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Auditor Report of Waterbase Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of The Water base Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the 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 thereunder.

We conducted our audit in accordance with the Standards on Auditing specifi ed 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 fi nancial 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. 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 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.

Emphasis of Matters

We draw attention to note no. 30 of the financial statements amounting to Rs.670.94 Lakhs related to the law suits filed against the Company by Canara Bank and Non-Provision of interest on dues.

Report on Other Legal and Regulatory Requirements

(1) As required by the Companies ( Auditors' 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 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 and taken on record by the Board of Directors, none of the directors are 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. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note no. 30 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company

Annexure to Auditors' Report Independent Auditor's Report

Refer to paragraph (1) of the Report on Other Legal and Regulatory Requirements.

(i) (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) The Company has a regular programme of physical verification of its fixed assets by which assets are verified in a phased manner over a period of three years. Accordingly, certain fi xed assets were verified during the year and no material discrepancies were noticed

(ii) (a) The 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, is reasonable and adequate in relation to the size of the company and the nature of its business.

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

(iii) According to the information and explanations given to us, the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanations as given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services.

(v) The company has not accepted deposits.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government under sub-section (1) of section 148 of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(vii) (a) According to the records of the Company, the Company is regular in depositing with appropriate authorities the undisputed statutory dues including Provident Fund, Income Tax, Sales Tax and other material statutory dues.

(b) According to the information and explanations given to us, there are no disputed dues of Value Added Tax, Income Tax, Wealth Tax, Service Tax, Custom duty, Excise duty or cess which have not been deposited on account of any dispute other than the following items:

(Rs. Lakhs)

Forum where Dispute is Name of Statute Nature of Dues Amount pending.

Import duty on Raw Materials Custom Duty Chennai High Court 535.36 Imported during 1995-96

(a) Service Tax on Commission CESTAT, Bangalore 63.86 Custom- Central Excise & to Foreign Agents 2006-07 Service Tax (b) disallowance of Cenvat credit AP High court 49.48

Dy, Commissioner(C.T) Interest on Deferred Sales Tax Sales Tax Commercial Tax Deptt. - 33.89 Payment Andhra Pradesh.

(c) There are no amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

(viii) The Company does not have accumulated loss and has not incurred cash losses during the financial year and in the immediately preceding financial year;

(ix) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders except, working capital loan of Rs. 459.85 lakhs from Canara Bank which is under dispute / litigation. The unpaid balance interest as per books of accounts is Rs. 349.96 Lakhs.

(x) The company has not given any guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof are prejudicial to the interest of the company;

(xi) The Company has not applied for term loans during the year under review.

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

For Mitra Kundu & Basu

Chartered Accountants (F. R. No. 302061E)

(S. Das)

(Partner) (Membership No. 051391)

New Delhi, 21st May, 2015


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

The 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 notified under the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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 judgment, including the assessment of the risks of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessment, 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 the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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 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 ended as at March 31, 2014.

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

(iii) in the case of Cash Flow Statement, of the cash flows for the year 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-sec(4A) of Sec 227 of the Act, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the order.

2. As required by section 227(3) ofthe 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 purposes 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, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry ofCorporate Affairs in respect of Section 133 ofthe Companies Act, 2013

(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, none of the directors are disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 ofthe Companies Act, 1956.

ANNEXURE TO AUDITOR''S REPORT

(referred to in paragraph 5 of our report of even date)

Referred to our report to the members of The Waterbase Limited for the year ended 31st March,2014.

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

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. Accordingly, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and nature of its assets.

(c) During the year, the company has not disposed off any substantial part of its fixed assets and the going concern status ofthe Company is not affected.

2 (a) The inventory of the Company has been physically verified by the management at reasonable intervals during the year.

(b) The procedure of physical verification appears to be reasonable and adequate in relation to the size of the company and nature of its business, on the basis of information and explanations received by us.

(c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3 (a) According to information and explanations given to us, the company has not granted any loan, secured or unsecured to Companies, firms or other parties covered in the register maintain under section 301 of the Companies Act, 1956. Consequently, clause (iii) (b), (c) & (d) of paragraph 4 of the order are not applicable.

(b) According to the information and explanations as given to us in respect of loans secured or unsecured, taken by the Company from companies, firms or other parties covered in the register maintained under section 301 ofthe Companies Act, 1956:

i) The Company has taken loan of L 680 lakhs as covered in the register maintained under section 301 of the Companies Act, 1956. At the year end, the outstanding balance of such loan is L 91 lakhs and the maximum amount outstanding during the year is 680 lakhs.

ii) The rate of interest and other terms and conditions of such loan are prima-facie not prejudicial to the interest ofthe company,

iii) The principal amount of L 589 lacs is repaid during the year and the Company has defaulted in payment of interest to the tune of L 50.92 lakhs.

4 In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for sale of goods and services. Further, on the basis of our examinations, and according to the information and explanations given to us, we have neither come across nor have we been informed of any instance of major weakness in the aforesaid internal control system.

5. In our opinion there are no contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(v)(b) of the Order is not applicable to the Company and hence not commented upon.

6 The Company has not accepted any deposits from the public to which the provisions of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposit) rules, 1975 apply.

7 The internal audit of the company is being carried out by the departmental staff which in our opinion is commensurate with the size and nature of its business.

8 We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the central government for the maintenance of cost records under section 209 ( 1 ) ( d ) of the Companies Act,1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

9 (a) According to the records of the company, the company is regular in depositing with appropriate authorities the undisputed statutory dues including Provident Fund, Income Tax, Sales Tax and other material statutory dues.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, wealth tax, sales tax, customs duty, excise duty and other material statutory dues were outstanding, as at 31st March,2014 for a period of more than six months from the date they became payable.

10. According to information and explanations given to us, there are no disputed dues of sales tax, income- tax, customs tax/wealth-tax, excise duty/cess which have not been deposited except, Import Duty of L 535.36 lakhs levied by Custom Authority against import of raw materials, which is under appeal by the department in the High Court of Chennai and L 63.86 lakhs levied by Central Excise which is also under CESCAT ,Bangalore.

11. The company has not incurred any cash loss during the year and in the immediately preceding financial year.

12. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders except, working capital loan of L 459.85 lakhs from Canara Bank which is under dispute / litigation.

13. The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

14. Since the Company is not a chit fund / Nidhi / Mutual Benefit Fund / Society, the relative reporting requirements of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable.

15. Since the Company is not dealing or trading in shares, securities, debentures or other investments, the relative reporting requirements of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable.

16. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

17. According to the information and explanations given to us and as per available records, the Company has availed a fresh loan from banks and the said fund was utilized for the purposes for which the loan has been taken.

18. 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 utilized for long term investment.

19. The company during the period covered by our audit report has not made a preferential allotment of shares to parties or companies covered in the register maintained under section 301 ofthe Companies Act, 1956.

20. During the period covered by our audit report, the company has not issued debentures.

21. During the year the Company has raised L 1286.77 lakhs by way of Rights Issue to the Share holders and the end use objective as set out in the prospectus has been fulfilled except settlement of a disputed amount.

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

For MITRA KUNDU & BASU Chartered Accountants Firm Regn.No.302061E (SIBAJI DAS) Partner.

Chennai, May 27, 2014 Membership No. 051391


Mar 31, 2013

Report on the Financial Statement

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

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 principles generally accepted in India including Accounting Standards referred to in sub-section (3C) of section 211 of the 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 these 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 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 Statement of Profit and Loss Account, of the profit of the Company for the year ended on that date; and

(iii) in the case of 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-sec(4A) of Sec 227 of the Act, we enclose in the Annexure a statement on the matters specified in paragraph 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 purposes 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 sub-section (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, none of the Directors are 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 THE AUDITOR''S REPORT (referred to in paragraph 5 of our report of even date)

Referred to our report to the members of The Waterbase Limited for the year ended 31 March, 2013.

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

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. Accordingly certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and nature of its assets.

(c) During the year, the Company has not disposed off any substantial part of the fixed assets and the going concern status of the Company is not affected.

2. (a) The inventory of the Company has been physically verified by the management at reasonable intervals

during the year.

(b) The procedure of physical verification appears to be reasonable and adequate in relation to the size of the Company and nature of its business, on the basis of information and explanation received by us.

(c) On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3. (a) According to information and explanations given to us, the Company has not granted any loan, secured

or unsecured to Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Consequently, clause (iii) (b) (c) & (d) of paragraph 4 of the order is not applicable.

(b) According to the information and explanations given to us the Company has taken secured and unsecured loans from companies, firms or other parties covered in the register maintain under section 301 of the Companies Act, 1956:

The Company has taken loan of Rs. 680 lakhs as covered in the register maintained under section 301 of the Companies Act, 1956. At the year end, the outstanding balance of such loan is Rs. 680 lakhs and the maximum amount outstanding during the year is Rs. 680 lakhs.

(c) The rate of interest and other terms and conditions of such loan are prima-facie not prejudicial to the interest of the Company,

(d) The principal amount is not due for repayment and the Company has defaulted in payment of interest to the tune of Rs. 194.92 lakhs.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchase of inventory, fixed assets and for sale of goods and services. Further, on the basis of our examinations, and according to the information and explanations given to us, we have neither come across nor have we been informed of any instance of major weakness in the aforesaid internal control system.

5. In our opinion there are no contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provision of clause 4(v)(b) of the Order is not applicable to the Company and hence not commented upon.

6. The Company has not accepted any deposits from the public to which the provision section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposit) rules, 1975 apply.

7. The internal audit of the Company is being carried out by the departmental staff which in our opinion is commensurate with the size and nature of its business.

8. As per information and explanations given to us it is noted that the maintenance of cost records has not been prescribed by the Central Government under clause ( d ) of sub-section 209 of the Act.

9. (a) According to the records of the Company, the Company is regular in depositing with appropriate authorities the undisputed statutory dues including Provident Fund, Income Tax, Sales Tax and other material statutory dues. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, wealth tax, sales tax, customs duty, excise duty and other material statutory dues were outstanding, as at 31st March 2013 for a period of more than six months from the date they became payable.

10. According to information and explanations given to us, there are no disputed dues of sales tax, income- tax, customs tax/wealth-tax, excise duty/cess which have not been deposited except, Import Duty of Rs. 535.36 lakhs levied by Custom Authority against import of raw materials, which is under appeal by the department in the High Court of Chennai.

11. The Company has not incurred any cash loss during the year and in the immediately preceding financial year.

12. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders except working capital loan of Rs. 459.85 lakhs from Canara Bank which is under dispute / litigation.

13. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

14. Since the Company is not a chit fund / Nidhi / Mutual Benefit Fund / Society, the relative reporting requirements of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable.

15. Since the Company is not dealing or trading in shares, securities, debentures or other investments, the relative reporting requirements of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable.

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

17. According to the information and explanations given to us and as per available records, the Company has availed a fresh term loan from banks and the said fund was utilized for the purposes for which the loan has been taken.

18. According to the information and explanations given to us and asper the verification of the records of the Company, on an overall basis, the Company has not utilised short term fund for long term purposes.

19. The Company during the period covered by our audit report has not made a preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

20. During the period covered by our audit report, the Company has not issued debentures

21. The Company has not raised any money by the way of public issue during the year. Therefore the provisions of clause (xx) of the said Order are not applicable to the Company.

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

Chartered Accountants

Firm Regn. No. 302061E

SIBAJI DAS

Partner

New Delhi, May 24, 2013 Membership No. 051391


Mar 31, 2012

We have audited the accompanying financial statements of The Waterbase Limited which comprise the Balance Sheet as at 31st March, 2012, 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.

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 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.

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In making those assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design the audit procedures that are appropriate in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

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

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

As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report) Amendment Order, 2004 issued by the Central Government of India in terms of sub-sec(4A) of Sec 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

Further to our comments in the Annexure referred to above, 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 purposes 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, Cash Flow Statement comply with the Accounting Standards referred to sub-section (3C) of section 211 of the Companies Act, 1956; and

(v) On the basis of written representations received from the directors as on 31st. March,2012, and taken on record by the Board of Directors, none of the directors are 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.

ANNEXURE TO THE AUDITOR'S REPORT (referred to in paragraph 3 of our report of even date)

Referred to our report to the members of The Waterbase Limited for the year ended 31 March, 2012.

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

2. The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. Accordingly certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and nature of its assets.

3. During the year, the Company has not disposed off any substantial part of the fixed assets

4. The inventory of the Company has been physically verified by the management at reasonable intervals during the year.

5. The procedure of physical verification appears to be reasonable and adequate in relation to the size of the Company and nature of its business, on the basis of information and explanation received by us.

6. On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

7. The Company has not granted any loan, secured or unsecured to Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Consequently, clause (iii) (b); (c) & (d) of paragraph 4 of the order are not applicable.

In respect of loans secured or unsecured taken by the Company from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, according to the information and explanations given to us:

a) The Company has taken loan of Rs. 780 lakhs as covered in the register maintained under section 301of the Companies Act, 1956. At the year end, the outstanding balance of such loan is Rs. 680 lakhs and the maximum amount outstanding during the year is Rs. 780 lakhs.

b) The rate of interest and other terms and conditions of such loan are prima-facie not prejudicial to the interest of the Company.

c) The principal amount is not due for repayment and the unpaid interest to the tune of Rs. 143.62 lakhs is proposed for conversion through Rights Issue.

8. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchase of inventory and fixed assets and for sale of goods and services. Further, on the basis of our examinations, and according to the information and explanations given to us, we have neither come across nor have we been informed of any instance of major weakness in the aforesaid internal control system.

9. a) In our opinion and according to the information and explanations given to us, the particulars of

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

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained u/s 301of the Act and exceeding the value of Rs. 5 lakhs, the transactions have been made on prices which are prima-facie reasonable having regard to the prevailing market prices at the relevant time.

10. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public under section 58A and 58AA of the Companies Act, 1956 and the rules framed there under.

11. The internal audit of the company is being carried out by the departmental staff which in our opinion is commensurate with the size and nature of its business.

12. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, 1956 and are of opinion that prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

13. According to the records of the Company, the Company is regular in depositing with appropriate authorities the undisputed statutory dues including Provident Fund; Income Tax; Sales Tax etc.

According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty and excise duty were outstanding, as at 31 March, 2012 for a period of more than six months from the date they became payable.

14. According to information and explanations given to us, there are no disputed dues of sales tax, income-tax, customs duty/wealth-tax, excise duty/cess which have not been deposited except, Import Duty of Rs. 535.36 lakhs levied by Custom Authority against import of raw materials, which is under appeal by the department in the High Court of Madras.

15. The Company has not incurred any cash loss during the year and in the immediately preceding financial year. The accumulated loss has been set off and there is no loss at the end of the year.

16. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders except, a working capital loan of Rs. 939.85 lakhs from Canara Bank which is under dispute / litigation.

17. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

18. Since the Company is not a chit fund / Nidhi / Mutual Benefit Fund / Society, the relative reporting requirements are not applicable.

19. Since the Company is not dealing or trading in shares, securities, debentures or other investments, the relative reporting requirements are not applicable.

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

21. According to the information and explanations given to us and as per available records, the Company has availed a fresh term loan from banks and the said fund was utilized for the purposes for which the loan has taken.

22. According to the information and explanations given to us and as per the verification of the records of the Company, on an overall basis, the Company has not utilized short term funds for long term purposes.

23. The Company has made a preferential allotment of 10,00,000 Equity shares of Rs. 10/- each to M/s. Towerbase Services Pvt. Ltd., a Company covered in the Registrar maintained under section 301 of the Act. According to the information and explanations and available records we are of the opinion that the prices at which shares have been issued is not prejudicial to the interest of the Company.

24. During the period covered by our audit report, the Company has not issued debentures

25. During the period covered by our audit report, the Company has not raised money by public issues.

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

For MITRA KUNDU & BASU

Chartered Accountants Firm Regn. No. 302061E

SIBAJI DAS Partner

Chennai, May 30, 2012 Membership No. 051391


Mar 31, 2011

We have audited the attached Balance Sheet of The Waterbase Limited, as at 31st March, 2011 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 Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with 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 mis-statement. 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.

As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we are giving in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order. 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 accounts as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement read with significant Accounting Policy and Notes on Accounts as referred in Schedule 19 comply with the Accounting Standards referred to in sub-section (3c) of section 211 of the Companies Act, 1956.

(e) On the basis of the written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors 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;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said Accounts read with the Notes in Schedule 19 gives the information required by the Companies Act, 1956 (as amended) in the manner so required and gives 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 loss of the Company 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 AUDITOR'S REPORT (referred to in paragraph 3 of our report of even date)

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

(b) The fixed assets have been physically verified by the management at reasonable intervals during the year and no material discrepancy was noticed during such verification.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

(ii) (a) The inventory of the Company has been physically verified by the management at reasonable intervals during the year.

(b) In our opinion and according to the information and explanations 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) On the basis of our examination of records of inventory, in our opinion, the Company has maintained proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) The Company has not granted any loan, secured or unsecured to Companies, firms, or other parties covered in the register maintain under section 301 of the Companies Act, 1956. Consequently, clause (iii) (b); (c) & (d) of paragraph 4 of the order are not applicable. In respect of loans, secured or unsecured taken by the Company from companies, firms or other parties covered in the register maintain under section 301 of the Companies Act, 1956. According to the information and explanations given to us:

(b) The Company has taken loan of Rs. 630 lakhs as covered in the register maintained under section 301 of the Companies Act, 1956. At the year end, the outstanding balance of such loan is Rs. 630 lakhs and the maximum amount outstanding during the year is Rs. 630 lakhs.

(c) The rate of interest and other terms and conditions of such loan taken are, in our opinion, prima-facie not prejudicial to the interest of the Company.

(d) The principal amount is not due for repayment and the Company has been regular in payment of interest.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchase of inventory and fixed assets and for sale of goods and services. Further, on the basis of our examinations, and according to the information and explanations given to us, we have neither come across nor have we been informed of any instance of major weakness in the aforesaid internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts of arrangements referred to in section 301 of the Act, has been entered in the register required to maintain under the section.

(b) In our opinion and according to the information and explanations given to us, for sale of goods made in pursuance of contracts or arrangements entered into the register in pursuance of section 301 of the Act and exceeding the value of Rs. 5.00 lakhs in respect of any party during the year, the transaction have been made on prices which are prima-facie reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits under the provision of section 58A and 58AA of the Companies Act, 1956 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) To the best of our knowledge, the Central Government has not prescribed the maintenance of cost records by the Company under section 209 (1) (d) of the Companies Act, 1956 for any of its products.

(ix) (a) According to the information and explanations given to us and according the books and records as produced and examined by us, in our opinion, the Company is regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues with the appropriate authorities and no undisputed amounts payable in respect of the aforesaid dues are outstanding as at 31st March, 2011 for a period of more than six months from the date of becoming payable.

(b) According to the records of the Company and the information and explanations given to us, there are no disputed dues on account of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess matters that have not been deposited.

(x) The Company has made profits during the financial year ended 31st March 2011, the Company incurred a cash loss in the immediately preceding financial year and has an accumulated loss as at 31st March 2011, this loss is less than 50% of its net worth.

(xi) In our opinion and according to the explanations given to us, the Company has not defaulted in repayment of dues to banks.

(xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provision of any special statute as specified under paragraph

(xiii) of the Order are not applicable to the Company.

(xiv) In our opinion and according to the information and explanation given to us, the Company is not a dealer or trader in securities.

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

(xvi) According to the information and explanations given to us, the term loans have been applied for the purpose for which they were obtained.

(xvii) Based on information and explanations given to us and on overall examination of the balance sheet of the Company, in our opinion, there are no funds raised on a short term basis which have been used for a long term investment.

(xviii) 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.

(xix) The Company has not issued any debentures during the period covered by our report.

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

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

For MITRA KUNDU & BASU Chartered Accountants Firm Regn. No. 302061E

SIBAJI DAS Partner Membership No. 051391

New Delhi, July 18, 2011


Mar 31, 2010

We have audited the attached Balance Sheet of The Waterbase Limited, as at 31st March, 2010 and the Profit and Loss account and the Cash Flow statement for the year ended on that date, annexed thereto. These fmancial statements are the responsibility of the companys management. Our responsibihty is to express an opinion on these financial statements based on our audit.

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 mis-statement. 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.

As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we are giving in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.

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 accounts as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement read with significant Accounting Policy and Notes on Accounts as referred in Schedule 19 comply with the Accounting Standards referred to in sub-section(3c)ofsection211 of the Companies Act, 1956.

(e) On the basis of the written representations received from the Directors and take no nrecord by the Board of Directors, we report that none of the Directors is 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 CompamesAct,1956;

(f) In our opinion and to the best of our information and according to the explanatons given to us, the said Accounts read with the Notes in Schedule 19 gives the information required by the Companies Act, 1956 (as amended) in the manner so required and gives 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 3lMarch, 2010;

(ii) In the case of the Profit and Loss Account, of the loss of the Company 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 maintaining proper records showing Ml particulars including quantitative details and situation of fixed assets

(b) The fixed assets have been physically verified by the management at reasonable intervals during the year and no material discrepancy was noticed during such verification.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

(ii) (a )The inventory of the Company has been physically verified by the management at reasonable intervals duringthe year.

(b) In our opinion and according to the information and explanations 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) On the basis of our examination of records of inventory, in our opinion, the Company has maintained proper records of inventory and no material discrepancies were noticed on physical verification.

(iii)The Company has neither granted / 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. Consequently, clause (iii) (b), (c), (d), (f) and (g) of paragraph 4 of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchase of inventory and fixed assets and for sale of goods and services. Further; on the basis of our examinations, and according to the information and explanations given to us, we have neither come across nor have we been informed of any instance of major weakness in the aforesaid internal control system.

(v) In our opinion and according to the information and explanations given to us, there are no transactions that need to be enered in the register maintained in pursuance of section 301l of the Companies Act, 1956 hence paragraph (v) (b) of the order is not applicable.

(vi) The Company has not accepted any deposits under the provision of section 58A and 58AA of the Companies Act, 1956 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) To the best of our knowledge, the Central Government has not prescribed the maintenance of cost records by the Company under section 209(1) (d) of the Companies Act, 1956 for any of its products.

(ix)(a) According to the information and explanations given to us and according the books and records as produced and examined by us, in our option, the Company is regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues with the appropriate authorities and no undisputed amounts payable in respect of the aforesaid dues are outstanding as at 31st March, 2010 for a penod of more than six months from the date of becoming payable.

(b) According to the records of the Company and the information and explanations given to us, there are no disputed dues on account of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess matters that have not been deposited.

(x) The Company has incurred cash loss during the financial year ended 31st March, 2010 and it has not incurred any cash losses in the immediately preceding financial year. The Company has no accumulated losses as at 3rlst March,2010.

(xi) In our opinion and according to the explanations given to us, the Company has not defaulted in repayment of dues to banks

(xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provision of any special statute as specified under paragraph (xiii) of the Order are not applicable to the Company

(xiv) In our opinion and according to the information and explanation given to us, the Company is not a dealer or trader in securities.

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

(xvi) According to the information and explanations given to us, the term loans have been applied for the purpose for which they were obtained.

(xvii) Based on information and explanations given to us and on overall examination of the balance sheet of the Company, in our opinion, there are no funds raised on a short term basis which have been used for along term investment.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section301 of the Companies Act, 1956 during the year.

(xix) The Company has not issued any debentures during the period covered by our report.

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

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

For MITRAKUNDU & BASU

Chartered Accountants Firm Regn .No.302061E

SIBA JI DAS

Partner

New Delhi, August3,2010 MembershipNo. 051391





 
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