GSL Nova Petrochemicals Ltd.
|BSE: 530605||Sector: Industrials|
|NSE: GSLNOVA||ISIN Code: INE787A01022|
|BSE 00:00 | 14 Oct||GSL Nova Petrochemicals Ltd|
|NSE 05:30 | 01 Jan||GSL Nova Petrochemicals Ltd|
|BSE: 530605||Sector: Industrials|
|NSE: GSLNOVA||ISIN Code: INE787A01022|
|BSE 00:00 | 14 Oct||GSL Nova Petrochemicals Ltd|
|NSE 05:30 | 01 Jan||GSL Nova Petrochemicals Ltd|
To The Members of GSL NOVA PETROCHEMICALS LIMITED
1. Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of GSL NOVAPETROCHEMICALS LIMITED ("the Company") which comprise the Balance Sheet asat 31st March 2018 and the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equityfor the year then ended and a summary of the significant accounting policies and otherexplanatory information.
2. Management's Responsibility for the Standalone Ind AS 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 ofthe standalone Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed undersection 133 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
3. Auditors' Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the policies usedand the reasonableness of the accounting estimates made by the Company's Directors aswell as evaluating the overall presentation of the standalone Ind AS 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 Ind AS financialstatements.
4. Basis for Qualified Opinion
i. The company has suspended its manufacturing activities disposed off its plant &machinery and entire net worth of the company has been eroded hence there is a materialuncertainty which caste significant doubt upon the Company's ability as going Concern.However the accounts of the Company has been prepared on a going concern basis. TheFinancial statements do not include any adjustments relating to the recoverability andclassification of recorded asset amounts and classification of liability that may benecessary if the Company is unable to continue as a going concern.
ii. Trade Receivables Advances Deposits and Trade Payables & other payables aresubject to confirmation and adjustment if any. iii. Compound interest Penal interest andliquidated damages in respect of all borrowings have not been provided amount of which isunascertainable pending confirmations / reconciliation (Refer to Note No.19.1)
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 Ind As financial statements give the information required by theAct in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including the Ind AS of the financialposition of the Company as at 31st March 2018 and its financial performance includingother comprehensive income its cash flows and the changes in equity for the year ended onthat date.
6. Emphasis Matter
We draw attention to the fact that the ministry of Corporate affairs vide its letterDt.09/06/2017 considered the company as "Shell Company" and directed SEBI who inturn directed Bombay Stock Exchange for initiating necessary action as per SEBI laws &Regulations. The Bombay Stock Exchange Vide Order Dt.19/01/2018 has directed to conductforensic audit of the Company. The report of the forensic auditor is awaited the outcomeof the same is uncertain. Our opinion is not qualified in respect of this matter.
7. Other Matters
The comparative financial information of the Company for the year ended 31st March2017 and the transition date opening balance sheet as at 1st April 2016 included in thesestandalone Ind AS financial statements are based on the previously issued statutoryfinancial statements prepared in accordance with the Companies (Accounting Standards)Rules 2006 audited by other auditor whose report for the year ended 31st March 2017 and31st March 2016 dated 30th May 2017 and 30th May 2016 respectively expressed anqualified opinion on those standalone financial statements as adjusted for thedifferences in the accounting principles adopted by the Company on transition to the IndAS which have been audited by other auditor.
8. 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 inparagraphs 3 and 4 of 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) Except for the effects of the matter described in the Basis for Qualified Opinionparagraph in our opinion proper books of account as required by law have been kept bythe Company so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account.
(d) Except for the effects of the matter described in the Basis for Qualified Opinionparagraph in our opinion the aforesaid standalone Ind As financial statements complywith the Accounting Standards specified under Section 133 of the Act.
(e) The described in the Basis for Qualified Opinion paragraph above in our opinionmay have an adverse effect on the functioning of the Company.
(f) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of disqualified Directors none of thedirectors as on 31st March 2018 from being appointed as a director in terms of Section164 (2) of the Act.
(g) The Qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the basis for Qualified Opinion paragraph above.
(h) 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 B".
(i) 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 in Note No.32 to the financial statements;
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;
iii. There was a default in transferring a sum of Rs.285041/- to the InvestorEducation and Protection Fund in the earlier year. The said default has continued in theyear under audit. (Refer Clause No.7(a) of the Companies (Auditor's Report) Order 2016)
ANNEXURE "A" TO INDEPENDENT AUDITORS' REPORT
Referred to in paragraph 8 (i) of our Report of even date to the Members of GSL NOVAPETROCHEMICALS LIMITED for the year ended 31st March 2018.
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 atreasonable intervals during the year in accordance with a programme of physicalverification physically verified the fixed assets and no material discrepancies werenoticed on such verification as compared to the available records.
(c) As explained to us the title deeds of all the immovable properties are held inthe name 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. As regards the loans the company has not granted any loans secured orunsecured during the year under audit to the Companies firms and other parties covered inthe register 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. According to the information and explanation given to us the company hadneither given any loan guarantee or security nor made any investments during the year.Hence the provisions of section 185 and 186 are not applicable. Therefore clauses (iv) ofcompanies (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 andlargeregularindepositingwithappropriateauthoritiesundisputed statutory dues includingemployees' state insurance income tax wealth tax Excise duty duty of customs ServiceTax Value Added Tax Central Sales Taxcessandotherstatutorydueswiththeappropriateauthoritiesapplicable to it except there wereinstances of delay in payment of Professional Tax and Tax deducted at Source.
According to the information and explanations given to us in respect statutory duesProfessional Tax of Rs. 111980/- 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 31st March 2018 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:
4. In our opinion and according to the information and explanation given to usthere was a delay ranging upto 365 days in repayment of principal of Rs.59090457/- and adelay ranging upto 2 days in repayment of interest of Rs.1647340/- 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:-
5. 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.
6. Based upon the audit procedures performed and information and explanations givenby the management we report that no fraud by the Company or any fraud on the company byit's officer or employees has been noticed or reported during the course of our audit.
7. 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.
8. 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.
9. 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.
10. 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.
11. 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. 12. In our opinion and according to the information and explanationgiven to us the company is not required to be registered under section 45-IA of ReserveBank of India Act 1934.
ANNEXURE "B" TO INDEPENDENT AUDITORS' REPORT
Referred to in paragraph 8(ii)(f) of our Report of even date to the Members of GSL NOVAPETROCHEMICALS LIMITED for the year ended 31st March 2018.
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 2018 in conjunction with our audit ofthe standalone 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.
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 principles. A company's internal financial control over financial reportingincludes those policies and procedures that (1)Pertain to the maintenance of records thatin reasonable detail accurately and fairly reflect the transactions and dispositions ofthe assets of the company; (2) Provide reasonable assurance that transactions are recordedas necessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized use or disposition of the company's assets that could have a material effecton the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent of internal financial controls over financial reportingincluding the possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
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 2018 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.