a. Industry Structure and Developments

During the year under review , the demand across the globe has slowed down but the supply of SPV Cells has increased resulting in price war. The higher efficiency focus is expected to bring in results soon but it is not expected that it will bring any price increase. Most of the existing players in the PV cell manufacturing segment expanded their capacities. Also several new players entered the global PV cell manufacturing segment. It is clear that the market is looking at higher efficiency & reliability at lower cost.

The worldwide installations of solar power plants in 2015-16 is expected to be similar to that of 2014-15. Hence the module prices will not see an upsurge in near future; unless demand is created from unexpected quarters. It is expected that the prices will remain at the same level in the coming year as well. This is a Challenging period of consolidation. Few companies may find it difficult to survive and this may lead to dumping of modules at much lower prices; leading to price war and brssure on margins. The financial and technologically well equipped companies will survive .

A number of federal policies are being proposed to spur domestic demand for solar PV products have expired or reached their funding limits. More clarity is expected on domestic content, quality of domestic content w.r.t global content, Feed-in-Tariffs, benefit for investors, etc.

b. Opportunities and Threats Opportunities

a) Our strong brand positioning and state of the art manufacturing capabilities help us to leverage our position in domestic market in view of the mandatory use of domestic content under Jawaharlal Nehru National Solar Mission (JNNSM).

b) MNRE under the JNNSM has targeted a domestic manufacturing capacity of 10,000 MW by 2017. Appx. 3000 MW of Solar Power in expected to be installed in next 12 Months.

c) About 20 to 30 GW of solar installations are expected in the commercial parity space in the next 4 to 5years.

d) Apart from JNNSM policy, other State Governments are running equal policies for installation of solar power projects which will also generate huge demand of solar cells in India.

Threats

a) Solar module prices fell by about 80% (USD 3/watt to USD 0.3 watt) during 2014-2015.

b) Big players in India who may have a capability to install GW projects.

c) Non-utilization of our available manufacturing capacity.

d) Non-availability of full or part of any financial incentives which we have applied for.

e) Delays and cost overruns in expansion of our manufacturing facilities as a result of factors beyond our control.

f) The solar market is growing and competition is resulting decline in market share and margins.

g) 60% of raw material cost is silicon wafer and its manufacturing is dominated by large / limited players.

h) Continued dumping of PV Cells at cheap prices.

c. Future Outlook

According to International Monetary Fund (IMF), India is set to become the world's fastest growing economy by 2016 ahead of China . India will be an attractive destination for the Global Investments in the coming years. Under The domestic solar market is slated to explode with projects scheduled to be implemented under Jawaharlal Nehru National Solar Mission (JNNSM) and State Solar Mission. The overall domestic market is estimated to swell to the level of 20-30 GW by 2020. Indosolar, with the proposed up-gradation, the Company would move into top tier of the market segment, which not only provides insulation from the Chinese competition but also augments the pricing brmiums.

Solar power in India at current levels is already cheaper than electricity generated through diesel. Support from various state Governments for solar power industry is continuously increasing. Indian manufacturers of solar equipment are seeking anti-dumping duty on imports on the grounds that local industry is bleeding because of "ridiculously low" price of foreign equipment. Use of domestically manufactured 'cells and modules' has been made mandatory for all projects in the second batch of JNNSM under grid connected applications.

d. Risks and Concerns

Due to industry downturn and resultant fall in demand, the capacities of the Company are underutilized. The plant remained closed during the year due to considerable fall in selling prices. Despite low capacity utilization and production, the Company has to incur fixed costs.

The Company has implemented a Risk Management Policy to have a systematic process to assist in the identification , assessment , treatment and monitoring of risks .which provides effective tools to manage the identified risks.

e. Internal Control Systems and its Adequacy

The Company has a proper and adequate system of internal controls commensurate with its size to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and the transactions are authorized, recorded and reported correctly.

The internal control system is designed to ensure that all financial and other records are reliable for brparing financial statements and other data and for maintaining accountability of assets.

f. Financial Performance viz-a-viz Operational Performance

During the year under review, the Company's Net Sales were Rs. 291.93 Crores as against Rs. 15.39 Crores last year. EBITDA was Rs. 51.65 Crores as against Rs. (-) 26.01 Crores last year. The Company produced photovoltaic solar cells of 98.35 MWp as against 0.616 MWp last year.

g. Human Resource

The Company has adequate Human Resources which commensurate with the current volume of activity and is reviewed by the Management periodically and company would induct competent persons on increase / expansion of the activity.

h. Cautionary Statement

Statements in Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations may be "forward looking statements' within the meaning of applicable securities laws and regulations. Actual result could differ materially

On behalf of the Board of Directors

For INDOSOLAR LIMITED

GAUTAM SINGH KUTHARI

(Director) DIN: 00945195

H.R. GUPTA

(MANAGING DIRECTOR)

DIN: 00297722

Place : Greater Noida

Date : 21.08.2015