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Auditor Report of Surana Telecom and Power Ltd.

Mar 31, 2018

Report on the Financial Statements

1. We have audited the accompanying Standalone Ind AS financial statements of M/s. Surana Telecom And Power Limited (“the Company”), which comprise the Balance Sheet as at 31st March, 2018, the Statement of Profit and Loss including the statement of Other Comprehensive Income, the Cash Flow Statement and the statement of change in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information

Management’s Responsibility for the Financial

Statements

2. 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 of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the companies (Indian Accounting Standards) Rule, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our 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 there under. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 Ind AS financial statements that give a true and fair view 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 the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

5. In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS 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, 2018, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Report on other Legal and Regulatory Requirements

6. 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” statement on the matters Specified in paragraphs 3 and 4 of the Order.

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

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

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

c. The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 Companies (Indian Accounting Standards) Rules, 2015, as amended;

e. on the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of Section 164(2) of the Act.

f. with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”; and

g. With respect to 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 litigations which would impact its financial position. Refer note No.36 to the financial statement.

(ii) The Company has made provision, as required under the applicable law or accounting standard, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

(iii) During the year the Company has transfer the required amount to the Investor Education and Protection Fund and there is no delay in transferring of such sum.

Other Matter

8. The comparative financial information of the Company for the year ended 31st March 2017 and the transition date opening balance sheet as at 1st April 2016 are based on previously issued statutory financial statements prepared in accordance with the companies (Accounting Standards ) Rules, 2006 audited by the predecessor auditor whose reports for the year ended 31st March 2017 and 31st March 2016, dated 18th May 2017 and 24th May 2016 respectively expressed an unmodified opinion on those statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.

Our opinion is not qualified in respect of these matters.

Annexure-A’ referred to in Independent Auditors’ Report to the members of the Company on the standalone financial statements for the year ended 31st March, 2018, we report that

Re: Surana Telecom and Power Limited

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

b. As explained to us, fixed assets have been physically verified by the management at reasonable intervals. According to the information and explanation given us, no material discrepancies were noticed on such verification;

c. The title deeds of immovable properties are held in the name of the company. As explained to us, mutation of title deeds of properties which have been transferred to the company on account of scheme of arrangement between Bhagyanagar India Limited, Bhagyanagar Properties Limited and the company are yet to be completed. However, the High Court order mentions the transfer of the assets.

Category

No of Instances

Freehold/ Leasehold

Gross Block

Net Block

Land

1

Freehold

80,65,191/-

80,64,191/-

Building

1

Freehold

3,08,694/-

2,95,077/-

ii. a. The inventories have been physically verified at reasonable intervals by the management.

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.

iii. The company had granted loans to four parties as covered in the register maintained under section 189 of the Companies Act, 2013.

a. In our opinion and according to the information and explanations given to us, the terms and conditions of the grant for such Loan are not prejudicial to the Company''s interest.

b. In respect of the aforesaid loans, the schedule of repayment of principle and interest has been stipulated, repayment of principal and interest has been regular as per the stipulation.

c. There are no overdue amounts in respect of the loan granted to a body corporate listed in the register maintained under section 189 of the Act.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.

v. The Company has not accepted any deposits from the public.

vi. We have broadly reviewed the cost records maintained by the company prescribed by the Central Government of India under section 148(1) of the Act and are of the opinion that prima facie the prescribed accounts and records have been 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. According to the information and explanations given to us and based on the records of the company examined by us, the company is generally regular in depositing the undisputed statutory dues, including Provident Fund, , Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other statutory dues, as applicable, with the appropriate authorities in India;

b. According to the information and explanations given to us and based on the records of the company examined by us, no undisputed amounts payable in respect of Provident Fund, Income Tax, Sales Tax, Wealth Tax and other material statutory dues for a period of more than six months from the date they become payable, except the following disputed statutory liabilities have not been deposited in view of pending Appeals.

Sl.

No.

Name of Statue

Nature of dues

Amount not paid/ (Amount involved in dispute)

Period to which it relates

Forum where dispute is pending

1

Central Excise Act, 1944

Excise Duty

9,90,387/

(22,75,654)

2009-10

CESTAT Bangalore

1,40,32,981/

(1,40,32,981)

2004-05

CESTAT Mumbai

16,44,861/

(24,63,994)

2010-11

CESTAT Bangalore

1,87,495/

(1,87,495)

2007-08/

2008-09

CESTAT Bangalore

viii. According to the records of the company examined by us and as per the information and explanations given to us, the company has not defaulted in repayment of loans from any financial institution or banks and has not issued debentures.

ix. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.

x. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

xi. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the provisions of section 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934

Annexure B to the Auditor’s Report:

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of M/s. Surana Telecom And Power Limited (“the Company”) as of 31 March 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

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

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Luharuka & Associates

Chartered Accountants

FRN:01882S

Rameshchand Jain

Place: Secunderabad Partner

Date:26th May, 2018 M.No.: 023019


Mar 31, 2016

INDEPENDENT AUDITORS’ REPORT

To The Members of

Surana Telecom and Power Limited Report on the Financial Statements

We have audited the accompanying financial statements of Surana Telecom and Power Limited (“the Company”), which comprise the Balance Sheet as at 31 March 2016, 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 in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our 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 there under.

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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view, 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 the management as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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, 2016, and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw your attention to Note 2.23(ii) of the financial statements wherein the management has disclosed the details of Claims against the company not acknowledged as debts in respect of matters under dispute with statutory authorities.

Our opinion is not modified in this matter.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order,

2016 (“the Order”) as amended, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in “Annexure - A” a statement on matters specified in paragraphs 3 and 4 of the Order.

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

a. We have sought and obtained all the information and explanations which to the 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 it appears from our examination of those books;

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

d. In our opinion, the aforesaid 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 written representations received from the directors as on 31 March, 2016, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2016, from being appointed as a director in terms of Section 164(2) of the Act;

f. With respect to the adequacy of the Internal Financial Controls over financial reporting of the

Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure

B”;

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 2.23(ii) to the financial statements and also included in the Emphasis of Matter paragraph above.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Re: Surana Telecom and Power Limited

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

b) As explained to us, the fixed assets have been physically verified by the management in a phased manner designed to cover all the fixed assets over the year. In respect of fixed assets verified according to this program, which we consider reasonable, no material discrepancies were noticed on such verification.

c) The title deeds of immovable properties are held in the name of the company.

ii. The inventory, except Goods-in-transit, has been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable. In respect of inventory lying with third parties, these have substantially been confirmed by them. No material discrepancies were noticed on physical verification.

iii. The Company has granted loans to one parties covered in the register maintained under section 189 of the Act.

a) In respect of the aforesaid loans, the terms and conditions under which such loans were granted are not prejudicial to the company''s interest.

b) In respect of the aforesaid loans, the schedule of repayment of principle and interest has not been stipulated. Due to absence of schedule of repayment, the regularity of the same could not be commented.

c) In absence of specific schedule of repayment of loans, we are of the opinion of no overdue amounts.

iv. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees and security.

v. The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

vi. We have broadly reviewed the cost records maintained by the Company prescribed by the Central Government of India under Section 148(1) of the Act and are of the opinion that prima facie the prescribed accounts and records have been 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) According to information and explanations given to us and on the basis of our examination of the books of

accounts and records, the Company has been generally regular in depositing undisputed statutory dues with appropriate authorities including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31,2016 for a period of more than six months from the date on when they become payable.

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, duty of customs, duty of excise, value added tax or cess were in arrears as at 31st March 2016 for a period more than six months from the date they became payable.

c) Details of dues of Duty of Excise, Duty of Customs and Income Tax which have not been deposited as on 31st March 2016 on account of disputes are given below:

Sl.

No.

Name of Statute

Nature of Dues

Amount not paid/ (Amount involved in dispute)

Period to which it relates

Forum where dispute is pending

1

Central Excise Act, 1944

Excise Duty

1,40,32,981

(1,40,32,981)

2004-05

CESTAT - Mumbai

17,12,827

(3,13,24,943)

2007-08

Supreme Court of India

1,87,495

(1,87,495)

2007-09

CESTAT - Bangalore

2

Service Tax

Input Credit

17,24,796

(24,63,994)

2010-11

CESTAT - Bangalore

3

Customs Act, 1964

Custom Duty

12,75,654

(22,75,654)

2009-10

CESTAT - Bangalore

4

A. P. General Sales Tax Act

Income Tax

10,80,332

(21,60,663)

1994-95

Commercial Tax Officer

The above amounts are net of taxes paid under protest at '' 3,29,40,558 in Long Term Advances which are part amounts paid pending final decision of the matter under dispute.

viii. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company has not taken any loan either from financial institutions or from the government and has not issued any debentures.

ix. Based upon the audit procedures performed and the information and explanations given by the management, the company has not raised moneys by way of initial public offer or further public offer including debt instruments and term loans. Accordingly, the provisions of clause 3 (ix) of the Order are not applicable to the Company and hence not commented upon.

x. Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the company or on the company by its officers or employees has been noticed or reported during the year.

xi. Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.

xii. In our opinion, the Company is not a Nidhi company. Therefore, the provisions of clause 4 (xii) of the Order are not applicable to the Company.

xiii. In our opinion, all transactions with the related parties are in compliance with Section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

xiv. Based upon the audit procedures performed and the information and explanations given by the management, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to the company and hence not commented upon.

xv. Based upon the audit procedures performed and the information and explanations given by the management, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the company and hence not commented upon.

xvi. In our opinion, the company is not required to be registered under Section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the company and hence not commented upon.

Report on the Internal Financial Controls under the Clause (i) of sub section 3 of Section 143 of the Companies Act, 2013 (‘the Act)

We have audited the internal financial controls financial reporting of Surana Telecom and Power Limited (“the Company”) as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls base on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detention of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013(“the Act”).

Auditors'' Responsibility:

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the ‘Guidance Note'') and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting were established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of the internal financial controls over the financial reporting included obtaining an understanding of the internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on assessed risk. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatements of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls systems over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of the financial reporting and the preparation of financial statements for external purposes in accordance it generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of the Management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Sekhar& Co.,

Chartered Accountants

FRN: 003695-S G.Ganesh

Place : Secunderabad Partner

Date : 24-May-2016 M.No.: 211704


Mar 31, 2015

We have audited the accompanying financial statements of Surana Telecom and Power Limited ("the Company"), which comprise the Balance Sheet as at 31st March 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 in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our 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 financial statements are free from material misstatement.

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw your attention to Note 2.23(ii) of the financial statements wherein the management has disclosed the details of Claims against the company not acknowledged as debts in respect of matters under dispute with statutory authorities.

Our opinion is not modified in this matter.

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 Annexure a statement on matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

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

a. We have sought and obtained all the information and explanations which to the 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 it appears from our examination of those books

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

d. In our opinion, the aforesaid 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 written representations received from the directors as on 31st March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

f. We are not required to report on clause (i) with respect to Internal Financial Controls over financial reporting and the operating effectiveness of the same for the Financial Year ending 31st March 2015, based on the Government of India notification dated October 14, 2014 on the same matter.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 2.23(ii) to the financial statements and also included in the Emphasis of Matter paragraph above;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure referred to in paragraph 1 of our report of even date

Re: Surana Telecom and Power Limited

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

b) As explained to us, the fixed assets have been physically verified by the management according to the phased program designed to cover all the fixed assets over the year. In respect of fixed assets verified according to this program, which we consider reasonable, no material discrepancies were noticed on such verification.

ii. a) As explained to us, inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b) The procedures explained to us, which are followed by the management for physical verification of inventories, are in our opinion reasonable and adequate in relation to the size of the company and nature of its business.

c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

iii. The Company has granted loans to three parties covered in the register maintained under section 189 of the Act. The maximum amount involved during the year is Rs. 9,42,68,520 and the year-end outstanding is Rs. 2,45,61,695.

a) In our opinion and as per the records examined by us, the payment of principal amount and interest thereon is regular.

b) There are no overdue amounts in excess of Rs.1 lakh in respect of loans granted to companies, firms or other parties listed in register maintained under section 189 of the Act.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory and fixed assets and for sale of goods and power. We have not observed any major weakness in the internal control system during the course of the audit.

v. The Company has not accepted any deposits from the public within the meaning of sections 73 to 76 or any other relevant provisions of the Act and rules framed thereunder.

vi. We have broadly reviewed the cost records maintained by the Company prescribed by the Central Government of India under Section 148(1) of the Act and are of the opinion that prima facie the prescribed accounts and records have been 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) The Company is regular in depositing undisputed statutory dues with appropriate authorities including provident

fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, 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, duty of customs, duty of excise, value added tax or cess were in arrears as at 31st March 2015 for a period more than six months from the date they became payable.

c) Details of dues of Duty of Excise, Duty of Customs and Income Tax which have not been deposited as on 31st March 2015 on account of disputes are given below:

Sl. Name of Nature of Amount not paid/ No. Statute Dues (Amount involved in dispute)

1 Central Excise Excise Duty (1,40,32,981) Act, 1944 1,40,32,981

17,12,827

(3,13,24,943)

1,87,495

(1,87,495)

2 Service Tax Input Credit 17,24,796

(24,63,994)

3 Customs Custom Duty 12,75,654 Act, 1964 (22,75,654)

4 A. P. General Income Tax 10,80,332 Sales Tax Act (21,60,663)

Sl. Name of Period to which Forum where dispute No. Statute it relates is pending

2004-05 CESTAT - Mumbai 1 Central Excise Act, 1944 2007-08 Supreme Court of India

2007-09 CESTAT - Bangalore

2010-11 CESTAT - Bangalore 2 Service Tax

2009-10 CESTAT - Bangalore 3 Customs Act, 1964 1994-95 Commercial Tax Officer 4 A. P. General Sales Tax Act

The above amounts are net of taxes paid under protest at Rs. 3,29,40,558 in Long Term Advances which are part amounts paid pending final decision of the matter under dispute.

d) In our opinion, the amount required to be transferred to the investor education and protection fund in accordance with relevant provisions of the Companies Act, 1956 and rules made thereunder has been transferred to such fund within time.

viii. The Company has no accumulated losses at the end of the financial year and it has not incurred cash loss during the year covered by audit and in the immediately preceding financial year.

ix. According to the records of the Company examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders, as applicable, as at the Balance sheet date.

x. The Company has not given any guarantee for loans taken by others from bank or financial institutions.

xi. 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 obtained.

xii. During the course of our examination of the books and records of the Company, carried out in accordance with the Generally Accepted Accounting Practice in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company noticed or reported during the year, nor have we been informed of such case by the management.

For Sekhar & Co., Chartered Accountants FRN: 003695-S

G. Ganesh Place : Secunderabad Partner Date : 30-May-2015 M.No.: 211704


Mar 31, 2014

We have audited the accompanying Financial Statements of Surana Telecom and Power Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the 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 of our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) in the case of Statement of Profit and Loss, the Profit of the Company for the year ended on that date; and

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

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 Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of the 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. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section(3C) of section 211 of the Act read with the General Circular 15/2013 dated 13 th September 2013 of the Ministry of Company Affairs in respect of Section 133 of the Companies Act 2013; and

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

Annexure referred to in paragraph 1 of our report of even date Re: Surana Telecom and Power Limited

i. a) The Company has maintained proper records showing full particular including quantitative details and

situation of fixed assets on the basis of available information.

b) As Explained to us, a substantial portion of the fixed assets have been physically verified by the management during the year, which in our opinion is reasonable, having regard to the size of the company and nature of its assets. According to information and explanations given to us, no material discrepancies have been found on such verification.

c) In our opinion, the company has not disposed of a substantial part of its fixed assets during the year and the going concern status of the company is not effected.

ii. a) The inventories have been physically verified during the year by the management. In our opinion the frequency of such verification is reasonable.

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 nature of its business.

c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

iii. a) The Company has during the year granted loans to three Companies covered in the register maintained under Section 301 of the Act. The maximum amount involvedduring the year is Rs. 9,24,43,741and year end outstanding is Rs. 8,99,83,124.

b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the company.

c) The principal and interest wherever due have been paid and there are no outstanding amounts at the end of the year.

d) There are no overdue amounts in excess of Rs. 1 Lakh in respect of loans granted to companies, firms or other parties listed in the register maintained under section 301 of the Act.

e) The Company has taken loans during the year from one company covered in the register maintained under section 301 of the Act. The maximum amount involved during the year is Rs. 5,80,18,587 and the year balance of such party is Nil.

f) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions on which the loan has been taken from the companies listed in the register maintained under section 301 of the Act are notprima-facie prejudicial to the interest of the Company.

g) In our opinion and as per the records examined by us, the payment of principal amount and interest thereon is regular.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and nature of its business with regards to purchase of inventories and fixed assets and with regard to sale of goods and services. We have not observed any major weakness in the internal control system during the course of audit.

v. a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the Act have been so entered.

b) In respect of transactions made in pursuance of such contracts or arrangements exceeding the value of Rs. Five Lakhs entered into during the financial year, because of the unique and specialized nature of the items involved and absence of any comparable transactions, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time.

vi. According to the information and explanations given to us the Company has not accepted any deposits from the public. Therefore, the provisions of clause (vi) of paragraph 4 of the order are not applicable to the Company.

vii. In our opinion, the Company has an internal audit system commensurate with the size and nature its of 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 Act and are of the opinion that prima facie the prescribed accounts and records have been 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) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employee''s state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty and any other material statutory dues applicable to it.

According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues in paragraph (a) above were in arrears as at 31st March 2014 for a period more than six months from the date they became payable.

b) Details of dues of Central Excise Duty, Custom Duty and Income Tax which have not been deposited as on 31st March 2014 on account of disputes are given below.

Period Sr. Name of the Statute Nature of dues Amount which it No relates

1 The Central Excise Excise Duty 1,40,32,981 2004-05 Act 1944 17,12,827 2007-08

1,87,495 2007-09

2 Service Tax Act Input Credit 17,24,796 2010-11

3 Customs Act 1964 Custom Duty 12,75,654 2009-10

4 A.P.General Sales Sales Tax 10,80,332 1994-95 Tax Act

Sr. Name of the Statute Forum where dispute No is pending

1 The Central Excise CESTAT-Mumbai Act 1944 Supreme Court of India

CESTAT - Bangalore

2 Service Tax Act CESTAT - Bangalore

3 Customs Act 1964 CESTAT - Banagalore

4 A.P.General Sales Commercial Tax Officer Tax Act

The above amounts are net of taxes Paid under protest at Rs. 3,29,40,558 in long term advances which are part amounts paid pending final decision of the mater under dispute.

x. The Company has no accumulated losses at the end of the financial year and it has not incurred cash loss during the year covered by audit and in the immediately preceding financial year.

xi. According to the records of the Company examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders, as applicable, as at the Balance sheet date.

xii. Based on our examination of documents and records, we are of the opinion that the company has maintained adequate records, where the Company has granted loans and advances on the basis of security by way of pledge of shares and other securities.

xiii. The company is not a Chit Fund or a Nidhi Mutual benefit Fund / Society. Therefore the provisions of 4(xiii) of the Order are not applicable to the Company.

xiv. In our opinion and according to the information and explanations given to us the Company is not dealing in or trading in securities.

The Company has invested surplus funds in mutual funds. According to the information and explanations given to us, proper records have been made of the transactions and contracts and timely entries have been made therein. The investment in Mutual Funds have been held by the Company in its own name.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. In our opinion and according to the information and explanations given to us the term loans have been applied for the purposes or which they are obtained.

xvii. In our opinion and according to the information and explanations given to us, and on overall examination of the Balance Sheet and the Cash Flow 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 companies / firms parties covered in the register maintained under Section 301 of the Act.

xix. The Company has not issued any debentures or securities on which charge is to be created during the year.

xx. The Company has not raised any money by through public issue during the year.

xxi. We have not come across any instance of fraud on or by the company during the year during the course of our examination of the books and records of the Company, carried out in accordance with the Generally Accepted Accounting Practice in India and according to the information and explanations given to us.

For Sekhar & Co Chartered Accountants Firm Registration No : 003695-Ss

G. Ganesh Place : Secunderabad (Partner) Date : 13th May 2014 Membership No : 211704


Mar 31, 2013

Report on Financial Statements

We have audited the accompanying fi nancial statements of Surana Telecom and Power Limited, which comprise the Balance sheet as at March 31, 2013, the Statement of Profi t and Loss and Cash Flow for the year then ended and a summary of signifi cant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The management is responsible for preparation of these fi nancial statement that give a true and fair view of the fi nancial position, fi nancial performance and cash fl ows of the company in accordance with Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 (''the Act''). This responsibility includes design, implementation and maintenance of internal control relevant to the preparation and presentation of the fi nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An Audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The Procedures selected depend on the auditor''s judgment, including the assessment of risks of material misstatement of the fi nancial 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 fi nancial 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 reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the fi nancial statements

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the fi nancial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(b) in the case of the Profi t and Loss Account, of the profi t for the year on that date; and

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

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 Act, we give in the Annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act we report that:

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

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

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

d. in our opinion, the Balance Sheet, Statement of Profi t and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualifi ed 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 to the Independent Auditors'' Report

The Annexure referred to in the Independent auditors'' report to the members of Surana Telecom and Power Limited ("the Company"), on the fi nancial statements for the period ended 31st March 2013, we report that:

1) Fixed Assets

a) The Company has maintained proper records showing full particulars, including quantitative details of fi xed assets

b) The Company has conducted physical verifi cation of fi xed assets during the year. In our opinion, this physical verifi cation is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such verifi cation.

c) During the period, the Company has discarded certain items of its fi xed assets. In our opinion and according the information and explanations given to us, the aforesaid disposal has not affected the going concern assumption.

2) Inventories

a) The inventories have been physically verifi ed by the company during the period. In our opinion the frequency of such verifi cation is reasonable.

b) The procedures for the physical verifi cation of Inventories followed by the management are reasonable and adequate to the size of the Company and nature of its business.

c) The company is maintaining proper records of inventory. The discrepancies noticed on physical verifi cation between physical stocks and the book records are not material.

3) Loans to and from Parties (Companies, fi rms or such other parties) listed in the register maintained under section 301 of the Act, hence forth referred to as parties, amounts in Rupees.

a) The company has granted loans which are not secured to "3" ("three") parties during the year. The Maximum amount involved is Rs. 6,82,54,698 and the year end outstanding is Rs.4,26,53,188.

b) The Loans to 2 parties are given free of interest and without any specifi c terms of repayment. In case of one party the interest has been charged on the loan given. Keeping in view the investment and amount involved we are of opinion, the rate of interest and other terms and conditions of such loan are not, prima facie, prejudicial to the interest of the Company.

c) There being no interest payable and no specifi c terms of repayment of principal we have nothing to comment about the status of payment of interest or principal in case of 2 parties. In case of one party there has been no default in payment of interest or repayment of principal.

d) There are no overdue amounts in excess of Rs.1,00,000 in respect of such loans granted.

e) The company has not taken any loan from parties listed in the register maintained U/s.301 of the Act. The Loan availed during the earlier year from one party amounting to Rs.8,05,74,077 was fully repaid during the year.

f) In our opinion the terms of interest and other terms and conditions on which the loan has been taken from such parties are not prima facie prejudicial to the interest of the Company.

g) The company is regular in payment of principal amounts as stipulated and has been regular in payment of interest.

4) Internal Control:- In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and nature of its business with regard to purchase of inventories and fi xed assets and with regard to sale of goods and services. We have not observed any major weakness in the internal control system during the course of audit.

5) Arrangement &/ Transactions with parties covered under Section 301 of the Act.

a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the act have been entered in the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, the transactions in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs.5,00,000, for goods and services for which suitable alternative sources are not available to obtain comparable quotations. Hence it is not possible for us to comment whether above contracts and arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6) Deposits from Public: In our opinion, and according to the information and explanations given to us, the company has not accepted any deposits covered under Section 58A and 58AA of the Act.

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

8) Cost Records: We have broadly reviewed the books of account maintained by the company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 209(1) (d) of the Act in respect of products sold by the Company and are of the opinion that prima facie, the prescribed accounts and records have been maintained. However, we have not made a detailed examination of the records.

9) Statutory Dues :

a) According to the information and explanations given to us and on the basis of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Income tax, Sales Tax, Wealth Tax, Customs Duty, Excise duty, Investor Education and Protection Fund, Service tax, Cess and material statutory dues have been deposited regularly but for some minor delays during the year by the company with the appropriate authorities. There were no dues on account of Cess under Section 441A of the Act since the aforesaid Section comes into force has not yet been notifi ed by the Central Government.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom duty, Excise duty, Investor Education and Protection Fund, Service Tax, Cess and other material statutory dues which were in arrears as at March 31, 2013 for a period more than six months from the date they became payable.

b) According to the information and explanations give to us, the dues set out in "Annexure – I" in respect of Income Tax, Sales Tax, Excise & Custom duties have not been deposited with appropriate authorities on account of dispute. According to the information and explanations given to us there are no other amounts not deposited with appropriate authorities on account of dispute.

10) Accumulated Losses & Cash Loss: As on date of Balance Sheet there are no accumulated Losses and the company has not incurred any cash loss during the year or the immediately preceding fi nancial year.

11) Dues to Banks and Financial Institutions: In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to its bankers or to any fi nancial institutions. The Company did not have any outstanding debentures at the end of the year.

12) Loans on Security of Shares, debentures and other Securities: The Company has maintained adequate records for the loans granted loans and advances on the basis of security of shares and properties.

13) Nidhi chit fund Companies: In our opinion and according to the information and explanations given to us the company is not a nidhi / mutual benefi t fund / society.

14) Dealing in / Trading in Securities: According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments.

15) Guarantees on behalf of others: In our opinion, the terms and conditions on which the company has given guarantee for loans taken by others from banks or fi nancial institutions are not prejudicial to the interest of the company.

16) Usage of Term Loans: In our opinion the term loans raised during the year are applied for the purpose they are raise.

17) Usage of Short Term Funds: 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 have not been used for long term investment.

18) Preferential allotments: The Company has not made any preferential allotment of shares to companies / fi rms / parties covered in the register maintained under Section 301 of the Act.

19) Debentures: The Company did not have any outstanding debentures during the year.

20) Public Issue: The Company has not raised any money by public issues during the year.

21) Fraud: During the course of our examination of the books and records of the Company, carried out in accordance with generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have been informed of such case by the management.

For Sekhar & Co

Chartered Accountants

Firm Registration No: 003695-S

Place : Secunderabad G. Ganesh

Date : 08th May 2013 (Partner)

Membership No: 211704


Mar 31, 2012

1. We have audited the attached Balance Sheet of Surana Telecom and Power Limited as at March 31,2012, the Profit and Loss Account and the Cash flow statement for the year ended on that date and annexed thereto. These Financial Statements are the responsibility of the Management. Our Responsibility is to express an opinion on these financial statements based on our audit.

2. We have 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 from 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 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 (hence forth referred to as the "Order") issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, (hence forth referred to as the "Act"), 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 in paragraph 3 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 are in compliance with Accounting Standards referred to in sub-section (3C) of Section 211 of the "Act".

e. on the basis of written representations received from the Directors as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31,2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the "Act".

f. in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and notes thereon 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.

i. in case of Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

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

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

Annexure to the Auditors' Report

The Annexure referred to in the auditors' report to the members of Surana Telecom and Power Limited ("the Company"), on the financial statements for the period ended 31st March 2012, we report that:

1) Fixed Assets

a) The Company has maintained proper records showing full particulars, including quantitative details of fixed assets

b) The Company has conducted physical verification of fixed assets during the year. In our opinion, this physical verification is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification.

c) During the period, the Company has disposed certain items of its fixed assets. In our opinion and according the information and explanations given to us, the aforesaid disposal has not affected the going concern assumption.

2) Inventories

a) The inventories have been physically verified by the company during the period. In our opinion the frequency of such verification is reasonable.

b) The procedures for the physical verification of Inventories followed by the management are reasonable and adequate to the size of the Company and nature of its business.

c) The company is maintaining proper records of inventory. The discrepancies noticed on physical verification between physical stocks and the book records are not material.

3) Loans to and from Parties (Companies, firms or such other parties) listed in the register maintained under section 301 of the Act, hence forth referred to as parties, amounts in Lakhs of Rupees.

a) The company has granted loans which are not secured to One Wholly owned subsidiary during the year The Maximum amount involved and the year end outstanding are Rs.400.93 Lacs and Rs.395.59 Lacs respectively.

b) The Loan is an interest free loan without any specific period of repayment. However as the company is a wholly owned subsidiary, In our opinion, the rate of interest and other terms and conditions of such loan are not, prima facie, prejudicial to the interest of the Company.

c) The loan being interest free and there being no specific term of re-payment of principal the question of default does not arise.

d) There is no overdue amount in excess of Rs. 1 Lakh in respect of loans granted to parties listed in the register maintained under the Section 301 of the Act.

e) The company has taken loan from three parties during the year. The Maximum amount involved and the year end outstanding are Rs.805.74Lacs.

f) In our opinion the terms of interest and other terms and conditions on which the loan has been taken from such parties are not prima facie prejudicial to the interest of the Company.

g) The loan is interest free and there is no specific term of repayment of principal hence we are of the opinion that there is no default by company..

4) Internal Control:- In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and nature of its business with regard to purchase of inventories and fixed assets and with regard to sale of goods and services. During the course of audit, we have not observed any continuing failure to correct major weaknesses in internal control of the company.

5) Arrangement &/ Transactions with parties covered under Section 301 of the Act.

a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the act have been entered in the register required to be maintained under that section.

b) In respect of transactions made in pursuance of such contracts or arrangements exceeding the value of Rs. Five Lakhs entered into during the financial year, because of the unique and specialized nature of the items involved and absence of any comparable prices, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time.

6) Deposits from Public: In our opinion, and according to the information and explanations given to us, the company has not accepted any deposits covered under Section 58A and 58AA of the Act.

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

8) Cost Records: We have broadly reviewed the books of account maintained by the company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 209(1) (d) of the Act in respect of products sold by the Company and are of the opinion that prima facie, the prescribed accounts and records have been maintained. However, we have not made a detailed examination of the records.

9) Statutory Dues :

a) According to the information and explanations given to us and on the basis of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Income tax, Sales Tax, Wealth Tax, Customs Duty, Excise duty, Investor Education and Protection Fund, Service tax, Cess and material statutory dues have been deposited regularly but for some minor delays during the year by the company with the appropriate authorities.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom duty, Excise duty, Investor Education and Protection Fund, Service Tax, Cess and other material statutory dues which were in arrears as at March 31, 2012 for a period more than six months from the date they became payable.

c) According to the information and explanations give to us, the dues set out in "Appendix - I" in respect of Income Tax, Sales Tax, Service Tax, Excise Duty and such other taxes as detailed have not been deposited with appropriate authorities on account of disputes. According to the information and explanations given to us there are no other amounts not deposited with appropriate authorities on account of dispute.

10) Accumulated Losses & Cash Loss: As on date of Balance Sheet there are no accumulated Losses and the company has not incurred any cash loss during the year or the immediately preceding financial year.

11) Dues to Banks and Financial Institutions: In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to its bankers or to any financial institutions. The Company did not have any outstanding debentures at the end of the year.

12) Loans on Security of Shares, debentures and other Securities: The Company has maintained adequate records for the loans granted loans and advances on the basis of security of shares and properties.

13) Nidhi chit fund Companies: In our opinion and according to the information and explanations given to us the company is not a nidhi / mutual benefit fund / society.

14) Dealing in / Trading in Securities: According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments.

15) Guarantees on behalf of others: In our opinion, the terms and conditions on which the company has given guarantee for loans taken by others from banks or financial institutions are not prejudicial to the interest of the company.

16) Usage of Term Loans: In our opinion the term loans raised during the year are applied for the purpose they are raise.

17) Usage of Short Term Funds: 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 have not been used for long term investment.

18) Preferential allotments: The Company has not made any preferential allotment of shares to companies / firms / parties covered in the register maintained under Section 301 of the Act.

19) Debentures: The Company has not raised any money by issue of debentures during the year.

20) Public Issue: The Company has not raised any money by public issues during the year.

21) Fraud: According to the information and explanations given to us, no material fraud on the Company has been noticed or reported during the course of the Audit.

APPENDIX-I as referred to in Para ix (b) of Auditors Report of Surana Telecom and Power Limited

Nature of the Amount Period to Forum where the dispute is Name of the Statute which it dues in Rs pending relates

Central Excise & Custom Laws Excise Duty 22,75,654 2009-10 CESTAT - Bangalore

-do- Excise Duty 6,08,728 2003-04 CESTAT - Mumbai

-do- Excise Duty1,40,32,981 2004-05 CESTAT- Mumbai

-do- Custom Duty 4,06,023 2007-08 CESTAT - Mumbai

Andhra Pradesh Sales Tax Act Sales Tax 1,15,288 2001-02 Remanded back to Assessing officer by Appellate tribunal -do- Sales Tax 10,80,331 1994-95 A.P. Sales Tax Appellate Tribunal

For Sekhar & Co

Chartered Accountants Firm Registration No: 003695-S

Secunderabad G.GANESH

Date:28/4/2012 (Partner)

MembershipNo:211704


Mar 31, 2010

1. We have audited the attached Balance Sheet of Surana Telecom And Power Limited as at March 31, 2010 and also the Profit & Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto which we have signed under reference to this report. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by Companies (Auditors Report) Order, 2003 (as amended) (henceforth referred to as the Order) issued by the Central Government of India in terms of sub-section (4A) of section 227, of the Companies Act, 1956, (henceforth referred to as the Act), 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 as far as appears from our examination of those books. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

c. 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 Act.

d. On the basis of the written representation 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 Act.

e. Without qualifying our opinion, we draw your attention of sharehol -ders and stakeholders to the following :

1. Note 20B of Schedule 12 : Sundry Debtors and other Balances : Advances to suppliers under Schedule - 11 " Loans & Advances" include Rs.214.35 Lakhs Paid to M/s. United International Shipping Agent (T) Ltd, towards Cost of copper Cathode. However, copper was stolen and replaced with worthless material on the sea-way. The company has lodged claim with Insurance Company which is under process. As the Management is confident of recovering the entire amount from the Insurance Company/ Shipping Agent, no provision for loss of goods has been made in the books of account.

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 Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India

1. In the case of the Balance Sheet, of the state of affairs of the company as at March 31, 2010;

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

3. In the case of 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 Re: Surana Telecom and Power Limited

1.a.The Company has maintained adequate records showing full particulars, including quantitative details of fixed assets.

b. All fixed assets have not been physically verified during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

c. In our opinion, there have been no significant disposals of fixed assets during the year which affect the going concern assumption. The transfer of substantial assets as per the scheme arrangement of de-merger under sections 391 to 394 of the Act does not effect the going concern concept of the company as per the information and explanations given to us.

2. 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 nature of its business

c. The company is maintaining proper records of inventory. The discrepancies notices on verification between the physical stocks and the book records were not material.

3.a.The Company has granted loans to companies which are wholly owned subsidiaries, associates covered in the register maintained under section 301 of the Act. It involves 1 wholly owned subsidiary, 1 associate company. The Maximum amount of Loan involved is Rs.590.43 Lakhs and year end balance is Rs.590.43 Lakhs.

b. In our opinion and according to the information and explanation given to us, the rate of interest, where applicable and other terms and conditions are not prima facie prejudicial to the interest of the company.

c. The principal and interest wherever due are as per the respect of loans granted to companies, firms or other parties listed in the register maintained under section 301 of the act.

d. As on 31st March 2010 there are no overdue amounts in excess of Rs.1 Lakh in respect of loans granted to companies, firms or other parties listed in the register maintained under section 301 of Companies Act, 1956.

e. The company has taken loans from 1 company covered in the register maintained under section 301 of the Act. The Maximum amount of Loan involved is Rs.1200.00 Lakhs and year end balance is Rs.214.99 Lakhs

f. In our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not, prime facie prejudicial to the interest of the company.

g. The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest

4. In our opinion and according to the information and explanations given to us, there exists adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the company.

5.a. According to the information and explanations given to us, by the management, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the Act, have been so entered.

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

6. The Company has not accepted deposits which fall under section 58A and 58AA of the Act and the rules made there under from the public, hence we have not reported on the relevant reporting requirements of the Order.

7. An outside firm of Chartered Accountants has carried out the Internal Audit of the Company. In our opinion the system of Internal Audit is commensurate to nature and size of the company and the nature of its business.

8. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the company pursuant to the Rules made by the Central Government for the maintenance of Cost records maintained under section 209(1) (d) of the Act, and are of the opinion that prima facie the prescribed accounts and records are maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. a. The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty and other material statutory dues applicable to it.

Further, since Central Government has till date not prescribed the amount of Cess payable under section 441A of the Act, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

b. According to the information and explanations given to us and the records of the company produced before us and examined by us, there are no dues of wealth tax, service tax, excise duty and Cess, which have not been deposited on account of any dispute. The particulars of sales tax, & Customs duty as at 31st March 2010, which has not been deposited on account of dispute are as follows.

Name of Nature Amount under

the Statue of Dues Dispute yet to be

deposited

Andhra Pradesh APGST Rs.10.80 lakhs General Sales Tax Act (APGST)

APGST APGST Rs.1.15 lakhs

Central Excise Levy of Duty on Rs.293.95 and Customs Duty certain Products



Name of the Statue Accounting Year to Forum where

which Amount dispute is

relates contested

Andhra Pradesh 1995-96 Sales Tax General Sales Tax Appellate Act (APGST) Tribunal Hyderabad

APGST 2001-02 ADC Sec-bad Central Excise 2004-05 Supreme Court and Customs Duty of India



10. The company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12. We are of the opinion that the company has maintained adequate records where the company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. 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 Order are not applicable to the company.

14. In our opinion, the company is not dealing in or trading in shares, securities debentures and other investments. Accordingly the provisions of the clause 4(xiv) of the Order are not applicable to the company.

15. According to the information and explanations given to us, the company has not given guarantees for loans taken by others from bank or financial institutions, the terms and conditions whereof in our opinion are prima-facie prejudicial to the interest of the company.

16. Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

17. 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.

18. 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.

19. The Company has not issued any debentures during the year.

20. The Company has not made any public issue of securities during the period under review hence we are not required to comment on reporting requirement of the order.

21. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information, Representations and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.



For Sekhar & Co.

Chartered Accountants

Firm Regn No : 003695 -S



G. Ganesh

Place : Secunderabad (Partner)

Date : 7th August, 2010 M.No:211704

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