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Auditor Report of Indosolar Ltd.

Mar 31, 2016

To the Members of Indosolar Limited 1. Report on the Financial Statements

We have audited the accompanying financial statements of Indosolar Limited (“the Company”), which comprise the balance sheet as at 31 March 2016, 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 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 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.

3. Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

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

4. Basis for Qualification

a) The Company has continued to incur significant losses in the current year resulting in further erosion of its net worth which had already been fully eroded during the year ended 31 March 2014. Further, the Company has not met its liabilities due on the first corporate debt restructuring package (Rs. 59,444.58 lakhs) and on account of purchase of materials and capital goods (Rs. 6,452.78 lakhs). Further, an amount of Rs. 10,07750 lakhs will become payable by 31 March 2017 Due to continued liquidity issues, the Company approached the consortium bankers for a second corporate debt restructuring package on the basis of a techno economic viability study conducted by an external expert. Consortium bankers in their joint lenders meeting has decided that banks’ are not considering second restructuring proposal as of now and exploring the possibility of sale to Asset Restructuring Company and/or to invoke change in management.

b) As per the Company, despite significant downturn in global market, as a result of several initiatives by Government of India, the domestic market has been showing an upturn of late resulting in the Company getting orders and hence continuation of commercial production. Based on the current orders in hand (approx. 71 MW), the Company expects to operate at the significant level of capacity till July 2016. The note of the Statement also expands on certain measures taken/expected to be announced by the Government to support domestic manufacturers in India including the domestic content requirement etc.

c) The Company’s claim to it being eligible for certain capital incentives is still under litigation and the outcome will be known upon the conclusion of the litigation. Also refer note 40 to the financial statement.

d) The dispute with MP Urja regarding the turnkey contract and the likely impact of the customers claim is uncertain. Also refer note 41 to the financial statements.

e) The Company has not been able to meet its commitment to Special Economic Zone on the basis of which the Company imported certain raw material and machinery without payment of custom duty. Also refer note 33 to the financial statements.

On the basis of the overall evaluation of the above factors and considering the domestic content requirements and other expression of interests issued by certain Public Sector Units, procurement of recent orders and resumption of production in the second quarter of year ended 31 March 2016, a techno economic viability conducted by an external expert which forms the basis of the application for seeking a second Corporate Debt Restructuring package and favorable decision of the High Court of Delhi in relation to the Company’s eligibility for certain capital incentive, management believes that there is no impairment in respect of the carrying value of its fixed assets including capital work in progress as at 31 March 2016 and that it is appropriate to prepare the accounts on a going concern basis.. In our view, the full erosion of net worth, inability of the Company to meet certain material liabilities and commitments, the fact that the impact of the government decisions would be known only in future, the uncertainty of outcome of claims, uncertainty regarding the second corporate debt restructuring and uncertainty on the ability of the Company to meet its export obligations create material uncertainties. Therefore, the quantum of impairment in respect of carrying value of fixed assets cannot be determined at present and material uncertainties exist regarding the use of going concern assumption in preparing the financial statements.

5. Qualified opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, 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 31 March 2016, its loss and its cash flows for the year ended on that date.

6. Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor’s Report) Order, 2016 (‘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, a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

a. We have sought and, except for the matters described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b. except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph above, 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. except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the 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. the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

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

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

h. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule11of 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 39 and note 40 to the financial statements;

ii. the Company did not have any long term contracts including derivative contracts for which there were any foreseeable losses; and

iii. the Company did not have any dues on account of Investor Education and Protection Fund.

The Annexure referred to in Independent Auditors’ Report to the members of the Company on the financial statements for the year ended 31 March 2016. We report that:

(i) (a) According to the information and explanations given to us, the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us, the Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified annually. In our opinion, the frequency of physical verification is reasonable having regard to the size of the Company and nature of its assets. As informed to us, no discrepancies have been noticed on such verification.

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

(ii) According to the information and explanations given to us, the inventories have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable and no material discrepancies were noticed.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act. Accordingly, Paragraph 3 (iii) (a), (b) and (c) of the Order are not applicable.

(iv) The Company has not given any loans, or made any investments, or provided any guarantee, or security as specified under section 185 and 186 of the Act. Accordingly, Paragraph 3(iv) of the Order is not applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by Central government for maintenance of cost records under section 148(1) of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, employees’ state insurance, sales tax, duty of customs duty of excise, value added tax, cess and other material statutory dues have generally been regularly deposited during the year with the appropriate authorities. In respect of income tax and service tax, the amounts have not been regularly deposited with the appropriate authorities and there have been delays in number of cases.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income tax, sales tax, service, tax duty of excise, duty of custom, value added tax, cess and other material statutory dues were in arrears as at 31 March 2016 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, and on the basis of the records of the Company examined by us, there are no dues of income tax, sales tax, duty of customs, duty of excise and value added tax which have not been deposited with the appropriate authorities on account of any dispute except as mentioned below:

Name of the statute

Nature of the dues

Amount in rupees (lakhs)*

Period to which the amount relates

Forum where dispute is pending

Finance Act, 1994

Service tax

25.60

2010-2011

Commissioner of Service tax

Finance Act, 1994

Service tax

161.06

2011-2012

Commissioner of Service tax

Finance Act, 1994

Service tax

20.10

2012-2013

Commissioner of Service tax

Finance Act, 1994

Service tax

11.52

2013-2014

Commissioner of Service tax

‘Subsequent to the year end, the Company has paid Rs. 11.61 lakhs as payment under protest.

(viii) In our opinion and according to the information and explanations given to us, and based on our examination of the books of account and related records, the Company has defaulted in repayment of dues to its bankers as disclosed below. The Company did not have any outstanding dues to financial institutions, government and debenture holders during the year.

Nature of the lender

Nature of dues

Amount in rupees (lakhs)

Period to which it relates

Andhra Bank

Interest

5,969.84

July 2013- March 2016

Andhra Bank

Principal

6,882.66

October 2013- March 2016

Bank of Baroda

Interest

3,995.76

July 2013- March 2016

Bank of Baroda

Principal

2,505.34

October 2013- March 2016

Corporation Bank

Interest

5,333.64

April 2013- March 2016

Corporation Bank

Principal

5,26748

October 2013- March 2016

Indian Bank

Interest

3,83744

April 2013- March 2016

Indian Bank

Principal

2,015.71

October 2013- March 2016

Union Bank of India

Interest

11,063.21

April 2013- March 2016

Union Bank of India

Principal

12,573.50

October 2013- March 2016

(ix) According to the information and explanations given to us, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and the term loans during the year. Accordingly, Paragraph 3(ix) is not applicable.

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

(xi) According to the information and explanations given to us, and based on our examination of the records of the Company, the Company has accrued/paid managerial remuneration which was in excess of the limits specified in Schedule V read with Section 197 of the Act. The Company had filed applications with the Central Government for regularizing the payments of managerial remuneration. Subsequent to the year end, the Company received letters from Central Government rejecting such applications. Accordingly, the Company has recovered the managerial remuneration paid in year ended 31 March 2016 of Rs. 184.99 lakhs and in previous year of Rs. 147.84 lakhs by adjusting the payable balances of directors.

(xii) According to the information and explanations given to us, the Company is not a nidhi company. Accordingly, Paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, there are no transactions with the related parties which are not in compliance with Section 177 and 188 of the Act and the details have been disclosed in the Financial Statements, as required, by the applicable accounting standards.

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

(xv) According to information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, Paragraph 3(xv) of the Order is not applicable.

(xvi) According to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

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

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

Management’s Responsibility for Internal Financial Controls

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

Auditors’ Responsibility

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

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

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

Meaning of Internal Financial Controls over Financial Reporting

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

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

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

For B S R & Co. LLP

Chartered Accountants

Firm’s registration number: 101248W/W-100022

Rajiv Goyal

Place: Gurgaon Partner

Date: 30 May 2016 Membership number: 094549


Mar 31, 2015

We have audited the accompanying financial statements of Indosolar Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2015, and 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 Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act 2013 ("the Act") with respect to the preparation of these 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 referred 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.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and 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 qualified audit opinion on the financial statements

4. Basis of Qualification

a) The Company has made a profit in the current quarter though on a full year basis it has continued to incur losses resulting in further erosion of its net worth which had already been fully eroded as at 31 March 2014. Further the Company has not met its liabilities (Rs. 26522.78 lakhs) due on the first corporate debt restructuring package and on account of purchase of materials and capital goods (Rs. 3,866.32 lakhs). The Company has therefore approached the bankers for a second corporate debt restructuring package on the basis of a technical economic viability study conducted by an external expert.

b) As per the Company, despite significant downturn in global market, as a result of several initiatives by Government of India, the domestic market has been showing an upturn of late resulting in the Company having obtained orders for 132.65 MW in the current year which has resulted in recommencement of production in the current year ended 31 March 2015 which is expected to ensure full capacity utilization upto May 2015. The note also expands on certain measures taken/expected to be announced by the Government to support domestic manufacturers in India including the domestic content requirement, viability gap funding etc.

c) The Company's claim to it being eligible for certain capital incentives is still under litigation. (Note 35)

d) The dispute with MP Urja regarding the turnkey contract and the likely impact of the customers claim is uncertain. (Note 42)

e) The Company has not been able to meet its commitment to customs authorities on the basis of which the company imported certain raw materials and machinery without payment of customs duty. (Note 35)

On the basis of its overall evaluation of the above factors and as per the techno-economic viability study conducted by an external expert, the Company believes that there is no impairment in respect of carrying value of its fixed assets including capital work in progress as at 31 March 2015 and it is appropriate to prepare the accounts on a going concern basis. In our view, the full erosion of net worth, inability of the Company to meet certain material liabilities and commitments, the fact that the impact of the government decisions (some of which are yet to be announced) would be known only in future, the uncertainty of outcome of various litigations and claims and uncertainty regarding whether the second corporate debt restructuring package (which, as informed to us is under consideration by the bankers) would be sanctioned or not create material uncertainties (even though the procurement of certain orders during the year resulting in full resumption of production is a positive factor). Therefore, the quantum of impairment in respect of carrying value of fixed assets cannot be determined as at present and material uncertainties exist regarding the use of going concern assumption in preparing the financial statements.

5. Qualified opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, 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 31 March 2015, its loss and its cash flows for the year ended on that date.

6. Emphasis of matter

Without qualifying our opinion, attention is invited to note 36, with regard to managerial remuneration paid by the Company amounting to Rs. 97 lakhs for the year ended 31 March 2015, which is in excess of the limits specified under schedule V read with section 197 of the Companies Act, 2013 and in respect of which Central Government approval as required under the provisions of the Companies Act, 2013, is pending. The impact if any of this on the financial statement is not ascertainable at present.

7. Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order, 2015 ('Order'), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we enclose in the Annexure, a statement on the matters specified in paragraphs 3 and 4 of the said Order.

As required by section 143(3) of the Companies Act, 2013, we report that:

a. We have sought and, except for the matters described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. Except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph above, 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. Except for the possible 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 specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2013; and

e. The matter described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company

f. On the basis of written representations received from the directors as on 31 March 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2015, from being appointed as a director in terms of sub-section (2) of section 164 of the Companies Act, 2013.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note 41 to the financial statement;

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

iii. The Company did not have any dues on account of Investor Education and Protection Fund.

ANNEXURE REFERRED TO IN PARAGRAPH 6 OF THE INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF INDOSOLAR LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2015

(i) (a) According to the information and explanations given to us, the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us, the Company has a regular programme of physical verification of its fixed assets by which all fixed assets are physically verified by the management in a phased manner over a period of two years. In accordance with such phased programme, the Company has carried out physical verification of majority of its fixed assets during the year. In our opinion, the frequency of physical verification is reasonable having regard to the size of the Company and nature of its fixed assets. As informed to us, no discrepancies have been noticed on such verification.

(ii) (a) According to the information and explanations given to us, the inventories have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. Further, as informed, there are no stocks lying with third party.

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

(c) According to the information and explanations given to us, and on the basis of our examination of the records of inventories, we are of the opinion that the Company is maintaining proper records of inventories. As informed to us, the discrepancies noticed on physical verification of inventories as compared to the book records were not material.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies or other parties covered in the register maintained under section 189 of the 2013 Act. Accordingly, paras 3 (iii) (a) and (b) of the Order are not applicable. There are no firms covered in the register required under section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and fixed assets are for the Company's specialised requirements and suitable alternative sources are not available to obtain comparable quotations, 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 inventories and fixed assets and with regard to sale of goods. The activities of the Company do not involve rendering of services. We did not observe any major weakness in internal controls during the course of our audit.

(v) According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by Central government for maintenance of cost records under section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident fund, Employees' state insurance, Income tax, Sales tax, Wealth tax, Service tax, Excise duty, Custom duty, Value added tax, Cess and other material statutory dues, to the extent applicable, have generally been regularly deposited with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Employees' state insurance, Income tax, Sales tax, Wealth tax, Service tax, Excise duty, Custom duty, Value added tax, Cess and other material statutory dues were in arrears as at 31 March 15 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, and on the basis of the records of the Company examined by us, there are no dues of Income tax, Wealth tax, Service tax, Sales tax, Customs duty and Excise duty which have not been deposited with the appropriate authorities on account of any dispute except as mentioned below:

Amount in Name of the Nature of the Rupees Amount statute dues (lakhs) deposited

Customs Act, Customs duty 9,430.19 - 1962*

Name of the Statute Period to which Forum where the amount relates dispute is pending

Customs Act, 1962 2010-11 and Commissioner, 2011-12 Customs, Central Excise & Service Tax

*Amount as per the show cause notice.

(c) According to the information and explanations given to us, and on the basis of the records of the Company examined by us, no amount is 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 thereunder.

(viii)The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses during the financial year and in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, and on the basis of our examination of the books of account and related records, the Company has defaulted in repayment of dues to its bankers. The Company did not have any outstanding dues to debenture holders during the year.

Nature of the lender Nature of dues Amount in rupees (lakhs) Period to which it relates

Andhra Bank Interest on secured loans 3,498.79 July 2013-March 2015

Andhra Bank Principal amount 1,287.27 January 2014- March 2015

Bank of Baroda Interest on secured loans 2,384.74 July 2013-March 2015

Bank of Baroda Principal amount 1,274.29 January 2014- March 2015

Corporation Bank Interest on secured loans 3,223.80 April 2013- March 2015

Corporation Bank Principal amount 1,412.58 January 2014- March 2015

Indian Bank Interest on secured loans 2,414.33 April 2013- March 2015

Indian Bank Principal amount 1,037.30 January 2014- March 2015

Union Bank of India Interest on secured loans 5,446.97 April 2013- March 2015

Union Bank of India Principal amount 2,552.70 January 2014- March 2015

Interest on interest Interest on secured loans 3,498.79 August 2014- March 2015

(x) In our opinion and 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;.

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

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

For B S R & Co. LLP

Chartered Accountants

Firm registration number: 101248W

VIKRAM ADVANI

Place:New Delhi Partner

Date :4 May, 2015 Membership No.: 091765


Mar 31, 2013

1. Report on the Financial Statements

We were engaged to audit the accompanying financial statements of Indosolar Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2013, and 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

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and fair presentation of the financial statements that 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 in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Because of the matter described in the Basis for Disclaimer of Opinion paragraph, however, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.

4 . Basis for disclaimer of opinion

(i) Certain consignments relating to plant and machinery, imported in connection with the expansion of the manufacturing facility, had been lying at the bonded warehouse for a significant period of time until 31st March 2012. During the year, a substantial portion of such machinery was removed and demurrage/ detention charges was paid at the time of such removal amounting to Rs.1,365.93 lakhs and the same has been considered as part of the cost of acquisition of an asset and capitalised under capital work-in-progress accordingly, as at 31st March 2013. Management is of the view that such expenses are directly attributable to bringing the machinery to its current location and condition and should be capitalized.

However, we are of the view that such charges should be treated as an expense and accordingly should not be capitalised as they cannot be considered as a cost that is directly attributable for getting the asset ready for its intended use in accordance with the requirements of AS 10 "Accounting for fixed assets". Had the Company accrued for such demurrage/ detention charges, other expense would have been higher by Rs.1,365.93 lakhs and the loss for the year ended 31st March 2013 would have been higher by the corresponding amount.

(ii) Attention is invited to note 28, which explains in detail the substantial erosion of net worth as at the balance sheet date because of which the reference required in case of erosion of more than 50% of peak net worth has been made to BIFR during the year and also explains the multiple uncertainties being faced by the company. The Company has been unable to utilise its capacity as the cost of production of solar cells continues to be higher than the prevailing market prices and the plant has remained shut for a significant part of the current year and for the other part of the year has been operational at significantly low levels of capacity utilization. Key policy decisions such as those relating to imposition of Anti Dumping Duty, Local Content requirement and Company''s eligibility for certain incentives remain unresolved.

The actual net cash inflows during the year ended 31st March 2013 are significantly lower than the projections for the same period incorporated in the first CDR package. Accordingly the cash flow projections approved as part of that CDR package can no longer be relied upon. Due to continued liquidity issues the Company has approached the bankers for a second Corporate Debt Restructuring package. The response of the banks is awaited.

Overall the short term liabilities exceed the short term assets by Rs. 7,125.31 lakhs. In addition as per the terms of the first Corporate Debt Restructuring package, an amount of Rs. 2,281.89 lakhs, representing 3% of the outstanding Term Loans, Funded Interest Term Loans, Working Capital Demand Loan and Priority Term Loan together with quarterly interest thereon shall become payable in the year ending 31st March 2014.

The above factors create multiple uncertainties and we are unable to determine their possible effects on the financial statements. We are also unable to conclude on the ability of the Company to carry on as a going concern.

5 . Disclaimer of opinion

Because of the significance of the matters described, specifically relating to the multiple uncertainties created due to factors such as response of banks to the application filed for a 2nd Corporate Debt Restructuring; key policy initiatives of the government relating to anti dumping duty and local content requirement; we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the financial statements.

6. 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 Companies Act, 1956, we report that:

(a) as described in the Basis for Disclaimer of Opinion paragraph, we were unable to obtain 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) due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act; and

(e) on the basis of written representations received from the directors as on 31st March 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 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 REFERRED TO IN PARAGRAPH 6 OF THE INDEPENDENT AUDITORS'' REPORT TO THE MEMBERS OF INDOSOLAR LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2013

(i) (a) According to the information and explanations given to us, the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us, the Company has a regular programme of physical verification of its fixed assets by which all fixed assets are physically verified by the management in a phased manner over a period of two years. In accordance with such phased programme, certain categories of fixed assets have been physically verified by the management during the year. In our opinion, the frequency of physical verification is reasonable having regard to the size of the Company and nature of its fixed assets. As informed to us, discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.

(c) Fixed assets disposed of during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) (a) According to the information and explanations given to us, the inventories have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. Further, as informed, there are no stocks lying with third party.

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

(c) According to the information and explanations given to us, and on the basis of our examination of the records of inventories, we are of the opinion that the Company is maintaining proper records of inventories. As informed to us, the discrepancies noticed on physical verification of inventories as compared to the book records were not material and have been properly dealt with in the books of account.

(iii) (a) The Company had taken interest free loan from a party covered in the register maintained under Section 301 of the Companies Act, 1956 in the year ended 31st March 2012. The maximum amount outstanding during the year in respect of such loan was Rs. 418.62 lakhs and the year-end balance of such loan is Rs. 418.62 lakhs.

In our opinion, the terms and conditions on which interest free loan was taken from such party are not, prima facie, prejudicial to the interest of the Company.

In the case of interest free loan taken from a party listed in the register maintained under Section 301, the Company is not permitted to repay the loan under the terms and condition of restructuring agreement approved by the CDR Cell, unless the same has been approved by CDR Cell. As informed by the management and according to the terms and conditions of restructuring agreement, the loan has accordingly not been repaid by the Company during the year.

(b) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, paras 4 (iii) (f) to (g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and fixed assets are for the Company''s specialised requirements and suitable alternative sources are not available to obtain comparable quotations, 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 inventories and fixed assets and with regard to sale of goods. The activities of the Company do not involve rendering of services. We did not observe any major weakness in internal controls during the course of our audit.

(v) (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 Companies Act, 1956 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, there are no transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956, and exceeding Rs. 5 lakhs with any party during the year.

(vi) According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year.

(vii) The Company has an internal audit system. In our opinion, the scope of work and coverage of internal audit needs to be enlarged to make it commensurate with the size of the Company and the nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by Central government for 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. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Wealth tax, Customs duty, Excise duty and other material statutory dues, to the extent applicable, have generally been regularly deposited with the appropriate authorities. In respect of Provident Fund, Employees'' State Insurance, Income Tax, Service Tax and Work Contract Tax, the deposits have not been regularly deposited with the appropriate authorities and there have been serious delays in large number of cases. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund and Customs duty.

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

(b) According to the information and explanations given to us, and on the basis of the records of the Company examined by us, there are no dues of Income-tax, Wealth-tax, Service tax, Sales-tax, Customs duty and Excise duty which have not been deposited with the appropriate authorities on account of any dispute except as mentioned below:



Name of the Nature of the Amount in Amount statute dues Rupees* deposited

Customs Act, 1962 Customs duty 9,223,204 8,690,510

Central Excise Excise duty 112,249,935 18,198,763 Act, 1944

Finance Act, 1994 Service tax 190,371,164 13,706,745

Name of the statute Period to which Forum where the amount relates dispute is pending

Customs Act,1962 2009-2011 Office of settlement commission

Central Excise Act,1944 2009-2011 Office of settlement commission

Finance Act,1994 2009-2011 Office of settlement commission

*amount as per demand orders, including interest and penalty wherever quantified in the order.

(x) The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses during the financial year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, and on the basis of our examination of the books of account and related records, the Company has not defaulted in repayment of dues to its bankers. The Company did not have any outstanding dues to financial institutions or debenture holders during the year.

(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) According to the information and explanations given to us, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society.

xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) In our opinion and 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, term loans have been applied for the purpose for which such loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the funds raised on short-term basis amounting to Rs. 4,843.11 lakhs have been used for long-term investments.

(xviii) The Company has not made any preferential allotment of shares to companies/firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) We have verified the end-use of money raised by public issues as disclosed in the notes to the financial statements.

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



For B S R and Associates

Chartered Accountants

Firm Registration No.: 128901 W

VIKRAM ADVANI

Place:New Delhi Partner

Date :29.05.2013 Membership No.: 091765


Mar 31, 2012

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

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

3. As required by the Companies (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 Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

(i) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

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

(iii) the Balance Sheet, the Statement of Profit and Loss and the 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 dealt with by this report comply with the accounting standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable;

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

(vi) without qualifying our opinion, attention is invited to Note 28, with regard to impairment assessment carried out by management as of 31st March, 2012 based on cash flows determined after taking into account the current business realities and which has been incorporated in the Corporate Debt Restructuring ('CDR') package approved by the consortium of banks ('CDR Cell'). Such cash flows do not indicate impairment as at 31st March, 2012.

As elaborated in the note, the achievement of such cash flows is dependent upon sustaining reasonable gross margins despite low selling prices; ability of project developers reaching financial closure; the Company being able to garner a reasonable share of the demand both under National Solar Missions and State Solar Missions and the ultimate outcome of various policy interventions that are required for the viability of the sector. The result of all of the above significant possible changes in the business dynamics and its consequent effect on the Company's cash flows will be known in the ensuing period. Accordingly, the cash flows that were prepared by management and as approved by the CDR cell have been considered by us for impairment assessment; and

(vii) Without qualifying our opinion, attention is invited to note 6 (iii) (f) that highlights that one of the lending banks has not signed the joint Master Restructuring Agreement. However for purposes of the attached financial statements, the owings to this particular bank including interest due at lower rates have been disclosed / calculated in accordance with the terms of the CDR package per Letter of Approval dated 7th March, 2012 received from the CDR cell. As informed to us the owings to this particular bank have been reclassified / interest calculated in accordance with the CDR package as the necessary stipulated majority of the CDR cell has agreed to the CDR package. Accordingly, short term borrowings comprising cash credit amounting to Rs. 1,223.92 lakhs and devolved Letter of Credit amounting to Rs. 511.57 lakhs have been reclassified as Long Term Borrowing (Rs 1,402.43) and Short Term Borrowings (Rs. 333.06 lakhs) as at 31st March, 2012. The existing term loan of Rs. 5,996.79 lakhs has been disclosed as long term borrowing with nil current maturities. The interest due w.e.f 1st July, 2011 till 31st March, 2012 at revised rates amounting to Rs. 549.73 lakhs has been reclassified as a Funded Interest Term Loan. The above reclassifications and interest calculations are subject to reconciliation and approval by this particular bank.

(viii) in our opinion, and to the best of our information and according to the explanations given to us, the said accounts give the information required by the 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:

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

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

(i) (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 all fixed assets are verified in a phased manner over a period of two years. In accordance with the policy, the Company has carried out physical verification of majority of its fixed assets during the year. In our opinion, the frequency of physical verification is reasonable having regard to the size of the Company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verification.

(c) Fixed assets disposed of during the year were not substantial, and therefore, do not affect the going concern assumption.

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

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

(c) The Company is maintaining proper records of inventory. As informed to us, no material discrepancies were noticed on verification between the physical stocks and the book records.

(iii) (a) The Company had taken interest free loan from a party covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount outstanding during the year in respect of such loan was Rs 418.62 lakhs and the year-end balance of such loan is Rs 418.62 lakhs.

In our opinion, the terms and conditions on which interest free loan had been taken from such party are not, prima facie, prejudicial to the interest of the Company.

In the case of interest free loan taken from a party listed in the register maintained under Section 301, the Company is not permitted to repay the loan under the terms and condition of restructuring agreement approved by the CDR Cell, unless the same has been approved by CDR Cell. As informed by the management and according to the terms and conditions of restructuring agreement, the loan has accordingly not been repaid by the Company during the year.

(b) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and fixed assets are for the Company's specialized requirements and suitable alternative sources are not available to obtain comparable quotations, 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 inventories and fixed assets and with regard to sale of goods. The activities of the Company do not involve rendering of services. We did not observe any major weakness in internal controls during the course of our audit.

(v) (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 Companies Act, 1956 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, there are no contracts or arrangement referred to in (a) above that exceeds the value of Rs. 5 lakh during the year except interest free loan taken from a party covered in the register maintained under Section 301 of the Companies Act, 1956. Refer to our comments in respect of transaction related to loan taken in para (iii) (a) above.

(vi) The Company has not accepted any deposits from the public.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the amounts deducted/ accrued in the books of accounts in respect of undisputed statutory dues including Income tax, Provident Fund, Employees' State Insurance, Sales tax, Wealth tax, Excise duty and other material statutory dues have generally been regularly deposited with the appropriate authorities except Service tax and work contract tax where there have been serious delays in few cases. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund and Customs duty.

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

(b) According to the information and explanations given to us, there are no amounts in respect of Income tax, Sales tax, Service tax, Wealth tax and Excise duty that have not been deposited with appropriate authorities on account of any dispute. As explained to us, the provisions relating to Customs duty are not applicable to the Company.

(x) The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses during the financial year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, and on the basis of our examination of the books of account and related records, we observed following delays in the repayment of principal sums and interest thereon to banks:

Name of the lender Period of default Minimum amount of Maximum amount of in days default (Rs. in lakhs) default (Rs. in lakhs)

Corporation Bank 1 to 271 0.64 3,522.47

Bank of Baroda 6 to 274 74.59 3,303.07

Indian bank 18 to 274 70.58 2,977.80

Union Bank of India 1 to 212 20.12 1,806.11

Andhra Bank 6 to 308 14.52 4,174.46

However, as explained in Note 6 of financial statements the Corporate Debt Restructuring Empowered Group approved a restructuring package on 28th March, 2012 in terms of which the Existing loans were restructured with effect from 1st July, 2011. As a consequence, there are no overdue amounts outstanding towards interest and principal as at year end.

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

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefit fund/society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

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

(xvi) In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that funds raised on short-term basis amounting to Rs. 2,254.50 lakhs have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to companies, firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) We have verified the end-use of money raised by public issues as disclosed in the notes to the financial statements.

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

ForB S R and Associates

Chartered Accountants

Firm Registration No.: 128901 W

VIKRAM ADVANI

Place : Gurgaon Partner

Date : 30.05.2012 Membership No.: 091765


Mar 31, 2011

1. We have audited the attached Balance Sheet of Indosolar Limited (formerly known as Robin Solar Private Limited) ("the Company") as at 31 March 2011 and the Profit and Loss Account and Cash Flow Statement for the year ended on that date ("financial year"), annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (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 Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

(i) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

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

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

(iv) in our opinion, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable;

(v) on the basis of written representations received from the Directors of the Company, as on 31 March 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 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; and

(vi) in our opinion, and to the best of our information and according to the explanations given to us, the said accounts give the information required by the 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:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2011;

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

(i) (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 all fixed assets are verified in a phased manner over a period of two years. In accordance with the policy, the Company has carried out physical verification of majority of its fixed assets during the year. In our opinion, the frequency of physical verification is reasonable having regard to the size of the Company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verification.

(c) Fixed assets disposed of during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) (a) The inventory, except goods-in-transit, has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable.

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

(c) The Company is maintaining proper records of inventory, except in respect of spares where adequate records were not being maintained for identifying the quantity of each item of spares received, issued and the closing balances and appropriate bifurcation between spares received free of cost and those purchased. As at year end, however the same has been rectified and the complete data and records for spares have been updated. As informed to us, no material discrepancies were noticed on verification between the physical stocks and book records.

(iii) (a) The Company had taken interest free loans from parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount outstanding during the year in respect of such loans was Rs 70,000,000 and the year-end balance of such loans is Rs. Nil.

In our opinion, the terms and conditions on which loans had been taken from such parties were not, prima facie, prejudicial to the interest of the Company.

In the case of interest free loans taken from parties listed in the register maintained under Section 301, the Company has been regular in repaying the principal amounts according to the agreed terms and conditions.

(b) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and fixed assets are for the Company's specialized requirements and suitable alternative sources are not available to obtain comparable quotations, 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 inventories and fixed assets and with regard to sale of goods. The activities of the Company do not involve rendering of services. We did not observe any major weakness in internal controls during the course of our audit, except in respect of spares where the adequate records were not being maintained for identifying the quantity of each item of spares received, issued and the closing balances and appropriate bifurcation between spares received free of cost and those purchased. As at year end, however the same has been rectified and the complete data and records for spares have been updated.

(v) (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 Companies Act, 1956 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, there are no contracts or arrangement referred to in (a) above that exceeds the value of Rs. 5 lakh during the year.

(vi) The Company has not accepted any deposits from the public.

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

(viii) According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for any of the products manufactured or any of the service rendered by the Company.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the amounts deducted/ accrued in the books of accounts in respect of undisputed statutory dues including Provident Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Excise duty and other material statutory dues have generally been regularly deposited with the appropriate authorities though there have been some delays in a few cases. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund and Customs duty. According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Excise duty and other material statutory dues were in arrears as at 31 March 2011 for a period of more than six months from the date they became payable.

There are no dues on account of Cess under Section 441A of the Companies Act 1956, since the date from which the aforesaid Section comes into force has not yet been notified by the Central Government.

(b) According to the information and explanations given to us, there are no amounts in respect of Income tax, Sales tax, Service tax, Wealth tax and Excise duty that have not been deposited with appropriate authorities on account of any dispute. As explained to us, the provisions relating to Customs duty are not applicable to the Company. In respect of Cess, refer to our comments in para (ix)(a).

(x) The accumulated losses at the end of the financial year are less than fifty percent of its net worth. The Company has incurred cash losses during the financial year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, and on the basis of our examination of the books of account and related records, we observed following delays in the repayment of principal sums and interest thereon to banks:

Name of the lender Period of default Minimum amount of Maximum amount in days default (Rs.) of default (Rs.)

Corporation Bank 1 to 77 2,747,399 45,000,000

Bank of Baroda 1 to 89 701,854 45,000,000

Indian Bank 2 to 82 1,086,526 40,000,000

Union Bank 1 to 63 15,781 70,000,000

Andhra Bank 2 to 89 1,500,000 40,000,000

However, there are no overdue amounts outstanding towards interest and principal payable as at year end.

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

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefit fund/society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

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

(xvi) In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.

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

(xviii) The Company has not made any preferential allotment of shares to companies, firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The management has properly disclosed the end use of money raised by public issue during the year and the same has been verified.

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

For B S R and Associates

Chartered Accountants

Firm Registration No.: 128901 W

VIKRAM ADVANI

Place:New Delhi Partner

Date :09.05.2011 Membership No.: 091765


Mar 31, 2010

1. We have audited the attached Balance Sheet of Indosolar Limited (formerly known as Robin Solar Private Limited) ("the Company") as at 31 March 2010 and the Profit and Loss Account and Cash Flow Statement for the year ended on that date ("financial year"), annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003 (‘the Order) issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. 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 purpose of our audit;

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

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

(iv) in our opinion, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable;

(v) on the basis of written representations received from the Directors of the Company, as on 31 March 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 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; and

(vi) without qualifying our report, attention is invited to Note 18 of Schedule 19 regarding managerial remuneration amounting to Rs. 24,353,250 paid for the period 26 September to 31 March 2010, in excess of the limits prescribed under Schedule XIII of the Companies Act, 1956 and being held in trust by such managerial personnel. The Company has filed an application with the Central government for such excess remuneration for the financial year in respect of which the appointment is effective. The management believes that the Company shall be able to get the approval.

(vii) in our opinion, and to the best of our information and according to the explanations given to us, the said accounts give the information required by the 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:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2010;

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

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

Annexure referred to in paragraph 3 of our report of even date

(i) (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 all fixed assets are verified in a phased manner over a period of two years. In accordance with the policy, the Company has carried out physical verification of majority of its fixed assets during the year. In our opinion, the frequency of physical verification is reasonable having regard to the size of the Company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verification.

(c) The Company has not disposed off any fixed assets during the year.

(ii) (a) The inventory, except goods-in-transit, has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable.

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

(c) The Company is maintaining proper records of inventory. As informed to us, no material discrepancies were noticed on verification between the physical stocks and book records.

(iii) (a) The Company has taken interest free loans from parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount outstanding during the year in respect of such loans was Rs 70,000,000 and the year- end balance of such loans was Rs. 70,000,000.

In our opinion, the terms and conditions on which loans have been taken from such parties are not, prima facie, prejudicial to the interest of the Company.

In the case of such loans, repayment of principal has been stipulated and according to information and explanations provided by the management, the Company was not required to repay any principal during the year.

(b) The Company has not granted any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, and

having regard to the explanation that purchases of certain items of inventories and fixed assets are for the Companys specialised requirements and suitable alternative sources are not available to obtain comparable quotations, 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 inventories and fixed assets and with regard to sale of goods. The activities of the Company do not involve rendering of services. We have not observed any major weaknesses in internal control system during the course of our audit.

(v) (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 Companies Act, 1956 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, there are no contracts or arrangement referred to in (a) above that exceeds the value of Rs. 5 lakh during the year, except the interest free loan taken from directors of the Company. Refer to our comments in respect of transactions related to loans taken in para (iii) (a) above.

(vi) The Company has not accepted any deposits from the public.

(vii) The Companys paid up share capital and reserves are less than Rs. 50 lakhs at the beginning of the financial year and average annual turnover does not exceed five crores for a period of three consecutive financial years immediately preceding the financial year. Thus, provision of clause 4(vii) of the order is not applicable to the Company.

(viii) According to the information and explanations given to us, the Central Government

has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for any of the products manufactured/services rendered by the Company.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the amounts deducted/ accrued in the books of accounts in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Excise Duty and other material statutory dues have generally been regularly deposited with the appropriate authorities. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund and Customs duty.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax Service tax, Excise duty and other material statutory dues were in arrears as at 31 March 2010 for a period of more than six months from the date they became payable.

There are no dues on account of Cess under Section 441A of the Companies Act 1956, since the date from which the aforesaid Section comes into force has not yet been notified by the Central Government.

(b) According to the information and explanations given to us, there are no amounts in respect of Income tax, Sales tax, Service tax, Wealth tax and Excise duty that have not been deposited with appropriate authorities on account of any dispute. As explained to us, the provisions relating to Customs duty are not applicable to the Company. In respect of Cess, refer to our comments in para (ix)(a).

(x) The Company has been registered for a period less than five years, thus paragraph 4 (x) of the Order is not applicable.

(xi) In our opinion and according to the information and explanations given to us, the Company has delayed in repayment of interest dues to its bankers. However, such dues have been repaid within 30 days from the respective due dates. Delays of 2 to 15 days in payment of interest on term loan taken from Andhra Bank for various months amounting to Rs. 3,961,853, Rs. 6,490,521, Rs. 7,411,060, Rs. 7,905,951, Rs. 7,982,059 and Rs. 7,213,589; Delays of 3 to 15 days in payment of interest on term loan taken from Bank of Baroda for various months amounting to Rs. 8,790,411, Rs. 8,516,121, Rs. 8,811,993, Rs. 8,861,631 and Rs. 7,985,126; Delays of 3 to 8 days in payment of interest on term loan taken from Corporation Bank for various months amounting to Rs. 8,472,171, Rs. 8,208,624, Rs. 8,500,507, and Rs. 7,901,752; Delays of 3 to 14 days in payment of interest on term loan taken from Union Bank of India for various months amounting to Rs. 11,465,723, Rs. 11,105,499, Rs. 11,485,794, Rs. 11,479,914and Rs. 10,405,699; and Delays of 3 to 16 days in payment of interest on term loan taken from Indian Bank for various months amounting to Rs. 8,323,288, Rs. 8,063,175, Rs. 8,339,524, Rs. 8,345,734 and Rs. 7,556,966.

The Company did not have any outstanding dues to any financial institutions or debenture holders during the year.

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

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefit fund/society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

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

(xvi) In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the funds amounting to Rs. 538,534,660 raised on short-term basis have been used for long-term investment.

(xviii) The Company has made preferential allotment of shares to parties covered in the register maintained under Section 301 of the Companies Act, 1956, In our opinion, the price at which shares have been issued is not prejudicial to the interest of the Company.

(xix) The Company did not have any outstanding debentures during the year.

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

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

For B S R and Associates Chartered Accountants Firm Registration No.: 128901W

Sd/-

Vikram Advani Partner Membership No.: 091765

Place: Gurgaon Date : May 6, 2010