Auditor Report of Aqua Logistics Ltd.

Mar 31, 2013

1. Report on the Financial Statements

We have audited the accompanying financial statements of Aqua Logistics Limited ("the Company"), which comprise the Balance sheet as at 31st March 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

2. Management''s Responsibility for the Financial Statements

The management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. 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.

3. Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatements 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 financial statements.

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

Basis for qualified opinion

4. We draw attention to Point (r) forming part of Note 1 to the financial statements regarding the accounting policy followed for treatment of advertisement expenditure as Deferred Revenue Expenditure, which is not in accordance with AS-26 on Intangible Assets issued by the ICAI. Consequently, the profit for the year has been understated by Rs 99.93 lakhs.

5. Parties'' Account Balances are subject to confirmation and reconciliation and the consequential effects of the same on the profits, assets and liabilities of the company are not determinable.

6. Provision for interest on loan accounts with banks and financial institutions where there has been a default has been made based on contracted rates of interest without providing for penal interest, liquidated damages and other charges (if any) and the same has not been quantified.

7. We draw attention to Note - 23 of notes to financial statements on the non completion of transfer formalities for change in ownership to the company for the mines acquired outside India.

8. Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matter described in Para4,5,6 and 7 of the basis for qualified opinion paragraph and the cumulative and consequential effects of the same on the financial statements of the Company which are not determinable, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(ii) in the case of the Statement of Profit and Loss, of the loss for the 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.

9. Emphasis of Matter

We state that no actuarial valuation was made for the gratuity liability for the year ended 31.3.2013 and according to the information and explanations given to us and based on the estimated gratuity liability due to present employees, the existing provision carried in the books is adequate to cover the liabilities as at 31st March 2013. Our opinion is not qualified in respect of this matter.

10. 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:

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

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

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

d) Except for the effects of the matter described in the basis for qualified opinion paragraph in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956; and

e) On the basis of written representations received from the directors as at March 31,2013, and taken on record by the Board of Directors, none of the directors are prima facie 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.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the company.

Annexure to the Auditors'' Report

The Annexure referred to in our report to the members of Aqua Logistics Limited ("the Company") for the year ended March 31, 2013. We report that:

1) a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, the management during the year has physically verified all the fixed assets 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 were noticed on such verification.

c) As per the information and explanations given to us, during the year, the Company has not disposed off any substantial part of the fixed assets that would affect the going concern status of the company.

2) The Company does not have any tangible inventory and accordingly the provisions of clause 4 (ii) of the order are not applicable.

3) According to the information and explanations given to us the Company has not taken any loans secured or unsecured from parties listed in the Register U/s.301 of the Companies Act, 1956 except short term advances not in the nature of loans arising out of disposal of collateral belonging to the Director by a financial institution.

b. The company has not granted any loans secured or unsecured to companies, firms or other parties listed in the Register maintained U/s.301 of the Companies Act, 1956 during the year under review except advances in the ordinary course of the business and not in the nature of loans.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of fixed assets, for receiving of services and for rendering of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5) In respect of contracts or arrangements referred to in Section 301 of Companies Act,1956

a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, there is no contract or agreement that needs to be entered in the register required to be maintained under section 301 of the Act. Accordingly sub clause (b) of clause 4(v) of CARO is not applicable

6) The company has not accepted any deposits from public and hence directives issued by the Reserve Bank of India and the provisions of the sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable for the year under audit.

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

8) In our opinion and according the information and explanations given to us the Central Government has not prescribed the maintenance of cost records by the company under section 209(1) (d) of the Companies Act, 1956.

9) In respect of statutory dues:

a) Based on the records of the company examined by us, the company has generally been regular in depositing undisputed taxes like Service Tax and all other applicable statutory dues other than Income Tax Deducted at Source and Provident Fund where there has been a delay in depositing the same with the appropriate authorities and the following amounts were outstanding for a period exceeding six months as on 31st March 2013 from the date to became payable.

Name of the statute Nature of the Amount Rs. dues (in. lakhs)

Income Tax Act Tax deducted 107.31 at source

Provident Fund Act Provident fund 3.43 contribution

Name of the Statute Period to Date of which the payment amount relates

Income Tax Act FY 2011-2012 Not paid & FY 2013-2014

Provident Fund Act FY 2013-2014 Not paid

b) According to the information and explanations given to us, the following sums have not been deposited on account of dispute.

Name of the statute Nature of the Amount Rs. dues (in. lakhs)

Income Tax Act Income Tax 158.88

Income Tax Act Income Tax 274.54

Name of the Statute Period to Forum where the dispute is which the pending amount relates Income Tax Act Assessment Income Tax Year 2009-2010 Appellate Tribunal

Income Tax Act Assessment Commissioner Year 2010-2011 of Income Tax (Appeals)

10) The company does not have any accumulated losses as at 31st March, 2013 and even though the Company has incurred cash losses during the financial year covered by our audit and had posted profits in the immediately preceding financial year.

11) Based on the information and explanation given to us the company has defaulted in the repayment of the following sums in respect of loans availed from banks and financial institutions. The default occurred on various dates and was not cleared till 31st March 2013 aggregate to Rs. 3271.95 lacs. The over dues relate to the financial year 2011-2012 and 2012 - 2013.

12) In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion and to the best of our information and according to the explanations provided by the management, the Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. Therefore the provisions of Clause 4(xiii) of the Companies (Auditors Report) Order 2003 (as amended) do not apply to the Company.

14) As per the records of the Company examined by us and the information and explanations given to us by the management, the company is not dealing or trading in shares, securities, debentures and other investments, therefore in our opinion Clause 4(xiv) of the Companies (Auditors Report) Order 2003 is not applicable to the company.

15) According to the information and explanations given to us, the company has extended guarantees for loans taken by a company under the same management from a Bank of India. We are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interests of the company.

16) According to the information and explanations given to us and in our opinion, the company has not taken any term loans during the year.

17) According to the information and explanations given to us and an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on a short term basis have not been used for long term investments.

18) 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 during the year.

19) During the period covered by our audit report the company has not issued any debentures.

20) According to the information and explanations given to us company has not raised money from the public.

21) Based upon the audit, procedures performed and information and explanation given by the management, we report that no fraud on or by the company has been noticed or reported during the year. For ANIL NAIR & ASSOCIATES

Chartered Accountants

(Registration No. 000175S)

R.MOHAN

Place: Mumbai Partner

Date: 30th May 2013 Membership No - 023022

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Mar 31, 2012

1. We have audited the attached Balance Sheet of Aqua Logistics Limited ("the company") as at 31st March 2012, Statement of Profit and Loss and the Cash Flow statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These Financial Statements are the responsibility of the 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 the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure hereto, a statement on the matters specified in Paragraphs 4 & 5 of the said order to the extent applicable to the company.

4. Without qualifying our opinion we state that no provision for employee benefits in accordance with AS 15 on Employee Benefits issued by the Institute of Chartered Accountants of India was made in the financial year as the existing provision at the beginning of the current year was adequate to cover the liabilities as at the year end.

5. a) The company has not restated the bank balances in foreign currency held outside India in accordance with AS-11 on The Effects Of Foreign Exchange Rates issued by the ICAI as a result of which, the profit after tax for the year has been understated by Rs 919.92 lakhs, the bank balance has been understated by Rs 1361.74 lakhs and the EPS has been understated by Re. 0.31. Further, attention is drawn to point i(iii) of note 1 regarding non-recognition of foreign exchange gain / loss arising on account of transactions in the nature of advances towards acquisition of overseas capital assets. In our opinion, the said non- recognition does not have a bearing on the profits of the company.

B) We draw attention to Point (l) forming part of Note 1 to the financial statements regarding the accounting policy followed for treatment of advertisement expenditure as Deferred Revenue Expenditure, which is not in accordance with AS-26 on Intangible Assets issued by the ICAI. Consequently, the profit for the year has been understated by Rs 99.93 lakhs.

C) Parties' Account Balances are subject to confirmation and reconciliation and the consequential effects of the same on the profits, assets and liabilities of the company are not determinable.

6. Further to our comments in the Annexure referred to in point 3 above we report that:

a) We have obtained all the information & explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account, as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate have been received from branches not visited by us;

c) The Balance Sheet and the Statement of Profit & Loss dealt with by this report are in agreement with the books of account;

d) Except for the comments on non-compliance of /AS 11 on Effects of Changes in Foreign Exchange rates and AS 26 on Intangible Assets as stated in point 5 above, in our opinion, the Balance Sheet, Statement Profit & Loss and the Cash flow statement dealt with by this report comply with the Accounting Standards referred in Section 211(3C) 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 directors is prima facie 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.

f) In our opinion and to the best of our information and according to the explanations given to us and subject to our comments in point 5 above and the consequential effects of the same on the financial statements of the Company which are not determinable, the said Balance Sheet and the Statement of Profit and Loss and the Cash Flow Statement read together with the Schedules and 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 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 Profit and Loss, of the Profit for the year ended on that date

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 the paragraph 3 of our report of even date on the accounts for the year ended ended 31st March, 2012 of Aqua Logistics Limited

1. a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, the management during the year has physically verified all the fixed assets 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 were noticed on such verification.

c) As per the information and explanations given to us, during the year, the Company has not disposed off any substantial part of the fixed assets that would affect the going concern status of the company.

2. The Company does not have any tangible inventory and accordingly the provisions of clause 4 (ii) of the order are not applicable.

3. According to the information and explanations given to us the Company has neither granted loans nor taken any loans (except advances in the course of business not in the nature of loans) secured or unsecured, to or from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956 during the year under review.

4. In our opinion and according to the information and explanation 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 fixed assets and receiving and rendering of services. Further, on the basis of our examination of the books and records of the Company, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control systems.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956;

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. In respect of transactions with parties with whom transactions exceeding value of Rupees Five Lakhs have been entered into during the financial year, for which no comments are being made owing to the unique and specialized nature of the items involved and absence of any comparable prices. For price justification, reliance is placed on the information and explanation given by the management.

6. The company has not accepted any deposits from public and hence directives issued by the Reserve Bank of India and the provisions of the sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable for the year under audit.

7. In our opinion, the internal audit system commensurate with the size and nature of its business needs to be strengthened.

8. In our opinion and according the information and explanations given to us the Central Government has not prescribed the maintenance of cost records by the company under section 209(1) (d) of the Companies Act, 1956.

9. In respect of statutory Dues, we report as under;

a. Based on the records of the company examined by us, the company has generally been regular in depositing undisputed taxes like Service Tax and all other applicable statutory dues except Tax Deducted At Source and Provident Fund where there has been a delay in depositing the same with the appropriate authorities as on 31st March 2012.However there are no arrears of Provident Fund as on 31st March 2012.

b. According to the information and explanations given to us and based on our examination of the company's books, the following dues are outstanding as on 31st March 2012 for a period of more than six months from the date they became payable.

Sr. No Nature of Due Amount Due (Rs)

1 Tax Deducted at Source 35.61 Lakhs

c. According to the information and explanations given to us, there is a disputed amount of Rs. 291.02 Lakhs with respect to Income Tax payable for the Assessment Year 2009-10 pending with the Income Tax Appellate Tribunal. Besides the above there are no other statutory dues which have not been deposited on account of any dispute.

10. The company does not have any accumulated losses as at 31st March, 2012. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. Based on the information and explanation given to us the company has defaulted in repayment of dues amounting to Rs. 2,983.41 lakhs to SICOM Ltd which fell due during November 2011 and the said default continues as on date.

12. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion and to the best of our information and according to the explanations provided by the management we are of the opinion that the company is neither a Chit Fund nor a Nidhi/Mutual Benefit Fund/Society. Therefore in our opinion the requirements of Clause 4(xiii) of the Companies (Auditors Report) Order 2003 do not apply to the company.

14. As per the records of the Company examined by us and the information and explanations given to us by the management, the company is not dealing or trading in shares, securities, debentures and other investments, therefore in our opinion Clause 4(xiv) of the Companies (Auditors Report) Order 2003 is not applicable to the company.

15. According to the information and explanations given to us, the company has extended guarantees for loans taken by a company under the same management from a bank. We are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interests of the company.

16. According to the information and explanations given to us and in our opinion, the term loans have been applied for the purposes for which they were obtained.

17. According to the information and explanations given to us and an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956 during the year.

19. During the period covered by our audit report the company has not issued any debentures.

20. The company has disclosed the end use of capital raised by way of issue of Global Depository Receipts during the financial year 2010-11 and the same has been verified by us with the information and explanation given to us.

21. Based upon the audit, procedures performed and information and explanation given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For ANIL NAIR & ASSOCIATES

Chartered Accountants

(Registration No. 000175S)

R. MOHAN

Place: Mumbai Partner

Date: 04th September, 2012 Membership No: 23022

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Mar 31, 2011

1. We have audited the attached Balance Sheet of Aqua Logistics Limited ("the company") as at 31st March 2011, the Profit and Loss account and the Cash Flow statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These Financial Statements are the responsibility of the 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 the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure hereto, a statement on the matters specified in Paragraphs 4 & 5 of the said order to the extent 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 & explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account, as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate have been received from branches not visited by us;

c) The Balance Sheet and the Profit & Loss account dealt with by this report are in agreement with the books of account;

d) In our opinion and subject to accounting policy on deferred revenue expenditure, the Balance Sheet, Profit & Loss Account and the Cash fow statement dealt with by this report comply with the Accounting Standards referred in Section 211(3C) 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 directors is prima facie 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.

f) In our opinion and to the best of our information and according to the explanations given to us and subject to;

a) Note - 11 on accounting for advertisement expenditure incurred in current year and earlier years and amortization of the same,

And

b) Note - 15 regarding confrmation of balances in parties' accounts and the consequential effects of the same on the profits, assets and liabilities of the company which are not ascertainable, the said

Balance Sheet and the Profit and Loss Account and the Cash Flow Statement read together with the Schedules and 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 the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2011.

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

iii. In the case of the Cash Flow Statement, of the Cash fows for the year ended on that date.

Annexure To The Auditors' Report

Referred to in the paragraph 3 of our report of even date on the accounts for the year ended 31st March, 2011 of Aqua Logistics Limited.

1. In respect of its fixed assets:

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

b. As explained to us, the management during the year has physically verified all the fixed assets 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 were noticed on such verification.

c. As per the information and explanations given to us, during the year, the Company has not disposed off any substantial part of the fixed assets that would affect the going concern status of the company.

2. The Company does not have any tangible inventory and accordingly the provisions of clause 4 (ii) of the order are not applicable.

3. According to the information and explanations given to us the Company has neither granted loans nor taken any loans (except advances in the course of business not in the nature of loans) secured or unsecured, to or from companies, frms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956 during the year under review.

4. In our opinion and according to the information and explanation 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 fixed assets and receiving and rendering of services. Further, on the basis of our examination of the books and records of the Company, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control systems.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956;

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. In respect of transactions with parties with whom transactions exceeding value of Rupees Five Lakhs have been entered into during the financial year, for which no comments are being made owing to the unique and specialized nature of the items involved and absence of any comparable prices. For price justification, reliance is placed on the information and explanation given by the management.

6. The company has not accepted any deposits from public and hence directives issued by the Reserve Bank of India and the provisions of the sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable for the year under audit.

7. In our opinion, the internal audit system commensurate with the size and nature of its business needs to be strengthened.

8. In our opinion and according the information and explanations given to us the Central Government has not prescribed the maintenance of cost records by the company under section 209(1) (d) of the Companies Act, 1956.

9. According to the information and explanations given to us and;

a. Based on the records of the company examined by us the company has generally in regular in depositing undisputed dues including Income Tax, Service Tax and other applicable statutory dues with the appropriate authorities except in the case of Provident fund where there has been a delay in depositing the same in few instances with the appropriate authorities. However there are no arrears of Provident fund as on 31st March, 2011.

b. According to the information and explanations given to us and the records of the company examined by us the Income tax demand for the assessment year 2008-2009 amounting to Rs. 27,23,490 is outstanding as on 31st March 2011 for a period of more than six months from the date they became payable. Besides the above there are no undisputed amounts payable of Income Tax, Service Tax and other applicable statutory dues.

c. According to the information and explanations given to us, there are no dues in respect of Service tax, Income tax, or other statutory dues that have not been deposited with the authorities on account of any dispute.

10. The company does not have any accumulated losses as at 31st March, 2011. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. Based on the information and explanations given to us the company has not defaulted in repayment of dues to any financial institution or bank.

12. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion and to the best of our information and according to the explanations provided by the management we are of the opinion that the company is neither a Chit Fund nor a Nidhi / Mutual Benefit Fund/ Society. Therefore in our opinion the requirements of Clause 4(xiii) of the Companies (Auditors Report) Order 2003 do not apply to the company.

14. As per the records of the Company examined by us and the information and explanations given to us by the management, the company is not dealing or trading in shares, securities, debentures and other investments, therefore in our opinion Clause 4(xiv) of the Companies (Auditors Report) Order 2003 is not applicable to the company.

15. According to the information and explanations given to us, the company has extended guarantees for loans taken by a company under the same management from a bank. We are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interests of the company.

16. According to the information and explanations given to us and in our opinion, the term loans have been applied for the purposes for which they were obtained.

17. According to the information and explanations given to us and an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956 during the year.

19. During the period covered by our audit report the company has not issued any debentures.

20. The company has not put to use the money raised by a GDR issue except issue expenses and we are therefore not commenting on the end use of money from the GDR issue.

21. Based upon the audit, procedures performed and information and explanation given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For ANIL NAIR & ASSOCIATES

Chartered Accountants

(Registration No. 000175S)

R. MOHAN

Place: Mumbai Partner

Date: 23rd August, 2011 Membership No: 23022

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Mar 31, 2010

1. We have audited the attached Balance Sheet of Aqua Logistics Limited ("the company") as at 31st March 2010, the Profit and Loss account and the Cash Flow statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These Financial Statements are the responsibility of the 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 the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure hereto, a statement on the matters specified in Paragraphs 4 & 5 of the said order to the extent 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 & explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account, as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate have been received from branches not visited by us;

c) The Balance Sheet and the Profit & Loss account dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit & Loss Account and the Cash flow statement dealt with by this report comply with the Accounting Standards referred in Section 211(3C) of the Companies Act, 1956.

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

f) In our opinion and to the best of our information and according to the explanations given to us and subject to

a.) treatment of advertisement expenditure

b) confirmation of balances in parties’ accounts and the consequential effects of the same on the profits, assets and liabilities of the company which are not ascertainable, the said Balance Sheet and the Profit and Loss Account and the Cash Flow Statement read together with the Schedules and 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 the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010.

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

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 the paragraph 3 of our report of even date on the accounts for the year ended 31st March, 2010 of Aqua Logistics Limited.

1. In respect of its fixed assets :

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

b. As explained to us, the management during the year has physically verified all the fixed assets 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 were noticed on such verification.

c. As per the information and explanations given to us, during the year, the Company has not disposed off any substantial part of the fixed assets that would affect the going concern status of the company.

2. In respect of its Inventory :

a. The Company does not have inventories and hence we are not commenting on clause (ii) of Paragraph 4 of the Order.

3. According to the information and explanations given to us the Company has neither granted loans nor taken any loans, secured or unsecured, to or from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956 during the year under review.

4. In our opinion and according to the information and explanation 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 fixed assets and receiving and rendering of services. Further, on the basis of our examination of the books and records of the Company, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control systems.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956;

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. In respect of transactions with parties with whom transactions exceeding value of Rupees Five Lakhs have been entered into during the financial year, for which no comments are being made owing to the unique and specialized nature of the items involved and absence of any comparable prices. For price justification, reliance is placed on the information and explanation given by the management.

6. The company has not accepted any deposits from public and hence directives issued by the Reserve Bank of India and the provisions of the sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable for the year under audit.

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

8. In our opinion and according the information and explanations given to us the Central Government has not prescribed the maintenance of cost records by the company under section 209(1) (d) of the Companies Act, 1956.

9. According to the information and explanations given to us in respect of Statutory dues:- a. Based on the records of the company examined by us and in our opinion the Company is generally regular with delays in a few instances in depositing undisputed statutory dues including Provident fund, Income Tax, Service Tax and other applicable statutory dues with the appropriate authorities during the year.

b. According to the information and explanations given to us and the records of the company examined by us the following amounts towards statutory dues is outstanding as on 31st March 2010 for a period of more than six months from the date they became payable:

(i) Tax Deducted at Source : Rs. 10.15 Lakhs

The aforesaid sums have since been deposited with the appropriate authorities.

c. According to the information and explanations given to us, there are no dues in respect of service tax, income tax, or other statutory dues that have not been deposited with the authorities on account of any dispute.

10. The company does not have any accumulated losses. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. Based on the information and explanations given to us the company has not defaulted in repayment of dues to any financial institution or bank.

12. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion and to the best of our information and according to the explanations provided by the management we are of the opinion that the company is neither a Chit Fund nor a Nidhi / Mutual Benefit Fund/ Society. Therefore in our opinion the requirements of Clause 4(xiii) of the Companies (Auditors Report) Order 2003 do not apply to the company.

14. As per the records of the Company examined by us and the information and explanations given to us by the management, the company is not dealing or trading in shares, securities, debentures and other investments, therefore in our opinion Clause 4(xiv) of the Companies (Auditors Report) Order 2003 is not applicable to the company.

15. According to the records of the Company and the information and explanations provided by the management, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us and in our opinion, the term loans have been applied for the purposes for which they were obtained.

17. According to the information and explanations given to us and an overall examination of the balance sheet, we report that no funds raised by the company on a short term basis have been used for long term investment by the company during the year under review.

18. During the period covered by our audit report the company has not issued any debentures.

19. We have verified the end use of money raised by public issue as disclosed in the notes to the financial statements.

20. 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 during the year.

21. Based upon the audit, procedures performed and information and explanation given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For ANIL NAIR & ASSOCIATES

Chartered Accountants

(Registration No. 000175S)

Place: Mumbai R.MOHAN

Date: May 29, 2010 Partner

Membership No: 023022

---

Mar 31, 2009

We have audited the attached Balance Sheet of M/S AQUA LOGISTICS LIMITED as at 31st March 2009 and the Profit and Loss account and the cash flow statement for the year ended on that date annexed thereto. These Financial Statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these Financial Statements based on our audit.

1. 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 preparation. We believe that our audit provides a reasonable basis for our opinion.

2. 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 hereto, a statement on the matters specified in Paragraphs 4 & 5 of the said order.

3. Further to our comments in the Annexure referred to in paragraph 2 above we report that:

a) We have obtained all the information 85 explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account, as required by law, have been kept by the Company, so far as appears from our examination of those books and proper returns adequate have been received from branches not visited by us;

c) The Balance Sheet and the Profit & Loss account dealt with by this report are in agreement with the books of account;

d) In our opinion the Balance Sheet and the Profit & Loss Account dealt with by this report comply with the mandatory Accounting Standards referred 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, 2009 and taken on record by the Board of Directors, we report that none of the directors is prima facie disqualified as on 31st March 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us and subject to confirmation of balances in parties accounts and the consequential effects of the same on the profits, assets and liabilities of the company which are not ascertainable, the said Balance Sheet and the Profit and Loss Account and the Cash Flow Statement read together with the Schedules and 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 the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2009.

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

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 the paragraph 2 of our Report of even date)

1. a. The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the management during the year has physically verified all the fixed assets 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 were noticed on such verification.

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

2. The Company does not have inventories and hence clause (ii) of Paragraph 4 of the Order is not applicable to the Company.

3. The Company has neither granted loans nor taken any loans secured or unsecured, to/ from companies, firms or other parties listed in the Register maintained under Section 301 of the Act except advances for software purchase, system integration and advance towards share capital to three companies listed in the register maintained under Section 301 of the Act and in the ordinary course of business.

4. In our opinion and according to the information and explanation 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 fixed assets and receiving and rendering of services. During the course of our audit, we have not observed any continuing failures to correct major weaknesses in internal controls with regard to purchase of fixed assets and receiving and rendering of services.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956;

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the companies act, 1956 and exceeding the value of five lakh rupees in have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The company has not accepted any deposits contemplated U/s.58A and 58AA of the Act and Rules framed there under are not applicable.

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

8. In our opinion and according the information and explanations given to us the Central Government has not prescribed the maintenance of cost records by the company under section 209(1) (d) of the Companies Act, 1956.

9. In respect of Statutory dues:-

a. According to the information and explanations given to us and based on the records of the company examined by us and in our opinion the Company is generally regular with delays in a few instances in depositing undisputed statutory dues including Provident fund, Income Tax, Sendee Tax and other applicable statutory dues with the appropriate authorities during the year.

b. According to the information and explanations given to us and the records of the company examined by us the following amounts towards statutory dues is outstanding as on 31st March 2009 for a period of more than six months from the date they became payable:

(i) Tax Deducted at Source - Rs. 15.59 lakhs

(ii) FBT (Asst. Year 2008-09) - Rs.21.80 lakhs

The aforesaid sums have since been deposited with the appropriate authorities.

c. According to the information and explanations given to us, there are no dues in respect of service tax, income tax, or other statutory dues that have not been deposited with the authorities on account of any dispute.

10.The company does not have any accumulated losses. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. Based on the information and explanations given to us the company has not defaulted in repayment of dues to any financial institution or bank.

12.In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities,

13.In our opinion and to the best of our information and according to the explanations provided by the management we are of the opinion that the company is neither a Chit Fund nor a Nidhi / Mutual Benefit Fund/ Society. Therefore in our opinion the requirements of Clause 4(xiii) of the Companies (Auditors Report) Order 2003 do not apply to the company,

14.As per the records of the Company examined by us and the information and explanations given to us by the management, the company is not dealing or trading in shares, securities, debentures and other investments, therefore in our opinion Clause 4{xiv) of the Companies (Auditors Report) Order 2003 is not applicable to the company.

15, According to the records of the Company and the information and explanations provided by the management, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16.According to the information and explanations given to us and in our opinion, the term loans have been applied for the purposes for which they were obtained.

17.According to the information and explanations given to us and an overall examination of the balance sheet, we report that no funds raised by the company on a short term basis have been used for long term investment by the company during the year under review.

18.During the year, the company has made preferential allotment of shares to parties covered in the register maintained U/s.301 of the Act. We are unable to comment as to whether the prices at which shares have been issued were not prejudicial to the interest of the company as the allotments have been made pursuant to a contractual obligation in earlier years.

19.During the period covered by our audit report the company has not issued any debentures.

20.The company has not raised any money by way of public issue during the year. Hence in our opinion Clause 4(xx) of the Companies (Auditors Report) Order 2003 is not applicable to the company.

21. Based upon the audit, procedures performed and information and explanation given by the management, we report that no fraud on or by the company has been noticed that causes the financial statements to be materially misstated.

For ANIL NAIR & ASSOCIATES Chartered Accountants

Place: Mumbai R.MOHAN

Date: 30th July 2009 Partner

Membership No- 23022