Auditor Report of Entegra Ltd.

Mar 31, 2015

We have audited the accompanying consolidated financial statements of Entegra Limited (the "Company") and its subsidiaries (collectively referred to as "the Group"), which comprise the Consolidated Balance Sheet as at March 31, 2015, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

II. Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and in accordance with the accounting principles generally accepted in India. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, 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.

III. Auditors' Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.

The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give true and fair view 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 Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

IV. Qualified Opinion

As stated in the Note no as referred below of the financial statement:

1. As stated in Note No. 3(b) of the financial statements, Non-provision of interest liability amounting to Rs. 1,741,943,789 of M/s. Edelweiss Asset Reconstruction Company Ltd. (EARCL), who have been absolutely assigned all rights and interests in the financial assistance of the Company, vide Assignment Agreement dated 28.03.2014 in respect of the Loan which was taken in the earlier years by the Company from Central Bank of India based on the estimates of the management that the liability that exists in the books of accounts would be sufficient to meet the proposed One Time Settlement(OTS) amount, which will be negotiated with EARCL. On account of the aforesaid non-provision towards interest, loss for the year and borrowing have been has been understated by Rs. 1,741,943,789.

2. As explained in Note No.32 of the financial statements, Non-provision in respect of Deposit given to one of the party which is shown under the head Long term loans and advances amounting to Rs 20,00,00,000. The said deposit is given for occupying rent free area in the proposed newly constructed building. However, the said project is still on hold by the developer but the management is hopeful of its performance in near future. On account of the aforesaid non-provision, loss for the year has been understated and deposit have been has been overstated by Rs 20,00,00,000.

3. As stated in Note No 25 of the financial statements, which states that financials of one of the subsidiary Company are consolidated based on management drawn accounts adopted by the board of directors of that company. On account of the same assets amounting to Rs 535029 Lacs and cash flow of Rs1.89 Lacs has been consolidated. We have neither reviewed the said financial statements of the said subsidiary company nor do we express any opinion on it.

4. As stated in Note No. 34 of the financial statements, in case of one of the Company's subsidiary Ennertech Biofuels Limited regarding granting interest free loan to its related party amounting to Rs 41,00,00,000/- there by overstating the loss for the year and understating to an amount which is unascertainable.

5. As stated in Note No. 33 of the financial statements, in case of one of the Company's Rajasthan Solar Power Company Private Limited regarding non provision of amount given to advance to supplier which is pending performance/ recovery amounting to Rs35,75,00,000 there by understating the loss for the year and overstating short term Loans & Advances to the said tune to an amount which is unascertainable.

V. Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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 Consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2015;

(b) in the case of the Consolidated Statement of Profit and Loss, of the Loss of the Group for the year ended on that date and

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

Annexure to the Auditors' Report

(On the Financial Statements for the year ended 31st March 2015) As stated in the Auditors report that the financial statement of one of the subsidiary has been consolidated based on unaudited financials our report does not include report of the said subsidiary company.

(i) Fixed Assets

In respect of the fixed assets of holding company and Subsidiary companies,

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

b) During the year, the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable.

c) In case of one of the subsidiary Rajasthan Solar Power Company Private Limited, the Company does not have fixed assets during the year under review.

(ii) Inventories

The Company does not have any inventory during the year under review.

(iii) Loans & Advances either granted or taken

a) The Company has granted loan to two body corporate being the parties covered under the register maintained under section 189 of the Act. The maximum and closing balance of the said loan is Rs 59,90,33,623 /- and Rs 58,20,09,861 / - respectively.

b) In our opinion, the rate of interest and other terms and conditions for such loan is prima facie, prejudicial to the interest of the Company.

c) In respect of the loan granted, the same is recoverable on demand and hence we cannot comment on regulatory of payment.

(iv) Internal Controls

In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls in respect of these areas.

(v) Public Deposits

According to the information and explanations given to us, the Company has not accepted deposits as per the directives issued by Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under.

(vi) Cost Records

In case of holding company the maintenance of cost records pursuant to the Rules made by the Central Government under section 148 (1) of the Companies Act, 2013 has been prescribed in respect of the class of the Company (Electricity industry). However, the Company is exempt from the maintenance of such records as the aggregate value of the machinery and plant installed as on the last date of the preceding financial year does not exceed the limits as specified for a small scale undertaking under the provisions of the Industries (Development and Regulation) Act 1951 (65 of 91) i.e. Rs 100 Lakh. In case of subsidiary company the Central Government has not prescribed maintenance of cost records for other subsidiaries under section 148 (1) of the Companies Act, 2013. Accordingly this clause is not applicable.

(vii) Statutory Dues

a) Undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service-tax, custom duty, excise duty, cess and other material statutory dues, as applicable, have not been regularly deposited with the appropriate authorities, though there has been a slight delay in a few cases. No undisputed amounts payable in respect thereof were outstanding as at the yearend for a period of more than six months from the date they became payable except Income Tax amounting to Rs 560,975and Service Tax amounting to Rs 11913

(b) There are no dues in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess that have not been deposited with the appropriate authorities on account of any dispute

(viii) Accumulated Losses

In our opinion, the Company's accumulated losses at the end of the financial year are more than fifty per cent of its net worth. Further, the Company has incurred cash losses of Rs 90,65,536 during the financial year covered by our audit and Rs.238,782,951 in the immediately preceding financial year.

(ix) Dues to Financial Institutions/Banks

The Company has not taken loan during the year under review.

(x) Guarantees given

As per the records verified by us and based on the explanations given to us, during the year the Company has not given any guarantee for loans taken by others from bank or financial institutions, the terms and conditions, whereof, are in our opinion prejudicial to the interest of the Company.

(xi) Application of Funds raised

According to the information and explanation given to us, in our opinion, no term loans were raised during the year under review.

(xii) Frauds

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

For Shyam Malpani & Associates

Chartered Accountants

Firm Registration No. 120438 W

Sd/-

Shyam Malpani

Place: Mumbai Proprietor

Dated: 14th November 2015 Membership No. F- 34171

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Mar 31, 2014

We have audited the attached financial statements of Entegra Limited (hereinafter referred to as the Company), comprising of the Balance Sheet as at 31st March 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended along with the Significant Accounting Policies and other explanatory information forming an integral part thereof.

II) 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 Section 211(3C) of the Companies Act, 1956 (hereinafter referred to as the Act), read with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. 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.

III) Auditors'' 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 of 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 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 opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall financial statement presentation.

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

Qualified Opinion

(i) Non availability of Confirmation for a loan amounting to Rs 2,750,000,000 from Central Bank of India (CBI) shown under the head Short term Borrowing as CBI has absolutely assigned all rights and interests in the financial assistance granted to the Company in favour of Edelweiss Asset Reconstruction Companywide Assignment Agreement dated 28.03.2014. Accordingly Edelweiss Asset Reconstruction Company (EARC) has become the secured lender and all rights title and interest of CBI have vested in EARC.

In our opinion and to the best of 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 Profit / Loss of the Company for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the Cash flows of the Company for the year ended on that date Emphasis of Matter We draw attention to

Note 3(b) which states that in respect of payable to a bank, in absence of formal communication from the bank, an interest amounting to Rs. 47,81,46,932 has been provided in the books in the current year and total interest liability on account of the said loan is Rs 1,46,90,56,211 based on management''s estimate and the final liability will be determined on conclusion of settlement with bank.

Note No. 37 of the financial statements, In respect of Deposit given to one of the party which is shown under the head Long term loans and advances amounting to Rs 20,00,00,000. The said deposit is given for occupying rent free area in the proposed newly constructed building. However the said project is still on hold by the developer but the management is hopeful of its performance in near future.

IV) Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we enclose in the Annexure a statement on the matters specified in paragraph 4 & 5 of the said Order, to the extent applicable to the Company during the year under review.

2. Further to our comments in the Annexure referred to in 1. above, as required by Section 227(3) of the Act, we report as follows:

(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, 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 Balance Sheet and Cash Flow Statement comply with the accounting standards referred to in sub- section (3C) of section 211 of the Act;

(e) Pursuant to Circular No. 8/2002 dated March 22, 2002 issued by the Department of Company Affairs, Ministry of Law, Justice & Company Affairs, Government of India, directors nominated by the Public Financial Institutions / Banks / Central & State Government are not liable to be disqualified for appointment as directors under the provisions of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956. In respect of other directors, on the basis of the written representations received from the directors, as on March 31, 2014 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report as under:

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

(b) The fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion, a substantial part of fixed assets has not been disposed off during the year. (ii) The Company does not have any inventory during the year under review.

(a) The Company has not granted any loan any loans to any party covered under the register maintained under section 301 of the Act.

(b) In our opinion, the rate of interest and other terms and conditions for such loan is not, prima facie, prejudicial to the interest of the Company.

(c) In respect of the loan granted, repayment of the principal amount is as stipulated, however the interest payment has not been regular.

(d) The overdue amount in respect of interest due on the loan granted is more than rupees one lakh and reasonable steps have not been taken by the Company for the recovery of such interest.

(e) The Company has taken a loan from one companies covered in the register maintained under section 301 of the Act. The maximum amount involved during the year was Rs. 260,723,456 and the year-end balance of loans taken from such party was Rs. 260,723,456.

(f) In our opinion, the rate of interest and other terms and conditions for such loan is not prima facie prejudicial to the interest of the Company.

(g) In respect of loans taken, the principal is repayable on demand and such loan is interest free.

(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls in respect of these areas.

(v) The Company has not entered into contracts or arrangements referred to in section 301 of the Act. Accordingly, the provisions of clause 4(v) of the Order are not applicable.

(vi) The Company has not accepted any deposits from the public within the meaning of sections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975.

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

(viii) The maintenance of cost records pursuant to the Rules made by the Central Government under section 209 (1)(d) of the Companies Act, 1956 has been prescribed in respect of the class of the Company (Electricity industry). However, the Company is exempt from the maintenance of such records as the aggregate value of the machinery and plant installed as on the last date of the preceding financial year does not exceed the limits as specified for a small scale undertaking under the provisions of the Industries (Development and Regulation) Act 1951 (65 of 91) i.e. Rs 100 Lakh.

(ix) ( a ) Undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service-tax, custom duty, excise duty, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, though there has been a slight delay in a few cases. No undisputed amounts payable in respect thereof were outstanding as at the year end for a period of more than six months from the date they became payable.

(b) There are no dues in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess that have not been deposited with the appropriate authorities on account of any dispute.

(x) In our opinion, the Company''s accumulated losses at the end of the financial year are less than fifty per cent of its net worth. Further, the Company has incurred cash losses of Rs 51,55,56,950 during the financial year covered by our audit and Rs. 63,10,68,430 in the immediately preceding financial year.

(xi) A s stated in Note 3(b) and for the reasons stated in paragraph 4(i) of our audit report, we are unable to comment on the extent of default in respect of period and amount payable to the bank in respect of the principal dues aggregating Rs. 275,00,00,000 Further, as explained in Note 3 (c) to the financial statements, the Company has filed an application with MPSIDC for agreeing the terms of closure against an outstanding loan, which is currently under evaluation and the Company expects that it would not be required to repay an amount exceeding the liability of Rs. 52,27,53,000, which is already provided in the books of account.

The Company has no dues to any debenture holders.

( x i i ) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4(xii) of the Order are not applicable.

(xiii) I n our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Accordingly, the provisions of clause 4(xiii) of the Order are not applicable.

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

(xv) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not, prima facie, prejudicial to the interest of the Company.

(xvi) In our opinion, the Company has applied the term loans for the purpose for which the loans were obtained.

(xvii) In our opinion, no funds raised on short-term basis have been used for long-term investment.

(xviii) During the year, the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Order are not applicable.

(xix) The Company has neither issued nor had any outstanding debentures during the year. Accordingly, the provisions of clause 4(xix) of the Order are not applicable.

(xx) The Company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4(xx) of the Order are not applicable.

(xxi) In our opinion, no fraud on or by the Company has been noticed or reported during the period covered by our audit.

For Shyam Malpani & Associates Chartered Accountants Firm Registration No. 120438 W

Sd/- Shyam Malpani Proprietor Membership No. F- 34171

Place : Mumbai, Date : 21st August 2014

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Mar 31, 2012

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

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

3. As required by the Companies (Auditor's Report) Order, 2003 (the 'Order') (as amended) is sued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 (the Act'), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Without qualifying our report we draw attention to;

i. Note 3(b) which states that in respect of payable to a bank, in absence of formal communication from the bank, an interest amounting to Rs. 56,85,97,912 has been provided based on management's estimate and the final liability will be determined on conclusion of settlement with bank.

ii. Note 38, in relation to the Company's registration as Core Investment Company as defined under the Guidelines issued by the Reserve Bank of India (RBI) vide its circular RBI/2010-11/360 DNBS (PD) CC No. 206/03.10.001/2010-11 dated 5 January 2011. The Company is in the process of seeking legal advice on the applicability of the Guidelines and extension of time for applying for registration.

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

a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 appears from our examination of those books;

c. The financial statements dealt with by this report are in agreement with the books of account;

d. On the basis of written representations received from the directors, as on 31 March 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 March 2012 from being appointed as a director in terms of clause(g) of sub-section (1) of section 274 of the Act;

e. In our opinion and to the best of our information and according to the explanations given to us, the financial statements dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act and give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, in the case of:

i) the Balance Sheet, of the state of affairs of the Company as at 31 March 2012; ii) the Profit and Loss Account, of the loss for the year ended on that date; and iii) the Cash Flow Statement, of the cash fl ows for the year ended on that date.

Annexure to the Auditors' Report of even date to the members of Entegra Limited, on the financial statements for the year ended 31 March 2012.

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report as under:

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

(b) The fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion, a substantial part of fixed assets has not been disposed off during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year

(b) 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.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) There is one company covered in the register maintained under section 301 of the Act to which the Company has granted unsecured loans. The maximum amount outstanding during the year was Rs. 14,06,29,253 and the year-end balance was Rs 2,24,65,576.

(b) In our opinion, the rate of interest and other terms and conditions for such loan is not, prima facie, prejudicial to the interest of the Company.

(c) In respect of the loan granted, repayment of the principal amount is as stipulated, however the interest payment has not been regular.

(d) The overdue amount in respect of interest due on the loan granted is more than rupees one lakh and reasonable steps have not been taken by the Company for the recovery of such interest.

(e) The Company has taken a loan from two companies covered in the register maintained under section 301 of the Act. The maximum amount involved during the year was Rs. 46,28,11,988 and the year-end balance of loans taken from such party was Rs. 38,95,45,187.

(f) In our opinion, the rate of interest and other terms and conditions for such loan is not prima facie prejudicial to the interest of the Company.

(g) In respect of loans taken, the principal is repayable on demand and such loan is interest free.

(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls in respect of these areas.

(v) The Company has not entered into contracts or arrangements referred to in section 301 of the Act.

Accordingly, the provisions of clause 4(v) of the Order are not applicable.

(vi) The Company has not accepted any deposits from the public within the meaning of sections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975. For the reasons stated in paragraph 4(H) of our audit report, we are unable to comment on defaults, if any, under directives issued by the 'Reserve bank of India.

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

(viii) The maintenance of cost records pursuant to the Rules made by the Central Government under section 209 (1)

(d) of the Companies Act, 1956 has been prescribed in respect of the class of the Company (Electricity industry). However, the Company is exempt from the maintenance of such records as the aggregate value of the machinery and plant installed as on the last date of the preceding financial year does not exceed the limits as specified for a small scale undertaking under the provisions of the Industries (Development and Regulation Act 1951 (65 of 91) i.e. Rs 100 Lakh.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service-tax, custom duty, excise duty, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, though there has been a slight delay in a few cases. No undisputed amounts payable in respect thereof were outstanding as at the year end for a period of more than six months from the date they became payable.

(b) There are no dues in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess that have not been deposited with the appropriate authorities on account of any dispute.

(x) In our opinion, the Company's accumulated losses at the end of the financial year are less than fifty per cent of its net worth. Further, the Company has incurred cash losses of Rs 54,21,53,217 during the financial year covered by our audit and Rs. 41,61,23,241 in the immediately preceding financial year.

(xi) As stated in Note 3(b) and for the reasons stated in paragraph 4(i) of our audit report, we are unable to comment on the extent of default in respect of period and amount payable to the bank in respect of the principal dues aggregating Rs. 2,75,00,00,000

Further, as explained in Note 3 (c) to the financial statements, the Company has fi led an application with MPSIDC for agreeing the terms of closure against an outstanding loan, which is currently under evaluation and the Company expects that it would not be required to repay an amount exceeding the liability of Rs. 55,27,53,000, which is already provided in the books of account.

The Company has no dues to any debenture holders.

(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. Accordingly, the provisions of clause 4(xii) of the Order are not applicable.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Accordingly, the provisions of clause 4(xiii) of the Order are not applicable.

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

(xv) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not, prima facie, prejudicial to the interest of the Company.

(xvi) In our opinion, the Company has applied the term loans for the purpose for which the loans were obtained.

(xvii) In our opinion, no funds raised on short-term basis have been used for long-term investment.

(xviii) During the year, the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Order are not applicable.

(xix) The Company has neither issued nor had any outstanding debentures during the year. Accordingly, the provisions of clause 4(xix) of the Order are not applicable.

(xx) The Company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4(xx) of the Order are not applicable.

(xxi) In our opinion, no fraud on or by the Company has been noticed or reported during the period covered by our audit.

For Walker, Chandiok & Co For Shyam Malpani & Associates

Chartered Accountants Chartered Accountants

Firm Registration No: 001076N Firm Registration No: 120438W

Sd/- Sd/-

Amyn Jassani Shyam Malpani

Partner Proprietor

Membership No: F – 46447 Membership No: F – 34171

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Mar 31, 2011

1. We have audited the attached Balance Sheet of Entegra Limited, (the 'Company') as at 31 March 2011, and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto (collectively referred as the 'financial statements'). 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 the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (the 'Order') (as amended), issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 (the Act'), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 appears from our examination of those books;

c. The financial statements dealt with by this report are in agreement with the books of account;

d. On the basis of written representations received from the directors, as on 31 March 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 March 2011 from being appointed as a director in terms of clause(g) of sub-section (1) of section 274 of the Act;

e. In our opinion and to the best of our information and according to the explanations given to us, the financial statements dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act and the Rules framed there under and give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, in the case of:

i) the Balance Sheet, of the state of affairs of the Company as at 31 March 2011;

ii) the Profit and Loss Account, of the loss for the year ended on that date; and

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

Annexure to the Auditors' Report of even date to the members of Entegra Limited, on the financial statements for the year ended 31 March 2011.

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report as under:

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

(b) The fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion, a substantial part of fixed assets has not been disposed off during the year.

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

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

(d) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) There are two companies covered in the register maintained under section 301 of the Act to which the Company has granted unsecured loans. The maximum amount outstanding during the year was Rs. 2,725.20 Lakh and the year-end balance was Rs 2,725.20 Lakh.

(b) In our opinion, the rate of interest and other terms and conditions of such loans are not, prima facie, prejudicial to the interest of the Company.

(c) Keeping in view the terms of the said unsecured loans, the payment of interest has been made applicable along with the repayment of principal which is on demand, there is no overdue interest or principal as at the close of the year.

(d) There is no amount overdue in respect of loans granted to companies, firms or other parties listed in the register maintained under section 301 of the Act.

(e) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clauses 4(iii)(f) and 4(iii)(g) of the Order are not applicable.

(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services.

(v) (a) The Company has not entered into contracts or arrangements referred to in section 301 of the Act. Accordingly, the provisions of clause 4(v) of the Order are not applicable.

(vi) The Company has not accepted any deposits from the public within the meaning of sections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of clause 4(vi) of the Order are not applicable.

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

(viii) The maintenance of cost records pursuant to the Rules made by the Central Government under section 209 (l)(d) of the Companies Act, 1956 has been prescribed in respect of the class of the Company (Electricity industry). However, the Company is exempt from the maintenance of such records as the aggregate value of the machinery and plant installed as on the last date of the preceding financial year does not exceed the limits as specified for a small scale undertaking under the provisions of the Industries (Development and Regulation) Act 1951 (65 of 91) i.e. Rs 100 Lakh.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service-tax, custom duty, excise duty, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, though there has been a slight delay in a few cases. No undisputed amounts payable in respect thereof were outstanding as at the year end for a period of more than six months from the date they became payable.

(b) There are no dues in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess that have not been deposited with the appropriate authorities on account of any dispute. The Company has deposited under protest the entire amount of income tax for AY 2001 -02, which is under dispute, together with the related interest thereon.

(x) In our opinion, the Company's accumulated losses at the end of the financial year are less than fifty per cent of its net worth. Further, the Company has incurred cash losses of Rs. 4,161.32 Lakh during the financial year covered by our audit and Rs 2,832.73 Lakh in the immediately preceding financial year.

(xi) According to the information and explanations given to us, the Company has been regular in meeting its interest payment and principal repayment obligations to its lenders except in 5 instances of interest payment, where amounts ranging from Rs 23.53 Lakh to Rs 29.04 Lakh were paid within 21 to 36 days of the due date. In respect of a loan where the interest and repayment terms are not stipulated, we are unable to comment.

Further, as explained in Note 5.4 of Schedule 17 to the financial statements, the Company has filed an application with MPSIDC for agreeing the terms of closure against an outstanding loan, which is currently under evaluation and the Company expects that it would not be required to repay an amount exceeding the liability of Rs. 5,527.53 Lakh, which is already provided in the books of account.

The Company has no dues to any debenture holders.

(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. Accordingly, the provisions of clause 4(xii) of the Order are not applicable.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Accordingly, the provisions of clause 4(xiii) of the Order are not applicable.

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

(xv) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not, prima facie, prejudicial to the interest of the Company.

(xvi) In our opinion, the Company has applied the term loans for the purpose for which the loans were obtained.

(xvii) In our opinion, no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Order are not applicable.

(xix) The Company has neither issued nor had any outstanding debentures during the year. Accordingly, the provisions of clause 4(xix) of the Order are not applicable.

(xx) The Company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4(xx) of the Order are not applicable.

(xxi) In our opinion, no fraud on or by the Company has been noticed or reported during the period covered by our audit.

For Walker, Chandiok & Co For Malpani & Associates

Chartered Accountants Chartered Accountants

Firm Registration No: 001076N Firm Registration No: 120438W

Sd/- Sd/-

per Khushroo B. Panthaky Shyam Malpani

Partner Proprietor

Membership No: F-42423 Membership No: F-34171

Place: Mumbai Place: Mumbai

Date: 24 May 2011 Date: 24 May 2011

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Mar 31, 2010

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

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

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

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

a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 appears from our examination of those books;

c. The financial statements dealt with by this report are in agreement with the books of account;

d. On the basis of written representations received from the directors, as on 31 March 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 March 2010 from being appointed as a director in terms of clause(g) of sub-section (1) of section 274 of the Act;

e. In our opinion and to the best of our information and according to the explanations given to us, the financial statements dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act and the Rules framed there under and give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, in the case of:

i) the Balance Sheet, of the state of affairs of the Company as at 31 March 2010;

ii) the Profit and Loss Account, of the loss for the year ended on that date; and

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



Annexure to the Auditors Report of even date to the members of Entegra Limited, on the financial statements for the year ended 31 March 2010.



Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report as under:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed

assets.

(b) The fixed assets have been physically verified by the management during the year and no material discrepancies were

noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion, a substantial part of fixed assets has not been disposed off during the year.

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

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clauses 4(iii) (b) to (c) of the Order are not applicable.

(d) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clauses 4(iii)(f) and 4(iii)(g) of the Order are not applicable.

(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services.

(v) (a) In our opinion, the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the Act have been so entered. (b) In our opinion, the transactions made in pursuance of such contracts or arrangements and exceeding the value of rupees five lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to prevailing market prices/rate at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of sections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of clause 4(vi) of the Order are not applicable.

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

(viii) The maintenance of cost records pursuant to the Rules made by the Central Government under section 209 (1)(d) of the Companies Act, 1956 has been prescribed in respect of the class of the Company (Electricity industry). However, the Company is exempt from the maintenance of such records as the aggregate value of the machinery and plant installed as on the last date of the preceding financial year does not exceed the limits as specified for a small scale undertaking under the provisions of the Industries (Development and Regulation) Act 1951 (65 of 91) i.e. Rs 10 million.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service-tax, custom duty, excise duty, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, though there has been a slight delay in a few cases. No undisputed amounts payable in respect thereof were outstanding as at the year end for a period of more than six months from the date they became payable.

(b) There are no dues in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess that have not been deposited with the appropriate authorities on account of any dispute. The Company has deposited under protest the entire amount of income tax for AY 2001-02, which is under dispute, together with the related interest thereon.

(x) In our opinion, the Companys accumulated losses at the end of the financial year are less than fifty per cent of its net worth.

Further, the Company has incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) The Company had originally accepted a One Time Settlement (OTS) from Madhya Pradesh State Industrial Development

Corporation (MPSIDC), which was communicated vide letter dated 3 July 2004 for settlement of outstanding dues in respect of a loan taken from MPSIDC. The amount has not been settled and as explained in Note 5.4 of Schedule - 17 to the financial statements for the year ended 31 March 2010, the Company is in the process of obtaining an approval for settlement under May, 2007 Scheme. The Company has recognized an aggregate liability in the books as at 31 March 2010 of Rs 5,527.53 Lakhs.

(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. Accordingly, the provisions of clause 4(xii) of the Order are not applicable.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Accordingly, the provisions of clause 4(xiii) of the Order are not applicable.

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

(xv) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not, prima facie, prejudicial to the interest of the Company.

(xvi) In our opinion, the Company has applied the term loans for the purpose for which the loans were obtained.

(xvii) In our opinion, no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Order are not applicable.

(xix) The Company has neither issued nor had any outstanding debentures during the year. Accordingly, the provisions of clause 4(xix) of the Order are not applicable.

(xx) The Company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4(xx) of the Order are not applicable.

(xxi) In our opinion, no fraud on or by the Company has been noticed or reported during the period covered by our audit.

For Walker, Chandiok & Co For Malpani & Associates

Chartered Accountants Chartered Accountants

Firm Registration No: 001076N Firm Registration No: 120438W



Sd/- Sd/- per Khushroo B. Panthaky Shyam Malpani

Partner Proprietor Membership No: F-42423 Membership No: F-34171



Place: Mumbai Place: Mumbai

Date: 23 August 2010 Date: 23 August 2010