Auditor Report of Indowind Energy Ltd.

Mar 31, 2018

Report on the standalone IndAS Financial Statements Opinion

We have audited the accompanying Standalone Ind AS financial statements of indowind Energy Limited (“the company”), which comprises the Balance Sheet as at March 31,2018, the Statement of Profit and Loss,(including other comprehensive income), the statement of changes in equity and statement of cash flows for the year then ended and summary of the significant accounting policies and other explanatory information(here in after referred to as “standalone Ind AS financial statements").

Responsibility of Management for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian accounting Standards(lnd AS) prescribed under section 133 of the Act read with relevant Rules issued thereunder.

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 standalone Ind AS financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility forthe Audit of the Financial Statements

Our responsibility is to express an opinion on these standalone IndAS 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 standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the Auditors’ judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS 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 standalone Ind AS financial statements.

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

Basis for Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the financial position of the Company as at 31 March, 2018, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date

Emphasis of Matters:

The company is the defendant in a legal case filed by the Foreign Currency Bond Holders (FCCB) for winding up. The company has filed a counter. Proceedings are in progress. The impact of the matter cannot be ascertained at this stage.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the “Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3)oftheAct, we reportthat:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of ouraudit.

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

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 and with the returns received from the branches not visited by us

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on 31^st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.

f) 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”.

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 standalone Ind AS financial statements. Refer to Note: 39 to the standalone Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;

Annexure A to Independent Auditors’ Report

The Annexure referred to in Independent Auditors’ Report to the members of the Company on the standalone Ind AS financial statements for the year ended March 31,2018, we report that

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 fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification .In our opinion, this periodicity of physical verification is reasonable having regard to the size of the company and the nature of its assets.

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

ii. According to the information and explanation given to us, the physical verification of the inventory has been conducted at the reasonable intervals by the management and there has been no material discrepancies noticed during such verification. Based on the nature of business it is not feasible to verify the inventory.

iii. The Company has granted loans to one body corporate covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act’).

a) In our opinion, the rate of interest and other terms and conditions on which the loans had been granted to the bodies corporate listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company

b) In the case of the loans granted to the bodies corporate listed in the register maintained under section 189 of the Act, the borrowers have been regular in the payment of the principal and interest as stipulated.

c) There are no overdue amounts in respect of the loan granted to a body corporate listed in the register maintained under section 189 of the Act.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.

v. The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of deposits) Rules,2015 with regard to the deposits accepted from the public are not applicable.

vi. The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the Company.

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 accounting in respect of undisputed statutory dues including provident fund, income-tax, sales tax, value added tax, duty of customs, service tax, cess, Goods and Service Tax and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, value added tax, duty of customs, service tax, cess, Goods and Service Tax and other material statutory dues were in arrears as at 31th March 2018 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 dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax or goods or service tax which have not been deposited on account of any dispute, except for the following:

S.No.	Particulars	Amount (Rs.) in lakhs	Period to which the amount relates	Forum where dispute is pending
01.	Income Tax Act	27.00	A.Y. 1998 -1999	First appellate authority -Commissioner of income tax appeals
02.	Income Tax Act	75.11	A.Y. 2004-2005	Third appellate authority - High Court of Madras
03.	Income Tax Act	22.39	A.Y. 2005 -2006	Third appellate authority - High Court of Madras
04.	Service Tax	218.00	F.Y. 2005-2006, 2006-2007, 2007-2008, 2008-2009, 2009-2010	Central Excise and Service Tax Appellate Tribunal [CESTAT]
05.	Value Added Tax	16.80	F.Y. 2007-2008	High Court of Madras
06.	Value Added Tax	29.60	F.Y. 2008-2009	High Court of Madras

viii. The Company does not have any loans or borrowings from debenture holders during the year and has not defaulted in the repayment of dues to any financial institution and banks. Accordingly, paragraph 3(viii) of the Order is not applicable.

ix. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3(ix) of the Order is not applicable.

x According to the information and explanations given to us, no material fraud by the Company or onthe Company by its officers or employees has been noticed or reported during the course ofouraudit.

xi. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197, read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii)ofthe 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, transactions with the related parties are in compliance with sections 177 and 188 of the Act wherein applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable accounting standards.

xiv. According to the information and explanations give to us and based on 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 the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered in to non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi. The companyis not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.

Annexure B to Independent Auditors Report for indowind Energy Limited

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Indowind Energy Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the standalone 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 (the “Guidance Note”) issued by the Institute of Chartered Accountants of India (“the 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 Companies Act, 2013.

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 Companies Act, 2013, 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 March 31, 2018, 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 Sanjiv Shah and Associates

Chartered Accountants

Firm Registration No.003572S

CA G Ramakrishnan

Place: Chennai. Partner

Date: 8^th June, 2018 Membership No.: 209035

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Mar 31, 2016

INDEPENDENT AUDITOR''S REPORT TO THE MEMBERS OF INDOWIND ENERGY LIMITED Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of INDOWIND ENERGY LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these 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 audit opinion on the standalone financial statements.

Basis of Qualified Opinion

As mentioned in Note No. 1, the financial statements of the company have been prepared on a Going Concern basis. However, as mentioned in our basis of qualified opinion / emphasis of matters there are matters pending in litigation with courts and Appellate authorities. The final outcome of these litigations is uncertain. The company has followed accounting practices which are in deviation from accounting standards prescribed by the Institute of Chartered Accountants of India as described under Emphasis of Matter. The outcome of some of these events, if unfavorable from the company''s standpoint, can cast significant doubts on the ability of the Company to continue as a going concern.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, “except for the effects of the matter described in the paragraphs “Basis of Qualified Opinion” and “Emphasis of Matter”, the aforesaid standalone 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, in the case of standalone Balance Sheet of the state of affairs of the Company as at 31st March, 2016, and its profit and its cash flows for the year ended on that date. Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

1. We draw your attention to Note No. 9 of financial statements under fixed assets regarding capitalization of 4.2 MW out of 5.8 MW wind farm project for Rs. 48.60 Crores out of 24 MW expansion project.

The capitalization was done by way of a Transfer agreement with suppliers towards settlement of project advances made in the past. We had expressed our qualified opinion in earlier audit reports regarding the recoverability of the project advances.

2. Note No. 5 of the financial statements in respect of the Company''s ability to continue as a going concern which is in part dependent on the successful outcome of the decision regarding the liquidation petition by the bond holders before the Honorable Madras High Court.

3. In accordance with Accounting Standard - 11 (Standard on The Effects of Changes in Foreign Exchange Rates), the Company is required to value its monetary assets and liabilities viz., Long Term Provisions at the foreign exchange rate prevailing on the date of the balance sheet. The company has not re-instated the foreign currency term loan disclosed under Note No 4 & 7 amounting to Rs. 57.30 Crores representing a part of the loan amount taken from EXIM Bank at the yearend forex rates. Had the same been re-instated, the profit for the financial year ended 31st March 2016 as per the statement of profit & loss account, would have been decreased by Rs. 25.98 Crores.

4. Note No. 9 in respect of Depreciation. The company has to compute depreciation in accordance with the Schedule II to the Companies Act which provides useful lives to compute the depreciation. However, the company has computed depreciation in a manner which is inconsistent with Schedule II of the Companies Act. Had the depreciation been provided in compliance with the provisions of Schedule II, the profit would have decreased by Rs. 1.29 Crores.

5. Note No. 15 in respect of cash and equivalents. In our opinion Rs 30 Lakhs grouped under cash and cash equivalents requires provisioning since the bank has not confirmed this balance and the quality of the asset is doubtful. Had the same been provided for, the profit for the year would have been decreased by Rs. 30 Lakhs

6. Note No. 19 in respect of other income. In accordance with the provisions of Accounting Standard AS 29 (Provisions, Contingent liabilities and Contingent assets) an entity shall not recognize a contingent asset as this may result in recognition of income which is uncertain. Had this income not been recognized, the profit for the year would have decreased by Rs. 1.25 Crores.

7. Note No. 14 of financial statements in respect of trade receivables of Rs. 2.93 Crores. The Company had provided interest on the belated payments from TANGEDCO and BESCOM, during the financial year 2014-15 in accordance with terms of the Power Purchase Agreement. However the same has not been acknowledged as payable by the electricity boards.

Our opinion is not modified in respect of the matters mentioned above.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure A”, a statement on the matters specified in paragraph 3 and 4 of the Order, to the extent applicable

2. Further to the comments in the annexure, as required by Section 143 (3) of the Act, we report that:

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

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

(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 and with the returns received from the branches not visited by us.

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 except to the matters mentioned under our “basis of qualified opinion” and “emphasis of matters” and their effect on Profit & Loss of the company on account of noncompliance of Accounting Standards.

(e) On the basis of the written representations received from the directors as on 31 st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) 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”;

(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 5 and 26.1 to the financial statements.

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

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

Referred to in paragraph 1 under the heading ''Report on Other Legal & Regulatory Requirement'' of our report of even date to the financial statements of the Company for the year ended March 31, 2016:

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

(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 deeds of immovable properties are held in the name of the company except for seven cases of freehold land having aggregate gross block of Rs. 1,80,72,120 where the company is in the process of Collating and identifying title deeds.

(ii) According to the information and explanation given to us, the physical verification of the inventory has been conducted at the reasonable intervals by the management and there has been no material discrepancies noticed during such verification.

(iii) The Company has granted loans, both secured and unsecured to companies, firms, limited liability partnerships and other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

(a) “In our opinion, the terms and conditions of loans granted by the company to the parties covered in the register maintained under section 189 of the Companies Act, 2013 are not prejudicial to the company''s interest.

(b) According to the information and explanation given to us, the schedule of repayment of principal and payment of interest has been stipulated and the repayments are regular.

(c) According to the information and explanations given to us, there are no over dues for more than 90 days from the parties covered in the register maintained under section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the companies Act 2013, with respect to the loans and investments made.

(v) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

(vi) According to information and explanations given to us, the Central Government has not prescribed the maintenance of Cost Records under sub-section (1) of section 148 of the Companies Act, 2013 for the Company. Thus, paragraph 3(vi) of the Order is not applicable to the Company.

(vii) (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in few cases which is not material. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2016 for a period of more than six months from the date on when they become payable.

(b) According to the information and explanations given to us, there are no dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax which have not been deposited on account of any dispute, except for the following:

S.No.	Particulars	Amount (Rs.) in lakhs	Period to which the amount relates	Forum where dispute is pending
1	Income tax act	27.00	AY 1998-99	First appellate authority -Commissioner of Income tax appeals
2	Income tax act	21.30	AY 2006-07	Second appellate authority -Income tax tribunal
4	Income tax act	8.95	AY 2009-10	First appellate authority - Commissioner of Income tax appeals
5	Income tax act	106.00	AY 2010-11	First appellate authority -Commissioner of Income tax appeals
6	Income tax act	2.41	AY 2011-12	Second appellate authority -Income tax tribunal
8	Income tax act	5.39	AY 2004-05	Third Appellate authority -High Court of Madras
9	Income tax act	15.73	AY 2005-06	Third Appellate authority -High Court of Madras
10	Service tax	218.00	FY 2005-06, 2006-07, 2007-08, 2008-09 and 2009-2010	Central Excise and service tax appellate tribunal [CESTAT]
11	VAT	16.80	FY 2007-08	High Court of Madras
12	VAT	29.60	FY 2008-09	High Court of Madras

(vii) In our opinion and according to the information and explanations given to us, the Company has not issued any debentures and not defaulted in the repayment of dues to banks and financial institution except the following :

Sl.No	Particulars	Amount of default as at the balance sheet data (in Rs.)	Period of default
1	EXIM Bank	80,00,000	Quarter IV of FY 2015-16
2	Indian Renewable Energy Development Agency [IREDA]	95,00,000	Quarter IV of FY 2015-16

(iv) The company did not raise money by way of initial public offer or further public offer including debt instruments and term Loans. Thus, paragraph 3(ix) of the Order is not applicable to the Company.

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

(vi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(vii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Thus, paragraph 3(xii) of the Order is not applicable.

(viii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with section 177 and section 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

(ix) According to the information and explanation given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, paragraph 3(xiv) of the Order is not applicable.

(x) According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him.

(xi) According to the information and explanation given to us and in our opinion, 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 Indowind Energy Limited (“the Company”) as of 31st 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 Companies Act, 2013. 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 Companies Act, 2013, 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 issued by Institute of Chartered Accountants of India.

Emphasis of Matter

We would draw attention to the matters disclosed in the paragraph 1 under the heading ''Basis of Qualified opinion''; the Paragraph 1 to 7 under the heading ''Emphasis of matter'' and the paragraph 3(i)(c) and 3(viii) of the ''Annexure A'' referred in paragraph 1 under the heading ''Report on Other Legal & Regulatory Requirement'', which could indicate possible lapses in internal financial control system at various points in time.

Our opinion under clause (i) of sub-section 3 of the section 143 of the Act is not qualified in respect of this matter.

For V. Ramaratnam & Co

Chartered Accountants

Firm Registration No.002956S

R.Sundar

Place: Chennai. Partner

Date: 26th May, 2016 Membership No. : 012339

---

Mar 31, 2015

We have audited the accompanying standalone financial statements of INDOWIND ENERGY LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these 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 audit opinion on the financial statements.

Basis of Qualified Opinion

(i) We draw your attention to the Note. No. 12 of Financial Statements regarding the Project Advances amounting to Rs.44.60 Crores made as part of the 24 MW wind farm expansion project. This transaction has occurred outside India, during the financial year 2011 -12. We have in the past drawn your attention to the lack of information concerning the supply schedule and non confirmation of balance by the party. In view of the above facts, we are unable to comment on the substance of the transaction and its disclosure in the accompanying financial statements. In the absence of any information about the progress of the project or legal proceedings in the Court of Law we are unable to comment about the recoverability of the amount and / or acquisition of WEGs for which the payments have been made. The consequential financial impact on the profit and loss account and the net-worth of the Company forthefinancialyearended31stMarch,2015is indeterminable.

(ii) We draw your attention to Point 2 (d) in the paragraph "Report on other Legal & Regulatory requirements" for effect on Profit & Loss of the company on account of non-compliance of Accounting Standards.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the paragraphs- Basis of Qualified Opinion" and "Emphasis of Matter", the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

(i) Note No. 5 (i) of the Financial Statements in respect of the Company's ability to continue as a going concern which is in part dependent on the successful outcome of the decision regarding the liquidation petition filed by the bond holders before the Honorable Madras High Court.

(ii) Note No. 10 of the Financial Statements in respect of Non-Current Investments. In the absence of information, we are unable to comment whether any provision for diminution, other than temporary, in the value of investments, in India Wind Power Private Ltd., to the extent of Rs. 100 Lakhs, needs to be made.

(iii) Note No. 15 of the Financial Statements in respect of cash & cash equivalents. In our opinion, Rs.30 lakhs grouped under cash & cash equivalents requires Provisioning since the Bank has not confirmed this balance and the Quality of the Asset is doubtful. Had the same been provided for, the Profit for the year would have been decreased by Rs.30 lakhs.

(iv) Note No. 19of Financial Statements in respect of Rs.2,93,10,704/- accounted as Interest from Tamil Nadu Electricity Board (TNEB) and Bangalore Electricity Supply Company (BESCOM), in respect of delayed payments being made by TNEB& BESCOM. The said amount has been accounted in accordance with the Power Purchase Agreement entered into between the Company and TNEB& BESCOM; however the same has not been acknowledged as payable by TNEB& BESCOM.

Our opinion is not modified in respect of the matters mentioned above.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order) issued by the central government in terms sub-section (11) of section 143 of the Act, we give in Annexure a statement on matters specified in paragraph 3 &4 of the said order.

2. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

(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 and with the returns received from the branches not visited by us.

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 except Accounting Standard 11 - The Effects of Changes in Foreign Exchange Rates, wherein the Company has not re-instated the foreign currency term loan disclosed under Note No. 4 & 7 amounting to Rs. 58,33,93,531/- representing a part of total sanctioned loan amount, taken from EXIM Bank at the year-end forex rates. Had the same been re-instated, the profit for the financial year ended 31st March 2015 as per the Statement of Profit & Loss A/c could have been decreased by Rs.21,16,01,199/-

(e) The matter described in sub-paragraph (i) under the Emphasis of Matters paragraph above, regarding outcome of winding up petition, in our opinion, may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on31stMarch,2015from 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, we are of opinion that internal controls needs to be strengthened on the basis stated in paragraph "Basis for Qualified Opinion", "Emphasis of Matter"& "Point (d) of Report on Other Legal and Regulatory Requirements".

(h) 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 5 and 27.1 to the financial statements

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

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

The Annexure referred to in paragraph 1 in Other Legal and Regulatory Requirements of Our Report of even date to the members of INDOWIND ENERGY LIMITED on the accounts of the company for the year ended 31st March. 2015.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

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

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion is reasonable having regard to the size of the company and the nature of its assets. No Material discrepancies were noticed on such verification.

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

(b) The procedures of 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) On the basis of our examination of the records of Inventory, we are of the opinion that the company is maintaining proper records of its inventories.

No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. (a) There is a Company covered in the register maintained under section 189 of the Companies Act, 2013 to which the company has granted loans.

(b) The parties have repaid the principal amounts as stipulated and have been regular in the payment of interest.

(c) There is no overdue amount of loans granted to companies /firms / other parties listed in the register maintained under section 189 of the Companies Act,2013.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, with regards to the purchase of inventories & fixed assets and with regards to sale of goods& services.

During the course of our audit, no major weakness has been noticed in the internal controls.

5. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of sections 73 & 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 with regard to deposits accepted from the publics from the members.

No Order has been passed by the Company Law Board or the National Company Law Tribunal or by any Court or by any other Tribunal with regard to such deposits.

6. We have broadly reviewed the Books of Account relating to materials, labour and other items of cost maintained by the company pursuant to the Rules made by the Central Government for maintenance of Cost Records under section 148 (1) of the Companies Act, 2013 and we are of the opinion, that prima facie the prescribed accounts and records have been made and maintained.

7. (a) According to the records of the company, the company is regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Employees- State Insurance, Sales-tax, Value Added Tax, Wealth Tax, Income Tax, Service Tax, Custom Duty, Excise Duty, cess & other statutory dues applicable to it.

According to the information and explanations given to us, no undisputed amounts payable in respect of Sales-tax, Value Added Tax, Wealth Tax, Income Tax, Service Tax, Custom Duty and Excise Duty were outstanding as at 31st March 2015 for a period of more than six months from the date they became payable.

(b) According the records of the company, there are no dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Value Added Tax, Service Tax, Excise Duty or Cess which have not been deposited on account of any dispute except the following

Particulars Amount disputed Case preferred by the Co.

income tax

A.Y. 1998-99 21,54,944 Pending before CIT(A)

A.Y. 2006-07 21,30,000 Pending before ITAT

A.Y. 2007-08 55,63,470 Pending before CIT(A)

A.Y. 2009-10 8,95,560 Pending before CIT(A)

A.Y 2010-11 1,06,04,310 Pending before CIT(A)

A.Y. 2011-12 2,41,051 Pending before ITAT

2,15,89,335

VAT

F.Y. 2007-08 21,69,024 Pending before Commissioner of Commercial Tax

F.Y. 2008-09 54,40,000 Pending before Commissioner of Commercial Tax

76,09,024

SERVICE TAX

F.Y. 2007-08 2,14,83,296 Pending before CESTAT

(c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

8. The accumulated losses of the company are not more than 50% of its net worth. The Company has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

9. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution and bank or debenture holders.

10. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

11. Based on our audit procedures and on the information given by the management, the term loans have been applied for the purpose for which they were raised.

12. Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.



For V.Ramaratnam & Co

Chartered Accountants

FRN: 002956S

R. Sundar

Place: Chennai. Partner

Date: 13th June 2015 Membership No. : 012339

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Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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 control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the paragraphs-Basis of Qualified Opinion" and "Emphasis of Matter", the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2014;

b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

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

Basis for Qualified Opinion

1. We draw your attention to Note 12.of the financial statements regarding project advances for an amount of Rs 44.60 crores made for the purposes of acquiring WEGs. Given that this transaction occurred outside India and in the absence of information regarding the supply schedule, confirmation of outstanding and steps taken by the Company for recovery of advances, we are unable to comment on the extent of recoverability of advance. The consequential impact of this matter on the profit forthe year and the retained earnings as on Mar 31,2014 is indeterminable.

Emphasis of Matter on Going Concern assumption

1. We draw your attention to Note 5(1) of the financial statements in respect of material uncertainty about the Company''s ability to continue as a going concern which is in part dependent on the successful outcome of the decision regarding the liquidation petition filed by the bond holders before the Honourable Madras High Court. Our opinion is not qualified in respect of this matter.

2. We draw your attention to Note No 4 of the financial statements regarding long term borrowings from EXIM Bank. We have observed that out of the earlier proceeds of the loan, an amount of Rs. 43.20 crores, disclosed under capital Advances, have been utilised to acquire rights over the 6MW wind farm project. In the absence of full loan disbursement by EXIM Bank, non- availability of modified sanctioned terms and conditions agreed upon by the Company and EXIM Bank, we are unable to comment on the compliance with original terms, utilisation and repayment schedule. Ouropinion is not qualified in this matter

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

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

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

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

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated September 2013, of the Ministry of Corporate Affairs in respect of Section 133oftheCompaniesAct2013and

e) on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of Indowind Energy Limited on the accounts of the company for the year ended 31st March, 2014.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

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

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. (a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of 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) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to books of records.

3. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has granted loan to companies, listed in the register maintained under Section 301 of the Companies Act, 1956.

(b) The Company has granted loan and advances to 3 parties that are covered in the register maintained under Section 301 of the Act. The amount involved during the year and the year- end balance of such loans aggregates to Rs. 21.57 Crores.

The Company has not taken loans, secured or unsecured from companies, firms or other parties that are covered in the register maintained under Section 301 of the Act.

(c) In our opinion the rate of interest and other terms and conditions on which loans have been granted to companies, firms or other parties listed in the registers maintained under Section 301 are not, prima facie, prejudicial to the interest of the Company.

(d) The parties are regular in the payment of interest.

(e) There is no overdue amount of loans granted to companies listed in the registers maintained undeletion 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained underthat section.

b) As per information & explanations given to us and in our opinion, the transaction entered into by the Company with parties covered u/s 301 of the Act exceeds five lacs rupees in a financial year are made under any contracts or arrangements at the price at which it is made are reasonable to prevailing market price.

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act,1956.

7. In our opinion and according to the information and explanations given to us the company has an internal audit system that needs to be strengthened to make it commensurate with its size and the nature of its business.

8. As per information & explanation given by the management and in our opinion, the company has maintained the required cost records as prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act.

9. (a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance Sales-tax, Wealth Tax, Income Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2014 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 amounts payable in respect of Income tax, wealth tax, service tax, sales tax, customs duty and excise duty which have not been deposited on account of disputes, the following amounts are disputed:

Particulars Amount disputed Case preferred by the Co.

INCOME TAX

A.Y. 1998-99 2,154,944 Pending before CIT(A)

AY. 2004-05 538,759 Pending before CIT(A)

A.Y 2006-07 14,011,679 Pending before CIT(A)

A.Y 2007.08 5,563,470 Pending before CIT(A)

AY 2008-09 6,264,350 Pending before CIT(A)

AY2011-12 51,480,890 Pending before CIT(A)

80,014,092

VAT

F.Y. 2007-08 2,169,024 Pending before Commissioner of Commercial Tax

F.Y. 2008-09 5,440,000 Pending before Commissioner of Commercial Tax

7,609,024

SERVICE TAX

F.Y. 2007-08 21,483,296 Pending before CESTAT

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

11. According to the information and explanations given to us and the records examined by us, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

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

13. The Company is not a chitfund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14. According to information and explanations given to us, the Company is not dealing or trading in shares securities, debentures or mutual funds and other Investments. The Company has invested in equity shares. According to the information and explanations given to us, proper records have been maintained of the transactions and contracts.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bankorfinancial institution.

16. Except as reported in item number 2 under our "Emphasis of Matter", according to the information and explanations given to us, in our opinion, the term loans availed during the current year by the Company were prima facie applied by the Company for the purposes for which the loans were obtained.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. According to the information and explanations given to us and records examined by us, the Company has not made any preferential allotment of shares during the year.

19. According to the information and explanations given to us and records examined by us, the Company has not issued any secured debentures during the year under audit.

20. According to the information and explanations given to us and records examined by us, the Company has not raised any money by public issue during the year.

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

For V.Ramaratnam & Co

Chartered Accountants

FRN:002956S

R.Sundar

Place: Chennai - 600 034 Partner

Date : 30th May 2014 Membership No. : 012339

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Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

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 control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Basis for Qualified Opinion

The company had made payment for machinery advance to the tune of $15.25 million (i.e. Rs. 68,99,14,581/-). There has been a delay in the supply of machinery and release of bank funds, as a result the completion of the project has been delayed. The company on its part has initiated arbitration proceeding. No provision has been made for any potential losses which may arise in the future on this project.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the paragraph- Basis for Qualified Opinion", the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) in the case of the Profit and Loss Account,of the profit for the year ended on that date;and

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

Emphasis of Matter

We draw your attention to the following notes on which we are not expressing qualified opinion as it does not affect the financial statements materially:

Loss arising out of foreign currency fluctuations out of partial settlement of Foreign Currency Convertible Bonds and certain advances have been classified as unamortised expenses, grouped under "Other Current Assets" to be written off over the period of time. In the case of loss arising out of foreign currency fluctuation, the decision to write-off will be taken after meeting the entire foreign currency convertible bonds redemption commitments.[(refer18(a)(ii)]

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that

a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary forthe purpose of ouraudit

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) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 except Accounting Standard 5 on Net Profit or Loss for the period, Prior Period ltem&Changes in Accounting Policies. CER Income recognised in earlier years due to its non-recoverability to the tune ofRs. 3,09,67,422/- has been treated as Prior period item and an amount equivalent to it has been withdrawn from reserves. In our opinion, it has to be treated as Bad - Debts written off during the currentyearand consequently, Profits fortheyearto thatextentare overstated;

e) on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

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

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of Indowind Energy Limited on the accounts of the company for the year ended 31s'' March, 2013.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

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

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. (a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of 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) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has granted loan to companies, listed in the register maintained under Section 301 of the Companies Act, 1956.

(b) The Company has granted loan and advances to 5 parties that are covered in the register maintained under Section 301 of the Act. The amount involved during the year and the year-end balance of such loans aggregates to Rs.7,78,56,694/- & Rs.51,29,42,982/- respectively.

The Company has not taken loan from the parties that are covered in the register maintained under Section 301 of the Act.

(c) In our opinion the rate of interest and other terms and conditions on which loans have been granted to companies, firms or other parties listed in the registers maintained under Section 301 are not, prima facie, prejudicial to the interest of the company.

(d) The parties have repaid the principal amounts as stipulated and have been regular in the payment of interest.

(e) There is no overdue amount of loans granted to companies listed in the registers maintained undersection 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management/the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b) As per information & explanations given to us and in our opinion, the transaction entered into by the company with parties covered u/s 301 of the Act exceeds five lacs rupees in a financial year are made under any contracts or arrangements at the price at which it is made are reasonable to prevailing market price.

6. The Company has not accepted any deposits from the public covered under section 58A and 58AAofthe Companies Act, 1956.

7. As per information & explanations given by the management, there is no formal internal audit department but the Company has an internal audit system which commensurates with its size and the nature of its business. External Audit Firm is doing Internal Audit periodically and their scope of the audit carried out is adequate.

8. As per information & explanation given by the management and in our opinion, the company has maintained the required cost records as prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act.

9. (a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees''State Insurance Sales-tax, Wealth Tax, Income Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of 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, there is no amounts payable in respect of Income tax, wealth tax, service tax sales tax, customs duty and excise duty which have not been deposited on account of any disputes except the following:

Sl. Act Under which Year Amount of pending before No. the amount is Demand payable

1. Income Tax A.Y. 1998 -1999 2654944 CIT Appeals

Income Tax A.Y. 2004 - 2005 538759 High Court - Madras

Income Tax A.Y. 2006 - 2007 10985773 CIT Appeals

Income Tax A.Y. 2007 - 2008 5563470 CIT Appeals

Service Tax F.Y 2007 -2008 21483296 CESTAT

Value Added Tax F.Y. 2007 - 2008 2169024 High Court - Madras

Value Added Tax F.Y. 2008 - 2009 5440000 High Court - Madras

Total 48835266

Liability provided for in the books of account

Surcharge Gadag (Payable to BESCOM) -- 4238741 High Court - Karnataka

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

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bankor debenture holders.

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

13. The Company is not a chit fund or a nidhi Anuiusi benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14. According to information and explanations given to us, the Company is trading in Shares, Mutual funds & other Investments. Proper records & timely entries have been maintained in this regard &further investments specified are held in theirown name.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16. Based on our audit procedures and on the information given by the management, we report that, the EXIM Bank during the year has released the other part of Term Loan sanctioned in previous years to the extent of Rs.8,30,00,000/- and the loan has been utilised only for the purpose for which it is sanctioned.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2013, we report that no funds raised on short- term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

19. The Company has no outstanding debentures during the period underaudit.

20. The Company has not raised any money by public issue during the year.

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.



For V.Ramaratnam & Co

Chartered Accountants

FRN:002956S



R. Sundar

Place: Chennai Partner

Date : 28-May-2013 Membership No. : 012339

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Mar 31, 2012

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

We conducted our audit in accordance with Auditing Standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatements. 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 statements. We believe that our audit provides a reasonable basis for ouropinion.

1. As required by the manufacturing and other Companies (Auditor's report) order 2003 and (Amendment) Order 2004 issued by the Company Law Board in terms of section 227 (4A) of the Companies Act 1956, and on the basis of such checks as we considered appropriate, we enclose in the annexure a statement on the matter specified in paragraph 4 and 5 of the said order.

2. Further to our comments in the annexure referred to in paragraph 1 above, we report that:

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

b) In our opinion, the Company, as required by law, has kept proper books of accounts so far as appears from ourexamination of those books.

c) The Balance Sheet and Profit and Loss account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow Statement comply with the Accounting Standards as referred to in sec 211 (3C) of the Companies Act, 1956.

e) The Company has been consistently following the policy of writing off the prior period items against reserves. In our opinion, in view of the revised Schedule VI, such disclosure under Exceptional Items differs from the Accounting Standard 5 with respect to "Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies"

f) Based on the written representation received from Directors 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 Director under section 274(1 )(g) of Companies Act, 1956.

g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the Significant Accounting Policies and Notes thereon, give the information required by the Companies Act 1956, in the manner so required and give a true and fair view:

In so faras it relates to Balance Sheet, of the state of affairs of the Company asatSf'March 2012;

In so faras itrelates to the Profitand LossAccount, of the profit for the year ended on that date

And

In so far as it relates to cash flow statement, the cash flow of the Company for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE REPORT OF EVEN DATE OF THE AUDITORS TO THE MEMBERS OF INDOWIND ENERGY LIMITED ON THE ACCOUNTS FORTHE YEAR ENDED MARCH 31,2012

I a) The Company has maintained proper records showing particulars, including quantitative details and situation of Fixed Assets.

b) All the assets have been physically verified by the management during the year and there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noted on such verification.

c) During the year, the Company has disposed off the fixed assets, which are not substantial to affect the going concern status of the Company.

II a) The Inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

c) The Company is maintaining proper records of inventory. No discrepancies noticed on verification between the physical stocks and the book records

III a) The Company has not taken loans from Companies, firms covered in the register maintained undersection 301 of the Companies Act, 1956.

b) The Company has given loans, including Capital Advances, to firms covered in the register maintained under section 301 of the Companies Act, 1956.The loans are given to nine entities and the amount outstanding on 31st March, 2012 is Rs 73,00,40,944/-

c) In our opinion, based on the information and explanations given, the terms and conditions on which loans were given to the parties listed in the register maintained under section 301 of the Companies act, 1956 are, prima facie, not prejudicial to the interest of the Company.

IV In our opinion and according to the information and explanation given to us, the internal control procedures are adequate, commensurate with the size of the Company and nature of its business with regard to purchase of inventory and assets and with regard to sale of goods.

V a) According to the information and explanations given to us, we are of the opinion, that the transactions need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made exceeding the value of Rs.5,00,000/- with parties maintained under section 301 of the Companies Act, 1956 are not made under any contracts of arrangements but at the price at which it is made are reasonable to prevailing market price.

VI The Company has not accepted any fixed deposits during the year in respect of which Section 58A of the Companies Act, 1956 is applicable. However the company has taken long term secured loans and short term loans from unrelated parties.

VII In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. External audit firm is doing internal audit and they are giving periodical report to the management and the scope of the audit is adequate.

VIII We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the Maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956, related to the main business of the Company and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

IX a) The Company is regular in depositing with appropriate authorities statutory dues including provident fund, investor education and protection fund, employee's state insurance, sales tax custom duty, excise duty, Cess and other material statutory dues applicable to it except the following mentioned below

b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, exercise duty and Cess were in arrears as at 31st March 2012 for a period of more than six months from the date they became payable, except the following:

Act Under which Assessment Sl. the amount is year to which Amount of Forum where dispute is pending No payable demand relates Demand

1. Income Tax Act 1998-99 26,54,944 Appeal pending before CIT - Appeals

2. Income Tax Act 2004-05 538,759 Preferred an appeal before Madras High Court against order of the ITAT

3. Income Tax Act 2006-07 10,985,773 Appeal pending before CIT Appeals

4. Income Tax Act 2007-08 5,563,470 Appeal pending before CIT - Appeals

5. Service Tax FY 2007-08 21,546,270 Appeal to be filed before CSTAT

6. VAT FY 2008-09 5,440,000 Appeal preferred before Hon'ble High Court of Madras

7. VAT FY 2007-08 2,169,024 Appeal preferred before Hon'ble High Court of Madras

c) According to the information and explanations given to us, there is no undisputed tax pending for payment.

X In our opinion, there is no accumulated loss. The Company has not incurred any cash loss during the financial year covered under the audit and also immediately preceding financial year.

XI According to the information and explanations given to us, the Company has not defaulted in repayment of its dues to Banks and Financial institutions. The Company has not issued any debentures.

XII Based on our examination of the records and of the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures orothersecurities.

XIII In our opinion the company is not a chit fund or Nidhi / Mutual benefit fund/ Society. Therefore the provisions of clause 4(Xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

XIV In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(XVI) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

XV According to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from Banks and Financial Institutions.

XVI In our opinion, the Company has availed term loan for Rs.44.00 Crores from EXIM Bank, during the year in addition to previously sanctioned Loans carried over to this year and these loans were utilizedonlyforthepurposeforwhichitissanctioned.

XVII According to information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-term assets except permanent working capital.

XVIII During the year the Company did not make any preferential allotment to any persons covered undertheregistermaintained undeletion 301 of the Companies Act, 1956.

XIX According to the information and explanations given to us, the company has not issued any debentures during the year and hence the provisions of clause no 4(XIX) of the Companies (Auditor's Report) Order; 2003 is not applicable to the Company.

XX According to the information and explanations given to us, the company raised an amount of Rs. 81,40,26,500/- by way of issue of Global Depository Receipts 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 ouraudit.

Place: Chennai - 600 034 For V.Ramaratnam & Co

Date : 10/08/2012 Chartered Accountants

R. Sundar

Partner

Firm Regn No.002956S

PRN 005295

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Mar 31, 2011

We have audited the attached Balance Sheet of INDOWIND ENERGY LIMITED, as at 31st March 2011 and the Profit and Loss Account of the Company for the period ended 31st March 2011 annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with 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 misstatements. 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 statements presentation. We believe that our audit provides a reasonable basis for ouropinion.

1. As required by the Companies (Auditor's report) order 2003, (as amended CARO (by amendment 2004)) , issued by the Central Government of India in terms of Section 227 (IV) (a) of the Companies Act, 1956, we annex hereto a statement of the matters specified in paragraphs 4 and 5 of the said order.

2. Further to our comments in the statement referred to in paragraph 1 above, we report that:

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

b. In our opinion, proper books of account, as required by law have been kept by the company so farasappearsfromourexaminationofsuchbooks.

c. The Company's Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account.

d. On the basis of written representations received from the Directors as on 31st March 2011 and taken on record by the by the Board of Directors, we report that none of the directors is disqualified as on 30th June 2010 from being appointed as a director in terms of clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956.

e. In our opinion, the Balance sheet, Profit & Loss account and Cash Flow Statements dealt with by the report, comply with the Accounting Standard referred to in (3c) of section 211 of the Companies Act, 1956.

f. With outqualifying ouropinion, we draw your attention to Note II, Clause 12of Schedule15to Accounts to Financial statements. The management is of the view that the liability to pay premium on redemption of the Foreign Currency Convertible Bonds is contingent and it is too early to decide the issue and therefore no provision for any liability that may result in future, including creation of reserve for redemption, has been made in financial statements.

g. The notification for levy and deposit of Cess U/s. 441A of the Companies Act has not yet been issued in the official gazzett, hence in ouropinion this clause is not applicable to the company.

In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon under Schedule 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.

In the case of the Balance Sheet,of the state of affairs of the company as at 31st, March 2011 and

2 in the case of the Profit and Loss Account, for the profit for the year ended on that date.

3 In the case of cash flow statement, of the cash flows for the yearended on that date.

ANNEXURE RE: INDO WIND ENERGY LIMITED Referred to Paragraph 2 of our report of even date

1. Fixed assets

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets.

(b) According to the information and explanations provided to us the Company has regular programme of verification which, in ouropinion, is reasonable having regard to the nature of the Company and its size. No material discrepancies were noticed.

(c) During the year, Company had disposed off 1.650 Mw of Wind Mill Capacity which is not substantial having any bearing on the going concern basis.

2. Inventory

(a) Physical verification of inventory of units of electricity generated and work-in-progress by the management have been conducted by the Management during the year. In our opinion" the frequency of verification is reasonable.

(b) Procedures for physical verification of units of electricity generation and work-in-progress followed by the management are reasonable and adequate in relation to the size of the Company and its nature of business.

(c) The Company is maintaining proper records of units of electricity generated and work-in- progress no material discrepancies have been noticed on verification between physical stocks and the book records.

3. Loans taken

The company has not taken unsecured loan from companies, firms and other parties covered in the register maintained under section 301 of the Companies Act. Number of loan taken is NIL and total amountoutstandingisRs.NIL

4. Loans & Advances granted

The company has given Loans & advances to companies, firms and other parties covered in the register maintained under section 301 of the Companies Act. Amount outstanding on 31st March 2011 is Rs.349.76 Lakhs and No. of parties involved is 5. In the case of Loans, the company has stipulated repayment & interest terms.

5. Internal control

In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness is internal controls.

6. Related party transactions

(a) According to the information and explanations given to us, we are of the opinion that the transactions need to be entered into the Register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanation given to us, in the case of transactions made exceeding the value of Rs.500,000/- with parties in the register maintained under section 301 of the Companies Act, 1956, the prices are reasonable having regard to prevailing market prices. However, we are unable to comment on certain transactions of specialized items for which comparative prices are not available.

7. Deposits

In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public to which the provisions of section 58A and 58AA of the Companies Act, 1956 and the Rules framed there under are applicable, and therefore paragraph 4(vi)ofthe Order is not applicable.

8. Internal audit

In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. Internal audit is done by an outside firm M/s. Vasudevan & Associates, Chartered Accountants. The reports have been considered wherever applicable., while finalizing the audit.

9. Cost records

We have reviewed the books of account relating to materials, labour and other items of cost records maintained by the Company pursuant to the Rules prescribed by the Central Government under section 209(1 )(d) of the Companies Act, 1956 and we are of the opinion that prima-facie, the prescribed accounts and records have been maintained.

10. Statutory dues

(a) The Company is regular in depositing statutory dues with appropriate authorities including provident und and ESI, Income Tax, Sales Tax, Service Tax, Customs duty and other materials statutory dues applicable to it, except any disputed statutory dues. Further, no provision for Gratuity has been made during the year as in the opinion of the Management, provision already made is sufficient based on the quotation taken from The Life Insurance Corporation of India, who have quantified the provision.

(b) As on 31st March 2011 according to the records of the company, the following are the particulars of disputed dues on account of Income Tax that have not been deposited:

Name of Nature Amount of Assessment year Forum where the of Demand to which dispute is Statute dues (Rs.) demand relates Pending

Income Tax Law Income Tax 2,654,944 1998-99 Commissioner - Appeals

Income Tax Law Income Tax 538,759 2004-05 Commissioner - Appeals

Income Tax Law Income Tax 10,985,773 2006-07 Commissioner - Appeals

Income Tax Law Income Tax 55,63,470 2007-08 Commissioner - Appeals

11. The Company has neither accumulated losses nor incurred cash loss during the financial year covered underour audit and preceding financial year.

12. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of its dues to any financial institution or debenture holders.

13. In our opinion of the company has not granted loans and advances on the basis of security byway of pledge of shares, debentures orothersecurities.

14. In our opinion, the Company is not a chit fund or a Nidhi/Mutual benefit fund, society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

15. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

16. Based on the information and explanations given to us by the management, proceeds of term loans were applied for the purpose for which the loans were obtained. The company has availed a term loans from various banks and amount outstanding as on the balance sheet date is Rs. 359,439,947/-.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we report that no short-term funds were raised by the company for long-term investment. Long-term funds have been used for permanent working capital.

18. According to the information and explanations given to us, the company has not made any preferential allotment of shares to the party covered in the register maintained under section 301 of the companies Act, 1956 during the year.

19. According to the information and explanations given to us during the period covered underour audit, the company has not issued any debentures during the yearand hence, the provisions of clause no 4 (xix) of the Companies (Auditor's Report) Order, 2003 is not applicable to the company.

20. The company has not raised any money by way of public issue during the year.

21. Based up on the Audit procedures performed forthe purpose of reporting the true and fairviewof the financial statements and as per the information and explanation given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For V.RAMARATNAM & CO.,

Chartered Accountants

Place: Chennai R. SUNDAR

Date: 20.08.2011 Partner

FRN 002956S

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Jun 30, 2010

We have audited the attached Balance Sheet of INDOWIND ENERGY LIMITED, as at 30th June 2010 and the Profit and Loss Account of the Company for the year ended 30th June 2010 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.

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 misstatements. 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors report) order 2003, (as amended CARO ( by amendment 2004)), issued by the Central Government of India in terms of Section 227 (IV) (a) of the Companies Act, 1956, we annex hereto a statement of the matters specified in paragraphs 4 and 5 of the said order.

2. Further to our comments in the statement referred to in paragraph 1 above, we report that:

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

b. In our opinion, proper books of account, as required by law have been kept by the company so far as appears from our examination of such books.

c. The Companys Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account.

d. On the basis of written representations received from the Directors as on 30th June 2010 and taken on record by the by the Board of Directors, we report that none of the directors is disqualified as on 30th June 2009 from being appointed as a director in terms of clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956.

e. In our opinion, the Balance sheet, Profit & Loss account and Cash Flow Statements dealt with by the report, comply with the Accounting Standard referred to in (3c) of section 211 of the Companies Act, 1956.

f. With out qualifying our opinion, we draw your attention to Note II, Clause 12 of Schedule 15 to Accounts to Financial statements. The management is of the view that the liability to pay premium on redemption of the Foreign Currency Convertible Bonds is contingent and it is too early to decide the issue and theretore no provision for any liability that may result in future, including creation of reserve for redemption, has been made in financial statements.

g. The notification for levy and deposit of Cess U/s. 441A of the Companies Act has not yet been issued in the official gazzett, hence in our opinion this clause is not applicable to the company.

In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon under Schedule 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,

1 in the case of the Balance Sheet, of the state of affairs of the company as at 30th June 2010 and

2 in the case of the Profit and Loss Account, for the profit for the year ended on that date.

3 In the case of cash flow statement, of the cash flows for the year ended on that date

Annexure INDOWIND ENERGY LIMITED Referred to Paragraph 2 of our report of even date

1. Fixed assets

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets.

(b) According to the information and explanations provided to us the Company has regular programme of verification which, in our opinion, is reasonable having regard to the nature of the Company and its size. No material discrepancies were noticed.

(c) During the year, there was no substantial disposal of fixed assets of the company having any bearing on the going concern basis of the company

2. Inventory

(a) Physical verification of inventory of units of electricity generated and work-in-progress by the management have been conducted by the Management during the year. In our opinion, the frequency of verification is reasonable.

(b) Procedures for physical verification of units of electricity generation and work-in-progress followed by the management are reasonable and adequate in relation to the size of the Company and its nature of business.

(c) The Company is maintaining proper records of units of electricity generated and work-in-progress no material discrepancies have been noticed on verification between physical stocks and the book records.

3. Loans taken

The company has not taken unsecured loan from companies, firms and other parties covered in the register maintained under section 301 of the Companies Act. Number of loan taken is NIL and total amount outstanding is Rs. NIL.

4. Loans granted

The company has not given any unsecured loans to companies, firms and other parties covered in the register maintained under section 301 of the Companies Act.

5. Internal control:

In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness is internal controls.

6. Related party transactions:

(a) According to the information and explanations given to us, we are of the opinion that the transactions need to be entered into the Register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanation given to us, in the case of transactions made exceeding the value of Rs.500,000/- with parties in the register maintained under section 301 of the Companies Act, 1956, the prices are reasonable having regard to prevailing market prices. However, we are unable to comment on certain transactions of specialized items for which comparative prices are not available.

7. Deposits:

In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public to which the provisions of section 58A and 58AA of the Companies Act, 1956 and the Rules framed there under are applicable, and therefore paragraph 4(vi) of the Order is not applicable.

8. Internal audit:

In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. Internal audit is done by an outside firm M/s. Vasudevan & Associates, Chartered Accountants. The reports have been considered wherever applicable., while finalizing the audit.

9. Cost records:

We have reviewed the books of account relating to materials, labour and other items of cost records maintained by the Company pursuant to the Rules prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956 and we are of the opinion that prima-facre, the prescribed accounts and records have been maintained:

10. Statutory dues:

(a) The Company is regular in depositing statutory dues with appropriate authorities including provident und and ESI, Income Tax, Sales Tax, Service Tax, Customs duty and other materials statutory dues applicable to it, except any disputed statutory dues. Further, no provision for Gratuity has been made during the year as in the opinion of the Management, provision already made is sufficient based on the quotation taken from The Life Insurance Corporation of India, who have quantified the provision.

(b) As on 30th June 2010 according to the records of the company, the following are the particulars of disputed dues on account of Income Tax that have not been deposited:

Name of Nature of Amount of Assessment Forum where the dues Demand year to which dispute is Statute (Rs.) demand Pending relates

Income Income 2,654,944 1998-99 Commissioner - Tax Law Tax Appeals

Income Income 10,985,773 2006-07 Commissioner - Tax Law Tax Appeals

Income Income 55,63,470 2007-08 Commissioner - Tax Law Tax Appeals

11. The Company has neither accumulated losses nor incurred cash loss during the financial year covered under our audit and preceding financial year.

12. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of its dues to any financial institution or debenture holders.

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

14. In our opinion, the Company is not a chit fund or a Nidhi/Mutual benefit fund, society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

15. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

16. Based on the information and explanations given to us by the management, proceeds of term loans were applied for the purpose for which the loans were obtained. The company has availed a term loans from various banks and amount outstanding as on the balance sheet date is Rs.398,991,237/-.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we report that no short-term funds were raised by the company for long-term investment. Long-term funds have been used for permanent working capital.

18. According to the information and explanations given to us, the company has made preferential allotment of 20,00,000 shares to the party covered in the register maintained under section 301 of the companies Act, 1956 during the year, approval for which has been obtained from the share holders in the Extra ordinary General Meeting of the company held on August 12, 2009.

19. According to the information and explanations given to us during the period covered under our audit, the company has not issued any debentures during the year and hence, the provisions of clause no 4 (xix) of the Companies (Auditors Report) Order, 2003 is not applicable to the company. (See if same Clause No. continues)

20. The company has not raised any money by way of public issue during the year.

21. Based up on the Audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanation given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For V. Ramaratnam & Co., Chartered Accountants

R. Sundar Partner FRN 002956S

Place: Chennai Date : 21.10.2010