not include any adjustmentsrelating to the recoverability and classification of recorded asset amounts andclassification of liability that may be necessary if the Company is unable to continue asa going concern.

ii. Trade Receivables Other Advances Deposit and Trade Payables are subject toconfirmation and adjustment if any.

iii. Compound interest Penal interest and liquidated damages in respect of allborrowings have not been provided amount of which is unascertainable pendingconfirmations / reconciliation(Refer to Note No.8.3)

5. Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph the financial statements give the information required by the Act inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India :- i. In the case of the Balance Sheet of thestate of affairs of the Company as at March 31 2017;

ii. In the case of the Statement of Profit and Loss Account of the loss for the yearended on that date; and iii. In the case of the Cash Flow Statement of the cash flows forthe year ended on that date.

6. Report on Other Legal and Regulatory Requirements

(i) As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of Companies Act2013 we give in the Annexure a statement on the matters specified in paragraphs 3 and 4of the Order to the extent applicable.

(ii) As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of disqualified Directors none of thedirectors as on 31st March 2017 from being appointed as a director in terms of Section164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements Refer Note 25 to the financial statements;

ii. The Company does not have any outstanding long-term contracts including derivativecontracts as at 31st March 2017 for which there were any material foreseeable losses; and

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during year.

iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management Refer Note 38 to thefinancial statements.

For J.T. Shah & Co.
Chartered Accountants
[Firm Regd. No. 109616W]
(J.T. Shah)
Place : Ahmedabad Partner
Date : 30/05/2017 [M. No. 3983]

ANNEXURE TO INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 6 (i) of our Report of even date to the Members of GSL NOVAPETROCHEMICALS LIMITED for the year ended 31st March 2017.

1. In respect of Fixed Assets :

(a) The present register of Fixed Assets requires completion in certain respects &we have been informed that such work is in progress.

(b) As per the information and explanations given to us the management at reasonableintervals during the year in accordance with a programme of physical verificationphysically verified the fixed assets and no material discrepancies were noticed on suchverification as compared to the available records.

(c) As explained to us the title deeds of all the immovable properties are held in thename of the company.

2. In respect of its Inventories :

As per the information and explanations given to us inventories were physicallyverified during the year by the management at reasonable intervals. No materialdiscrepancies were noticed on such physical verification.

3. In respect of Loans and Advances granted during the year:

As regards the loans the company has not granted any loans secured or unsecuredduring the year under audit to the Companies firms and other parties covered in theregister maintained under section 189 of the companies Act 2013 and therefore theclauses (iii) (a) to (c) of the companies (Auditor's Report) Order 2016 are notapplicable.

4. Loans Investments and gurantees:

According to the information and explanation given to us the company had neither givenany loan guarantee or security nor made any investments during the year. Hence theprovisions of section 185 and 186 are not applicable. Therefore clauses (iv) of companies(Auditor's Report) Order 2016 is not applicable.

5. During the year the company has not accepted any deposits and hence thedirectives issued by the Reserve Bank of India and the provisions of sections 73 to 76 orany other relevant provisions of the Companies Act and the rules framed there under arenot applicable to the company. Therefore clauses (v) of companies (Auditor's Report)Order 2016 is not applicable.

6. According to the information and explanations given to us the company is notrequired to maintain cost records as required by the central government under sub section(1) of section 148 of the Companies Act 2013. Hence clause (vi) of the (Auditor's Report)Order 2016 is not applicable.

7. In respect of Statutory Dues :

(a) According to the records of the Company the Company is by and large regular indepositing with appropriate authorities undisputed statutory dues including employees'state insurance income tax wealth tax duty of customs cess and other statutory dueswith the appropriate authorities applicable to it except there were instances of delay inpayment of Professional Tax Tax deducted at Source Service Tax Value Added Tax CentralSales Tax and Excise duty.

According to the information and explanations given to us in respect statutory duesProfessional Tax of Rs. 107530/- Investor Education Protection Fund Rs 285041/- Taxdeducted at source of Rs.14480/- Central sales tax of Rs. 463841/- and value added taxof Rs. 101151/- were outstanding as at 31stMarch 2017 for a period of more than sixmonths from the date they became payable.

(b) According to the records of the company the dues of income tax sales tax wealthtax or service tax or duty of customs or duty of excise or value added tax or cess whichhave not been deposited on account of disputes and the forum where the dispute is pendingare as under:

Name of the Statute Nature of the Dues Year Amount (Rs.) Forum where dispute is pending
The Central Excise and Customs Act Excise Duty & Penalty 2003-04 3230730 Custom Excise and Service Tax Appellate Tribunal
Excise Duty & Penalty 2006-07 & 2007-08 1959742 Commissioner of Excise and Customs (Appeals)
Excise Duty & Penalty 2007-10 24700000 Custom Excise and Service Tax Appellate Tribunal
Excise Duty & Penalty 2005-06 1189019 Additional Commissioner of Central Excise
The Finance Act1994 Service tax & Penalty 2004-05 3398000 Custom Excise and Service Tax Appellate Tribunal
Service tax & Penalty 2005-06 141479 Assistant Commissioner of Central Excise
Service tax & Penalty 2007-08 1853152 Commissioner (Appeal) Service Tax
The Central Sales Tax Act1956 Central Sale Tax demand and penalty 2012-13 514814 Joint Commissioner (Appeals)
Gujarat Value Added Tax Act2003 Gujarat Value Added Tax and penalty 2012-13 1055818 Joint Commissioner (Appeals)
The Textile Committee Amendment Act 1973 Textile Cess 1995 to 2005 5090119 Textiles Committee Government of India Ministry of Textiles
Gujarat Pollution Control Act Compensation 2004 to 2010 5164620 High Court of Gujarat

8. In our opinion and according to the information and explanation given to usthere was a delay ranging upto 178 days in repayment of principal of Rs 49872341 /- anda delay ranging upto 169 days in repayment of interest of Rs. 46639524 /- to financialinstitution which have been since paid. Further the company has defaulted in repayment ofprincipal and repayment of interest to Financial Institution as on balance sheet date thedetails of the same are as follows:-

Particulars Amount of default as at balance sheet date Period of default
JM Financial Asset Reconstruction Company Pvt. Ltd. Principal-Rs.129867534/- Principal-182 Days
Interest-Rs.1647340/- Interest-1 Days

9. According to the information and explanations given to us the company had notraised any money by way of public issue during the year. According to the information andexplanations given to us and on an overall examination of the balance sheet of thecompany in our opinion no new term loans has been taken during the year underconsideration.

10. Based upon the audit procedures performed and information and explanationsgiven by the management we report that no fraud by the Company or any fraud on thecompany by it's officer or employees has been noticed or reported during the course of ouraudit.

11. In our opinion and according to the information and explanations given to usthe company had paid managerial remuneration which is in accordance with the requisiteapprovals mandated by the provisions of section 197 read with schedule V of The CompaniesAct 2013.

12. In our opinion and according to the information and explanations given to usthe provisions of special statute applicable to chit funds and nidhi / mutual benefitfunds / societies are not applicable to the company. Hence clause (xii) of the Company's(Auditor's Report) Order 2016 is not applicable.

13. In our opinion and according to the information and explanations given to usthe transactions entered by the company with related parties are in compliance with theprovisions of section 177 and 188 of The Companies Act 2013 and details thereof areproperly disclosed in the financial statements.

14. The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review henceprovisions of sections of 42 of the Companies Act 2013 are not applicable.

15. The company had not entered in to any non-cash transactions with the directorsor persons connected with him during the year hence section 192 of the Companies' Act 2013 is not Applicable. And clause (xvi) of Company's (Auditor's Report) Order 2016 isnot applicable.

16. In our opinion and according to the information and explanation given to us thecompany is not required to be registered under section 45- IA of Reserve Bank of IndiaAct 1934.

For J.T. Shah & Co.
Chartered Accountants
[Firm Regd. No. 109616W]
(J.T. Shah)
Place : Ahmedabad Partner
Date : 30/05/2017 [M. No. 3983]

ANNEXURE "A" TO INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 6(ii)(f) of our Report of even date to the Members of GSL NOVAPETROCHEMICALS LIMITED for the year ended 31st March 2017.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of GSL NOVAPETROCHEMICALS LIMITED as of 31st March 2017 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1)Pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) Provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized use or disposition of the company's assetsthat could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For J.T. Shah & Co.
Chartered Accountants
[Firm Regd. No. 109616W]
(J.T. Shah)
Place : Ahmedabad Partner
Date : 30/05/2017 [M. No. 3983]