Suzlon Energy

1.  We have audited the attached balance sheet of Suzlon Energy
 Limited(Suzlonorthe Company)asatMarch31, 2009 and also the profit
 and loss account and the cash flow statement for the year ended on that
 date annexed thereto. These financial statements are the responsibility
 of the Companys management. Our responsibility is to express an
 opinion on these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether 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 (as
 amended) issued by the Central Government of India in terms of
 sub-section (4A)ofSection227ofthe Companies Act, 1956,weencloseinthe
 Annexure a statement on the matters specified in paragraphs 4 and 5 of
 the said Order.
 
 4.  Further to our comments in the Annexure referred to above,wereport
 that:
 
 i.  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;
 
 ii. 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;
 
 iii. The balance sheet, profit and loss account and cash flow statement
 dealt with by this report are in agreement with the books ofaccount;
 
 iv. 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 211ofthe Companies
 Act, 1956;
 
 v. On the basis of the written representations received from the
 directors, as on March 31, 2009, and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 March 31, 2009 from being appointed as a director in terms of clause
 (g) of sub-section (1)of section 274 of the Companies Act, 1956;
 
 vi. Without qualifying our opinion, we draw attention to Schedule O,
 Note 9 regarding non-provision of proportionate premium on redemption
 of US$ 50O Million Zero Coupon Convertible Bonds due 2012
 amountingtoRs.226.11 crores which has been considered by the Company as
 a contingent liability;
 
 vii. In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts give the information
 required by the Companies Act, 1956, 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, ofthe state of affairs of the
 Company as at March 31, 2009;
 
 b) in the case of the profit and loss account,ofthe loss for the year
 ended on that date; and
 
 c) in the case of the cash flow statement, of the cash flows for the
 year ended on that date.
 
 Annexure referred to in paragraph 3 of our report of even date Re:
 Suzlon Energy Limited
 
 1.  (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) Fixed assets have been physically verified by management during the
 year in accordance with a regular programme of verification which,in
 our opinion, is reasonable having regard to the size of the Company and
 the nature of its assets. Asinformed,nomaterial discrepancies were
 noticed on such verification.
 
 (c) There was no substantial disposal of fixed assets during the year.
 
 2.  (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
 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.
 
 3.  (a) The Company has granted an unsecured loan to a Company covered
 in the register maintained under section 301 of the Companies Act,
 1956.The maximum amount involved during the year was Rs.50crores and
 the year- end balance of loans granted to such parties was Rs.Nil.
 
 (b) In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions for
 such loans are not prima facie prejudicial to the interest of the
 Company.
 
 (c) The loans granted are repayable on demand. Where loans have been
 demanded, there payment is within the date demanded. The payment of
 interest has been regular.
 
 (d) Based on the information and explanations provided by management
 andourcommentsinclause3(c)above, there is no over due amount more than
 rupees one lakh of loans, granted to companies, firms or other parties
 listed in the register maintained under Section 301of the Companies
 Act, 1956.
 
 (e) The Company has taken a loan from a Company covered in the register
 maintained under section 301ofthe Companies Act, 1956. The maximum
 amount involved during the year was Rs. 148 crores and the year-end
 balance of loans taken from such party was Rs. Nil.
 
 (f) In our opinion and according to the information and explanations
 given to us, the rate of interest, and other terms and conditions for
 such loan are not prima facie prejudicial to the interest of the
 Company.
 
 (g) In respect of loans taken, repayment of the principal amount is as
 stipulated and payment of interest has been regular.
 
 4.  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, 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 control system in respect of these areas.
 
 5.  (a) According to the information and
 explanationsprovidedbymanagement,weareofthe opinion that the
 particulars of contracts or arrangements referred to in section 301 of
 the Act that need to be entered into the register maintained under
 section 301 have been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements exceeding value of Rupees five lakhs have been entered
 into during the financial year at prices which are reasonable having
 regard to the prevailing market prices at the relevant time.
 
 6.  The Company has not accepted any deposits from the public.
 Accordingly, the provisions of clause 4(vi) of the Companies (Auditors
 Report)Order, 2003(asamended) are not applicable to the Company.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size and the nature of its business.
 
 8.  We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules made by the Central Government for the
 maintenance of cost records under section 209(1) (d)ofthe
 CompaniesAct,1956, and are of the opinion that prima facie, the
 prescribed accounts and records have been made and maintained in
 respect of generation of electricity from wind power. We have not,
 however, made a detailed examination of the records with a view to
 determining whether they are accurate or complete.
 
 9.  (a) Undisputed statutory dues including provident fund, investor
 education and protection fund, employees state insurance, income tax,
 sales tax, wealth tax, service tax, customs duty, excise duty, cess
 have generally been regularly deposited with the appropriate
 authorities.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, investor
 education and protection fund, employees state insurance, income-tax,
 wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
 other undisputed statutory dues were outstanding, at the year end, for
 a period of more than six months from the date they became payable.
 
 (c) According to the information and explanations given to us, there
 are no dues of income tax, sales tax, wealth tax, service tax, customs
 duty, excise duty and cess which have not been deposited on account of
 any dispute.
 
 10.  The Company has no accumulated losses at the end of the financial
 year. It has incurred cash losses in the current financial year and has
 not incurred cash losses in the immediately preceding financial year.
 
 11.  Based on our audit procedures, and as per the information and
 explanations given by management and relevant confirmations from
 applicable banks and financial institutions, we are of the opinion that
 the Company has not defaulted in repayment of dues of principal or
 interest on loans, to a financial institution, bank or debenture
 holders.
 
 12.  According to the information and explanations given to us and
 based on the documents and records produced 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. Accordingly, the provisions of
 clause 4(xii) of the Companies (Auditors Report) Order, 2003 (as
 amended) are not applicable to the Company.
 
 13.  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 Companies (Auditors Report) Order, 2003 (as amended) are not
 applicable to the Company.
 
 14.  In our opinion, the Company does not deal or trade in shares,
 securities, debentures and other investments.  Accordingly, the
 provisions of clause 4(xiv) of the Companies (Auditors Report) Order,
 2003 (as amended) are not applicable to the Company.
 
 15.  According to the information and explanations given to us, the
 Company has given guarantee for loans taken by others from banks or
 financial institutions, the terms and conditions whereof in our opinion
 are not prima-facie prejudicial to the interests of the Company.
 
 16.  In our opinion and according to the information and explanations
 given to us, on an overall basis, the term loans have been applied for
 the purposes for which they were obtained.
 
 17.  According to the information and explanations givento us and on an
 overall examination of the balance sheet of the Company,wereport that
 no funds raised on short-term basis have been used for long-term
 investment.
 
 18.  The Company has not made any preferential allotment of shares to
 parties or companies covered in the register maintained under section
 301 of the Companies Act, 1956. Accordingly, clause 4(xviii) of the
 Companies (Auditors Report) Order, 2003 (as amended) are not
 applicable to the Company.
 
 19.  In respect of debentures issued by the Company and outstanding
 during the year, the Company,asatyear-end was in the process of
 creating a subservient charge as required by the terms of sanction with
 the lender, which has been completed post year-end.Further,the Company
 has unsecured Zero Coupon Convertible Bonds outstanding during the year
 on which no security or charge is required to be created.
 
 20.  We have verified that the end use of money raised by qualified
 institutional placements made in compliance with Chapter XIII-A of the
 SEBI (Disclosure and Investor Protection) Guidelines, 2000 and is as
 disclosed in the notes to the financial statements.
 
 21.  Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations givenbymanagement,wereport that no
 fraud on or by the Company has been noticed or reported during the
 course of our audit. However,anex-employeeofthe Company is suspected of
 having committed fraud arising out of certain commission payments made
 to entities alleged to be owned by him by suppliers of the Company and
 this matter is currently under investigation. The Company believes that
 it has not incurred any financial loss or liability based on the
 information available to it at this point of time
 
 SNK & Co.                                       S. R. BATLIBOI & Co.
 Chartered Accountants                          Chartered Accountants
 
 per Jasmin B. Shah                                  per Arvind Sethi
 Partner                                                      Partner
 Membership No. 46238                            Membership No. 89802
 
 Place : Mumbai                                        Place : Mumbai
 Date : June 27, 2009                            Date : June 27, 2009