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Directors Report of Indosolar Ltd.

Mar 31, 2015

The Board has pleasure in presenting the Tenth Annual Report on business and operations of the Company for the year ended 31st March 2015.

1. FINANCIAL SUMMARY (Rs. in Crores)

PARTICULARS YEAR ENDED YEAR ENDED 31ST MARCH 2015 31ST MARCH 2014

INCOME FROM SALES AND SERVICES 295.97 15.67

OTHER INCOME 3.92 2.43

TOTAL INCOME 299.89 18.09

OPERATING EXPENSES 248.25 44.11

PROFIT BEFORE DEPRECIATION, INTEREST AND TAX 51.65 (26.01)

DEPRECIATION AND AMORTIZATION EXPENSE 26.98 30.19

INTEREST 102.83 80.75

PROFIT / (LOSS) BEFORE TAX (78.17) (136.95)

PROVISION FOR TAXATION (INCL. DEFERRED INCOME TAX) 0 0

ADD: PROFIT/( LOSS) BROUGHT FORWARD FROM PREVIOUS YEAR (600.89) (463.94)

ADD DEPRECIATION PURSUANT TO COMPANIES ACT 2013 (.46) 0

BALANCE CARRIED TO BALANCE SHEET (679.52) (600.89)

2. PERFORMANCE REVIEW

During the year under review, the performance of the Company continues to be severely impacted due to significant down turn in the Global Market. However in the last two quarters of the year , company got the orders worth 132.65 Mega Watt , because of which the Company could recommence the production and also logged in profit in the last quarter, though company incurred the loss on full year basis.

Your Directors feel that the Company will be seeing a turn around in the coming quarters keeping in view the certain measures taken or expected to be taken by the Government to support of the domestic manufacturers in India viz. domestic content requirement policy , viability gap funding policy etc.

3. RESERVES AND SURPLUS (Rs. in Crores)

PARTICULARS YEAR ENDED YEAR ENDED 31ST MARCH 2015 31ST MARCH 2014

Securities premium account 214.88 214.87

(Loss) in the Statement of Profit and Loss

At the commencement of the year (600.89) (463.94)

Add: Depreciation pursuant to companies act 2013 (.46)

Add: (loss) for the year (78.17) (136.95)

Net (loss) in the Statement of Profit and Loss (679.53) (600.89)

Total Reserves and surplus (464.65) (386.02)

During the year under review, the Company has not transferred any amount to any reserves due to heavy losses incurred.

4. DIVIDEND

Due to non availability of profit, the Board does not recommend any dividend for the year ended 31st March 2015

5. STATUS OF IMPLEMENTATION OF 250 MW PROJECT

The project is in the last stages of implementation and it is expected that it will get ready in near future. The Company is negotiating with the banks for the release of required funds to avoid further delays.

6. BOARD OF DIRECTORS AND ITS MEETINGS

The Company has a professional board with right mix of knowledge, skills and expertise with an optimum combination of executive, non executive and independent Directors including one Women Director.

The Board provides the strategic guidance and direction to the Company in achieving its business objectives and protecting the interest of the Stakeholders.

One Meeting of the Board of Directors is held in each quarter. Additional meetings of the Board / Committees are convened as may be necessary for the proper management of the business operations of the Company.

During the year ended 31st March 2015 , the Board of Directors met six times viz on 29th May 2014, 12th Aug 2014 ( two times) , 13th Oct 2014, 14th Nov 2014 & 19th Jan 2015.

7. DIRECTORS / KEY MANAGERIAL PERSONNEL APPOINTMENT OR RESIGNATION

Our beloved Chairman , mentor and guide Mr Bhushan Kumar Gupta has left for the heavenly abode this 17th Aug. 2015. All the Members of Board on behalf of your Company acknowledge his immense contribution and pray that the great soul may rest in peace.

As per Section 152 of the Companies Act 2013 , Mr Hulas Rahul Gupta Whole time Director retiring by rotation in 10th AGM being eligible has offered himself for the reappointment. Board has recommended the reappointment.

During the year 2014-15 , The Board of Directors on the recommendation of the Nomination and Remuneration Committee appointed Ms Vinati Dev as additional director in the category of Independent and Non-Executive Director in the Board Meeting held on 12th Aug 2014 . Board in its meeting held on 12th Aug 2014 appointed Mr. Anand Kumar Agarwal as Chief Finance Officer w.e.f. 1st July 2014 for a period of five years. Shareholders in the Annual General Meeting held on 30th Sep 2014 appointed Mr Vidyut M Vora , Ms Vinati Dev and Mr Gautam Singh Kuthari as Independent Non-Executive Directors for the period of five years. .

8. EXTRACT OF THE ANNUAL RETURN

The relevant extracts of the annual return in form MGT 9 for the Financial Year 2014-15 under the Companies Act 2013 is given in as Annexure I to this report.

9. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH THE RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT , 2013.

All the related party transactions that were entered during the financial year were in the ordinary course of business and were on arm's length basis . All the related party transactions , wherever applicable , are placed before the Audit Committee. The Quarterly disclosures of the transactions with the related party are made to the Audit Committee.

The policy on Materiality of Related Party Transactions as approved by the Board is uploaded on the website www.indosolar.co.in .

In compliance of Section 134(5) of the Companies Act , 2013 , the particulars of the contracts or arrangements with the related parties refered to in Section 188 (1) of the Companies Act are enclosed in Form AOC-2 , as a part of this report as Annexure – II.

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

No loans , guarantees or investment as described under Section 186 of the Companies Act has been given by the Company during the Financial Year 2014-15.

11. AUDIT COMMITTEE

The Company has an adequately qualified Audit Committee constituted in accordance to the provisions of Companies Act 2013 and Clause 49 of the listing agreement.

As on 31st March 2015 , the Committee comprised of three members and all of them are Non-Executive Independent Directors viz. Mr Gautam Singh Kuthari , Mr Vidyut Manubhai Vora , Ms Vinati Dev.

All the members are financially literate and have accounting or related financial management expertise.

12. CORPORATE SOCIAL RESPONSIBILITY ( CSR)

Due to the continued heavy losses incurred by the Company, the CSR provisions of Companies Act, 2013, are not applicable.

13. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION INCLUDING THE CRITERIA FOR DETERMINING QUALIFICATIONS , POSITIVE ATTRIBUTES , INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS AS PROVIDED UNDER SECTION 178(3) OF THE COMPANIES ACT, 2013.

The Company strives to maintain an appropriate combination of executive , non executive and independent Directors subject to Min of 3 and Maximum of 12 Directors including at least one Women Director.

The Nomination and Remuneration Committee of the Company leads the process for Board Appointment in accordance with the requirements of the Companies Act, 2013 , listing agreement and other applicable regulations or policy guidelines.

During the current year under review the Company has adopted the Nomination and Remuneration Policy for Directors , KMPs and Other Senior Employees . The policy is attached as Annexure III.

14. PERFORMANCE EVALUATION OF BOARD , COMMITTEES & INDIVIDUAL DIRECTORS

Nomination and Remuneration Committee carried out a formal evaluation of the performance of the Board , its committees, the Chairman and the Individual Directors. The evaluation was done using the questionnaire covering amongst others, vision , strategy , risk management , budgetary controls , receipt for the regular inputs and information, functioning performance and structure of the Board Committees , ethics and values , skill sets , knowledge & expertise of the Directors , leadership etc.

15. CHANGES IN CAPITAL STRUCTURE

There has been preferential allotment of 2,29,85,973 Equity Shares pursuant to the provisions of Chapter VII of the Securities and Exchange Board of India ( Issue of Capital and Disclosure Requirements) Regulations 2009, as amended , as approved by the Board of Directors in their meeting held on 12th August 2014 and as approved by the shareholders of the Company in Annual General Meeting held on 30th September 2014. Out of the 22985973 shares, 20485973 shares have been allotted to Greenlite Lighting Corporation against the Conversion of ECB Loan and Cash. Balance 2500000 Equity shares have allotted to Skybase Infra Private Limited against the conversion of unsecured loan.

16. RISK MANAGEMENT

The Board of Directors is overall responsible for identifying, evaluating and managing all the significant risks faced by the Company. The Board has approved the Risk Management Policy, which acts as the guideline by which the key risks are managed across the organization.

In the opinion of the Board, none of the risk faced by the Company threaten its existence. However the following risks are considered to have the potential bearing on the performance of the Company:

(i) Low prices of the Chinese Suppliers of the Solar Voltaic Cells

(ii) Liquidity Crunch is resulting in the delay of completion of line C.

(iii) Threat from new entrants in the Market.

(iv) Inability of the Company to get the Continuous Orders throughout the year.

The Risk Management Policy is available on the Company's Website www.indosolar.co.in

17. INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY

The Company has put in place an adequate system of Internal and Financial Control commensurate with its size and nature of business which helps in ensuring the orderly and efficient conduct of its business.

18. VIGIL MECHANISM

The Company has in place a Whistleblower policy , to support the Codes of Business Ethics. This policy documents the Company's commitment to maintain an open work environment in which employees , consultants and contractors are able to report instances of unethical or undesirable conduct, actual or suspected frauds or any violation of Company's Code of Busines Ethics at a significantly Senior Level without fear of intimidation or retaliation. The Company's Whistle Blower Policy has been posted on the Company's website www.indosolar.co.in .

19. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS

In terms of the definition of the "independent director" as prescribed under clause 49 of the Listing Agreement entered with Stock Exchange under Clause 49 of the Listing Agreement entered with Stock Exchanges and Section 149(6) of the Companies Act 2013 and based on the confirmation / disclosures received , following Non-Executive Directors are Independent Directors :-

S.No. Name DIN

1 Mr Gautam Singh Kuthari 00945195

2 Mr Vidyut Manubhai Vora 06810035

3 Ms Vinati Dev 06922256

20. AUDITORS

STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Company's Act 2013 and the Rules framed there under M/s B S R & Co. LLP (earlier B S R & Co.), Chartered Accountants were appointed as the Statutory Auditors of the Company from the conclusion of 9th AGM held on 30th Sep 2014 till the conclusion of 13th AGM to be held in the Year 2018 subject to ratification of their appointment in every AGM.

The Board of Directors recommends their ratification by way of an ordinary resolution in the forth coming AGM.

COST AUDITOR

In terms of Section 148 of the Companies Act , 2013 read with Companies ( Cost Records and Audit ) Rules , 2014, the Company is required to maintain cost accounting records and get them audited for the Financial Year 2015-16.

The Board has appointed M/s Kabra & Associates Cost Accountants as the Cost Auditors for the Company for the Financial Year 2015-16 for the fees of Rs. 50000/- ( Rupees Fifty Thousand Only) plus applicable taxes and out of pocket expenses subject to the ratification of the said fees by the Shareholders at the ensuing AGM.

SECRETARIAL AUDITOR

Pursuant to the provisions of the Section 204 of the Companies Act , 2013 and the Companies ( Appointment and Remuneration ) Rules, 2014 , the Company had appointed M/s Chandrasekaran Associates a firm of Company Secretaries in Practise to undertake the secretarial audit of the company for the Financial Year 2014-15. The report of secretarial audit is annexed to this report as Annexure IV.

The Secretarial Auditor's Report is self explanatory and does not require further comment.

21. STATUTORY AUDITORS' REPORT

On the Auditors' qualified opinion with regards to Going Concern Status of the Company, the reply from the management is as under:

1. As regards inability to meet its liabilities of Rs 265.23 Cr due on the first CDR and on Account of purchase of materials and capital goods for Rs. 38.66 Cr as mentioned in para 4(a) of the Auditors' Report, it is submitted that the Company is in the last stages of the negotiation of 2nd CDR package and favorable policies like Domestic Content Requirements and Viability Gap Funding etc. are expected to be announced by the Government.

2. During the year under review , the performance of the Company continues to be severely impacted due to significant downturn in the Global Market . However in the last two quarters of the year , company got the orders worth 132.65 Mega Watt , because of which the Company could recommence the production and also logged in profit in the last quarter though company incurred the loss on full year basis. Your Directors feel that the Company will be seeing a turnaround in the coming quarters keeping in view the certain measures taken or expected to be taken by the Government to support the domestic manufacturers in India including domestic content requirement , viability gap funding etc.

3. The Long Disputed cases namely the dispute regarding the Capital Subsidy under Special Incentive Package has been decided in the favour of the Company. Refer Delhi High Court No. WP© 3625/2013.

4. The Dispute with MP Urja regarding the turnkey contract in in the final stages of getting settled.

5. The Dispute with the Custom's Authorities with regards to the Show Cause Notice being received for the demand of the Customs Duty foregone for importing 250 MW Project equipment has been dropped in the month of July 2015.

6. As regards inability of the auditors to express an opinion on financial statements and obtain all information and explanations mentioned in para 5 of the Auditors' Report, it is submitted that the auditors have not expressed any opinion on the financial results due to their inability to collect audit evidence to provide a basis for an audit opinion on account of multiple uncertainties created by external and internal factors like consideration of 2nd Corporate Debt Restructuring proposal of the Company and other key policy initiatives of the government etc.

22. DEPOSITS

The Company has not accepted any deposits from public during the financial year under review.

23. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

Information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required to be furnished under the provisions of section 134 (3) (m) given as Annexure V to this report.

24. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 of the Companies Act, 2013, the Directors confirm that :- i. in preparation of the accounts for financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. the appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2015 and of the loss of the Company for the year ended 31st March 2015;

iii. proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis.

v. Internal financial controls have been laid down to be followed by the Company and such internal financial controls are adequate and were operating effectively.

vi Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

25. DISCLOSURES UNDER SECTION 197 OF THE COMPANIES ACT, 2013 AND RULE 5 OF THE COMPANIES ( APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL ) RULES, 2014

A-Disclosure pursuant to Section 197(12) of the Companies Act 2013 and Rule 5 of Companies ( Appointment and Remuneration of Managerial Personnel ) Rule, 2014 is provided below:

a) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year;

Name of Director Designation Ratio to Median Remuneration

Mr Bhushan Kumar Gupta Executive Chairman & Whole time Director 46:1

Mr Hulas Rahul Gupta Managing Director 46:1

Mr Gautam Singh Kuthari Non-Executive Independent Director 0

Mr Vidyut Manubhai Vora Non-Executive Independent Director 0

Ms Vinati Dev Non-Executive Independent Director 0

b) the percentage increase in remuneration of each director, Chief Executive Officer, Chief Financial Officer, Company Secretary or Manager, if any, in the financial year;

Name of Person Designation % Increase in remuneration

Mr Bhushan Kumar Gupta Executive Chairman & Whole time Director 150%

Mr Hulas Rahul Gupta Managing Director 150%

Mr Gautam Singh Kuthari Non-Executive Independent Director 0

Mr Vidyut Manubhai Vora Non-Executive Independent Director 0

Ms Vinati Dev Non-Executive Independent Director 0

Mr Anand Kumar Agarwal CFO 0

(b) The percentage increase in the median remuneration of employees in the financial year 17%.

(c) The number of permanent employees on the rolls of company as on 31st March 2015: 282

(d) the explanation on the relationship between average increase in remuneration and company performance;

On an average, employees received an increase of 26.84%. The increase in remuneration is in line with the market trends and is necessary to retain the employees. Since Company is incurring heavy losses hence it is not possible to establish the relationship between the increase in remuneration and company performance.

(e) comparison of the remuneration of the Key Managerial Personnel against the performance of the company;

Particulars Rs./lac

Remuneration of Key Managerial Personnel (KMP) during financial year 2014-15 (aggregated) 201.84

Revenue from operations 29597.55

Remuneration (as % of revenue) 0.68%

Profit before tax (PBT) -7817.01

Remuneration (as % of PBT) N.A.as PBT is negative

(f) variations in the market capitalisation of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the company as at the close of the current financial year and previous financial year;

Particulars Unit As at As at Variation 31st Mar 15 31st Mar 14 (%)

Closing Rate of Share at NSE Rs. 14.90 1.86 701%

EPS (Consolidated) Rs. -2.26 -4.09 44%

Market Capitalization Rs./lacs 53361.37 6233.68 756%

Price Earnings ratio Ratio N.A. as EPS N.A. as is -ive EPS is -ive

(g) average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration

The average increase in salaries of employees other than managerial personnel in 2014-15 was 12.66%. Percentage increase in the managerial remuneration for the year was 150%. The Managerial Remuneration to Managing Director and Chairman is as per the Companies Act Provisions and subject to Central Government Permission.

(h) Comparison of each remuneration of the Key Managerial Personnel against the performance of the Company

Particulars Chief Executive Officer Chief Financial Officer Company Secretary Rs./lac Rs./lac Rs./lac

FY 15 Remuneration 73.92 54 N.A. as there was no CS during the Period

Revenue 29597.55 29597.55

Remuneration (as % of revenue) 0.25% 0.18%

Profits before tax (PBT) -7817.01 -7817.01

Remuneration (as % of PBT) N.A.as PBT is-ive N.A.as PBT is-ive

(i) the key parameters for any variable component of remuneration availed by the directors;

There is no variable components approved for the payment to any director.

(j) the ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year;

Not applicable.

(k) affirmation that the remuneration is as per the remuneration policy of the Company

The Company's remuneration policy is driven by the success and performance of the individual employees and the Company. Through its compensation package, the Company endeavours to attract, retain, develop and motivate a high performance staff. The Company follows a compensation mix of fixed pay, benefits and performance based variable pay. Individual performance pay is determined by business performance and the performance of the individuals measured through the annual appraisal process. The Company affirms remuneration is as per the remuneration policy of the Company.

B- Information as per Rule 5(2) of Chapter XIII of the Companies ( Appointment and Remuneration of Managerial Personnel ) Rules, 2014 :

During the year following employees received salary in excess of Rs. 60 lacs p.a. or employed for the part of year with Average Salary above Rs. 5 Lacs

S. No. Designation Age Qualifi cation Experience Date of Commencement of Employment

Chairman and 80 BA 50 year 15th Jan 2008 Whole time Director

Managing 56 BBA 30 years 15th Jan 2008 Director

Chief Finance 66 B.Com 40 year 1st July 2008 Officer

Designation Gross Previous Nature of % of Equity Salary per Employment Employment Shares held Year (in lacs)

Chairman and Whole time Director 73.92 Phoenix lamps Full time 15.78% Limited Employee

Managing Director 73.92 Phoenix lamps Full Time 22.45% Limited Employee

Chief Finance Officer 54 lac Phoenix lamps Full Time .09% Limited Employee

26. BUSINESS RESPONSIBILITY STATEMENT

The Business Responsibility Report for the financial year 2014-15 forms the part of the annual report.

27. MATERIAL AND SIGNIFICANT ORDERS PASSED BY REGULATORS & COURTS

During the Financial Year following Significant orders have been passed by the court/ regulators.

(i) Delhi High Court has ruled in Case No. : WP(C_ No.3625/2013 confirming the entitlement of the subsidy under special incentive scheme to Indosolar Limited.

(ii) The Commissioner Central Excise Noida II has passed order in favour of Indosolar Limited against the show cause notice for the payment of Custom Duty of INR 94.30 Cr along with Interest and Penalties.

29. CORPORATE GOVERNANCE REPORT

Your Company strives to ensure that best Corporate Governance Practices are identified , adopted and consistently followed .

The Report on the Corporate Governance forms an integral part of this report and is set out as Annexure VI to this report. The Certificate from the practicing Company Secretary "Chandrasekaran Associates Company Secretaries" certifying compliance with the conditions of the Corporate Governance as stipulated in Clause 49 of the listing agreement is annexed with the report on Corporate Governance.

30. LISTING OF SHARES

The Equity Shares of the Company are listed on BSE Limited and National Stock Exchange of India Limited. The listing fees for the Financial Year 2015-16 has been paid.

31. APPRECIATION

Your Directors wish to place on record their sincere appreciation of the efforts and dedicated services of all the employees which have contribute by staying with the Company in the tough period .

32. PREVENTION OF SEXUAL HARASSMENT

The Company is committed to provide a protective environment at workplace for all its women employees. To ensure that every woman employee is treated with dignity and respect and as mandate under " The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal ) Act, 2013" the Company has in place a formal policy for prevention of sexual harassment of its women employees.

The Company has in place an Anti Sexual Harassment Policy in line with the requirement of "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal ) Act, 2013".

Further, the Company has constituted Internal Complaints Committee to redress Complaints received regarding sexual harassment during the period. The following is a summary of sexual harassment complaints received and disposed off during the period:

Number of Complaints received Nil

Number of Complaints disposed off Nil

33. ACKNOWLEDGEMENTS

The Board of Directors places on record its appreciation for the support, assistance and co-operation received from Government, Regulators and the bankers to the Company, i.e. Union Bank of India, Andhra Bank, Bank of Baroda, Corporation Bank and Indian Bank.

The Board is thankful to the shareholders for their support to the Company.

The Board is also thankful to the employees of the Company for their co-operation and unstinted dedication to duty leading to cordial industrial relations during the year under review.

On behalf of the Board of Directors

For INDOSOLAR LIMITED

Place : Greater Noida GAUTAM SINGH KUTHARI H.R. GUPTA

Date :21.08.2015 (Director) (MANAGING DIRECTOR)

DIN: 00945195 DIN: 00297722


Mar 31, 2014

Dear members,

The Board has pleasure in presenting the Ninth Annual Report on business and operations of the Company for the year ended 31st March 2014.

1. FINANCIAL RESULTS (Rs. in Crores)

PARTICULARS YEAR ENDED YEAR ENDED 31ST MARCH 2014 31ST MARCH 2013

TOTAL INCOME 18.09 55.81

PROFIT / (LOSS) BEFORE INTEREST, DEPRECIATION AND TAX (26.01) (25.55)

INTEREST 80.75 59.24

CASH PROFIT / (LOSS) (106.76) (84.79)

DEPRECIATION 30.19 39.10

PROFIT / (LOSS) BEFORE TAX (136.95) (123.89)

PROFIT / (LOSS) AFTER TAX (136.95) (123.89)

PROFIT / (LOSS) BROUGHT FORWARD (463.94) (340.05)

PROFIT / (LOSS) TO BE CARRIED FORWARD TO BALANCE SHEET (600.89) (463.94)

2. PERFORMANCE REVIEW

During the year under review, performance of the Company continued to be severely impacted due to downturn in SPV Cell industry. Added to this, large scale dumping at cheap prices of PV Cells from select countries worsened the performance of the Company. The plant remained closed during the year due to considerable fall in selling prices. Lower sales realization as well as underutilization of capacity resulted in heavy cash losses. The liquidity had dried-up and the Company is not in a position to service its debt till revival of the market. In view of the same, the Company has approached its Bankers for second corporate debt restructuring which is under consideration by the Banks.

During the year under review, your Company reported total income of Rs. 18.09 Crores as against Rs. 55.81 Crores last year. After making a provision of Rs. 80.75 Crores towards interest and Rs.30.19 Crores towards depreciation, the current financial year closed with a loss of Rs. 136.95 Crores as against loss of Rs. 123.89 Crores last year.

3. STATUS OF IMPLEMENTATION OF 200 MW PROJECT

The 200 MW solar cell manufacturing line upgraded to 250 MW and part of auxiliary equipments have been arrived at the factory. However, inspite of sanction of additional CAPEX for the project by CDR cell, some Banks have not released sanctioned funds and the installation of the line has been delayed due to this reason. The Company is requesting the Banks to release the undisbursed amounts approved but undisbursed by the Banks.

4. DIVIDEND

Due to non availability of profit, the Board does not recommend any dividend for the year ended 31st March 2014.

5. PAYMENT OF ANNUAL LISTING FEES

Annual listing fee for financial year 2014-2015 has been paid to National Stock Exchange of India Limited and BSE Limited.

6. DIRECTORS

Mr. Bhushan Kumar Gupta, the Executive Chairman will retire by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment. Board recommends the same for your approval.

During the year, Mr. Arun Kumar Gupta has resigned from the Board with effect from 16th August 2013, Mr. Gurbaksh Singh Vohra has resigned from the Board with effect from 20th August 2013 and Mr. Anand Kumar Agarwal has resigned from the Board and as Whole Time Director cum Chief Financial Officer of the Company with effect from 13th February 2014.

Mr. Vidyut Manubhai Vora has been appointed as an additional director of the Company in the category of Independent and Non-Executive Director with effect from 13th February 2014 to hold the office of director upto the date of ensuing Annual General Meeting. The Board has received letter from shareholder alongwith deposit of Rs. 1,00,000/- for appointment of Mr. Vidyut Manubhai Vora as director of the Company. The Board recommends the same for your approval.

Ms. Vinati Dev has been appointed as an additional director of the Company in the category of Independent and Non-Executive Director with effect from 12th August 2014 to hold the office of director upto the date of ensuing Annual General Meeting. The Board has received letter from shareholder alongwith deposit of Rs. 1,00,000/- for appointment of Ms. Vinati Dev as director of the Company. The Board recommends the same for your approval. Pursuant to Section 149 of the Companies Act, 2013, ("the Act") the Board has recommended appointment of Mr. Vidyut Manubhai Vora, Mr. Gautam Singh Kuthari and Ms. Vinati Dev as Independent and Non-Executive Directors of the Company, not liable to retire by rotation for a period of five years subject to approval of the Members of the Company. These Directors have given the declarations to the Board that they meet the criteria of independence as provided under Section 149(6) of the said Act and also confirmed that they will abide by the provisions as mentioned in Schedule IV of the Act.

The Board recommends the same for your approval.

7. DIRECTORS REMUNERATION

During the year, the Board, considering the cash flow restraint of the Company, has decided not to pay any remuneration to the Directors of the Company with effect from 1st April 2013.

8. STATUTORY AUDITORS

The Company has received a letter from M/s B S R & Co. LLP (earlier B S R & Co.), Chartered Accountants, the Statutory Auditors of the Company expressing their willingness for re-appointment as statutory auditors and simultaneously their eligibility certificate pursuant to section 141 of the Companies Act, 2013. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed there under, it is proposed to re-appoint M/s B S R & Co. LLP as Statutory Auditors of the Company for a period of four years to hold the office from conclusion of this Annual General Meeting (AGM) till the conclusion of 13th AGM, subject to ratification of their appointment at the subsequent AGMs.

The Board of Directors recommends their re-appointment for your approval by way of an ordinary resolution.

9. STATUTORY AUDITORS'' REPORT

On the Auditors'' observations, reply from the management is as under:

(i) As regards inability of the Company to carry on as a going concern mentioned in para 4.1 of the Auditors'' Report, it is submitted that the Company was not in a position to carry out the production on continuous basis due to cost of production being higher than the market price. The concerned department of the government has already activated imposition of anti-dumping duty on imports of solar cells & modules and also mandated local content condition under JNNSM scheme for revival of the industry. Notification for final findings establishing injury to solar industry has been issued and recommendation has been sent to Ministry of Finance for imposition of anti-dumping duty, which is under consideration. As such the auditors were unable to conclude on the ability of the company to carry on as a going concern.

(ii) As regards contract for setting up solar PV power plants mentioned in para 4.2 of the Auditors'' Report, it is submitted that the Company has contested the claim and also applied for extension of time for completing the project.

(iii) As regards inability of the auditors to express an opinion on financial statements and obtain all information and explanations mentioned in para 5, 6(2)(a) and 6(2)(d) of the Auditors'' Report, it is submitted that the auditors have not expressed any opinion on the financial results due to their inability to collect audit evidence to provide a basis for an audit opinion on account of multiple uncertainties created by external and internal factors like consideration of 2nd Corporate Debt Restructuring proposal of the Company, key policy initiatives of the government relating to anti-dumping duty, etc.

(iv) As regards internal audit system mentioned in para (vii) of the Annexure to the Auditors'' Report, it is submitted that the operation of the Company remained closed during the year and as such, there was no need to enlarge the scope of internal audit work and coverage of internal audit. However, the internal audit system would be enlarged once the Company restarts its operations.

(v) As regards delay in payment of statutory dues mentioned in para (ix) (a) of the Annexure to the Auditors'' Report, it is submitted that the same was due to adverse financial condition of the Company as well as non-realization of its dues in time. However, the same were paid alongwith interest till date and rectified.

(vi) As regards accumulated losses becoming more than net worth and further cash losses incurred by the Company mentioned in para (x) of the Annexure to the Auditors'' Report, it is submitted that during the year under review, performance of the Company continued to be severely impacted due to downturn in SPV Cell industry. Added to this, large scale dumping at cheap prices of PV Cells from select countries worsened the performance of the Company. The plant remained closed during the year due to considerable fall in selling prices. Lower sales realization as well as underutilization of capacity resulted in heavy cash losses. The Company will make reference to Board for Industrial & Financial Reconstruction after finalization of annual accounts in the forthcoming Annual General Meeting.

(vii) As regards default in repayment of dues to bankers mentioned in para (xi) of the Annexure to the Auditors'' Report, it is submitted that the same was due to adverse financial condition of the Company and the Company has already approached the Banks for second corporate debt restructuring to regularize the defaults, which is under consideration by the Banks.

(viii) As regards funds raised on short term basis used for long term investment mentioned in para (xvii) of the Annexure to the Auditors'' Report, it is submitted that long term application is due to losses incurred and was financed out of short term funds as there were no alternate funds with the Company.

10. COST AUDIT

The Company has filed cost audit report for the financial year ending 31st March 2013 on 10th October 2013. The Company will file cost audit report for the financial year ending 31st March 2014 within the stipulated time period.

11. APPLICABILITY OF SECTION 15 OF THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985

The accumulated losses of the Company have exceeded the net worth of the Company. As per the provisions of section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985, the Company will make reference to Board for Industrial & Financial Reconstruction after approval of financials in the ensuing Annual General Meeting.

12. DEPOSITS

The Company has not accepted any deposits from public during the financial year under review.

13. PARTICULARS OF THE EMPLOYEES

There are no employees drawing remuneration as specified in section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

14. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

Information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required to be furnished under the provisions of section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given as Annexure - I to this report.

15. CORPORATE GOVERNANCE REPORT

In terms of Clause 49(VI) of Listing Agreement entered into by the Company with the Stock Exchanges, a detailed report on Corporate Governance along with Management Discussion and Analysis Report has been attached with this Report. A Certificate from Practicing Company Secretary on compliance with the conditions of corporate governance requirements by the Company is attached to the Corporate Governance Report and forms part of this Report.

16. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Director''s Responsibility Statement, it is hereby confirmed:-

i. That in preparation of the accounts for financial year ended 31st March, 2014, the applicable accounting standards have been followed;

ii. That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year under review;

iii. That the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. That the Directors have prepared the accounts for the financial year ended on 31st March, 2014 on a going concern basis.

17. ACKNOWLEDGEMENTS

The Board of Directors places on record its appreciation for the support, assistance and co-operation received from Government, Regulators and the bankers to the Company, i.e. Union Bank of India, Andhra Bank, Bank of Baroda, Corporation Bank and Indian Bank.

The Board is thankful to the shareholders for their support to the Company.

The Board is also thankful to the employees of the Company for their co-operation and unstinted dedication to duty leading to cordial industrial relations during the year under review.

On behalf of the Board of Directors For INDOSOLAR LIMITED

Place : New Delhi B.K. GUPTA Date : 12.08.2014 (Chairman) DIN: 00168071


Mar 31, 2013

The Directors have pleasure in presenting the Eighth Annual Report on business and operations of the Company for the year ended 31st March 2013.

1. FINANCIAL RESULTS (Rs. in Crores)

PARTICULARS YEAR ENDED YEAR ENDED 31ST MARCH 2013 31ST MARCH 2012

TOTAL INCOME 55.81 97.19

PROFIT / (LOSS) BEFORE INTEREST, DEPRECIATION AND TAX (25.55) (108.89)

INTEREST 59.24 59.25

CASH PROFIT / (LOSS) (84.79) (168.14)

DEPRECIATION 39.10 34.22

PROFIT / (LOSS) BEFORE TAX (123.89) (202.36)

PROFIT / (LOSS) AFTER TAX (123.89) (202.36)

PROFIT / (LOSS) BROUGHT FORWARD (340.05) (137.69)

PROFIT / (LOSS) TO BE CARRIED FORWARD TO BALANCE SHEET (463.94) (340.05)

2. PERFORMANCE REVIEW

During the year under review, performance of the Company continued to be severely impacted due to further downturn in SPV Cell industry. Added to this, large scale dumping at cheap prices of PV Cells from select countries further worsened the performance of the Company. The plant remained closed for significant part of the year due to considerable fall in selling prices. Lower sales realization as well as underutilization of capacity resulted in heavy cash losses. The liquidity had dried-up and the Company is not in a position to service its debt till revival of the market. In view of the same, the Company is planning to approach its bankers for second corporate debt restructuring.

During the year under review, your Company reported total income of Rs. 55.81 Crores as against Rs. 97.19 Crores last year. After making a provision of Rs. 59.24 Crores towards interest and Rs. 39.10 Crores towards depreciation, the current financial year closed with a loss of Rs. 123.89 Crores as against loss of Rs. 202.36 Crores last year.

3. STATUS OF IMPLEMENTATION OF 200 MW PROJECT

The Company was in the process of setting-up 200 MW solar cell manufacturing line financed through a mix of debt and equity as appraised by the Banks and approved by the CDR cell. CDR cell had considered setting-up of 200 MW line as an integral component for success of the Company and approved additional CAPEX of Rs. 100 Crores for completing the expansion over and above Rs. 47 Crores already sanctioned by Union Bank of India.

The 200 MW solar cell manufacturing line has arrived at the factory and some of other auxiliary equipments have also been ordered. However, inspite of sanction of additional CAPEX for the project, some Banks have not released funds and the installation of the line has stopped due to this reason. The Company is also planning to raise the issue of balance funding with the CDR cell in its proposed second corporate debt restructuring.

4. DIVIDEND

Due to non availability of profit, your Directors do not recommend any dividend for the year ended 31st March 2013.

5. PAYMENT OF ANNUAL LISTING FEES

Annual listing fee for financial year 2013-2014 has been paid to National Stock Exchange of India Limited and BSE Limited.

6. RE-CLASSIFICATION OF AUTHORIZED SHARE CAPITAL

During the year, the Company has re-classified its authorized share capital from Rs. 5,00,00,00,000-/ (Rupees Five Hundred Crores) divided into 50,00,00,000 (Fifty Crores) Equity Shares of Rs. 10/- (Rupees Ten) each to Rs. 5,00,00,00,000-/ (Rupees Five Hundred Crores) divided into 40,00,00,000 (Forty Crores) Equity Shares of Rs. 10/- (Rupees Ten) each and 10,00,00,000 (Ten Crores) Preference Shares of Rs. 10/- (Rupees Ten) each.

7. ALLOTMENT OF PREFERENCE SHARES

During the year, the Company has issued and allotted 95,00,000 (Ninety Five Lacs) zero coupon redeemable non-convertible non-cumulative preference shares of Rs. 10/- (Rupees Ten) each fully paid-up.

8. EROSION OF NET WORTH

As per audited financial accounts of the Company for the year ended 31st March 2012 adopted by the shareholders at their 7th annual general meeting held on 29th September 2012, the accumulated losses of the Company stood at Rs. 340.05 Crores, which was more than 50% of peak net worth of the Company in the immediately preceding four financial years. Pursuant to provisions of section 23 of Sick Industrial Companies (Special Provisions) Act, 1985, the Company duly convened and held an extra-ordinary general meeting for considering such erosion and reported the fact of such erosion to Board for Industrial and Financial Reconstruction.

9. DIRECTORS

Mr. Bhushan Kumar Gupta, the Chairman and Mr. Hulas Rahul Gupta, the Managing Director will retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. Board recommends the same for your approval.

10. STATUTORY AUDITORS

The existing statutory auditors of Company M/s B S R and Associates, Chartered Accountants whose term will expire on the conclusion of this Annual General Meeting have expressed their unwillingness for re-appointment in Annual General Meeting. Further, the Company has received a letter from M/s B S R & Co., Chartered Accountants expressing their willingness for appointment as statutory auditors and simultaneously their eligibility certificate pursuant to section 224(1B) of the Companies Act, 1956 that the appointment, if made, will be within the limits.

The Board of Directors recommends their appointment for your approval by way of an ordinary resolution.

11. STATUTORY AUDITORS'' REPORT

On the Auditors'' observations, reply from the management is as under:

(i) As regards consideration of demurrage and detention charges as cost of acquisition of asset mentioned in para 4 (i) of the Auditors'' Report, it is submitted that demurrage and detention charges are mainly in the nature of rental and storage expenses as machineries could not be stored in our premises due to non-completion of construction work and accordingly considered as a part of cost of acquisition of the assets and capitalized under Capital Work-in-Progress. The Management has also sought an opinion from the Institute of Chartered Accountants of India for the same and their reply is still awaited. Pending receipt of the reply from ICAI, the Management is treating these demurrage and detention and storage charges as capital expenditure pending allocation.

(ii) As regards inability of the Company to carry on as a going concern mentioned in para 4 (ii) of the Auditors'' Report, it is submitted that the Company was not in a position to carry out the production on continuous basis due to cost of production being higher than the marker price. The Company has represented to the government for anti-dumping duty on imports and also applied for local content requirements in the government projects and certain other incentives for revival of the industry which are still awaited, thus creating uncertain conditions. As such the auditors were unable to conclude on the ability of the Company to carry on as a going concern.

(iii) As regards inability of the auditors to express an opinion on financial statements and obtain all information and explanations mentioned in para 5, 6 (2) (a) and 6 (2) (d) of the Auditors'' Report, it is submitted that the auditors have not expressed any opinion on the financial results due to their inability to collect audit evidence to provide a basis for an audit opinion on account of multiple uncertainties created by external and internal factors like consideration of 2nd Corporate Debt Restructuring proposal of the Company to the banks, key policy initiatives of the government relating to anti-dumping duty, local content requirement, etc.

(iv) As regards internal audit system mentioned in para (vii) of the Annexure to the Auditors'' Report, it is submitted that the operation of the Company remained closed for a significant part of the year and as such, there was no need to enlarge the scope of internal audit work and coverage of internal audit. However, the internal audit system would be enlarged once the Company restarts its operations.

(v) As regards delay in payment of statutory dues mentioned in para (ix) (a) of the Annexure to the Auditors'' Report, it is submitted that the same was due to adverse financial condition of the Company as well as non-realization of its dues in time. However, the same were paid alongwith interest and rectified before 31st March 2013.

(vi) As regards accumulated losses becoming more than fifty percent of net worth and cash losses mentioned in para (x) of the Annexure to the Auditors'' Report, it is submitted that during the year under review, performance of the Company continued to be severely impacted due to further downturn in SPV Cell market pricing structure due to dumping from China in international and domestic markets at lower pricies. The plant remained closed for significant part of the year due to considerable fall in selling prices. Lower sales realization as well as underutilization of capacity resulted in heavy cash losses. The fact of erosion of net worth by more than fifty percent has been reported to the Board for Industrial and Financial Reconstruction.

(vii) As regards funds raised on short term basis used for long term investment mentioned in para (xvii) of the Annexure to the Auditors'' Report, it is submitted that out of total loss of Rs. 123.89 Crores incurred during the year, loss of Rs. 48. 43 Crores was financed out of short term funds as there were no alternate funds with the Company.

12. COST AUDITORS

The Company has appointed M/s Kabra & Associates, Cost Accountants to conduct audit of cost accounting records being maintained by the Company for the manufacture of solar cells for the financial year ending 31st March 2014. The Company has filed cost compliance report for the financial year ending 31st March 2012 on 21st December 2012. The Company will file cost audit report for the financial year ending 31st March 2013 within stipulated time period.

13. DEPOSITS

The Company has not accepted any deposits from public during the financial year under review.

14. PARTICULARS OF THE EMPLOYEES

The employees drawing remuneration as specified in section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and details are as per Annexure-I to this report.

15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

Information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required to be furnished under the provisions of section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given as Annexure - II to this report.

16. CORPORATE GOVERNANCE REPORT

In terms of Clause 49(VI) of Listing Agreement entered into by the Company with the Stock Exchanges, a detailed report on Corporate Governance along with Management Discussion and Analysis Report has been attached with this Report. A Certificate from Practicing Company Secretary on compliance with the conditions of corporate governance requirements by the Company is attached to the Corporate Governance Report and forms part of this Report.

17. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Director''s Responsibility Statement, it is hereby confirmed:- i. That in preparation of the accounts for financial year ended 31st March, 2013, the applicable accounting standards have been followed;

ii. That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year under review;

iii. That the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. That the Directors have prepared the accounts for the financial year ended on 31st March, 2013 on a going concern basis.

18. ACKNOWLEDGEMENTS

The Board of Directors places on record its appreciation for the support, assistance and co-operation received from Government, Regulators and the bankers to the Company, i.e. Union Bank of India, Corporation Bank, Bank of Baroda, Andhra Bank and Indian Bank.

The Board is thankful to the shareholders for their support to the Company.

The Board is also thankful to the employees of the Company for their co-operation and unstinted dedication to duty leading to cordial industrial relations during the year under review.



On behalf of the Board of Directors

For INDOSOLAR LIMITED

Place : New Delhi H.R. GUPTA A.K. AGARWAL

Date : 13.08.2013 (Managing Director) (Whole Time Director)


Mar 31, 2012

The Directors have pleasure in presenting the Seventh Annual Report on business and operations of the Company for the year ended 31st March, 2012.

1. FINANCIAL RESULTS (Rs. in Crores)

PARTICULARS YEAR ENDED YEAR ENDED 31ST MARCH, 2012 31ST MARCH, 2011

TOTAL INCOME 97.19 591.03

PROFIT / (LOSS) BEFORE INTEREST, DEPRECIATION AND TAX (110.86) 57.92

INTEREST 57.28 63.52

CASH PROFIT / (LOSS) (168.14) (5.60)

DEPRECIATION 34.22 51.83

PROFIT / (LOSS) BEFORE TAX (202.36) (57.43)

PROFIT / (LOSS) AFTER TAX (202.36) (57.44)

PROFIT / (LOSS) BROUGHT FORWARD (137.69) (80.25)

PROFIT / (LOSS) TO BE CARRIED FORWARD TO BALANCE SHEET (340.05) (137.69)

2. PERFORMANCE REVIEW

During the year under review, the Company has been severally impacted due to sudden demand downturn in SPV cell segment resulting from liquidity crisis in Europe, lower sales realization without commensurate fall in raw material prices and underutilization of capacity due to industry downturn.

Germany reduced Feed-in-Tariff from January 2011 and this gave farm developers time to wait for better pricing. Many countries reduced subsidy support to solar sector, in order to combat their fiscal deficit. This resulted in lower off take of solar products globally leading to reduced demand. This downturn was entirely unanticipated and had taken the industry by surprise.

The demand had suddenly eroded while the supply chain was in full ramp. This created an artificially high inventory pile-up in Asia as well as at European ports and the same resulted in over 60% price erosion worldwide. These factors also caused halt in operations of solar industry globally.

Indosolar also got affected severely and its operations showed heavy losses. Since beginning of the year, the plant was operating at a very low capacity and it remained totally closed from September 2011 onwards. The liquidity had dried-up and the Company was not in a position to service its debt till revival of the market. So, the Company approached its bankers for restructuring of debts under CDR route.

During the year under review, your Company reported total income of Rs. 97.19 Crores as against Rs. 591.03 Crores last year. After making a provision of Rs. 57.28 Crores towards interest and Rs. 34.22 Crores towards depreciation, the current financial year closed with a loss of Rs. 202.36 Crores as against loss of Rs. 57.44 Crores last year.

3. CORPORATE DEBT RESTRUCTURING

In order to address the above situation, the Company applied to the Corporate Debt Restructuring (CDR) Forum set up under Reserve Bank of India for debt restructuring during September 2011 with an intention that the debt re-alignment under CDR aegis would help the Company and the lenders to address the situation quickly and in a scientific manner. The Company has been sanctioned CDR package by CDR Forum vide its letter dated 07.03.2012. The package is effective from 01.07.2011 and includes, inter-alia, reduction in rate of interest on loans, rescheduling of the loan repayment period with an initial moratorium of 24 months from effective date, sanction of additional CAPEX of Rs. 100 Crores for completing the expansion of 200 MW solar cell project, interest on loans during the moratorium period will be funded by additional Funded Interest Term Loan (FITL).

After getting approval form CDR Forum, the Company has entered into Master Restructuring Agreement, alongwith other security documents, with the consortium of banks and CDR package has been implemented.

4. STATUS OF IMPLEMENTATION OF 200 MW PROJECT

The Company is in the process of setting-up 200 MW solar cell manufacturing line to be financed through a mix of debt and equity. Union Bank of India had appraised the project and established LC of Rs. 228 Crores for import of 200 MW line against its debt underwriting of Rs. 275 Crores. The Company had also spent Rs. 179.66 Crores for the said expansion as equity contribution. The solar cell manufacturing line has already arrived, however, Company requires additional funding to the extent of Rs. 147 Crores to complete the project. In view of declining financial performance of the Company as well as weak outlook of solar sector in the short run, the bankers were reluctant to provide balance funding. However, CDR Forum has considered setting-up of 200 MW line as an integral component for success of the Company and approved additional CAPEX of Rs. 100 Crores for completing the expansion over and above Rs. 47 Crores already sanctioned by Union Bank of India.

5. DIVIDEND

Due to non availability of profit, your Directors do not recommend any dividend for the year ended 31st March, 2012.

6. PAYMENT OF ANNUAL LISTING FEES

Annual listing fee for financial year 2012-2013 has been paid to National Stock Exchange of India Limited and BSE Limited.

7. DIRECTORS

Mr. Gautam Singh Kuthari, Director will retire by rotation at the forthcoming Annual General Meeting and being eligible offer himself for re-appointment. Board recommends the same for your approval.

Mr. Ravinder Khanna has resigned from the Board with effect from 11th November, 2011 and Mr. Aditya Jain has resigned from the Board with effect from 14th February, 2012.

Mr. Arun Kumar Gupta and Mr. Gurbaksh Singh Vohra have been appointed as additional directors of the Company with effect from 14th February, 2012 to hold the office of director upto the date of forthcoming annual general meeting. The Board has received letters from shareholders alongwith deposit of Rs. 500/- for each of them for appointment as directors of the Company. The Board recommends the same for your approval.

The tenure of Mr. Bhushan Kumar Gupta, Chairman, Mr. Hulas Rahul Gupta, Managing Director and Mr. Anand Kumar Agarwal, Whole Time Director is upto 25th September, 2012. The management decided to re-appoint them for a further period of three years, i.e. from 26th September, 2012 to 25th September, 2015. The Board recommends the same for your approval.

8. STATUTORY AUDITORS

The statutory auditors of your Company, M/s B S R and Associates, Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility for re-appointment at the forthcoming Annual General Meeting under section 224(1B) of the Companies Act, 1956.

The Board of Directors recommends their re-appointment for your approval.

9. STATUTORY AUDITORS' REPORT

On the Auditors' observations, reply from the management is as under:

(i) As regards delay in payment of service tax and work contract tax mentioned in para (ix)(a) of the Annexure to the Auditors' Report, the same was due to adverse financial condition of the Company as well as non-realization of its dues in time. However, the same have since been paid alongwith interest and rectified.

(ii) As regards accumulated losses becoming more than fifty percent of net worth and cash losses mentioned in para (x) of the Annexure to the Auditors' Report, the same were due to sudden demand downturn in SPV cell segment resulting from liquidity crisis in Europe, lower sales realization without commensurate fall in raw material prices and underutilization of capacity due to industry downturn. The demand had suddenly eroded while the supply chain was in full ramp. This created an artificially high inventory pile-up in Asia as well as at European ports and the same resulted in over 60% price erosion worldwide. These factors also caused halt in operations of solar industry globally. Indosolar also got affected severely and its operations showed heavy losses. As regards erosion of net worth by more than fifty percent, the Company is taking required necessary steps.

(iii) As regards delay in repayment of principal sums and interest thereon to banks mentioned in para (xi) of the Annexure to the Auditors' Report, the same was due to non-availability of funds as the operations were at very low level during the year resulting into heavy cash losses. Accordingly, the Company approached CDR cell of RBI for approval of restructuring package seeking relief which was approved by the empowered group committee and the delays were condoned and rectified.

(iv) As regards funds raised on short term basis being used for long term investment mentioned in para (xvii) of the Annexure to the Auditors' Report, the significant losses incurred by the Company were being financed out of short term funds as there were no alternate funds with the Company.

10. COST AUDITORS

In view of recent circular issued by the Ministry of Corporate Affairs, the cost audit is now applicable on the Company with effect from 1st April, 2012. The Company has appointed M/s Kabra & Associates, Cost Accountants to conduct audit of cost accounting records being maintained by the Company for the manufacture of solar cells for the financial year ending 31st March, 2013.

11. DEPOSITS

The Company has not accepted any deposits from public during the financial year under review.

12. PARTICULARS OF THE EMPLOYEES

The employees drawing remuneration as specified in section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and details are as per Annexure-I to this report.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

Information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required to be furnished under the provisions of section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given as Annexure - II to this report.

14. REPORT ON MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE ALONGWITH GENERAL SHAREHOLDER INFORMATION

In terms of Clause 49(VI) of Listing Agreement entered into by the Company with the Stock Exchanges, a detailed report on Corporate Governance along with Management Discussion and Analysis Report has been attached with this Report. A Certificate from Practicing Company Secretary on compliance with the conditions of corporate governance requirements by the Company is attached to the Corporate Governance Report and forms part of this Report.

15. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Director's Responsibility Statement, it is hereby confirmed:-

i. That in preparation of the accounts for financial year ended 31st March, 2012 the applicable accounting standards have been followed;

ii. That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year under review;

iii. That the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. That the Directors have prepared the accounts for the financial year ended on 31st March, 2012 on a going concern basis.

16. ACKNOWLEDGEMENTS

The Board of Directors places on record its appreciation for the support, assistance and co-operation received from Government, Regulators and the bankers to the Company, i.e. Union Bank of India, Corporation Bank, Bank of Baroda, Andhra Bank and Indian Bank.

The Board is thankful to the shareholders for their support to the Company.

The Board is also thankful to the employees of the Company for their co-operation and unstinted dedication to duty leading to cordial industrial relations during the year under review.

On behalf of the Board of Directors

For INDOSOLAR LIMITED

Place : Greater Noida H.R. GUPTA A.K. AGARWAL

Date : 11.08.2012 (Managing Director) (Whole Time Director)

 
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