Auditor Report of GSL Nova Petrochemicals Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of GSL-NOVA PETROCHEMICALS LIMITED which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

2. Management''s responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4. Basis for Qualified Opinion

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

ii. Trade Receivables, Other Advances, Deposit and Trade Payables are subject to confirmation and adjustment if any.

iii. Compound interest, Penal interest and liquidated damages in respect of all borrowings have not been provided, amount of which is unascertainable, pending confirmations/ reconciliation(Refer to Note No.4.6).

5. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(b) in the case of the Statement of Profit and Loss, of the profit/ loss for the year; ended on that date ; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

6. Report on Other Legal and Regulatory Requirements

i As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

ii As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

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

d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO INDEPENDENT AUDITOR''S REPORT (Referred to in paragraph 6(i) of "Report on Other Legal and regulatory Requirements" of our report of even date.)

1. In respect of Fixed Assets :

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

b. As per the information and explanations given to us, the management at reasonable intervals during the year in accordance with a programme of physical verification physically verified the fixed assets and no material discrepancies were noticed on such verification as compared to the available records.

c. In our opinion, the Company has not disposed off any major / substantial part of the fixed assets during the year and the going concern status of the company is not affected.

2. In respect of its Inventories :

a. The inventory other than the inventory of work in process has been physically verified during the year by the management. We have been informed that looking at the manufacturing process, it is not possible to physically verify the inventory of work in process. In our opinion, the frequency of verification is reasonable.

b. The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. On the basis of our examination of the records of inventory, we are of opinion that the Company is maintaining proper records of inventory. The discrepancies noticed if any on verification between the physical stocks and books records were not material.

3. In respect of loans, secured or unsecured, granted or taken by the company to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

a. During the year under audit, the company has not granted any loans, secured or unsecured, to the companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956 hence clause 4 (iii) (a), (iii) (b), (iii) (c) and (iii)

(d) of the Companies (Auditor''s Report) Order, 2003 are not applicable.

b. There are 7 parties covered in the register maintained under section 301 of the Companies Act, 1956 from whom the company has taken loans. The maximum amount involved during the year was '' 83,940,000/- and the year-end balance of loans taken from such parties was '' 81,555,000/-.

c. In our opinion and according to the information and explanations given to us, in case of loans taken during the year, the rates of interest, wherever applicable and other terms and conditions are not prima facie prejudicial to the interest of the company.

d. In respect of loans taken by the company, the company has taken interest free loans and in case of principal, the terms of repayment have not been stipulated hence the question of regularity of payment of interest and principal does not arise.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

5. In respect of contracts or arrangements covered under Section 301 of the Companies Act, 1956:

a. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the contracts or arrangements that need to be entered into the register maintained under section 301 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under section 301 in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6 The company has not accepted any deposits from public.

7 In our Opinion, the Company has internal audit system commensurate with size and nature of its business.

8 We have been informed that duing the year under review the company has not made any manufacturing activity, hence company is not required to maintain the records pursuant to the companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956.

9 In respect of Statutory Dues:

a. According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including wealth tax, excise duty, cess and other statutory dues applicable to it with the appropriate authorities although there has been delay in depositing Service Tax, Provident fund, Gujarat Value Added Tax, Central Sales Tax, Professional Tax, Tax deducted at source and Tax Collected at Source.

b. According to the information and explanations given to us Wealth Tax of '' 5,00,000/-, Investor Education & Protection Fund of '' 2,85,041/-, Tax deducted at Source of '' 14,498/-, Gujarat Value Added Tax of3,353/- and Professional Tax of '' 93,930/- are due for a period more than six months from the date they became payable and have not been deposited till balance sheet date, except that no undisputed amounts payable in respect of Excise duty, Service Tax, Central Sales Tax & Tax Collected at Source for a period of more than six months from the date they became payable.

c. On the basis of our examination of the records, following disputed statutory dues have not been deposited with the appropriate authorities;

Name of the Statute Nature of the Dues Financial Year

The Income Tax Act, 1961 Income Tax& Interest 2000-2001 2003-2004

The Income Tax Act, 1961 Interest on Income Tax 2001-02

The Central Excise and Excise Duty and Penalty 2005-06 Customs Act

The Central Excise and Excise Duty and Penalty 2006-2007 Customs Act & 2007-2008

The Central Excise and Excise Duty and Penalty 2003-2004 Customs Act 2004-2005 2006-2007

The Gujarat Value Added Interest & Penalty on 2006-07 Tax Act,2003 Value Added Tax

Service Tax Act Service Tax and Penalty 2007-08

The Textile Committee Textile Cess 1995 to 2005 Amendment Act, 1973



Name of the Amount Forum where dispute is pending Statue (In Rs.)

The Income Tax Act, 1961 1,33,650 Commissioner of Income Tax, Appeals 11,050

The Income Tax Act, 1961 2,72,135 The Income Tax Appellate Tribunal

The Central Excise and Customs Act 1,46,479 Assistant Commissioner of Central Excise & Customs

The Central Excise and Customs Act 19,59,742 Commissioner of Excise and Customs (Appeals)

The Central Excise and Customs Act 32,30,731 Custom Excise and Service Tax

33,98,641 Appellate Tribunal

12,59,207

The Gujarat Value Added Tax Act,2003 2,69,152 Joint Commissioner Appeals

Service Tax Act 18,53,152 Commissioner of Service Tax (Appeals)

The Textile Committee Amendment Act, 1973 50,90,119 Textiles Committee, Government of India, Ministry of Textiles

10 The accumulated losses of the company at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash loss during the year under audit and in the immediately preceding financial year.

11 In our Opinion and according to the information and explanations given to us, there was a delay for more than 92 days in repayment of principal of Rs 50,00,000/- to Bank. Further the company has defaulted in repayment of principal of Rs.586,244,098/- and in repayment of interest of Rs.209,249,633/- till balance sheet date.

12 Based on our examination of documents and records and information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13 The provisions of any special statute applicable to Chit Fund, Nidhi or Mutual benefit Fund/Societies are not applicable to the Company. Therefore, clause 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the company.

14 The Company is not dealing or trading in shares, securities, debentures or other investments and hence, the requirements of Para 4 (xiv) are not applicable to the Company.

15 As per the information provided to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16 The company has not obtained any term loans from banks or financial institutions during the year under audit.

17 According to the information and explanations given to us and on the basis of an overall examination of the balance sheet of the company, in our opinion funds amounting to Rs.476,474,011/- raised for short term basis have been used for long term purpose.

18 During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19 During the year, the company has not issued any debentures.

20 During the year, the Company has not raised any money by way of Public issues.

21 Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For, J. T. Shah & Co.

Chartered Accountants, [FRN No. 109616W]

[J. T. Shah]

Place : Ahmedabad Partner

Date : 30/05/2014 [M. No. 3983]

---

Mar 31, 2013

1. Report on the Financial Statements

We have audited the attached Balance Sheet of GSL-NOVA PETROCHEMICALS LIMITED which comprise the balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year ended on the date annexed thereto (together read as financial Statements). These financial statements are the responsibility of the Company''s Management. Our responsibility is to express an opinion on these financial statements based on audit.

2. Management''s responsibility for the Financial Statements .

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4. Basis for Qualified Opinion

i. The accounts of the Company have been prepared on a going concern basis, though the company has Stopped its manufacturing activities since September 2012 and entire net woth of the company has been eroded. The Financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liability that may be necessary if the Company is unable to continue as a going concern.

ii. Trade Receivable, Other Advances, Deposit and Trade Payables are subject to confirmation and adjustment if any.

iii. Compound interest. Penal interest and liquidated damages in respect of all borrowings have not been provided, amount of which is unascertainable, pending confirmations / reconciliation (Refer to Note No.4.6).

iv. The Company has unilaterally written off certain disputed creditors of Rs 98,287,146/-. As a result of the same Trade Payables would have been higher and balance in Statement of Profit and Loss would have been lower by Rs. 98,287,146/-.

Without considering items mentioned at para (i) to (iii) of para 4 above, the effect of which could not be determined, had the observations made by us in para (vi) of para 4 above been considered, Exceptional Item would have been Rs.16,920,220/- (as against the reported figure of f115,207,366/-), Trade payable would have been Rs 187,914,385/- (as against the reported figure ofRs 89,627,239/ -)

5. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) in the case of the Statement of Profit and Loss, of the profit/ toss for the year; ended on that date ; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

6. Report on Other Legal and Regulatory Requirements

i As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

ii As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion proper books of account as required by law have been kept, by the Company so far as appears from our examination of those books;

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

d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(Referred to in paragraph 1 of "Report on Other Legal and regulatory Requirements" of our report of even date.)

1. In respect of Fixed Assets :

a. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets on the basis of available information.

b. As per the information and explanations given to us, the management at reasonable intervals during the year in accordance with a programme of physical verification physically verified the fixed assets and no material discrepancies were noticed on such verification as compared to the available records.

c. In our opinion, the Company has not disposed off any major / substantial part of the fixed assets during the year and the going concern status of the company is not affected. .

2. In respect of its Inventories :

a. The inventory other than the inventory of work in process has been physically verified during the year by the management. We have been informed that looking at the manufacturing process, it is not possible to physically verify the inventory of work in process. In our opinion, the frequency of verification is reasonable.

b. The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. On the basis of our examination of the records of inventory, we are of opinion that the Company is maintaining proper records of inventory. The discrepancies noticed if any on verification between the physical stocks and books records were not material.

3. In respect of loans, secured or unsecured, granted or taken by the company to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

a. During the year under audit, the company has not granted any loans, secured or unsecured, to the companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956 hence clause 4 (iii) (a), (iii) (b), (iii) (c) and (iii)

(d) of the Companies (Auditor''s Report) Order, 2003 are not applicable.

b. There are 8 parties covered in the register maintained under section 301 of the Companies Act, 1956 from whom the company has taken loans. The maximum amount involved during the year was Rs. 64,563,000/- and the year-end balance of loans taken from such parties was Rs. 61,663,000/-. ,

c. In our opinion and according to the information and explanations given to us, in case of loans taken during the year, the rates of interest, wherever applicable and other terms and conditions are not prima facie prejudicial to the interest of the company.

d. In respect of loans taken by the company, the company has taken interest free loans and in case of principal, the terms of repayment have not been stipulated hence the question of regularity of payment of interest and principal does not arise.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

5. In respect of contracts or arrangements covered under Section 301 of the Companies Act, 1956:

a. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the contracts or arrangements that need to be entered into the register maintained under section 301 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under section 301 in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6 The company has not accepted any deposits from public.

7 In our Opinion, the Company has internal audit system commensurate with size and nature of its business.

8 We have broadly reviewed the books of account maintained by the company pursuant to the companies (Cost Accounting Records) Rule,2011 prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prime facie the prescribed accounts and records have been maintained. However, we have, however not made a detailed examination of the cost records with a view to determine whether they are accurate or complete

9 In respect of Statutory Dues:

a. According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including wealth tax, custom duty, Provident fund, excise duty, cess and other statutory dues applicable to it with the appropriate authorities all though there has been delay in depositing Service Tax, Gujarat Value Added Tax, Central Sales Tax, Professional Tax, Tax deducted at source and Tax Collected at Source.

b. According to the information and explanations given to us Wealth Tax of f 5,00,000/-, Investor Education & Protection Fund of f 2,85,041/-, Tax deducted at Source of f 4,74,149-/, Tax Collected at Source of Rs.22,404/-, Service tax of Rs 218,144/-, Provident Fund of Rs.251,511/- and Professional Tax of Rs.122,770/- are due for a period more than six months from the date they became payable and have not been deposited till balance sheet date, except that no undisputed amounts payable in respect of Gujarat Value Added Tax, Central Sales Tax, Customs Duty and Excise Duty were outstanding as at 31st March, 2013 for a period of more than six months from the date they became payable.

c. On the basis of our examination of the records, following disputed statutory dues have not been deposited with the appropriate authorities;

Name of the Statute Nature of the Dues Period Amount Forum where dispute is pending (inRs.)

The Income Tax Act, 1961 Income Tax& Interest 2000-2001 4,83,400 Commissioner of Income Tax, Appeals

2003-2004 11,050

The Income Tax Act, 1961 Interest on Income Tax 2001-02 2,72,135 The Income Tax Appellate Tribunal

The Central Excise and Excise Duty and Penalty 2005-06 1,46,479 Assistant Commissioner of Central Customs Act Excise & Customs

The Central Excise and Excise Duty and Penalty 2006-2007 19,59,742 Commissioner of Excise and Customs

Customs Act & 2007-2008 (Appeals)

The Central Excise and Excise Duty and Penalty 2001-2002 16,85,00,816 Custom Excise and Service Tax

Customs Act . 2003-2004 32,30,731 Appellate Tribunal

2004-2005 37,17,000 2006-2007 12,59,207

The Gujarat Value Added Interest & Penalty on 2006-07 2,69,152 Joint Commissioner Appeals Tax Act,2003 Value Added Tax

Service Tax Act Service Tax and Penalty 2007-08 18,53,152 Commissioner of Service Tax (Appeals)

The Textile Committee Textile Cess 1995 to 2005 50,90,119 Textiles Committee, Government of

Amendment Act, 1973 India, Minis try of Textiles

10 The accumulated losses of the company at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash loss during the year under audit and in the immediately preceding financial year.

11 In our Opinion and according to the information and explanations given to us, there was a delay up to 92 days in repayment of principal of Rs.3,484,000/- and a delay up to 92 days in repayment of interest of Rs.2,214,945/- to various banks. Further the company has defaulted in repayment of principal of Rs.613,542,597/- and in repayment of interest of Rs.119,444,856/- till date of this report.

12 Based on our examination of documents and records and information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13 The provisions of any special statute applicable to Chit Fund, Nidhi or Mutual benefit Fund/Societies are not applicable to the Company. Therefore, clause 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the company.

14 The Company is not dealing or trading in shares, securities, debentures or other investments and hence, the requirements of Para 4 (xiv) are not applicable to the Company.

15 As per the information provided to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions. 16 The company has not obtained any term loans from banks or financial institutions during the year under audit.

17 According to the information and explanations given to us and on the basis of an overall examination of the balance sheet of the company, in our opinion funds amounting to 7405,640,998''/- raised for short term basis have been used for long term purpose.

18 During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19 During the year, the company has not issued any debentures.

20 During the year, the Company has not raised any money by way of Public issues.

21 Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For, J. T. Shah & Co.

Chartered Accountants,

[FRN No. 109616W]

[J. T. Shah]

Place : Ahmedabad Partner

Date : 30/05/2013 [M. No. 3983]

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of GSL NOVA PETROCHEMICALS LIMITED as at 31st March 2012, Statement of Profit and Loss and also Cash Flow Statement for the year ended on that date annexed thereto (together read as financial statements). These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Company Law Board in terms of section 227 (4 A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(i) We have obtained all the information and explanations, which are to the best of our knowledge and belief, were necessary for the purpose of our audit;

(ii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub section (3C) of section 211 of the Companies Act, 1956;

(v) On the basis of written representation received from the directors, as on 31st March, 2012 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2012, from being appointed as director of the company in terms of clause (g) of subsection (1) of section 274 of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

(ii) In the case of the Statement of Profit and Loss, the Loss of the Company for the year ended on that date; and

(iii) In the case of the Cash Flow Statement, of the Cash Flow of the Company for the year ended on that date.

For, J. T. SHAH & COMPANY Chartered Accountants

(FRN No. 109616W)

(J.T. Shah)

Place: Ahmedabad Partner

Date:31st August, 2012 [M. No. 3983]

reirgcnemicais bra.

ANNEXURE TO THE AUDITORS REPORT

Referred to in paragraph 3 of our Report of even date to the Members of GSL NOVA PETROCHEMICALS LIMITED for the year ended 31st March, 2012.

1. In respect of Fixed Assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets on the basis of available information.

b. As per the information and explanations given to us, the management at reasonable intervals during the year in accordance with a programme of physical verification physically verified the fixed assets and no material discrepancies were noticed on such verification as compared to the available records.

c. In our opinion, the Company has not disposed off any major / substantial part of the fixed assets during the year and the going concern status of the company is not affected.

2. In respect of its Inventories:

a. The inventory other than the inventory of work in process has been physically verified during the year by the management. We have been informed that looking at the manufacturing process, it is not possible to physically verify the inventory of work in process. In our opinion, the frequency of verification is reasonable.

b. The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. On the basis of our examination of the records of inventory, we are of opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and books records were not material.

3. In respect of loans, secured or unsecured, granted or taken by the company to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

a. During the year under audit, the company has not granted any loans, secured or unsecured, to the companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956 hence clause 4 (iii) (a), (iii) (b), (iii) (c) and (iii) (d) of the Companies (Auditor's Report) Order, 2003 are not applicable.

b. There are 7 parties covered in the register maintained under section 301 of the Companies Act, 1956 from whom the company has taken loans. The maximum amount involved during the year was Rs 6,44,35,000/- and the year-end balance of loans taken from such parties was Rs 5,74,35,000/-.

c. In our opinion and according to the information and explanations given to us, in case of loans taken during the year, the rates of interest, wherever applicable and other terms and conditions are not prima facie prejudicial to the interest of the company.

d. In respect of loans taken by the company, the company has taken interest free loans and in case of principal, the terms of repayment have not been stipulated hence the question of regularity of payment of interest and principal does not arise.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

5. In respect of contracts or arrangements covered under Section 301 of the Companies Act, 1956:

a. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the contracts or arrangements that need to be entered into the register maintained under section 301 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under section 301 in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The company has not accepted any deposits from public.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8. We have broadly reviewed the books of account maintained by the company pursuant to the companies (Cost Accounting Records) Rule,2011 prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prime facie the prescribed accounts and records have been maintained. However, we have, however not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. In respect of Statutory Dues:

a. According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including income tax, wealth tax, custom duty, Provident fund, excise duty, cess and other statutory dues applicable to it with the appropriate authorities all though there has been delay in depositing Service Tax, Gujarat Value Added Tax, Central Sales Tax, Professional Tax, Tax deducted at source and Tax Collected at Source. According to the information and explanations given to us, Wealth Tax of Rs 5,00,000/-, Investor Education & Protection Fund oft 2,85,041/-, Tax deducted at Source oft 14,480/- and Value Added Tax of Rs 3,61,254/- have not been deposited till balance sheet date , except that no undisputed amounts payable in respect of Income Tax, Service Tax, Customs Duty, and Excise Duty were outstanding as at 31st March, 2012 for a period of more than six months from the date they became payable.

10. The accumulated losses of the company at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash loss during the year under audit, however the company has not incurred cash loss in the immediately preceding financial year.

11. In our Opinion and according to the information and explanations given to us, there was a delay upto 152 days in repayment of principal of Rs.2,41,25,266/- and a delay upto 110 days in repayment of interest of Rs.2,07,15,333/- to various banks. Further the company has defaulted in repayment of principal of Rs.2,64,00,275/- and in repayment of interest of Rs.2,38,43,913/- till date of this report.

12. Based on our examination of documents and records and information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to Chit Fund, Nidhi or Mutual benefit Fund/Societies are not applicable to the Company. Therefore, clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 is not applicable to the company.

14. The Company is not dealing or trading in shares, securities, debentures or other investments and hence, the requirements of Para 4 (xiv) are not applicable to the Company.

15. As per the information provided to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. The company has not obtained any term loans from banks or financial institutions during the year under audit.

17. According to the information and explanations given to us and on the basis of an overall examination of the balance sheet of the company, in our opinion funds amounting to Rs.30,92,80,924/- raised for short term basis have been used for long term purpose.

18. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. During the year, the company has not issued any debentures.

20. During the year, the Company has not raised any money by way of Public issues.

21. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For, J. T. SHAH & COMPANY Chartered Accountants (FRN No. 109616W)

(J.T. Shah)

Place: Ahmedabad Partner

Date:31st August, 2012 [M. No. 3983]

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Mar 31, 2010

1. We have audited the attached Balance Sheet of GSL-NOVA PETROCHEMICALS LIMITED as at 31st March 2010, the Profit and Loss Account and also Cash Flow Statement for the year ended on that date annexed thereto (together read as financial statements). These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Company Law Board in terms of section 227 (4 A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(i) We have obtained all the information and explanations, which are to the best of our knowledge and belief, were necessary for the purpose of our audit;

(ii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub section (3C) of section 211 of the Companies Act, 1956;

(v) On the basis of written representation received from the directors, as on 31st March, 2010 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2010, from being appointed as director of the company in terms of clause (g) of subsection (1) of section 274 of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

(ii) In the case of the Profit and Loss Account, of the Loss of the Company for the year ended on that date; and

(iii) In the case of the Cash Flow Statement, of the Cash Flow of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

Referred to in paragraph 3 of our Report of even date to the Members of GSL-NOVA PETROCHEMICALS LIMITED for the year ended 31st March, 2010.

1. In respect of Fixed Assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets on the basis of available information.

b. As per the information and explanations given to us, the management at reasonable intervals during the year in accordance with a programme of physical verification physically verified the fixed assets and no material discrepancies were noticed on such verification as compared to the available records.

c. In our opinion, the Company has not disposed off any major / substantial part of the fixed assets during the year and the going concern status of the company is not affected.

2. In respect of its Inventories:

a. The inventory other than the inventory of work in process has been physically verified during the year by the management. We have been informed that looking at the manufacturing process, it is not possible to physically verify the inventory of work in process. In our opinion, the frequency of verification is reasonable.

b. The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. On the basis of our examination of the records of inventory, we are of opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and books records were not material.

3. In respect of loans, secured or unsecured, granted or taken by the company to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

a. There is 1 party covered in the register maintained under section 301 of the Companies Act, 1956 to whom the company has granted loans/advances. The maximum amount involved during the year was Rs. 18.13 Lacs and the year-end balance of loans taken from such parties was Rs. Nil Lacs.

b. In our opinion and according to the information and explanations given to us, in case of loans/advances granted during the year, the rates of interest, wherever applicable and other terms and conditions are not prima facie prejudicial to the interest of the company.

c. In respect of loans/advances granted by the company, the company has granted interest free loans and in case of principal, the terms of repayment have not been stipulated hence the question of regularity of payment of interest and principal does not arise.

d. There are 4 parties covered in the register maintained under section 301 of the Companies Act, 1956 from whom the company has taken loans. The maximum amount involved during the year was Rs. 577.98 Lacs and the year-end balance of loans taken from such parties was Rs. 442.30 Lacs.

e. In our opinion and according to the information and explanations given to us, in case of loans taken during the year, the rates of interest, wherever applicable and other terms and conditions are not prima facie prejudicial to the interest of the company.

f. In respect of loans taken by the company, the company has taken interest free loans and in case of principal, the terms of repayment have not been stipulated hence the question of regularity of payment of interest and principal does not arise.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

5. In respect of contracts or arrangements covered under Section 301 of the Companies Act, 1956:

a. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the contracts or arrangements that need to be entered into the register maintained under section 301 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under section 301 in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The company has not accepted any deposits from public.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the said records with a view to determine whether they are accurate or complete.

9. In respect of Statutory Dues:

a. According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including custom duty, excise duty, cess and other statutory dues applicable to it with the appropriate authorities all though there has been delay in depositing Service Tax, Gujarat Value Added Tax, Central Sales Tax, Provident fund, Professional Tax, Income tax deducted at source and Tax Collected at Source. According to the information and explanations given to us, Wealth Tax of Rs. 5 Lacs, Investor Education & Protection Fund of Rs.2.85 Lacs and Tax deducted at Source of Rs.0.14 Lacs have not been deposited till balance sheet date except that no undisputed amounts payable in respect of Income Tax, Service Tax, Customs Duty, Value Added Tax, and Excise Duty were outstanding as at 31st March, 2010 for a period of more than six months from the date they became payable.

b. On the basis of our examination of the records, following disputed statutory dues have not been deposited with the appropriate authorities;



Name of the Statute Nature of the Dues Period Amount Forum where disputeIs pending (Rs. In Lacs)

The Income Tax Act, 1961 Income Tax & Interest 1998 to 2001 34.29 Commissioner of Income Tax, Appeals

The Income Tax Act, 1961 Interest on Income Tax 2001-02 2.72 The Income Tax Appellate Tribunal

The Central Excise and Excise Duty and Penalty 2001-2002 2508.96 Custom Excise and Service Tax Customs Act to 2006-07 Appellate Tribunal

The Central Excise and Excise Duty and Penalty 2006-07, 2007-08 197.50 Commissioner of Excise and Customs Customs Act & 2009-10 (Appeals)

The Central Excise and Excise Duty and Penalty 2005-06 1.46 Assistant Commissioner of Excise and Customs Customs Act

Service Tax Act Service Tax and Penalty 2006-07 29.39 Commissioner of Service (Appeals) & 2007-08

The Textile Committee Textile Cess 1995 to 2005 50.90 Textiles Committee, Government of Amendment Act, 1973 India, Ministry of Textiles

10. The accumulated losses of the company at the end of the financial year are not more than fifty percent of its net worth. The Company has not incurred cash loss during the year under audit and in the immediately preceding financial year.

11. In our Opinion and according to the information and explanations given to us, there was a delay ranging upto 15 days in repayment of principal of Rs.59.36 Lacs and a delay ranging up to 67 days in repayment of interest of Rs.280.82 Lacs.

12. Based on our examination of documents and records and information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to Chit Fund, Nidhi or Mutual benefit Fund/Societies are not applicable to the Company. Therefore, clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 is not applicable to the company.

14. The Company is not dealing or trading in shares, securities, debentures or other investments and hence, the requirements of Para 4 (xiv) are not applicable to the Company.

15. As per the information provided to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. The company has not obtained any term loans from banks or financial institutions during the year under audit.

17. According to the information and explanations given to us and on the basis of an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long term purpose.

18. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. During the year, the company has not issued any debentures.

20. During the year, the Company has not raised any money by way of Public issues.

21. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.



For, J. T. SHAH & COMPANY

Chartered Accountants

(FRN No. 109616W)

(J.T. Shah)

Place: Ahmedabad Partner

Date:13th November,2010 [M. No. 3983]