Auditor Report of Neueon Towers Ltd.

Mar 31, 2016

INDEPENDENT AUDITORS’ REPORT

To

The Members,

Sujana Towers Limited.

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of SUJANA TOWERS LIMITED (“the Company”), which comprise the Balance Sheet as at 31 March 2016, 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 Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,

2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the 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 standalone 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 the 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 the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the 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 financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A to this report, a statement on the matters specified in the paragraph 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 the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) On the basis of the written representations received from the directors as on 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”; and

g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule

11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion, and to the best of our information and according to the explanations given to us :

i. There are no pending litigations for the company that will impact the financial position of the company;

ii. There are no foreseeable losses 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.

The Annexure A referred to in our Independent Auditor’s Report to the members of the Company on the standalone financial statements for the year ended March 31, 2016, we report that:

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

(b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. No material discrepancies have been noticed on such physical verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

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

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

c) The Company has maintained proper records of the said stocks. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

iii) The Company has granted a loan aggregating to Rs 1114.79 lakhs a company covered under the register maintained under section 189 of The Act. The rate of interest and other terms and conditions are prima facie not prejudicial to the interests of the company.

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 did not accept any deposits from public.

vi) 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 under sub-section (1) of Section 148 of the Act in respect of the activities carried on by the Company, wherever applicable and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records

vii) (a) According to the information and explanations given to us and on the basis of examination 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, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts are payable in respect of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax or cess and other material statutory dues were in arrears as at 31 March 2016 for a period of more than six months from the date they became payable except:

Rs. In Lakhs

Income Tax (2009-2010)	151.14
Income Tax (2010-2011)	2688.45
Income Tax (2011-2012)	2447.15
Income Tax (2012-2013)	129.69
Income Tax (2013-2014)	102.20

(b) According to information and explanations given to us, the following dues (amounts) have not been deposited by the Company on account of disputes/assessment:

Name of the Statute (Nature of the Dues)	Period to which the amount relates	Forum where matter is pending	Amount
Excise Department:
Excise Duty on Job Work	2010-2011	Additional Commissioner of central Excise	Rs. 30.98 lacs (paid Rs.15.49 lacs during the year 2010-2011
Sales Tax Department:
Submission of C Forms	2011-2012	Appellate Deputy Commissioner	Rs. 72.02 lacs

viii) According to the information and explanations given to us and on the basis of examination of the records, the company has not defaulted in the repayment of loans along with interest to the Banks/ financial institutions.

ix) The Company did not raise any money from public during the year.

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 managerial remuneration of Rs.5.61 lakhs to its Managing Director.

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 give to us and based on our examination of the records of the Company, the Company has made preferential allotment of 4629629 no.of equity shares and has complied with Section 42 of the Companies Act, 2013, and has used the money for the purposes for which it is raised.

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.

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 SUJANA TOWERS 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 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 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 VENUGOPAL & CHENOY

Chartered Accountants,

FRN: 004671S

(P.V. SRI HARI )

Place: Hyderabad Partner

Date: 30.05.2016 Membership No. 021961

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Mar 31, 2015

We have audited the accompanying financial statements of M/s.Sujana Towers Limited, which comprise the Balance Sheet as at March 31,2015, 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 Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 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 standalone 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 the 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 the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the 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 financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order, 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 the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) On the basis of the written representations received from the directors as on 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; and

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

I. There are no pending litigations for the company that will impact the financial position of the company;

II. There are no foreseeable losses 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 TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in our Independent Auditors' Report to the members of the Company on the standalone financial statements for the year ended 31 March 2015, we report that:

(i) (a) The Company is in the process of updating its Fixed Assets register showing full particulars, including quantitative details and situation of fixed assets.

(b) According to the information given to us, the fixed assets have been physically verified during the year by the management in accordance with a programme of verification. In our opinion, the periodicity of verification is reasonable having regard to the size of the company and the nature of its assets. However, the comparison of the fixed assets physically found is pending reconciliation with the Fixed Assets Register

(ii) (a) As explained to us, the physical verification of inventory was carried out during the year by the management at reasonable intervals. However, the documentation with regard to such verification has to be strengthened.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) According to the information and explanation given to us, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book record were not material.

(iii) (a) The Company has not granted loans to companies, firms or other parties covered in the registermaintained under section 189 of the Companies Act, 2013 ('the Act').

(iv) In our opinion and according to the information and explanations given to us, the internal control procedures, considering the size of the company and the nature of its business, need to be strengthened with regard to purchase of inventory, fixed assets and with regard to sale of goods and services. However, we were informed, that the company is taking steps to improve the internal control procedures. We have not observed any other continuing failure to correct major weaknesses in internal controls.

(v) In our opinion and according to the information and explanation given to us, the company has not accepted any deposits from the public.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to Section 148(1) of the Companies Act, 2013, and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(vii) (a) According to the information and explanations given to us and on the basis of our examination 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, excise, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues were in arrears as at 31 March 2015 for a period of more than six months from the date they became payable except: Rs. In Lakhs

Income Tax (2009-2010) 151.14

Income Tax (2010-2011) 2688.45

Income Tax (2011-2012) 2447.15

Income Tax (2012-2013) 129.69

Income Tax (2013-2014) 102.20

(b) According to information and explanations given to us, the following dues of Excise Duty and Sales tax have not been deposited by the Company on account of disputes:

Name of the Statute Period to which Forum where (Nature of the Dues) the amount relates matter is pending

Excise Department:

Excise Duty on Job Work 2010-2011 Additional Commissioner of

Sales Tax Department:

Submission of C Forms 2011-2012 Appellate Deputy Commissioner

Name of the Statute Amount (Nature of the Dues)

Excise Department:

Excise Duty on Job Work Rs. 30.98 lacs (paid Rs. 15.49 lacs during the year central Excise 2010-2011

Sales Tax Department:

Submission of C Forms Rs. 72.02 lacs

(viii) In our opinion, the company has no accumulated losses as at 31.03.2015 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(ix) The Company has not defaulted in the repayment of dues to any bank or financial institution during the year.

(x) According to the information and explanations given to us, the company has not given any guarantees for loans taken by others from banks or financial institutions.

(xi) According to the information and explanations given to us, the company has applied the term loans disbursed during the year for the purposes for which they were granted.

(xii) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For VENUGOPAL & CHENOY Chartered Accountants, FRN: 004671S

(P.V. SRI HARI ) Place: Hyderabad Partner Date: 20-05-2015 Membership No. 021961

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Mar 31, 2014

We have audited the accompanying financial statements of M/s.Sujana Towers Limited, which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss, and Consolidated Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information,

Management''s Responsibility for the Financial Statements

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

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 judgement, 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 purpose of expressing an opinion on the effectiveness of company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements, together with the Accounting Policies and Notes to 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:

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

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

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

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 specified in paragraphs 4 and 5 of the Order.

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

i. 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;

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

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

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

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

ANNEXURE TO AUDITORS'' REPORT Re: Sujana Towers Limited. [Referred to in our report of even date]

(i) In respect of Fixed Assets:

(a) The company is in the process of updating its Fixed Assets Register showing full particulars including quantitative details and location/situation of fixed assets.

(b) According to the information given to us, the fixed assets have been physically verified during the year by the management in accordance with a programme of verification. In our opinion, the periodicity of verification is reasonable having regard to the size of the company and the nature of its assets. However, the comparison of the fixed assets physically found is pending reconciliation with the Fixed Assets Register

(c) As per the information and explanations given to us, the disposal of fixed assets, during the year, was not substantial and hence does not affect the going concern status of the company.

(ii) In respect of Inventories:

(a) As explained to us, the physical verification of inventory was carried out during the year by the management at reasonable intervals. However, the documentation with regard to such verification has to be strengthened.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) According to the information and explanation given to us, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) According to the information and explanations given to us, during the year under review, the company has neither granted nor taken any loans secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 , except for interest free contributions received by the company from promoters as per CDR package to the extent of Rs.77,87,46,933. Such contributions are not prima facie prejudicial to the interest of the company

(iv) In our opinion and according to the information and explanations given to us, the internal control procedures, considering the size of the company and the nature of its business, need to be strengthened with regard to purchase of inventory, fixed assets and with regard to sale of goods and services. However, we were informed, that the company is taking steps to improve the internal control procedures. We have not observed any other continuing failure to correct major weaknesses in internal controls.

(v) According to the information and explanations given to us, the particulars of contracts or arrangements have been entered into the Register maintained under section 301 of the Companies Act, 1956.

(vi) In our opinion and according to the information and explanation given to us, the company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA or any other relevant provision of the Act and the rules framed there under.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to Section 209 (1)(d) of the Companies Act, 1956, read with Companies (Cost Accounting Records) Rules, 2011, and Companies (Cost Audit Report) Rules, 2011, and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(ix) In respect of Statutory Dues:

(a) According to the information and explanations given to us and the records of the company examined by us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident fund, Investor education and protection fund, Employees'' state insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues applicable to it.

(b) According to information and explanation given to us, no undisputed amounts payable in respect of Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty and Cess were in arrears, as at 31.03.2014 for a period of more than six months from the date they became payable excepting:

Particulars Amount Rs. in Lakhs

Income Tax (2009-2010) 151.14

Income Tax (2010-2011) 2718.45

Income Tax (2011-2012) 2447.15

Income Tax (2012-2013) 131.31

Work Contract Tax (2010-2011) 6.98

Dividend Distribution Tax 1.51

(c) According to the information and explanations given to us, the dues of Excise Duty, Sales tax and Income tax as at March 31,2014, which have not been deposited on account of disputes are as follows:

Name of the Statute Period to which the Forum where Amount (Nature of the Dues amount relates matter is pending

Excise Department:

Additional Rs. 30.98 lacs (paid Excise Duty on Job 2010-2011 Commissioner of Rs.15.49 lacs Work during central Excise the year 2010-2011)

Sales Tax Department:

Appellate Deputy Rs. 72.02 lacs Submission of C 2011-2012 Commissioner Forms

(x) In our opinion, the company has no accumulated losses as at 31.03.2014 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause xii of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

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

(xiii) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause xiv of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the company.

(xiv) According to the information and explanations given to us, the company has not given any guarantees for loans taken by others from banks or financial institutions.

(xv) According to the information and explanations given to us, the company has applied the new term loans disbursed during the year for the purposes for which they were granted.

(xvi) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, funds raised by the company on short term basis are not used for long term investment.

(xvii) According to the information and explanation given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of The Act. Accordingly, the provisions of clause xviii of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the company.

(xviii) According to the information and explanation given to us, the company has not issued any debentures. Therefore, the provisions of clause xix of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the company.

(xix) According to the information and explanation given to us, the company has not raised any money by public issues during the year. Accordingly, the provisions of clause xx of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the company.

(xx) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For VENUGOPAL & CHENOY Chartered Accountants, FRN: 004671S

(P.V.SRI HARI ) Place: Hyderabad Partner Date: 30.05.2014 Membership No.021961

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Mar 31, 2013

Report on Financial Statements

We have audited the acCompanying financial statements of M/s.Sujana Towers Limited, which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss, and Consolidated Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information,

Management''s Responsibility for the Financial Statements

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements, together with the Accounting Policies and Notes to 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:

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the 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:

i. 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;

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

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

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

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

ANNEXURE TO AUDITORS'' REPORT

Re: M/s. Sujana Towers Limited.

[Referred to in our report of even date]

(i) In respect of Fixed Assets:

(a) The Company is in the process of updating its Fixed Assets Register showing full particulars including quantitative details and location/situation of fixed assets.

(b) According to the information given to us, the fixed assets have been physically verified during the year by the management in accordance with a programme of verification. In our opinion, the periodicity of verification is reasonable having regard to the size of the Company and the nature of its assets. However, the comparison of the fixed assets physically found is pending reconciliation with the Fixed Assets Register

(c) As per the information and explanations given to us, the disposal of fixed assets, during the year, was not substantial and hence does not affect the going concern status of the Company.

(ii) In respect of Inventories:

(a) As explained to us, the physical verification of inventory was carried out during the year by the management at reasonable intervals. However, the documentation with regard to such verification has to be strengthened.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) According to the information and explanation given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) According to the information and explanations given to us, during the year under review, the Company has neither granted nor taken any loans secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 , except for interest free contributions received by the Company from promoters as per CDR package to the extent of Rs. 3,004.70 lakhs. Such contributions are not prima facie prejudicial to the interest of the Company

(iv) In our opinion and according to the information and explanations given to us, the internal control procedures, considering the size of the Company and the nature of its business, need to be strengthened with regard to purchase of inventory, fixed assets and with regard to sale of goods and services. However, we were informed, that the Company is taking steps to improve the internal control procedures. We have not observed any other continuing failure to correct major weaknesses in internal controls.

(v) According to the information and explanations given to us, the particulars of contracts or arrangements have been entered into the Register maintained under section 301 of the Companies Act, 1956.

(vi) In our opinion and according to the information and explanation given to us, the Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA or any other relevant provision of the Act and the rules framed there under.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to Section 209 (1)(d) of the Companies Act, 1956, read with Companies (Cost Accounting Records) Rules, 2011, and Companies (Cost Audit Report) Rules, 2011, and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(ix) In respect of Statutory Dues:

(a) According to the information and explanations given to us and the records of the Company examined by us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues applicable to it.

(b) According to information and explanation given to us, no undisputed amounts payable in respect of Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty and Cess were in arrears, as at 31.03.2013 for a period of more than six months from the date they became payable excepting:

Amount Particulars Rs. in Lakhs

Income Tax (2009-2010) 291.14

Income Tax (2010-2011) 2,718.45

Income Tax (2011-2012) 2,610.23

Income Tax (2012-2013) upto sep 12 65.65

Work Contract Tax (2010-2011) 6.98

Dividend Distribution Tax (upto sep 12) 1.01

(c) According to the information and explanations given to us, the dues of Excise Duty, Sales tax and Income tax as at March 31,2013, which have not been deposited on account of disputes are as follows:

Name of the Statute Period to which Forum where Amount (Nature of the Dues) the amount relates matter is pending

Excise Department Additional Rs. 30.98 lacs (paid

Excise Duty on Job Work 2010-2011 Commissioner of Rs. 15.49 lacs during central Excise the year 2010-2011)

Sales Tax Department Appellate Deputy Submission of C Forms 2011-2012 Rs. 72.02 lacs Commissioner

(x) In our opinion, the Company has no accumulated losses as at 31.03.2013 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) As per information and explanations made available to us, the Company has not defaulted in repayment of dues to financial institutions or banks as the Company approached CDR cell for restructuring of Company debts and the same has been approved by the CDR cell on March 28, 2013.

(xii) In our opinion and according to the information and explanation given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause xii of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

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

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause xiv of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the Company.

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

(xvi) According to the information and explanations given to us, the Company has applied the new term loans disbursed during the year for the purposes for which they were granted.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, funds raised by the Company on short term basis are not used for long term investment.

(xviii) According to the information and explanation given to us, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of The Act. Accordingly, the provisions of clause xviii of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the Company.

(xix) According to the information and explanation given to us, the Company has not issued any debentures. Therefore, the provisions of clause xix of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the Company.

(xx) According to the information and explanation given to us, the Company has not raised any money by public issues during the year. Accordingly, the provisions of clause xx of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the Company.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For VENUGOPAL & CHENOY

Chartered Accountants FRN: 004671S

P.V.SRI HARI

Place: Hyderabad Partner

Date: 29th May, 2013 Membership No. 21961

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Mar 31, 2012

1. We have audited the attached Balance Sheet of Sujana Towers Limited as at 31st March 2012, the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 of the said order to the extent they are applicable to the Company.

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 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 it appears from our examination of such books.

c. The Balance Sheet, the Statement of Profit and Loss and the Cash Flow statement referred to in this report are in agreement with the books of accounts of the Company.

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e. On the basis of written representations received from the Directors, as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the Director is disqualified as on 31st March 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

5. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with the notes thereon and schedules attached thereto, give the information required by the Companies Act, 1956, in the manner so required and present a true and fair view, in conformity with the accounting principles generally accepted in India.

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

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

iii) in the case of the Cash Flow statement, of the cash flows for the year ended on that date;

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 3 of our report of even date)

i. (a) The Company is in the process of updating its fixed assets register showing particulars including

quantitative details and location / situation of fixed assets.

(b) According to the information given to us, the fixed assets have been physically verified during the year by the management in accordance with a programme of verification. In our view the periodicity of verification is reasonable having regard to the size of the Company and nature of its assets. However the comparison of the physical fixed assets is pending reconciliation with Fixed Assets Register.

(c) As per information and explanations given to us, the disposal of fixed assets during the year was not substantial and hence does not affect the going concern assumption.

ii. (a) As explained to us, physical verification of inventories was carried out during the year by the

Management at reasonable intervals. However the documentation with regard to such verification has to be strengthened.

(b) In our opinion and according to information and explanation given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to information and explanation given to us, proper records of inventory have been maintained by the Company and no material discrepancies were noticed on physical verification as compared to the record of inventories.

iii. (a) During the period under review, the Company has not availed loans from companies, firms or

other parties listed in the Register maintained under section 301 of the Companies Act, 1956.

(b) During the period under review, the Company has not granted to a company listed in the Register maintained under section 301 of the Companies Act, 1956.

iv. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, additional strengthening of the internal control procedures with regard to purchases of inventory and fixed assets and for the sale of goods is recommended so as to be commensurate with the current size of the Company and nature of its business. However, in our opinion, management is taking reasonable steps to correct the said weaknesses and we have not observed any other continuing failure to correct major weaknesses in internal controls.

v. The particulars of contracts or arrangements referred to section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

vi. The Company has not accepted any fixed deposits from the public during the year requiring compliance of provisions of Section 58 A and 58 AA or any other relevant provisions of the Companies Act, 1956.

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

viii. We have broadly reviewed the books of account maintained by the Company pursuant to section 209(1) (d) of the Companies Act 1956, for maintenance of cost records and based on review; we are of the opinion that prima facie the prescribed accounts and records are maintained. We have however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. (a) According to the information and explanations given to us, the Company has been regular, in depositing undisputed statutory dues including Employees Provident Fund, Employees' State Insurance, Investor Protection fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year. However, there have been instances of delay in remittance of TDS, Income Tax with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Service Tax etc., were in arrears as at 31.03.2012 for a period of more than six months from the date they became payable excepting :



Particulars Amount Rs. in Lakhs

Income Tax (2009 - 2010) 354.89

Income Tax (2010 - 2011) 2722.21

Income Tax (2011 - 2012) upto Sep 11 1371.23

Tax Deducted at Source (upto Sep 11) 27.37

Work Contract Tax (2010 - 2011) 6.98

Dividend Distribution Tax (upto Sep 11) 0.50



(c) According to the information and explanations made available to us and on the basis of examination of records of the Company, the dues of Excise Duty, Sales Tax and Income Tax as at 31st March 2012 which have not been deposited on account of any dispute are as follows:



Name of the Statute Period to which the Forum where Amount (Nature of the Dues) amount relates matter is pending

Excise Department

Additional Rs. 30.98 lacs (Paid

Excise Duty on Sale of 2010 - 2011 Commissioner of Rs. 15.49 lacs during Scrap Central Excise the year 2010-2011)

Sales Tax Department

Submission of C Forms 2011 - 2012 Appellate Deputy Rs.72.02 lacs Commissioner





x. The Company does not have any accumulated losses as at 31.03.2012 and has not incurred cash losses during the current period and also in the immediately preceding period covered by audit.

xi As per the information and explanations made available to us, the Company has defaulted in repayment of dues to financial institutions or banks to the extent of Rs.28.47 Crores payable to M/s L&T Infrastructure Finance Limited and M/s SICOM.

xii. According to the information and explanations given to us, the Company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

xiii. The provisions of Clause 4(xiii) of the Order relating to Chit Funds / Nidhi are not applicable to the Company.

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments.

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

xvi According to the information and explanations given to us, the Company has not availed any term loan during the current year.

xvii. According to the Cash Flow statement and other records examined by us and based on the information and explanations given to us, on an overall basis, funds raised on short term basis have not been used for long term investment.

xviii. According to the information and explanations given to us, the Company has during the year made allotment of shares to Warrant holders on conversion of such warrants issued on preferential basis to parties companies covered in the register maintained under section 301 of the companies' act 1956. The issue price of shares so allotted has been determined in accordance to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. Hence, it is not prejudicial to the interests of the company.

xix. The Company has not issued debentures during the year and therefore the question of creating security or charge in respect thereof does not arise.

xx. The Company has not raised any funds by means of public issue during the current year and hence the question of disclosing the end-use of money raised by way of public issue does not arise.

xxi. Based on the audit procedures performed and on the basis of representation obtained from the management, we report that no instance of fraud on or by the Company have been noted or reported by the management during the year.



For R. SUBRAMANIAN AND COMPANY

CHARTERED ACCOUNTANTS (Reg No. 004137S)

A.S. Ramanathan

Partner Membership No. 011072

Place: Hyderabad (Camp)

Date: May 28, 2012

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Mar 31, 2011

1. We have audited the attached Balance Sheet of Sujana Towers Limited as at 31st March 2011, the Profit and Loss Account and the Cash flow Statement for the period of 18 months ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent they are applicable to the company.

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 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 it appears from our examination of such books.

c) The Balance Sheet, Profit and loss account and the cash flow statement referred to in this report are in agreement with the books of account produced.

d) In our opinion, the Balance Sheet Profit and loss account and Cash flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

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

5. our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes thereon and schedules attached thereto give the information required by the Companies Act 1956, in the manner so required and give a true and fair view, in conformity with the accounting principles generally accepted in India.

i) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2011,

ii) in so far it relates to the Profit and Loss account of the Profit for the period 18 months ended on that date and

iii) In so far it relates to the Cash flow statement of the Cash flows for the period 18 Months ended on that date.

ANNEXURE TO THE AUDITORS REPORT (referred to in paragraph 3 of our report of even date

i. In respect of its fixed assets:

a. The company is maintaining records which need to be updated showing particulars, including quantitative details and situation of fixed assets for the current year additions.

b. A major portion of the fixed assets have been physically verified during the year by the management in accordance with a programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the Company and nature of its assets.

c. Substantial part of the Fixed assets have not been disposed off during the year affecting going- concern

ii. In respect of its inventory:

a. Physical verification of Inventory has been conducted at reasonable intervals by the management.

b. The procedures of Physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. Proper records of inventory have been maintained by the company and material discrepancies noticed on Physical verification have been properly dealt with in the books of the company.

iii. (a) During the period under review, the company has not availed loans from companies, Firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956.

(b) During the period under review the company has granted interest free loan to its subsidiary companies. The balance amount due as at 31.03.2011 and the maximum amount outstanding during the period aggregate to Rs. 15,509.56 Lakhs.

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

v. (a) The particulars of contracts or arrangements referred to section 301 of the companies act have not been entered in the register required to be maintained under that section.

(b) In the absence of comparative quotations, we are unable to comment as to whether the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. The company has not accepted any fixed deposits from the public during the year requiring compliance of provisions of Section 58 A and 58 AA or any other relevant provisions of the Companies Act 1956.

vii. The Company has an internal audit system which in our opinion is commensurate with the size of the company and the nature of its business.

viii. We have broadly reviewed the books of account maintained by the company pursuant to section 209(1) (d) of the Companies Act 1956, for maintenance of cost records and based on review; we are of the opinion that prima facie the prescribed accounts and records are maintained.

ix. According to the information and explanations given to us in respect of statutory dues:

(a) According to the information and explanations given to us, the company has been regular except in few cases, in depositing undisputed statutory dues including Employees Provident fund, Employees State Insurance, Investor protection fund, Income tax, sales tax, wealth tax, service tax customs duty excise duty, Cess and any other statutory dues with the appropriate authorities during the year.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax ,service tax etc were in arrears as at 31.03.2011 for a period of more than

six months from the date they became payable except Income tax of Rs.1,813.15 lakhs which is payable for the financial year 2009-10.

(c) According to the information and explanations made available to us there are no statutory dues which have not been deposited on account of Dispute, with the exception of Excise Duty amounting to Rs.15.49 lakhs which is pending before Additional Commissioner of Central Excise.

x. The company does not have has accumulated losses as at 31.03.2011 and has not incurred cash losses during the current period and also in the immediately preceding period covered by audit.

xi. As per the information and explanations made available to us, the company has not defaulted in repayment of dues to financial institutions or banks.

xii. The company has not granted any loan or advance on the basis of Security by way of pledge of shares, Debentures and other securities.

xiii. The provisions of Special Statute relating to Chit fund/Nidhi are not applicable to this company.

xiv. The company is not dealing in or trading in shares, securities, debentures and other investments.

xv. According to the information and explanations given to us, the Company has given guarantee to their associate companies Sujana Holdings Limited Dubai and Alpha Ventures Limited. The terms and conditions of the same are prima facie not prejudicial to the interests of the company.

xvi. To the best of our knowledge and belief and according to the information and explanation given to us, Term loan availed by the company during the current year have been applied for the purposes for which the loans were obtained.

xvii. According to the Cash flow statement and other records examined by us and based on the information and explanations given to us, on an overall basis, funds raised on short term basis have not been used for Long term Investment.

xviii. During the year Company has made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the companies act 1956. The prices at which these shares are issued are prima facie not prejudicial to the interests of the company.

xix. No debentures have been issued by the Company during the year.

xx. We have verified the end use of money raised by way of issue of Global Depository Receipts (GDRs) as disclosed in note 1 of II of Schedule 17 of the financial statements.

xxi. To the best of our knowledge and according to information and explanations given to us, no fraud on or by the company was noticed or reported during the financial year that causes the financial statements to be materially misstated.



For M/s. R. Subramanian & Company Chartered Accountants (Reg. No. 004137S)

V. Nalini Partner Membership No. 208352

Place: Hyderabad (Camp) Dated: 25.05.2011

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Sep 30, 2009

1. We have audited the attached Balance Sheet of M/s SUJANA TOWERS LIMITED (the Company) as at 30th September 2009 and also the Profit and Loss Account and Cash flow Statement of the Company for the year ended on that date, annexed thereof. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003 issue by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent they are applicable to the company.

4. Future to our comments in the annexure referred to above we, report that:

a. We have obtained all the information and explanation 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 it appears from our examination of those books.

c. The Balance Sheet, Profit and Loss Account and the dealt with by this report are in agreement with the books of accounts.

d. In our opinion, the Balance Sheet, the Profit and Loss account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 to the extent such standards are applicable to the Company.

e. On the basis of written representations / declaration received from the Directors and taken on record by the Board, and accoridng to the information and explanations given to us, we report that none of the Directors of the Company is disqualified as on 30th September 2009 from being appointed as a Director in terms of Section 274(1 )(g) fot the Companies Act, 1956.

In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the notes thereon, give the information required by the Companies Act 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India. i. In so far as it relates to the Balance Sheet, of the state of affairs of the company as at 30th September 2009 and

ii. In so far it relates to the Profit and Loss Account of the Profit of the Company for the year ended on that date

iii. In so far it relates to the Cash Flow Statement, the cash flows for the Company for the year ended on that date.

SUJANA TOWERS LIMITED REFERRED TO IN PARAGARAPH THREE OF OUR REPORT OF EVEN DATE

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

(b) The assets have been physically verified, in phases, by the Management during the year as per the regular programme of verification, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been noticed on such verification.

(c) The assets disposed off during the year are not substantial and therefore do not affect the going concern status of the Company.

ii. (a) Physical verification of inventory has been conducted at reasonable intervals by the management.

(b) The procedures of Physical verification of inventory followed by the management are reasonable. Considering the size of the company and the nature of its business.

(c) Proper records of inventory have been maintained by the company and material discrepancies on Physical verification have been properly dealt with in the books of the company.

iii. (a) According to the information and explanations given to us, the Company has not taken any loans from the companies, firms or other parties listed in the register maintained under Section 301 of the companies Act, 1956.

(b) During the period under review, the company has granted interest free loan to one of the subsidiary companies. No terms have been stipulated. The balance amount due as to 30.09.2009 and the maximum amount outstanding during the period aggregate to Rs. 1441.20 lakhs. (Previous year Rs. 469.40 Lakhs.)

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of inventory and Fixed Assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system.

v. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the contracts or arrangements that need to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956 have been properly entered in the said register.

(b) In our opinion and according to the information and explanations given to us, the transactions entered in the register maintained under Section 301 and exceeding during the financial year by rupees five lakhs in respect of each party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. The company has not accepted any fixed deposits from the public during the year requiring compliance of provisions of Section 58 A and 58 AA or any other relevant provisions of the Companies Act, 1956.

vii. The Company has an internal audit system, which in our opinion, commensurate with its size and nature of its business.

viii. We have broadly reviewed the books of account maintained by the company pursuant to section 209(1 )(d) of the Companies Act 1956, for maintenance of cost records and based on our review, we are of the opinion that prima facie the prescribed accounts and records are maintained.

ix. (a) According to the information and explanations given to us, the company has been regular in depositing undisputed statutory dues including Employees provident fund, income tax, wealth tax, sales, service tax, customs duty, excise duty, Cess and any other statutory dues with the appropriate authorities during the year. However delays have been observed in payment of Employees Provident fund and Employee state insurance and tax deducted at source, Income tax in certain months.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, service tax etc. were in arrears as at 30.09.2009 for a period of more than six months from the date they became payable with the exception of the following:-

Current Year - "NIL" (Previous year Rs.820.20 lakhs).

(c) As per the information and explanations made available to us there are no disputed Sales Tax / Income Tax / Customs Duty / Wealth Tax / Excise Duty / Cess.

x. The Company does not have accumulated losses as at 30.09.2009 and has not incurred cash losses during the current period and also in the immediately preceding period covered by audit.

xi. As per the information and explanations made available to us, the company has not defaulted in repayment of dues to Debenture holders, financial institution or bank.

xii. The company has not granted any loan or advance on the basis of Security by way of pledge of shares, Debentures and other securities.

xiii. The provisions of Special Statue relating to Chit Fund / Nidhi are not applicable to this company.

xiv. The Company is not dealing in or trading in shares, securities, debentures and other investments.

xv. According to the information and explanations given to us, the company has given guarantee to lenders of its associate companies M/s. Sujana Holdings Limited, Dubai and M/s. Alpha Ventures Limited to the extent of Rs. 938.80 Lakhs, (previous year Rs. 938.90 Lakhs) in respect of loans taken by them from Banks or Financial Institutions. As per the information and explanations made availabe to us, the terms and conditions where of are not prejudicial to the interest of the Company.

xvi. To the best of our knowledge and belief and according to the information and explanation given to us, Term loan availed by the company during the current year have been applied for the purpose for which the loans were obtained.

xvii. According to the Cash flow statement and other records examined by us and based on the information and explanations given to us, on an overall basis, funds raised on short them basis have not been used for Long term Investment.

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

xix. No debentures have been issued by the Company during the year.

xx. The Company has not raised any money by way of Public Issue during the year.

xxi. To the best of our knowledge and belief and according to information and explanations given to us, no fraud on or by the company was noticed or reported during the year.

For M/s. R. Subramanian & Company Chartered Accountants N. Krishnamurthy

Place: Hyderabad (Camp) Partner

Dated: 29.12.2009 Membership No. 19339