1.  We have audited the attached Balance Sheet of Solar Industries
 India Limited as at 31st March 2011, the Profit and Loss Account and
 Cash Flow Statement of the Company for the year ended on that date
 annexed thereto, which we have signed under reference to this report.
 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 have conducted our audit in accordance with auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material 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 issued
 by the Central Government of India in terms of section 227 (4A) of the
 Companies Act, 1956, we enclose in the Annexure a statement on the
 matters specified in paragraphs 4 and 5 of the said Order. 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 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, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 (d) In our opinion, the Balance Sheet, Profit and Loss account and Cash
 Flow Statement dealt with by this report comply with the accounting
 standards referred to in sub-section (3C) of section 211 of the
 Companies Act, 1956.
 
 (e) According to the information and explanations given to us and on
 the basis of written representations from Directors taken on record by
 the Board of Directors, we report that none of the Directors are
 disqualified as on 31st March 2011 from being appointed as director
 under Section 274(1) (g) of the Companies Act, 1956.
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, and subject to our notes/observations
 brought out elsewhere in the report, the said accounts give the
 information required by the Companies Act, 1956, in the manner so
 required and give a true a 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, 2011;
 
 (b) in the case of the Profit and Loss Account of the Profit for the
 year ended on that date.
 
 (c) in the case of Cash Flow Statement, of the Cash flows for the year
 ended on that date.
 
 ANNEXURE
 
 i) a) The Company has maintained proper records showing full
 particulars including quantitative details and location of its fixed
 assets.
 
 b) The Management has physically verified the fixed assets at
 reasonable intervals and no material discrepancies are reported to have
 been observed on such verification as compared to book records.
 
 c) As per the information and explanation given to us on our enquiries
 the disposal of assets during the year was not substantial so as to
 have an impact on the operations of the Company, or affect its going
 concern.
 
 ii) a) The stocks of finished goods, work in process, stores, spare
 parts and raw materials have been physically verified by the Management
 during the year. In our opinion, the frequency of the verification is
 reasonable.
 
 b) In our opinion and according to the information and explanations
 given to us, the procedure of physical verification of the stocks
 followed by the Management were found reasonable and adequate in
 relation the size of the Company and the nature of its business.
 
 c) In our opinion and according to the information and explanations
 given to us, the company is maintaining proper records of inventory and
 the discrepancies noticed on verification between the physical stocks
 and the book stocks were not material in relation to the operations of
 the Company.
 
 iii) a) The Company has granted loan to companies covered in the
 register maintained under section 301 of the Companies Act, 1956, and
 the yearend balance of loan granted to such Companies was Rs. 7956.62
 Lacs.
 
 b) In our opinion, the rate of interest and other terms and conditions
 of such loan are prima facie not prejudicial to the interest of the
 Company.
 
 c) The Company has repaid the principal amounts as stipulated and has
 been regular in the payment of interest.
 
 d) There is no overdue amount of such loan granted to aforesaid
 company.
 
 e) The Company has taken loan from companies covered in the register
 maintained under section 301 of the Act, and the yearend balance of
 loans taken from such Companies was Rs. 1137.02 Lacs.
 
 f) In our opinion, the rate of interest and other terms and conditions
 of loans taken by the Company are prima facie not prejudicial to the
 interest of the Company.
 
 g) The Company is regular in repaying the principal amounts as
 stipulated and has been regular in the payment of interest.
 
 iv) In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system
 
 commensurate with the size of the Company and the nature of its
 business with regard to purchases of inventory, fixed assets and for
 the sale of goods & services. During the course of our audit, we have
 not observed any continuing failure to correct major weaknesses in
 internal control system.
 
 v) a) According to the information and explanations given to us, we are
 of the opinion that the particulars of contracts or arrangements
 referred to in Sec. 301 of the Act have been entered in the register
 maintained under that section.
 
 b) In our opinion and according to the information and explanation
 given to us, the transactions made in pursuance of such contracts or
 arrangements entered in the register maintained under section 301 of
 the Companies Act, 1956 have been made at prices which are reasonable
 having regard to the prevailing market prices at the relevant time.
 
 vi) The Company has not accepted fixed deposits from the public and
 consequently, the directives issued by the Reserve Bank
 of India; the provisions of Sections 58A, 58AA or any other relevant
 provisions of Act and the rules framed there under are not applicable.
 
 vii) In our opinion, the Company has an internal audit system
 commensurate with the size of the Company and nature of its
 business.
 
 viii) According to the information and explanations given to us, the
 Central Government has not prescribed the maintenance
 of cost records under clause (d) of sub-section (1) of Section 209 of
 the Companies Act, 1956 in respect of goods manufactured by the
 Company.
 
 ix) a) According to the information and explanations given to us and
 according to the records of the Company, the Company is regular in
 depositing undisputed statutory dues including Provident Fund,
 Income-tax, and Sales - tax, Service Tax, Excise Duty, Cess and any
 other statutory dues with the appropriate authorities. However, there
 are no arrears of such dues as at the close of the year concerned for a
 period of more than six months from the date they become payable.
 
 b) According to the information and explanation given to us, the dues
 of sales tax, income tax, customs, wealth tax, excise duty, cess which
 have not been deposited on account of disputes and the forum where the
 dispute is pending are as follows :-
 
 Name     Nature of dues / demands             Amt (Rs.      Forum where
                                                             dispute
 of the                                        in Lacs)      is pending
 statute
 
 Central  Excise duty on to and fro freight 
          collected on account of sales made      84.49        CESTAT
 Excise 
 Act      to CIL subsidiaries treating it as 
          additional consideration
 
          Excise duty on the benefits earned by 
          the company due to premature           146.26     Commissioner
          payment of sales tax deferral 
          liability (Appeals)
 
          Excise Duty on assessable value of 
          goods used in in-house testing          12.87    Supreme Court
 
          Cenvat Credit of Service tax paid on 
          tour operator services                   4.54     Commissioner
                                                            (Appeals)
 
         Cenvat Credit of Service tax paid on 
         workmen compensation                      7.19     Commissioner
                                                              (Appeals)
 
          Cenvat Credit of Service tax paid on 
          outward transportation availed           6.35     Commissioner
          as credit                                          (Appeals)
 
 Sales  
 Tax     Sales Tax on A.N.sale,Input Credit,CST 
         liability on non submission of           85.87     M.P.Commerci
                                                              al Tax
 Act      ''c'' form & Entry Tax liability                    Appellate
                                                              Board
 
 The Company neither has accumulated losses at the end of the financial
 year, nor incurred cash losses during the financial year covered by our
 audit and the immediately preceding financial year.
 
 xi) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment
 of dues to a financial institution and bank.
 
 xii) According to the information and explanations given to us the
 Company has not granted loans and advances on the basis
 of security by way of pledge of shares, debentures and other
 securities.
 
 xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
 benefit fund/ society. Therefore, the provisions of clause
 
 (xiii) of the Companies (Auditor''s Report) Order, 2003 are not
 applicable to the Company.
 
 xiv) The Company has maintained proper records of the transactions and
 contracts in respect of dealing of trading in shares,
 securities and other investments and timely entries have been made
 therein. All shares, securities and other investments have been held by
 the company in its own name.
 
 xv) In our opinion, the terms and conditions on which the Company has
 given guarantees for loans taken by others from banks
 or financial institutions are not prejudicial to the interest of the
 Company.
 
 xvi) To the best of our knowledge and belief and according to the
 information and explanations given to us, term loan availed
 by the Company were, prima facie, applied by the Company for the
 purposes for which the loans were obtained.
 
 xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the
 Company, we report that the no funds raised on short-term basis have
 been used for long-term investment.
 
 xviii) The Company has not made preferential allotment of shares during
 the year.
 
 xix) No debentures have been issued by the Company to create securities
 or charge.
 
 xx) The Company has not raised any money by public issue during the
 year.
 
 xxi) According to the information and explanations given to us no fraud
 on or by the Company has been noticed or reported
 during the course of our audit.
 
                                                  FOR GANDHI RATHI & CO.
                                                  CHARTERED ACCOUNTANTS 
 PLACE: NAGPUR
 
 DATED : 19th May, 2011                                   (C.N. RATHI)
                                                              PARTNER 
                                                         M. No. 39895
                                                Firm Reg. No. 103031W