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
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
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
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
(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
(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
Additional Rs. 30.98
Excise Duty on Sale
of 2010 - 2011 Commissioner
of Rs. 15.49
Scrap Central Excise the year
Sales Tax Department
Submission of C Forms 2011 - 2012 Appellate
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
(Reg No. 004137S)
Membership No. 011072
Place: Hyderabad (Camp)
Date: May 28, 2012