Notes to Accounts of KSK Energy Ventures Ltd.

Mar 31, 2018

1 Corporate information

1.1 General information

KSK Energy Ventures Limited (‘the Company’), is a Public Company domiciled in India and incorporated under the provisions of Companies Act applicable in India. The Registered Office of the Company is located at Jubilee Hills, Hyderabad - 500 033, Telangana.

1.2 Nature of operations

KSK Energy Ventures Limited is primarily engaged in the development of private sector power projects

2 Basis of Preparation

2.1 Statement of Compliance

These financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 as amended notified under Section 133 of Companies Act, 2013, (the ‘Act’) and other relevant provisions of the Act.

The financial statements were authorised for issue by the Board of Directors on 14 June 2018.

2.2 Functional and presentation currency

These financial statements are presented in Indian Rupees (INR), which is also the Company’s functional currency. All amounts have been rounded-off to the nearest million, unless otherwise stated.

2.3 Basis of measurement

These financial statements have been prepared on historical cost basis except for the following items:

- Financial instruments that are designated as being at fair value through profit or loss account or through other comprehensive income upon initial recognition are measured at fair value;

- Net employee defined benefit (asset) / liability that is measured based on actuarial valuation.

2.4 Changes in accounting policy and disclosure

The accounting policies adopted are consistent with those of the previous financial year except for the adoption of new standards as of 1 April 2017, noted below.

The Company has adopted the following new standards and amendments to standards, including any consequential amendments to other standards, with a date of initial application of 1 April 2017.

IND AS 102 - Shares Based Payments: The amendments made to Ind AS 102 cover three accounting areas:

- Measurement of cash-settled share-based payments

- Classification of share-based payments settled net oftax withholdings and

- Accounting for a modification of a share-based payment from cash-settled to equity-settled.

These amendments affect the classification and/or measurement of the share-based payment arrangements and potentially the timing and amount of expense recognised for new and outstanding awards.

IND AS 7 - Statement of Cash Flows: The amendments made to Ind AS 7 require certain additional disclosures to be made for changes in liabilities arising from financing activities on account of non-cash transactions to improve information provided to users of financial statements about an entity’s financing activities.

These amendments do not have any material impact on the Company.

2.5 Standards and interpretations not yet applied

At the date of authorisation of these Consolidated financial statements, the following Standards and relevant Interpretations, which have not been applied in these Consolidated financial statements, were in issue but not yet effective

The Company has yet to assess the impact of above standards on the Consolidated financial statements. However the management does not intend to apply any of these pronouncements early.

2.6 Going Concern

The Company has incurred net loss during the current year as well in the previous years with resultant defaults in payment of interest and instalment dues to banks and financial institutions. Further as discussed at notes 35 and 36 to the financial statements, the underlying power generation assets also continue to face significant headwinds with resultant losses and defaulted in payment of interest and instalments dues to banks and financial institutions, along with the wider energy sector projects across India, thereby materially affecting the downstream investments and recoveries thereto. However, the company has been making appropriate representation and is in discussion with the respective lenders to find an appropriate resolution plan at each of the assets. The company continues to prepare the financial statements as going-concern.

3 Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with Ind AS requires management to make certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The principal accounting policies adopted by the Company in the financial statements are as set out above. The application of a number of these policies required the Company to use a variety of estimation techniques and apply judgment to best reflect the substance of underlying transactions.

The Company has determined that a number of its accounting policies can be considered significant, in terms of the management judgment that has been required to determine the various assumptions underpinning their application in the financial statements presented which, under different conditions, could lead to material differences in these statements.

The policies where significant estimates and judgments have been made are as follows:

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustments to the carrying amounts of assets and liabilities within the next financial year are discussed below:

- Estimation of fair value of acquired financial assets and financial liabilities: When the fair value of financial assets and financial liabilities recorded in the Balance sheet cannot be derived from active markets, their fair value is determined using valuation techniques including the discounted cash flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

- Un-collectability of trade receivables: Analysis of historical payment patterns, customer concentrations, customer credit-worthiness and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required.

- Taxes: Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates, for possible consequences of assessment by the tax authorities. The amount of such provisions is based on various factors, such as experience of previous tax assessment and differing interpretations of tax laws by the taxable entity and the responsible tax authority. The Company assesses the probability for litigation and subsequent cash outflow with respect to taxes.

- Deferred income tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgment is required to determine the amount of assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

- Gratuity benefits: The cost of defined benefit plans and the present value of the obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

Actual results can differ from estimates.

Judgement

In the process of applying the Company’s accounting policies, management has made the following judgements which have the most significant effect on the amounts recognised in the financial statements:

- Useful lives of depreciable assets: Management reviews the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets to the Company. Actual results, however, may vary due to technical obsolescence, particularly relating to software and information technology equipment.

The Company has tax losses of Rs. 2,678.99 (31 March 2017: Rs. 1,220.85) that are available for offset against future taxable profits. Deferred tax assets have not been recognised in respect of these losses as they may not be used to offset taxable profits . The Company evaluated and concluded that it is not probable that deferred tax assets on existing tax losses will be recovered fully. If the Company were able to recognise all unrecognised deferred tax assets, loss would decrease by Rs. 919.73 (31 March 2017: Rs. 422.51).Of the above, business losses expire at various dates ranging from 2019 to 2026.

Tax Reconciliation statement

Reconciliation between tax expense and the product of accounting profit multiplied by India’s domestic tax rate for the years ended 31 March 2018 and 31 March 2017 is as follows:

Note:

a The company has only one class of equity shares having a par value of Rs 10/- per share. The holders of equity shares are entitled to receive dividend as declared from time to time and are entitled to voting rights proportionate to their shareholding at the meeting of the shareholders.

1 The above rupee term loans from others are secured by first pari-passu charge by way of mortgage/hypothecation of all movable and immovable properties of Sai Lilagarh Power Generation Limited and KSK Surya photovoltaic Venture Limited, Mortgage of 95.48 HA land of VS Lignite Power Private Limited. Further these loans are secured by pledge of certain equity shares of the Company held by KSK Energy Limited, the holding company and corporate gurantee given by KSK Energy Limited and VS Lignite Power Private Limited, hence the same has been clasified as unsecured.

2 The long term rupee term loans are repayable in quarterly instalments with the last instalment of respective loans are payable up to November 2024. The long term borrowings carries an weightage average rate of interest of 16.26 % p.a.

3 Loans repayable on demand are secured by first pari-passu charge on fixed assets, current assets of the Company and corporate guarantee of KSK Power Ventur plc.

4 Some of the lenders have recalled the loan given to the Company and has issued notice for possession of underlying securities on account of non-payment of overdue amount. The Company would seek to take appropriate steps, for addressing the same. Notwithstanding of above, pending resolution, classification of borrowings into Non current and current is done based on original terms of sanctions.

Note :

1. The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

Discount rate: The discount rate is based on the prevailing market yields of indian government securities as at balance sheet date for the estimated term of the obligations

The Company has not received any information from suppliers or service providers, whether they are covered under the “The Micro Small and Medium Enterprises Development Act, 2006”. Disclosure relating to amount unpaid at the year end together with interest payable, if any, as required under the said Act are not ascertainable.

Trade payable are non-interest bearing and mainly includes amount payable to coal suppliers vendors in whose case credit period allowed is less than 12 months. Company usually opens usance letter of credit in favour of the coal suppliers. Since the average credit period is less than 12 months, the trade payable amount has been classified as current.

iii) Claims against the Company not acknowledged on debt Rs. 1,227.76 (31 March 2017: Rs. Nil)

iv) Service tax department has issued demand order to the Company for payment of service tax amounting to Rs 505.64 (31 March 2017: Rs. 505.64) (including penalty) relating to the disagreement on availment of Cenvat Credit for the period April 2008 to September 2010 and non -payment of service tax. Further, an amount of Rs. 26.88 (31 March 2017: Rs.26.88) has been paid against the demand under protest and the balance demand is stayed. However, the Company believes that the claims raised by the department are not tenable and the Company has filed an appeal against the said order before the CESTAT.

f) Equity held in subsidiaries and step down subsidiary have been disclosed under “Non current Investment”, (see note no 7).

g) The holding company has pledged certain shares held in the Company as security towards the borrowings of the Company.

h) Corporate Guarantees of Rs. 74,336.26 (31 March 2017 Rs.74,332.41), Bank guarantees of Rs. 2,743.12 (31 March 2017 Rs.2,848.68) and Letter of credit limits of Rs. Nil (31 March 2017 Rs.1,517.81) has been given by the Company on behalf of subsidiaries, fellow subsidiaries and associates.

i) The Company has obtained corporate guarantees of Rs. 8,039.00 (31 March 2017: Rs. 8,039.00) from step-up holding company Rs. 1,000.00 (31 March 2017: Rs.1,000.00) from holding company.

4 Financial risk managament objectives and policies

The Company’s principal financial liabilities comprises of loans and borrowings and trade and other payables. The main purpose of these financial liabilities is to raise finance for the Company’s operations. The Company has loans and receivables, trade and other receivables, and cash and short-term deposits that arise directly from its operations. The Company also hold investments designated at fair value through other comprehensive income, at amortised cost and at cost for investment in subsidiaries.

The Company’s risk management activities are subject to the management direction. The Management ensures appropriate risk governance framework for the Company through appropriate policies and procedures and that risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.

The Company is exposed to market risk, credit risk and liquidity risk.

Market risk

Market risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: interest rate risk, currency risk and other price risk, such as equity risk. Financial instruments affected by market risk include loans and borrowings, deposits, investment at fair value through at other comprehensive income.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates.

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.

The sensitivity analysis have been carried out based on the exposure to interest rates for instruments not hedged against interest rate fluctuation at the end of the reporting period. The said analysis has been carried on the amount of floating rate long term liabilities Outstanding at the end of the reporting period. A 50 basis point increase or decrease represents management’s assessment ofthe reasonably possible change in interest rates.

In case of fluctuation in interest rates by 50 basis points and all other variables were held constant, the Company’s profit before tax for the year would increase or decrease as follows:

Equity price risk

The Company’s investments in unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Board of Directors reviews and approves all equity investment decisions.

At the reporting date, the Company’s exposure to unlisted equity securities other than in subsidiaries was Rs. Nil (31 March 2017: 160.00)

Credit risk analysis

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily for trade and other receivables) and from its investing activities, including short-term deposits with banks and financial institutions, and other financial assets.

The carrying value of financial assets represents the maximum exposure for credit risk. The maximum exposure to credit risk of each class of financial assets at the reporting date was as follows:

The credit worthiness of customers / subsidiaries to which the Company grants credit in the normal course of the business is monitored regularly. The credit risk for liquid funds and other short-term financial assets is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

The Company’s maximum exposure for financial guarantees are noted in note 27.

Liquidity risk analysis

The Company’s main source of liquidity is its operating businesses. The treasury department uses regular forecasts of operational cash flow, investment and trading collateral requirements to ensure that sufficient liquid cash balances are available to service on-going business requirements. The Company manages its liquidity needs by carefully monitoring scheduled debt servicing payments for long-term financial liabilities as well as cash-outflows due in day-to-day business. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on the basis of a rolling 90 day projection. Long-term liquidity needs for a 90 day and a 30 day lookout period are identified monthly.

The Company requires funds both for short-term operational needs as well as for long-term investment programmes mainly in construction projects for its power plants.

The following is an analysis of the Company contractual undiscounted cash flows payable under financial liabilities at 31 March 2018:

Capital management

Capital includes equity attributable to the equity holders of the parent and debt.

The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value objectives include, among others:

- Ensure Company’s ability to meet both its long-term and short-term capital needs as a going concern;

- Constantly evolve multiple funding alternatives - equity and /or preference capital, senior and /or subordinated debt, corporate loan facilities to arrive at an optimal capital mix;

The Company maintains a mixture of cash and cash equivalents, long-term debt and short-term committed facilities that are designed to ensure the Company has sufficient available funds for business requirements.

5 Financial Instruments

Carrying amounts versus fair values

The fair values of financial assets and financial liabilities, together with the carrying amounts in the statement of financial position are as follows:

6 Fair value hierarchy

The table below analyses recurring fair value measurements for financial assets and financial liabilities. These fair value measurements are categorised in to different levels in the fair value hierarchy based on the inputs to valuation techniques used. The different levels are defined as follows.

- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

- Level 2: inputs other than quoted prices that is observable for the asset or liability, either directly or indirectly.

- Level 3: valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Company recognises transfers between levels of the fair value hierarchy as of the end of the reporting year during which the transfer has occurred. During the year ended 31 March 2018, there were no transfers between Level 1 and Level 2 fair value measurements.

Reconciliation of Level 3 fair value measurements of financial assets:

The Company recognises transfers between levels of the fair value hierarchy as of the end of the reporting year during which the transfer has occurred. During the year ended 31 March 2017, there were no transfers between Level 1 and Level 2 fair value measurements.

Reconciliation of Level 3 fair value measurements of financial assets:

Valuation techniques

Level 3 fair values for equity securities FVTOCI has been determined by using Comparable Company Analyses. This is a relative valuation technique which involves comparing that company’s valuation multiples to those of its peers. The multiples consider for the valuation is price to book value which is then adjusted for differences that are directly related to the characteristics of equity instruments being valued such as discounting factor for size and liquidity etc.

7 The company is primarily engaged in the business of providing project development and corporate support services. Accordingly there are no reportable segment as per Indian Accounting Standard -108 “Operating Segments”.

8 The Company has incurred an amount of Rs. Nil (31 March, 2017: Rs. 6.80) towards Corporate Social Responsibility (CSR) as per Section 135 of the Companies Act, 2013 and is included in other expenses.

9 The Company has made investment of Rs 28,771.44 million in KSK Mahanadi Power Company Limited (‘KMPCL’) in form of equity shares and advances . The Company has pledge certain shares with Power Finance Corporation Limited (‘PFC’) as Security Trustee for the financial assistance granted by lenders to KMPCL. Pursuant to the RBI Circular dated 12th February, 2018, Lenders decision on 27th March, 2018 to consider the change in management outside NCLT, during may 2018 lenders have accordingly invoked shares equivalent to Rs. 25,713.72 million in KMPCL held by the Company along with its subsidiaries.

Consequent to the above, the Company has lost control over KMPCL along with its subsidiaries i.e. KSK Water Infrastructures Private Limited (‘KWIPL’), Sai Power Pte Ltd (‘SPPL’) and associate i.e. Raigarh Champa Rail Infrastructure Private Limited (‘RCRIPL’) with effect from 27 March 2018. The Company continue to carry remaining Investment, advances and amount receivable pursuant to the invocation at carrying value and no provision has been considered in these financial statements by the management, as impact, if any, is currently unascertainable.

10 SWPGL Lenders on 28th April, 2017 have decided to implement change in Management and restructure the debt under “Outside Strategic Debt Restructuring Scheme (‘OSDR’) as per the Reserve Bank of India (RBI) guidelines and in October 2017 has invoked the pledge shares. However, RBI notification dated 12th February, 2018 repealed all debt restructuring schemes (including OSDR) therby necessitating resolution under the new circular

Consequent to the invocation of pledge shares, the Company has lost control over SWPGL and SWPGL ceased to be the subsidiary of the Company. The Company continue to carry balance investment, Loans and advances and amount receivable of Rs 2,993.15 million pursuant to the invocation at carrying value and no provision has been considered in these financial statements by the management, as impact, if any, is currently unascertainable.

11 Considering the wider developments across the energy sector in India , wherein even commissioned and operational projects are facing significant stress for resolution, the immediate demand for partially devloped project, especially various hydro and other projects that entail further development and construction risks, would attract very limited investor interest. Resultantly, the Company has re evaluated the recoverability of its investment in various Hydro, Solar and other projects which are under various stages of construction and implementation over the last few years. Based on such reassessment, Company has undertaken impairment of Property, Plant and Equipment (PPE), investments and other assets related to such projects and accordingly recognised an impairment loss of Rs. 1,888.84 million and disclosed the same as exceptional item in the financial statements.

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Mar 31, 2016

Onerous contract

Provisions for onerous contracts i.e. contracts where the expected unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it, are recognized when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event, based on a reliable estimate of such obligation."

5 Money received against share warrants

During the previous year, the Company has issued 80,808,080 Warrants of face value of Rs. 10 each to KSK Power Holdings Limited ("KPHL’’)with an option to apply for and be allotted equivalent number of equity shares of the face value of Rs10/- each at a premium of Rs 89/- each on a preferential basis. Pursuant to the same, during September 2014, Company has received an amount of Rs 2,006.97 from KPHL towards initial subscription amount [being 25% of total amount). During March 2015 and April 2015, pursuant to the exercise of option attached to these warrants, the company has received an aggregate amount of Rs. 806.16 as consideration towards issue and allotment of 10,951,280 equity shares of face value of Rs 10/- each (being balance 75% of the issue price of Re.99 per equity share). The Company has utilized the entire proceeds of the preferential issue towards meeting its capital expenditure / working capital requirements in accordance with the objects of the said issue.

Subsequent event:

KPHL has not exercised the right of conversion of balance 6,98,56,800 share warrants within stipulated time i.e. 17th April 2016. Accordingly, as per the terms of issue, the warrants has lapsed and Rs. 1,728.96 received as subscriber’s money towards the 6,98,56,800 share warrants will stand forfeited and will be accounted infinancialyear2016-17.

Note

1 The above rupee term loans from others are secured by first pari-passu charge by way of mortgage/hypothecation of all movable and immovable properties of Sai Lilagar Power Limited and KSK Surya photovoltaic Venture Limited, Mortgage of 95.48 HA land of VS Lignite Power Private Limited. Further these loans are secured by pledge of certain equity shares of the Company held by KSK Energy Limited, the holding company and corporate guarantee given by KSK Energy Limited and VS Lignite Power Private Limited, hence the same has been classified as unsecured.

2 The long term rupee term loans are repayable in quarterly installments with the last installment of respective loans are payable up to November 2024. The long term borrowings carries an weight age average rate of interest of 13.59% p.a.

3 Deferred payment liability is repayable in March 2023.

4 Loans repayable on demand are secured by first pari-passu charge on fixed assets, current assets of the Company and corporate guarantee of KSK Power Ventur pic and KSK Wind Energy Private Limited.

5 Loans against letter of credit are secured by first pari-passu charge on all assets of the Company.

The Company has not received any information from suppliers or service providers, whether they are covered under the "The Micro Small and Medium Enterprises Development Act, 2006". Disclosure relating to amount unpaid at the yearend together with interest payable, if any, as required under the said Act are not ascertainable.

iii] Service tax department has issued demand order to the Company for payment of service tax amounting to Rs 505.64 (including penalty] relating to the disagreement on a ailment of Convert Credit for the period April 2008 to September 2010 and non -payment of service tax. Further, an amount of Rs. 26.88 (31 Mar 2015: Rs.26.88) has been paid against the demand under protest and the balance demand is stayed. However, the Company believes that the claims raised by the department are not tenable and the Company has filed an appeal against the said order before the CESTAT.

iv] The Company has received a net demand of Rs. 280.26 (31 March 2015 :Rs 280.26] (including interest] from income tax department for Assessment Year 2010-11 pursuant to disallowance of certain claims / expenses against which an amount of Rs. 114.85 ( 31 March 2015: Rs. 114.85) has been paid under protest. Challenging the order, Company filed an appeal before CIT [appeals] who allowed the appeal on majority of the issues and consequently the assessing officer refunded the above amount paid under protest. The Company as well as the Department are in further appeal before the ITAT.

6 Related party Disclosures: a) Parties where control exists

Name of the party Relationship

K&S Consulting Group Private Limited Ultimate holding company

KSK Power Venture pic Step-up holding company

KSK Energy Limited Holding company

KSK Electricity Financing India Private Limited Subsidiary company

J R Power Gen Private Limited Subsidiary company

KSK Dibbin Hydro Power Private Limited Subsidiary company

Kameng Dam Hydro Power Limited Subsidiary company

KSK Narmada Power Company Private Limited Subsidiary company

KSK Wind Energy Private Limited Subsidiary company

KSK Vidarbha Power Company Private Limited Subsidiary company

KSK Surya Photovoltaic Venture Limited Subsidiary company

Sai Maithili Power Company Private Limited Subsidiary company

KSK Wardha Infrastructure Private Limited Subsidiary company

KSK Mahanadi Power Company Limited Subsidiary company

KSK Upper Subansiri Hydro Energy Limited Subsidiary company

KSK Dinchang Power Company Private Limited Subsidiary company

KSK Jameri Hydro Power Private Limited Subsidiary company

Tila karnali Hydro Electric Power Company Limited Subsidiary company

Bheri Hydro Power Company Private Limited Subsidiary company

Sai Regency Power Corporation Private Limited Subsidiary company

VS Lignite Power Private Limited Subsidiary company

Sai Wardha Power Limited Subsidiary company

Sai Power pte Limited Subsidiary company

KSK Wind Power Aminabhavi Chikodi Private Limited Subsidiary company

Sai Lilagar Power Limited (Arasmeta Captive Power Company Limited) Subsidiary company

Global Coal Sourcing Pic Subsidiary company

Field Mining and Ispats Limited Subsidiary company

b) Parties where significant influence exists and where the transactions have taken place during the period Name of the party Relationship

Sitapuram Power Limited Joint venture

KSK Mineral Resources Private Limited Fellow subsidiary

KSK Energy Company Private Limited Fellow subsidiary

KSK Green Energy pte Ltd Fellow subsidiary

KSK Water Infrastructures Private Limited¹ Associate

Raigarh Champa Rail Infrastructure Private Limited* Associate

KSK Energy Resources Private Limited Fellow subsidiary

Ill Loans to employees as per Company''s policy are not considered.

* The above loans & advances to subsidiary fall under the category of loans & advances in the nature of loans where there is no repayment schedule and are repayable on demand.

^A Excludes interest accrued.

f) Equity held in subsidiaries and step down subsidiary have been disclosed under "Non current Investment", (see note no 12).

g] The holding company has pledged certain shares held in the Company as security towards the borrowings of the Company.

h) Corporate Guarantees of Rs. 40,930.,97 (31 March 2015 Rs.44,195.06], Bank guarantees of Rs. 3,386.60 (31 March 2015 Rs.3,783.75] and Letter of credit limits of Rs. 1,444.20 (31 March 2015 Rs.1,766.66] has been given by the Company on behalf of subsidiaries and fellow subsidiaries.

i] Corporate Guarantees of Rs. 9,039.00 (31 March 2015 Rs.10,300.00] has been given by step-up holding and holding Company on behalf of the Company.

7 The company is primarily engaged in the business of providing project development and corporate support services. Accordingly there are no reportable segment as per accounting standard 17 notified under the Companies Act, 2013.

8 Expenditure incurred on Corporate Social Responsibility (CSR)

As per Section 135 of the Companies Act, 2013 the Company is required to spend a minimum amount of Rs 1.03 towards CSR activities for the year ended 31 March 2016 and an amount of Rs 10.00 was spent during the year.

9 In the opinion of board, any of the assets other than fixed assets and non-current investment have a value on realization in the ordinary course of business at least equal to the amount at which they are stated on the Balance Sheet.

10. Previous year figures have been regrouped and reclassified wherever necessary to conform to the current year classification.

¹

Fellow subsidiary up to 29 March 2016

c) Key Management personnel Name of the party Relationship

Mr. S. Kishore Whole-time Director

Mr. K. A. Sastry Whole-time Director

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Mar 31, 2015

1. Corporate Information

KSK Energy Ventures Limited ("KSKEVL" or the "Company"), was incorporated on February 14, 2001 and is primarily engaged in the development ownership and operation & maintenance of private sector power projects predominantly through its subsidiaries and joint venture. KSKEVL focused its strategy on the private sector power development market, undertaking entire gamut of development, investment, construction of power plant with supplies initially to heavy industrials operating in India and now branching out to cater to the needs of utilities and others in the wider Indian power sector.

2. Share Capital

During the year ended 31 March 2015, the Company has raised an amount of Rs 4,000 millions by issuing 40,404,040 equity shares of Rs 10/- each at a premium of Rs 89 to Qualified Institutional Buyers ("QIBs") through qualified institutions placement. The Company has raised the funds for investment in subsidiaries and Joint ventures, for meeting its capital expenditure and working capital requirement and for general corporate purpose.

3. Money received against share warrants

During the year, the Company has issued 80,808,080 Warrants of face value of Rs. 10 each to KSK Power Holdings Limited ("KPHL") with an option to apply for and be allotted equivalent number of equity shares of the face value of Rs 10/- each at a premium of Rs 89/- each on a preferential basis. Pursuant to the same, during September 2014, Company has received an amount of Rs 2,006.97 million from KPHL towards initial subscription amount (being 25% of total amount). During the March 2015, pursuant to the exercise of option attached to these warrants, the company has received an aggregate amount of Rs.681.88 million as consideration towards issue and allotment of 9,214,700 equity shares of face value of Rs 10/- each (being balance 75% of the issue price of Rs.99 per equity share). The Company has utilized the entire proceeds of the preferential issue towards meeting its capital expenditure / working capital requirements in accordance with the objects of the said issue.

4.Discount rate: The discount rate is based on the prevailing market yields of indian government securities as at balance sheet date for the estimated term of the obligations

5.Expected rate of return on planned assets: This is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

6. Contingent liabilities and commitments :

a) Contingent liabilities :

Year ended

31 March 2015 31 March 2014

i) Bank guarantees and letter of credits 3,732.36 5,814.84 outstanding

ii) Corporate guarantees outstanding 32,882.93 24,759.97

iii) Service tax department has issued demand order to the Company for payment of service tax amounting to Rs 505.64 million (including penalty) relating to the disagreement on availment of Cenvat Credit for the period April 2008 to September 2010 and non -payment of service tax. Further, an amount of Rs. 26.88 million ( 31 Mar 2014: Rs.25.88 million) has been paid against the demand under protest and the balance demand is stayed. However, the Company believes that the claims raised by the department are not tenable and the Company has filed an appeal against the said order before the CESTAT.

iv) The Company has received a net demand of Rs. 280.30 million (31 March 2014 :Rs 280.30 million) (including interest) from income tax department for Assessment Year 2010-11 pursuant to disallowance of certain claims / expenses. Challenging the order, Company preferred an appeal before CIT (appeals). Further, an amount of Rs. 114.85 million ( 31 Mar 2014: Rs. 114.85 million) has been paid against the demand under protest. During the current year, the CIT (Appeals) has disposed - off the appeal allowing majority of the claims made by the Company. Further the department has gone for appeal before the ITAT against the order passed by the CIT (Appeals). The Company is in process for submissions to defend the order of the CIT (Appeals).

7. Related party Disclosures:

a) Parties where control exists

Name of the party Relationship

KSK Power Venture pic Step-up holding company

KSK Energy Limited Holding company

KSK Electricity Financing India Private Subsidiary company Limited

J R Power Gen Private Limited Subsidiary company

KSK Dibbin Hydro Power Private Limited Subsidiary company

Kameng Dam Hydro Power Limited Subsidiary company

KSK Narmada Power Company Private Limited Subsidiary company

KSK Wind Energy Private Limited Subsidiary company

KSK Vidarbha Power Company Private Limited Subsidiary company

KSK Surya Photovoltaic Venture Limited Subsidiary company

Sai Maithili Power Company Private Limited Subsidiary company

KSK Wardha Infrastructure Private Limited Subsidiary company

KSK Mahanadi Power Company Limited Subsidiary company

KSK Upper Subansiri Hydro Energy Limited Subsidiary company

KSK Dinchang Power Company Private Limited Subsidiary company

KSK Jameri Hydro Power Private Limited Subsidiary company

TiLa karnaLi Hydro Electric Power Company Subsidiary company Limited

Bheri Hydro Power Company Private Limited Subsidiary company

Sai Regency Power Corporation Private Limited Subsidiary company

VS Lignite Power Private Limited Subsidiary company

Sai Wardha Power Limited Subsidiary company

Sai Power pte Limited Subsidiary company

Field Mining Ispats Limited Subsidiary company

Arasmeta Captive Power Company Limited Subsidiary company

(formerly known as Arasmeta Captive Power Company Private Limited)

b) Parties where significant influence exists and where the transactions have taken place during the year

Name of the party Relationship

Sitapuram Power Limited Joint venture

KSK Water Infrastructures Private Limited Fellow subsidiary

KSK Mineral Resources Private Limited Fellow subsidiary

KSK Energy Company Private Limited Fellow subsidiary

Raigarh Champa Rail Infrastructure Private Fellow subsidiary Limited

KSK Energy Resources Private Limited Fellow subsidiary

c) Key Management personnel

Name of the party Relationship

Mr. S. Kishore Whole-time Director

Mr. K. A. Sastry Whole-time Director

d) Equity held in subsidiaries and step down subsidiary have been disclosed under "Non current Investment", (see note no 12).

e) The Company has provided securities by way of pledge of investments for loans taken by subsidiaries ( see note no 12).

f) The holding company has pledged certain shares held in the Company as security towards the borrowings of the Company.

g) Corporate Guarantees of Rs. 44,195.06 (31 March 2014 Rs.36,957.67), Bank guarantees of Rs. 3,783.75 (31 March 2014 Rs.5,965.17) and Letter of credit limits of Rs. 1,766.66 (31 March 2014 Rs.1,684.01) has been given by the Company on behalf of subsidiaries and fellow subsidiaries.

h) Corporate Guarantees of Rs. 10,300.00 (31 March 2014 Rs.10,880.00) has been given by step-up holding Company on behalf of the Company.

8. The company is primarily engaged in the business of providing project development and corporate support services. Accordingly there are no reporateble segment as per accounting standard 17 notified under the Companies (Accounting Standards) Rules, 2006.

9. In the opinion of board, any of the assets other than fixed assets and non-current investment have a value on realization in the ordinary course of business at least equal to the amount at which they are stated on the Balance Sheet.

10. Previous year figures have been regrouped and reclassified wherever necessary to conform to the current year classification.

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Mar 31, 2014

1 Nature of operations

KSK Energy Ventures Limited ("KSKEVL" or the "Company"), was incorporated on February 14, 2001 and is primarily engaged in the development of private sector power projects, currently predominantly through subsidiaries and jointly controlled entities with multiple industrial consumers in India with next level of growth coming through large base load power plant subsidiaries. KSKEVL focused its strategy on the private sector power development market, undertaking entire gamut of development, investment, construction of power plant with supplies initially to heavy industrials operating in India and now branching out to cater to the needs of utilities and others in the wider Indian power sector.

2 Contingent liabilities and commitments :

a) Contingent liabilities :

Year ended 31 March 2014 31 March 2013

I) Bank guarantees and letter of credits outstanding 5,814.84 2,853.44

ii) Corporate guarantees outstanding 24,759.97 25,219.88

iii) Service tax department has issued demand order to the Company for payment of service tax amounting to Rs 505.64 million (including penalty) relating to the disagreement on availment of Cenvat Credit for the period April 2008 to September 2010 and non -payment of service tax. Further, an amount of Rs. 25.88 million has been paid against the demand under protest and the balance demand is stayed. However, the Company believes that the claims raised by the department are not tenable and the Company has filed an appeal against the said order before the CESTAT.

iv) The Company has received a net demand of Rs. 280.30 million (31 March 2013 :Rs 280.30 million) (including interest) from income tax department for Assessment Year 2010-11 pursuant to disallowance of certain claims / expenses. Challenging the order, Company preferred an appeal before CIT (appeals). Further, an amount of Rs. 114.85 million has been paid against the demand under protest and the CIT granted stay of collection of tax till September 2014. The Company believes that all the claims / expenses claimed are allowable as per the provision of income tax act and the demand raised is not tenable and there should not be any material impact on the financial statement.

III Loans to employees as per Company''s policy are not considered.

* The above loans & advances to subsidiary fall under the category of loans & advances in the nature of loans where there is no repayment schedule and are repayable on demand.

^ Excludes interest accrued.

IV) Equity held in subsidiaries and step down subsidiary have been disclosed under "Non current Investment", (see note no 11).

V) The Company has provided securities by way of pledge of investments for loans taken by subsidiaries ( see note no 11).

VI) The holding company has pledged certain shares held in the Company as security towards the borrowings of the Company.

VII) Corporate Guarantees of Rs. 36,957.67 (31 March 2013 Rs.32,917.20), Bank guarantees of Rs. 5,965.17 (31 March 2013 Rs.4,362.48) and Letter of credit limits of Rs. 1,684.01 (31 March 2013 Rs.2,043.79) has been given by the Company on behalf of subsidiaries and fellow subsidiaries.

VIII) Corporate Guarantees of Rs. 10,880.00 ( 31 March 2013 Rs.9,605.00) has been given by step-up holding Company on behalf of the Company.

3 The company is primarily engaged in the business of providing project development and corporate support services. Accordingly there are no reporateble segment as per accounting standard 17 notified under the Companies Act, 1956.

4 In the opinion of board, any of the assets other than fixed assets and non-current investment have a value on realization in the ordinary course of business at least equal to the amount at which they are stated on the Balance Sheet.

5 During the year the Company has assigned certain of its development portfolio assets along with associated liabilities to its wholly owned subsidiary KSK Electricity Financing India Private Limited for independent development pursuit.

6 Previous year figures have been regrouped and reclassified wherever necessary to conform to the current year classification.

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Mar 31, 2013

1 Nature of operations

KSK Energy Ventures Limited f hCSKEVL* or Ihe "Company"), was incorporated an February 14, 2001 and Ie primarily engaged in me Development of private sector power projects, currently predominantly through subsJdEanes and Jointly controflod wffi*» with ramtiplo industrial consumers In India with, next krvoi of growth coming through largo base load power pEatf subsidiaries. KSKEVL focused Ms strategy on the private sector power development market undertaking entire gamut of development, Inveslment, conatruclion of power plant with supplies iitibaJry to heavy industrials operating in India and nowbranchlno, out Jo cater to tha needs of utilities and others In the wider Indian power sector

2 Contingent liabilities and commrtmvnte:

Concingemnaoiities .

As at

31 March 2013 31 March 2012

I) Bark guarantees and latter of credits outstanding 2,053.44 343.73

ID Corporate guaranlses outatandjng 2.219 223.03

IN) Service tax department has Issued demand order (Rs. the company lor payment o1 service tax amounting to 7 505.64 million [including penalty) relating In the disagreement on avajlment of Genvat Credit for the period April 2006 to September 2010 and non -payment or service tax. However, the Company believes that the Ctains raised by the department are not tenable end the Company has filed an appeal againal the said order before the CESTAT.

hi) The Company has received a net demand Ol * 280.3D (including inlereslj from income tan department foe Assessmenl Vear 5010-11 pursuant to disallowance. at c«tan claims h'' oxponees. Challenging the ordof, Company prsfarrad an appeal betwCiT
3 Segment Reporting

The Segment report ha* been pnaperad m accordance. *i''n the Accounting StandBfC 17 "Segment Reporting".There Is

For lhe purpose of business segments, the Company & engaged In two segments, viz.. Project development and power aanerallrjn.

4 During the yoar onded 31 March 20T2, pursuant 1o The SharaholdBra and Board nT Directors approval, the Company has sold rts 2(5 wlndrmlla aa$ata aggregating to 31 00 MW situated in the stale of Tamllnadu to foe subsidiary, K§K Wind Energy Prwala Limited for a total consideration of T 883.70 m I km and Incurred a loss of 7 291.93 million and tine same, b otodosed as exceptional Hem in accordance wtth AS-5 ''Net Frofll or Low for the Period, Pnor Period Hems end Ghana** li Accounting Policies. Th*followng «tal*m#it shows the revenue andexpenseeol disconiinuino operations.

5 In the ordinary course or business at least equaJ Do Ihe amount slwhlch they are stetBd on the Balance Sheet

6 Previous year figures have been regrouped end reclessifted whenever necessary to conform to me cunent years cifiMJficaticn.

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Mar 31, 2012

1 Nature of operations

KSK Energy Ventures Limited ("KSKEVL' or the "Company"), was incorporated on February 14, 2001 and is primarily engaged in the development of private sector power projects, currently predominantly through subsidiaries and jointly controlled entities with multiple industrial consumers in India with next level of growth coming through large base load power plant subsidiaries. KSKEVL focused its strategy on the private sector power development market, undertaking entire gamut of development, investment, construction of power plant with supplies initially to heavy industrials operating in India and now branching out to cater to the needs of utilities and others in the wider Indian power sector.

1) Details of security provided for various credit facilities

a Secured by way of hypothecation on movable properties of the Company and pledge of certain equity shares of the Company held by KSK Energy Limited, holding Company.

b Secured by first pari-passu charge on fixed assets, current assets of the Company and corporate guarantee of KSK Power Ventur pic.

c Secured by pledge of deposits.

a. The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

Discount rate: The discount rate is based on the prevailing market yields of Indian government securities as at Balance Sheet date for the estimated term of the obligations

Expected rate of return on planned assets: This is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

2 Contingent liabilities and commitments a Contingent liabilities

As at 31 March 2012 31 March 2011

(I) Bank guarantees and letter of credits outstanding 3,493.73 3,837.54

(ii) Corporate guarantees outstanding 8,223.03 10,719.50

(iii) Service tax department has issued demand order for payment of service tax amounting to Rs 505.64 (including penalty) relating to the disagreement on availment of Cenvat Credit for the period April 2008 to September 2010 and non -payment of service tax. However, the Company believes that the claims raised by the department are not tenable and the Company has filed an appeal against the said order before the CESTAT.

b Estimated value of the contracts to be executed on capital and other account and not provided for:

As at

31 March 2012 31 March 2011

(i) Capital Commitments 0.74 2.78

(ii) Other commitment:

The Company has entered into an arrangement for buying out an additional stake in KSK Mahanadi Power Company Limited (a subsidiary). The commitment pending under the arrangement as at 31 March 2012 is Rs. 3,904.55. (31 March 2011:Rs 4,150.13).

3 Operating leases

The Company has entered in to certain operating lease agreements. An amount of Rs 11.66 (31 March 2011: Rs. 15.76) paid under such agreements has been disclosed as "Rent" under other expenses in the Profit and loss statement.

The schedule of future minimum rental payments in respect of non-cancellable operating leases is setout below:

4 Segment Reporting

The Segment report has been prepared in accordance with the Accounting Standard 17 "Segment Reporting". There is only one reportable geographical segment as all the business and operations of the Company are carried out in India.

For the purpose of business segments, the Company is engaged in two segments, viz., Project development and power generation.

1) Equity held In subsidiaries and step down subsidiary have been disclosed under "Investment", (see note no 11).

g) The Company has provided securities by way of pledge of investments for loans taken by subsidiaries (see note no 11).

h) The holding company has pledged certain shares held in the Company as security towards the borrowings of the Company.

i) Corporate guarantees of Rs.17,098.00 (31 March 2011 Rs.38,120.00), Bank guarantees of Rs.4,809.08 (31 March 2011 Rs.3,562.16) and Letter of credit limits of Rs.1,338.85 (31 March 2011 Rs.457.98) has been given by the Company on behalf of subsidiaries and fellow subsidiaries.

j) Corporate guarantees of Rs.11,255.00 (31 March 2011 Rs.11,555.00) has been given by step-up holding Company on behalf of the Company.

5 During the year ended 31 March 2012, pursuant to the Shareholders and Board of Directors approval, the Company has sold its 26 windmills assets aggregating to 31.80 MW situated in the state of Tamilnadu to its subsidiary, KSK Wind Energy Private Limited for a total consideration of Rs. 883.70 million and incurred a loss of Rs.291.93 million and the same is disclosed as exceptional item in accordance with AS-5 "Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies". The following statement shows the revenue and expenses of discontinuing operations.

6 During the year ended 31 March 2012, Company has sold Investment in Sai Maithili Power Company Private Limited for a total consideration of Rs. 3.50.

7 Pursuant to completion of open offer during the year, shareholdings of the promoters and promoter group have gone up from 54.94% to 74.94%.

8 In the opinion of the Board of Directors, sundry debtors, loans and advances as at 31 March 2012 stated would be realized in the ordinary course of the Company's business are expected to produce at least the amount at which they are stated in the Balance Sheet.

9 Previous year figures have been regrouped / reclassified to conform to the classification of the current year.

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Mar 31, 2011

1. CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS

1) Contingent liabilities

Particulars As at March 31

2011 2010

Bank guarantees / Letter of credits outstanding 3,837.54 5,075.90

Corporate guarantees 10,719.50 5,780.42

2. OPERATING LEASES

The Company has entered in to certain operating lease agreements. An amount of Rs 15.76 (March 31, 2010: Rs. 12.85) paid under such agreements has been disclosed as "Rent" under Administration and operating expenses in the Profit and Loss account.

3. As at March 31, 2011 there are no amounts including interest payable to Micro, Small and Medium enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006, based on the information available with the Company.

4. EMPLOYEE BENEFIT PLANS

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

5. RELATED PARTY DISCLOSURES

i) Parties where control exists

Name of the party Relationship

1. KSK Power Ventur plc Step-up Holding company

2. KSK Energy Limited, Mauritius Holding company

3. KSK Electricity Financing India Private Limited Subsidiary company

4. J R Power Gen Private Limited Subsidiary company

5. KSK Dibbin Hydro Power Private Limited Subsidiary company

6. Kameng Dam Hydro Power Private Limited Subsidiary company

7. KSK Narmada Power Company Private Limited Subsidiary company

8. KSK Wind Energy Private Limited ( formerly Bahur Power

Company Private Limited) Subsidiary company

9. KSK Vidarbha Power Company Private Limited Subsidiary company

10. Sai Maithili Power Company Private Limited Subsidiary company

11. KSK Wardha Infrastructure Private Limited ( formerly KSK Technology

Ventures Private Limited) Subsidiary company

12. KSK Mahanadi Power Company Limited Subsidiary company

13. KSK Upper Subansiri Hydro Energy Private Limited Subsidiary company

14. KSK Dinchang Power Company Private Limited Subsidiary company

15. KSK Jameri Hydro Power Private Limited Subsidiary company

16. Tila Karnali Hydro Electric Company Private Limited Subsidiary company

17. Sai Regency Power Corporation Private Limited Step-down subsidiary

18. VS Lignite Power Private Limited Step-down subsidiary

19. Wardha Power Company Limited Step-down subsidiary

20. Arasmeta Captive Power Company Private Limited Step-down subsidiary

21. Field Mining and Ispats Limited Step-down subsidiary

ii) Parties where significant influence exists and where the transactions have taken place during the year Name of the party Relationship

1. Sitapuram Power Limited Joint venture

2. S N Nirman Infra Projects Private Limited Fellow subsidiary

3. KSK Water Infrastructures Private Limited Fellow subsidiary

iii) Key Management Personnel Name of the party Relationship

1. S. Kishore Whole-time Director

2. K .A .Sastry Whole-time Director

3. K .B .Raju Director

6. SEGMENT REPORTING

The Segment report has been prepared in accordance with the Accounting Standard 17 "Segment Reporting". There is only one geographical segment as all the business and operations of the Company are carried out in India.

For the purpose of business segments, the Company is engaged in two segments, viz., Project development and power generation.

7. In the opinion of the Board of Directors, sundry debtors, loans and advances as at March 31, 2011 stated would be realized in the ordinary course of the Company's business are expected to produce at least the amount at which they are stated in the Balance Sheet.

8. Additional information pursuant to the provisions of Paragraphs 3 and 4 of Part II of Schedule VI of the Companies Act, 1956 - to the extent Not Applicable or Nil has not been furnished.

9. Demerger of undertaking of Wardha Power Company Limited under Scheme of Arrangement under section 391 to 394 read with sections 100 to 103 of the Companies Act, 1956.

A scheme of arrangement (hereinafter referred to as Scheme) between the Wardha Power Company Limited (Transferor Company) and KSK Mahanadi Power Company Limited (Transferee Company) and its respective lenders and shareholders was approved by the Honorable High Court of Andhra Pradesh vide its order dated February 26, 2010. The scheme, amongst others, provided demerger of 3600 MW power generating facility at Nariyara, Janjgir- Champa District, in the State of Chhattisgarh (hereinafter referred to as Demerged Undertaking) on a going-concern basis with all its assets and liabilities as defined in the scheme. The appointed date for demerger is 1 August, 2009. The scheme has become effective from March 31, 2010 and demerged undertaking stands transferred to and vest in as a going- concern to transferee company at its book values.

10. The Company has issued 100 million 8% Compulsorily Redeemable Preference Shares of Rs 10/- each amounting to Rs. 1,000 to L&T Infrastructure Finance Company Limited on October 1, 2010.

11. Previous year figures have been regrouped / reclassified wherever necessary to conform to the current year's classification.

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Mar 31, 2010

1. Contingent liabilities

Particulars As at March 31

2010 2009

Bank guarantees outstanding 5,075.90 2,980.20

Corporate guarantees 5,780.42 -

Discount rate: The discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated term of the obligations.

Expected rate of return on plan assets: This is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

Salary escalation rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors

2. Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

As at March 31, 2010 there are no amounts including interest payable to Micro, Small and Medium enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006, based on the information available with the Company.

3 .Related party disclosures

a) Parties where control exists

Name of the Related Party Relationship

K&S Consulting Group Private Limited Ultimate holding company

KSK Energy Limited, Mauritius Holding company

KSK Electricity Financing India Private Limited Subsidiary company

JR Power Gen Private Limited Subsidiary company

KSK Dibbin Hydro Power Private Limited Subsidiary company

Kameng Dam Hydro Power Private Limited Subsidiary company

KSK Narmada Power Company Private Limited Subsidiary company

Bahur Power Company Private Limited Subsidiary company

KSK Vidarbha Power Company Private Limited Subsidiary company

Sai Maithili Power Company Private Limited Subsidiary company

KSK Technology Ventures Private Limited Subsidiary company

KSK Mahanadi Power Company Limited Subsidiary company

Sai Regency Power Corporation Private Limited Step-down subsidiary

VS Lignite Power Private Limited Step-down subsidiary

Wardha Power Company Limited Step-down subsidiary

Arasmeta Captive Power Company Private Limited Step-down subsidiary

b) Parties where significant influence exists and where the transactions have taken place during the year

Name of the Related Party Relationship

Sitapuram Power Limited Joint venture

KSK Mineral Resource Private Limited Fellow subsidiary

KSK Energy Resources Private Limited Fellow subsidiary

KSK Energy Company Private Limited Fellow subsidiary

KSK Investment Advisor Private Limited Fellow subsidiary

KSK Surya Photovaltaic Venture Private Limited Fellow subsidiary

c) Key Management Personnel

Name of the Related Party Relationship

S. Kishore Whole-time Director

K .A .Sastry Whole-time Director

K .B .Raju Whole-time Director

The directors are covered under the Companys gratuity policy along with other employees of the Company. Proportionate amount of gratuity is not included in the aforementioned disclosure.

3. In the opinion of the Board of Directors, sundry debtors, loans and advances as at March 31, 2010 stated would be realized in the ordinary course of the Companys business are expected to produce at least the amount at which they are stated in the Balance Sheet.

4.The information required as per clause 4C and notes thereon of part II of Schedule VI to the Companies Act, 1956

Licensed and installed capacity, actual production and sales:

5.Additional information pursuant to the provisions of Paragraphs 3, 4, and 4D of Part II of Schedule VI of the Companies Act, 1956 - to the extent Not Applicable or Nil has not been furnished.

6.During 2008-09, the Company invested Rs. 157.25 for acquiring 2,700,000 ordinary shares of GBP 1/- each of KSK Emerging India Energy Fund Limited. However, due to global recession and internal problems faced by shareholders of KSK Emerging India Energy Fund Limited, the members of fund decided to liquidate the fund. The resolution to wind up the fund was passed by the shareholders at an extraordinary general meeting held in the Channel Islands on January 22,2009.The Company has received 91.70 pence per share on full and final settlement resulting in gainofRs. 23.93.

7.During the year ended March 31, 2010, the Company has raised an amount of Rs. 5,159.25 by issuing 26,525,714 equity shares of Rs 10/- each at a premium of Rs 184.50 to Qualified Institutional Buyers ("QIBs") through Qualified Institutions Placement under Chapter VIM of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended. The Shares were allotted on November 17, 2009 and as a result the paid up share capital has increased to Rs. 3,726.30. The Company has raised the funds for Investment in new projects, expansion of existing projects, repayment of loans, working capital and general corporate purpose.

8. During the year the Company has made investment of Rs. 0.49 in the equity shares of KSK Mahanadi Power Company Limited. Consequently, KSK Mahanadi Power Company Limited has become 100% subsidiary of the Company.

9. Demerger of undertaking of Wardha Power Company Limited under Scheme of Arrangement under section 391 to 394 read with sections 100 to 103 of the Companies Act, 1956.

A scheme of arrangement (hereinafter referred to as Scheme) between the Wardha Power Company Limited (Transferor Company) and KSK Mahanadi Power Company Limited (Transferee Company) and its respective lenders and shareholders was approved by the Honorable High Court of Andhra Pradesh vide its order dated February 26,2010. The scheme, amongst others, provided demerger of 3600 MW power generating facility at Nariyara, Janjgir-Champa District, in the State of Chhattisgarh (hereinafter referred to as Demerged Undertaking) on a going-concern basis with all its assets and liabilities as defined in the scheme. The appointed date for demerger is August 1, 2009. The scheme has become effective from March 31, 2010 and demerged undertaking stands transferred to and vest in as a going- concern to transferee company at its book values.

10.The following are the political contributions made during the year within the limits prescribed Under section 293A of the Companies Act,

11.Previous years figures have been regrouped / reclassified to conform to the classification of the current year.