Directors Report of KSK Energy Ventures Ltd.

Mar 31, 2018

Dear Shareholders,

The Directors have the pleasure in presenting the Eighteenth Annual Report together with the audited statements of accounts for the year ended 31 March 2018.

Performance Highlights

The financial performance of your Company for the year ended 31 March 2018 is summarized below:

Rs. in million

Particulars	Standalone		Consolidated
	2017-18	2016-17	2017-18	2016-17
Income	24.93	198.49	31,490.17	39,385.83
Operating expenditure	(654.61)	(112.78)	(25,247.91)	(26,595.20)
Operating profit	(629.68)	85.71	6,242.26	12,790.63
Add: Other income	139.79	377.27	780.28	1,633.64
Less: Finance cost	(1,380.60)	(1,333.89)	(21,842.80)	(21,945.11)
Less: Depreciation	(2.16)	(4.09)	(5,997.75)	(6,822.71)
Add: Exceptional items	(1,888.84)	-	2,200.37	6,055.20
Profit/(loss) before tax (PBT)	(3,761.50)	(875.01)	(18,617.63)	(8,288.35)
Tax expense / (income)	(73.83)	-	(1,603.72)	(1,360.85)
Net profit/(loss) after tax	(3,835.33)	(875.01)	(17,013.91)	(6,927.50)
Share of profit /(loss) of Associate	-	-	(111.15)	(68.71)
Other comprehensive income	(1.32)	0.06	(4.60)	1.34
Total comprehensive income	(3,836.65)	(874.95)	(17,129.66)	(6,994.87)
Earnings per share (EPS) (Rs.) Basic and Diluted	(9.05)	(2.06)	(33.64)	(15.00)

Standalone

During the year under review, income of the Company stood at Rs. 24.93 million. Further, there is increase in the operating expenditure, resulting in operating loss of Rs. 629.68 million. With high finance cost, increase in operating expenditure and decrease of other income, the Company reported a loss of Rs. 3,836.65 million.

Consolidated

During the year under review, the consolidated revenue of the group has decreased by Rs. 7,895.66 million as a result of lower than expected PLF at KSK Mahanadi and deconsolidation of Sai Wardha Power and VS Lignite. As a result, operating profit has also decreased by Rs. 6,547.58 million. With high finance cost and depreciation and lower other income, loss before tax for the year has gone up by Rs. 10,329.28 million and stood at Rs. 18,617.63 million.

Review of Operations

KSK Energy Ventures Limited (The Company) is a power project development Company. The Company carries out development, operations and maintenance of power projects in India. The Company operates power plants which include three coal based plants, one lignite based power plant, one natural gas based power plant and a solar based power project, having a combined operating capacity of 2629 MW.

Principal Power Assets

KSK’s principal power projects are as follows:-Operational power plants

- KSK Mahanadi, a 3,600 MW coal based power plant in Chhattisgarh - three units of600 MW each are under operation;

- Sai Wardha, a 540 MW coal based power plant in Maharashtra;

- VS Lignite, a 135 MW lignite based power plant in Rajasthan;

- Sai Lilagar (formerly Arasmeta), a 86 MW coal based power plant in Chhattisgarh;

- Sai Regency, a 58 MW natural gas based power plant in Tamilnadu and

- Sai Maithili, a 10 MW Solar power plant in Rajasthan.

During the year, 43 MW coal based power plant of Sitapuram in which the Company held 49% equity was taken over by Zuari Cement Limited, Holding Company of Sitapuram in line with completion of initial term of 10 years under the PPA of this captive power plant.

Material changes and commitments

The Lenders Consortium at KSK Mahanadi Power Company Limited (KSK Mahanadi) along with Lenders consortium at the Water and Railway infrastructure SPVs have invoked the shares pledged with them as security for the financial facilities. Consequent to the invocation of pledge at KSK Mahanadi, it ceased to be subsidiary of the Company and the same will substantially impact the financial position of the Company moving forward.

Further, there is no change in the nature of business of the Company.

Review of Business

The operational and financial performance of each of the power plants for the financial year 2017-18 has been outlined in the “Management Discussion and Analysis Report”.

Share Capital

The paid up equity share capital as on 31 March 2018 was Rs.4,239.86 million comprising of 42,39,85,744 (Forty Two Crore Thirty Nine Lakh Eighty Five Thousand and Seven Hundred Forty Four) equity shares of Rs.10/- each.

Subsidiaries / Joint Ventures / Associates

Details of major subsidiaries of the Company and their business operations during the year under review are covered in the Management Discussion and Analysis Report.

As per the provisions of Section 129 of the Companies Act, 2013 (hereinafter referred to as “Act”) read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the Subsidiary Companies/Associate Companies/Joint Ventures has been provided in Form AOC-1.

The consolidated financial statements of the Company which includes the results of its subsidiaries, associates and joint ventures are included in this Annual Report.

Pursuant to the provisions of Section 136 of the Act, the financial statements including consolidated financial statements are being made available on the website of the Company www.ksk.co.in. The financial statements of subsidiary companies will be available for inspection during business hours at the registered office of the Company and also on the website of the Company.

Policy for determining material subsidiaries of the Company is available on the website of the Company at the link: http://www.ksk.co.in/ourpolicies.php.

Companies which have become or ceased to be Subsidiaries, Joint Ventures or Associate Companies during the year

During the year, the lenders of Sai Wardha Power Generation Limite (Sai Wardha) acquired the majority equity control by invocation of shares pledged with them and resultantly Sai Wardha and its subsidiary Field Mining and Ispats Limited have ceased to be subsidiary of the Company. Zuari Cement Limited, Holding Company of Sitapuram Power Limited has taken over entire 49% shareholding held by the Company and in result it has ceased to be Joint Venture of the Company.

Further, after the end of the financial year project consortium lenders of KSK Mahanadi Power Company Limited (KSK Mahanadi), KSK Water Infrastructures Private Limited, Subsidiaries and RaigarhChampa Rail Infrastructure Limited, Associate Company have invoked majority of shares pledged with them as security for the financial facilities and as a result all three Companies and Sai Power Pte. Ltd. subsidiary of KSK Mahanadi have ceased to be Subsidiaries and Associate Company respectively.

Corporate Governance

Pursuant to SEBI (LODR) Regulations, 2015 (hereinafter referred to as “Listing Regulations”), a detailed report on Corporate Governance is given in this Annual Report. A certificate from the Statutory Auditors of the Company regarding compliance with conditions of Corporate Governance is attached to the Corporate Governance report.

Management Discussion and Analysis Report

A Management Discussion and Analysis report in terms of regulation 34 of Listing Regulations is provided in a separate section and forms an integral part of this Annual Report.

Directors and Key Managerial Personnel

Independent Directors & Non-Executive Directors

Mr. S.R. Iyer & Mr. Girish N Kulkarni, Independent Directors and Mr. Tanmay Das & Mr. K. Bapi Raju, Non-Executive Directors have resigned with effect from 05 February 2018. Mrs. Savita Jyoti, Mr. Anil Kumar Kutty and Mrs. K. Kusuma Mani Kumari, NonExecutive Directors have resigned with effect from 11 November, 2017, 09 April, 2018 and 30 May, 2018 respectively.

Mr. Abhay M. Nalawade and Ms. Alankrita Soni have been appointed as Additional Directors of the Company in the category of Independent Directors with effect from 05 February 2018 and 30 May 2018 respectively. Mrs. K. Kusuma Mani Kumari and Mr. K. Bapi Raju have been appointed as Additional Directors of the Company with effect from 05 February 2018 and 30 May 2018 respectively.

Mr. Abhay M. Nalawade, Ms. Alankrita Soni and Mr. K. Bapi Raju are proposed to be appointed as Directors under the provision of section 160 of the Act at the ensuing Annual General Meeting.

In accordance with the provisions of Section 152(6) of the Act, Mr. S. Kishore, Whole-time Director retires by rotation at the forthcoming Annual General Meeting and being eligible, offered himself for re-appointment.

Brief profiles of Mr. S. Kishore, Mr. Abhay M. Nalawade, Ms. Alankrita Soni and Mr. K. Bapi Raju are given in notice convening the Eighteenth Annual General Meeting for reference of shareholders.

During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company.

The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the applicable provisions of Section 149 of the Act and under Listing Regulations.

Key Managerial Personnel

Mr. V. Sambasiva Rao, Chief Financial Officer and Mr. M.S. Phani Sekhar, Company Secretary have resigned with effect from 30 May, 2018. Mr. Ranjith Kumara Shetty has been appointed as Company Secretary and Compliance Officer with effect from 30 May, 2018.

Meetings of the Board

The Board met five (5) times during the year. The details are given in Corporate Governance report that forms part of this Annual report.

Performance Evaluation

As per the provisions of the Act and Listing Regulations, the Board carried out annual evaluation of the Board’s performance, its Committees and individual Directors.

Board performance evaluation, evaluation of Committees and individual Directors is carried out through a questionnaire encompassing upon various areas that provide an insight and feedback into the functioning of the Board, its Committees, individual Directors and areas of development.

In a separate meeting of independent directors, performance of non-independent directors, performance of the Board as a whole, performance of the Chairman and quality, quantity and timeliness of flow of information between the Company management and the Board was evaluated.

Remuneration Policy

In terms of the provisions of Section 178(3) of the Act and Regulation 19 read with Schedule II Part D of Listing Regulations, the Nomination and Remuneration Committee is responsible for formulating the criteria for determining qualifications, positive attributes and independence of a Director.

The Nomination and Remuneration Committee is also responsible for recommending to the Board a policy relating to the remuneration of the Directors, Key Managerial Personnel and Senior Management.

The Remuneration Policy is annexed herewith as Annexure I and the same form part of this Report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith and marked as Annexure II.

Particulars of Employees

The particulars of employees as required to be disclosed pursuant to the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended is annexed herewith and marked as Annexure III to this Report.

Directors’ Responsibility Statement

In terms of Section 134(3)(c) and 134(5) of the Act, your Board of Directors to the best of their knowledge and ability confirm that:

- in the preparation of annual financial statements, the applicable accounting standards have been followed and there are no material departures;

- they have 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 loss of the Company for that period;

- proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- annual financial statements have been prepared on a going concern basis;

- they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

- proper systems are in place to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Audit Committee

The Audit Committee of the Company constituted in terms of Section 177(1) of the Act and Regulation 18 of the Listing Regulations comprises of - Mr. T.L. Sankar, Mr. Ahbay M. Nalawade and Mr. S. Kishore as on 31 March, 2018. Terms of reference, meetings and attendance particulars of the Audit Committee are included in the Corporate Governance Report forming an integral part of this Annual Report.

Corporate Social Responsibility Committee

KSK has been pursuing CSR activities long before they were made mandatory under the Act. The Group’s sustainability initiatives towards community are essentially focused on five thrust areas:

1. Education

2. Health and Family welfare

3. Sustainable development

4. Infrastructure development

5. Cultural and Community Support

In compliance with requirements of Section 135 of the Act, the Company has laid down a CSR Policy. The composition of the Committee, contents of CSR Policy and report on CSR activities carried out during the financial year ended 31 March, 2018 in the format prescribed under Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as Annexure IV. The CSR Committee has not met during the year.

Statutory Auditors

M/s. Jawahar and Associates, Chartered Accountants, Hyderabad, (ICAI Firm Registration No. 001281S) have been appointed as Statutory Auditors of the Company to hold office from the conclusion of the 17th Annual General Meeting held on 25 September, 2017 for 5 consecutive years till the conclusion of the 22nd Annual General Meeting of the Company in the calendar year 2022 (subject to ratification by the shareholders at each Annual General Meeting if so required under the Act).

Companies Amendment Act, 2017 omitted the first proviso to Section 139 of Companies Act, 2013 that requires ratification of appointment of auditor at every annual general meeting.

Explanation to Statutory Auditors’ Qualification / Comment on the Company’s financial statements

The Auditors’ Qualification has been appropriately dealt with in Note No. 35 and 36 of the Notes to the standalone audited financial statements and in Note No. 8 of the Notes to the consolidated audited financial statements. The Auditors’ Report is enclosed with the financial statements in this Annual Report.

Secretarial Audit Report

Pursuant to Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Mr. V. Pavana Srinivasa Rao, Practising Company Secretary, Hyderabad to undertake Secretarial Audit of the Company for the financial year 2017-18. The Secretarial Audit Report in form MR-3 received from him is annexed herewith as Annexure V to this Report.

There is no qualification, reservation, adverse remark or disclaimer by the Secretarial Auditor in his Secretarial Audit Report and hence no explanation or comments of the Board is required in this matter.

Cost Audit

The Company is not required to maintain cost records and cost audit as per section 148 of the Companies Act, 2013 and the rules framed thereunder.

Whistle Blower Policy/Vigil Mechanism

The Company has formulated a Whistle Blower Policy and has established a Vigil Mechanism for employees including Directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of Section 177(9) of the Act and Regulation 22 of Listing Regulations.

The whistle blower policy is available on the Company’s website at the link:http://ksk.co.in/pdfs/Whistle-Blower-Policy.pdf. Dividend

Your Directors have not recommended any dividend on equity shares for the year under review.

Transfer to Reserves

No amounts were proposed to be transferred to reserves for the year under review.

Deposits from Public

The Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014.

Details of significant and material orders passed by the Regulators or Courts or Tribunals

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

Internal Control Systems

Your Directors believes that the Company’s internal financial controls with reference to financial statements were adequate and effective during the financial year 2017-18.

Loans, Guarantees or Investments under Section 186 ofthe Act

Particulars of loans given, investments made, guarantees given and securities provided are detailed in notes to the financial statements.

Contracts and arrangements with Related Parties

The Board has approved a policy for Related Party Transactions which has been posted on the Company’s website at the web link http://ksk.co.in/ourpolicies.php

There are no materially significant related party transactions made by the company with related parties which may have potential conflict with interest of the company at large. As a matter of policy, your Company carries out transactions with related parties on an arms’ length basis.

Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 does not form a part of this report.

Further, the Company has not entered into any contract or arrangement or transaction with its related parties which is not at arm’s length during the financial year 31 March, 2018. Suitable disclosure as required by the Accounting Standard-18 (AS-18) and/or Indian Accounting Standards as applicable has been made in the notes to the financial statements.

Risk Management Policy

The Company’s policy for Risk Management is to apply best practice in identifying, evaluating and cost-effectively controlling risks to ensure that any residual risks are at an acceptable level. Whilst it is not possible to eliminate risk absolutely, effort is underway to actively promote and apply best practices at all levels and to all its activities, including its dealing with external partners.

Annual Return

As provided under Section 92(3) read with Section 134 of the Act, the annual return will be placed on the website of the Companyat the web link http://www.ksk.co.in/agm2018.php

Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Work place (Prevention, Prohibition and Redressal) Act, 2013.

There were no complaints received pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 for the year ended 31 March, 2018.

Details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

A. Conservation of Energy:

1) Steps taken or impact on conservation of energy: -N.A.

2) Steps taken by the Company for utilizing alternate sources of energy: -N.A.

3) The Capital investment on energy conservation equipments: -N.A.

B. Technology Absorption:

i. The efforts made towards technology absorption: NIL

ii. The benefits derived like product improvement, cost reduction, product development or import substitution: NIL

iii. Details of technology imported during the past 3 years:

No technology has been imported during the past 3 years.

a. The details of technology import: -NIL

b. The year of import: -NIL

c. Whether the technology has been fully absorbed: -NIL

d. If not fully absorbed, areas where absorption has not taken place and the reasons thereof: - NIL

iv. The expenditure incurred on Research and Development: -N.A.

C. Foreign Exchange Earnings and Outgo:

Acknowledgements

Your Directors would like to place on record their grateful appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government of India, State Government, Government Authorities, Customers, Vendors and Shareholders. Your Directors also wish to place on record their deep sense of appreciation for the services of the employees of the Company. We look forward to their continued support in the future.

On behalf of the Board

Sd/-

Hyderabad T.L. Sankar

Date: 11.08.2018 Chairman

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Mar 31, 2015

Dear Members,

The Directors have the pleasure in presenting the Fifteenth Annual Report together with the audited statements of accounts for the year ended 31st March 2015.

Performance Highlights

(INR Million)

Particulars Standalone

2014-15 2013-14

Income 435.26 479.76

Operating Expenditure (163.25) (114.56)

Operating Profit 272.01 365.20

Add: Other Income 0.97 7.26

Less: Finance Cost (379.21) (226.79)

Less: Depreciation and Amortisation (26.97) (10.48)

Less: Exceptional items - -

Profit/(loss) before tax (PBT) (133.19) 135.19

Tax (expense) / income 74.52 (37.69)

Net Profit/(loss) after Tax (58.67) 97.50

Earnings /(loss) per share (EPS) (Rs.) Basic and Diluted (0.26) 0.01

Particulars Consolidated

2014-15 2013-14

Income 23,804.34 21,118.01

Operating Expenditure (18,910.13) (15,746.22)

Operating Profit 4,894.21 5,371.79

Add: Other Income 423.70 1,365.52

Less: Finance Cost (10,449.73) (7,216.12)

Less: Depreciation and Amortisation (3,183.26) (2,929.73)

Less: Exceptional items (3.67) -

Profit/(loss) before tax (PBT) (8,318.75) (3,408.54)

Tax (expense) / income 4,623.50 1,527.61

Net Profit/(loss) after Tax (3,695.25) (1,880.93)

Earnings /(loss) per share (EPS) (Rs.) Basic and Diluted (8.01) (4.62)

Standalone:

During the year under review, the Company's income stood at INR 435.26 mn. Further, there is an increase in the operating expenditure. As a result, operating profit for the year decreased from INR 365.20 mn to INR 272.01 mn. With increase in finance cost, the Company reported a loss of INR 133.19 mn.

Consolidated:

During the year under review, the consolidated income of the Group stood at INR 23,804.34 mn. Given the current trading environment, while the underlying revenue compared to the previous year shows an increase, there has been a decrease in operating profit and an increase in the loss after tax due to the lower than expected PLF at Sai Wardha as well as single 600 MW unit operations at KSK Mahanadi owing to the transmission corridor constraints of national grid restricting actual generation and the resultant mismatches in meeting overall financing costs.

Review of Operations

KSK Energy Ventures Limited (KSK Energy) is a power project development Company. The Company carries out development, operations and maintenance of power projects in India. The Company operates power plants which include four coal based plants, one lignite-based power plant, one natural gas based power plant and a solar based power project, having a combined operating capacity of 2072 MW.

Principal Power Assets

KSK's principal power projects are as follows:- Operational power plants

* Sai Lilagar (formerly Arasmeta), a 86 MW coal based power plant in Chhattisgarh;

* Sai Regency, a 58 MW natural gas based power plant in Tamilnadu;

* Sitapuram, a 43 MW coal based power plant in Telangana;

* VS Lignite, a 135 MW lignite based power plant in Rajasthan;

* Sai Wardha Power, a 540 MW coal based power plant in Maharashtra;

* Sai Maithili Power, a 10 MW Solar power plant in Rajasthan; and

* KSK Mahanadi Power, a 3,600 MW coal based power plant in Chhattisgarh - two units of 600 MW each has been commissioned.

Power projects under active construction stage

* KSK Mahanadi, a 3,600 MW coal based power plant in Chhattisgarh - remaining 4 units of 600 MW each.

Review of Business

Further, the operational and financial performance of each of the power plants for the financial year 2014-15 has been outlined in the "Management Discussion and Analysis Report" section.

Share Capital

During the year under review, the Company has issued and allotted 4,04,04,040 Equity Shares under a Qualified Institutions Placement as per Chapter VIII of SEBI (ICDR) Regulations, 2009. Further, the Company has issued and allotted 8,08,08,080 warrants on preferential basis under preferential issue guidelines under Chapter VII of SEBI (ICDR) Regulations, 2009 and 92,14,700 share warrants have been converted into 92,14,700 equity shares during the year.

Subsidiaries / Joint Ventures / Associates

Details of major subsidiaries of the Company and their business operations during the year under review are covered in the Management Discussion and Analysis Report.

As per the provisions of Section 129 of the Companies Act, 2013 (hereinafter referred to as "Act") read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the Subsidiary Companies/Associate Companies/Joint Ventures has been provided in Form AOC-1.

The consolidated financial statements of the Company which includes the results of its subsidiaries are included in this Annual Report.

Pursuant to the provisions of Section 136 of the Act, the financial statements including consolidated financial statements are being made available on the website of the Company www.ksk.co.in.

Policy for determining material subsidiaries of the Company is available on the website of the Company at the link:http://www.ksk.co.in/pdfs/Policy-on-Material-Subsidiaries.pdf.

Companies which have become or ceased to be Subsidiaries, Joint Ventures or Associate Companies during the year

During the year, KSK Surya Photovoltaic Venture Limited has become subsidiary of the Company.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges, a Management Discussion and Analysis Report, Report on Corporate Governance and Auditors' Certificate are included in the Annual Report.

Directors and Key Managerial Personnel

Independent Directors & Non-Executive Directors

Pursuant to the provisions of Section 149 of the Act, which came into effect from 1stApril 2014, Mr. T.L. Sankar, Mr. S.R. Iyer and Mr. Girish Nilkanth Kulkarni were appointed as Independent Directors at the Annual General Meeting held on 27thSeptember 2014. The terms and conditions of appointment of independent directors are as per Schedule IV of the Act.

Mrs. Shubhalakshmi Panse has been appointed as an Additional Director of the Company in the category of Independent Director with effect from 30th March 2015. Mrs. Subhalakshmi Panse is proposed to be appointed as director under the provision of section 160 of the Act at the ensuing Annual General Meeting.

In accordance with the provisions of the Act, Mr. Tanmay Das, Director retire by rotation at the forthcoming Annual General Meeting and being eligible, offered himself for re-appointment.

During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company.

Pursuant to the provisions of Clause 49 of the Listing Agreement, brief particulars of the directors who are proposed to be appointed/re- appointed are provided as an annexure to the notice convening the Annual General Meeting.

Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Act, Mr. S. Kishore & Mr. K.A. Sastry were re-appointed as Whole-time Directors of the Company with effect from 1st April, 2015 and Mr. V. Sambasiva Rao has been appointed as Chief Financial Officer and Mr. M.S. Phani Sekhar has been appointed as Company Secretary and Compliance Officer.

Meetings of the Board

The Board met Nine (9) times during the year. The details are given in Corporate Governance report that forms part of this Annual report.

Independent Directors Declaration

The company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the applicable provisions of Section 149 of the Act and under Clause 49 of the Listing Agreement with the Stock Exchanges.

Performance Evaluation

Pursuant to the provisions of Act and Clause 49 of the Listing Agreement, the Nomination and Remuneration Committee (the "Committee") shall lay down the criteria for performance evaluation of Independent Directors and the Board and also provides that the Board is required to monitor and review Board Evaluation Framework.

Clause 49 of the Listing Agreement requires that the performance evaluation of all the independent directors shall be done by the entire Board of Directors excluding the director being evaluated. Further, Independent Directors are required to evaluate the performance of Non- Independent Directors and Board as a whole.

The following are some of the broad issues that are considered in performance evaluation:

Criteria for evaluation of Board and its Committees:

* Setting up of performance objectives and performance against them

* Board's contribution to the growth of the Company

* Whether composition of the board and its committees is appropriate with the right mix of knowledge and skills sufficient to maximise performance in the light of future strategy

* Board's ability to respond to crisis

* Board communication with the management team

* Flow of quality information to the Board

* Whether Board procedures are conducive to effective performance and flexible enough to deal with all eventualities

Criteria for evaluation of Independent Directors:

1. Demonstrates knowledge of the sector in which the company operates

2. Quality and value of their contributions at Board meetings

3. Contribution to development of strategy and risk management policy

4. Exhibits understanding of policies of the Company

5. Level of attendance and participation in the Board and Committee Meetings Criteria for evaluation of Non-Independent Directors:

1. Knowledge of industry issues and exhibition of diligence in leading the organization

2. Level of attendance at the Board and Committee meetings

3. Effectiveness in working with the Board of directors to achieve the desired results

4. Providing direction and support to the Board regarding its fiduciary obligations and governance role

5. Provides well-balanced information and clear recommendations to the Board as it establishes new policies

Remuneration Policy

In terms of the provisions of Section 178(3) of the Act and Clause 49(IV)(B)(1) of the Listing Agreement, the Nomination and Remuneration Committee is responsible for formulating the criteria for determining qualifications, positive attributes and independence of a Director.

The Nomination and Remuneration Committee is also responsible for recommending to the Board a policy relating to the remuneration of the Directors, Key Managerial Personnel and Senior Management.

The Remuneration Policy is annexed herewith as Annexure I and the same form part of this Report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith and marked as Annexure II.

Particulars of Employees

The particulars of employees as required to be disclosed pursuant to the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herwith marked as Annexure III to this Report.

Directors' Responsibility Statement

In terms of Section 134(3)(c) and 134(5) of the Act, your Board of Directors to the best of their knowledge and ability confirm that:

* in the preparation of annual accounts, the applicable accounting standards have been followed and there are no material departures;

* the directors have 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 loss of the company for that period;

* the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

* the directors have prepared the annual accounts on a going concern basis;

* the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

* the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Audit Committee

The Audit Committee of the Company constituted in terms of Section 177(1) of the Act and Clause 49 of the Listing Agreement comprises of Independent Directors namely Mr. S.R. Iyer (Chairman), Mr. T.L. Sankar (Member), Mr. Girish N. Kulkarni (Member) and Mrs. Shubhalakshmi Panse (Member).

Corporate Social Responsibility Committee

KSK has been pursuing CSR activities long before they were made manadatory under the Act. The group's sustainability initiatives towards community are essentially focused on five thrust areas:

1. Education

2. Health and Family welfare

3. Sustainable development

4. Infrastructure development

5. Cultural and Community Support

In compliance with requirements of Section 135 of the Act, the Company has laid down a CSR Policy. The composition of the Committee, contents of CSR Policy and report on CSR activities carried out during the financial year ended 31st March, 2015 in the format prescribed under Rule 9 of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure IV.

Statutory Auditors

M/s. Umamaheshwara Rao & Co, Statutory Auditors of the Company, hold office until the conclusion of the 17th Annual General Meeting to be held in the calendar year 2017 (subject to ratification by the shareholders at each Annual General Meeting). The Members year on year will be requested to ratify their appointment as Statutory Auditors and to authorise the Board of Directors to fix their remuneration. M/s. Umamaheswara Rao & Co have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-aapointment.

There is no qualification, reservation, adverse remark or disclaimer by the Statutory Auditors in their report and hence no explanation or comments of the Board is required in this matter.

Secretarial Auditor Report

In accordance with Section 204 of the Act and rules made thereunder, the Board has appointed Ms. Savita Jyoti, Practising Company Secretary to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended 31stMarch, 2015 is annexed herewith marked as Annexure V to this Report.

There is no qualification, reservation, adverse remark or disclaimer by the Secretarial Auditor in her Secretarial Audit Report and hence no explanation or comments of the Board is required in this matter.

Vigil Mechanism

The Company has formulated a Whistle Blower Policy and has established a Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and Clause 49 of the Listing Agreement with Stock Exchanges.

The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website at the link:http://ksk.co.in/pdfs/Whistle- Blower-Policy.pdf.

Dividend

Your Directors have not recommended any dividend on equity shares for the year under review.

As per the terms of issue, the Company had paid dividend on 8% Cumulative Redeemable Preference Shares of INR 10/- each issued to L&T Infrastructure Finance Company Limited. Further, the Company has also redeemed 33,000,000 8% Cumulative Redeemable Preference Shares of INR 10/- each issued to L&T Infrastructure Finance Company Limited.

Transfer of amount to Reserves

The net movement in the reserves of the Company for the current and previous financial year are as follows:

(INR Million)

Particulars 31.03.2015 31.03.2014

Securities Premium Account 4246.6 (57.85)

Capital Redemption reserve 330.00 330.00

Deposits from Public

The Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014.

Material changes and commitments

There are no material changes and commitments that affect the financial position of the Company from the financial year ended 31st March, 2015 to the date of signing of the Directors' Report. Further, there is no change in the nature of business of the Company.

Details of significant and material orders passed by the Regulators or Courts or Tribunals

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company's and its future operations.

Internal Control Systems

The Company's internal financial controls with reference to financial statements were adequate and effective during the financial year 2014-15.

Loans, Guarantees or Investments Under Section 186 of the Act

Particulars of loans given, investments made, guarantees given and securities provided are detailed in the financial statements.

Contracts and arrangements with Related Parties

The Company has not entered into any contract or arrangement or transaction with its related parties which is not at arm's length during financial year 2014-15 pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014. There were no materially significant transactions with related parties during the financial year which were in conflict with interest of the Company and hence, enclosing of Form AOC-2 is not required. Suitable disclosure as required by the Accounting Standard (AS-18) has been made in the notes to the financial Statements.

The Board has approved a policy for related party transactions which has been posted on the Company's website at the weblink- http://ksk.co.in/ourpolicies.php.

Risk Management Policy

The Company's policy for Risk Management is to apply best practice in identifying, evaluating and cost-effectively controlling risks to ensure that any residual risks are at an acceptable level. Whilst it is not possible to eliminate risk absolutely, effort is underway to actively promote and apply best practices at all levels and to all its activities, including its dealing with external partners.

Extract of Annual Return

As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure VI in the prescribed Form MGT-9, which form part of this report.

Details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

A. Conservation of Energy:

1) Steps taken or impact on conservation of energy: -N.A.-

2) Steps taken by the Company for utilizing alternate sources of energy: -N.A.-

3) The Capital investment on energy conservation equipments: -N.A.-

B. Technology Absorption:

i. The Efforts made towards technology absorption: NIL

ii. The Benefits derived like product improvement, cost reduction, product development or import substitution: NIL

iii. Details of technology imported during the past 3 years:

No technology has been imported during the past 3 years.

a. The details of technology import: -NIL

b. The year of import: -NIL

c. Whether the technology has been fully absorbed: -NIL

d. If not fully absorbed, areas where absorption has not taken place, and the reasons thereof: - NIL

iv. The expenditure incurred on Research and Development: -N.A.-

C. Foreign Exchange Earnings and Outgo:

(INR Million)

2014-15 2013-14

Exchange Earnings - -

Foreign Exchange Outgo - -

Acknowledgements

Your Directors would like to place on record their grateful appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government of India, State Government, Government Authorities, Customers, Vendors and Shareholders. Your Directors also wish to place on record their deep sense of appreciation for the services of the employees of the Company. We look forward to their continued support in the future.

On behalf of the Board

Sd/-

Hyderabad T.L. Sankar Date: 20th July, 2015 Chairman

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Mar 31, 2014

Dear Shareholders,

The Directors have the pleasure in presenting the Fourteenth Annual Report together with the audited statements of accounts for the year ended 31 March 2014.

PERFORMANCE HIGHLIGHTS (INR Million)

Particulars Standalone Consolidated

2013-14 2012-13 2013-14 2012-13

Income 479.76 491.55 21,118.01 22,070.20

Operating Expenditure (114.56) (165.69) (15,746.22) (13,886.25)

Operating Profit 365.20 325.86 5,371.79 8,183.95

Add: Other Income 7.26 0.54 1,365.52 1,006.96

Less: Finance Cost (226.79) (157.04) (7,216.12) (6,017.67)

Less: Depreciation (10.48) (16.64) (2,929.73) (2,264.68)

Profit before tax (PBT) 135.19 152.72 (3,408.54) 908.56

Tax expense (37.69) (19.91) (1,527.61) (764.96)

Net Profit/(Loss) after Tax 97.50 132.81 (1,880.93) 1,673.52

Earnings per Share (EPS) (Rs.)

a) Basic 0.01 0.11 (4.62) 3.79

b) Diluted 0.01 0.11 (4.62) 3.79

Standalone:

During the year under review, the Company''s income stood at Rs 479.66 mn. Further, there is a decrease in the operating expenditure. As a result, operating profit for the year increased from Rs 325.86 mn to Rs 365.20 mn. With increase in finance cost, the profit before tax reduced from Rs 152.72 mn to Rs 135.19 mn.

Consolidated:

During the year under review, the consolidated income of the Group stood at Rs. 21,118.01 mn. Further, during the year, operating expenses and finance cost experienced increase due to commissioning of first unit of 3600 MW KSK Mahanadi project resulting in a loss of Rs 3,408.54 mn. After providing for negative tax expense due to recognition of deferred tax asset on carry forward of losses. The Loss after tax stood at Rs 1,880.93mn as against Profit after tax of Rs 1,673.52 mn for the previous year.

DIVIDEND

Your Directors have not recommended any dividend on equity shares for the year under review.

As per the terms of issue, the Company had paid dividend on 8% Cumulative Redeemable Preference Shares of Rs. 10/- each issued to L&T Infrastructure Finance Company Limited. Further, the Company has also redeemed 33,000,000 8% Cumulative Redeemable Preference Shares of Rs. 10/- each issued to L&T Infrastructure Finance Company Limited.

REVIEW OF OPERATIONS

Your Company is a power project development company with track record of developing and operating power plants. The Company is established in 2001 to capitalize on the emerging opportunities in the Indian power sector and focus on developing, operating and maintaining power projects across various fuels, various territories and sizes.

The Company along with its subsidiaries and jointly controlled entities has an installed gross power generation capacity of 1472 MW of power and is currently involved in constructing 3600 MW KSK Mahanadi Power plant that has a 600 MW unit operational and another expected to be operational shortly taking aggregate operational capacity to 2000 MW. Additionally, the group has an exciting portfolio of planned projects across the fuel spectrum.

PRINCIPAL POWER ASSETS

KSK''s principal power projects are as follows:-

Operational power plants

Arasmeta, a 86 MW coal based power plant in Chhattisgarh;

Sai Regency, a 58 MW natural gas based power plant inTamilnadu;

Sitapuram,a43 MWcoal based power plant in Telangana;

VS Lignite, a 135 MW lignite based power project in Rajasthan;

SaiWardha Power, a 540 MWcoal based power project in Maharashtra;

Sai Maithili Power, a 10MW Solar Power project in Rajasthan; and

KSK Mahanadi Power, a 3,600 MW coal based power project in Chhattisgarh - first 600 MW has been commissioned.

Power projects under active construction stage

KSK Mahanadi, a 3,600 MWcoal based power project in Chhattisgarh- remaining 5 units of 600 MW each REVIEW OF BUSINESS

Further, the operational and financial performance of each of the power plants for the financial year 2013-14 has been outlined in the "Management Discussion and Analysis Report"section.

QUALIFIED INSTITUTIONAL PLACEMENT

The Company has successfully completed a Qualified Institutional Placement (QIP) of its Equity shares during June 2014. In terms of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, the issue price was fixed at Rs. 99.00 (including a premium of Rs. 89.00) per Equity share. 4,04,04,040 equity shares were allotted to the investors and an approximate amount of Rs. 400 Crores was raised through the QIP.

SUBSIDIARIES

Details of major subsidiaries of the Company and their business operations during the year under review are covered in the Management''s Discussion and Analysis Report.

The Ministry of Corporate Affairs, Government of India, vide General Circular No.: 2/20 dated February 8, 2011, has granted a general exemption to companies from attaching the Balance sheet, Statement of Profit & Loss and other documents referred to in Section 212(1) of the Companies Act, 1956 in respect of its subsidiary companies, subject to fulfillment of the conditions mentioned therein. Accordingly, the said documents are not being attached with the Balance Sheet of the Company. A gist of the financial performance of the subsidiary companies is contained in the report. The Annual Accounts of the subsidiary companies are open for inspection by any Member during the business hours at the Registered Office of the Company. The members, if desires may write to Company Secretary at the registered office of the Company for obtaining a copy of the financials of the subsidiaries.

The consolidated financial statements of the company, which includes the results of its subsidiaries, are included in this Annual Report.

DIRECTORS

In accordance with the provisions of the Companies Act, 2013, Independent Directors are required to be excluded while computing the number of directors to retire by rotation. As of the date of this Report, Mr. T.L. Sankar, Mr. S.R. Iyer and Mr. Girish N. Kulkarni are the Independent Directors liable to retire by rotation. In order to give effect to the applicable provisions of Sections 149 and 152 of the Act, it is proposed that these Directors be appointed as Independent Directors not liable to retire by rotation, to hold office as per the tenure of appointment mentioned in the Notice of the forthcoming Annual General Meeting of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the applicable provisions of Section 149 of the Act and under Clause 49 of the Listing Agreement with the Stock Exchanges.

In accordance with the provisions of the Companies Act, 2013, Mr. K. Bapi Raju, Director retire by rotation at the forthcoming Annual General Meeting and being eligible, offered himself for re-appointment.

Further, Mr. S. Kishore and Mr. K.A. Sastry whose term as Whole-time Directors will expire on March 31, 2015, are proposed to be reappointed as Whole-time Directors of the Company with effect from April 1, 2015 for a period of 5 years subject to the approval of the Members. Separate resolutions have been put up for consideration by the Members.

AUDITORS

M/s. Umamaheswara Rao & Co, Chartered Accountants, Hyderabad, Auditors of the Company will retire at the forthcoming Annual General Meeting of the Company and are eligible for re-appointment. It is proposed to re-appoint M/s. Umamaheswara Rao & Co., as Statutory Auditors of the Company from the conclusion of 14th Annual General Meeting till the conclusion of the 17th Annual General Meeting to be held in the year 2017, subject to the ratification of their appointment at every AGM. M/s. Umamaheswara Rao & Co., has under Section 141 of the Act, has furnished a certificate of its eligibility for re- appointment. The Members year on year will be requested to ratify their appointment as Auditors and to authorise the Board of Directors to fix their remuneration.

The Notes on Financial Statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreements with Stock Exchanges, a Management Discussion and Analysis Report, Report on Corporate Governance and Auditors'' Certificate, are included in the Annual Report.

COMPOSITION OF AUDIT COMMITTEE

The Audit Committee of the Company constituted in terms of Section 292Aof the Companies Act, 1956 and Clause 49 of the Listing Agreement consists of Mr. S.R. Iyer (Chairman), Mr. T.L Sankar (Member) and Mr. Girish N. Kulkarni (Member).

COMPOSITION OF CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Corporate Social Responsibility Committee of the Company constituted in terms of Section 135 of the Companies Act, 2013 consists of Mr. T.L. Sankar (Chairman), Mr. Anil Kumar Kutty (Member) and Mr. Tanmay Das (Member).

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 217 (2AA) of the Companies Act, 1956, your Directors hereby confirm that:

In the preparation of the Annual Accounts, the applicable accounting standards have been followed;

Appropriate accounting policies have been applied consistently. Judgment and estimates which are reasonable and prudent have been made so as to give true and fair view of the state of affairs of the Company as at the end of the financial yearand of the profit of the Company for the period;

Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

The annual accounts have been prepared on a going concern basis. PERSONNEL & INDUSTRIAL RELATIONS

Relations between employees and the management continued to be cordial during the year. KSK is committed in its quest to improve and maintain employee morale and satisfaction at all levels.

Particulars of Employees: The particulars of employees as required to be disclosed pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this Report. However, as per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the report and the accounts are being sent to all the shareholders excluding the aforesaid information. Any shareholder desirous of obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Conservation of Energy: Notapplicable

b) Technology Absorption: Not Applicable

ACKNOWLEDGEMENTS

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities, Customers, Vendors and Members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the excellent services of the executives, staff and the workers of the Company. We look forward to their continued support in the future.

On behalf of the Board

Sd/- Place: Hyderabad T.L. Sankar

Date :14th August 2014 Chairman

---

Mar 31, 2013

Dear Shareholders,

The Directors have the please representing The Thirteen Annual Report together with tar a dried statement of

STANDALONE Fl NANCIAL RESULTS

The standalone performance Company for the financial year ended 31 March 2013 is summarized bow:

(Rs.Laks)

Particulars 2012-13 2011-12

Income 402.09 667.66

Expenditure (322,73)

Depreciation (16.64) (32.57)

Exceptional Hems - (291.93)

PfOffl before Tan 152.72 97.00

Tax expense (19.91) (1.63)

Profil after Tax 1321 537

Earnings Per Sare

- basic and diluted 0.11 (0.24)

During die year under review, tan turnover of the Company 7 462 million as against 7 68fl million in the previous year. The Profile before lax amounted- to t153 nylon as eaglets for the previous year. The Profit after Tax la 7193. million 5 million In the previous year

CONSOLIDATED FINANCIAL R ESU LTS

During the year 2012-13, the Group has achieved an overall consolidated turnoveror 723,0 mllhon.

Ptrvcum 2012-13 2011-13

Income

Operating expenses (excluding

Interest and dnprectatlan}

Exceptional 923,52

Earnings before merest, tax and depreciation (EBITDA) 9,190.91 695.12

FnanceCosI (6017.67) (5,3.72)

Depreciation

Profit before Tan 906.56

Tax Income 764.96 359.97

Profit aner Tax 1,673.52 1.503,07

Earnings Per Snare basic and dimed 3.79 3.29

The consolidated income of the group has increased to T 23,077 million from T 20,59 millon registering of M%. The Estrous amounted lo f O.i9iminon u against 7 6,695 trillion lord the previous veer registering a growth of around G%. before tax has decreased 10 Rs. 909 rations from 71.143 million.

DIVIDEND

In order meet ten caplet requirements, for various ongoing projects, which will to the shareholder watt In the long term, the Defectors have not recommended any Dividend to the equity snarahoxdera for 1he financial year 2012-13.

As per the terms of issue and as approved by the shareholder, the Company had paid dividend en &% Cumulative Redeemable Preference Snares of 7 each Issued to LARs. Infrastructure Finance Company Limned.

REVIEW OF OPERATIONS

KSK Energy Ventures Mused (KSK) Is a power project development company experience In and operating multiple power plant* across fondle including conventional and non-conventional energy source*. KSK operates in the power generation bursts end at wed posit one with long-term fuel access la has power plants.

KSK presently ha* operational power plant* capable of generating 691 MW of power and actively revolved In construction of 3600 MW of KSK Mahanadi Power prefect. One unit of 600 MW of KSK Mahanadi Power Project was synch ionized win Natrona End dummy May 2013 and actively with respect to the remaining 5 units of this target, single location, green held project I* progressing walk

PRINCIPAL POWER ASSETS

KSKs current principal power projects are as footways: -

Operational power pi ants

O Ramset, a S3 MW coal based power plant In Chatty iGATE;

O Sal Regency, a 50 MW natural gas baaed power plant and 1 S.B MW wind Silepuram, a 43 MW coal based power plant in Andhra Pradesh;

O VS Lignite, a 135 MW Hits based power project In Rajasthan;

a ward, a 540 MW coil based power project m Maharashtra; and

o Say Main, a to Power protect in Rajas man;

o KSK Mahanea.e3.oTOMW coal abased power project

REVIEW OF BUSINESS

Further* the operational and financial performance for ins year 2012-13 or the various power punts has been outlined in the section Management Discussion and Analysis Report".

CORPORATE: GOVERNANCE

The Company''s Report on Corporate Governance Is attached and Tone part Of Hire Report. Certificate* from (he Statutory Auditors of the Company M/s. Umamahashwara Rao & Co., Charter ad Accountants confirming the compliance witty me conditions of Corporals Governance as 49 of Listing Agreement 15 attached to report

The Company has taken adequate sleeps for strict compliance with the Corporate Governance guidelines, as amended from time to lime.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A separate Management Discussion and Analysis Report also attached and forms part of this report.

PUBLIC DEPOSITS

Your Company has not accepted any deposits within the meaning at Section Slab of the Companies Ac1.1956 and the mm made inhere under during lea financial year under rev low.

DIRECTORS

In accordance with the provisions of the Compares. Act T95Q, anti me Company Articles of Association. Mr. Gins* N Kutkam. and Mr. Ami Kumar Kutty, Otreetccs retire by rotation at the forthcoming Annual General Meeting and being eligible, offer Ehemsatvea for re-appointment.

Subsidiaries

As at the end of the year the Company had the following subsidiaries:

1. KSK Framing India Private Limited

2. Kakinada Power Company Lorded

3. Arasmeta Captive Power Company Privale Limited

4. Wardha Power Company United

5. Field Mining and Ispats Lknrfced

6. Power Company Privete Llmitod

8. KSK Vdarbha Power Company Private Limited

9. KSK Narmada Power Company Private Limited

10. KSK OibOin Hydro Power Private United

11. Kameng Dam Hydro Power Limited

12. J R Power Gen Prftate Limited

13. KSK Upper Supansiri Hydro Energy Limited

14. KSK Dlnchang Power Company Private Limited

15. KSK Jameri Hydro Power Private Limited

16.TIIa Kamalb Hydro Electric Company Private Limited

17. Bhan Hydro Power Company Pnvate Limited

18. 5ei Power PTE. LTD.

CONSOLIDATED FINANCIAL STATEMENTS

Vide Genera.'' Circular No.: 2/20 doted February &, M11 corporate Adams. India has -granted a general exemption Id companies from attaching the Balance sheet. Statement of Profile A Less and other documents reJerredto m Sectional 2(1] of the Act In respect of its subsidiary companies, subject lo furfiamant of the conditions mentioned therein. Accordingly, the said documents are not being attached the Balance Sheet of the Company, a gist cJ this financial performance of the subsidiary com pan 1 he report. The Annual Accounts of the subsidiary companies are open lor inspection by any Member during me business hours, at me Registered Office of the Company. The members, if desires may write to Company Secretary at the registered office of the Company for obtaining a copy of the financials of the subsidiaries.

In Clause 32 of the Listing, Agreement the Exchanges and as prescribed by Accounting Standard 21 by the Government India under Section a of the Companies Act. 13&G, the Audited Consolidated Financial Statements duly audited by statutory auditors are annexed and forms pad of report,

AUDITORS

M/s. Umamah Beware Rao A Co, Chartered AccounEenle, Hyderabad. Auditors Of the Company win retire at the forthcoming Annual General Meeting of the Company and being esquire, offer Ihemsetues for re-appointment. As regard''s I he accounts and notes thereof. Ice same are setl explanatory and 4o not retire ludhcr explanation.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

a] Conservation of Energy: Not applicable

b] TuchrnjiosyAb50''p''ion:NotAdpKtable

c] Foreign Exchange Eamingsand Outgo:

B0ia-13 HM1-tt

Foreign Exchange Earnings

Foreign exchange Outgo - Outlet

PERSONNEL & INDUSTRIAL RELATIONS

Relations between employees and the management continued to be cordial during the year. KSK Iscommltled In Its quasi to Improve and maintain emcOoyea morale and satisfaction at an levels.

Particular* oi Employee*. The particulars of employees us requtfed to be disclosed pursuant to the provisions e'' Section of the Companies Acts 1956 read with Companies (Particulars OF Employees) Rules, 1975 as amended, forms part or this Report. However, as per the provisions Section 2l9f,1|(b) of the Companies Act. 195$, the report and the accounts are being sent lo all the snarehoioenj enduing, me aforesaid information. Any storehouse desirous or obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

In teems of Section 217 J2AA) of the Companies Act, 19£G, your Directors her epyconlinm the:

O In the preparation of the Annual Accounts, the applicable accounting standard''s Have been looked;

0 appropriated accounting policies have been applied consolingly. Judgments end estimates which are r&asonefcie and prudent have been made so as glue and fair via* of the stale flats or Company as at the end or the financial year and of profit of (he Company for (he period;

a proper and care has been liken maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1955 for the assets of Company and (or preventing and detecting fraud and

4 the annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENTS

Your Directors would like Id express their grateful apprecietlon for the assistance and received from 1h& Financial Banks, Government Author firts. Vendon and Members during the year under leview. Your Proctors also wish to place on record their Oeep sense of appreciation for the excellent services of the executives, staff and the workers of the Company, We look, forward to 1HeV continued support n the future.

On behalf of the Board

Piace: Hyderabad T.L Sank*

Date: 26 May 2013 Chairman

---

Mar 31, 2012

The Directors have the pleasure in presenting the Twelfth Annual Report together with the audited statements of accounts for the year ended 31 March 2012.

STANDALONE FINANCIAL RESULTS

The standalone financials are briefly summarized below:

(Rs. in Million)

2011-12 2010-11

Income 687.55 1,064.00

Expenditure (266.05) (495.29)

Depreciation (32.57) (81.26)

Exceptional items (291.93) -

Profit before tax 97.00 487.45

Tax expense 91.63 152.46

Profit after tax 5.37 334.99

Surplus brought forward from previous year 3,616.92 3,328.45

Amount available for appropriations 3,622.29 3,663.44

Preference dividend and dividend tax thereon 93.17 46.52

Surplus carried over 3,529.12 3,616.92

Earnings/(loss) Per Share (Rs.) - basic and diluted (0.24) 0.77

During the year under review, the turnover of the Company is Rs. 688 million as against Rs. 1,064 million in the previous year. The profit before tax amounted to Rs. 97 million as against Rs. 487 million for the previous year. The profit after tax is Rs. 5 million as against Rs. 335 million in the previous year. The decrease is mainly attributable to lower project development fee, as substantial part of the development activity of 3600 MW Chhattisgarh project has been completed. Moving forward, the Group performance would significantly be based on operational performance of the underlying power projects.

CONSOLIDATED FINANCIAL RESULTS

During the year 2011-12, the Group has achieved an overall consolidated turnover of Rs. 20,593 million. (Rs, in Million)

2011-12 2010-11

Income 20,592.79 11,592.64

Operating expenses (excluding interest and depreciation) (12,821.19) (5,880.94)

Exceptional items 923.52 -

Earnings before interest, tax and depreciation (EBITDA) 8,695.12 5,711.70

Finance cost (5,388.72) (2,560.55)

Depreciation (2,163.30) (1,223.81)

Profit before tax 1,143.10 1,927.34

Tax expense/(income) (359.97) (352.32)

Profit after tax 1,503.07 2,279.66

Minority interest 189.50 462.14

Profit for the year after minority interest 1,313.57 1,817.52

Surplus brought forward from previous year 5,919.35 4,148.35

Amount available for appropriations 7,232.92 5,965.87

Preference Dividend including Tax 93.17 46.52

Surplus carried over 7,139.75 5,919.35

Earnings per share (Rs.) - basic and diluted 3.28 4.75

The consolidated income of the Group has increased to Rs. 20,593 million from Rs. 11,593 million registering a growth of 78%. The EBITDA amounted to Rs. 8,695 million as against Rs.5,712 million for the previous year registering a growth of around 52%. The profit after tax has decreased to Rs. 1,503 million from Rs. 2,280 million in the previous financial year. The profit after tax is mainly decreased due to increase in financial costs as against the previous year.

DIVIDEND

The members are aware that the Company is currently involved in implementation of various projects and more specifically the 3600 MW power project through its downstream subsidiary which is one of the largest single location Greenfield project by private enterprise anywhere in India. In order to meet the investment requirements for various ongoing projects, which will contribute to the shareholders' wealth in the long term, the Directors have not recommended any Dividend to the equity shareholders for the financial year 2011 -12.

As per the terms of issue and as approved by the shareholders, the Company had paid dividend on 8% Cumulative Redeemable Preference Shares of Rs. 10/- each issued to L&T Infrastructure Finance Company Limited.

REVIEW OF OPERATIONS

KSK Energy Ventures Limited (KSK) is a power project development company in India with experience in developing and operating multiple power plants across India. KSK operates in the power generation business and is well positioned with long-term fuel access to its power plants.

KSK presently has operational power plants capable of generating 881 MW of power and further actively involved in construction of 3600 MW KSK Mahanadi Power project.

PRINCIPAL POWER ASSETS

KSKs current principal power projects are as follows:- Operational power plants

- Arasmeta, a 86 MW coal based power plant in Chhattisgarh;

- Sai Regency, a 58 MW natural gas based power plant and 18.9 MW wind power project in Tamilnadu;

- Sitapuram, a 43 MW coal based power plant in Andhra Pradesh;

- VS Lignite, a 135 MW lignite based power project in Rajasthan; and

- Wardha Warora, a 540 MW coal based power project in Maharashtra.

Power projects under construction

- KSK Mahanadi, a 3,600 MW coal based power project in Chhattisgarh.

REVIEW OF BUSINESS

Further, the operational and financial performance for the financial year 2011 -12 of each of the various power plants has been outlined in the section titled "Management Discussion and Analysis Report".

CORPORATE GOVERNANCE

The Company's Report on Corporate Governance is attached to and forms part of this Report. Certificate from the Statutory Auditors of the Company M/s. Umamaheshwara Rao & Co., Chartered Accountants confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

The Company has taken adequate steps for strict compliance with the Corporate Governance guidelines, as amended from time to time.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A separate Management Discussion and Analysis Report is also attached to and forms part of this report.

PUBLIC DEPOSITS

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under during the financial year under review.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, and the Company's Articles of Association, Mr. K Bapi Raju, Mr. Tanmay Das and Mr.S.R.Iyer Directors retire by rotation at the forthcoming Annual General Meeting and being eligible, offers themselves for re-appointment.

SUBSIDIARIES

As at the end of the year, the Company had the following subsidiaries:

1. KSK Electricity Financing India Private Limited;

2. Arasmeta Captive Power Company Private Limited;

3. Sai Regency Power Corporation Private Limited;

4. VS Lignite Power Private Limited;

5. Wardha Power Company Limited;

6. KSKWardha Infrastructure Private Limited;

7. KSK Wind Energy Private Limited;

8. KSK Vidarbha Power Company Private Limited;

9. Sai Maithili Power Company Private Limited;

10. KSK Narmada Power Company Private Limited;

11. KSK Dibbin Hydro Power Private Limited;

12. Kameng Dam Hydro Power Private Limited;

13. JR Power Gen Private Limited;

14. KSKMahanadi Power Company Limited;

15. KSK Upper Subansiri Hydro Energy Private Limited;

16. Field Mining and Ispats Limited;

17. KSK Dinchang Power Company Private Limited;

18. KSK Jameri Hydro Power Private Limited;

19. Tila Karnali Hydro Electric Company Private Limited

CONSOLIDATED FINANCIAL STATEMENTS

Vide General Circular No.: 2/20 dated February 8,2011, the Ministry of Corporate Affairs, Government of India has granted a general exemption to companies from attaching the Balance Sheet, Profit and Loss Statement and other documents referred to in Section 212(1) of the Act in respect of its subsidiary companies, subject to fulfillment of the conditions mentioned therein. Accordingly, the said documents are not being attached with the Balance Sheet of the Company. A gist of the financial performance of the subsidiary companies is contained in the report. The Annual Accounts of the subsidiary companies are open for inspection by any member / investor and the Company will make available these documents / details upon request by any Member of the Company on to any investor of its subsidiary companies who may be interested in obtaining the same. Further, the Annual Accounts of the subsidiary companies will be kept open for inspection by any investor at the Company's Head Office.

In terms of Clause 32 of the Listing Agreement with the Stock Exchanges and as prescribed by Accounting Standard 21 notified by the Government of India under Section 211 (3C) of the Companies Act, 1956, the Audited Consolidated Financial Statements duly audited by Statutory Auditors are annexed.

AUDITORS

M/s. Umamaheswara Rao & Co, Chartered Accountants, Hyderabad, Auditors of the Company will retire at the forthcoming Annual General Meeting of the Company and being eligible, offer themselves for re-appointment. As regards the accounts and notes thereof, the same are self explanatory and do not require further explanation.

COST AUDITORS

Pursuant to Section 233B of the Companies Act, 1956 read with the Order dated 2nd May, 2011 issued by Cost Audit Branch, Ministry of Corporate Affairs, the Company has appointed M/s. S.S. Zanwar & Associates, Cost Accountants, as Cost Auditors to audit the cost accounts in respect of financial year 2011 -12. The due date of filing of Cost Audit Report by the Cost Auditors is 180 days from the closing of respective financial year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Conservation of Energy: Not applicable

b) Technology Absorption: Not Applicable

c) Foreign Exchange Earnings and Outgo:

(Rs. in Million)

2011-12 2010-11

Foreign Exchange earnings - -

Foreign Exchange Outgo 0.62 4.97

PERSONNEL & INDUSTRIAL RELATIONS

Relations between employees and the management continued to be cordial during the year. The Human Resource Department is committed in its quest to improve and maintain employee morale and satisfaction at all levels.

Particulars of Employees: The particulars of employees as required to be disclosed pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report and the accounts are being sent to all the shareholders excluding the aforesaid information. Any shareholder desirous of obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 217 (2AA) of the Companies Act, 1956, your Directors hereby confirm that:

- in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

- appropriate accounting policies have been applied consistently. Judgment and estimates which are reasonable and prudent have been made so as to give true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for the period;

- proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- the annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENTS

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities, Customers, Vendors and Members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the excellent sen/ices of the executives, staff and the workers of the Company.

On behalf of the Board of Directors of

KSK Energy Ventures Limited

Place: Hyderabad T.L. Sankar

Date : 5 May 2012 Chairman

---

Mar 31, 2011

Dear Shareholders,

The Directors have the pleasure in presenting the Eleventh Annual Report together with the audited statements of accounts for the year ended March 31, 2011.

STANDALONE FINANCIAL RESULTS

The standalone financials are briefly summarized below:

(Rs. in million)

Particulars 2010-11 2009-10

Income 1,063.99 1,980.31

Expenditure 495.28 411.39

Depreciation 81.26 13.84

Profit before tax for the year 487.45 1,555.08

Provision for taxation including Deferred tax 152.46 284.60

Profit after tax 334.99 1,270.48

Surplus brought forward from previous year 3,328.44 2,057.96

Amount available for appropriations 3663.43 3,328.44

Preference dividend including tax 46.52 -

Surplus carried over 3,616.91 3,328.44

Earnings per share (Rs.) Basic and diluted 0.77 3.57

The turnover of the Company has decreased to Rs. 1,063.99 million from Rs. 1,980.31 million. The profit before tax amounted to Rs. 487.45 million as against Rs. 1,555.08 million for the previous year. The profit after tax has decreased to Rs. 334.99 million from Rs. 1,270.49 million. The decrease is mainly attributable to lower project development fee, as substantial part of the development activity of 3600 MW Chhattisgarh project has been completed during 2009-10. Moving forward, the Group performance would significantly be based on operational performance of the underlying power projects.

CONSOLIDATED FINANCIAL RESULTS

During the year 2010-11, the Company has achieved an overall consolidated turnover of Rs. 11,592.64 million.

(Rs. in million)

Particulars 2010-11 2009-10

Income 11,592.64 5,558.75

Operating expenses (excluding interest and depreciation) 5,880.93 1,864.00

Earnings before interest, tax and depreciation (EBITDA) 5,711.71 3,694.75

Interest and finance charges 2,560.55 1,246.38

Depreciation 1,223.81 259.73

Profit before tax for the year 1,927.35 2,188.64

Provision for taxation including Deferred tax (352.32) 275.93

Profit after tax 2,279.67 1,912.71

Minority Interest 462.14 161.64

Surplus brought forward from previous year 4,148.35 2,397.28

Amount available for appropriations 5,965.88 4,148.35

Preference dividend including tax 46.52 -

Surplus carried over 5,919.36 4,148.35

Earnings per share (Rs.) Basic and diluted 4.75 4.92

The consolidated income of the Company has increased to Rs.11,592.64 million from Rs.5,558.75 million registering a growth of 108%. The EBITDA amounted to Rs. 5,711.71 million as against Rs.3,694.75 million for the previous year registering a growth of around 55%. The profit after tax has increased to Rs.2,279.67 million from Rs.1,912.71 million registering a growth of around 19%. The growth is mainly attributable to increased operations and higher realizations for the year. -=<

DIVIDEND

The members are aware that the Company is currently involved in implementation of various projects and more specifically the 3600 MW power project through its downstream subsidiaries which is one of the largest single location greenfield project by private enterprise anywhere in India. In order to meet the investment requirements for various ongoing projects, which will contribute to the shareholders' wealth in the long term, the Directors have not recommended any Dividend to the equity shareholders for the financial year 2010-11.

As per the terms of issue and as approved by the shareholders, the Company had paid dividend on 8% Cumulative Redeemable Preference Shares of Rs. 10/- each issued to L&T Infrastructure Finance Company Limited proportionately from the date of allotment.

REVIEW OF OPERATIONS

KSK Energy Ventures Limited (KSK) is a power project development company in India with experience in developing and operating multiple power plants across India. KSK operates in the power generation business and is well positioned with long-term fuel access to various power plants.

KSK presently has operational power plants capable of generating 933 MW of power and further actively involved in construction of two projects aggregating an additional 3720 MW. The Group's initial foray and plans for independent initiatives into power generation from renewable energy sources marks the beginning of another growth initiative.

PRINCIPAL POWER ASSETS

KSKs current principal power projects are as follows:-

Operational Power Plants

- Arasmeta, a 86 MW coal based power plant in Chhattisgarh;

- Sai Regency a 58 MW natural gas based power plant and 18.9 MW wind power project in Tamil Nadu;

- Sitapuram, a 43 MW coal based power plant in Andhra Pradesh;

- VS Lignite, a 135 MW lignite based power plant in Rajasthan;

- Wardha Warora, a 540 MW coal based power plant in Maharashtra; and

- KSK Wind Energy, a 52 MW Wind power project in Tamil Nadu.

Power projects under construction (Initial / Progressed)

KSK Mahanadi, a 3,600 MW coal based power project in Chhattisgarh; and

KSK Dibbin, a 120 MW, run-of-the-river hydro electric power project in Arunachal Pradesh.

Planned power projects

Multiple thermal and hydro power projects across India.

REVIEW OF BUSINESS

Further, the operational and financial performance for the financial year 2010-11 of each of the power plants has been outlined in the section titled "Management Discussion and Analysis Report".

ISSUE OF PREFERENCE SHARES TO L&T INFRASTRUCTURE FINANCE COMPANY LIMITED

During the year under review, the Company has issued 100,000,000 (Hundred million) 8% Cumulative Redeemable Preference Shares (CRPS) of Rs.10/- each at par amounting to Rs. 1,000 million to L&T Infrastructure Finance Company Limited. Consequent to the allotment of CRPS, the paid-up share capital of the Company (equity & preference) has increased from Rs.3,726.30 million to Rs.4,726.30 million.

CORPORATE GOVERNANCE

The Company's Report on Corporate Governance is attached and forms part of this Report. Certificate from the Statutory Auditor of the Company M/s. Umamaheswara Rao & Co., Chartered Accountants confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

The Company has taken adequate steps for strict compliance with the Corporate Governance guidelines, as amended from time to time.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A separate Management Discussion and Analysis Report is also attached and forms part of this report.

PUBLIC DEPOSITS

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under during the financial year under review.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Mr. S.R. Iyer, Mr. Girish N Kulkarni and Mr. Anil Kumar Kutty, Directors retire by rotation at the forthcoming Annual General Meeting and being eligible, offers themselves for re-appointment.

Mr. Abhay M Nalawade and Mr. Henry Klein, Directors have resigned from the Board subsequent to closure of the financial year under review. The Board places on record its sincere appreciation for the services rendered by Mr. Abhay M Nalawade and Mr. Henry Klein during their tenure on the Board.

Mr. K. Bapi Raju ceased to be a Whole-time Director of the Company with effect from December 20, 2010. However, Mr. K. Bapi Raju continues as a Director of the Company.

Further, Mr. K. Bapi Raju was appointed as President – Corporate Affairs of KSK Mahanadi Power Company Limited a subsidiary of the Company w.e.f. January 1, 2011 at a remuneration of Rs. 90 Lakhs per annum. In terms of the provisions of Section 314(1)(a) of the Companies Act, 1956, Mr. K. Bapi Raju being a director of the holding Company shall not hold any office or place of profit except with the consent of the Company accorded by a special resolution at the general meeting held for the first time after the holding of such office or place of profit. In compliance with the above, a special resolution is put up for member's approval in the Notice of the Annual General Meeting of the Company.

SUBSIDIARIES

As at the end of the year, the Company had the following subsidiaries:

1. KSK Electricity Financing India Private Limited;

2. Arasmeta Captive Power Company Private Limited;

3. Sai Regency Power Corporation Private Limited;

4. VS Lignite Power Private Limited;

5. Wardha Power Company Limited;

6. KSK Wardha Infrastructure Private Limited (formerly KSK Technology Ventures Private Limited);

7. KSK Wind Energy Private Limited (formerly Bahur Power Company Private Limited);

8. KSK Vidarbha Power Company Private Limited;

9. Sai Maithili Power Company Private Limited;

10. KSK Narmada Power Company Private Limited;

11. KSK Dibbin Hydro Power Private Limited;

12. Kameng Dam Hydro Power Private Limited;

13. J R Power Gen Private Limited;

14. KSK Mahanadi Power Company Limited;

15. KSK Upper Subansiri Hydro Energy Private Limited;

16. Field Mining and Ispats Limited;

17. KSK Dinchang Power Company Private Limited;

18. KSK Jameri Hydro Power Private Limited; and

19. Tila Karnali Hydro Electric Company Private Limited.

CONSOLIDATED FINANCIAL STATEMENTS

Vide General Circular No.:2/2011 dated February 8, 2011, the Ministry of Corporate Affairs, GoI has granted a general exemption to companies from attaching the Balance Sheet, Profit and Loss Account and other documents referred to in Section 212(1) of the Act in respect of its subsidiary companies, subject to fulfillment of the conditions mentioned therein. Accordingly, the said documents are not being attached with the Balance Sheet of the Company. A gist of the financial performance of the subsidiary companies is contained in the report. The Annual Accounts of the subsidiary companies are open for inspection by any Member / Investor and the Company will make available these documents/ details upon request by any Member of the Company on to any investor of its subsidiary companies who may be interested in obtaining the same. Further, the Annual Accounts of the subsidiary companies will be kept open for inspection by any investor at the Company's Head Office and that of the subsidiary company concerned and would be posted on the website of the Company.

In terms of Clause 32 of the Listing Agreement with the Stock Exchanges and as prescribed by Accounting Standard 21 notified by the Government of India under Section 211(3C) of the Companies Act, 1956, the Audited Consolidated Financial Statements duly audited by Statutory Auditors are annexed.

AUDITORS

M/s. Umamaheswara Rao & Co, Chartered Accountants, Hyderabad, Auditors of the Company will retire at the forthcoming Annual General Meeting of the Company and being eligible, offer themselves for re-appointment. As regards the accounts and notes thereof, the same are self explanatory and do not require further explanation.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND

OUTGO

a) Conservation of energy : Not applicable

b) Technology absorption : Not Applicable

c) Foreign exchange earnings and outgo :

(Rs. in million)

2010 - 11 2009 - 10

Foreign exchange earnings - 25.84

Foreign exchange outgo 4.97 11.32

PERSONNEL & INDUSTRIAL RELATIONS

Relations between employees and the management continued to be cordial during the year. The Human Resource Department is committed in its quest to improve and maintain employee morale and satisfaction at all levels.

Particulars of Employees: The particulars of employees as required to be disclosed pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report and the accounts are being sent to all the shareholders excluding the aforesaid information. Any shareholder desirous of obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 217 (2AA) of the Companies Act, 1956, your Directors hereby confirm that:

- in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

- appropriate accounting policies have been applied consistently. Judgment and estimates which are reasonable and prudent have been made so as to give true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for the period;

- proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- the annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENTS

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities, Customers, Vendors and Members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the excellent services of the executives, staff and the workers of the Company.

On behalf of the Board of Directors,

KSK Energy Ventures Limited

T.L. Sankar

Chairman

Place: Hyderabad

Date: August 12, 2011

---

Mar 31, 2010

The Directors have the pleasure in presenting the Tenth Annual Report together with the audited statements of accountsfortheyearended March31,2010.

STANDALONE FINANCIAL RESULTS

The standalone financials are briefly summarized below:

(Rs. Million)

Particulars 2009-10 2008-09

Income 1,980.31 1,549.07

Expenditure 411.37 173.54

Depreciation 13.84 9.09

Profit before tax for the year 1,555.10 1,366.44

Provision for taxation including

Deferred tax 284.62 330.22

Profit after tax 1,270.48 1,036.22

Surplus brought forward

from previous year 2,057.96 1,021.74

Amount available for

appropriations 3,328.44 2,057.96

Earnings per share (Rs.)

Basic and diluted 3.57 3.10

The turnover of the Company has increased to Rs. 1,980.31 million from Rs. 1,549.07 million registering a growth of around 28%. The Profit before tax amounted to Rs. 1,555.10 million as against Rs. 1,366.44 million during the previous year registering a growth of around 14%. The Profit after tax has increased to Rs. 1,270.48 million from Rs. 1,036.22 million registering a growth of around 23%. The growth is mainly attributable to progress on the 3600 MW Chhattisgarh project.

CONSOLIDATED FINANCIAL RESULTS (Rs. Million)

Particulars 2009-10 2008-09

Income 5,660.52 4,992.18

Expenditure 3,212.13 2,848.62

Depreciation and amortization 259.73 246.43

Profit before tax for the year 2,188.66 1,897.13

Provision for taxation including

Deferred tax 275.95 442.88

Prof it after tax 1,912.71 1,454.25

Minority interest 161.64 95.11

Surplus brought forward from

previous year 2,397.28 977.05

Amount available for

appropriations 4,148.35 2,336.19

Earnings per share (Rs.)

Basic and diluted 4.92 4.07

The consolidated income of the Company has increased to Rs. 5,660.52 million from Rs. 4,992.18 million registering a growth of around 13%. The Profit before tax amounted to Rs. 2,188.66 million as against Rs.1,897.13 million during the previous year registering a growth of around 15%. The Profit after tax has increased to Rs.1,912.71 million from Rs.1,454.25 million registering a growth of around 32%. The growth is mainly attributable to increased operations and higher realizations for the year.

DIVIDEND

The members are aware that the Company is implementing various projects and especially the 3600 MW power project through its downstream subsidiaries and also participating in bids for new projects on a continuous basis. In order to meet the investment requirements for various ongoing projects, which will contribute to the shareholders wealth in the long term, the Directors have not recommended any dividend for the financial year 2009-10.

REVIEW OF OPERATIONS / STATUS OF PROJECTS OF SUBSIDIARIES AND JOINT VENTURE

COMPANIES

KSK Energy Ventures Limited (KSK) is a power project development Company in India, with experience in developing and operating multiple power plants across India. KSK operates in the power generation business and is well positioned with long-term fuel access to various power plants. The power projects are in various phases of operation and development, including operational power projects, power projects under construction and expected to be commissioned during the year, power projects under initial construction and power projects in the development and planning phases. The Company was established in 2001 to capitalize on the emerging opportunities in the Indian power sector and focus on developing, operating and maintaining power projects. The Company supplies power through a combination of long term and short term Power Purchase Agreements (PPAs) to a combination of industrial and state owned procurers and consumers in India.

- VS Lignite, a 135 MW lignite based power project in Rajasthan;

- Unit -1 of Wardha Warora, 135 MW coal based power project in Maharashtra; and

- Bahur Power, a 52 MW Wind Power based power project in Tamil Nadu.

Power projects under construction and scheduled for commissioning during the currentyear

- Unit - II, III & IV of Wardha Warora, aggregating to 405 MW coal based power project in Maharashtra; and

- Arasmeta Expansion, a 43 MW expansion of the existing Arasmeta power plant.

Power projects under initial construction

- KSK Mahanadi, a 3,600 MW coal based power project in Chhattisgarh.

PRINCIPAL POWER ASSETS

KSKs current principal power projects are as follows:-

Operational power plants

- Arasmeta, a 43 MW coal based power plant in Chhattisgarh;

- Sai Regency, a 58 MW combined cycle natural gas based power plant in Tamil Nadu;

- Sitapuram, a 43 MW coal based power plant in Andhra Pradesh;

Power projects under development

- KSK Dibbin, a 130 MW, run-of-the-river hydro electric power project in Arunachal Pradesh.

Planned power projects

Multiple thermal and hydro power projects across India.

Review of Business

Further, the operational and financial performance for the financial year 2009-10 of each of the various power plants has been outlined in the section titled "Management Discussion & Analysis Report".

RECLASSIFICATION OF AUTHORISED SHARE CAPITAL

During the year, the Authorised share capital of the Company was reclassified into 400,00,00,000 Equity Shares of Rs.10/- each and 103,15,00,000 Preference Shares of Rs.10/- each to facilitate issue of Preference Shares. The members had approved the reclassification of authorised capital through Postal Ballot process and the results of the Postal Ballot were announced by the Chairman on October 3,2009.

QUALIFIED INSTITUTIONAL PLACEMENT

The Company successfully completed a Qualified Institutional Placement (QIP) exercise during November, 2009. The offer opened on November 10, 2009 and closed on November 13,2009. In terms of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, the issue price was fixed at Rs. 194.50 (including a premium of Rs. 184.50) per Equity share. 2,65,25,714 equity shares were allotted to 36 investors on November 17, 2009 and a total amount of Rs. 5,159.3 million was raised through the QIP offer. The Company received the listing and trading approval for the shares allotted through QIP w.e.f. November 25, 2009 on both BSE & NSE. Subsequent to the QIP, the paid-up share capital of the Company has increased from Rs.346,10,47,400/-to Rs.372,63,04,540/-.

POSTAL BALLOT

During the year, the Company has conducted two postal ballot exercises to obtain members approval for, inter alia, reclassification of authorised share capital, issue of securities to Qualified Institutional Buyers (QIBs) and alteration of Articles of Association with respect to retirement of directors clause and common seal. The complete details of postal ballot exercises are provided in the Corporate Governance Report attached and forming part of this report.

CORPORATE GOVERNANCE

The Companys Report on Corporate Governance is attached and forms part of this Report. Certificate from the Statutory Auditor of the Company M/s. Umamaheswara Rao & Co., Chartered Accountants confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

The Company has taken adequate steps for strict compliance with the Corporate Governance guidelines, as amended from time to time.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A separate Management Discussion and Analysis Report is also attached and forms part of this report.

PUBLIC DEPOSITS

The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under during the financial year under review.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Mr. K. Bapi Raju, Mr. Henry Klein and Mr. Tanmay Das, Directors retire by rotation at the forthcoming Annual General Meeting and being eligible, offeres themselves for re-appointment.

Further, Mr. S. Kishore and Mr. K.A. Sastry whose term as Whole-time Directors expired on March 31, 2010, were reappointed as Whole-time Directors of the Company with effect from April 1, 2010 for a period of 5 years at the Board Meeting held on January 30,2010 subject to the approval of the Members. Separate resolutions have been put up for consideration by the Members.

SUBSIDIARIES

As at the end of the year, the Company had the following subsidiaries:

1. KSK Electricity Financing India Private Limited

2. Arasmeta Captive Power Company Private Limited

3. Sai Regency Power Corporation Private Limited

4. VS Lignite Power Private Limited

5. Wardha Power Company Limited

6. KSKTechnology Ventures Private Limited

7. Bahur Power Company Private Limited

8. KSK Vidarbha Power Company Private Limited

9. Sai Maithili Power Company Private Limited

10. KSKNarmada Power Company Private Limited

11. KSK Dibbin Hydro Power Private Limited

12. Kameng Dam Hydro Power Private Limited

13. J R Power Gen Private Limited

14. KSK Mahanadi Power Company Limited

CONSOLIDATED FINANCIAL STATEMENTS

As per Section 212 of the Companies Act, 1956, the Company is required to attach the Directors Report, Balance Sheet and Profit & Loss Account of its subsidiary companies to the Annual Report. The Ministry of Corporate Affairs, Government of India, vide its letter no.47/254/2010-CL-lll dated April 5,2010, has granted exemption to the Company from attaching the above documents of subsidiaries to the Annual Report of the Company for the financial year 2009- 10.

The Company will make available the annual audited accounts and related detailed information of the subsidiary companies upon request by any member of the Company. These documents will also be available for inspection during business hours at the registered office of the Company, also at the registered offices of the subsidiary companies and also on the website of the Company at www.ksk.co.in.

In terms of the above exemption, a summary of financial information of each of the subsidiary companies is provided as annexure to this report.

In terms of Clause 32 of the Listing Agreement with the Stock Exchanges and as prescribed by Accounting Standard 21 notified by the Government of India under section 211(3C) of the Companies Act, 1956, the Audited Consolidated Financial Statements are annexed.

SCHEME OF ARRANGEMENT BETWEEN WARDHA POWER COMPANY LIMITED AND KSK MAHANADI POWER COMPANY LIMITED

The shareholders are aware that Wardha Power Company Limited (Wardha), a subsidiary of the company, was developing two coal based Power Projects: one a 540 MW (4X135 MW) coal based Group Captive Power Project located at Warora, Maharashtra (Wardha-MH) and the other a 3600 MW (6X600 MW) also a coal based Power Project located at Nariyara, Chhattisgarh (Wardha-CG). Both the projects are geographically separate with project specific peculiarities.

Keeping in view the benefits and interests of the shareholders, creditors, employees and for better facilitation, effective management and considering the geographical location of the two projects, it was decided by the Board of Directors of Wardha Power Company Limited and KSKMahanadi Power Company Limited to demerge the 3600 MW Chhattisgarh Power Project into KSK Mahanadi Power Company Limited, also a subsidiary of the company, which was formed specifically for the purpose of implementation of the project, through demerger process subject to approval of the shareholders and confirmation by the Court.

The Honble High Court of Andhra Pradesh approved the Scheme of Arrangement vide its order dated February 26, 2010. The scheme came into effect from March 31,2010.

AUDITORS

M/s. Umamaheswara Rao & Co, Chartered Accountants, Hyderabad, Auditors of the Company will retire at the

forthcoming Annual General Meeting of the Company and being eligible, offer themselves for re-appointment. As regards the accounts and notes thereof, the same are self explanatory and do not require further explanation.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

(a) Conservation of Energy: Not Applicable

(b) Technology Absorption: Not Applicable

(c) Foreign Exchange Earnings And Outgo



Current Year Previous Year

March 31, 2010 March 31, 2009 (Rs. in Million) (Rs. in Million)

Foreign Exchange 82.26 1,810.68

Inflow

Foreign Exchange 1,011.32 2,001.83

Outgo

PERSONNEL & INDUSTRIAL RELATIONS

Relations between employees and the management continued to be cordial during the year. The Human Resource Department is committed in its quest to improve and maintain employee morale and satisfaction at all levels.

Particulars of Employees: The particulars of employees as required to be disclosed pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act,

1956, the report and the accounts are being sent to all the shareholders excluding the aforesaid information. Any shareholder desirous of obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

COMPOSITION OF AUDIT COMMITTEE

The Audit Committee of the Company constituted in terms of Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement consists of Mr. S.R. Iyer (Chairman), Mr. T.L. Sankar (Member), Mr. Abhay Nalawade (Member) and Mr. Girish Kulkarni (Member). Other details regarding the scope & meetings etc. are provided in the Report on Corporate Governance attached to and forming part of the Report.

DIRECTORSRESPONSIBILITY STATEMENT

In terms of Section 217 (2AA) of the Companies Act, 1956, your Directors hereby confirm that:

- in the preparation the of Annual Accounts, for the financial year 2009-10, the applicable accounting standards have been followed;

- appropriate accounting policies have been applied consistently. Judgement and estimates which are reasonable and prudent have been made so as to give true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for the period;

- proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- the annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENTS

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities, Customers, Vendors and Members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the excellent services of the executives, staff and the workers of the Company.

For and on behalf of the Board

KSK Energy Ventures Limited

T.LSankar

Hyderabad Chairman

May 29, 2010