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Indu Nissan Oxo Chemicals Industries Ltd.

BSE: 500208 Sector: Industrials
NSE: INDUNISSAN ISIN Code: INE599C01019
BSE 05:30 | 01 Jan Indu Nissan Oxo Chemicals Industries Ltd
NSE 05:30 | 01 Jan Indu Nissan Oxo Chemicals Industries Ltd

Indu Nissan Oxo Chemicals Industries Ltd. (INDUNISSAN) - Auditors Report

Company auditors report

To

The Members

Indu Nissan Oxo Chemicals Industries Limited

We have audited the accompanying financial statements of

Indu Nissan Oxo Chemicals Industries Limitedwhich comprise of theBalance Sheet as at March 31 2018 and the Statement of Profit and Loss and CashFlow Statement of the Company for the year ended on that date annexed thereto and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters statedin Section 134 (5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone Ind AS financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these 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 there under. We conductedour audit in accordance with the Standards on Auditing specified under Section 143(10) ofthe Act. Those Standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the Ind AS financialstatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and disclosures in the Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Ind AS financial statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theCompany's preparation of the Ind AS financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by Company's Directors as well as evaluating the overallpresentation of the Ind AS financial statements.

We believe that the audit evidence we have sought and obtained issufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

(a) Attention is invited to sub-note No. 2 (d) of Note No. 37. TheCompany has defaulted in redemption of Debentures which fell due on the 10th of July1998 aggregating to Rs.550.18 Lac and the amount of interest including penal interestcalculated at simple interests accrued as of 31st March 2013 is Rs.1422.04 Lac of whichthe Company has unilaterally written back interest element of RS. 1334.01 Lac mentioningthat it is in process of negotiating with debenture holders as to the repayment of duesand the Company does not anticipate any interest payment and the same has been treated bythe Company as other revenues. The Company has reached to settlement with the debentureholders . The debenture holders have agreed to settle the amount payable

@ 30% of principal amount outstanding subject to certain terms andconditions. The Company is in process of liquidating some of its assets and pay off thedebenture holders. In case the Company is not able to pay the settled amount withinstipulated period the settlement may be cancelled by the debenture holders. The Companyhad approached BIFR for the permission to sell the assets and had got the permission. TheCompany liquidated the assets and has been trying to pay off the debenture holders andhence has written back the balance amount not payable to capital reserve. The Companyfollowing to settlement does not anticipate additional interest liability as demanded bythe debenture holders due to which Company has not provided interest for the current yearas well as company has written back the interest of RS.133401338 provided in the earlieryears. Since then the BIFR has been dissolved. The powers of BIFR are now vested with NCLTfor which the Company can make an application. We are unable to form our opinion on thisas the entire matter is contingent and subject to approval of BIFR and now NCLT subjectto the application being made and admitted for sale of assets and further the Companyis able to sell the assets post such approval in open market and fetch necessaryamount to pay off the debenture holders but for which entire settlement may getcancelled.

(b) Attention is invited to sub-note No. 6 of Note No. 37 -Other Notesto Accounts regarding confirmation of account of various parties the balances have beentaken as per books of account. We in the absence of confirmations are unable toascertain the nature of adjustments that may be required in respect of various accountsand the resultant effects thereof on the accounts.

(c) Attention is invited to sub-note no. 2 (a) of Note No.

37 - Other Notes to Accounts. In respect of Inter Corporate Depositsreceived from Himalaya Machinery Limited the Company had based on legal opinion writtenback interest amounting to Rs. 23.43 Lac during the financial year ended 31st March 2002.Further the Company has not provided any interest for the period 1.10.2000 to 31.03.2018the interest of which works out to Rs. 203.43Lac calculated at simple rests @ 27%.Including current year's interest of Rs. 11.64 Lac.

(d) Provision for Gratuity payable to employees has been made onlyup to 31st March 2006 based on management estimates. Provision for gratuity andretirement benefits for the current year has not been made. In the absence of anyactuarial valuation we are unable to quantify the impact of the same on the Statement ofProfit and Loss. This practice of the Company is not in conformity with the Ind AS –19.

Attention is invited to subnote no. 2 (h) of Note No. 37 as regards thedecision of hon'ble Labour Court directing the Company to pay a sum of RS. 1299.61 Lactowards labor payments. The Company has filed miscellaneous application before the hon'bleCourt for review instead of filing further appeal. Meanwhile the Company has been able toreach to settelement with few of the employees and has paid agreed amount of gratuity tothese employees as per settlement arrived. To that extent the Company may have lowerliability subject to hon'ble Court's directions. Considering the significance of amountwe are not able to form our opinion in this regard.

(e) Attention is invited to sub-note no. 2 (b) of Note No.

37 of Other Notes to Accounts. Based on management's perception theCompany had written back Interest accrued on Working Capital Loans amounting to Rs 493 Lacduring preceding financial years. We are informed that the management is in negotiationwith the bankers as regards repayment of the working capital loans at a reduced principalamount and no interest. However no finality has been reached as to reduced payment ofloan or for that matter non payment of interest. No provision for interest payable onthis account is made during the year which the Company otherwise used to provide everyyear amounting to Rs. 52.98 Lac up to March 31 2010 on an estimated basis. This year noamount has been quantified by the management as not provided. During immediately precedingprevious year the Company had paid Rs. 500000 as advance against this account to ARCILwhich were shown as reduction in loan amount and the final amount was shown at Rs.12066944. However the Company has not been able to reach the settlement and deposit ofRs. 500000 has been refunded to the Company.During the year company has paidRs.5000000 as advance against this account to ARCIL which is shown as reduction in loanamount and the final amount is shown at Rs.7566944.In absence of any supportingevidence available or for that matter any confirmation from the bankers we are unable toexpress our opinion on this item;

(f) Attention is invited to Note no. 23 (d) of Notes to Accounts. Basedon management's perception the Company has not provided for interest on term loan payableto Kotak Mahindra Bank. We are explained by the management that it is in negotiation withthe bankers as regards repayment of the term loan at a reduced amount than what has beenstanding to the credit of bankers although no tangible and Convincing correspondence wasmade available to us. No finality has been reached as to reduced payment of loan as statedabove. No provision for interest payable on this account is made during the year whichthe Company otherwise used to provide every year amounting to Rs. 112.88 Lac up to March31 2011 on an estimated basis. This apart interest provided uptill earlier years isshown as payable unlike writing back the same in lines with other bank and debentures.

This year no amount has been quantified by the management as notprovided. In absence of any supporting evidence available or for that matter anyconfirmation from the bankers we are unable to express our opinion on this item;

(g) in absence of confirmations from creditors especially securedcreditors we are unable to opine on the outstanding balances shown in accounts includinginterest provided and payable thereon.

(h) Accounts of the Company are prepared on Going Concern basisalthough entire net worth is eroded and there are no material business activities carriedout by the Company. The Management was hopeful of revival of the Company with the help ofBIFR. However considerable period has elapsed after approaching BIFR which has nowceased and the Company not making fresh application to NCLT for revival we are unable tostate whether the Company remains a going concern;

(j) the combined effect of the above qualifications over financialresults is not determinable in view of absence of relevant components and information fromthe management.

Qualified Opinion

In our opinion and to the best of our information and according to theexplanations given to us except for the effects of the matter described in the Basis forQualified Opinion paragraph the 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:

(i) in case of the Balance Sheet of the state of affairs of theCompany as at 31st March 2018;

(ii) in case of Statement of Profit and Loss of the Loss of theCompany for the year ended on that date.

(iii) in case of cash flow statement of cash flow of the Company forthe year ended on that date.

Emphasis of Matter

(a) Attention is invited to sub-note no. 2 (c) of Note No.

37 - Other Notes to Accounts. The Custom department had imposed penaltyof Rs.1000 Lac on the Company which was disputed by the Company. On appeal before CESTATthe said penalty was reduced to Rs. 700 Lac vide order dated March 31 2011 SubsequentlyCESTAT removed the penalty levied by the department. At Present department is in appealbefore Hone'ble High Court of Gujarat and hence no provision for this liability is made inthe accounts contending this being contingent liability. Our opinion is not qualified inrespect of this matter.

(b) Attention is invited to sub-note no. 2 (e) of Note No.

37 - Other Notes to Accounts. Amount receivable from RSEB (RajasthanState Electricity Board) in respect of Assets given on Lease is shown at Rs.412.19 Lacagainst security deposit received from RSEB of Rs.653.09 Lac. We have been informed thatCompany has filed a suit against RSEB before Rajasthan High Court for the recovery ofRs.964.92 Lac inclusive of interest @ 20% after making adjustment of DPA (Deferred PaymentAgreement) decision of which remains pending. Our opinion is not qualified in respect ofthis matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in the Annexure A a statement on the mattersspecified in the paragraph 3 and 4 of the order

2. As required by Section143 (3) of the Act we report that:

(a) we have sought and obtained all the information and explanation exceptmentioned earlier in this report more particularly confirmations from lenders andcreditors including the secured lenders / creditors which to the best of ourknowledge and belief were necessary for the purpose of our audit;

(b) in our opinion proper books of account except fixed asset andstock registers as required by law have been kept by the Company so far as appears fromour examination of those books;

(c) the Balance Sheet Statement of Profit and Loss and Cash flowStatement dealt with by this Report are in agreement with the books of account;

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

(e) The Company has defaulted in redemption of Debentures which felldue on the 10th of July 1998 aggregating to Rs.550.18 Lac and the amount of interestincluding penal interest calculated at simple rests accrued as of 31st March 2013 isRs.1422.04 Lac (of which the Company had unilaterally written back interest element of RS.1334.01 Lac in the year ended 31st March 2013 and no provision is made for the yearending 31st March 2015) thereby the directors of the Company are disqualified frombeingappointed as director under sub section 2 of section 164 of the Companies Act 2013(although the Company has reached to settlement with debenture holders no payment hasactually been made as stated in Basis for Qualified Opinion)

(f) with respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate report in "Annexure B"; and

(g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. We are informed that the Company has pending litigations asdescribed in accounts and our report which are likely to impact its financial position;

ii. The Company has made provisions as required under the applicablelaw or accounting standard for material foreseeable losses if any on long-termcontracts including derivative contracts.

iii. There has been delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

FOR SHAH SHAH & SHAH CHARTERED ACCOUNTANTS

(Mehul Shah)

PARTNER

Mumbai : May 30 2018 M. No. : 049361 FRN : 116457W

ANNEXURE "A" REFERRED TO IN REPORT ON OTHER

LEGAL AND REGULATORY REQUIREMENTS OF

OUR REPORT OF EVEN DATE

IN CASE OF Indu Nissan Oxo Chemical Industries Limited

(i) (a) The Company has not maintained proper records showing fullparticulars of including quantitative details and situation of fixed assets since thesame is not updated.

(b) As plant of the Company is not in operation the Company has notcarried out physical verification of the assets at periodic intervals. In respect ofassets given on lease no confirmation from the lessee has been produced before usstating that the assets leased under the agreements are existing but owing to disputewith the lessee the same cannot be confirmed. The Company has written off some nonexisting assets during preceding years based on perception of the management.

(c) As per records presented before us the title deeds of immovableproperties are held in the name of the Company.

(ii) (a) Since the company does not have any inventory the sub-clausedealing with physical verification is not applicable.

(iii) The Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013.

(a) Since no loans are granted the sub-clause dealing with terms andconditions being prejudicial to the companies Interest in not applicable.

(b) Since no loans are granted the sub-clause dealing with rate ofinterest and other terms and conditions of loans given by the company are not applicable.

(c) Since no loans are granted the sub-clause dealing with overdueamount more than ninety days and reasonable steps taken by the Company for recovery ofthe principal and interest is not applicable.

(iv) As per records maintained and explanation given to us the Companyhas not granted Loans to directors and other parties listed under section 185 of theCompanies Act 2013 or for that matter given loans and made investments or given guaranteesand securities in excess of limits prescribed by section 186 of the Companies Act 2013.

(v) The Company has not accepted any deposits from public within themeaning of the provisions of section 73 or any other provisions of the Companies Act 2013and the rules made there under. We have been informed by the management that there hasbeen no order passed by the Company law Board or National Company Law Tribunal or ReserveBank of India or any Court or any other Tribunal on the Company with respect to complianceof the provisions of section 73 or any other provisions of the Companies Act 2013.

The Company has defaulted in repayment of debentures as mentioned inour report earlier.

(vi) We have been informed by the management that the CentralGovernment has not prescribed the method of maintenance of cost records u/s. 148 (1) ofthe Companies Act 2013 in relation to the Company.

(vii) (a) The Company has defaulted in payment of undisputed statutorydues as given below. The extent of arrears of Statutory Dues outstanding exclusive ofinterest that may be charged by the Revenue Authorities (after adjusting pre-paid taxes)for more than six months as on the year end is as follows:

Nature of

Amount (Rs)

Statutory Dues

(in lacs)

Investor Education and Protection Fund

16.26

Income Tax

119.47

Bajwa Gram Panchayat

13.86

The Company has not been collecting and paying employees professiontax. Similarly Company's own profession tax has also not been paid. Similarly theCompany has not provided for Service Tax payable under Reverse Charge mechanism ondirectors' sitting fees. The amount of arrears and default has not been quantified by theManagement.

The Company has requested the Income-tax Department to adjust refundsof subsequent years against outstanding dues of earlier years for which we are informedno communication is received from the Income-tax Department except with respect toAssessment Year 1995-96 where the demand is adjusted against refund of Assessment Year2010-11.

In the case of Income tax deducted at source the Company has deductedtax on payment basis whereas provisions of chapter VXII-B of the Income-tax Act 1961require deduction of tax on payment or credit in the books of account whichever isearlier. Details of payments wherein tax should have been deducted on credit basis are notavailable. Hence we are unable to state the exact amount of the defaulted tax deducted atsource liability. The above mentioned amount is tax deducted at source on payments madebut not deposited with the Central government. Rent paid in Court as described in Sub Noteno. 2 (j) of Note No. 37 the Company has not made TDS stating that the same is merely adeposit with hon'ble Court as per directions.

(b) As per information and explanation given to us the following aredetails of disputed statutory dues that has not been paid to the concerned authorities.

Name of the Statutory Dues Forum where dispute is pending

Period to which the amount relates

Unpaid Amount

(RS. in Lacs)

1 Custom Duty Gujarat High Court

1995-96

700

2 Excise Penalty CES Appellate Tribunal

2004-05 to 2007-08

0.41

2 Income tax Penalty ITAT-Ahmedabad

2007-08

18.01

4 Income tax Quantum ITAT-Ahmedabad

2007-08

Nil Because of Brought forward loss

6 Income tax Penalty ITAT-Ahmedabad

2006-07

45.72

(viii) (a)The Company has defaulted in redemption of Debentures whichfell due on the 10th of July 1998 aggregating to Rs.550.18 Lac and the amount of interestincluding penal interest calculated at simple interests accrued as of 31st March 2013 isRs.1422.04 Lac of which the Company has unilaterally written back interest element of RS.1334.01 Lac mentioning that it is in process of negotiating with debenture holders as tothe repayment of dues and the Company does not anticipate any interest payment and thesame has been treated by the Company as other revenues. The Company has reached tosettlement with the debenture holders. The debenture holders have agreed to settle theamount payable @30% of principal amount outstanding subject to certain terms andconditions. The Company is in process of liquidating some of its assets and pay off thedebenture holders. In case the Company is not able to pay the settled amount withinstipulated period the settlement may be cancelled by the debenture holders. The Companyhad approached BIFR for the permission to sell the assets and had got the permission. TheCompany liquidated the assets and has been trying to pay off the debenture holders andhence has written back the balance amount not payable to capital reserve. The Companyfollowing to settlement does not anticipate additional interest liability as demanded bythe debenture holders due to which Company has not provided interest for the current yearas well as company has written back the interest of RS. 133401338 provided in theearlier years. Since then the BIFR has been dissolved. The powers of BIFR are now vestedwith NCLT for which the Company can make an application. We are unable to form our opinionon this as the entire matter is contingent and subject to approval of BIFR and now NCLTsubject to the application being made and admitted for sale of assets and further theCompany is able to sell the assets post such approval in open market and fetch necessaryamount to pay off the debenture holders but for which entire settlement may getcancelled.

(b) In respect of term loans from financial institution the Companyhas defaulted in repayment of their dues.

Following table brings out the amount of default and the period fromwhich default is made:

Term
Loans from Finanacial

Principal (Rs.Lacs)

Interest (Rs.Lacs)

Total (Rs.Lacs)

Default commencing from

Interest

Total)

Total)

Principal

Interest

Institutions
1 Kotak Mahindra Bank (taken over from IDBI Bank)

261.3

1447.44

1708.74

31-Mar-08

30-Sep-08

TOTAL

261.3

1447.44

1708.74

As stated in our report the Company has not provided for interestpayable on above loan during the current year. The figure of default in interest excludesinterest not provided during the current year in absence of any confirmation from the bankto this effect.

Cash

Principal

Interest

Total

Default commencing from

Credits from Banks

(Rs. in Lacs)

(Rs. in Lacs)

(Rs. in Lacs)

Principal

Interest

1 ARCIL (UBI)

125.67

Nil

125.67

30-Sep-98

30-Sep-98

TOTAL

125.67

Nil

125.67

In case of ARCIL interest outstanding is indicated as zero in view ofwrite back of interest payable during earlier years. During the year company has paidRs.5000000 as advance against this account to ARCIL which is shown as reduction in loanamount and the final amount is shown at Rs.7566944.In absence of any supportingevidence available or for that matter any confirmation from the bankers we are unable toexpress our opinion on this item;

(ix) We have been informed by the management that no money was raisedby way of Initial Public offer or Further Public offer( including Debt instrument) and incase of term Loans the amount was applied for the purpose for which they are taken.

(x) As informed by the management there has not been noticed orreported any fraud on or by the Company or its officers or employees during the year.

(xi) During the year the Company has not paid managerial remuneration.In view of this the clause requiring reporting on managerial remuneration being paid orprovided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Companies Act is not applicable.

(xii) Since the Company is not a Nidhi Company the provisions of thisclause are not applicable to the Company.

(xiii) In our view and as per the explanation given to us by themanagement transactions with the related parties are in compliance with section 177 and188 of the Companies Act 2013 wherever applicable and details have been disclosed in theFinancial statements as required by the applicable accounting standard.

(xiv) we have been informed by the management that Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year under review.

(xv) As per the explanation given to us by the management and as perrecords maintained the Company has not entered into any non-cash transactions withdirectors or any persons connected with him as prescribed by section 192 of the CompaniesAct 2013.

(xvi) In our view the Company has not carried out any activities innature of activities carried out by non banking financial companies and thus is notrequired to get registered under section 45-IA of the Reserve Bank of India Act 1934.

FOR SHAH SHAH & SHAH CHARTERED ACCOUNTANTS

(Mehul Shah) PARTNER M. No. 049361 FRN: 116457W

MUMBAI : May 30 2018

ANNEXURE "B:" REFERRED TO IN REPORT ON OTHER

LEGAL AND REGULATORY REQUIREMENTS OF OUR

REPORT OF EVEN DATE

IN CASE OF Indu Nissan Oxo Chemical Industries Limited

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of Indu Nissan Oxo Chemicals Industries Limited ("the Company")as of 31 March 2018 in conjunction with our audit of the standalone financial statementsof the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India(‘ICAI'). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanations given to us and based onour audit the following material weaknesses have been identified as at March 31 2018:

1. The Company does not have Internal audit function being carried outfollowing to financial health although it is under legal obligation to do so.

2. As stated in our Audit Report many creditors secured andunsecured are subject to confirmation and reconciliation. The secured lenders have notgiven their account confirmations which involve significant amount payable. Under thesecircumstances in our view there remains a material weakness in internal financial controlover financial reporting.

3. The Company has not properly maintained fixed assets and inventoryRegisters / Records. We are informed that these assets are not physically verified by themanagement on a regular / periodical intervals. In view of this the objective ofsafeguarding of assets in our view is not met adequately.

A ‘material weakness' is a deficiency or a combination ofdeficiencies in internal financial control over financial reporting such that there is areasonable possibility that a material misstatement of the company's annual or interimfinancial statements will not be prevented or detected on a timely basis.

In our opinion except for the effects / possible effects of thematerial weaknesses described above on the achievement of the objectives of the controlcriteria the Company has maintained in all material respects adequate internalfinancial controls over financial reporting and such internal financial controls overfinancial reporting were operating effectively as of March 31 2017 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

We have considered the material weaknesses identified and reportedabove in determining the nature timing and extent of audit tests applied in our audit ofthe March 31 2017 standalone financial statements of the Company and these materialweaknesses do not affect our opinion on the standalone financial statements of theCompany.

FOR SHAH SHAH & SHAH CHARTERED ACCOUNTANTS

(Mehul Shah) PARTNER

Mumbai : May 30 2018 M. No. 049361 FRN: 116457W

Independent Auditors' Report On Quarterly Financial Results and Year toDate Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015

To

The Board of Directors

Indu Nissan Oxo Chemical Industries Limited

We have audited the quarterly Standalone Ind AS financial results of INDUNISSAN OXO CHEMICAL INDUSTRIES LIMITED (‘the Company') for the quarter ended March31 2018 and the year to date standalone financial results for the period from April1 2017 to March 312018 attached herewith being submitted by the Companypursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.These quarterly as well as year to datefinancial results have been prepared on the basis of the Standalone Ind AS FinancialStatements which are the responsibility of the company's management. Our responsibilityis to express an opinion on these financial results based on our audit of such standaloneInd AS financial statements which have been prepared in accordance with the recognitionand measurement principles laid down in Indian Accounting Standard 34 "InterimFinancial Reporting" prescribed under section 133 of the Companies Act 2013 readwith relevant rules issued thereunder; or by the Institute of Chartered Accountants ofIndia as applicable and other accounting principles generally accepted in India.

We conducted our audit in accordance with the auditing standardsgenerally accepted in India.Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial results are free of materialmisstatement(s). An audit includes examining on a test basis evidence supporting theamounts disclosed as financial results. An audit also includes assessing the accountingprinciples used and significant estimates made by management. We believe that our auditprovides a reasonable basis for our opinion.

In our opinion and to the best of our information and according to theexplanations given to us these quarterly financial results as well as the year to dateresults:

(i) are presented in accordance with the requirements of Regulation 33of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and SEBICircular No.CIR/ CFD/FAC/62/2016 dated 5th July 2016 in this regard; and

(ii) give a true and fair view of the net loss and totalcomprehensive income and other financial information for the quarter ended March 312018 as well as the year to date results for the period from April 1 2017 to March31 2018.

FOR SHAH SHAH & SHAH CHARTERED ACCOUNTANTS

(Mehul Shah) PARTNER

Mumbai : May 30 2018 M. No. 049361 FRN: 116457W