Indosolar Ltd Directors Report.

The Board has pleasure in presenting the (12th) Twelfth Annual Report on business and operations of the Company for the year ended 31st March 2017.

1. FINANCIAL HIGHLIGHTS
(Rs. in lakhs)
PARTICULARS YEAR ENDED YEAR ENDED
31-03-2017 31-03-2016
Revenue from operations (A) 44,231.09 25,768.11
Other Income (B) 297.44 215.91
Operating expenditure (C) 37,104.84 24,933.18
Earnings before interest, tax, depreciation and amortisation (EBITDA) 7,423.69 1,050.84
[D=A+B-C]
Finance Cost (E) 10,393.81 12,520.96
Depreciation and amortization expense (F) 2,834.17 2,657.08
Profit / ( Loss) before tax [G=D-E-F] (5,804.29) (14,127.20)
Provision for Taxation (incl. deferred income tax) (H) 14.23 0
Profit / ( Loss) after tax [I=G-H] (5,818.52) (14,127.20)

2. PERFORMANCE REVIEW

During the year under review, the Company achieved turnover of Rs. 44,231.09 lakhs during the financial year 2016-17 as compared to Rs. 25,768.11 lakhs in the previous year, an increase of 71.65%. The Earnings before interest, tax, depreciation and amortisation ("EBITDA") of Rs. 7,423.69 lakhs in the financial year 2016-17 as compared to Rs. 1,050.84 lakhs in the previous year, an increase of 606.45% due to full utilization of running capacity but at lower realisation.

Your Directors feel that the Company will be seeing a turnaround in the financial year 2017-18 keeping in view the certain measures taken or expected to be taken by the Government to support of the domestic manufacturers in India viz. Central Public Sector Undertakings "CPSU" Scheme to replace the Domestic Content Requirement "DCR" Policy, viability gap funding policy etc.

3. RESERVES AND SURPLUS

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

4. DIVIDEND

Due to non-availability of profit, the Board does not recommend any dividend for the year ended 31st March 2017.

5. QUALITY

Your Company has implemented International Quality Management System based on the requirement of ISO 9001:2015. The Company has established, implemented and maintaining a Quality Management System. During this year, ISO 14001 surveillance was carried out by TUV Nord and the auditors recommended the continuation of the ISO 9001: 2015. Apart from the above, your Company is also OHSAS-18001:2007 and ISO-14001:2015 certified. Your Company had also taken various initiatives during the year for ISO awareness like ISO Audits, ISO Awareness sessions, specially week observations (POI) point of improvement, NCRs (NON Conformities) safety week which enhances the three values viz., Integrity, Quality and Safety.

6. FIXED DEPOSITS

During the year under review, the Company has not accepted any fixed deposit within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 and no amount of principal or interest is outstanding as on the balance sheet closure date.

7. STATUS OF IMPLEMENTATION OF 250 MW PROJECT

In view of the market viability over Solar Industry, the Company is expected that the full utilization of capacity will use by end of the financial year 2017-18.

8. NUMBER OF MEETINGS OF THE BOARD

Eight (8) meetings of the board were held during the year. For details of the meetings of the board, please refer to the point no. 2 of the Corporate Governance Report, which forms part of this Report. The intervening gap between any two consecutive Board Meetings did not exceed 120 days.

9. DIRECTORS AND KEY MANAGERIAL PERSONNEL Directors

The Independent Directors of the Company have given a declaration confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 ("the Act") and the SEBI (Listing Regulations and Disclosure Requirements) Regulations, 2015.

Mr. Hulas Rahul Gupta [DIN: 00297722], Managing Director liable to retire by rotation at the ensuing Annual General Meetingand being eligible has offered himself for the re-appointment. The Board of Directors recommended his reappointment for the consideration of the shareholders in ensuing Annual General Meeting. A brief profileand other details as required under Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are provided in the Notice of 12th Annual General Meeting of the Company. However, there was no change in the board of the company during the financial year.

Key Managerial Personnel

During the year, there was no change in Key Managerial Personnel. Pursuant to the provision of Companies Act, 2013, the key managerial personnel of the Company are Mr. Hulas Rahul Gupta, Managing Director, Mr. Anand Kumar Agarwal, Chief Financial Officer and Mr. Manish Gupta, Company Secretary.

10. BOARD EVALUATION

The board of directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 ("Listing Regulations").

The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of the criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In a separate meeting of independent directors, performance of non-independent directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the concerned independent director being evaluated.

11. REMUNERATION POLICY

The Nomination and Remuneration Committee of the Company leads the process for Board Appointment in accordance with the requirements of the Companies Act, 2013, SEBI (Listing Regulations and Disclosure Requirements) Regulations, 2015 and other applicable regulations or policy guidelines.

The policy for determining the remuneration for Directors, Key Managerial Personnel & other employees is available on website of the Company i.e. http://www.indosolar.co.in/images/pdf_file/NOMINATION%20AND%20 REMUNERATION%20POLICY.pdf.

12. EXTRACT OF THE ANNUAL RETURN

The extract of Annual Return in Form MGT -9 as required under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is given in Annexure - I to this Report.

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

None of the transactions entered into by the companywithrelatedpartiesduringthefinancialyear 2016-17 falls under the scope of section 188(1) of the Companies Act, 2013. Information on transactions with related parties pursuant to section 134(3)(h) of the Companies Act, 2013 read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure II in Form AOC-2 and the same forms part of this Report.

However, omnibus approval is obtained from the Audit Committee for the related party transactions which are foreseen and repetitive in nature.

14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the financialyear 2016-17, the Company has not given loans, guarantees/surety or investment as described under Section 186 of the Companies Act, 2013.

15. DETAIL OF SUBSIDARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

There is no subsidiary, joint venture or associate of the Company during the Financial Year 2016-17.

16. AUDIT COMMITTEE

The details pertaining to composition of audit committee are included in the point no. 3 of the Corporate Governance Report, which forms part of this Report. The intervening gap between any two consecutive Audit Committee Meetings did not exceed 120 days.

17. CORPORATE SOCIAL RESPONSIBILITY (CSR)

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

18. CHANGES IN CAPITAL STRUCTURE

There was no change in capital structuring during the period 2016-17.

19. RISK MANAGEMENT

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

The Risk Management Policy is available on the Companys Website www.indosolar.co.in.

20. INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY

The details in respectofinternalfinancialcontrol and their adequacy are included in the point no. 6 of the Management Discussion & Analysis Report, which forms part of this report.

21. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company promotes ethical behaviour in all its business activities and has put in place a vigil mechanism for

Directors, Employee and other person dealing with the Company for reporting illegal or unethical behaviour, actual or suspected fraud or violation of the companys Code of Conduct. The mechanism provides for adequate safeguards against victimization of Directors, employees or other persons who avail the mechanism. In exceptional cases, Directors and employees have direct access to the Chairman of the Audit Committee.

The Vigil Mechanism (Whistle Blower Policy) is available on the Companys website www.indosolar.co.in.

22. AUDITORS

STATUTORY AUDITORS

During the year under review, M/s B S R & Co. LLP, Chartered Accountants (Firm Registration Number:101248W/W-100022) stepped down as the Statutory Auditors of the Company.

Subsequently, M/s. Arun K Gupta & Associates, Chartered Accountants, New Delhi (Firm Registration Number: 000605N) was appointed as Statutory Auditors of the Company, to hold office till the conclusion of Annual General Meeting. Accordingly, the Board of Directors in their meeting held on 11th August, 2017, on the basis of the recommendations of the Audit Committee, approved the appointment of M/s. Arun K Gupta & Associates, Chartered Accountants, New Delhi (Firm Registration Number: 000605N)(subject to ratification of the appointment by the members at every intervening Annual General Meeting) for the period of 5 (Five) years from the conclusion of the 12th Annual General meeting of the Company till the conclusion of 17th Annual General Meeting of the Company to be held in the year 2022 in place of retiring Auditors.

Clarification/explanation on remarks in Independent Auditors Report

On the Auditors qualified opinion with regards to Going Concern Status of the Company, the reply from the management is as under: a. With reference to point no. 4(a) of the Independent Auditors Report, we clarify that the management has evaluated the impact of CDR exit and is of the view that there would not be any material impact of the same on the financial results. b. With reference to point no. 4(b) of the Independent Auditors Report, the management is in view that Double Bench of High Court of Delhi upheld the order of the single bench vide order dated 10th April, 2017 against Companys claim for eligibility of capital subsidy under SIP Scheme of Government. Department preferred Special Leave Petition "SLP" against the said order before Honorable Supreme Court on 07th July, 2017. In view of the uncertainty and reasonable assurance the said grant has not been recognized. c. With reference to point no. 4(c) of the Independent Auditors Report, we clarify that being an Export Oriented Unit, the Company needs to achieve positive NFE during a period of 10 years from the start of commercial production and in view of the future projections, the management is hopeful of achieving positive NFE and expects no cash outflow on this account. d. With reference to point no. 4(d) of the Independent Auditors Report, we clarify that as Andhra Bank and Indian Bank has transferred absolute assignment to Asset Reconstruction Company (India) Limited (ARCIL). In the absence of execution of restructuring agreement with ARCIL, regarding such assignment of facilities, adjustments, if any, in the carrying value of borrowings could not be ascertained. e. During the year under review, the Statutory Auditors have not reported any matter under Section 143 (12) of the Companies Act, 2013, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Companies

Act, 2013.

COST AUDITOR

Pursuant to the provision of Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Board of Directors at their meeting held on 08th August, 2016 has appointed M/s Kabra & Associates Cost Accountants (Firm Registration Number: 000075) as the Cost Auditors to conduct audit of cost records relating to the products manufactured by your Company for the financial year 2016-17.

SECRETARIAL AUDITOR

Pursuant to the provisions of the Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration) Rules, 2014, the Company had appointed M/s Chandrasekaran Associates a firm of Company Secretaries in Practice to undertake the secretarial audit of the company for the Financial Year 2016-17. The report of Secretarial Audit is annexed to this report as Annexure III.

The Secretarial Auditors Reportdoes not contain any qualification, reservation or adverse remark or disclaimerand does not require further comment except the following: With reference to the observation, on imposition of fine of Rs. 55,000 each by National Stock Exchange of India ‘NSE and BSE Limited ‘BSE in respect of non-compliance of Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, in the Secretarial Audit Report. The Company exited from Corporate Debt Restructuring ‘CDR Mechanism on 04th November, 2016 due to which Company needed more time to calculate the impact of the same over financial results. As such the unaudited financial results for the quarter ended 30th September, 2016 could not be submitted on time as required under Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Company advised the same to NSE & BSE on 14th November, 2016. Due to CDR matter and uncertainties arising thereof, M/s. B S R & Co. LLP, Chartered Accountants, stepped down as Statutory Auditors of the Company on 19th November, 2016. The Company appointed M/s. Arun K Gupta & Associates, Chartered Accountants as Statutory Auditors on 21st November, 2016. The Company submitted the unaudited financial results for the quarter ended 30th September, 2016 on 26th November, 2016 and Stock Exchanges imposed fine of Rs. 5,000 per day for 11 days for the delay in submission of results.

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

Information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required to be furnished under the provisions of section 134(3)(m)of the Companies Act, 2013 given as Annexure IV

to this Report.

24. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 of the Companies Act, 2013, the Directors confirmed that: a. in the preparation of the annual accounts for the year ended 31st March, 2017, the applicable accounting standards had been followed along with proper explanation relating to material departures; b. they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for the period ended 31st March 2017; c. they had taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. they had prepared the annual accounts on a going concern basis; e. they had laid down Internal financialcontrols to be followed by the Company and such internal financial controls are adequate and were operating effectively; and f. they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

25. PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 given as Annexure V forming integral part of the Annual Report.

26. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review, in terms of Regulation 34 of the SEBI

(Listing Obligations and Disclosure Requirements), Regulations, 2015 given as Annexure VI forming integral part of the Annual Report.

27. CORPORATE GOVERNANCE REPORT

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

The Report on the Corporate Governance forms an integral part of this report and is set out as Annexure VII to this Report. The Certificate from the practicing Company Secretary M/s Chandrasekaran Secretaries, certifying compliance with the conditions of the Corporate Governance as stipulated under Regulation 15(2) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 is annexed with the Report on Corporate Governance.

28. MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

No material changes have occurred and commitments made, affecting the financial position of the Company between the end of the financial year of the Company i.e. 31st March, 2017 and the date of this Report i.e. 11th August, 2017.

29. DETAILS OF SIGNIFICANT AND MATERIAL ORDER

No significant and material order have been passed by any regulator or court or tribunal impacting status or future operations of the Company.

30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

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

The Company has an Anti Sexual Harassment Policy in line with the requirement of "The Sexual Harassment of

Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013".

Further, the Company has constituted Internal Complaints Committee to redress Complaints received regarding sexual harassment during the period 2016-17. The following is a summary of sexual harassment complaints received and disposed off during the period:

Number of Complaints received Nil
Number of Complaints disposed off Nil

31. APPRECIATION

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

32. ACKNOWLEDGEMENTS

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

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

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

On behalf of the Board of Directors

For INDOSOLAR LIMITED

H. R. GUPTA GAUTAM SINGH KUTHARI
Managing Director Director
DIN: 00297722 DIN: 00945195
Place : Greater Noida
Date : August 11, 2017