We have audited the attached Balance sheet of M/s. Hydro S&S Industries
Limited as at 31 st March 2012, the Statement of profit and loss 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.
We conducted our audit in accordance with 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.
1) As required by the Companies (Auditor''s Report) Order, 2003 issued
by the Central Government in terms of Section 224(4A) 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 to the extent
applicable to the company.
2) Further to our comments in the Annexure referred to in the paragraph
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
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
c) The Balance sheet, Statement of profit and loss and the Cash flow
statement dealt with by this report are in agreement with the books of
d) In our opinion, the Balance sheet, Statement of profit and loss and
the 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, as they apply to the company.
e) On the basis of written representations received from the directors
as at 31 st March, 2012 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March
2012 from being appointed as a director in terms of section 274 (1)(g)
of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, they 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 31 st March, 2012;
ii. in the case of the Statement of profit and loss, of the profit of
the company for the financial year ended on that date; and
iii. in the case of the Cash flow statement, of the cash flows for the
financial year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE REPORT OF EVEN DATE:
i) a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
b) These fixed assets have been physically verified by the management
at the end of the financial year, 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) In our opinion, the fixed assets disposed off during the year, do
not constitute a substantial part of the fixed assets of the company
and such disposal has not affected the going concern status of the
ii) a) As explained to us, the inventories held by the Company were
physically verified during the year by the management
at reasonable intervals.
b) In our opinion and according to the information and explanations
given to us, 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) In our opinion and according to the information and explanations
given to us, the company is maintaining proper records of its
inventories and no material discrepancies were noticed on physical
iii) a) The Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
u/s 301 of the Act.
b) The company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained
u/s 301 of the Act.
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 purchase of inventory and fixed assets and
for the sale of goods and services. Further on the basis of our
examination of the books and records of the Company, there is no
continuing failure to correct major weaknesses in the aforesaid
internal control system of the company.
v) a) The entries relating to particulars of contracts or arrangements
referred to in section 301 of the Act have been made in the register
required to be maintained under that section; and
b) In our opinion and to the best of our knowledge and belief, wherever
applicable the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
vi) The Company has not accepted any deposits from the public during
the year to which the directives issued by the Reserve Bank of India
and the provisions of sections 58 A and 58 AA or any other relevant
provisions of the Act and the rules framed there under are applicable.
vii) In our opinion, the company has an internal audit system
commensurate with its size and nature of its business.
viii) As explained 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.
ix) According to the records of the Company,
(a) the Company is regular in depositing undisputed statutory dues
including provident fund, investor education and protection fund,
employee''s state insurance, income tax, sales tax, wealth tax,
service tax, customs duty, excise duties and cess and any other
statutory dues applicable to it, with the appropriate authorities
during the year.
b) there are no dues of income tax, sales tax, wealth tax, service tax,
customs duty, excise duty and cess which have not been deposited on
account of any dispute except the following pending in appeals:
(i) Income tax of Rs. 16.94 lakhs before the First Appellate Authority
(ii) Customs duty of Rs. 26.78 lakhs pending before the First Appellate
(iii) Service tax pending before the appellate authorities as under:
a. First Appellate Authority Rs. 10.16 lakhs and
b. Second Appellate Authority Rs. 2.42 lakhs
x) The Company did not have accumulated losses at the end of the
financial year i.e. 31.03.2012. The Company did not incur cash loss in
this financial year and in the preceding financial year ended
xi) On the basis of records produced, the Company has not defaulted in
repayment of the dues to any financial institution or bank during the
xii) As per the records maintained, no loans or advances have been
granted by the Company on the basis of security by way of pledge of
shares, debentures and other securities.
xiii) The provisions of Special statute applicable to chit, nidhi,
mutual fund / societies are not applicable to the Company.
xiv) On the basis of records maintained and in our opinion, the Company
does not deal or trade in shares, securities, debentures and other
xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
xvi) As per the information and explanations given to us, term loans
have been applied for the purpose for which these term loans were
xvii) In our opinion, based on the information and explanations given
to us and on an overall examination of the books and records of the
company, the funds raised on short term basis prima facie have not been
used for long term investments. No long term funds have been used to
finance short-term assets.
xviii)The company has not made any preferential allotment of shares
during the financial year to any party.
xix) The company has not issued any debentures during the financial
xx) The company has not raised any money by public issues during the
xxi) On the basis of the audit procedures carried out and information
and explanations given by the management, we state that no fraud on or
by the Company has been noticed or reported during the course of our
For M/s. P. SRINIVASAN & Co.
Place : Chennai CA. P. SRINIVASAN
Date : 4th June, 2012 Partner
Membership No. : 2090