Home  »  Company  »  Hind. Dorr Olive  »  Quotes  »  Auditor Report
Enter the first few characters of Company and click 'Go'

Auditor Report of Hindustan Dorr-Oliver Ltd.

Mar 31, 2015

We have audited the accompanying Standalone financial statements of HINDUSTAN DORR-OLIVER LIMITED ( "the Company "), which comprise the Balance sheet as at March 31, 2015, the Statement of profit and loss, the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ( "the Act ") with respect to the preparation and presentation of these standalone 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 principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

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

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

Basis for Qualified Opinion

We refer to:

1. Note 31 to the financial statement wherein the accumulated losses of the Company as at March 31, 2015 amounting to T 9410.61 million have exceeded its net worth. The Company has obligations towards borrowings aggregating to Rs. 8,455.76 million, which include working capital loan and outstanding letters of credit/bill discounting from banks. The Company has obligations pertaining to operations including unpaid creditors and statutory dues. These matters require the Company to generate additional cash flows to fund the operations as well as other statutory obligations notwithstanding the current level of low operating activities. This indicates the existence of a material uncertainty that may cast significant doubt on the Company's ability to continue as going concern and therefore the Company may be unable to realize its assets and discharge its liabilities in the normal course of business. The financial statement does not include any adjustment in this respect.

2. Note 32 to the financial statement regarding investments in its Indian subsidiary having book value aggregating to Rs. 1,538 million as at March 31, 2015, which have been carried at fair value. In absence of valuation of investments in the subsidiary, we are unable to comment whether any provision for diminution in the value of investment is required.

3. Note 35 to the financial statement wherein the Management of the Company has considered Trade Receivables and other receivable amounting to Rs.534.93 million in respect of certain projects, as good and fully recoverable. In view of non-availability of alternate audit evidence to corroborate management's assessment of recoverability of these balances and having regard to the age of these balances, we are unable to comment the extent to which these balances are recoverable.

4. Note 36 to the financial statement regarding Unbilled Revenue of Rs.839.60 million in respect of certain projects where progress is insignificant during the year and the billing is pending for a longer period have been considered good and fully recoverable. In view of non-billing after a considerable period of time, we are unable to comment the extent to which these amounts will be billed and recoverable.

5. Note 34 to the financial statement, in respect of trade receivables, mobilization advances, retention money, trade payables and certain bank balances, external confirmations of the balances are not available. Due to non-availability of confirmation of balances, we are unable to quantify the impact, if any, arising from the confirmation of balances.

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 matters 3 and 4 and possible effects of the matters 1,2 and 5 described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone 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, of the state of affairs of the Company as at March 31, 2015 and its loss and its cash flows for the year ended on that date.

Emphasis of Matters

Attention is invited to:

1. Note 38 to the financial statement in respect of pending winding up petitions against the Company before the Hon'ble High Court of Mumbai. The matter is subjudice and outcome of which is subject to the Company fulfilling its obligations.

2. Note 44.3 to the financial statement regarding managerial remuneration paid to the executive director aggregating to Rs.0.11 million is in excess of the prescribed limits specified under schedule XIII of the companies Act, 1956 and is subject to the central government approval.

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ( "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 statement on the matters specified in the paragraph 3 and 4 of the Order.

2. As required by section 143 (3) of the Act, we report that:

a. We have sought and except for the effect of the matters described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. Except for the effect of the matters described in the Basis for Qualified Opinion paragraph, 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, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account.

d. Except for the effect of the matters described in the Basis for Qualified Opinion paragraph, in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. On the basis of the written representations received from the directors as on March 31, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act;

f. The matter described in the Basis of Qualified opinion and para 1 under Emphasis of Matters paragraph above, in our opinion, may have an adverse impact on the functioning of the Company.

g. The Qualification relating to the maintenance of accounts and other matters connected therewith are stated in the basis for qualified opinion paragraph and under the annexure referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements.

h. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the companies (Audit and Auditors) Rules, 2014 in our opinion and to the best of our information and according to the explanations given to us;

i. The company has disclosed the impact of pending litigation on its financial position in its financial statement as referred in Note 30 and Note 38.

ii. Except for the effect/possible effect of matters described in the basis of qualified opinion paragraph, the company has made provision under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts, including derivative contract.

iii. There has been delay of 285 days in transferring of Rs. 0.01 million to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS ' REPORT

(Refer to in paragraph 1 of report on other legal and regulatory requirements of our report of even date)

i. a. The Company has maintained records showing particulars including quantitative details and situation of fixed assets except description of assets and current location as mentioned in paragraph 1(b) below.

b. Fixed assets were not physically verified by the management during the year. Hence, in absence of physical verification report, we are unable to comment on the actual status and financial implication of the fixed assets owned by the company.

ii. a. The Company did not have any inventory as at the year-end therefore no physical verification of inventory was carried out.

b. The procedures of physical verification of inventories followed by the management are not adequate in relation to the size of the company and the nature of its business. The physical verification of inventories has not been carried out at reasonable intervals. In our opinion the system need to be strengthened to be commensurate with the size of the Company and the nature of its business.

c. The Company is not maintaining proper records of inventory. The system and maintenance of records needs to be strengthened to make them proper and facilitate reconciliation of quantity and value thereof.

iii. a. The Company had, in an earlier year, granted interest free loans and advances to one of its wholly own subsidiary company. The maximum amount involved during the year and year-end balance was Rs.1,472.37 million.

b. According to the information and explanations given to us the interest free loans and advances given to the subsidiaries was towards investment in the subsidiaries. Accordingly we are unable to comment over the repayment of principal and interest.

c. In view of para iii.b above and non-availability of relevant records we are unable to comment whether the company has taken reasonable steps to recover the principal.

iv. In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the sale of goods and services. However, the internal control system for estimation of project costs and percentage completion in respect of projects in progress is inadequate, since the cost estimates are not updated on a periodic basis. Internal control system with regard to purchase of inventory and fixed assets needs to be further strengthened. Except this, during the course of our audit, we have neither observed nor have been informed of any continuing failure to correct major weaknesses in internal control system of the Company.

v According to the information and explanations given to us, the Company has not accepted any deposit as per the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed there under. No order against the Company has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vi. We have broadly reviewed the cost records maintained by the Company pursuant to the Section 148 (1) (d) of the Companies Act, 2013 and are of opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

vii. a. Undisputed statutory dues such as provident fund, income-tax, sales-tax, wealth tax, works contract tax, service tax, custom duty, excise duty, investor education and protection fund, cess and other statutory dues have not been regularly deposited with the appropriate authorities as there have been significant delays in a large number of cases. Further, there were no undisputed amounts payable in respect of wealth tax, custom duty and excise duty except in respect of effect of pending reconciliation of service tax pending from previous years, the effect of which cannot be ascertained, and income tax and sales tax which are in arrears as at March 31, 2015 for a period of more than six months from the date they became payable. The details of such arrears in respect of sales tax and income tax are set out in Appendix I to this Report.

b. According to information and explanations given to us, there are no dues of income-tax, sales tax, wealth tax, service tax, customs duty, excise duty or cess or any other statutory dues which have not been deposited on account of any dispute except those mentioned in Appendix II to this Report.

c. There has been delay of 285 days in transferring of Rs. 0.01 million to the Investor Education and Protection Fund by the Company.

viii. Without considering the consequential effects, if any, of the matter(s) stated in Basis of Qualified opinion paragraph of our auditors' report, the accumulated losses of the company at the end of the financial year are more than fifty percent of its net worth. Further, the Company has incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

ix. According to the information and explanations given to us, the Company has defaulted in repayment of dues to banks. The particulars are as stated in Appendix III to this report. The Company have not issued any debenture during the year.

x According to the information and explanations given to us, the Company has given corporate guarantee for loan taken by its wholly owned subsidiary Company from banks. The terms and conditions thereof are not prejudicial to the interest of the Company.

xi. In our opinion and according to the information and explanations given to us, the Company did not raised any term loans during the year.

xii. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For CHATURVEDI & PARTNERS Chartered Accountants Firm Registration Number: 307068E

R N CHATURVEDI Hyderabad Partner May 30, 2015 Membership No. 092087


Mar 31, 2014

We have audited the attached Balance Sheet of Hindustan Dorr Oliver Limited (''the Company'') which comprise the Balance sheet as at March 31, 2014, and the Statement of Profit and Loss and also the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

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 positions, financial performance and Cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (" the Act") read with the General Circular 15/2013 dated September 13, 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 are free from material misstatement, whether due to fraud or error.

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 issues by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirement 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 disclosure in the financial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risk 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, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. 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 qualified audit opinion.

Basis for qualified opinion

We refer to:

a. Note 32 to the financial statement regarding preparation of financial statements of the Company on going concern basis for the reasons stated therein. The accumulated losses of the Company as at March 31, 2014 have eroded its net worth. The appropriateness of assumption of going concern is dependent upon improvement of the Company''s future operations and ability to raise requisite finance/generate cash flows in future to meet its obligations, including financial support to its subsidiaries.

b. Note 33 regarding further investments of Rs 237.50 million in its Indian subsidiary having book value aggregating to Rs 1,538 million as at March 31, 2014, which were carried at fair value. In absence of valuation of investments in the subsidiary, we are unable to comment whether any provision for diminution in the value of investment is required.

c. Note 34 regarding investments in its foreign subsidiary and loans and advances receivable from such subsidiary aggregating to Rs 1,495.88 million, whose accumulated losses exceeded their consolidated net worth and the financial statements have been prepared on going concern basis, considered good by the management for the reasons stated therein. In absence of audit evidence to corrobarate management''s assessment, we are unable to comment the extent to which these are recoverable.

d. Note 35 of the financial statements wherein deferred tax assets on business losses aggregating to Rs 1089.37 million has been recognized on the basis of business plan prepared by the management. The management believes that sufficient future taxable income will be available against which such deferred tax assets will be realised. In absence of virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which the deferred tax assets can be realized, we are unable to comment the extent to which such deferred tax assets can be realized.

e. Note 37 of the financial statements wherein the management of the company has considered trade receivables and other receivables amounting to Rs 515.30 million in respect of certain projects, as good and fully recoverable. In view of non availability of alternate audit evidence to corroborate management''s assessment of recoverability of these balances and having regard to the age of these balances, we are unable to comment the extent to which these balances are recoverable.

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 matters described in the basis for qualified opinion paragraph above, the financial statements 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 March 31, 2014;

ii. in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

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

Emphasis of Matters Attention is invited to:

a. Note 36 of the financial statements, in respect of trade receivables, mobilization advances, retention money, trade payables and certain bank balances, external confirmations of the balances are not available. Due to non availability of confirmation of balances, we are unable to quantify the impact, if any, arising from the confirmation of balances.

b. Note 38 regarding Unbilled Revenue of Rs 461 million in respect of certain projects where progress is insignificant during the year and the billing is pending for a period of more than two years have been considered good and fully recoverable. In view of non-billing after a considerable period of time, we are unable to comment the extent to which these amounts will be billed and recoverable.

c. Note 41 in respect of pending winding up petitions against the Company before the Hon''ble High Court of Bombay. The matter is subjudice and outcome of which is subject to the Company fulfilling the payment conditions of Memorandum of Understanding/ Consent Terms. d. Note 46.3 regarding managerial remuneration paid to the executive director aggregating to Rs 0.11 million is in excess of the prescribed limits specified under schedule XIII of the companies Act, 1956 and is subject to the central government approval.

Our opinion is not qualified in respect of these matters.

Report on other legal and regulatory requirements:

1. 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 Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the order.

2. As Required by Section 227 (3) of the Companies Act, 1956, 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 purposes 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 effect of the matters 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 September 13, 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, we report that 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 REFERRED TO IN PARAGRAPH ONE OF REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS OF OUR REPORT OF EVEN DATE

i. a. The Company has maintained records showing particulars including quantitative details and situation of fixed assets except description of assets and current location as mentioned in paragraph 1(b) below.

b. Fixed assets were physically verified by the management during the year in accordance with a program of verification which, in our opinion is reasonable having regard to the size of the Company and the nature of its assets. However, Pending completion of reconciliation with the financial books of accounts which is reportedly under progress, discrepancies, if any, cannot be ascertained.

c. No fixed assets were disposed off during the year.

ii. a. The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b. The procedures of physical verification of inventories followed by the management, needs to be further strengthened, to be commensurate with the size of the Company and the nature of its business.

c. The Company is maintaining proper records of inventory, however the system needs to be further strengthened to facilitate timely reconciliation of quantity and value thereof. The discrepancies noticed on verification between the physical stocks and the book records were not material and the same have been properly dealt with in the books of account.

iii. a. During the year, the Company has granted interest free loans and advances to two of its wholly own subsidiary companies. The maximum amount involved during the year was Rs 1,503.12 million and year end balance of the loan was Rs 1,472.37 million.

b. According to the information and explanations given to us and having regard to the explanation that the interest free loans and advances given to the subsidiaries are towards investment in the subsidiaries, we are unable to comment whether the terms and conditions of the interest free loan and advances given to wholly owned foreign subsidiary are, prima facie, prejudicial to the interest of the Company.

c. According to the information and explanations given to us and in absence of any stipulation for repayment or otherwise of the loans and advances given to the wholly owned subsidiaries, we are unable to comment on the repayment, overdue or otherwise of the loans and advances.

d. According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of the clause 4(iii)(e), (iii)(f) and (iii)(g) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

iv In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the sale of goods and services. However, the internal control system for estimation of project costs and percentage completion in respect of projects in progress is inadequate, since the cost estimates are not updated on a periodic basis. Internal control system with regard to purchase of inventory and fixed assets needs to be further strengthened. Except this, during the course of our audit, we have neither observed nor have been informed of any continuing failure to correct major weaknesses in internal control system of the Company.

v a. In our opinion and according to the information and explanations given to us, we are of the opinion that particulars of contracts or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 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 register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except for certain transactions for which comparable quotations are not available and in respect of which we are unable to comment.

vi. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under with regard to the deposits accepted from the public in earlier years and remained unclaimed as at year end. However, the Company has not accepted any deposit from the public during the year under audit.

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

viii. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, 1956 and are of opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

ix. a. Undisputed statutory dues such as income-tax, sales-tax, wealth tax, works contract tax, service tax, custom duty, excise duty, investor education and protection fund and cess have not been regularly deposited with the appropriate authorities and there have been significant delays in a large number of cases. The Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including provident fund, employees'' state insurance and any other statutory dues applicable to it.

b. there were no undisputed amounts payable in respect of wealth tax, service tax, custom duty and excise duty except in respect of effect of pending reconciliation of service tax related to earlier years, income tax and sales tax which in arrears as at March 31, 2014 for a period of more than six months from the date they became payable. The details of such delay in respect of income tax and sale tax are set out in Appendix I to this report:

c. According to information and explanations given to us, there are no dues of income-tax, sales tax, wealth tax, service tax, customs duty, excise duty or cess or any other statutory dues which have not been deposited on account of any dispute except those mentioned in Appendix II to this report:

x In our opinion, the accumulated losses of the Company are more than 50 percent of its net worth. Further, the Company has incurred cash losses during the financial year covered by our audit, and the immediately preceeding financial year.

xi. According to the information and explanations given to us, except for the dues stated in Appendix III to this report, the Company has not defaulted in repayment of dues to financial institution or bank or debenture holder.

xii. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

xiv According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

xv. According to the information and explanations given to us, the Company has given corporate guarantee for loan taken by its wholly owned subsidiary company from bank. The terms and conditions thereof are not prejudicial to the interest of the Company.

xvi. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were raised.

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that funds raised on short-term basis aggregating to Rs 3,854.96 million (excluding current maturities of Rs 736.24 million) have been used for long term purposes (i.e. non-current assets).

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

xix. The Company has not issued any debentures during the year. Accordingly, the provisions of clause 4 (xix) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

xx The Company has not raised money through public issue of shares. Accordingly, the provisions of clause 4 (xx) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

FOR CHATURVEDI & PARTNERS

Chartered Accountants Firm Registration Number:307068E

R. N. CHATURVEDI Hyderabad Partner May 29, 2014 Membership No. 092087


Mar 31, 2013

Report on the Financial Statements

We have audited the attached Balance Sheet of HINDUSTAN DORR-OLIVER LIMITED (''the Company'') which comprise the Balance sheet as at March 31, 2013, and the Statement of Profit and Loss and also the Cash Flow Statement for the nine months period then ended, and a summary of significant accounting policies and other explanatory information.

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 positions, 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 are free from material misstatement, whether due to fraud or error.

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 requirement 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 disclosure in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risk 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 qualified audit opinion.

Basis for qualified opinion

We refer to note 13 of the financial statements wherein deferred tax assets on business losses aggregating to T730.28 million has been recognized on the basis of future business plan. The management is confident that sufficient future taxable income will be available against which such deferred tax assets will be realised. In absence of virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which the deferred tax assets can be realized, we are unable to form comment on the extent to which such deferred tax assets can be realized.

Qualified opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects to the matters described in the basis for qualified opinion paragraph above, the financial statements 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 March 31, 2013,

ii. in the case of the Statement of Profit and Loss, of the loss for the period ended on that date; and

iii. in the case of the Cash Flow Statement, of the cash flows for the period ended on that date.

Emphasis of Matter

Attention is invited to note 32 to the financial statement whereby the accumulated losses of the Company as at March 31, 2013 have substantially eroded its free reserves. The ability of the Company to continue as a going concern is predominantly dependent on the improvement of the Company''s future operations. The Company is confident of implementing its business plan and improvement of the future operations. In view of this, the financial statements have been prepared on the basis that the Company is a going concern.

Attention is invited to note 33 regarding investments in foreign Subsidiary and loans and advances receivable from such subsidiary aggregating to T 1246.18 million, whose accumulated losses exceeded their consolidated net worth and the financial statements have been prepared on going concern basis, considered good for the reasons stated therein.

Our opinion is not qualified in respect of this matter.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditors Report) Order, 2003 ("the order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the order.

2. As Required by Section 227 (3) of the Companies Act 1956, we report that:

a. Except for the effect of the matters described in the basis for qualified opinion paragraph, we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

b. In our opinion, proper books of account as required by law have been kept by 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 effect of the matters described in the basis for qualified opinion paragraph, 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;

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, we report that 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;

ANNEXURE REFERRED TO THE INDEPENDENT AUDITORS'' REPORT

i. a. The Company has maintained records showing particulars including quantitative details and situation of fixed assets.

b. Fixed assets were physically verified by the management during the year in accordance with a programme of verification which, in our opinion is reasonable having regard to the size of the Compny and the nature of its assets. However, pending completion of reconciliation with the financial books of accounts which is reportedly under progress, discrepancies, if any, cannot be ascertained.

c. Fixed assets disposed off during the period were not substantial and therefore do not affect the going concern status of the Company.

ii. a. The inventory has been physically verified during the period by the management. In our opinion, the frequency of verification is reasonable.

b. The procedures of physical verification of inventories followed by the management, needs to be strengthened, to be adequate in relation to the size of the Company and the nature of its business.

c. The Company is maintaining proper records of inventory, However the system needs to be further strengthened to facilitate timely reconciliation of quantity and value thereof. The discrepancies noticed on verification between the physical stocks and the book records were not material and the same have been properly dealt with in the books of account.

iii. a. The Company had granted interest free loan to its wholly owned subsidiary Company. The maximum amount involved during the year was ì 1,232.42 million and year end balance of the loan was ì 1,172.67 million.

b. According to the information and explanations given to us and having regard to the explanation that the interest free loans and advances given to the subsidiary is towards investment in the subsidiary, we are unable to comment whether the terms and conditions of the interest free loans and advances given to wholly owned foreign subsidiary are, prima facie, prejudical to the interest of the Company.

c. According to the information and explanations given to us and in absence of any stipulation for repayment or otherwise of the loans and advances given to the wholly owned subsidiary, we are unable to comment on the repayment or otherwise of the loans and advances.

d. According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of the clause 4(iii) (e), (iii)(f) and (iii)(g) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the sale of goods and services. However, the internal control system for estimation of project costs and percentage completion in respect of projects in progress is inadequate, since the cost estimates are not updated on a periodic basis. Further internal control system with regard to purchase of inventory needs to be strengthened. During the course of our audit, we have neither observed nor have been informed of any continuing failure to correct major weaknesses in internal control system of the Company.

v a. In our opinion and according to the information and explanations given to us, we are of the opinion that particulars of contracts or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 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 register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except for certain transactions for which comparable quotations are not available and in respect of which we are unable to comment.

vi. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under with regard to the deposits accepted from the public in earlier years and remained unclaimed as at the year end. However, the Company has not accepted any deposit from the public during the year under audit.

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

viii. In our opinion and according to the information and explanations given to us, the management is in the process of compiling and maintaining the cost records of the Company pursuant to the rules made by the Central Government under Section 209 (1) (d) of the Companies Act, 1956.

ix. a. Undisputed statutory dues such as income-tax, sales-tax, wealth tax, works contract tax, service tax, custom duty, excise duty, and cess have not been regularly deposited with the appropriate authorities and there have been significant delays in a large number of cases. The Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, any other statutory dues applicable to it.

b. there were no undisputed amounts payable in respect of income-tax, wealth tax, service tax, custom duty and excise duty except in respect of sales tax which in arrears as at March 31, 2013 for a period of more than six months from the date they became payable. The details of such delay are given below:

Nature of the Statute Nature of dues Amount (Rs.in million) Due Date Date of payment

Sales tax and VAT Laws Works contract tax 4.89 April 2012 Not Paid

0.95 May 2012 Not Paid

0.87 June 2012 Not Paid

2.50 July 2012 Not Paid

1.50 August 2012 Not Paid

3.05 October 2012 Not Paid

Sales tax/VAT 5.37 July 2012 Not Paid

0.40 August 2012 Not Paid

0.56 September 2012 Not Paid

0.16 October 2012 Not Paid

20.25

c. According to information and explanations given to us, there are no dues of income-tax, sales tax, wealth tax, service tax, customs duty, excise duty or cess or any other statutory dues which have not been deposited on account of any dispute excepting those mentioned hereunder:

S. No Name of the Statute Nature of Dues Amount (Rs.in Million)

1 Custom Act, 1962 Custom Duty 0.08

2 Central Sales Tax Act, 1956 and Sales Tax/ WCT/ VAT 4.90 Sales Tax Act of Various States 14.33

21.50

18.65

3.59

Name Period Forum where dispute to which the is pending amount relates

Custom Act, 1962 1992-93 The collector of customs (Judicial), Mumbai

Central Sales Tax Act, 1956 1999-2000 to A.C. (Appeal) 2002-03 and 2007-08

1984-85, D.C. (Appeal)

1992-93 to 2002-03 and 2006-07

2008-09 D.C. (Enforcement)

2002-03 to J. C. (Appeal) 2004-05

1987-88 to Tribunal 1993-94

S. No Name of the Statute Nature of Dues Amount (Rs.in Million)

0.24

17.91

18.21

0.34

8.21

3 The Finance Act, 1994 Service Tax 360.94

4 The Income Tax Act, 1961 Income Tax 18.08

2.57

3.19

Name Period Forum where dispute to which the is pending amount relates

1995-96 Sales Tax Officer

1988-89, High Court 1995-96 and 2007-08 2008-2009 D.C. (APPEALS)

2008-2009 COMMERCIAL TAX OFFICER, HYDERABAD

2009-2010 COMMERCIAL TAX OFFICER, KOLKATA

The Finance Act, 1994 2007-08 to CCE (A) 2011-12

1997-98 to ITAT 2001-02

1996-97 CIT

2000-01 and CIT (A) 2002-03

x The Company has accumulated losses at the end of the period. Further, the Company has incurred cash losses in the period covered by our audit, and has incurred cash losses during the immediately preceding financial year.

xi. According to the information and explanations given to us, the Company has defaulted in repayment of dues to banks in respect of letters of credit and vendor''s bills discounting as stated below : in respect of working capital loan from bank were in arrears as of the balance sheet date, the Company did not have any debentures outstanding during the period. Period of delay in days as at March 31, 2013 is one day.

ii. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore the provisions of clause 4 (xiii) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

xiv According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

xv According to the information and explanations given to us, the Company has given corporate guarantee for loan taken by its wholly owned subsidiary Company from bank. The terms and conditions thereof are not prejudicial to the interest of the Company.

xvi. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were raised.

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that funds raised on short-term basis aggregating to f 2944.74 million have been used for long term purposes. (i.e. non-current assets)

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

xix. The Company has not issued any debentures during the period. Accordingly, the provisions of clause 4 (xix) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company

xx. The Company has not raised money through public issue of shares. Accordingly, the provisions of clause 4 (xx) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For CHATURVEDI & PARTNERS

Chartered Accountants

Firm Registration Number:307068E

R. N. CHATURVEDI

Hyderabad Partner

May 30, 2013 Membership No.092087


Mar 31, 2011

1. We have audited the attached Balance Sheet of HINDUSTAN DORR-OLIVER LIMITED, as at March 31,2011, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. 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 the auditing standards generally accepted in India. Those 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 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 the 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 (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub- section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

a. We have obtained all the information and explanations, which to the best of our knowledge and beliefwere necessary for the purposes 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. 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 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, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

f. Attention is invited to note 12 of Schedule 20 regarding investments in Subsidiary and loans and advances outstanding from such subsidiary aggregating to Rs. 535.56 Million, whose accumulated losses exceeded the consolidated net worth of the Company and the financial statements have been prepared on going concern basis, considered good for the reasons stated therein.

g. In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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 March 31, 2011,

ii. in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

i. a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b. A major portion of the fixed assets has been physically verified by the management during the year pursuant to a programme for physical verification of fixed assets, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c. Fixed assets disposed off during the year were not substantial and therefore do not affect the going concern status of the Company.

ii. a. The inventory has been physically verified during the year by the management. 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. The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and the same have been properly dealt with in the books of account.

iii. a. The Company had granted interest free loan to its wholly owned subsidiary Company. The maximum amount involved during the year and yearend balance of the loan was Rs. 462.05 Million.

b. In our opinion, terms and conditions of the interest free loan given to wholly owned subsidiary are not, prima facie, prejudicial to the interest of the company.

c. The principal is repayable on demand.

d. There is no overdue amount in excess of Rs One lac in respect of loans granted to the subsidiary company.

e. According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of the clause 4(iii)(e), (iii)(f) and (iii)(g) of the Companies (Auditors' Report) Order, 2003 are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, there exists an adequate internal control system 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, we have neither observed nor have been informed of any continuing failure to correct major weaknesses in internal control system of the Company.

v a. In our opinion and according to the information and explanations given to us, the contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register required to be maintained under that Section have been so entered.

b. In our opinion according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lacs in respect of any party during the year have been made at prices which are reasonable with regard to the prevailing market prices at the relevant time except for certain transactions for which comparable quotations are not available and in respect of which we are unable to comment.

vi. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under with regard to the deposits accepted from the public in earlier years and remained unclaimed as at the year end. However, the Company has not accepted any deposit from the public during the year under audit.

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

viii. According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 in respect of items manufactured by the Company.

ix. a. According to the information and explanations given to us, undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues applicable to it have generally been regularly deposited with the appropriate authorities except for works contract tax where there has been slight delay in few cases.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, sales-tax, wealth tax, service tax, custom duty and excise duty were in arrear as at March 31, 2011 for a period of more than six months from the date they became payable.

c. According to information and explanations given to us, there are no dues of income-tax, sales tax, wealth tax, service tax, customs duty, excise duty or cess or any other statutory dues which have not been deposited on account of any dispute excepting those mentioned hereunder:

S. No Name of the Statute Nature of Dues Amount Period (Rs in Million) to which the amount relates

1 Custom Act, 1962 Custom Duty 0.77 1992-1993

2 Central Excise Act, 1944 Central Excise Duty 4.50 2004-05

3 Finance Act 1994 Service Tax 1.36 2006-07 5.86

4 Sales Tax Act/ Work Contract Sales Tax/ WCT/ VAT 1.60 2002-2003 Tax Act/ Value Added Tax Act 1.18 1999-2000

1.72 2000-2001

0.40 2007-2008

4.90

Sales Tax/ WCT/ VAT 1.96 1997-1998

0.64 1998-1999 5.90 2002-2003 0.05 1994-1995

0.29 1984-1985

0.02 1992-1993 1.80 2004-2005

1.00 2002-2003

0.06 1998-1999

2.56 2001-2002

2.57 2002-2003 0.18 2006-2007

17.03

Sales Tax/ WCT/ VAT 21.50 2008-2009

Sales Tax/ WCT/ VAT 4.16 2003-2004

0.18 2002-2003 0.52 2003-2004

6.27 2003-2004

1.77 2003-2004

5.75 2004-2005

18.65

Sales Tax/ WCT/ VAT 1.78 1995-1996

0.23 1988-1989 0.42 1993-1994 0.67 1987-1988 0.12 1988-1989

0.30 1989-1990

0.07 1990-1991

3.59



Sales Tax/ WCT/ VAT 0.23 1995-1996 0.19 2008-2009

0.42 Sales Tax/ WCT/ VAT 8.68 1988-89

5.43 2007-2008

14.11

5 Income Tax Act, 1961 Income Tax 0.26 1996-97 7.13 1997-98

0.20 1998-99

4.44 2001-02 3.92 1996-97

3.97 1997-98 0.96 1999-00

20.88











Name of the Statute Forum where dispute is pending

Custom Act, 1962 The collector of customs (Judicial), Mumbai

Central Excise Act, 1944 CESTAT, New Delhi

Finance Act 1994 Commissioner of Service Tax (Appeal)

Sales Tax Act/ Work Contract Tax Act/ Value Added Tax Act A.C. (Appeal) A.C. (Appeal) A.C. (Appeal) A.C. (Appeal)

D.C. (Appeal) D.C. (Appeal) D.C. (Appeal) D.C. (Appeal) D.C. (Appeal) D.C. (Appeal) D.C. (Appeal) D.C. (Appeal) D.C. (Appeal) D.C. (Appeal) D.C. (Appeal) D.C. (Appeal)

D.C .(Enforcement)

J.C. (Appeal) J.C. (Appeal) J.C. (Appeal) J.C. (Appeal) J.C. (Appeal) J.C. (Appeal)

Tribunal Tribunal Tribunal Tribunal Tribunal Tribunal Tribunal

5 Income Tax Act, 1961 Sales Tax Officer Sales Tax Officer

High Court High Court

ITAT ITAT ITAT ITAT ITAT ITAT ITAT

x The Company does not have any accumulated losses at the end of the financial year. The Company has not incurred cash losses in the financial year covered by our audit and in the immediately preceeding financial year.

xi. In our opinion and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or bank.

xii. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore the provisions of clause 4 (xiii) of the Companies (Auditors' Report) Order, 2003 are not applicable to the Company.

xiv. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors' Report) Order, 2003 are not applicable to the Company.

xv. According to the information and explanations given to us, the Company has given corporate guarantee for loan taken by its wholly owned subsidiary company from bank. The terms and conditions thereof are not prejudicial to the interest of the company.

xvi. The Company has not raised any term loan during the year. Accordingly, provisions of clause 4 (xvi) of the Companies (Auditors' Report) Order, 2003 are not applicable to the Company.

xvii. According to the information and explanations given to us and on 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 investment.

xviii.The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix. The Company has not issued any debentures during the year. Accordingly, the provisions of clause 4 (xix) of the Companies (Auditors' Report) Order, 2003 are not applicable to the Company

xx. The Company has not raised money through public issue of shares. Accordingly, the provisions of clause 4 (xx) of the Companies (Auditors' Report) Order, 2003 are not applicable to the Company.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For CHATURVEDI & PARTNERS

Chartered Accountants

Firm Registration No. 307068E

R N CHATURVEDI

Hyderabad Partner

May 28, 2011 Membership No. 092087


Mar 31, 2010

1. We have audited the attached Balance Sheet of HINDUSTAN DORR-OLIVER LIMITED, as at March 31,2010, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. 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 the auditing standards generally accepted in India. Those 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 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 the 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 Central Government of India in terms of sub- section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, 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 purposes 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. 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;

e. On the basis of written representations received from the directors, as on March 31,2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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 March 31,2010,

ii. in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

i. a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b. A major portion of the fixed assets has been physically verified by the management during the year pursuant to a programme for physical verification of fixed assets, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c. Fixed assets disposed off during the year were not substantial and therefore do not affect the going concern status of the Company.

ii. a. The inventory has been physically verified during the year by the management. 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. The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and the same have been properly dealt with in the books of account.

iii. a. The Company had granted interest free loan to its wholly owned subsidiary Company. The maximum amount involved during the year was Rs. 6887.04 lacs and year end balance of the loan was Rs. 67.67 lacs.

b. In our opinion, the rate of interest and other terms and conditions of the loan are not, prima facie, prejudicial to the interest of the company.

c. The principal has been repaid/repayable on demand. The party has been regular in payment of interest to the Company.

d. There is no overdue amount in excess of Rs one lac in respect of loans granted to the subsidiary company.

e. According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of the clause 4(iii)(e), (iii)(f) and (iii)(g) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, there exists an adequate internal control system 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, we have neither observed nor have been informed of any continuing failure to correct major weaknesses in internal control system of the Company.

v. a. In our opinion and according to the information and explanations given to us, the contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register required to be maintained under that Section 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 register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lacs in respect of any party during the year have been made at prices which are reasonable with regard to the prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under with regard to the deposits accepted from the public in earlier years and remained unclaimed as at the year end. However, the Company has not accepted any deposit from the public during the year under audit.

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

viii. According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 in respect of items manufactured by the Company.

ix. a. According to the information and explanations given to us, the Company is generally regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues applicable to it.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of income- tax, sales-tax, wealth tax, service tax, custom duty and excise duty were in arrear as at March 31, 2010 for a period of more than six months from the date they became payable.

c. According to information and explanations given to us, there are no dues of income-tax, sales tax, wealth tax, service tax, custom duty, excise duty or cess or any other statutory dues which have not been deposited on account of any dispute excepting those mentioned hereunder:

S. No Name of the Statute Nature of Dues Amount Period Forum where dispute

(Rs in lacs) to which the is pending

amount relates

1 Customs Act, 1962 Custom Duty 7.65 1992-1993 The collector of customs

(Judicial), Mumbai

2 Central Excise Act, 1944 Central Excise Duty 44.98 2004-2005 CESTAT, New Delhi

3 Service Tax Act Service Tax 13.60 2006-2007 Commissioner of Service Tax

(Appeal)

4 Sales Tax Act/Work Contract Sales Tax/ WCT/VAT 15.94 2002-2003 A.C. (Appeal) Tax Act/ Value Added Tax Act 11.76 1999-2000 A.C. (Appeal)

17.21 2000-2001 A.C. (Appeal)

Sales Tax/ WCT/VAT 19.60 1997-1998 D.C. (Appeal)

6.38 1998-1999 D.C. (Appeal)

59.03 2002-2003 D.C. (Appeal)

0.52 1994-1995 D.C. (Appeal)

2.93 1984-1985 D.C. (Appeal)

0.23 1992-1993 D.C. (Appeal)

18.00 2004-2005 D.C. (Appeal)

10.00 2002-2003 D.C. (Appeal)

0.55 1998-1999 D.C. (Appeal)

Sales Tax/ WCT/VAT 17.78 1995-1996 Tribunal

2.31 1988-1989 Tribunal

4.24 1993-1994 Tribunal

6.73 1987-1988 Tribunal

1.24 1988-1989 Tribunal

3.03 1989-1990 Tribunal

0.70 1990-1991 Tribunal

Sales Tax/ WCT/VAT 2.33 1992-1993 Sales Tax Officer

Sales Tax/ WCT/VAT 86.75 1988-89 High Court

6 Income Tax Act, 1961 Income Tax 2.61 1996-97 ITAT

71.30 1997-98 ITAT

2.05 1998-99 ITAT

44.36 2001-02 ITAT

39.23 1996-97 ITAT

39.74 1997-98 ITAT

9.55 1999-00 ITAT

7 BOCW Act, 1996 Cess 53.12 2009-10 High Court

x. The Company does not have any accumulated losses at the end of the financial year. The Company has not incurred cash losses in the financial year covered by our audit and in the immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or bank.

xii. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xiv. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xv. According to the information and explanations given to us, the Company has given corporate guarantee for loan taken by its wholly owned subsidiary company from bank. The terms and conditions thereof are not prejudicial to the interest of the company.

xvi. The Company has not raised any term loan during the year. Accordingly, provisions of clause 4 (xvi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xvii. According to the information and explanations given to us and on 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 investment.

xviii. The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix. The Company has not issued any debentures during the year. Accordingly, the provisions of clause 4 (xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company

xx. The Company has not raised money through public issue of shares. Accordingly, the provisions of clause 4 (xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For CHATURVEDI & PARTNERS

Chartered Accountants

Firm Registration No. 307068E

Hyderabad R N CHATURVEDI

May 7, 2010 Partner

Membership No. 092087

 
Subscribe now to get personal finance updates in your inbox!