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Auditor Report of Websol Energy Systems Ltd.

Mar 31, 2015

REPORT ON THE FINANCIAL STATEMENTS

1. We have audited the accompanying financial statements of WEBSOL ENERGY SYSTEM LIMITED (The Company) which comprise the Balance Sheet as at March 31, 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 FINANCIAL STATEMENTS

2. 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 to give a true and fair view of the financial position, financial performance and cash flow 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. The 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 judgements 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

3. Our responsibility is to express on opinion on these financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made thereunder including the accounting and auditing standards and matters which are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the institute of Chartered Accountants of India. Tose Standards and pronouncements 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.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statement. Te procedures selected depend on the auditor's judgement including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place on adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

7. 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.

OPINION

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, its loss and its cash flows for the year ended on that date.

EMPHASIS OF MATTERS

9. We draw attention to the matter that the confirmations in respect of balances of Sundry Debtors, Sundry Creditors and Advances from the respective parties have not been received in all cases. However, we do not modify our opinion on this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

10. As required by the Company (Auditor's Report) Order, 2015, issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act (hereinafter referred to as the "Order") and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

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

(e) On the basis of the written representations received from the directors as on March 31, 2015; taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164(2) of the Act. However, the Company had in an earlier year issued Foreign Currency Convertible Bonds which were to be converted into Equity Shares in the Company by November, 2012, but, due to fall in market price of Company's shares the same were not converted and are still outstanding. Among the then Directors, only Managing Director is still on the Board.

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

i. The Company has disclosed the impact of pending litigations as at March 31, 2015 on its financial position in its financial statements. (Refer Note 40)

ii. The Company has made provision as at March 31, 2015 as required under the applicable law or accounting standards for material foreseeable losses, if any, on long term contracts including derivative contracts.

iii. Tere has been a delay of one month in transferring amounts, required to be transferred, to the investor Education and Protection Fund by the Company during the year ended March 31, 2015.

(Referred to in paragraph 10 of the Independent Auditors' Report of even date to the members of WEBSOL ENERGY SYSTEM LIMITED on the standalone financial statements as at and for the year ended March 31, 2015.)

(i) The Fixed Assets records of the Company are being maintained to show full particulars including quantitative details and situation thereof. Majority of Fixed Assets of the Company have been physically verified during the year by the management and discrepancy, which were not material have been properly dealt with in the books of account.

(ii) The Inventory of the Company consisting of stocks of raw materials, finished goods, work-progress and stores and spare parts have been physically verified by the management at regular intervals during the year. In our opinion the frequency of verification is reasonable. Te discrepancies between the physical stocks and book records, which were not material, have been properly dealt with in the books of account. Te Company is maintaining proper records of the inventories. In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(iii) The Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Act.

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

(v) The Company has not accepted any deposit from the public within the meaning of Sections 73 and 74 of the Act and the rules framed there under to the extent notified.

(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where pursuant to the rules made by the Central Government of India, the maintenance of cost records has been specified under sub-section (1) of Section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not however made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) The Company has made delayed deposits with appropriate authorities, the amount deducted/accrued in the books of accounts in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, duty of Customs, duty of Excise, Value Added Tax, Cess and other statutory dues as applicable to it. As per the information and explanations given to us the following undisputed amounts in respect of the abovementioned statutory dues were outstanding as at 31st March, 2015 for a period of more than six months from the date they became payable:

Name of Statute Nature of Dues Amount (Rs. In Lacs)

Delhi Value Added Tax 2004 Delhi Value Added Tax 51.21

WB VAT Act, 2003 Works Contract Tax & VAT 0.65

Income Tax Act, 1961 Tax Collected at Source 0.10

Finance Act, 1994 Delhi Service Tax & Delhi Service Tax on Works Contract 23.92

Further the following statutory dues have not been deposited on account of dispute:

Nature of dues Forum where dispute is pending Amount (Rs. In Lacs) Remarks

Excise Duty & Penalty High Court at Kolkata 366.55 The Company has paid Rs. 100.00 Lacs against this demand in the year 2004-05.

Excise Duty & Penalty Custom, Excise and Service Tax 497.10 - Appellate Tribunal

Income Tax Commissioner of Income Tax -Appeal 101.04 -

The amount required to be transferred to investor Education and Protection Fund has been transferred by a delay of one month from the dare the same was required to be transferred in accordance with the provisions of the Companies Act, 1956 and the rules made thereunder.

(viii) The accumulated losses of the Company as at the date of the balance sheet continues to be more than its net worth. The Company has not incurred cash losses during the current financial year but had incurred cash losses in the immediately preceding financial year. A reference was filed and registered with the Board of Industrial and Financial Reconstruction (BIFR) during one of the previous financial years.

(ix) In our opinion and according to the information and explanations given to us, and basis of our examination of the books of accounts and related records, we observed delays in the repayment of the principal sums and interest thereon to banks / financial institutions. However as explained in Note 25 and 26 annexed to the financial statements, out of the total borrowings, accounts of the Company , as on the date of the Balance Sheet under review, the accounts of working capital bankers continues to be classified as a Non Performing Asset. Further the Company does not have any Debentures. The amounts repayable to Banks on various due dates and period of delay is mentioned below,

Name of Bank Facality Amount Period of Delay

Axis Bank Term Loan US$0.44 Lacs 424 days

Axis Bank Term Loan US$0.44 Lacs 396 days

Axis Bank Term Loan US$0.44 Lacs 365 days

Axis Bank Term Loan US$0.44 Lacs 335 days

Axis Bank Term Loan US$0.44 Lacs 304 days

Axis Bank Term Loan US$0.44 Lacs 274 days

Axis Bank Term Loan US$0.44 Lacs 243 days

Axis Bank Term Loan US$0.44 Lacs 212 days

Axis Bank Term Loan US$0.44 Lacs 182 days

Axis Bank Term Loan US$0.44 Lacs 151 days

Axis Bank Term Loan US$0.44 Lacs 121 days

Axis Bank Term Loan US$0.44 Lacs 90 days

Axis Bank Term Loan US$0.44 Lacs 59 days

Axis Bank Term Loan US$0.44 Lacs 31 days

Axis Bank Term Loan US$0.44 Lacs 0 days

ICICI Bank Working Capital Term Loan Rs. 5.01 Lacs 365 days

ICICI Bank Working Capital Term Loan Rs. 16.67 Lacs 335 days

ICICI Bank Working Capital Term Loan Rs. 16.67 Lacs 304 days

ICICI Bank Working Capital Term Loan Rs. 16.67 Lacs 274 days

ICICI Bank Working Capital Term Loan Rs. 16.67 Lacs 243 days

ICICI Bank Working Capital Term Loan Rs. 16.67 Lacs 212 days

ICICI Bank Working Capital Term Loan Rs. 16.67 Lacs 182 days

ICICI Bank Working Capital Term Loan Rs. 16.67 Lacs 151 days

ICICI Bank Working Capital Term Loan Rs. 16.67 Lacs 121 days

ICICI Bank Working Capital Term Loan Rs. 16.67 Lacs 90 days

ICICI Bank Working Capital Term Loan Rs. 16.67 Lacs 59 days

ICICI Bank Working Capital Term Loan Rs. 16.67 Lacs 31 days

ICICI Bank Working Capital Term Loan Rs. 16.67 Lacs 0 days

Axis Bank Term Loan Rs. 202.33 Lacs 455 days

Axis Bank Term Loan Rs. 250.62 Lacs 365 days

Axis Bank Term Loan Rs. 250.62 Lacs 274 days

Axis Bank Term Loan Rs. 250.62 Lacs 182 days

Axis Bank Term Loan Rs. 250.62 Lacs 90 days

Axis Bank Term Loan Rs. 250.62 Lacs 0 days

Axis Bank Overdraft Rs. 23.21 Lacs 454 days

Axis Bank Overdraft Rs. 23.21 Lacs 364 days

Axis Bank Overdraft Rs. 23.21 Lacs 273 days

Axis Bank Overdraft Rs. 23.21 Lacs 181 days

Axis Bank Overdraft Rs. 23.21 Lacs 89 days

Axis Bank Funded Interest Term Loan Rs. 13.61 Lacs 454 days

Axis Bank Funded Interest Term Loan Rs. 13.61 Lacs 423 days

Axis Bank Funded Interest Term Loan Rs. 13.61 Lacs 395 days

Axis Bank Funded Interest Term Loan Rs. 13.61 Lacs 364 days

Axis Bank Funded Interest Term Loan Rs. 13.61 Lacs 334 days

Axis Bank Funded Interest Term Loan Rs. 13.61 Lacs 303 days

Axis Bank Funded Interest Term Loan Rs. 13.61 Lacs 273 days

Axis Bank Funded Interest Term Loan Rs. 13.61 Lacs 242 days

Axis Bank Funded Interest Term Loan Rs. 13.61 Lacs 211 days

Axis Bank Funded Interest Term Loan Rs. 13.61 Lacs 181 days

Axis Bank Funded Interest Term Loan Rs. 13.61 Lacs 150 days

Axis Bank Funded Interest Term Loan Rs. 13.61 Lacs 120 days

Axis Bank Funded Interest Term Loan Rs. 13.61 Lacs 89 days

Axis Bank Funded Interest Term Loan Rs. 13.61 Lacs 58 days

Axis Bank Funded Interest Term Loan Rs. 5.06 Lacs 30 days

Axis Bank Funded Interest Term Loan Rs. 5.06 Lacs 454 days

Axis Bank Funded Interest Term Loan Rs. 5.06 Lacs 423 days

Axis Bank Funded Interest Term Loan Rs. 5.06 Lacs 395 days

Axis Bank Funded Interest Term Loan Rs. 5.06 Lacs 364 days

Axis Bank Funded Interest Term Loan Rs. 5.06 Lacs 334 days

Axis Bank Funded Interest Term Loan Rs. 5.06 Lacs 303 days

Axis Bank Funded Interest Term Loan Rs. 5.06 Lacs 273 days

Axis Bank Funded Interest Term Loan Rs. 5.06 Lacs 242 days

Axis Bank Funded Interest Term Loan Rs. 5.06 Lacs 211 days

Axis Bank Funded Interest Term Loan Rs. 5.06 Lacs 181 days

Axis Bank Funded Interest Term Loan Rs. 5.06 Lacs 150 days

Axis Bank Funded Interest Term Loan Rs. 5.06 Lacs 120 days

Axis Bank Funded Interest Term Loan Rs. 5.06 Lacs 89 days

Axis Bank Funded Interest Term Loan Rs. 5.06 Lacs 58 days

Axis Bank Funded Interest Term Loan Rs. 5.06 Lacs 30 days

Exim Bank Term Loan US$ 2.32Lacs 350 days

Exim Bank Term Loan US$ 2.32Lacs 259 days

Exim Bank Term Loan US$ 2.32Lacs 167 days

Exim Bank Term Loan US$ 2.32Lacs 75 days

Exim Bank Term Loan US$3.93 Lacs 441 days

Exim Bank Term Loan US$3.93 Lacs 351 days

Exim Bank Term Loan US$3.93 Lacs 260 days

Exim Bank Term Loan US$3.93 Lacs 168 days

Exim Bank Term Loan US$3.93 Lacs 76 days

Exim Bank Funded Interest Term Loan US$ 0.06 Lacs 350 days

Exim Bank Funded Interest Term Loan US$ 0.06 Lacs 320 days

Exim Bank Funded Interest Term Loan US$ 0.06 Lacs 289 days

Exim Bank Funded Interest Term Loan US$ 0.06 Lacs 259 days

Exim Bank Funded Interest Term Loan US$ 0.06 Lacs 228 days

Exim Bank Funded Interest Term Loan US$ 0.06 Lacs 197 days

Exim Bank Funded Interest Term Loan US$ 0.06 Lacs 167 days

Exim Bank Funded Interest Term Loan US$ 0.06 Lacs 136 days

Exim Bank Funded Interest Term Loan US$ 0.06 Lacs 106 days

Exim Bank Funded Interest Term Loan US$ 0.06 Lacs 75 days

Exim Bank Funded Interest Term Loan US$ 0.06 Lacs 44 days

Exim Bank Funded Interest Term Loan US$ 0.06 Lacs 16 days

Exim Bank Funded Interest Term Loan US$ 0.034 Lacs 441 days

Exim Bank Funded Interest Term Loan US$ 0.136 Lacs 410 days

Exim Bank Funded Interest Term Loan US$ 0.136 Lacs 382 days

Exim Bank Funded Interest Term Loan US$ 0.136 Lacs 351 days

Exim Bank Funded Interest Term Loan US$ 0.136 Lacs 321 days

Exim Bank Funded Interest Term Loan US$ 0.136 Lacs 290 days

Exim Bank Funded Interest Term Loan US$ 0.136 Lacs 260 days

Exim Bank Funded Interest Term Loan US$ 0.136 Lacs 229 days

Exim Bank Funded Interest Term Loan US$ 0.136 Lacs 198 days

Exim Bank Funded Interest Term Loan US$ 0.136 Lacs 168 days

Exim Bank Funded Interest Term Loan US$ 0.136 Lacs 137 days

Exim Bank Funded Interest Term Loan US$ 0.136 Lacs 107 days

Exim Bank Funded Interest Term Loan US$ 0.136 Lacs 76 days

Exim Bank Funded Interest Term Loan US$ 0.136 Lacs 45 days Exim Bank Funded Interest Term Loan US$ 0.136 Lacs 17 days

(x) The Company has not given any guarantee for loans taken by others from bank or financial institutions, hence, the question of terms and conditions whereof being prejudicial to the interest of the Company does not arise.

(xi) During the year under audit, as verified from the relevant books and records of the Company, it was ascertained that no fresh term loan has been obtained by the Company.

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

AGARWAL SANGANERIA & Co.

Chartered Accountants

Firm Registration No.317224E

P. K. AGARWAL

Place : Kolkata Partner

Dated, the 29th May, 2015 C.A. Membership No.53496


Mar 31, 2014

We have audited the accompanying financial statements of Websol Energy System Limited ("the Company"), which comprises the Balance Sheet as at 31st March, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date, 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") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. 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 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

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

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 referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;

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

Annexure to Auditors'' Report

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF WEBSOL ENERGY SYSTEM

LIMITED FOR THE YEAR ENDED 31st March, 2014

(i) The Fixed Assets records of the Company are incomplete and are being currently updated to show full particulars, including quantitative details and situation thereof. The majority of Fixed Assets of the Company have been physically verified during the year by the management and any discrepancies between the book records and the physical records can be determined on updating of the book records. During the year under report, the Company has not disposed off any substantial part of its Fixed Assets except the write-off of Fixed Assets on account of discard of assets of erstwhile manufacturing unit located at Salt Lake, becoming obsolete and unusable.

(ii) The Inventories of the Company consisting of stocks of raw materials, finished goods, work-in-progress and stores and spares parts have been physically verified by the management at regular intervals during the year. The discrepancies between the physical stocks and book records which were not material have been properly dealt with in the books of account. The Company is maintaining proper records of the Inventories. In our opinion, the frequency of physical verification is reasonable. The procedure of physical verification followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(iii) The Company has, during the year under report not granted unsecured loan to any party covered under section 301 of the Companies Act, 1956. The Company has taken unsecured loans from companies as covered in the register maintained under section 301 of the Companies Act, 1956. The balance outstanding at the beginning of the year was Rs. 512.42 Lacs in respect of the parties covered under the said section. During the year one more company has come into the fold of Parties stated in Register maintained under Section 301 of the Companies Act, 1956 and hence after considering the amount taken Rs.205.00 Lacs and amount repaid Rs.141.53 Lacs, the balance outstanding as at the date of the Balance Sheet was Rs. 695.89 Lacs in respect of the party covered under section 301 of the Companies Act, 1956. The terms and conditions of the Loans taken by the Company are not prima facie prejudicial to the interest of the Company. As explained to us the interest on loans taken were not charged by the respective parties due to the financial condition of the company.

(iv) In our opinion, and according to the informati on and explanati ons given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchase of inventory, fixed assets and sale of goods amongst others. During the course of our audit, we have not come across any continuing failure to correct major weaknesses in internal controls.

(v) According to the information and explanations given to us there are no contracts or arrangements, as referred to in Section 301 of the Companies Act, 1956, entered into by the Company, during the year under report.

(vi) As far as we have been able to ascertain, the Company has not accepted any deposits from the public, hence the question of complying with the provisions of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 does not arise.

(vii) The Internal Audit of the company is being carried out by an external entity, commensurate with the size and nature of its business, and the internal audit reports are submitted to the management on a quarterly basis.

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

(ix) The Company has made delayed deposits with appropriate authorities the amount deducted/accrued in the books of accounts in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Sales- tax, Service Tax Custom Duty, Exicse Duty and any other statutory dues as applicable to it. As per the information and explanations given to us the following undisputed amounts in respect of the abovementi''oned statutory dues were outstanding as at 31st March, 2014 for a period of more than six months from the date they became payable :

Name of Statute Nature of Dues Amount ('' in Lacs)

Delhi Value Added Tax 2004 Delhi Value Added Tax 50.41

Income Tax Act, 1961 Income Tax 39.46

Central Sales Tax Act, 1956 Central Sales Tax 60.99

WB VAT Act, 2003 Works Contract Tax & VAT 0.65

Finance Act, 1994 Delhi Service Tax 22.75

Further the following statutory dues have not been deposited on account of dispute :

Nature of dues Forum where Amount Remarks dispute is pending (in Lacs)

Excise Duty & Penalty High Court at Kolkata 373.09 The Company has paid 100.00 Lacs against this demand in the year 2004-05.

Excise Duty & Penalty Custom, Excise and 452.40 - Service Tax Appellate Tribunal

Excise Duty & Penalty Commissioner-Appeals 13.08 -

Income Tax Commissioner of 101.04 - Income Tax - Appeal

(x) The accumulated losses of the Company as at the date of the balance sheet continues to be more than its net worth. The company has incurred cash losses during the current financial year as well as in the immediately preceding financial period. A reference was filed and registered with the Board of Industrial and Financial Reconstruction (BIFR) during the preceding financial period due to erosion of net worth of the company.

(xi) In our opinion and according to the information and explanations given to us, and on the basis of our examination of the books of accounts and related records, we observed delays in the repayment of the principal sums and interest thereon to banks / financial institutions. However as explained in Note 24 annexed to the financial statements, out of the total borrowings, accounts of the Company, as on the date of the Balance Sheet under review, the accounts of working capital bankers continues to be classified as a Non Performing Asset. Further the Company does not have any Debentures.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, hence the question of maintenance of records thereof does not arise.

(xiii) 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 it.

(xiv) The Company is not dealing in Shares and Securities in the normal course of its business and has not made any investment during the year under report.

(xv) The Company has not given any guarantee for loans taken by others from bank or financial institutions, hence the question of terms and conditions whereof being prejudicial to the interest of the Company does not arise.

(xvi) During the year under audit as verified from the relevant books and records of the Company, it was ascertained that no fresh term loan has been obtained by the Company except the conversion of part of working capital to Working Capital Term Loan (WCTL) and interest on such Working Capital Term Loans (WCTL) to Funded Interest Term Loans (FITL) as per the bilateral restructuring scheme approved by the majority of the lenders and conversion of External Commercial Borrowings of Axis Bank into Rupee Term Loan.

(xvii) According to the informati on and explanati ons given to us and on overall examinati on of the balance sheet of the Company, we are of the opinion that no funds raised for short term basis have been used for long term investment.

(xviii) The Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

(xix) The Company has not issued any debentures hence the question of creating securities there against does not arise.

(xx) The Company has not raised any money by way of fresh issues from the public during the year under review and hence, any disclosure regarding its end use is not applicable.

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

For AGARWAL SANGANERIA & CO. Chartered Accountants Firm Registration No. 317224E

P. K. Agarwal Place : Kolkata Partner Dated, the 30th day of May, 2014 C. A. Membership No.53496


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Websol Energy Systems Limited ("the Company"), which comprises the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for nine months ended on that date, 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 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

(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 Statement of Profit and Loss, of the loss for nine months ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-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 referred to in subsection (3C) of section 211 of the Companies Act, 1956;

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 payable by the Company.

ANNEXURE TO ThE AUDITORS'' REPORT

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF WEBSOL ENERGY SYSTEM LIMITED FOR NINE MONTHS ENDED 31st MARCH, 2013

(i) The Fixed Assets records of the Company are incomplete and are being currently updated to show full particulars, including quantitative details and situation thereof. The majority of Fixed Assets of the Company have been physically verified during the period by the management and any discrepancies between the book records and the physical records can be determined on updating of the book records. During the period under report, the Company has not disposed off any substantial part of its Fixed Assets and therefore, it does not affect the going concern assumption.

(ii) The Inventories of the Company consisting of stocks of raw materials, finished goods, work-in-progress and stores and spare parts have been physically verified by the management at regular intervals during the period. The discrepancies between the physical stocks and book records which were not material have been properly dealt with in the books of account. The Company is maintaining proper records of the Inventories. In our opinion, the frequency of physical verification is reasonable. The procedure of physical verification followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(iii) The Company has, during the period under report not granted unsecured loan to any party covered under section 301 of the Companies Act, 1956. The principal balance outstanding at the beginning of the period, in respect of erstwhile joint venture, was Rs.18.45 Lacs and as the joint venture was called off during the previous period under report, the said loan does not come under the purview of section 301 of the Companies Act, 1956 as on the date of the balance sheet. The Company has also taken unsecured loans from a company as covered in the register maintained under section 301 of the Companies Act, 1956. The balance outstanding at the beginning of the period was Rs. 1,487.73 Lacs including Rs. 870.23 Lacs in respect of a party which is not covered under the purview of section 301 of the Companies Act, 1956 during the period under report and Rs. 617.50 Lacs in respect of the party covered under the said section. Hence after considering the amount taken of Rs. 164.58 Lacs and amount repaid of Rs. 269.66 Lacs, the balance outstanding as at the date of the balance sheet was Rs. 512.42 Lacs in respect of the party covered under section 301 of the Companies Act, 1956. The terms and conditions of the Loans given and taken by the Company are not prima facie prejudicial to the interest of the Company. As explained to us the interest on loans taken and given were not charged due to the financial condition of the company as well as the party to whom the loan was given.

(iv) 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 the nature of its business with regard to the purchase of inventory, fixed assets and with regards to sale of goods. During the course of our audit, we have not come across any continuing failure to correct major weaknesses in internal controls.

(v) According to the information and explanations given to us there are no contracts or arrangements, as referred to in Section 301 of the Companies Act, 1956, entered into by the Company, during the period under report.

(vi) As far as we have been able to ascertain, the Company has not accepted any deposits from the public, hence the question of complying with the provisions of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 does not arise.

(vii)The Internal Audit of the company is being carried out by an external entity, commensurate with the size and nature of its business, and the internal audit reports are submitted to the management on a quarterly basis.

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

(ix) The Company has made delayed deposits with appropriate authorities the amount deducted/accrued in the books of accounts in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable to it.

(x) The accumulated losses of the Company as at the date of the balance sheet are more than its net worth and it has incurred losses during the nine months period covered by audit. The company has also incurred cash losses in the immediately preceding financial period. As a result of the erosion of net worth of the company, a reference has been filed with the Board of Industrial and Financial Reconstruction (BIFR) and the same has been registered with the said Board during the period under audit.

(xi) In our opinion and according to the information and explanations given to us, and on the basis of our examination of the books of accounts and related records, we observed delays in the repayment of the principal sums and interest thereon to banks / financial institutions. However as explained in Note 26 annexed to the financial statements, three working capital banks viz. Standard Chartered Bank, Dena Bank and HDFC Bank did not restructure the credit facilities of the company as approved by the lead bank of the company i.e., Allahabad Bank under bilateral scheme of restructuring and these banks have classified the account as a Non Performing Asset. As on the date of the balance sheet the remaining two working capital banks viz., Allahabad Bank and Federal Bank have also classified the accounts as a non-performing asset. Further the Company does not have any Debentures.

(xii)The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, hence the question of maintenance of records thereof does not arise.

(xiii)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 it.

(xiv) The Company is not dealing in Shares and Securities in the normal course of its business and has not made any investment during the period under report. The company has initiated legal steps to recover the investment in erstwhile Joint Venture situated in Germany for which proper records have been maintained by the company.

(xv)The Company has not given any guarantee for loans taken by others from bank or financial institutions, hence the question of terms and conditions whereof being prejudicial to the interest of the Company does not arise.

(xvi During the period under audit as verified from the relevant books and records of the Company, it was ascertained that no fresh term loan has been obtained by the Company except the conversion of part of working capital to Working Capital Term Loan (WCTL) and interest on such Working Capital Term Loans (WCTL) to Funded Interest Term Loans (FITL) as per the bilateral restructuring scheme approved by the majority of the lenders.

(xvii) According to the information and explanations given to us and on overall examination of the balance sheet of the Company, we are of the opinion that no funds raised for short term basis have been used for long term investment.

(xviii) The Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

(xix) The Company has not issued any debentures hence the question of creating securities there against does not arise.

(xx)The Company has not raised any money by way of fresh issues from the public during the period under review and hence, any disclosure regarding its end use is not applicable.

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

For AGARWAL SANGANERIA & CO.

Chartered Accountants

Firm Registration No. 317224E

Sd/-

(P. K. AGARWAL)

Place: Kolkata Partner

Dated, the 29th day of May, 2013 C. A. MEMBERSHIP NO.53496


Jun 30, 2012

1. We have audited the attached Balance Sheet of WEBSOL ENERGY SYSTEM LIMITED ("the Company") as at 30th June , 2012, and the Statement of Profit and Loss and Cash Flow Statement for the period ended on that date together with the Notes thereon annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3.As required by Companies (Auditor's Report) Order, 2003 ("the Order") issued by the Central Government under section 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and the records of the Company as we considered appropriate and as per the information and explanations given to us during the course of our Audit, we set out in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

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

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

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

iii.The Balance Sheet of the said Company as at 30th June 2012 signed by us under reference to this report, the annexed Statement of Profit and Loss and the Cash Flow Statement are in agreement with the books of account;

iv.In our opinion, these accounts have been prepared in compliance with the applicable Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 except as otherwise mentioned in the accounts and Notes thereon;

v.On the basis of the information and explanations given by the management, we report that none of the Directors is disqualified as on the date of the Balance Sheet under report from being appointed as a Director in terms of Section 274(1)(g) of the Companies Act,1956;

vi.In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement subject to and read with Notes thereon and attached thereto, give in the prescribed manner, the information so required by the Companies Act, 1956 and give a true and fair view:

a. in the case of Balance Sheet of the state of affairs of the Company as at 30th June 2012;

b. in the case of the Statement of Profit & Loss of the Loss of the Company for the period ended on that date; and

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF WEBSOL ENERGY SYSTEM LIMITED FOR THE PERIOD ENDED 30th JUNE, 2012

(i) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets. The company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in phased manner. In accordance with the policy, the majority of Fixed Assets of the Company have been physically verified during the period by the management and as informed to us no material discrepancies were noticed on verification between the book records and the physical records. During the period under report, the Company has not disposed off any substantial part of its Fixed Assets and therefore, don't affect the going concern assumption.

(ii) The Inventories of the Company consisting of stocks of raw materials, finished goods, work-in-progress and stores and spares parts have been physically verified by the management at regular intervals during the period. The discrepancies between the physical stocks and book records which were not material have been properly dealt with in the books of account. The Company is maintaining proper records of the Inventories. In our opinion, the frequency of physical verification is reasonable. The procedure of physical verification followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(iii) The Company has, during the period under report, granted unsecured loan to one party covered under section 301 of the Companies Act, 1956. The balance outstanding at the beginning of the year was Nil and after considering the amount given of 18.45 lacs and interest accrued of Rs.2.35 lacs, the balance outstanding as at the date of the balance sheet was Rs.20.80 lacs. The Company has also taken unsecured loans from four companies as covered in the register maintained under section 301 of the Companies Act, 1956. The balance outstanding at the beginning of the year was Rs.2,503.73 lacs and after considering the amount taken of 1,496.62 lacs and amount repaid Rs.2,904.49 lacs and interest Rs.391.87 lacs (net of tax deducted at source), the balance outstanding as at the date of the balance sheet was 1,487.73 Lacs. The rate of interest and other terms and conditions of the Loans given and taken by the Company are not prima facie prejudicial to the interest of the Company. The receipt and payment of principal and interest has not been regular as per terms of the loan given and taken. In case of loan given, the company has initiated legal course. In case of loan taken, the company could not be regular in payment because of financial constraints.

(iv) 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 the nature of its business with regard to the purchase of inventory, fixed assets and with regards to sale of goods. During the course of our audit, we have not come across any continuing failure to correct major weaknesses in internal controls.

(v) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section. There are no contracts or arrangements to in Section 301 of the Companies Act, 1956 that exceeds the value of Rs.5.00 lacs during the year except those stated in para (iii) above.

(vi) As far as we have been able to ascertain, the Company has not accepted any deposits from the public, hence the question of complying with the provisions of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 does not arise.

(vii) The Company had a competent team of staff and officials for conducting internal audit commensurate with the size and nature of its business. With effect from 1st April 2012 an external entity has been appointed as the Internal Auditor of the company and their first report is yet to be submitted

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

(ix) The Company has made delayed deposits with appropriate authorities the amount deducted/accrued in the books of accounts in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable to it. As per the information and explanations given to us the following undisputed amounts in respect of the abovementioned statutory dues were outstanding as at 30th June, 2012 for a period of more than six months from the date they became payable:

Name of Statute Nature of Dues Amount (Rs. In Lacs)

Delhi Value Added Tax 2004 Delhi Value Added Tax 12.85

Income Tax Act, 1961 Income Tax 39.46

Finance Act, 1994 Service Tax 6.64

WB VAT Act, 2003 Works Contract Tax 0.65

Income Tax Act, 1961 Tax Deducted at Source 17.70

Further the following statutory dues have not been deposited on account of dispute:

Nature of dues Forum where dispute is pending Amount (Rs. in Lacs) Remarks

Excise Duty & Penalty High Court at Kolkata 216.55 The Company has paid Rs.100.00 Lacs against this demand

Excise Duty & Penalty Custom, Excise and Service Tax 478.34 - Appellate Tribunal

Excise Duty & Penalty Commissioner -Appeals 51.05 -

Sales Tax Assistant Commissioner 222.44 -

Income Tax Commissioner of Income Tax -Appeal 61.57 -

(x) The accumulated losses of the Company as at the date of the balance sheet are more than its net worth and it has incurred cash losses during the fifteen months period covered by audit. However the company did not incur any cash losses in the immediately preceding financial period.

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

Name of the Lender Period of Default in days Minimum Amount of Default (Rs. In Lacs) Maximum Amount of Default (Rs. In Lacs)

Standard Chartered Bank 1 to 253 10.00 1265.70

Dena Bank 46 to 334 0.98 793.38

HDFC Bank 29 to 182 0.21 13.62

EXIM Bank 1 to 204 19.10 307.20

However as explained in Note 26 annexed to the financial statements, the lead bank of the company i.e., Allahabad Bank has approved the restructuring scheme of the borrowings of the company on 27th March 2012 under bilateral scheme of restructuring, but the above mentioned Banks have not yet restructured the loans as on the date of the Balance Sheet. Further the Company does not have any Debentures.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, hence the question of maintenance of records thereof does not arise.

(xiii) 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 it.

(xiv) The Company is not dealing in Shares and Securities in the normal course of its business but has investment in a Joint Venture situated in Germany during the period under report. Proper records have been maintained by the company for such investments and as reported timely entries have been made therein. The Joint Venture has been called off prior to the date of the balance sheet and proportionate consolidation has not been felt appropriate by the management.

(xv) The Company has not given any guarantee for loans taken by others from bank or financial institutions, hence the question of terms and conditions whereof being prejudicial to the interest of the Company does not arise.

(xvi) During the period under audit as verified from the relevant books and records of the Company, it was ascertained that the term loan obtained by the Company was applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on overall examination of the balance sheet of the Company, we are of the opinion that no funds raised for short term basis have been used for long term investment.

(xviii)The Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

(xix) The Company has not issued any debentures hence the question of creating securities there against does not arise.

(xx) The Company has not raised any money by way of fresh issues from the public during the period under review and hence, any disclosure regarding its end use is not applicable.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the period covered by our audit. For AGARWAL SANGANERIA & CO.

Chartered Accountants

Firm Registration No. 317224E

P. K. AGARWAL

KOLKATA Partner

Dated, the 29th day of August, 2012 C. A. MEMBERSHIP No.53496


Mar 31, 2011

We have audited the attached Balance sheet of WEBSOL ENERGY SYSTEMS LIMITED as at 31 st March, 2011, the Profit and Loss Account and also the Cash Flow Statement for nine months period ended on that date together with the notes and schedules thereon 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 financial statements are free of material mis-statements. An audit includes examining, on a test basis, evidences supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. With these comments we report that:

1. The Balance Sheet of the said Company as at 31 st March, 2011 signed by us under reference to this report and the annexed Profit and Loss Account and the Cash Flow Statement are in agreement with the books of account.

2. Further to our comments in the Annexure referred to in Paragraph 3 below :

2.1 In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement subject to and read with notes thereon and attached thereto, give in the prescribed manner, the information so required by the Companies Act, 1956 and give a true and fair view :

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

b. in the case of the Profit & Loss Account of the Profit of the Company for nine months period ended on that date ; and

c. in the case of the Cash Flow Statement, of the cash flow of the Company for nine months period ended on that date.

2.2 We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for our audit. In our opinion, proper books of account have been kept by the Company as required by law, so far as appears from our examination of those books.

2.2 In our opinion, these accounts have been prepared in compliance with the applicable Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 except as otherwise mentioned in the accounts and notes thereon.

2.3 On the basis of the information and explanations given by the management, we report that none of the Directors is disqualified as on the date of the Balance Sheet under report from being appointed as a Director in terms of Section 274(1 )(g) of the Companies Act, 1956.

3. As required by Companies (Auditor's Report) Order, 2003 issued by the Central Government under section 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and the records of the Company as we considered appropriate and as per the information and explanations given to us during the course of our Audit, we set out in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

Annexure to Auditor's Report Annexure referred to in paragraph 3 of the report of even date of the Auditors to the members of Websol Energy Systems Limited for the period ended 31st March, 2011.

i) The Fixed Assets records of the Company are incomplete and are being currently updated to show full particulars including quantitative details and situation thereof. The Fixed Assets of the Company have been physically verified during the year by the management and any discrepancies between the book records and the physical inventory can be determined on updating of the book records. During the year under report, the Company has not disposed off any substantial part of its Fixed Assets.

ii) The Inventories of the Company consisting of stocks of finished goods, work-in-progress, stores, spare parts and raw materials have been physically verified by the management at regular intervals during the period. The discrepancies between the physical stocks and book stocks which were not material have been properly dealt with in the books of account. The Company is maintaining proper records of the Inventories. In our opinion, the frequency of physical verification is reasonable. The procedure of physical verification followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

iii) The Company has not granted secured or unsecured loan to any of the party covered under section 301 of the Companies Act, 1956. The Company, during the period under report, had taken unsecured loans from four companies as covered in the register maintained under section 301 of the Companies Act, 1956. The balance outstanding at the beginning of the year was NIL and after considering the amount taken of Rs.3605.00 lacs and amount repaid Rs.1160.00 lacs and interest Rs.58.73 lacs (net of Tax deducted at source), the balancing outstanding as at the date of the balance sheet was Rs.2503.73 Lacs. The rate of interest and other terms and conditions of the Loan taken by the Company are not prima facie prejudicial to the interest of the Company. The payment of principle and interest was also regular as per terms of the loan taken.

iv) 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 the nature of its business with regard to the purchase of inventory, fixed assets, and with regards to sale of goods. During the course of our audit, we have not come across any continuing failure to correct major weaknesses in internal controls.

v) According to the information and explanations given to us, we are of the opinion that the Company has not entered into any transaction for the sale, purchase or supply of any goods, materials or services that need to be entered into the register maintained under section 301 of the Companies Act, 1956. The contracts and arrangements as per Section 299 required to be entered in the register under Section 301 have been properly entered.

vi) As far as we have been able to ascertain, the Company has not accepted any deposits from the public, hence the question of complying with the provisions of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 does not arise.

vii) The Company has a competent team of staffs and officials for conducting internal audit in place. It was observed that all transactions are carried out under the personal supervision of senior officials and/or the Managing Director of the Company.

viii) The rules regarding the maintenance of cost records are not applicable to the Company.

ix) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable to it. As per the information and explanations given to us no undisputed amount in respect of the abovementioned statutory dues were outstanding as at 31st March, 2011 for a period of more than six months from the date they became payable and there are no such statutory dues which have not been deposited on account of any dispute except the following :

Act Nature of Forum where Amount dues dispute is (Rs.in Lacs) pending

Central Excise Excise Duty High Court at 216.55 Act, 1944 Kolkata

Central Excise Excise Duty & Custom, Excise and 114.25 Act, 1944 Penalty Service Tax Appel late Tribunal

Central Excise Excise Duty & Custom, Excise and 6.55 Act, 1944 Penalty Service Tax Appel late Tribunal Central Excise Excise Duty & Custom, Excise and 357.54 Act, 1944 Penalty Service Tax Appel late Tribunal

Central Excise Excise Duty & Commissioner - 7.04 Act, 1944 Penalty Appeals

Central Excise Excise Duty & Commissioner - 30.73 Act, 1944 Penalty Appeals

Central Excise Excise Duty & Commissioner - 10.85 Act, 1944 Penalty Appeals

Central Excise Excise Duty Commissioner - 20.08 Act, 1944 Appeals

Act Remarks

Central Excise The Company has paid Act, 1944 Rs.100.00 Lacs against this demand

Central Excise - Act, 1944

Central Excise - Act, 1944 Central Excise - Act, 1944

Central Excise - Act, 1944

Central Excise - Act, 1944

Central Excise - Act, 1944

Central Excise - Act, 1944

x) The Company does not have accumulated losses as on the date of the Balance Sheet under report and has not incurred any cash losses during the nine months period covered by audit as well as in the immediately preceding financial year.

xi) The Company does neither have any dues payable to financial institutions nor does it have any debentures. In respect of dues of Term Loan taken from Bank, the Company has not defaulted on scheduled repayment thereof during the year under report.

xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, hence the question of maintenance of records therefor does not arise.

xiii) The Company is not a chit fund or a nidhi/mutual fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to it.

xiv) The Company is not dealing in Shares and Securities in the normal course of its business and substantial part of investment held by it in the unquoted Equity Shares of certain Companies and also ordinary shares of erstwhile Joint Venture Company at Singapore has been sold by the Company during the period. Proper records have been maintained by the Company for such disposals and as reported timely entries have been made therein. The remaining shares have been held by the company in its own name as on the date of the balance sheet under consideration.

xv) The Company has not given any guarantee for loans taken by others from bank or financial institutions, hence the question of terms and conditions whereof being prejudicial to the interest of the Company does not arise.

xvi) During the period under audit as verified from the relevant books and records of the Company, it was ascertained that the term loan obtained by the Company was applied for the purpose for which the loans were obtained.

xvii) According to the information and explanations given to us and on overall examination of the balance sheet of the Company, we are of the opinion that no funds raised for short term basis have been used for long term investment.

xviii) The Company has made preferential allotment of shares to a Promoter Group Company being a Company covered in the Register maintained under section 301 of the Act and in our opinion the price at which shares have been issued was not prejudicial to the interest of the Company.

xix) The Company has not issued any debentures, hence, the question of creating securities there against does not arise.

xx) The Company has not raised any money by way of fresh issues from the public during the period under review and hence, any disclosure regarding its end use is not applicable.

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

For Agarwal Sanganeria & Co. Chartered Accountants Firm Regn. No. 317224E

P. K. Agarwal Partner C. A. Membership No. 53496

Kolkata Dated, the 28th day of May,2011.


Jun 30, 2010

We have audited the attached Balance sheet of WEBSOL ENERGY SYSTEMS LIMITED as at 30th June, 2010, the Profit and Loss Account and also the Cash Flow Statement for the fifteen months period ended on that date together with the notes and schedules thereon 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 financial statements are free of material mis- statements. An audit includes examining, on a test basis, evidences supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. With these comments we report that:

1. The Balance Sheet of the said Company as at 30th June, 2010 signed by us under reference to this report and the annexed Profit and Loss Account and the Cash Flow Statement are in agreement with the books of account.

2. Further to our comments in the Annexure referred to in Paragraph 3 below :

2.1 In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement subject to and read with notes thereon and attached thereto, give in the prescribed manner, the information required by the Companies Act, 1956 and give a true and fair view :

a) in the case of Balance Sheet of the state of affairs of the Company as at 30th June 2010;

b) in the case of the Profit & Loss Account of the Loss of the Company for the fifteen months period ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flow of the Company for the fifteen months period ended on that date.

2.2 We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for our audit. In our opinion, proper books of account have been kept by the Company as required by law, so far as appears from our examination of those books.

2.3 In our opinion, these accounts have been prepared in compliance with the applicable Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 except as otherwise mentioned in the accounts and notes thereon.

2.4 On the basis of the information and explanations given by the management, we report that none of the Directors is disqualified as on the date of the Balance Sheet under report from being appointed as a Director in terms of Section 274(1)(g) of the Companies Act, 1956.

3. As required by Companies (Auditors Report) Order, 2003 issued by the Central Government under section 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and the records of the Company as we considered appropriate and as per the information and explanations given to us during the course of our Audit, we set out in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

Annexure referred to in paragraph 3 of the report of even date of the Auditors to the members of Websol Energy Systems Limited for the period ended 30th June, 2010

i) The Fixed Assets records of the Company are incomplete and are being currently updated to show full particulars including quantitative details and situation thereof. The Fixed Assets of the Company have been physically verified during the year by the management and any discrepancies between the book records and the physical inventory can be determined on updating of the book records. During the year under report, the Company has not disposed off any substantial part of its Fixed Assets.

ii) The Inventories of the Company consisting of stocks of finished goods, work-in-progress, stores, spare parts and raw materials have been physically verified by the management at regular intervals during the period. The discrepancies between the physical stocks and book stocks which were not material have been properly dealt with in the books of account. The Company is maintaining proper records of the Inventories. In our opinion, the frequency of physical verification is reasonable. The procedure of physical verification followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

iii) The Company has not granted secured or unsecured loan to any party covered under section 301 of the Companies Act, 1956. The Company had taken unsecured loans from Companies covered in the register maintained under section 301 of the Companies Act, 1956 which were repaid during the period and hence their was no balance outstanding as at the date of the Balance Sheet. The rate of interest and other terms and conditions of the Loan taken by the Company are not prima facie prejudicial to the interest of the Company. The payment of principle and interest was also regular as per terms of the loan taken.

iv) 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 the nature of its business with regard to the purchase of inventory, fixed assets, and with regards to sale of goods. During the course of our audit, we have not come across any continuing failure to correct major weaknesses in internal controls.

v) According to the information and explanations given to us, we are of the opinion that the Company has not entered into any transaction for the sale, purchase or supply of any goods, materials or services that need to be entered into the register maintained under section 301 of the Companies Act, 1956. Hence, the question of their being entered into the said register does not arise.

vi) As far as we have been able to ascertain, the Company has not accepted any deposits from the public, hence the question of complying with the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 does not arise.

vii) The Company does not have a formal internal audit system. However, it was observed that all transactions are carried out under the personal supervision of senior officials and/or the Managing Director of the Company.

viii) The rules regarding the maintenance of cost records are not applicable to the Company.

ix) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable to it. As per the information and explanations given to us no undisputed amount in respect of the abovementioned statutory dues were outstanding as at 30th June, 2010 for a period of more than six months from the date they became payable and there are no such statutory dues which have not been deposited on account of any dispute except the following : Forum where Nature of dispute is Amount Act dues pending (Rs. in Lacs) Remarks

Central Excise Excise Duty High Court 216.55 The Company Act, 1944 at Kolkata has paid

Rs. 100.00 Lacs against this demand Central Excise Excise Duty & Custom, Excise Act, 1944 Penalty and Service Tax Appellate Tribunal 114.24

Central Excise Excise Duty & Custom, Excise Act, 1944 Penalty and Service Tax Appellate Tribunal 6.55

Central Excise Excise Duty & Custom, Excise Act, 1944 Penalty and Service Tax Appellate Tribunal 357.54

Central Excise Excise Duty & Commissioner - Act, 1944 Penalty Appeals 7.05

Central Excise Excise Duty & Commissioner - Act, 1944 Penalty Appeals 30.73

Central Excise Excise Duty & Commissioner - Act, 1944 Penalty Appeals 7.04

x) The Company does not have accumulated losses as on the date of the Balance Sheet under report and has not incurred any cash losses during the fifteen months period covered by audit as well as during the immediately preceding financial year.

xi) The Company does neither have any dues payable to financial institutions nor does it have any debentures. In respect of dues of Term Loan taken from Bank, the Company has not defaulted on scheduled repayment thereof during the year under report.

xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, hence the question of maintenance of records therefor does not arise.

xiii) The Company is not a chit fund or a nidhi/mutual fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to it.

xiv) The Company is not dealing in Shares and Securities, but has an investment in unquoted Equity shares of certain Companies and also ordinary shares of erstwhile Joint Venture Company situated at Singapore. Proper records have been maintained by the Company for such acquisitions and as reported timely entries have been made therein. The said shares have been held by the in its own name as on the date the balance sheet under consideration.

xv) The Company has not given any guarantee for loans taken by others from bank or financial institutions, hence the question of terms and conditions whereof being prejudicial to the interest of the Company does not arise.

xvi) During the period under audit, the Company has not raised any new term loan from a Bank.

xvii) According to the information and explanations given to us and on overall examination of the balance sheet of the Company, we are of the opinion that no funds raised for short term basis have been used for long term investment.

xviii) The Company has made preferential allotment of shares to a Promoter Group Company being a Company covered in the Register maintained under section 301 of the Act and also to a Strategic Investor and in our opinion the price at which shares have been issued was not prejudicial to the interest of the Company.

xix) The Company has not issued any debentures, hence, the question of creating securities there against does not arise.

xx) The Company has raised money by way of Qualified Institutional Placement of fresh Equity Shares during the period under report. The end use of proceeds thereof has been disclosed by the management in schedule of notes on accounts (Schedule 21-note no.10). Such use has been verified by us with reference to the books of accounts of the Company.

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

For Agarwal Sanganeria & Co. Chartered Accountants

P. K. Agarwal

Partner

Kolkata C.A. Membership No-53496

Dated: 30th August, 2010 Firm Regn. No. 317224E

 
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