ANNUAL REPORT

Transcription

1 ANNUAL REPORT

2 BOARD OF DIRECTORS Mr. T.L. Sakar Chairma Mr. S.R. Iyer Idepedet Director Mr. Girish N. Kulkari Idepedet Director Ms. Savita Jyoti No-Executive Director Mr. K. Bapi Raju No-Executive Director Mr. Tamay Das No-Executive Director Mr. Ail Kumar Kutty No-Executive Director Mr. K.A. Sastry Whole-time Director Mr. S. Kishore Whole-time Director

3 CONTENTS Busiess Review 02 Corporate Iformatio 04 Chairma Statemet Statutory Report Fiacial Statemets STANDALONE 06 Maagemet Discussio ad Aalysis Report o Corporate Goverace Directors Report Idepedet Auditors Report Balace Sheet Statemet of Profit ad Loss CONSOLIDATED 112 Statemet of Chages i Equity 101 Idepedet Auditors Report o Cosolidated Fiacial Statemets 114 Cash Flow Statemet 105 Cosolidated Balace Sheet 184 Notes to Fiacial Statemets 107 Cosolidated Statemet of Profit ad Loss 188 Cosolidated Statemet of Chages i Equity Cosolidated Cash Flow Statemet Notes to Cosolidated Fiacial Statemets Form AOC-I Notice of the Aual Geeral Meetig ANNUAL REPORT

4 Corporate Iformatio Board of Directors Mr. T.L. Sakar Mr. S.R. Iyer Mr. Girish N. Kulkari Mr. K.A. Sastry Mr. S. Kishore Ms. Savita Jyoti Mr. K. Bapi Raju Mr. Ail Kumar Kutty Mr. Tamay Das Chief Fiacial Officer Mr. V. Sambasiva Rao Compay Secretary Mr. M.S. Phai Sekhar Registered Office /82/A/431/A, Road No.22, Jubilee Hills, Hyderabad , Telagaa, Idia Ph: Fax: ivestors@ksk.co.i CIN:L45204TG2001PLC Statutory Auditors M/s. Umamaheswara Rao & Co., Chartered Accoutats Flat No.5-H, D Block, Krisha Apartmets, Ameerpet X Roads, Hyderabad Telagaa, Idia Bakers Adhra Bak Bak of Idia Axis Bak UCO Bak Idia Bak Registrar & Share Trasfer Aget Karvy Computershare Private Limited Karvy Seleium Tower B, Plot 31-32, Gachibowli, Fiacial District, Naakramguda, Hyderabad Ph: Fax: eiward.ris@karvy.com Shares Listed at Natioal Stock Exchage of Idia Limited BSE Limited Website 2 KSK ENERGY VENTURES LIMITED

5 ANNUAL REPORT

6 Chairma Statemet Dear Shareholders I am pleased to update you o the overall performace of your Compay for the year The year cotiued to be a difficult year for the etire power sector i Idia as a whole ad maagemet have cotiued to maitai their efforts to address various challeges i the operatig power projects especially cotiued costraits i eforcig rights o fuel, PPA ad other project aspects agaist Govermet couterparties at KSK Mahaadi, Sai Wardha ad VS Ligite power projects. The capacity additio i the last three years, wherei Idia's total power capacity has icreased from 243 GW i March 2014 to 320 GW i March 2017 reflects the last decade of effort i augmetig power geeratio wherei covetioal or coal based power capacity (which is the maistay of the coutry's overall power capacity) has icreased from 214 GW i Mar 2014 to 270 GW i March This growth i covetioal power geeratio alog with a cotrastig fall i Plat Load Factors (PLFs) of Idepedet Power Producers (IPPs) from 83.9% to 55.7% betwee 2010 ad 2017 reflect the iheret challeges ad cotrasts i the policy paradigms of ew power geeratio capacities that have resulted i prologed period of challeges ad ucertaity across the Idia power sector. While reewable eergy is experiecig the ehaced thrust, balacig the same with base load roud the clock power from covetioal power sources would be the reality for the future ad therefore improved thermal capacity PLFs are immiet i the ear future. Therefore, the curret metamorphosis at the Idia power sector carries both a opportuity ad threat. If hadled appropriately, through recosidered busiess approach ad collaboratios, log term ecoomic value could be preserved as well as realised ad if ot properly hadled, the same could lead to challeges to private power geeratio, distressed projects addig to the growig bad loa portfolios of project leders. The compay is, therefore, i pursuit of a recosidered busiess approach ad is i discussio with a umber of potetial strategic ad fiacial ivestors to preserve log term value of the power projects uder the compay ad udertake ecessary collaboratios thereto. This would etail dilutio of equity holdigs by the compay i such projects. Operatioal Performace Durig the period uder review, operatig power assets geerated 9,402 GWh with a average portfolio plat load factor of 52% margially less tha the 10,000 GWh mark that was expected to be crossed durig the year.the iitial 1,200 MW uits (uder operatio) of KSK Mahaadi, a large sigle locatio gree field private power plat, geerated 6,731 GWh durig the year. Further, 4 KSK ENERGY VENTURES LIMITED

7 Busiess Review Statutory Report Fiacial Statemets the costructio progress of the remaiig uits of KSK Mahaadi is cotiuig with third 600 MW due to be commissioed over the ext few moths, followed by the fourth 600 MW uit thereafter. Progress o the last 1,200 MW (2x 600 MW uits) is cotiget upo equity fudig, as well as addressig fuel supply ad power purchase agreemet issues. The 540 MW Sai Wardha geerated 1,395 GWh reflectig the cotiued challegig local operatig eviromet, the fuel ad the offtake costraits. A sigificat achievemet durig the period at Sai Wardha was the fial rulig by the Competitio Appellate Tribual (COMPAT) i December 2016 ad the process to execute proceedigs for the recovery of the claim uder the law are curretly uderway. Also, the Compay awaits the judgemets at Ho ble Supreme Court dealig with fial appeals o both fuel ad offtake, which are very vital to address the project's requiremets i the log ru. VS Ligite the 135 MW Ligite based power plat geerated 474 GWh as agaist the 792 GWh durig FY 2016, reflectig the challeges experieced i the trasitio from Captive Power Plat (CPP) to Idepedet Power Plat (IPP) imposed uder a local madate by the Govermet. While efforts to secure ecessary log term PPAs from the local grid cotiue, discussios are uderway with project leders as to address the project's requiremets i the iterim period. The other operatioal power plats of the group viz., 58 MW Sai Regecy, 43 MW Sitapuram ad 10 MW Sai Maithili cotiue to do reasoably well while Sai Lilagar cotiues its effort to address fuel ad offtake challeges. Fiacial Performace Durig the year uder review, the cosolidated reveue of the group has decreased by Rs. 3,929 millio as a result of decreased output levels at Sai Wardha ad VS Ligite. The operatig profit has also decreased by Rs. 3,149 millio. Certaity towards ehaced operatig ad fiacial performace gaied mometum recetly with the aoucemet of the ew coal likage policy "SHAKTI" (Scheme for Haressig ad Allocatig Koyala (Coal) Trasparetly i Idia) by Govermet of Idia i May Decrease i operatig profit coupled with higher fiace cost ad depreciatio resulted i loss before tax of ` 8,288 millio. Outlook As regards level of equity iterest i the various power projects uder the Compay, the group cotiues to explore for solutios to the problems faced by the operatioal assets ad addressig the o-groud situatios i a sustaiable maer. Resultatly, the Compay is i discussio with the project leders at each of these project compaies to fid appropriate solutios for meetig debt servicig obligatios o sustaiable basis, icludig appropriate equity collaboratio as may be appropriate at each of such project compaies. Over the years, the Group's iterest i uderlyig busiess has bee supported both by equity raised as well as leverage. A secodary sale of project iterests ad refiacig opportuities o more favourable terms to provide the ecessary liquidity to retire part of the existig high cost debt is beig cosidered for ogoig busiess operatios. With the uderlyig asset quality, associated performace ad opportuities, KSK is well positioed to be oe of the more stable, valuable ad sustaied players i the Idia Power Geeratio area. Your Board is cofidet i the outlook for KSK ad we thak you for your cotiued support of the Compay. Appreciatio The Compay has come thus far because of the people who have believed ad supported the same. I wish to take this opportuity to covey my appreciatio to my fellow Directors for their support, diligece ad valuable guidace. Last but ot least, my sicere appreciatio goes to the maagemet team ad employees for their ureletig commitmet ad dedicatio to the Group. We look to all our stakeholders to led us their cotiuous support as we leverage o all opportuities ad overcome challegig times to esure a strog ad sustaiable future for all. Sd/- T.L. SANKAR Chairma ANNUAL REPORT

8 Maagemet Discussio ad Aalysis Idia Ecoomy Outlook Idia has emerged as the fastest growig major ecoomy i the world as per the Cetral Statistics Orgaisatio (CSO) ad Iteratioal Moetary Fud (IMF). Real GDP growth i the first half of the year was 7.2 percet, o the weaker side of the per cet projectio i the Ecoomic Survey ad somewhat lower tha the 7.6 percet rate recorded i the secod half of The mai problem was fixed ivestmet, which declied sharply as stressed balace sheets i the corporate sector cotiued to take a toll o firms' spedig plas. Agaist the backdrop, the year was marked by two major domestic policy developmets, the passage of the Costitutioal amedmet, pavig the way for implemetig the trasformatioal Goods ad Services Tax (GST), ad the actio to demoetise the two highest deomiatio otes. The GST is expected to create a commo Idia market, improve tax compliace ad goverace ad boost ivestmet ad growth; it is also a bold ew experimet i the goverace of Idia's cooperative federalism. Demoetisatio has had short-term costs but also expected to hold the potetial for log term beefits. As per the Ecoomic Survey , the Idia ecoomy should grow betwee 6.75 ad 7.5 per cet i FY Idia would remai the fastest growig major ecoomy i the world. Follow-up actios to miimize the costs ad maximise the beefits iclude: fast, demad-drive, remoetisatio; further tax reforms, icludig brigig lad ad real estate ito the GST, reducig tax rates ad stamp duties; ad actig to allay axieties about over-zealous tax admiistratio. These actios would allow growth to retur to tred i , followig a temporary declie i Power Sector: Performace Highlights: Power supply positio i the coutry has geerally improved durig the year Durig the curret year the demad - supply gap i terms of eergy has reduced to -0.3% from -1.6% from the previous year. Similarly the peak shortage i the coutry has reduced to -0.5% compared to -1.6% i the previous year. Geeratio The additio i power geeratio capacity durig FY is give below: Type of Geeratio Target for Achievemet i Thermal 6,945 11, Hydro 1,469 1, Nuclear 1,500 1, Total 9,914 14, All figures i MW The total electricity geeratio for the FY was 1159 BU as compared to 1108 BU for the previous year. However, the aggregate Plat Load Factor for the FY reduced to 59.88% compared to 62.24% durig the previous year Geeratio (BU) % 70.00% 68.00% 66.00% 64.00% 62.00% 60.00% 58.00% 56.00% PLFs 69.90% 65.60% 64.50% 62.24% 59.88% % KSK ENERGY VENTURES LIMITED

9 Busiess Review Statutory Report Fiacial Statemets The Plat Load Factor of Thermal Power Statios is a idex of utilizatio of the istalled capacity. Therefore, eve though there was icrease i geeratio compared to the previous year, lot of thermal power plats were left straded due to various reasos like lack of demad, availability of fuel, etc. The fall i Plat Load Factors of Idepedet Power Producers (IPPs) from 83.9% to 55.7% betwee 2010 to 2017 also reflects the iheret challeges ad cotrasts i the policy paradigms of ew power geeratio capacities that have resulted i prologed period of challeges ad ucertaity across the Idia power sector. Trasmissio Recogizig the eed for developmet of the atioal grid, thrust was give to ehace the capacity of iter-regioal liks i a phased maer. Workig i this directio, all the five regioal grids are ow itercoected through sychroous liks. As o 31 December 2016 iter regioal power trasfer capacity of the Natioal Grid is about 63,650 MW, which was about 27,750 MW at the ed of XI Pla. I additio, presetly a umber of high capacity iter regioal trasmissio liks are uder implemetatio/plaig. The iter-regioal power trasfer capacity is evisaged to ehace to 72,350 MW by the ed of XII pla. Developmet of High Capacity Power Trasmissio Corridors (HCPTCs) Beig the odal agecy for grat of Log Term Access (LTA), POWERGRID has udertake developmet of high capacity power trasmissio corridors for evacuatio of large quatum of power from various Idepedet Power Producers (IPPs) maily comig up i resource rich states/coastal locatios, i.e Odisha, Jharkhad, Sikkim, Madhya Pradesh, Chhattisgarh, Tamil Nadu, Adhra Pradesh, etc. Accordigly, to trasmit this power to various load cetres located across the states ad regios, implemetatio of 11 os of HCPTCs has bee plaed by POWERGRID i cosultatio with CEA, IPPs & beeficiaries. Cetral Electricity Regulatory Commissio (CERC) has already grated regulatory approval for 11 os. of HCPTCs at a estimated cost of `750,000 millio. Implemetatio of HCPTCs is progressig as per schedule with completio i a phased maer matchig with geeratio projects. I fact some of the elemets uder HCPTCs of Chhattisgarh ad Odisha have already bee commissioed ad balace elemets of HCPTCs are expected to be completed progressively as per requiremet. Distributio The various reforms like Dee Dayal Upadhaya Gram Jyoti Yojaa (DDUGJY), Ujwal Discom Assurace Yojaa (UDAY), Natioal Smart Grid Missio (NSGM), Revised Tariff Policy, 2016 were lauched for developmet of the Distributio sector. Uder the DDUGJY scheme, projects with total cost of ` 425,500 millio have bee sactioed for 32 States/UTs. Subsidy of ` 26,640 millio has bee released by Miistry of Power to REC. States are i the process of tederig ad award of sactioed projects. Uder the UDAY scheme, Govermet of Rajastha, Uttar Pradesh, Chhattisgarh, Jharkhad, Pujab, Bihar, Haryaa, Jammu & Kashmir ad Adhra Pradesh have issued bods to the tue of ` 1,830,842.9 millio icludig bods issued by Rajastha Discoms worth ` 123,680 millio ad UP Discoms worth ` 107,140 millio. So far twety States ad oe UT i all viz. Jharkhad, Chhattisgarh, Rajastha, Uttar Pradesh, Gujarat, Bihar, Pujab, Jammu & Kashmir, Haryaa, Himachal Pradesh, Uttrakhad, Goa, Karataka, Adhra Pradesh, Maipur, Madhya Pradesh, Maharashtra, Assam, Telagaa, Tamil Nadu ad UT of Puducherry have siged Memoradum of Uderstadigs. Some more States are likely to joi the scheme. I order to brig uiformity i power procuremet by the DISCOMs ad also to promote competitio i electricity sector, DEEP (Discovery of Efficiet Electricity Price) e-biddig portal was lauched. I the first stage portal was lauched for procuremet of short term power (i.e. up to Oe year). The scope of the portal has bee exteded for procuremet of power for medium term also. Itroductio of SHAKTI - (Scheme for Haressig ad Allocatig Koyala (Coal) Trasparetly i Idia) The Cabiet Committee o Ecoomic Affairs, chaired by the Prime Miister Shri Naredra Modi, has approved the sigig of Fuel Supply Agreemet (FSA) with the Letter of Assurace (LoA) holders. Allocatio of likages for power sector shall be based o auctio of likages or through Power Purchase Agreemet (PPA) based o competitive biddig of tariffs except for the State ad the cetral power geeratig compaies ad the exceptios provided i Tariff Policy, Coal drawl will be permitted agaist valid log term PPAs ad to be cocluded medium term PPAs. The iteded beefits of the policy iclude : Coal available to all Power Plats i trasparet ad objective maer. Auctio to be made o the basis of likage allocatios to IPPs; cheaper ad affordable POWER FOR ALL. The stress o accout of o-availability of likages to power sector projects shall be overcome. Good for the ifrastructure ad bakig sector. PPA holders to reduce tariff for likage; direct beefit of reduced tariff to Discom/cosumers. ANNUAL REPORT

10 Maagemet Discussio ad Aalysis OPPORTUNITIES AND OUTLOOK The Idia power sector itself has a ivestmet potetial of US$ 250 billio i the ext 4-5 years, providig immese opportuities i power geeratio, distributio, trasmissio ad equipmet, accordig to Uio Miister of Coal, Power ad Reewable Eergy. The Govermet's immediate goal is to geerate two trillio uits (kilowatt hours) of eergy by This meas doublig the curret productio capacity to provide 24x7 electricity for residetial, idustrial, commercial ad agriculture use. Capital itesive ature of the idustry ad streuous process of regulatory approval ad lad acquisitio makes it difficult for ew etrats there by existig players reachig their highest potetial. Therefore, the curret metamorphosis at the Idia power sector carries both a opportuity ad threat. If hadled appropriately, through recosidered busiess approach ad collaboratios, log term ecoomic value could be preserved as well as realised ad if ot properly hadled, the same could lead to challeges to private power geeratio, distressed projects addig to the growig bad loa portfolios of project leders. The compay is, therefore, i pursuit of a recosidered busiess approach ad is i discussio with a umber of potetial strategic ad fiacial ivestors to preserve log term value of the power projects uder the Compay ad udertake ecessary collaboratios thereto. This would etail dilutio of equity holdigs by the Compay i such projects. RISKS AND CONCERNS While the compay attempts to address various risks, the key risks ad ucertaities cotiued to be faced by the group are as follows: Liquidity risk, project fiacig ad sustaiable debt levels agaist ivested equity at projects Delay i Govermet decisios or implemetatio of earlier Govermet decisios alog with cotiual icosistecies i Govermet policies across departmets ad retrospective amedmets to the existig policies or itroductio of ew policies Delay i providig ecessary regulatory support ad / or dispesatio as may be required for timely implemetatio of the fiacig plas or regulatory costraits o fiacig arragemets resultig i alterate fiacig arragemets, which may take more time tha aticipated to fructify Deviatio from approved Govermet policies ad abuse of market domiace positio by certai cotractual couterparties Shortage of fuel ad depedece o market based or imported fuel which is subject to market vagaries ad other ucertaities Ecoomic slowdow ad egative sectoral outlook with resultat impact o bakig sector delays i agreed project disbursemets ad timely availability of credit Delays i eforcemet of cotractual rights or legal remedies with Govermet couter parties udertakig fuel supplies, power offtake, trasmissio ad ope access amogst others PPA Couter parties goig cotrary to pre agreed uderstadig ad seekig beefits from the power geerators that are ofte i coflict with shareholder obligatios to further the busiess Uusual currecy depreciatio that adversely affects the cost of project imports, project implemetatio ad repaymet obligatios Logistics bottleecks ad other ifrastructure costraits of various agecies Challeges i the developmet of support ifrastructure for the power projects icludig physical hidraces ad delay i the issue of permits ad clearaces associated with lad acquisitios Political ad ecoomic istability, global fiacial turmoil ad the resultat fiscal ad moetary policies as well as currecy depreciatio resultig i icreasig cost structures Nevertheless, the curret year has witessed resolutio of a umber of issues relatig to various projects o accout of the cotiued efforts of the Compay's Maagemet ad active egagemet with Govermet ad various authorities thereto. 8 KSK ENERGY VENTURES LIMITED

11 Busiess Review Statutory Report Fiacial Statemets INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Compay has a iteral cotrol system, which provides protectio to all its assets agaist loss from uauthorised use ad for correct reportig of trasactios. The iteral cotrol systems are further supplemeted by iteral audit carried out by a idepedet firm of Chartered Accoutats ad periodical review by the maagemet. The Audit Committee of the Board addresses issues raised by both the Iteral ad Statutory Auditors. The iteral cotrol systems are implemeted : 31-Mar Mar Mar Mar-14 GWH (%) GWH (%) GWH (%) GWH (%) KSK Mahaadi (1200 MW) 6,731 (64%) 6,368 (61%)* 3,203 (30%)* 1,088 (10%)* Sai Wardha (540 MW) 1,395 (29%) 1,856 (39%) 1,174 (25%) 2,586 (55%) VS Ligite (135 MW) 474 (40%) 792 (67%) 851 (72%) 902 (76%) Sai Regecy (58 MW) 379 (75%) 459 (90%) 423 (83%) 445 (88%) Sai Lilagar (86 MW) 124 (16%) 172 (23%) 148 (20%) 341 (45%) Sitapuram Power (43 MW) 281 (75%) 324 (86%) 343 (91%) 342 (91%) Solar Project (10 MW) 18 (21%) 17 (19%) 16 (18%) 19 (22%) Wid Project (20%) TOTAL 9,402 (52%) 9,988 (55%) 6,158 (34%) 5,756 (32%) 3,600 MW KSK Mahaadi Power Compay Limited: Costructio of KSK Mahaadi, a large sigle locatio gree field private power plat, has cotiued. Followig are the otable achievemets durig the year: To safeguard the Compay's assets from loss or damage To keep costat check o cost structure To provide adequate fiacial ad accoutig cotrols ad implemet accoutig stadards OPERATIONAL PERFORMANCE Durig the twelve moth period, operatig assets geerated 9,402 GWh with a average portfolio plat load factor of 52%, (FY16: 9,988 GWh with a 55% load factor, FY 2015: 6,158 GWh with a 34% load factor, FY 2014: 5,756 GWh with 32% load factor), margially less tha the 10,000 GWh mark that was expected to be crossed durig the year primarily o accout of decreased geeratio at Sai Wardha ad VS Ligite. The Plat wise details are tabulated below: *KSK Mahaadi's PLF is calculated across the periods o the istalled capacity base of 1,200 MW although actual operatios of this capacity oly commeced substatially durig the secod half of FY 2016 (upo grat of the ecessary trasmissio corridor access for supplyig through the Natioal Grid). The iitial 1,200 MW uder operatio geerated 6,731 GWh durig the year with a third 600 MW due to be commissioed over the ext few moths, followed by the fourth 600 MW uit thereafter. Mitigatig arragemets were put i place to esure power requiremet of various State Distributio Compaies (Discoms) cotiue to be fulfilled by alterate sources pedig the third 600 MW uit beig fully commissioed ad made operatioal. A scheme of arragemet was agreed with the leders allowig the Raigarh Champa Rail Ifrastructure SPV ad the KSK Water Ifrastructure SPV to be merged ito KSK Mahaadi. Progress is beig made o addressig project equity fudig, as well as addressig fuel supply ad PPA issues of last 1,200 MW for uit executio ad completio. 540 MW Sai Wardha Power Geeratio Limited: The total gross power geerated durig the review period was 1,395 GWh as agaist the 1,856 GWh durig FY This reflected the cotiued challegig local operatig eviromet, the fuel ad the offtake costraits experieced by Sai Wardha ad resultat pressure o workig capital. ANNUAL REPORT

12 Maagemet Discussio ad Aalysis A sigificat achievemet durig the period at Sai Wardha was the fial rulig by the Competitio Appellate Tribual (COMPAT) i December 2016 ad the process to execute proceedigs for the recovery of the claim uder the law are curretly uderway. As regards, the fial legal appeal of WCL ad Coal Idia Limited (CIL), the Ho'ble Supreme Court has ot stayed the COMPAT order ad fial hearig o the appeal is expected to commece shortly. A favourable fial rulig would ot oly eable a price reductio but also allow substatial claims of damages for the prior period be determied by the COMPAT. As regards log term power sale arragemets to commece delivery for half of the capacity of the Sai Wardha project to the local utility, the appeal agaist the Appellate Tribual for Electricity ("APTEL") is also expected to be adjudicated by the Ho'ble Supreme Court shortly. The Compay cotiues to make every effort to pursue the coal price reductio ad implemetatio of the APTEL directio, which we believe will ultimately lead to the ehaced utilisatio ad profitability of the Sai Wardha plat. However, proposals are uder cosideratio for coversio of the project debt ito equity ad /or collaboratio with a ew ivestor cosortium to address the project requiremets before log term solutios o fuel ad PPA are achieved. 135 MW VS Ligite Power Private Limited: The total gross power geerated durig the year was 474 GWh as agaist the 792 GWh durig FY 2016, reflectig the challeges experieced i the trasitio from Captive Power Plat (CPP) to Idepedet Power Plat (IPP) imposed uder a local madate by the Govermet. While efforts to secure ecessary log term PPAs from the local grid cotiue, coversio of the project debt ito equity ad/or collaboratio with a ew ivestor cosortium to address the project's requiremets are beig explored. 86 MW Sai Lilagar Power Geeratio Limited: The total gross power geerated durig the year was 124 GWh as agaist 172 GWh durig the previous year reflectig the trasitio from Captive Power Plat to Idepedet Power Producer.The Compay aticipates icreased geeratio, reveue ad profitability from the Sai Lilagar plat upo resolutio of the various challeges it faces. 58 MW Sai Regecy Power Corporatio Private Limited: The total gross power geerated i the combied cycle gas fired power plat durig the year was 379 GWh as agaist 459 GWh durig FY 2016, primarily o accout of movemet of gas supply arragemet from direct to auctio basis. The PLF has recetly improved ad is operatig at 81% PLF i the April to Jue 2017 quarter. 43 MW Sitapuram Power Limited: The total gross power geerated durig the year was 281 GWh as agaist 324 GWh durig the previous year. The fuel cost for the period uder review cotiued to be high due to a icrease i coal prices from Sigarei Collieries Compay Limited, as well as from ope market purchases. The eergy geerated i the period has bee supplied to the captive cosumers i accordace with the provisios of the PPA, ad the balace of power geerated has bee sold to local utility compaies. 10 MW Sai Maithili Solar Power Project: The total gross power geerated durig the year was 18 GWh as agaist 17 GWh durig the previous year. The 10 MW PV solar power geeratio plat of Sai Maithili is located i the state of Rajastha, operatig uder the Jawaharlal Nehru Natioal Solar Missio with a log term PPA. FINANCIAL REVIEW All figures give i the review are i Idia Rupee millio uless otherwise stated. Fiacial Highlights: ` i millio Particulars March 2017 March 2016 % variace Reveue from operatios 39,386 43,315-9 Gross profit 16,535 19, EBITDA 12,791 15, Loss after tax (6,927) (4,340) KSK ENERGY VENTURES LIMITED

13 Busiess Review Statutory Report Fiacial Statemets These movemets are o accout of moderate icrease i PLF at KSK Mahaadi accompaied by lower PLF ad operatig performace at Sai Wardha ad other smaller geeratio assets withi the wider sectorial ad ecoomic challeges beig experieced by the Idia Power sector as a whole with respect to fuel supplies costs thereto ad state agecies meetig commitmets. While the certaity towards ehaced operatig ad fiacial performace gaied mometum recetly with the aoucemet of the ew coal likage policy "SHAKTI" (Scheme for Haressig ad Allocatig Koyala (Coal) Trasparetly i Idia) by Govermet of Idia i May 2017, the path to recovery ad timig of the same cotiues to be ucertai util these ew govermet policies o fuel likages are actually implemeted ad proposed coal supply auctio mechaisms completed. Also, the decrease i gross profit coupled with the high fiace cost at KSK Mahaadi wherei a debt refiacig has become ecessary ad corer stoe for further equity value susteace ad ehacemet eve at the higher 2400 MW operatig base upo completio of the third ad fourth 600 MW uits at KSK Mahaadi. The Group has bee i discussios for active equity collaboratio ad stake divestmet at KSK Mahaadi wherei the debt fudig at the project would be refiaced. Therefore, the beefit of lower fiace cost at KSK Mahaadi is expected to be substatially realised thereafter. Notwithstadig the challeges across the sector ad exchage rate volatility expected to cotiue durig the curret year that could create distortios to the Compay's performace, the combiatio of our uderlyig assets, our risk mitigatio strategies ad certai recet positive developmets should, i the log term, assist i movig the Compay back towards meetig market expectatios. However, i the short term the Board expects reveues ad uderlyig profit to remai below the Board's iitial expectatios, but gradually improvig over the loger term. Pricipal activity ad overview KSK Group is primarily egaged i the developmet, owership, operatio ad maiteace of power geeratio assets i Idia. KSK focused its strategy o the private sector power developmet market, udertakig etire gamut of developmet, ivestmet, costructio, operatio ad maiteace of power plat with supplies iitially to idustrial cosumers operatig i Idia ad ow brachig out to cater to the eeds of utilities ad others i the wider Idia power sector. Icome Statemet Operatig Results Particulars March 2017 March 2016 Variace % variace Reveue 39,386 43,315 (3,929) -9 Cost of reveue (19,959) (20,757) Maufacturig expeses (2,892) (3,509) Gross Profit 16,535 19,049 (2,514) -13 Geeratio, reveues ad cost of reveue ` i millio The total reveue from operatio of the Group have decreased by ` 3,929 millio reflectig a year o year decrease of 9% as a result of moderate icrease i power geeratio at KSK Mahaadi offset by decreased output levels at Sai Wardha ad VS Ligite. Reveues for the year 2017 also iclude reveue of ` 4,699 millio (2016: ` 6,359 millio) at KSK Mahaadi uder chage i law provisio of the Power Purchase Agreemets with State Utilities ad Govermet of Idia directive but requirig determiatio by the Electricity Regulatory Commissio before receipt of paymet. Cost of reveue also decreased by ` 798 millio reflectig a year o year decrease of 4%. The decrease is maily due to decreased operatio i Sai Wardha ad other smaller assets. However, cost of reveue cotiued to remai at higher levels as compared to the maagemet expectatio largely o accout of efforts o reducig coal cost i Sai Wardha could ot materialise ad o accout of delay i gratig likage coal to KSK Mahaadi by the Govermet of Idia. The Positive achievemet durig the period has bee a fial rulig by the Competitio Appellate Tribual (COMPAT) i December As regards, the fial legal appeal of the Wester Coal Fields Limited (WCL) ad Coal Idia Limited (CIL), the Hoourable Supreme Court has ot stayed the COMPAT order ad fial hearig o the appeal is expected to be take up shortly. A favourable fial rulig would ot oly eable a price reductio but substatial claims of damages for the prior period determied by the COMPAT. Further cost of reveue is expected to come dow with the aoucemet of the ew coal likage policy "SHAKTI" (Scheme for Haressig ad Allocatig Koyala (Coal) Trasparetly i Idia) by Govermet of Idia i May However, the timig of the receipt of likage coal supplies cotiues to be ucertai util this ew Govermet policy o fuel likages is actually implemeted ad proposed coal supply auctio mechaisms completed. ANNUAL REPORT

14 Maagemet Discussio ad Aalysis Gross Profit Gross profit of the Group decreased from ` 19,049 millio to ` 16,535 millio, reflectig a year o year decrease of 13%. Decrease as explaied above is maily o accout of decreased operatio at Sai Wardha ad VS Ligite. The followig table ad charts shows year o year tred i reveue ad gross profit ` i Millio 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000-22,070 10,059 Reveue ad Gross Profit 43,315 23,804 21,118 19,049 8,962 7,617 39,386 16,535 * as per previous GAAP FY13* FY14* FY15* FY16 FY17 Sale of eergy Gross Profit Poly ( Sale of eergy) Poly (Gross Profit) Earigs Before Iterest, Depreciatio ad Tax (EBITDA) ` i millio Particulars March 2017 March 2016 Variace % Gross Profit 16,535 19,049 (2,514) -13% Employee beefit expeses (1,119) (870) (249) 29% Other geeral & admiistrative expeses (2,626) (2,240) (386) 17% EBITDA 12,791 15,939 (3,149) -20% EBITDA of the Group have decreased by 20% from ` 15,939 millio i FY 2016 to ` 12,791 millio i FY 2017 maily due to declie i gross profit alog with icrease i geeral ad admiistrative expese by 17% ad icrease i employee beefit expeses by 29% primarily due to full year operatio of secod uit of KSK Mahaadi. The followig chart shows the year o year tred i EBITDA of the Group. EBITDA ` i Millio 20,000 15,000 10,000 5,000 8,183 5,372 4,894 15,939 12,791 * as per previous GAAP - FY13* FY14* FY15* FY16 FY17 EBITDA Poly ( EBITDA) 12 KSK ENERGY VENTURES LIMITED

15 Busiess Review Statutory Report Fiacial Statemets Profit / (loss) for the year Particulars March 2017 March 2016 Variace % EBITDA 12,791 15,939 (3,149) -20 Fiace costs (21,945) (17,082) (4,863) 28 Depreciatio ad amortisatio (6,823) (5,467) (1,355) 25 Other icome ad exceptioal items 7, , Loss before tax (8,288) (5,919) (2,370) 40 Tax icome 1,361 1,579 (218) -14 Loss for the year (6,927) (4,340) (2,588) 60 Movemet i loss for the year from ` 4,340 millio to ` 6,927 millio is maily because of the followig: Icrease i fiace costs by ` 4,863 millio from ` 17,082 millio to ` 21,945 millio reflectig year o year icrease of 28%. The Icrease is o accout of icreased borrowig levels with respect to operatioal power plats, wherei ` 4,077 millio icrease is oly at KSK Mahaadi o a year o year basis was maily o accout of secod uit operatios for the full year. Icrease i Depreciatio ad amortizatio expeses from ` 5,467 millio i FY 2016 to ` 6,823 millio i FY 2017 is maily o accout of full year operatio of secod uit of the KSK Mahaadi. Icrease i other icome (icludig exceptioal item) from ` 691 millio to ` 7,689 millio maily o accout of claim of ` 6,055 millio relatig to iferior quality ad excess price receivable from a coal supplier i Sai Wardha after favorable rulig at COMPAT. Other icome has also icreased o accout of icrease i isurace claims amoutig to ` 253 millio, iterest o deposits/receivables amoutig to ` 319 millio ad foreig exchage gai amoutig to ` 279 millio. Decrease i tax icome from ` 1,579 millio to ` 1,361 millio reflects o recogitio of deferred tax asset o carry forward of losses i various group compaies due to ucertaity of recoverability. Segmetal aalysis The Group is curretly egaged i two busiess segmets, amely, power geeratio ad power developmet. Net reveues from its power geeratio segmet have decreased from ` 43,313 millio i FY 2016 to ` 39,367 millio i FY Net reveues from its project developmet segmet have icreased from ` 2 millio i FY 2016 to ` 19 millio i FY The power geeratio segmet cotributed 99% reveue of the Group's total reveue i both fiacial years 2017 ad Fiacial positio ad cash flows The capital employed of the Group was ` 259,178 millio as at March 31, 2017 ad icreased by ` 29,493 millio as compared to March 31, The Group icurred ` 27,636 millio towards capital expediture relatig to cotiuous costructio ad developmet activities at our 6 x 600 MW KSK Mahaadi power plat durig FY The loa portfolio of the Group comprises a combiatio of domestic ad foreig currecy loas. The aggregate outstadig idebtedess as at 31 March 2017 stood at ` 230,944 millio ad icreased by ` 36,158 millio compared to FY The icrease is maily o accout of disbursemet of cost overru term loas ad workig capital loas i KSK Mahaadi. However, the icrease is offset to the certai extet o accout of regular repaymet of loas borrowed i operatig compaies. Net customer receivables as at 31 March 2017 stood at ` 29,538 millio as compared to ` 23,328 millio as at previous year. Higher trade receivables are maily due to icrease i operatio o accout of commecemet of secod uit of KSK Mahaadi ad receivable pertaiig to chage i law pedig adjudicatio by appropriate authority. Cash accruals from operatios before workig capital chages are higher i FY 2017 by ` 3,579 millio as compared to FY 2016 maily due to secod uit operatio of KSK Mahaadi. Apart from deploymet of cash for capital expediture, the Group repaid some of its log term loas amoutig to ` 5,080 millio ad availed fresh disbursemet of borrowigs amoutig to ` 37,719 millio. Cosequetly, there is et cash iflow of ` 694 millio for the FY Equity ad fiacig arragemets ` i millio The Group's fiacig plas iclude pursuig a umber of iitiatives icludig a secodary sale of project iterests ad refiacig opportuities o more favourable terms to provide the ecessary liquidity to retire part of the existig high cost debt. ANNUAL REPORT

16 Maagemet Discussio ad Aalysis The Group's iterest i uderlyig busiess has bee supported by the equity raised ad leverage at the holdig compaies. Upo ehaced fiacial performace the Group would be i a positio to cosolidate its equity iterest ad further icrease equity stakes at uderlyig power plats i the future. Cosequetly, the Compay is holdig discussios ad evaluatig proposals for further strategic fudig ad equity collaboratio at the asset level with various potetial participats. HUMAN RESOURCES Huma Resources Departmet plays a key role i esurig the orgaizatios Huma assets are egaged ad motivated to eable achievemet of busiess goals. Learig & Developmet team has developed systems ad processes to uderstad ad assess the employee competecies required for the curret ad future roles to eable a holistic approach of eed idetificatio to preparatio of idividual developmetal pla, for developmet of the idetified gaps. Based o the busiess model of the Compay, HR has created mechaism for collaborative workig with the cotractor HR teams for esurig capability, skill ehacemet ad i tur improvig productivity at the groud level. Agecy Staff Traiig, a iitiative to moitor the traiig of KSK Cotractor's Employees o SOP/SMP/SCP thus esurig that traied cotractor employees are workig o our machiery has bee eabled durig the year. Total mapower of the Group at the ed of the fiacial year is 1,310. SUSTAINABILITY INITIATIVES KSK's Corporate Social Resposibility (CSR) programmes itegrate commuity developmet ad evirometal sustaiability i a holistic busiess operatios framework. At KSK, the values of givig back to society are deeply igraied i its philosophy of sustaiable growth wherei systematically plaed corporate itervetios have yielded promisig results ad possess the potetial of socio-ecoomic trasformatio of its project eighbourhood commuities. KSK is firmly committed to "Brigig Digity to Life" by assessig ad bridgig ifrastructure gaps aroud its projects across Idia that erich the quality of life of eighbourhood commuities. KSK's socio-ecoomic developmet iitiatives spa five thrust areas - health care, educatio, buildig healthier commuities, ecoomic developmet ad creatio of rural ifrastructure. Promotig Health Care KSK is committed to esure that healthcare is more easily available to all. KSK believes that as a corporate, its resposibilities towards the society are sigificat ad it reflects i our iitiative i tertiary healthcare with cardiac facility at Raipur, where services are offered free of charge to all stakeholders. The facility has achieved various milestoes as summarised below ad has edeavoured to serve more ad more childre with heart ailmets. More tha 16,500 Outpatiet Cardiac cosultatios ad 3,520 state of art cardiac surgeries performed free of cost by Jue 2017 Thousads of rural childre were screeed to early detectio of cardiac ailmets The hospital has take forward the iitiative of exclusive paediatric cardiac services totally free of cost to all irrespective of caste, creed, colour, religio ad atio. KSK Mahaadi ad the support ifrastructure projects i the state of Chhattisgarh alog with other power projects of the group cotiue to be ivolved with the above Sajeevai Hospital project ad look forward to the active support of the local commuities. Further, more importatly edeavour to facilitate ad stregthe the existig setup of multiple primary medical care facilities across locatios i the state of Chhattisgarh to create public goodwill for a harmoious costruct ad delivery of comprehesive medical care for the surroudig commuities. CAUTIONARY STATEMENT Certai statemets i this Maagemet Discussio ad Aalysis describig the Compay's busiess plas estimates ad expectatios, umerical or otherwise, may be 'Forward lookig statemets' withi the meaig of applicable laws ad regulatios. Actual results might differ substatially or materially from those expressed or implied. Importat developmets that could affect the Compay's operatios iclude ecoomic coditios, govermet permissios, sigificat chages i political ad regulatory eviromet i Idia, tax laws, litigatio, labour relatios ad iterest costs amogst others. 14 KSK ENERGY VENTURES LIMITED

17 Busiess Review Statutory Report Fiacial Statemets REPORT ON CORPORATE GOVERNANCE I compliace with Regulatio 34(3) ad Schedule V of Securities ad Exchage Board of Idia (SEBI) (Listig Obligatios ad Disclosure Requiremets) Regulatios, 2015 ("Listig Regulatios") the Compay submits the followig report: 1. Compay's philosophy o code of Corporate Goverace Corporate goverace is a syoym for soud maagemet, trasparecy ad disclosure. It is all about ethical coduct, opeess, itegrity ad accoutability of a eterprise ad it is vital for sustaied growth ad ehacig shareholder value. Credibility geerated by good Corporate Goverace eables a eterprise i ehacig the cofidece of the ivestors ad i establishig productive ad lastig busiess relatioship with all stakeholders. The Compay believes that maitaiig the highest stadards of Corporate Goverace is to facilitate effective, prudet maagemet that will cotribute towards achievig log term success. The Board govers the Group cosistetly with their busiess strategy ad commitmet to a trasparet ad high quality goverace system. It is the Compay's firm belief that corporate goverace policies ad practices ad its periodic review eed to be tailored to the size ad maturity of the orgaisatio. The Compay is committed to good Corporate Goverace ad has complied i all material respects with the requiremets specified i Listig Regulatios. The Compay is cotiually puttig thrust o implemetig best corporate goverace practices ad bechmarkig the same with high stadards. The Corporate Goverace Priciples implemeted by the Compay seeks to protect, recogize ad facilitate shareholders rights ad esure timely ad accurate disclosure to them. 2. Board of Directors The Board has a resposibility to determie the policies, practices ad operatig frameworks for the Compay. The Board's role is to provide etrepreeurial leadership of the compay withi a framework of prudet ad effective cotrols which eables risk to be assessed ad maaged. The Board of Directors is the pricipal aget of risk takig eterprise, the pricipal maker of commercial ad other judgmets. Dischargig these resposibilities ivolves havig a overall perspective of the fuctioig of the Compay ad the busiess as a whole. i. Compositio ad Category of Directors As o date of this report, the Board of Directors of the Compay cosists of 9 (Nie) Directors comprisig of oe No-Executive Idepedet Chairma, two Idepedet Directors, four No-Executive Directors ad two Executive / Whole-time Directors. The umber of Idepedet Directors is oe-third of the total umber of Directors ad hece the compositio of the Board is i coformity with Listig Regulatios. The umber of Directorships, Committee Memberships/Chairmaships of all Directors is withi the limits prescribed uder Compaies Act, 2013 ad Listig Regulatios ad same are provided below. Other directorships do ot iclude directorships of private limited compaies, Sectio 8 compaies ad of compaies icorporated outside Idia. Chairmaships / Memberships of board committees shall iclude oly Audit Committee ad Stakeholders' Relatioship Committee (excludig KSK Eergy Vetures Limited). ANNUAL REPORT

18 REPORT ON CORPORATE GOVERNANCE Name of the Director No. of other Directorships No. of other Committee positios & Category as o 31 March 2017 held as o 31 March 2017 Mr. T. L. Sakar Chairma Chairma / Idepedet Director Mr. S. R. Iyer Idepedet Director Mr. Girish N Kulkari Idepedet Director Mr. Ail Kumar Kutty No-Executive Director Mr. Tamay Das No-Executive Director Mr. K. Bapi Raju No-Executive Director Ms. Savita Jyoti * No-Executive Director Mr. K.A. Sastry Whole-time Director / Promoter Director Mr. S. Kishore Whole-time Director / Promoter Director * Appoited w.e.f. 27 August Mr. K. A. Sastry ad Mr. S. Kishore are the Promoter Directors. Noe of the other Directors are related to each other. ii. Board Meetigs ad Procedures Member Durig the year eded 31 March 2017, the Board met five times o the followig dates: 30 May 2016, 27 August 2016, 9 September 2016, 13 December 2016 ad 11 February The Maximum time gap betwee ay two meetigs did ot exceed 120 days. Leave of absece was grated to those directors who expressed their iability to atted the Board Meetig(s). Details of equity shares of the Compay held by the Directors as o 31 March 2017 are give below: Name Category Number of equity shares Mr. Ail Kumar Kutty No-Executive Director 375 Mr. Girish N Kulkari Idepedet Director 100 All required iformatio icludig but ot limited to those metioed i Schedule II of Listig Regulatios has bee placed before the Board for its cosideratio. Presetatios o the fiacial ad operatioal performace are made to the Board by the members of the Seior Maagemet team. Iformatio ad data that are more importat to the Board's uderstadig of the busiess i geeral ad related matters are tabled for discussio. The terms ad coditios of appoitmet of the Idepedet Directors are disclosed o the website of the Compay. Durig the year a separate meetig of the Idepedet Directors was held iter-alia to review the performace of No-idepedet Directors ad the Board as a whole. The details of the familiarisatio programme of the Idepedet Directors are available o the website of the Compay ( The Board periodically reviews compliace reports of all laws applicable to the Compay. The Board fuctios i a democratic maer ad the members are at liberty to discuss ay issue related to the busiess i geeral. 16 KSK ENERGY VENTURES LIMITED

19 Busiess Review Statutory Report Fiacial Statemets iii. Details of Directors attedace at Board Meetigs ad at the last Aual Geeral Meetig held o 24 September 2016 are give i the followig table: Name of the Director No. of Board Meetigs atteded Attedace at the durig the year Aual Geeral Meetig Mr. T. L. Sakar 5 Yes Mr. S. R. Iyer 4 Yes Mr. Girish N Kulkari 3 No Mr. Ail Kumar Kutty 4 Yes Mr. Tamay Das 5 Yes Mr. K. Bapi Raju 4 No Ms. Savita Jyoti* 3 Yes Mr. K.A. Sastry 4 Yes Mr. S. Kishore 5 Yes * Appoited w.e.f. 27 August Committees of the Board The Committees costituted by the Board focus o specific areas ad make iformed decisios withi the authority delegated. Each Committee of the Board is guided by its Charter, which defies the compositio, scope ad powers of the Committee. The Committees also make specific recommedatios to the Board o various matters from time to time. All observatios, recommedatios ad decisios of the Committees are placed before the Board for iformatio or for approval. Your Board has costituted the followig committees. i. Audit Committee The maagemet is resposible for the Compay's iteral cotrols ad the fiacial reportig process while the statutory auditors are resposible for performig idepedet audits of the Compay's fiacial statemets i accordace with geerally accepted auditig practices ad for issuig reports based o such audits. The Board of Directors has etrusted the Audit Committee to supervise these processes ad thus esure accurate ad timely disclosures that maitai the trasparecy, itegrity ad quality of fiacial reportig. Apart from the matters provided i Part C of Schedule II of SEBI (LODR) Regulatios, 2015 read with Sectio 177(4) of the Compaies Act, 2013, the Committee reviews Iteral Audit Report, Secretarial Audit Report ad the report of Statutory Auditors. The Committee also discusses with the Iteral, Secretarial ad Statutory Auditors their scope of audit, adequacy of iteral cotrol systems, fidigs ad observatios / suggestios. Compositio, meetigs ad attedace particulars of the Audit Committee durig the year is as follows: The Audit Committee met four times durig the year o 30 May 2016, 9 September 2016, 13 December 2016 ad 11 February Sl. No Name of the Director Category No. of Meetigs atteded 1 Mr. S.R. Iyer Chairma 4 2 Mr. T.L. Sakar Member 4 3 Mr. Girish N Kulkari Member 3 4 Mr. S. Kishore* Member 2 * Mr. S. Kishore was appoited as member of the committee w.e.f. 30 May All the members of the Committee except Mr. S. Kishore are Idepedet Directors ad all have the requisite qualificatio ad soud kowledge of fiace, accoutig practices ad iteral cotrols. The Audit Committee ivites such of the executives, as it cosiders appropriate (ad particularly the head of the Accouts fuctio) to be preset at its meetigs. The Iteral Auditors ad Statutory Auditors are also ivited to the meetigs. The Compay Secretary officiates as the Secretary of the Committee. The terms of referece of the Audit Committee are: 1. Oversight of the compay's fiacial reportig process ad the disclosure of its fiacial iformatio to esure that the fiacial statemet is correct, sufficiet ad credible; ANNUAL REPORT

20 REPORT ON CORPORATE GOVERNANCE 2. Recommedatio for appoitmet, remueratio ad terms of appoitmet of auditors of the Compay; 3. Approval of paymet to Statutory Auditors for ay other services redered by the Statutory Auditors; 4. Reviewig, with the maagemet, the aual fiacial statemets ad auditor's report thereo before submissio to the Board for approval, with particular referece to: a. Matters required to be icluded i the Director's Resposibility Statemet to be icluded i the Board's report i terms of clause ( c ) of sub-sectio 3 of sectio 134 of the Compaies Act, 2013; b. Chages, if ay, i accoutig policies ad practices ad reasos for the same; c. Major accoutig etries ivolvig estimates based o the exercise of judgmet by maagemet; d. Sigificat adjustmets made i the fiacial statemets arisig out of audit fidigs; e. Compliace with listig ad other legal requiremets relatig to fiacial statemets; f. Disclosure of ay related party trasactios; g. Qualificatios i the draft audit report. 5. Reviewig, with the maagemet, the quarterly fiacial statemets before submissio to the board for approval; 6. Reviewig, with the maagemet, the statemet of uses / applicatio of fuds raised through a issue (public issue, rights issue, preferetial issue, etc.), the statemet of fuds utilized for purposes other tha those stated i the offer documet / prospectus /otice ad the report submitted by the moitorig agecy moitorig the utilisatio of proceeds of a public or rights issue ad makig appropriate recommedatios to the Board to take up steps i this matter; 7. Review ad moitor the auditor's idepedece ad performace, ad effectiveess of audit process; 8. Approval or ay subsequet modificatio of trasactios of the compay with related parties; 9. Scrutiy of iter-corporate loas ad ivestmets; 10. Valuatio of udertakigs or assets of the Compay, wherever it is ecessary; 11. Evaluatio of iteral fiacial cotrols ad risk maagemet systems; 12. Reviewig, with the maagemet, performace of Statutory ad Iteral Auditors, adequacy of the iteral cotrol systems; 13. Reviewig the adequacy of iteral audit fuctio, if ay, icludig the structure of the iteral audit departmet, staffig ad seiority of the official headig the departmet, reportig structure coverage ad frequecy of iteral audit; 14. Discussio with iteral auditors of ay sigificat fidigs ad follow up there o; 15. Reviewig the fidigs of ay iteral ivestigatios by the iteral auditors ito matters where there is suspected fraud or irregularity or a failure of iteral cotrol systems of a material ature ad reportig the matter to the board; 16. Discussio with statutory auditors before the audit commeces, about the ature ad scope of audit as well as post-audit discussio to ascertai ay area of cocer; 17. To look ito the reasos for substatial defaults i the paymet to the depositors, debeture holders, shareholders (i case of o-paymet of declared divideds) ad creditors; 18. To review the fuctioig of the Whistle Blower mechaism; 19. Approval of appoitmet of CFO (i.e., the whole-time Fiace Director or ay other perso headig the fiace fuctio or dischargig that fuctio) after assessig the qualificatios, experiece ad backgroud, etc., of the cadidate; ad 20. Carryig out ay other fuctio as is metioed i the terms of referece of the Audit Committee. ii. Nomiatio ad Remueratio Committee Nomiatio ad Remueratio Committee cosists of No-Executive Idepedet Directors ad the terms of referece of Nomiatio ad Remueratio Committee are: 1. Formulatio of the criteria for determiig qualificatios, positive attributes ad idepedece of a Director ad recommed to the Board a policy, relatig to the remueratio for the Directors, Key Maagerial Persoel ad other employees; 2. Formulatio of criteria for evaluatio of Idepedet Directors ad the Board; 3. Devisig a policy o Board diversity; 18 KSK ENERGY VENTURES LIMITED

21 Busiess Review Statutory Report Fiacial Statemets 4. Idetifyig persos who are qualified to become Directors ad who may be appoited i seior maagemet i accordace with the criteria laid dow ad recommed to the Board their appoitmet ad removal. Accordigly, the Board has adopted the policy o Board Diversity, Director Attributes ad Remueratio policy for Directors, Key Maagerial Persoel ad other employees of the Compay. The Remueratio Policy is attached as Aexure to the Directors Report. a. Compositio, meetigs ad attedace particulars of the Nomiatio ad Remueratio Committee durig the year is as follows: The Committee met two times durig the year o 6 August 2016 ad 11 February Sl. No Name of the Director Category No. of Meetigs atteded 1 Mr. Girish N Kulkari Chairma 2 2 Mr. T.L. Sakar Member 2 3 Mr. S.R. Iyer Member 1 b. Performace evaluatio criteria for Idepedet Directors The performace evaluatio criteria for Idepedet Directors is determied by the Nomiatio ad Remueratio Committee. A idicative list of factors that may be evaluated icludes participatio i board meetigs, cotributio to developmet of strategy ad risk maagemet policies, uderstadig of policies of the compay, relatioship with fellow members, compliace with code of coduct ad Isider Tradig Policy of the Compay. c. Remueratio to Directors: The Idepedet Directors receive sittig fee for attedig meetigs of the Board ad Audit Committee. The remueratio paid to the Directors durig the year uder review was i coformity with the applicable provisios of the Compaies Act, 2013, duly cosidered ad approved by the Board ad the shareholders. The appoitmet of Whole-time Directors is govered by resolutios passed by the Board of Directors, Members of the Compay ad the Service Agreemets etered ito by the Compay with the Whole-time Directors, which cover the terms ad coditios of such appoitmet read with the service rules of the Compay. The otice period for Whole-time Directors is six moths as per the Service Agreemets. All compoets of remueratio to the Whole-time Directors are fixed i lie with the Compay's policies. The Compay has o stock optio scheme ad hece o stock optios have bee grated to the Directors. d. Details of Remueratio paid to Directors for the year eded 31 March 2017: Name of the Director Sittig Fees Salary Perquisites Commissio Total Mr. T. L. Sakar Mr. S. R. Iyer Mr. Girish N Kulkari Ms. Savita Jyoti Mr. Ail Kumar Kutty Mr. Tamay Das Mr. K. Bapi Raju Mr. K.A. Sastry Mr. S. Kishore iii. Stakeholders Relatioship Committee The Stakeholders Relatioship Committee is empowered to perform followig fuctios: 1. to redress the grievaces of shareholders, debeture holders ad other security holders; ` i millio 2. to resolve the grievaces of the security holders of the compay icludig complaits related to trasfer of shares, oreceipt of balace sheet, o receipt of declared divideds. ANNUAL REPORT

22 REPORT ON CORPORATE GOVERNANCE The Stakeholders Relatioship Committee cosists of three Directors. The Chairma of the Committee is a No-executive Director. The Committee met four times durig the year o 30 May 2016, 9 September 2016, 13 December 2016 ad 11 February The Compay Secretary, Mr. M.S. Phai Sekhar has bee desigated as Compliace Officer of the Compay i compliace with the SEBI (LODR) Regulatios, 2015 for resolutio of shareholder / ivestor complaits. Compositio of the Stakeholders Relatioship Committee ad attedace record durig the year is as follows: Name of the Director Category No. of Meetigs atteded Mr. Tamay Das Chairma 4 Mr. K.A. Sastry Member 4 Mr. S. Kishore Member 4 Durig the year uder review, the Compay has ot received ay complaits from the ivestors. iv. Fiace ad Authorisatio Committee The Fiace ad Authorisatio Committee allows the directors of the Compay to exercise amog other thigs, powers to borrow moey otherwise tha o debetures, ivest the fuds of the Compay ad to ope the bak accouts. The Committee cosists of four directors icludig two whole-time directors. The Compay Secretary officiates as Secretary of the Committee. The Committee met fourtee times durig the year o 28 April 2016, 13 May 2016, 27 Jue 2016, 22 July 2016, 30 July 2016, 10 August 2016, 27 August 2016, 12 September 2016, 24 September 2016, 27 October 2016, 18 November 2016, 26 December 2016, 4 March 2017 ad 25 March 2017 Compositio of the Fiace ad Authorisatio Committee ad attedace record durig the year is as follows: Name of the Director Category No. of Meetigs atteded Mr. Tamay Das Member 14 Mr. K.A. Sastry Member 14 Mr. S. Kishore Member 14 Mr. K. Bapi Raju Member 5 v. Corporate Social Resposibility (CSR) Committee The Committee cosists of three directors, icludig two No-Executive Directors. The Chairma is a No-Executive Idepedet Director. The CSR Committee's primary fuctios are to: 1. To formulate ad recommed a Corporate Social Resposibility Policy to the Board which shall idicate the activities to be udertake by the Compay i lie with Schedule VII of the Compaies Act, To recommed the amout of expediture to be icurred o the activities. 3. To moitor the Corporate Social Resposibility Policy from time to time. Durig the year, the Committee met o 13 December Compositio of the CSR Committee ad attedace record durig the year is as follows: Name of the Director Category No. of Meetigs atteded Mr. T.L. Sakar Chairma 1 Mr. Tamay Das Member 1 Mr. Ail Kumar Kutty Member 1 20 KSK ENERGY VENTURES LIMITED

23 Busiess Review Statutory Report Fiacial Statemets 4. GENERAL BODY MEETINGS i. Details of the Aual Geeral Meetigs (AGMs) held durig the precedig 3 years ad Special Resolutios passed thereat are give below: ii. Fiacial Year Date ad time of AGM Locatio Details of Special Resolutios passed September 2014 Plot No. 694, Road No. 33, Alteratio of Articles of Associatio of AM Jubilee Hills, Hyderabad - the Compay, Approval for Borrowig Powers of the Compay, Creatio of Charge for Borrowigs / Fiacial Assistace availed by the Compay, Power to give loas / make ivestmets August 2015 Plot No. 694, Road No. 33, Coversio of loa ito equity share AM Jubilee Hills, Hyderabad - capital September 2016 Plot No. 694, Road No. 33, Approval for Issue of Securities AM Jubilee Hills, Hyderabad - Approval for disposal of shares held i Subsidiaries/assets held by Subsidiaries Postal Ballot The Compay sought approval of the members through Postal Ballot dated 9 September 2016 for the followig Special Resolutios. (i) Icreasig the borrowig powers (ii) Creatio of charge for borrowigs / fiacial assistace availed (iii) Power to give loas / guaratees / provide security / make ivestmet Mr. V. Pavaa Sriivasa Rao, Practicig Compay Secretary has bee appoited as Scrutiizer for coductig Postal Ballot. The results were declared o 12 December 2016 based o the report submitted by him. The results icludig votig patter of the Postal Ballot are as follows: Resolutio No. 1: Icreasig the borrowig powers of the Compay (Special) Particulars Number of valid Votig i favour Votig agaist Remarks votes received of resolutio resolutio No. of shares % age No. of shares % age Passed with e-votig requisite Physical votig majority Total Ivalid votes 225 Abstaied 103 Less voted 50 Resolutio No. 2: Creatio of charge o the assets of the Compay (Special) Particulars Number of valid Votig i favour Votig agaist Remarks votes received of resolutio resolutio No. of shares % age No. of shares % age Passed with e-votig requisite Physical votig majority Total Ivalid votes 225 Abstaied 100 Less voted 50 ANNUAL REPORT

24 REPORT ON CORPORATE GOVERNANCE Resolutio No. 3: Power to give loas/ guaratees/ provide security / make ivestmets (Special) Particulars Number of valid Votig i favour Votig agaist Remarks votes received of resolutio resolutio 5. OTHER DISCLOSURES: i. Disclosure of Related Party Trasactios There are o materially sigificat related party trasactios that may have potetial coflict with the iterests of the Compay at large. The Board has approved the policy for dealig with related party trasactios ad the said policy has bee posted o the Compay's website at ii. Suitable disclosures as required for related parties by the Accoutig Stadard - 18 (AS-18) ad/or Idia Accoutig Stadards as applicable has bee made i the otes to the fiacial statemets iii. Capital Market Compliace(s) There was o icidece of o-compliace durig the last three years by the Compay o ay matter related to Capital Market. There were o pealties imposed or strictures passed o the Compay by Stock Exchages, SEBI or ay statutory authority. iv. Whistle Blower Policy The Compay has adopted a Whistle Blower Policy ad has established the ecessary vigil mechaism for employees ad directors to report cocers about uethical behaviour, actual or suspected fraud or violatio of the Compay's Code of Coduct. The policy has bee posted o the Compay's website at The Compay affirms that o perso has bee deied access to the Chairma of the Audit Committee. v. The policy for determiig 'material' subsidiaries is available o the website of the Compay at our policies.php 6. The Compay has complied with the requiremets of Schedule V Corporate Goverace report subparas (2) to (10) of the SEBI (Listig Obligatios ad Disclosure Requiremets) Regulatios, Compliace with madatory requiremets ad adoptio of discretioary requiremets: The Compay has complied with all the madatory requiremets of corporate goverace as stipulated i Schedule V of the SEBI (Listig Obligatios ad Disclosure Requiremets) Regulatios, Certificate from Statutory Auditors cofirmig compliace with the coditios of Corporate Goverace is aexed. The status of compliace with discretioary requiremets is as uder: a. Half-yearly ad other quarterly fiacial results are published i ewspapers ad posted o Compay's website. b. The Chairma of the Board is a No-Executive Idepedet Director ad his positio is separate from that of the Wholetime Director. c. The Iteral Auditor s Reports to the Audit Committee. No. of shares % age No. of shares % age Passed with e-votig requisite Physical votig majority Total Ivalid votes 225 Abstaied 100 Less voted 50 The Compay has complied with the procedures for the Postal Ballot i terms of the Compaies (Maagemet ad Admiistratio) Rules, 2014 ad amedmets thereto. 22 KSK ENERGY VENTURES LIMITED

25 Busiess Review Statutory Report Fiacial Statemets 8. The Compay has complied with the requiremets specified i Regulatios 17 to 27 ad clauses (b) to (i) of Regulatio 46(2) of the Listig Regulatios. 9. Code of Coduct: The Compay has adopted a Code of Coduct as required uder Regulatio 17 (5) of SEBI (LODR) Regulatios, 2015, which applies to all the Board Members ad Seior Maagemet of the Compay. The Board Members ad seior maagemet persoel have affirmed their compliace o a aual basis ad their cofirmatios have bee received i this regard. The Code of Coduct is available o the Compay's website: A declaratio to this effect siged by the Whole-time Director is attached as Aexure. 10.CEO ad CFO Certificatio The WTD ad CFO of the Compay have certified to the Board i relatio to reviewig fiacial statemets ad other iformatio as metioed i Part B Schedule II of SEBI (LODR) Regulatios, 2015 ad the required certificate is appeded. 11. Meas of Commuicatio i. Fiacial Results: The quarterly, half yearly ad aual fiacial results are published i all Idia editios of Busiess Stadard / Fiacial Express (atioal daily) ad Adhra Prabha (regioal ewspaper). Further the fiacial results, official ews releases ad other shareholder iformatio are posted o Compay's website: ii. iii. iv. Aual Reports: The Aual Reports were ed/posted to Members ad others etitled to receive them. Website: The Compay's website cotais a separate dedicated sectio 'Ivestor relatios' where shareholders' iformatio is available. Comprehesive iformatio about the Compay, its busiess ad operatios, press releases ad presetatio to Ivestors ca also be viewed. Aual Report is also available i a dowloadable form. NSE Electroic Applicatio Processig System (NEAPS) ad BSE olie Portal: The Compay also submits to NSE, all disclosures ad commuicatios through NSE's NEAPS portal. Similar filigs are made to BSE o their Olie Portal - BSE Corporate Compliace & Listig Cetre. 12.Geeral Shareholder Iformatio i. Aual Geeral Meetig ii. iii. iv. Day, Date ad time: Moday, 25 September 2017,10:30 hours Veue: Plot No.694, Road No.33, Jubilee Hills, Hyderabad Fiacial Year: 1 April to 31 March Divided Paymet date: Nil Listig o Stock Exchages with Stock Code Name ad Address of the Stock Exchage Scrip Code / Tradig Symbol BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai Natioal Stock Exchage of Idia Limited Exchage Plaza, Badra-Kurla Complex, Badra (East),Mumbai v. Listig fee for the year has bee paid to all the Stock Exchages. KSK vi. ISIN Code for Demat: The ISIN allotted to the Compay is INE143H01015 ANNUAL REPORT

26 REPORT ON CORPORATE GOVERNANCE vii. Market Iformatio: a. Market Price Data: High, low durig each moth ad tradig volumes of the Compay's Equity shares durig the last fiacial year at NSE ad BSE are give below. MONTH NSE BSE High Low Volume High Low Volume ` ` ` ` April, May, Jue, July, August, September, October, November, December, Jauary, February, March, b. Performace of share price of the Compay i compariso to the BSE Apr- 16 May- 16 Ju- 16 Jul- 16 Aug- 16 Sep- 16 Oct- 16 Nov- 16 Dec- 16 KSK Sesex KSK Sesex Ja- 17 Feb- 17 Mar KSK ENERGY VENTURES LIMITED

27 Busiess Review Statutory Report Fiacial Statemets c. Performace of share price of the Compay i compariso to the NSE Apr- 16 May- 16 Ju- 16 Jul- 16 Aug- 16 Sep- 16 Oct- 16 Nov- 16 Dec- 16 KSK Nifty KSK Nifty Ja- 17 Feb- 17 Mar viii. There was o suspesio of tradig i Securities of the Compay durig the year uder review ix. Registrar ad Trasfer Agets Karvy Computershare Private Limited Karvy Seleium Tower B, Plot 31-32, Gachibowli, Fiacial District, Naakramguda, Hyderabad Ph: Fax: eiward.ris@karvy.com x. Share Trasfer System : The Compay has appoited M/s. Karvy Computershare Private Limited, as its Registrar ad Share Trasfer Aget, who are fully equipped to carry out share trasfer activities ad redress ivestor complaits. Compay Secretary is the Compliace Officer for redressal of all shareholders' grievaces. xi. Distributio of Shareholdig a). Distributio of Shares as o 31 March 2017 Category (Amout) No. of Cases % of Cases Total Shares Amout % of Amout , ,408,334 24,083, , ,968,301 19,683, , ,322,285 23,222, ,759,425 17,594, ,151,674 11,516, ,659,248 16,592, ,130,838 41,308, & Above ,585,669 4,085,856, TOTAL ,985,774 4,239,857, ANNUAL REPORT

28 REPORT ON CORPORATE GOVERNANCE b) Shareholdig Patter as o 31 March 2017 Category No of Shares % A. Promoters Holdig Promoters Sub -Total: A B. Public Shareholdig Mutual Fuds /UTI Fiacial Istitutios /Baks Foreig Istitutioal Ivestors Bodies Corporate No Residet Idias No Residet Idia No Repatriable Foreig Bodies Idia Public Sub -Total: B GRAND TOTAL (A+B) xii. xiii. xiv. Dematerialisatio of Shares ad Liquidity: The Compay's shares are compulsorily traded i dematerialized form ad are admitted for dematerialisatio o both Depositories viz. Natioal Securities Depository Limited (NSDL) ad Cetral Depository Services (Idia) Limited (CDSL). The shares of the Compay are actively traded i the Natioal Stock Exchage of Idia Limited (NSE) ad BSE Limited (BSE). Address for ivestor's correspodece (a) Registrar ad Trasfer Agets: Karvy Computershare Private Limited Karvy Seleium Tower B, Plot 31-32, Gachibowli, Fiacial District, Naakramguda, Hyderabad Ph: Fax: eiward.ris@karvy.com (b) Ay Query o Aual Report: Corporate Affairs Departmet KSK Eergy Vetures Limited /82/A/431/A, Road No. 22, Jubilee Hills Hyderabad Ph: Fax: ivestors@ksk.co.i CIN: L45204TG2001PLC Plat Locatios: Not applicable as the Compay operates through its subsidiaries 26 KSK ENERGY VENTURES LIMITED

29 Busiess Review Statutory Report Fiacial Statemets Auditors' Certificate & Compliace Certificate Auditors' Certificate regardig compliace of the coditios of Corporate Goverace uder Schedule V (E) of SEBI (LODR) Regulatios, 2015 To The Members of KSK Eergy Vetures Limited We have examied the compliace of coditios of Corporate Goverace by KSK Eergy Vetures Limited for the year eded o 31 March 2017, as stipulated i regulatios 17 to 27, clauses (b) to (i) of sub-regulatio (2) of regulatio 46 ad paragraph C, D ad E of Schedule V of the SEBI (Listig Obligatios ad Disclosure Requiremets) Regulatios, 2015 ( Listig Regulatios ) with Stock Exchages i Idia. The compliace of coditios of Corporate Goverace is the resposibility of the maagemet. Our examiatio has bee limited to a review of the procedures ad implemetatio thereof, adopted by the Compay for esurig compliace with the coditios of Corporate Goverace. It is either a audit or a expressio of opiio o the fiacial statemets of the Compay. I our opiio ad to the best of our iformatio ad accordig to the explaatios give to us ad the represetatios made by the Directors ad maagemet, we certify that the Compay has complied with the coditios of Corporate Goverace as stipulated i the above metioed Listig Regulatios. We further state that such compliace is either a assurace as to the further viability of the Compay or the efficiecy or effectiveess with which the maagemet has coducted the affairs of the Compay. For Umamaheswara Rao & Co., Chartered Accoutats Sd/- R.R. Dakshiamurthy Parter Place: Hyderabad ICAI MRN Date : 27 May 2017 FRN S Certificate of Compliace with the Code of Coduct I hereby cofirm that the Compay has obtaied from all the members of the Board ad Seior Maagemet Persoel, affirmatio that they have complied with the Code of Coduct ad Ethics for Directors ad Seior Maagemet of the Compay i respect of Fiacial Year Place: Hyderabad Date : 27 May 2017 Sd/- S. Kishore Whole-time Director ANNUAL REPORT

30 CEO & CFO Certificate The Board of Directors, KSK Eergy Vetures Limited. COMPLIANCE CERTIFICATE We, S. Kishore, Whole-time Director ad V. Sambasiva Rao, Chief Fiacial Officer of KSK Eergy Vetures Limited, to the best of our kowledge ad belief hereby certify that: a) We have reviewed fiacial statemets ad the cash flow statemet for the year eded 31 March 2017 ad: (i) these statemets do ot cotai ay materially utrue statemet or omit ay material fact or cotai statemets that might be misleadig. (ii) these statemets together preset a true ad fair view of the Compay's affairs ad are i compliace with existig accoutig stadards, applicable laws ad regulatios. b) There are o trasactios etered ito by the Compay durig the year that are fraudulet, illegal or violative of the Compay's code of coduct. c) We accept resposibility for establishig ad maitaiig iteral cotrols for fiacial reportig ad that we have evaluated the effectiveess of the iteral cotrol systems of the Compay pertaiig to fiacial reportig ad we have disclosed to the auditors ad the Audit Committee, deficiecies i the desig ad operatios of iteral cotrols, if ay, of which we are aware ad the steps we have take or propose to take to rectify these deficiecies. d) We have idicated to the auditors ad the Audit Committee: (i) Sigificat chages i iteral cotrol over fiacial reportig durig the year; (ii) Sigificat chages i accoutig policies durig the year ad that the same has bee disclosed i the otes to the fiacial statemets; ad (iii) Istaces of sigificat fraud of which we have become aware ad the ivolvemet therei, if ay, of the maagemet or a employee havig a sigificat role i the Compay's iteral cotrol system over fiacial reportig. Sd/- Sd/- Place: Hyderabad V. Sambasiva Rao S. Kishore Date: 27 May 2017 Chief Fiacial Officer Whole-time Director 28 KSK ENERGY VENTURES LIMITED

31 Busiess Review Directors Statutory Report Fiacial Statemets DIRECTORS REPORT Dear Shareholders, Your Directors have the pleasure i presetig the Seveteeth Aual Report together with the audited statemets of accouts for the year eded 31 March Performace Highlights The fiacial performace of your Compay for the year eded 31 March 2017 is summarized below: Particulars Stadaloe Cosolidated Icome , , Operatig expediture (112.78) (166.47) (26,595.20) (27,375.96) Operatig profit , , Add: Other icome , Less: Fiace cost (1,333.89) (1,010.47) (21,945.11) (17,081.75) Less: Depreciatio (4.09) (7.21) (6,822.71) (5,467.47) Add: Exceptioal items - - 6, Profit/(loss) before tax (PBT) (875.01) (372.01) (8,288.35) (5,918.69) Tax expese / (icome) (1,360.85) (1,578.89) Net profit/(loss) after tax (875.01) (376.04) (6,927.50) (4,339.80) Share of profit /(loss) of Associate - - (68.71) - Other comprehesive icome Total comprehesive icome (874.95) (374.51) (6,994.87) (4,331.64) Earigs per share (EPS) (`) Basic ad Diluted (2.06) (0.88) (15.00) (9.77) The stadaloe ad cosolidated fiacial statemets of the Compay ad its Idia subsidiaries have bee prepared i accordace with Idia Accoutig Stadards ("IND AS") otified uder the Compaies (Idia Accoutig Stadards) Rules 2015 as ameded by Compaies (Idia Accoutig Stadards) (amedmet) Rules The Compay adopted IND AS from 1 April 2016 with trasitio date of 1 April 2015, replacig the previous Idia GAAP prescribed uder the Compaies Act, Stadaloe Durig the year uder review, icome of the Compay stood at ` millio. Further, there is a decrease i the operatig expediture, resultig i icrease of operatig profit from ` millio to ` millio. With icrease i fiace cost ad decrease other icome, the Compay reported a loss of ` millio. Cosolidated Durig the year uder review, the cosolidated reveue of the group has decreased by `3, millio as a result of moderate icrease i power geeratio at KSK Mahaadi offset by decreased output levels primarily at Sai Wardha Power ad VS Ligite. As a result, operatig profit has also decreased by ` 3, millio. With higher fiace cost ad depreciatio, loss before tax for the year has goe up by ` 2, millio ad stood at ` 8, millio. Review of Operatios ` i millio KSK Eergy Vetures Limited (The Compay) is a power project developmet Compay. The Compay carries out developmet, operatios ad maiteace of power projects i Idia. The Compay operates power plats which iclude four coal based plats, oe ligite based power plat, oe atural gas based power plat ad a solar based power project, havig a combied operatig ANNUAL REPORT

32 DIRECTORS REPORT capacity of 2072 MW. Pricipal Power Assets KSK's pricipal power projects are as follows:- Operatioal power plats KSK Mahaadi, a 3,600 MW coal based power plat i Chhattisgarh - two uits of 600 MW each are uder operatio; Sai Wardha, a 540 MW coal based power plat i Maharashtra; VS Ligite, a 135 MW ligite based power plat i Rajastha; Sai Lilagar (formerly Arasmeta), a 86 MW coal based power plat i Chhattisgarh; Sai Regecy, a 58 MW atural gas based power plat i Tamiladu; Sitapuram, a 43 MW coal based power plat i Telagaa ad Sai Maithili, a 10 MW Solar power plat i Rajastha. Power projects uder active costructio KSK Mahaadi, a 3,600 MW coal based power plat i Chhattisgarh - 4 uits of 600 MW each uder costructio. Review of Busiess Further, the operatioal ad fiacial performace of each of the power plats for the fiacial year has bee outlied i the"maagemet Discussio ad Aalysis Report". Share Capital Durig the year uder review, KSK Power Holdigs Limited (KPHL) has ot exercised the right of coversio of balace 6,98,56,800 share warrats held by them withi stipulated time. As per the terms of issue, the warrats lapsed ad ` 1, millio received as subscriber's moey towards the 6,98,56,800 share warrats has bee forfeited by the Compay. The paid up equity share capital as o 31 March 2017 was `4, millio comprisig of 42,39,85,744 (Forty Two Crore Thirty Nie Lakh Eighty Five Thousad ad Seve Hudred Forty Four)equity shares of ` 10/- each. Subsidiaries / Joit Vetures / Associates Details of major subsidiaries of the Compay ad their busiess operatios durig the year uder review are covered i the Maagemet Discussio ad Aalysis Report. As per the provisios of Sectio 129 of the Compaies Act, 2013 (hereiafter referred to as "Act") read with Compaies (Accouts) Rules, 2014,a separate statemet cotaiig the saliet features of the fiacial statemets of the Subsidiary Compaies/Associate Compaies/Joit Vetures has bee provided i Form AOC-1. The cosolidated fiacial statemets of the Compay which icludes the results of its subsidiaries, associates ad joit vetures are icluded i this Aual Report. Pursuat to the provisios of Sectio 136 of the Act, the fiacial statemets icludig cosolidated fiacial statemets are beig made available o the website of the Compay fiacial statemets of subsidiary compaies will be available for ispectio durig busiess hours at the registered office of the Compay ad also o the website of the Compay. Policy for determiig material subsidiaries of the Compay is available o the website of the Compay at the lik: Compaies which have become or ceased to be Subsidiaries, Joit Vetures or Associate Compaies durig the year Durig the year, KSK Water Ifrastructures Private Limited, KSK Wid Eergy Halagali Bechi Private Limited, KSK Wid Eergy Mothalli Haveri Private Limited ad KSK Wid Power Sakoahatti Athi Private Limited have become subsidiaries of the Compay. 30 KSK ENERGY VENTURES LIMITED

33 Busiess Review Statutory Report Fiacial Statemets Corporate Goverace Pursuat to SEBI (LODR) Regulatios, 2015 (hereiafter referred to as "Listig Regulatios"), a detailed report o Corporate Goverace is give i this Aual Report. A certificate from the Statutory Auditors of the Compay regardig compliace with coditios of Corporate Goverace is attached to the Corporate Goverace report. Maagemet Discussio ad Aalysis Report A Maagemet Discussio ad Aalysis report i terms of regulatio 34 of Listig Regulatios is provided i a separate sectio ad forms a itegral part of this Aual Report. Directors ad Key Maagerial Persoel Pursuat to the provisios of Sectio 149 of the Act, Ms. Savita Jyoti was appoited as Director at the Aual Geeral Meetig held o 24 September I accordace with the provisios of the Act, Mr. K. Bapi Raju, Director retires by rotatio at the forthcomig Aual Geeral Meetig ad beig eligible, offered himself for re-appoitmet. Durig the year, the No-Executive Directors of the Compay had o pecuiary relatioship or trasactios with the Compay. Brief profile of Mr. K. Bapi Raju is give i otice coveig the Seveteeth Aual Geeral Meetig for referece of shareholders. The Compay has received declaratio from all the Idepedet Directors of the Compay cofirmig that they meet the criteria of idepedece as prescribed uder the applicable provisios of Sectio 149 of the Act ad uder Listig Regulatios. There is o chage i the Key Maagerial Persoel. Meetigs of the Board The Board met five (5) times durig the year. The details are give i Corporate Goverace report that forms part of this Aual report. Performace Evaluatio As per the provisios of the Act ad Listig Regulatios, the Board carried out aual evaluatio of the Board's performace, its Committees ad idividual Directors. Board performace evaluatio, evaluatio of Committees ad idividual Directors is carried out through a questioaire ecompassig upo various areas that provide a isight ad feedback ito the fuctioig of the Board, its Committees, idividual Directors ad areas of developmet. I a separate meetig of idepedet directors, performace of o-idepedet directors, performace of the Board as a whole, performace of the Chairma ad quality, quatity ad timeliess of flow of iformatio betwee the Compay maagemet ad the Board was evaluated. Remueratio Policy I terms of the provisios of Sectio 178(3) of the Act ad Regulatio 19 read with Schedule II Part D of Listig Regulatios, the Nomiatio ad Remueratio Committee is resposible for formulatig the criteria for determiig qualificatios, positive attributes ad idepedece of a Director. The Nomiatio ad Remueratio Committee is also resposible for recommedig to the Board a policy relatig to the remueratio of the Directors, Key Maagerial Persoel ad Seior Maagemet. The Remueratio Policy is aexed herewith as Aexure I ad the same form part of this Report. Disclosures pertaiig to remueratio ad other details as required uder Sectio 197(12) of the Act read with Rule 5(1) of the Compaies(Appoitmet ad Remueratio of Maagerial Persoel) Rules, 2014 is aexed herewith ad marked as Aexure II. Particulars of Employees The particulars of employees as required to be disclosed pursuat to the provisios of Sectio 197(12) of the Act read with Rules 5(2) ad 5(3)of the Compaies (Appoitmet ad Remueratio of Maagerial Persoel) Rules, 2014,as ameded is aexed herewith ad marked as Aexure III to this Report. ANNUAL REPORT

34 DIRECTORS REPORT Directors' Resposibility Statemet I terms of Sectio 134(3) (c) ad 134(5) of the Act, your Board of Directors to the best of their kowledge ad ability cofirm that: i the preparatio of aual fiacial statemets, the applicable accoutig stadards have bee followed ad there are o material departures; they have selected such accoutig policies ad applied them cosistetly ad made judgmets ad estimates that are reasoable ad prudet so as to give a true ad fair view of the state of affairs of the Compay at the ed of the fiacial year ad of the loss of the Compay for that period; proper ad sufficiet care has bee take for the maiteace of adequate accoutig records i accordace with the provisios of this Act for safeguardig the assets of the Compay ad for prevetig ad detectig fraud ad other irregularities; aual fiacial statemets have bee prepared o a goig cocer basis; they have laid dow iteral fiacial cotrols to be followed by the Compay ad that such iteral fiacial cotrols are adequate ad were operatig effectively; proper systems are i place to esure compliace with the provisios of all applicable laws ad that such systems were adequate ad operatig effectively. Audit Committee The Audit Committee of the Compay costituted i terms of Sectio 177(1) of the Act ad Regulatio 18 of the Listig Regulatios comprises of - Mr. S.R. Iyer (Chairma& Idepedet Director), Mr. T.L. Sakar (Member& Idepedet Director), Mr. Girish N. Kulkari (Member& Idepedet Director) ad Mr. S. Kishore (Member& Whole-Time Director). Terms of referece, meetigs ad attedace particulars of the Audit Committee are icluded i the Corporate Goverace Report formig a itegral part of this Aual Report. Corporate Social Resposibility Committee KSK has bee pursuig CSR activities log before they were made madatory uder the Act. The group's sustaiability iitiatives towards commuity are essetially focused o five thrust areas: 1. Educatio 2. Health ad Family welfare 3. Sustaiable developmet 4. Ifrastructure developmet 5. Cultural ad Commuity Support I compliace with requiremets of Sectio 135 of the Act, the Compay has laid dow a CSR Policy. The CSR Committee met o 13 December The compositio of the Committee, cotets of CSR Policy ad report o CSR activities carried out durig the fiacial year eded 31 March 2017 i the format prescribed uder Rule 8 of Compaies (Corporate Social Resposibility Policy) Rules, 2014 is aexed herewith as Aexure IV. Statutory Auditors M/s. Umamaheshwara Rao & Co., Chartered Accoutats, Hyderabad, Statutory auditors of your Compay hold office util the coclusio of this year's Aual Geeral Meetig. The Board has recommeded appoitmet of M/s. Jawahar ad Associates, Chartered Accoutats, Hyderabad (Firm Registratio No S), as statutory auditors of the Compay i place of M/s. Umamaheshwara Rao &Co., Chartered Accoutats, Hyderabad, the existig auditors of the Compay, for a period of five years from the coclusio of this Seveteeth Aual Geeral Meetig i 2017 till the coclusio of the twety secod Aual Geeral Meetig to be held i the year 2022, subject to the ratificatio of their appoitmet at every AGM. The Members are hereby requested to approve the appoitmet of M/s Jawahar ad Associates, Chartered Accoutats as Auditors ad to authorise the Board of Directors to fix their remueratio. There is o qualificatio, reservatio, adverse remark or disclaimer by the Statutory Auditors i their report ad hece o explaatio or commets of the Board is required i this matter. 32 KSK ENERGY VENTURES LIMITED

35 Busiess Review Statutory Report Fiacial Statemets Secretarial Audit Report Pursuat to Sectio 204 of the Act read with the Compaies (Appoitmet ad Remueratio of Maagerial Persoel) Rules, 2014, the Compay had appoited Mr. V. Pavaa Sriivasa Rao, Practisig Compay Secretary, Hyderabad to udertake Secretarial Audit of the Compay for the fiacial year The Secretarial Audit Report i form MR-3 received from him is aexed herewith as Aexure V to this Report. There is o qualificatio, reservatio, adverse remark or disclaimer by the Secretarial Auditor i his Secretarial Audit Report ad hece o explaatio or commets of the Board is required i this matter. Whistle Blower Policy/Vigil Mechaism The Compay has formulated a Whistle Blower Policy ad has established a Vigil Mechaism for employees icludig Directors of the Compay to report geuie cocers. The provisios of this policy are i lie with the provisios of the Sectio 177(9) of the Act ad Regulatio 22 of Listig Regulatios. The whistle blower policy is available o the Compay's website at the lik: Divided Your Directors have ot recommeded ay divided o equity shares for the year uder review. Trasfer to Reserves The et movemet i the reserves of the Compay for the curret ad previous fiacial year are as follows: ` i millio Particulars 31 March March 2016 Securities Premium Accout Capital Redemptio reserve 1, Deposits from Public The Compay has ot accepted ay deposits from the public fallig withi the ambit of Sectio 73 of the Act ad the Compaies (Acceptace of Deposits) Rules, Material chages ad commitmets There are o material chages ad commitmets that affect the fiacial positio of the Compay from the fiacial year eded 31 March 2017 to the date of sigig of the Directors' Report. Further, there is o chage i the ature of busiess of the Compay. Details of sigificat ad material orders passed by the Regulators or Courts or Tribuals There are o sigificat ad material orders passed by the Regulators or Courts or Tribuals which would impact the goig cocer status of the Compay ad its future operatios. Iteral Cotrol Systems Your Directors believes that the Compay's iteral fiacial cotrols with referece to fiacial statemets were adequate ad effective durig the fiacial year Loas, Guaratees or Ivestmets uder Sectio 186 of the Act Particulars of loas give, ivestmets made, guaratees give ad securities provided are detailed i otes to the fiacial statemets. Cotracts ad arragemets with Related Parties The Board has approved a policy for Related Party Trasactios which has bee posted o the Compay's website at the weblik There are o materially sigificat related party trasactios made by the compay with related parties which may have potetial coflict with iterest of the compay at large. As a matter of policy, your Compay carries out trasactios with related parties o a arms' legth basis. Accordigly, particulars of cotracts or arragemets with related parties referred to i Sectio 188(1) alog with the justificatio for eterig ito such cotract or arragemet i Form AOC-2 does ot form a part of this report. Further, the Compay has ot etered ito ay cotract or arragemet or trasactio with its related parties which is ot at arm's legth durig the fiacial year 31 March Suitable disclosure as required by the Accoutig Stadard-18 (AS-18) ad/or ANNUAL REPORT

36 DIRECTORS REPORT Idia Accoutig Stadards as applicable has bee made i the otes to the fiacial statemets. Risk Maagemet Policy The Compay's policy for Risk Maagemet is to apply best practice i idetifyig, evaluatig ad cost-effectively cotrollig risks to esure that ay residual risks are at a acceptable level. Whilst it is ot possible to elimiate risk absolutely, effort is uderway to actively promote ad apply best practices at all levels ad to all its activities, icludig its dealig with exteral parters. Extract of Aual Retur As provided uder Sectio 92(3) of the Act, the extract of aual retur is give i Aexure VI i the prescribed Form MGT-9, which forms part of this report. Sexual Harassmet of Wome at Workplace (Prevetio, Prohibitio ad Redressal) Act, 2013 There were o complaits received pursuat to the Sexual Harassmet of Wome at Workplace (Prevetio, Prohibitio ad Redressal) Act, 2013 for the year eded 31 March Details of Coservatio of Eergy, Techology Absorptio, Foreig Exchage Earigs ad Outgo A. Coservatio of Eergy: 1) Steps take or impact o coservatio of eergy: -N.A.- 2) Steps take by the Compay for utilizig alterate sources of eergy: -N.A.- 3) The Capital ivestmet o eergy coservatio equipmet's: -N.A.- B. Techology Absorptio: i. The Efforts made towards techology absorptio: NIL ii. The Beefits derived like product improvemet, cost reductio, product developmet or import substitutio: NIL iii. Details of techology imported durig the past 3 years: No techology has bee imported durig the past 3 years. a. The details of techology import: -NIL b. The year of import: -NIL c. Whether the techology has bee fully absorbed: -NIL d. If ot fully absorbed, areas where absorptio has ot take place, ad the reasos thereof: - NIL iv. The expediture icurred o Research ad Developmet: -N.A.- C. Foreig Exchage Earigs ad Outgo: Particulars Exchage Earigs - - Foreig Exchage Outgo Ackowledgemets ` i millio Your Directors would like to place o record their grateful appreciatio for the assistace ad co-operatio received from the Fiacial Istitutios, Baks, Govermet of Idia, State Govermet, Govermet Authorities, Customers, Vedors ad Shareholders. Your Directors also wish to place o record their deep sese of appreciatio for the services of the employees of the Compay. We look forward to their cotiued support i the future. O behalf of the Board Place : Hyderabad Date: 27 May 2017 Sd/- T.L. Sakar Chairma 34 KSK ENERGY VENTURES LIMITED

37 Busiess Review Statutory Report Fiacial Statemets ANNEXURE-I TO DIRECTORS' REPORT REMUNERATION POLICY Preamble Much before the advet of Compaies Act, 2013 madatig various class of Compaies to formulate a Remueratio Policy, KSK Eergy Vetures Limited ("KSK" or "Compay") has a remueratio strategy i place, desiged to reward competitively the achievemet of log-term sustaiable performace ad attract ad motivate the best people who are committed to maitaiig a log-term career with the Compay ad aligig their performace ad iterest to the log-term iterests of the Compay. I achievig this, the Compay always believed that effective goverace of its remueratio practices is a key driver. The guidig priciple has always bee that the remueratio ad the other terms of employmet shall be competitive i order to esure that KSK ca attract ad retai competet people. Purpose This Policy o appoitmet ad remueratio of the Directors, Key Maagerial Persoel ad Seior Maagemet (the"policy") has bee formulated i terms of the provisios of Sectio 178 of the Compaies Act, 2013 (the "Act")ad Securities ad Exchage Board of Idia (SEBI) (Listig Obligatios ad Disclosure Requiremets) Regulatios, 2015 ( Listig Regulatios ) Objectives of the Policy The objectives of this policy are as detailed below: To formulate the criteria for determiig qualificatios, positive attributes ad idepedece of a Director ad recommed to the Board a policy, relatig to the remueratio for the directors, key maagerial persoel ad other employees. To esure that the level ad compositio of remueratio is reasoable ad sufficiet to attract, retai ad motivate Directors of the quality required to ru the Compay successfully. To esure that the relatioship of remueratio to performace is clear ad meets appropriate performace bechmarks. To esure that the remueratio to directors, key maagerial persoel ad seior maagemet ivolves a balace betwee fixed ad icetive pay reflectig short ad log term performace objectives appropriate to the workig of the Compay ad its goals. To evaluate the performace of the members of the Board. Defiitios Some of the key terms used i the policy are as uder: Board meas Board of Directors of KSK Eergy Vetures Limited or the Compay. Director meas a Director appoited o the Board of the Compay icludig executive, o-executive ad idepedet directors. Idepedet Director meas a Director referred to i Sectio 149(6) of the Act ad Listig Regulatios, as ameded from time to time. Key Maagerial Persoel(the "KMP") shall mea "Key Maagerial Persoel" as defied i Sectio 2(51) of the Act ad icludes Maagig Director or Chief Executive Officer or Maager ad i their absece, a Whole-time Director; Compay Secretary ad Chief Fiacial Officer. Nomiatio ad Remueratio Committee, by whatever ame called, shall mea a Committee of Board of Directors of the Compay, costituted i accordace with the provisios of Sectio 178 of the Act ad the Listig Regulatios. Seior Maagemet meas persoel of the Compay who are members of its core maagemet team excludig Board of Directors. This would iclude all members of maagemet oe level below the Executive Directors, icludig all fuctioal heads. ANNUAL REPORT

38 DIRECTORS REPORT Costitutio of Nomiatio ad Remueratio Committee A omiatio ad remueratio committee of the Board has bee costituted i lie with the requiremets of the Act. Role of the Committee: Formulatio of the criteria for determiig qualificatios, positive attributes ad idepedece of a director ad recommed to the Board a policy, relatig to the remueratio for the directors, key maagerial persoel ad other employees; Formulatio of criteria for evaluatio of Idepedet Directors ad the Board; Devisig a policy o Board diversity; Idetifyig persos who are qualified to become directors ad who may be appoited i seior maagemet i accordace with the criteria laid dow ad recommed to the Board their appoitmet ad removal. The compay shall disclose the remueratio policy ad the evaluatio criteria i its Aual Report. Remueratio of Maagig / Whole-time Director, KMP ad Seior Maagemet The remueratio / compesatio / commissio, etc., to the Maagig /Whole-time Director will be determied by the Committee ad recommeded to the Board for approval ad shall be i accordace with the provisios of the Act ad Rules made thereuder ad subject to the approval of the shareholders of the Compay. Further, the Whole-time Directors of the Compay are authorised to decide the remueratio of KMP (other tha Maagig / Whole-time Director) ad Seior Maagemet ad which shall be decided by Whole-time Directors based o the stadard market practices ad prevailig HR policy of the Compay. Remueratio to No-executive / Idepedet Director The remueratio / commissio / sittig fees, as the case may be, to the No-Executive /Idepedet Director, shall be i accordace with the provisios of the Act ad the Rules made thereuder for the time beig i force or as may be decided by the Committee / Board / Shareholders. A Idepedet Director shall ot be etitled to ay stock optio of the Compay uless otherwise permitted i terms of the Act ad listig regulatios, as ameded from time to time. O behalf of the Board Place : Hyderabad Date: 27 May 2017 Sd/- T.L. Sakar Chairma 36 KSK ENERGY VENTURES LIMITED

39 Busiess Review Statutory Report Fiacial Statemets ANNEXURE-II TO DIRECTORS' REPORT Statemet of particulars as per Rule 5 of Compaies (Appoitmet ad Remueratio of Maagerial persoel) Rules, (I) The ratio of the remueratio of each Director to the media remueratio of the employees of the compay for the fiacial year , the percetage icrease i remueratio of each Director, Chief Fiacial Officer ad Compay Secretary i the fiacial year are as below: S. Name of Desigatio Remueratio of The ratio of the The percetage icrease No. the Director Director/Key remueratio i remueratio of Maagerial of each Director each Director, Chief Persoel to the media Fiacial Officer, Chief for the remueratio of the Executive Officer, fiacial year employees of the Compay Secretary (` Millio) Compay for the or Maager i fiacial year the fiacial year 1 1 Mr. T.L. Sakar No-Executive Chairma ad Idepedet Director Nil Nil Nil 1 2 Mr. S.R. Iyer Idepedet Director Nil Nil Nil 1 3 Mr. Girish N. Kulkari Idepedet Director Nil Nil Nil 2 4 Ms. Savita Jyoti No-Executive Director Nil Nil Nil 5 Mr. K. A. Sastry Whole-time Director 9.0 1: Nil 6 Mr. S. Kishore Whole-time Director 9.0 1: Nil 7 2 Mr. K. Bapi Raju No-Executive Director Nil Nil Nil 8 2 Mr. Ail Kumar Kutty No-Executive Director Nil Nil Nil 9 2 Mr. Tamay Das No-Executive Director Nil Nil Nil 10 Mr. V. Sambasiva Rao Chief Fiacial Officer 3.6 Not Applicable Nil 11 Mr. M.S. Phai Sekhar Compay Secretary 2.4 Not Applicable Nil 1. Mr. T.L. Sakar, Mr. S.R. Iyer& Mr. Girish N. Kulkari were paid sittig fees for attedig the Meetigs. 2. Mr. K. Bapi Raju, Mr. Ail Kumar Kutty, Ms. Savita Jyoti ad Mr. Tamay Das were ot paid ay remueratio. 3. The Compay experieced a average icrease of 11.68% i the media remueratio of employees i the fiacial year. Though there is o icrease i salaries of employees, the icrease i media remueratio of employees is due to reductio i employees durig the year The Compay has 16 permaet employees o its rolls as o 31 March Average percetile icrease already made i the salaries of employees other tha the maagerial persoel i the last fiacial year was NIL ad the icrease i the maagerial remueratio was NIL. 6. The key parameters for ay variable compoet of remueratio availed by the Directors are cosidered by the Board of Directors based o the recommedatios of Nomiatio ad Remueratio Committee. 7. It is hereby affirmed that the Remueratio paid to Directors, Key Maagerial Persoel ad Seior Maagemet is as per the Remueratio policy of the Compay. O behalf of the Board Place : Hyderabad Date: 27 May 2017 Sd/- T.L. Sakar Chairma ANNUAL REPORT

40 DIRECTORS REPORT ANNEXURE-III TO DIRECTORS' REPORT Iformatio pursuat to Rule 5 (2) of the Compaies (Appoitmet ad Remueratio of Maagerial Persoel) Amedmet Rules, 2016 as ameded Details of top te employees of the Compay i terms of remueratio draw as o 31 March 2017 S. Employee Age Qualifi- Desigatio Date of Remu- Nature of Related to Exper- Last No Name -catios comme- -eratio employ- ay Director -iece Employmet -cemet (` Millio) -met or Maager (Years) of emplo- of the -ymet Compay 1 Sastry K A 57 B.Com, Whole-time 1 April 9.00 Cotractual No 29 Director, K&S FCA Director 2004 Cosultig Group Private Limited 2 Kishore S 54 B.Com, Whole-time 1 April 9.00 Cotractual No 30 Director, K&S FCA Director 2004 Cosultig Group Private Limited 3 Prakash B N 62 M. Tech Geeral 1 Sept 5.01 Permaet No 40 Global Trust Maager - ember Bak Fiace Krisha 40 MBA Deputy Chief 8 Jue 5.01 Permaet No 18 Vxceed Murthy K V Fiacial 2004 Techologies Officer 5 Shaker 56 B.Com, Head-HR 21 August 4.21 Permaet No 31 Aris Global Naraya C PGDMSM 2006 Software Private Limited 6 Sambasiva 68 B.Com, Chief 3 October 3.6 Permaet No 42 Bambio Agro Rao V ACA Fiacial 2006 Idustries Officer Limited 7 Raj Kamal 65 B.Com Head-Admi 25 Jauary 2.71 Permaet No 36 Pidilite Idustries Bajaj istratio 2010 Limited 8 Phai 37 M.Com, Compay 1 May 2.40 Permaet No 11 KSK Group Sekhar M S LLB, Secretary 2014 ACS 9 Narasimha 42 B.Com Seior 10 Jue 1.94 Permaet No 23 Sumagala Seeds Reddy G Maager 1997 Private Limited - Accouts 10 Latha 51 B.Com Executive 9 Jauary 1.80 Permaet No 33 Super Iducto Parikh Secretary 1993 Castigs Private Limited Note: No employees are there i the service of the compay i the category specified uder Rule 5 (2)(iii) of the Compaies (Appoitmet & Remueratio of Maagerial Persoel) Rules, Place : Hyderabad Date: 27 May 2017 O behalf of the Board Sd/- T.L. Sakar Chairma 38 KSK ENERGY VENTURES LIMITED

41 Busiess Review Statutory Report Fiacial Statemets ANNEXURE-IV TO DIRECTORS' REPORT Report o CSR Activities udertake durig the year as per Rule 8 of Compaies (Corporate Social Resposibility Policy) Rules, A brief outlie of the Compay's CSR policy, icludig overview of projects or programmes proposed to be udertake ad a referece to the web-lik to the CSR policy ad projects or programmes. The CSR activities of KSK reflect its basic philosophy of beig a ifrastructure compay that ot oly geerates power - which is a essetial buildig block for the developmet ad susteace of the ecoomy - but also, a Compay that seeks a larger role i atio buildig through its cotributio towards improvig the lives of the commuities i whose midst it works. The projects udertake will be withi the broad framework of Schedule VII of the Compaies Act, The group's CSR iitiatives towards commuity are essetially focused o five thrust areas: a. Educatio b. Health ad Family welfare c. Sustaiable Developmet d. Ifrastructure Developmet e. Cultural ad Commuity Support web-lik: 2. The CSR committee comprises of Mr. T.L. Sakar - Chairma, Mr. Ail Kumar Kutty - Member ad Mr. Tamay Das - Member 3. Average et profit of the Compay for last three fiacial years: ` (123.34) millio 4. Prescribed CSR expediture: Not Applicable for the fiacial year Details of CSR sped for the fiacial year: a. Total amout spet for the fiacial year: ` 6.8 millio b. Amout uspet, if ay: Nil c. Maer i which the amout spet durig the fiacial year: Maer i which amout spet durig the fiacial year is detailed below: ` i millio CSR Project Sector i Projects or Amout outlay Amout spet Cumulative Amout spet : or activity which the programs (budget) o the projects expediture Direct or projects project is (1) Local area project or or programs upto the through idetified covered or other programs Sub heads: reportig the implemetig (2) specify the wise (1)Direct period agecy State ad expediture District where o projects or projects or programs programs was (2) Overheads udertake Public Health Promotig Chhattisgarh Implemetig health care agecy Total I case the Compay has failed to sped the two per cet of the average et profit of the last three fiacial years or ay part thereof, the Compay shall provide the reasos for ot spedig the amout i its Board report : Not Applicable We hereby cofirm that the Implemetatio ad moitorig of CSR Policy, is i compliace with CSR objectives ad Policy of the compay. For ad o behalf of Corporate Social Resposibility Committee Sd/- Sd/- Place: Hyderabad Mr. S. Kishore Mr. T.L. Sakar Date: 27 May 2017 Whole-time Director Chairma of CSR Committee ANNUAL REPORT

42 DIRECTORS REPORT ANNEXURE-V FORM NO. MR-3 SECRETARIAL AUDIT REPORT for the fiacial year eded 31 March 2017 [Pursuat to Sectio 204(1) of the Compaies Act, 2013 ad Rule No.9 of the Compaies (Appoitmet ad Remueratio of Maagerial Persoel) Rules, 2014] To, The Members, KSK Eergy Vetures Limited CIN: L45204TG2001PLC /82/A/431/A, Road No.22, Jubilee Hills, Hyderabad I have coducted the secretarial audit of the compliace of applicable statutory provisios ad the adherece to good corporate practices by KSK Eergy Vetures Limited (hereiafter called 'the compay'). Secretarial Audit was coducted i a maer that provided me a reasoable basis for evaluatig the corporate coducts/statutory compliaces ad expressig my opiio thereo. Based o my verificatio of the compay's books, papers, miute books, forms ad returs filed ad other records maitaied by the compay ad also the iformatio provided by the Compay, its officers, agets ad authorized represetatives durig the coduct of secretarial audit, I hereby report that i my opiio, the compay has, durig the audit period coverig the fiacial year eded o 31 March 2017 complied with the statutory provisios listed hereuder ad also that the Compay has proper Board processes ad compliace mechaism i place to the extet, i the maer ad subject to the reportig made hereiafter: I have examied the books, papers, miute books, forms ad returs filed ad other records maitaied by KSK Eergy Vetures Limited ("the Compay") for the fiacial year eded o 31 March 2017accordig to the provisios of: (i) (ii) (iii) (iv) (v) The Compaies Act, 2013 (the Act) ad the rules made thereuder; The Securities Cotracts (Regulatio) Act, 1956 ('SCRA') ad the rules made thereuder; The Depositories Act, 1996 ad the Regulatios ad Bye-laws framed there uder; Foreig Exchage Maagemet Act, 1999 ad the rules ad regulatios made thereuder to the extet of Foreig Direct Ivestmet ad Overseas Direct Ivestmet; The followig Regulatios ad Guidelies prescribed uder the Securities ad Exchage Board of Idia Act, 1992 ('SEBI Act') icludig ay amedmets thereto; (a) The Securities ad Exchage Board of Idia (Substatial Acquisitio of Shares ad Takeovers) Regulatios, 2011; (b) The Securities ad Exchage Board of Idia (Prohibitio of Isider Tradig) Regulatios, 2015; (c) The Securities ad Exchage Board of Idia (Issue of Capital ad Disclosure Requiremets) Regulatios, 2009; (d) The Securities ad Exchage Board of Idia (Employee Stock Optio Scheme ad Employee Stock Purchase Scheme) Guidelies, 1999; (Not applicable to the compay durig the Audit Period) (e) The Securities ad Exchage Board of Idia (Issue ad Listig of Debt Securities) Regulatios, 2008; (Not applicable to the Compay durig the Audit Period) (f) The Securities ad Exchage Board of Idia (Registrars to a Issue ad Share Trasfer Agets) Regulatios, 1993 regardig the Compaies Act ad dealig with cliet; (g) The Securities ad Exchage Board of Idia (Delistig of Equity Shares) Regulatios, 2009; (Not Applicable to the Compay durig the Audit Period) ad 40 KSK ENERGY VENTURES LIMITED

43 Busiess Review Statutory Report Fiacial Statemets (h) The Securities ad Exchage Board of Idia (Buyback of Securities) Regulatios, 1998; (Not Applicable to the Compay durig the Audit Period) We have also examied compliace with the applicable clauses of the followig: (i) Secretarial Stadards issued by The Istitute of Compay Secretaries of Idia. (ii) The Securities ad Exchage Board of Idia (Listig Obligatios ad Disclosure Requiremets) Regulatios, 2015 & Listig Agreemets etered with the Natioal Stock Exchage of Idia Limited ad the BSE Limited. Durig the period uder review the Compay has complied with the provisios of the Act, Rules, Regulatios, Guidelies, Stadards, etc. metioed above. I further report that The Board of Directors of the Compay is duly costituted with proper balace of Executive Directors, No-Executive Directors ad Idepedet Directors. Adequate otice is give to all directors to schedule the Board Meetigs, ageda ad detailed otes o ageda were set at least seve days i advace ad a system exists for seekig ad obtaiig further iformatio ad clarificatios o the ageda items before the meetig ad for meaigful participatio at the meetig. All decisios at Board ad Committee Meetigs are carried out uaimously as recorded i the miutes of the meetigs of the Board of Directors or Committee of the Board, as the case may be. I further report that there are adequate systems ad processes i the Compay commesurate with the size ad operatios of the Compay to moitor ad esure compliace with applicable laws, rules, regulatios ad guidelies. I further report that durig the audit period 6,98,56,800 share warrats issued by the Compay have lapsed ad ` Crores received as subscribed moey towards the lapsed share warrats has bee forfeited by the Compay. Place: Hyderabad Sd/- V. Pavaa Sriivasa Rao, ACS Practicig Compay Secretary Date: 19 May 2017 FCS No C P No.:7671 ANNUAL REPORT

44 DIRECTORS REPORT ANNEXURE-VI TO DIRECTORS' REPORT FORM NO. MGT 9 EXTRACT OF ANNUAL RETURN (As o fiacial year eded o 31 March 2017) Pursuat to Sectio 92 (3) of the Compaies Act, 2013 ad rule 12(1) of the Compay (Maagemet & Admiistratio) Rules, I. REGISTRATION & OTHER DETAILS: 1. CIN L45204TG2001PLC Registratio Date 14 February Name of the Compay KSK ENERGY VENTURES LIMITED 4. Category/Sub-category of the Compay Public Compay limited by shares 5. Address of the Registered office & cotact details /82/A/431/A, Road No.22, Jubilee Hills, Hyderabad Whether listed compay YES Name, Address & cotact details Karvy Computershare Private Limited of the Registrar & Trasfer Aget Karvy Seleium Tower B, Plot No , Gachibowli, Fiacial District, Naakramguda, Hyderabad Tel: II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY eiward.ris@karvy.com (All the busiess activities cotributig 10 % or more of the total turover of the compay) Name ad Descriptio of mai NIC Code of the % to total turover products / services Product/service of the compay Project Maagemet / Developmet of Power Projects % III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES S.No. Name ad address of the CIN/GLN Holdig/ % of Applicable Compay subsidiary/ shares sectio associate held 1 KSK Eergy Limited NA Holdig (46) St. James Court, St. Deis Street, Port Louis, Mauritius 2 KSK Narmada Power Compay U40109TG2005PTC Subsidiary (87) Private Limited* 3 KSK Wid Eergy Private Limited* U40109TG2005PTC Subsidiary (87) 4 KSK Vidarbha Power Compay U40109TG2005PTC Subsidiary (87) Private Limited* 5 KSK Wardha Ifrastructure U45400TN1998PTC Subsidiary (87) Private Limited** 6 Sai Maithili Power Compay U40101TG2002PTC Subsidiary 76 2 (87) Private Limited* 7 KSK Dibbi Hydro Power U40108TG2007PTC Subsidiary 70 2 (87) Private Limited* 8 Kameg Dam Hydro Power Limited* U40108TG2007PLC Subsidiary (87) cotiued.. 42 KSK ENERGY VENTURES LIMITED

45 Busiess Review Statutory Report Fiacial Statemets S.No. Name of the Compay CIN/GLN Holdig/ % of Applicable subsidiary/ shares sectio associate held 9 Sai Lilagar Power Geeratio U40101TG2004PLC Subsidiary (87) Limited (formerly Sai Lilagar Power Limited)* 10 KSK Electricity Fiacig Idia U40109TG2005PTC Subsidiary (87) Private Limited* 11 VS Ligite Power Private Limited* U40104AP2001PTC Subsidiary (87) 12 Sai Regecy Power Corporatio U40105TN2002PTC Subsidiary (87) Private Limited** 13 Sai Wardha Power Geeratio Limited U40109TG2005PLC Subsidiary (87) (formerly Sai Wardha Power Limited)* 14 KSK Mahaadi Power Compay Limited* U40300TG2009PLC Subsidiary (87) 15 J R Power Ge Private Limited** U31200TN2007PTC Subsidiary (87) 16 KSK Upper Subasiri Hydro U40108TG2010PLC Subsidiary (87) Eergy Limited* 17 KSK Jameri Hydro Power Private Limited* U40108TG2010PTC Subsidiary (87) 18 KSK Dichag Power Compay U40108TG2010PTC Subsidiary (87) Private Limited* 19 Field Miig ad Ispats Limited U13100MH2001PLC Subsidiary (87) 2d floor, Bhaskar, Besides MLA Hostel Civil Lies, Nagpur, Maharashtra KSK Surya Photovoltaic Veture Limited* U74999TG2008PLC Subsidiary (87) 21 Tila Karali Hydro Electric Compay NA Subsidiary (87) Private Limited Kathmadu Muicipality - 3, Baluwatar, Kathmadu, Nepal 22 Bheri Hydro Power Compay NA Subsidiary (87) Private Limited Kathmadu Muicipality - 2, Saraswattitha Marg, Gairithara, Kathmadu, Nepal 23 Sai Power Pte Ltd NA Subsidiary (87) 79, Robiso Road, # CPF Bldg., Sigapore Sitapuram Power Limited U40109TG2005PLC Associate (6) Sitapuram, Dodapadu, Post- Mallareddy Gudem (M) (Chitalapalem) Suryapet, Telagaa KSK Wid Power AmiabhaviChikodi U40108TG2011PTC Subsidiary (87) Private Limited* 26 KSK Water Ifrastructures Private Limited* U41000TG2009PTC Subsidiary (87) 27 KSK Wid Eergy Mothalli Haveri U40108TG2010PTC Subsidiary (87) Private Limited* 28 KSK Wid Power Sakoahatti Athi U40105TG2011PTC Subsidiary (87) Private Limited* 29 KSK Wid Eergy Halagali Bechi U40108TG2010PTC Subsidiary (87) Private Limited* 30 Raigarh Champa Rail Ifrastructure U41000TG2009PTC Associate (6) Private Limited* 31 Global Coal Sourcig Plc NA Subsidiary (87) First Names House, Victoria Road, Douglas, Isle of Ma IM2 4DF * /82/A/431/A, Road No. 22, Jubilee Hills, Hyderabad d ** 2 Floor, Crow Court, No. 128, Cathedral Road, Cheai ANNUAL REPORT

46 DIRECTORS REPORT IV. SHARE HOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP AS PERCENTAGE OF TOTAL EQUITY) a) Category-wise Share Holdig Category of No. of Shares held at the begiig No. of Shares held at the ed of % Chage Shareholders of the year the year durig the year PROMOTER AND PROMOTER GROUP INDIAN Demat Physical Total % of Total Demat Physical Total % of Total Shares Shares Idividual /HUF Cetral Govermet / State Govermet(s) Bodies Corporate (2.38) Fiacial Istitutios / Baks Others Sub-Total A(1) (2.38) FOREIGN Idividuals (NRIs/ Foreig Idividuals) Bodies Corporate (7.96) Istitutios Qualified Foreig Ivestor Others Sub-Total A(2) : (7.96) Total A=A(1)+A(2) (10.34) PUBLIC SHAREHOLDING INSTITUTIONS Mutual Fuds /UTI (0.46) Fiacial Istitutios /Baks Cetral Govermet/ State Govermet(s) Veture Capital Fuds Isurace Compaies Foreig Istitutioal (0.86) Ivestors Foreig Veture Capital Ivestors Qualified Foreig KSK ENERGY VENTURES LIMITED

47 Busiess Review Statutory Report Fiacial Statemets Category of No. of Shares held at the begiig No. of Shares held at the ed of % Chage Shareholders of the year the year durig the year Ivestor Demat Physical Total % of Total Demat Physical Total % of Total Shares Shares Others Sub-Total B(1) : NON-INSTITUTIONS Bodies Corporate Idividuals (i) Idividuals holdig omial share capital upto Rs.1 lakh (ii) Idividuals holdig omial share capital i excess of Rs.1 lakh Others Sub-Total (B)(2) Total Public (10.34) Shareholdig (B)= (B) (1)+(B)(2) C. Shares held by Custodia for GDRs & ADRs Grad Total (A+B+C) b) Shareholdig of Promoters S Shareholder's Shareholdig at the begiig of the year Shareholdig at the ed of the year % chage No. Name i share No. of % of total %of Shares No. of % of total %of Shares holdig Shares durig Pledged / Shares Shares of Pledged / the year Shares of the ecumbered the compay ecumbered compay to total shares to total shares 1 KSK Eergy (7.96) Limited 2 KSK Eergy (2.38 ) Compay Private Limited 3 KSK Power Holdigs Limited ANNUAL REPORT

48 DIRECTORS REPORT ( c) Chage i Promoters' Shareholdig (please specify, if there is o chage) S. Name Shareholdig at the Date Icrease/ Reaso Cumulative shareholdig No. begiig of the year Decrease i durig the year share- No. of % of total -holdig No. of % of total Shares Shares Shares Shares of the of the Compay Compay 1 KSK Eergy Limited Sale Sale KSK Eergy Compay Private Limited Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale KSK ENERGY VENTURES LIMITED

49 Busiess Review Statutory Report Fiacial Statemets S. Name Shareholdig at the Date Icrease/ Reaso Cumulative shareholdig No. begiig of the year Decrease i durig the year share- No. of % of total -holdig No. of % of total Shares Shares Shares Shares of the of the Compay Compay Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale KSK Power Holdigs Limited (d) Shareholdig Patter of top te Shareholders (Other tha Directors, Promoters ad Holders of GDRs ad ADRs): S. Name Shareholdig at the begiig Cumulative Shareholdig No. of the year durig the year No. of % of total shares No. of % of total shares shares of the Compay shares of the Compay 1 HDFC Trustee Compay Limited - HDFC Equity Fud LB Mauritius IV Limited Pujab Natioal Bak Tarish Ivestmet Ad Tradig Co. Pvt. Ltd Tree Lie Asia Master Fud (Sigapore) PTE Ltd LB Mauritius III Limited HDFC Trustee Compay Limited - HDFC Prudece Fud HDFC Trustee Compay Limited - HDFC Ifrastructure Fud Bodhivriksha Advisors LLP Life Isurace Corporatio of Idia Note : 1. The Share Capital of the Compay as o 1 April 2016 is The Shares of the Compay are traded o a daily basis o the stock exchages ad hece date wise icrease/decrease i shareholdig is ot provided. 3. The details of the date wise icrease/decrease will be provided at the request of shareholder. ANNUAL REPORT

50 DIRECTORS REPORT (e) Shareholdig of Directors ad Key Maagerial Persoel: S. Name of the Director / Shareholdig at the begiig Cumulative Shareholdig No. Key Maagerial Persoel of the year durig the year Directors 1 Mr. T.L. Sakar No. of % of total shares No. of % of total shares shares of the Compay shares of the Compay At the begiig of the year At the ed of the year Mr. S.R. Iyer At the begiig of the year At the ed of the year Mr. Girish Kulkari At the begiig of the year At the ed of the year Ms. Savita Jyoti At the begiig of the year At the ed of the year Mr. Ail Kumar Kutty At the begiig of the year At the ed of the year Mr. Tamay Das At the begiig of the year At the ed of the year Mr. K. Bapi Raju At the begiig of the year At the ed of the year Mr. K.A. Sastry At the begiig of the year At the ed of the year Mr. S. Kishore At the begiig of the year At the ed of the year Key Maagerial Persoel 1 Mr. V. Sambasiva Rao At the begiig of the year At the ed of the year Mr. M.S. Phai Sekhar At the begiig of the year At the ed of the year KSK ENERGY VENTURES LIMITED

51 Busiess Review Statutory Report Fiacial Statemets V. INDEBTEDNESS -INDEBTEDNESS OF THE COMPANY INCLUDING INTEREST OUTSTANDING/ACCRUED BUT NOT DUE FOR PAYMENT. ` i millio Idebtedess at the begiig of the fiacial year Secured Loas Usecured Deposits Total excludig Loas Idebtedess deposits i) Pricipal Amout 1, , , ii) Iterest due but ot paid iii) Iterest accrued but ot due Total (i+ii+iii) 1, , , Chage i Idebtedess durig the fiacial year * Additio , * Reductio Net Chage , Idebtedess at the ed of the fiacial year i) Pricipal Amout 1, , , ii) Iterest due but ot paid iii) Iterest accrued but ot due Total (i+ii+iii) 1, , , VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remueratio to Maagig Director, Whole-time Directors ad/or Maager: ` i millio S.No. Particulars of Remueratio Name of WTD Total Amout 1 Gross salary K. A. Sastry S. Kishore (a) Salary as per provisios cotaied i sectio 17(1) of the Icome-tax Act, (b) Value of perquisites u/s 17(2) Icome-tax Act, (c) Profits i lieu of salary uder sectio 17(3) Icome- tax Act, Stock Optio Sweat Equity Commissio - as % of profit others, specify 5 Others, please specify Total (A) Ceilig as per the Act 10% of the et profits of the Compay as calculated uder Sectio 198 of Compaies Act, 2013 ANNUAL REPORT

52 DIRECTORS REPORT B. Remueratio to other directors ` i millio SN. Particulars of Remueratio Name of Directors Total Amout 1 Idepedet Directors T. L. Sakar S.R. Iyer Girish N. Kulkari Fee for attedig board committee meetigs Commissio Others, please specify Total (1) Other No-Executive Directors Fee for attedig board committee meetigs Commissio Others, please specify Total (2) Total (B)=(1+2) Ceilig as per the Act 1% of the et profits of the Compay as calculated uder Sectio 198 of Compaies Act, 2013 Total Maagerial Remueratio Overall Ceilig as per the Act C. Remueratio to Key Maagerial Persoel other tha MD/Maager/WTD 11% of the et profits of the Compay as calculated uder Sectio 198 of Compaies Act, 2013 SN Particulars of Remueratio Key Maagerial Persoel 1 Gross salary CS CFO Total (a) Salary as per provisios cotaied i sectio 17(1) of the Icome-tax Act, 1961 (b) Value of perquisites u/s 17(2) Icome-tax Act, (c) Profits i lieu of salary uder sectio 17(3) Icome-tax Act, Stock Optio Sweat Equity Commissio as % of profit Others specify Others, please specify Total VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: ` i millio There were o pealties / puishmet / compoudig of offeces for breach of ay sectio of Compaies Act agaist the Compay or its Directors or other officers i default, if ay, durig the year. O behalf of the Board Place: Hyderabad Date: 27 May 2017 Sd/- T.L. Sakar Chairma 50 KSK ENERGY VENTURES LIMITED

53 INDEPENDENT AUDITORS' REPORT To The Members of KSK Eergy Vetures Limited Report o the Stadaloe Fiacial Statemets We have audited the accompayig stadaloe Id AS fiacial statemets of KSK Eergy Vetures Limited ("the Compay"), which comprises the Balace Sheet as at March 31, 2017, the Statemet of Profit ad Loss (icludig other Comprehesive icome),the statemet of Cash Flows ad the Statemet of Chages i Equity for the year the eded ad a summary of sigificat accoutig policies ad other explaatory iformatio (hereiafter referred to as 'Stadaloe Id AS fiacial statemets'). Maagemet's Resposibility for the Stadaloe Fiacial Statemets The Compay's Board of Directors is resposible for the matters stated i Sectio 134(5) of the Compaies Act, 2013 ("the Act") with respect to the preparatio of these stadaloe Id AS fiacial statemets that give a true ad fair view of the fiacial positio, fiacial performace icludig other Comprehesive icome, cash flows ad chages i Equity of the Compay i accordace with the accoutig priciples geerally accepted i Idia, icludig the Idia Accoutig Stadards (Id AS) prescribed uder Sectio 133 of the Act, read with relevat Rule issued thereuder. This resposibility also icludes maiteace of adequate accoutig records i accordace with the provisios of the Act for safeguardig the assets of the Compay ad for prevetig ad detectig frauds ad other irregularities; selectio ad applicatio of appropriate accoutig policies; makig judgmets ad estimates that are reasoable ad prudet; ad desig, implemetatio ad maiteace of adequate iteral fiacial cotrols, that were operatig effectively for esurig the accuracy ad completeess of the accoutig records, relevat to the preparatio ad presetatio of the stadaloe Id AS fiacial statemets that give a true ad fair view ad are free from material misstatemet, whether due to fraud or error. Auditor's Resposibility Our resposibility is to express a opiio o these stadaloe Id AS fiacial statemets based o our audit. We have take ito accout the provisios of the Act, the accoutig ad auditig stadards ad matters which are required to be icluded i the audit report uder the provisios of the Act ad the Rules made thereuder. We coducted our audit i accordace with the Stadards o Auditig specified uder Sectio 143(10) of the Act. Those Stadards require that we comply with ethical requiremets ad pla ad perform the audit to obtai reasoable assurace about whether the stadaloe Id AS fiacial statemets are free from material misstatemet. A audit ivolves performig procedures to obtai audit evidece about the amouts ad the disclosures i the stadaloe Id AS fiacial statemets. The procedures selected deped o the auditor's judgmet, icludig the assessmet of the risks of material misstatemet of the stadaloe Id AS fiacial statemets, whether due to fraud or error. I makig those risk assessmets, the auditor cosiders iteral fiacial cotrol relevat to the Compay's preparatio of the stadaloe Id AS fiacial statemets that give a true ad fair view i order to desig audit procedures that are appropriate i the circumstaces. A audit also icludes evaluatig the appropriateess of the accoutig policies used ad the reasoableess of the accoutig estimates made by the Compay's Directors, as well as evaluatig the overall presetatio of the stadaloe Id AS fiacial statemets. We believe that the audit evidece we have obtaied is sufficiet ad appropriate to provide a basis for our audit opiio o the stadaloe Id AS fiacial statemets. Opiio I our opiio ad to the best of our iformatio ad accordig to the explaatios give to us, the aforesaid Id AS fiacial statemets give the iformatio required by the Act i the maer so required ad give a true ad fair view i coformity with the accoutig priciples geerally accepted i Idia icludig Id AS : (a) i the case of the Balace Sheet, of the state of affairs of the Compay as at March 31, 2017; (b) i the case of the Profit ad Loss Accout icludig other comprehesive icome, of the loss for the year eded o that date; (c) i the case of the Cash Flow Statemet, of the cash flows for the year eded o that date; ad (d) i the case of the chages i equity for the year eded o that date. ANNUAL REPORT

54 INDEPENDENT AUDITORS' REPORT Report o Other Legal ad Regulatory Requiremets 1. As required by the Compaies (Auditor's Report) Order, 2016 ("the Order") issued by the Cetral Govermet of Idia i terms of sub-sectio (11) of sectio 143 of the Act, we give i the Aexure A, a statemet o the matters specified i paragraphs 3 ad 4 of the Order. 2. As required by sectio 143(3) of the Act, we report that: a. We have sought ad obtaied all the iformatio ad explaatios which to the best of our kowledge ad belief were ecessary for the purposes of our audit.; b. I our opiio, proper books of accout as required by law have bee kept by the Compay so far as it appears from our examiatio of those books. c. the Balace Sheet, Statemet of Profit ad Loss, the statemet of Cash Flow ad the Statemet of chages i equity dealt with by this Report are i agreemet with the books of accout. d. i our opiio, the aforesaid stadaloe Id AS fiacial statemets comply with the Accoutig Stadards referred to i sectio 133 of compaies act 2013, read with relevat Rules issued thereuder. e. o the basis of writte represetatios received from the directors as o March 31, 2017, ad take o record by the Board of Directors, oe of the directors is disqualified as o March 31, 2017, from beig appoited as a director i terms of subsectio (2) of sectio 164(2) of the Compaies Act, f. With respect to the adequacy of the iteral fiacial cotrols over fiacial reportig of the compay ad the operatig effectiveess of such cotrols, refer to our separate report i 'Aexure B'; ad g. With respect to the other matters to be icluded i the Auditor's Report i accordace with Rule 11 of the Compaies (Audit ad Auditors) Rules, 2014, i our opiio ad to the best of our iformatio ad accordig to the explaatios give to us: i. The Compay has disclosed the impact of pedig litigatios o its fiacial positio i its stadaloe Id AS fiacial statemets-refer Note 26 to the stadaloe Id AS fiacial statemets ii. The Compay has made provisio, as required uder the applicable law or accoutig stadards, for material foreseeable losses, if ay, o log-term cotracts icludig derivatives cotracts. Refer to Note 12A to the stadaloe Id AS fiacial statemets. iii. There were o amouts which were required to be trasferred to the Ivestor Educatio ad Protectio Fud by the Compay. iv. The Compay has provided requisite disclosures i its stadaloe Id AS fiacial statemet as to holdig as well as dealigs i specified Bak Notes durig the period from 8 November, 2016 to 30 December, 2016 ad these are i accordace with the books of accouts maitaied by the Compay. Refer to Note 33 to the stadaloe Id AS fiacial statemets. For UmamaheswaraRao& Co., Chartered Accoutats Sd/- R R Dakshiamurthy Parter ICAI MRN: FRN S Hyderabad Date: May 27, KSK ENERGY VENTURES LIMITED

55 Aexure - A to Auditors' Report Referred to i paragraph 1 of "Report o Other Legal ad Regulatory Requiremets "iour report of eve date: Accordig to the iformatio ad explaatios give to us: i. (a) The compay has maitaied proper records showig full particulars, icludig quatitative details ad situatio of fixed assets. ii. iii. (b) (c) The Compay has a fixed programme of Physical verificatio of its fixed assets which, i our opiio, is reasoable havig regard to the size of the Compay ad the ature of its assets. Maagemet has physically verified the fixed assets durig the year. No material discrepacies were oticed o such verificatio. Accordig to the iformatio ad explaatio give to us ad o the basis of our examiatio of the records of the Compay, the title deeds of the immovable properties are held i the ame of the Compay. The Clause relatig to Ivetories is ot applicable to the compay, as the Compay has ot carried out ay maufacturig activity. The Compay has grated usecured loas from time to time to eleve compaies covered i the register maitaied uder sectio 189 of the Compaies Act, (a) I our opiio, the rate of iterest ad other terms ad coditios o which the Loas had bee grated to the bodies corporate listed i the register maitaied uder sectio 189 of the Act were ot, prima facie, prejudicial to the iterest of the Compay. (b) The terms of arragemet do ot stipulate ay repaymet schedule ad loas are repayable o demad. Accordigly, paragraph- 3(iii)(b)& (c) of the order is ot applicable to the compay i respect of repaymet of the pricipal amout. iv. I our opiio ad accordig to the iformatio ad explaatios give to us, the compay has complied with the provisios of sectio 185 ad 186 of the Act, with respect to the loas ad ivestmets made. v. The Compay has ot accepted ay deposits from the public ad cosequetly the directives issued by Reserve Bak of Idia; the provisios of Sectio 73to 76 of the Compaies Act, 2013 ad the rules framed there uder are ot applicable. vi. The cetral Govermet has ot prescribed the maiteace of cost records uder Sectio 148(1) of the Act, for ay of the services redered by the Compay. vii. (a) Accordig to the Iformatio ad explaatios give to us ad o the basis of examiatio of books of accouts of the Compay, amouts deducted/ accrued i the books of the accout i respect of udisputed statutory dues icludig Providet Fud, Employees' State Isurace, Icome tax, Sales Tax, Excise duty, Value Added Tax, Service Tax, Custom Duty, Cess ad other material statutory dues have bee regularly deposited durig the year by the Compay with the appropriate authorities. (b) Accordig to the iformatio ad explaatios give to us, o udisputed amouts payable i respect of Providet Fud, Employees' State Isurace, Icome tax, Sales Tax, Excise duty, Value Added Tax, Service Tax, Custom Duty, Cess ad other material statutory dues were i arrears as at 31 March 2017 for a period of more tha six moths from the date they became payable. Accordig to the iformatio ad explaatios give to us, there are o dues of duty of customs, Sales Tax, Icome Tax, Service Tax, duty of excise ad Value Added Tax which have ot bee deposited with the appropriate authorities o accout of ay dispute. viii. Accordig to the books of accout ad other relevat records of the compay examied by us ad the iformatio ad explaatios give to us, the compay has ot paid pricipal ad iterest of Rs crores ad Rs crores respectively to baks ad fiacial istitutios as at the date of our audit report. ix. The compay did ot raise ay moey by way of iitial public offer or further public offer (icludig debt istrumets) ad term loas durig the year. Accordigly, paragraph 3(ix) of the Order is ot applicable. x. Accordig to the iformatio ad explaatios give to us, o material fraud by the Compay or o the Compay by its officers or employees has bee oticed or reported durig the course of our audit. xi. xii. Accordig to the iformatio ad explaatios give to us ad based o our examiatio of the records of the Compay, the Compay has paid/provided for maagerial remueratio i accordace with the requisite approvals madated by the provisios of sectio 197 read with Schedule V to the Act. I our opiio ad accordig to the iformatio ad explaatios give to us, the Compay is ot a Nidhi compay. Accordigly, paragraph 3(xii) of the Order is ot applicable. xiii. Accordig to the iformatio ad explaatios give to us ad based o our examiatio of the records of the Compay, trasactios with the related parties are i compliace with sectios 177 ad 188 of the Act where applicable ad details of such trasactios have bee disclosed i the fiacial statemets as required by the applicable accoutig stadards. xiv. The compay has ot made ay preferetial allotmet or private placemet of shares or fully or partly covertible debetures durig the year uder review. Accordigly, paragraph 3(xiv) of the Order is ot applicable. xv. Accordig to the iformatio ad explaatios give to us ad based o our examiatio of the records of the Compay, the Compay has ot etered ito o-cash trasactios with directors or persos coected with him. Accordigly, paragraph 3(xv) of the Order is ot applicable. xvi. The Compay is ot required to be registered uder sectio 45-IA of the Reserve Bak of Idia Act ANNUAL REPORT

56 Aexure - B to Auditors' Report Report o the Iteral Fiacial Cotrols uder Clause (i) of Sub-sectio 3 of Sectio 143 of the Compaies Act, 2013 ("the Act"): We have audited the iteral fiacial cotrols over fiacial reportig of KSK Eergy Vetures Limited ("the Compay") as of 31 March 2017 i cojuctio with our audit of the stadaloe fiacial statemets of the Compay for the year eded o that date. Maagemet's Resposibility for Iteral Fiacial Cotrols The Compay's maagemet is resposible for establishig ad maitaiig iteral fiacial cotrols based o the iteral cotrol over fiacial reportig criteria established by the Compay cosiderig the essetial compoets of iteral cotrol stated i the Guidace Note o Audit of Iteral Fiacial Cotrols over Fiacial Reportig issued by the Istitute of Chartered Accoutats of Idia ('ICAI'). These resposibilities iclude the desig, implemetatio ad maiteace of adequate iteral fiacial cotrols that were operatig effectively for esurig the orderly ad efficiet coduct of its busiess, icludig adherece to compay's policies, the safeguardig of its assets, the prevetio ad detectio of frauds ad errors, the accuracy ad completeess of the accoutig records, ad the timely preparatio ad presetatio of reliable fiacial iformatio, as required uder the Compaies Act, Auditors' Resposibility Our resposibility is to express a opiio o the Compay's iteral fiacial cotrols over fiacial reportig based o our audit. We coducted our audit i accordace with the Guidace Note o Audit of Iteral Fiacial Cotrols over Fiacial Reportig (the "Guidace Note") ad the Stadards o Auditig, issued by ICAI ad deemed to be prescribed uder sectio 143(10) of the Compaies Act, 2013, to the extet applicable to a audit of iteral fiacial cotrols, both applicable to a audit of Iteral Fiacial Cotrols ad, both issued by the Istitute of Chartered Accoutats of Idia. Those Stadards ad the Guidace Note require that we comply with ethical requiremets ad pla ad perform the audit to obtai reasoable assurace about whether adequate iteral fiacial cotrols over fiacial reportig was established ad maitaied ad if such cotrols operated effectively i all material respects. Our audit ivolves performig procedures to obtai audit evidece about the adequacy of the iteral fiacial cotrols system over fiacial reportig ad their operatig effectiveess. Our audit of iteral fiacial cotrols over fiacial reportig icluded obtaiig a uderstadig of iteral fiacial cotrols over fiacial reportig, assessig the risk that a material weakess exists, ad testig ad evaluatig the desig ad operatig effectiveess of iteral cotrol based o the assessed risk. The procedures selected deped o the auditor's judgmet, icludig the assessmet of the risks of material misstatemet of the fiacial statemets, whether due to fraud or error. We believe that the audit evidece we have obtaied is sufficiet ad appropriate to provide a basis for our audit opiio o the Compay's iteral fiacial cotrols system over fiacial reportig. Meaig of Iteral Fiacial Cotrols over Fiacial Reportig A compay's iteral fiacial cotrol over fiacial reportig is a process desiged to provide reasoable assurace regardig the reliability of fiacial reportig ad the preparatio of fiacial statemets for exteral purposes i accordace with geerally accepted accoutig priciples. A compay's iteral fiacial cotrol over fiacial reportig icludes those policies ad procedures that (1) pertai to the maiteace of records that, i reasoable detail, accurately ad fairly reflect the trasactios ad dispositios of the assets of the compay; (2) provide reasoable assurace that trasactios are recorded as ecessary to permit preparatio of fiacial statemets i accordace with geerally accepted accoutig priciples, ad that receipts ad expeditures of the compay are beig made oly i accordace with authorisatios of maagemet ad directors of the compay; ad (3) provide reasoable assurace regardig prevetio or timely detectio of uauthorised acquisitio, use, or dispositio of the compay's assets that could have a material effect o the fiacial statemets. Iheret Limitatios of Iteral Fiacial Cotrols over Fiacial Reportig Because of the iheret limitatios of iteral fiacial cotrols over fiacial reportig, icludig the possibility of collusio or improper maagemet override of cotrols, material misstatemets due to error or fraud may occur ad ot be detected. Also, projectios of ay evaluatio of the iteral fiacial cotrols over fiacial reportig to future periods are subject to the risk that the iteral fiacial cotrol over fiacial reportig may become iadequate because of chages i coditios, or that the degree of compliace with the policies or procedures may deteriorate. Opiio I our opiio, the Compay has, i all material respects, a adequate iteral fiacial cotrols system over fiacial reportig ad such iteral fiacial cotrols over fiacial reportig were operatig effectively as at 31 March 2017, based o the iteral cotrol over fiacial reportig criteria established by the Compay cosiderig the essetial compoets of iteral cotrol stated i the Guidace Note o Audit of Iteral Fiacial Cotrols Over Fiacial Reportig issued by the Istitute of Chartered Accoutats of Idia. For UmamaheswaraRao& Co., Chartered Accoutats Sd/- R R Dakshiamurthy Parter ICAI MRN: FRN S Hyderabad Date: May 27, KSK ENERGY VENTURES LIMITED

57 Balace Sheet as at 31 March 2017 (All amouts i Idia Rupees millio, except share data ad where otherwise stated) I ASSETS 1 No-curret assets (a) Property, Plat ad Equipmet (b) Capital work-i-progress (c) Itagible assets (d) Fiacial Assets (i) Ivestmets 7 40, , , (ii) Trade receivables (iii) Loas , (iv) Other fiacial assets (e) Deferred tax assets (et) (f) Other o-curret assets Curret assets (a) Fiacial Assets Note As at As at As at 31 March March April , , , (i) Trade receivables (ii) Cash ad cash equivalets (iii) Bak balaces other tha (ii) above (iv) Loas 9 1, (v) Other fiacial assets (b) Curret tax assets (Net) (c) Other curret assets , , , No-curret assets held for sale TOTAL 44, , , ANNUAL REPORT

58 Balace Sheet as at 31 March 2017 (All amouts i Idia Rupees millio, except share data ad where otherwise stated) Note As at As at As at 31 March March April 2015 II EQUITY AND LIABILITIES Equity (a) Equity share capital 15 4, , , (b) Other equity 26, , , , , , Liabilities 1 No-curret liabilities (a) Fiacial liabilities (i) Borrowigs 16 4, , , (ii) Other fiacial liabilities , , , Curret liabilities (a) Fiacial liabilities (i) Borrowigs 16 2, , , (ii) Trade payables 17 1, (iii) Other fiacial liabilities 18 4, , , (b) Other curret liabilities (c) Curret tax liabilities (Net) , , , Liabilities associates with o-curret assets held for sale TOTAL 44, , , See accompayig otes to the fiacial statemets As per our report of eve date For Umamaheswara Rao & Co., Chartered Accoutats Firm Registratio No: S for ad o behalf of the Board Sd/- Sd/- Sd/- Sd/- Sd/- R R Dakshiamurthy S. Kishore K. A. Sastry V. Sambasiva Rao M. S. Phai Sekhar Parter Whole-time Director Whole-time Director Chief Fiacial officer Compay Secretary Membership No: DIN DIN Place: Hyderabad Date: 27 May KSK ENERGY VENTURES LIMITED

59 Statemet of Profit ad Loss for the year eded 31 March 2017 (All amouts i Idia Rupees millio, except share data ad where otherwise stated) Note Year eded Year eded 31 March March 2016 I Reveue from operatios II Other icome III Total reveue (I+II) IV Expeses Employee beefits expese Other expeses Fiace costs 24 1, , Depreciatio ad amortisatio expese 5 ad Total expeses 1, , V Profit /(loss) before tax (III-IV) (875.01) (372.02) VI Tax expese / (Icome) Curret tax - - I respect of earlier years Total tax expese / (Icome) VII Profit / (loss) for the year (V-VI) (875.01) (376.05) VIII Other Comprehesive Icome (a) (i) Items that will ot be reclassified to profit or loss Other Comprehesive Icome for the year IX Total Comprehesive Icome / (loss) for the year (VII+VIII) (874.95) (374.52) X Earigs / (loss) per share (EPS) Basic ad Diluted- face value Rs.10 per share (2.06) (0.88) See accompayig otes to the fiacial statemets As per our report of eve date For Umamaheswara Rao & Co., Chartered Accoutats Firm Registratio No: S for ad o behalf of the Board Sd/- Sd/- Sd/- Sd/- Sd/- R R Dakshiamurthy S. Kishore K. A. Sastry V. Sambasiva Rao M. S. Phai Sekhar Parter Whole-time Director Whole-time Director Chief Fiacial officer Compay Secretary Membership No: DIN DIN Place: Hyderabad Date: 27 May 2017 ANNUAL REPORT

60 Statemet of Chages i Equity for the year eded 31 March 2017 A. Equity Share Capital Particulars No of Shares Amout Balace as at 1 April ,249,194 4, Chages i equity share capital durig the year : (i) Coversio of warrats issued to promotor group 1,736, Balace as at 31 March ,985,774 4, Balace as at 1 April ,985,774 4, Chages i equity share capital durig the year : - - Balace as at 31 March ,985,774 4, B. Other Equity Reserves ad Surplus items of Other Moey Total Securities Capital Capital Retaied Comprehesive received Premium Reserve Redemptio Earigs Icome - Actuarial agaist share Reserve reserve gais / (losses) warrats Balace as at 1 April , , , , Profit / (loss) for the year (376.05) - - (376.05) Other Comprehesive Icome Items that will ot be reclassified to profit or loss Actuarial gai / (loss) Total comprehesive icome (376.05) (374.52) Allotmet of shares (47.64) Trasfer to Capital Redemptio Reserve (340.00) Trasactio with ower (340.00) - (47.64) Balace as at 31 March , , , , , KSK ENERGY VENTURES LIMITED

61 Reserves ad Surplus items of Other Moey Total Securities Capital Capital Retaied Comprehesive received Premium Reserve Redemptio Earigs Icome - Actuarial agaist share Reserve reserve gais / (losses) warrats Balace as at 1 April , , , , , Profit / (loss) for the year (875.01) - - (875.01) Other Comprehesive Icome Items that will ot be reclassified to profit or loss Actuarial gai / (loss) Total comprehesive icome (875.01) (874.95) Forfeiture of share warrats - 1, (1,728.96) - Trasactio with ower - 1, (1,728.96) - Balace as at 31 March , , , , , See accompayig otes to the fiacial statemets As per our report of eve date For Umamaheswara Rao & Co., for ad o behalf of the Board Chartered Accoutats Firm Registratio No: S Sd/- Sd/- Sd/- Sd/- Sd/- R R Dakshiamurthy S. Kishore K. A. Sastry V. Sambasiva Rao M. S. Phai Sekhar Parter Whole-time Director Whole-time Director Chief Fiacial officer Compay Secretary Membership No: DIN DIN Place: Hyderabad Date: 27 May 2017 ANNUAL REPORT

62 Cash Flow Statemet for the year eded 31 March 2017 (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 31 March March 2016 CASH FLOW FROM OPERATING ACTIVITIES Profit /(loss) before tax (875.01) (372.02) Adjustmet for Depreciatio ad amortisatio expese Fiace costs 1, , Iterest icome (350.70) (576.16) Baddebt writte off / Provisio for doubtful debts Profit/Loss o sale of assets, et (13.24) (0.01) Others, et Operatig profit before workig capital chages Adjustmet for workig capital Trade receivables (819.93) Fiacial assets Other assets (1.92) (37.38) Trade payables Other liabilities ad provisios (61.56) (29.73) Cash geerated from / (used i ) operatios 1, Icome taxes (paid) / Refud Net cash provided by operatig activities 1, CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets icludig capital work-i-progress ad capital advace (0.07) 9.10 Sale of fixed assets Advace received for sale of asset Advace received agaist issue of fiacial istrumet Advace for ivestmets, et - (20.00) Iter corporate deposit give / refud, et (1,448.93) 1, Sale of o curret ivestmets Purchase of o curret ivestmets (625.39) (2,776.43) (Ivestmet)/redemptio of bak deposit (held as margi moey or security agaist guaratees or borrowigs) (17.57) (168.83) Iterest received Net cash used i ivestig activities (1,021.27) (832.22) 60 KSK ENERGY VENTURES LIMITED

63 31 March March 2016 CASH FLOW FROM FINANCING ACTIVITIES Proceed from share issue, et of share issue expeses Proceed of log term borrowigs - 2, Repaymet of log term borrowigs - (340.00) Proceed/(repaymet) of short term borrowigs, et (1,024.42) Paymet of fiace costs (541.69) (813.81) Net cash used i fiacig activities (248.80) (53.95) Net icome / (decrease) i cash ad cash equivalets (29.59) (644.85) Cash ad cash equivalets at the begiig of the year Cash ad cash equivalets at the ed of the year (Refer ote. 13) See accompayig otes to the fiacial statemets As per our report of eve date For Umamaheswara Rao & Co., Chartered Accoutats Firm Registratio No: S for ad o behalf of the Board Sd/- Sd/- Sd/- Sd/- Sd/- R R Dakshiamurthy S. Kishore K. A. Sastry V. Sambasiva Rao M. S. Phai Sekhar Parter Whole-time Director Whole-time Director Chief Fiacial officer Compay Secretary Membership No: DIN DIN Place: Hyderabad Date: 27 May 2017 ANNUAL REPORT

64 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 1 Corporate iformatio 1.1 Geeral iformatio KSK Eergy Vetures Limited ( the Compay ), is a Public Compay domiciled i Idia ad icorporated uder the provisios of Compaies Act applicable i Idia. The Registered Office of the Compay is located at Jubilee Hills, Hyderabad , Telagaa. 1.2 Nature of operatios KSK Eergy Vetures Limited is primarily egaged i the developmet of private sector power projects 2 Basis of Preparatio 2.1 Statemet of Compliace These fiacial statemets of the Compay have bee prepared i accordace with Idia Accoutig Stadards (Id AS) as per the Compaies (Idia Accoutig Stadards) Rules, 2015 otified uder Sectio 133 of Compaies Act, 2013, (the 'Act') ad other relevat provisios of the Act. The Compay's fiacial statemets up to ad for the year eded 31 March 2016 were prepared i accordace with the Compaies (Accoutig Stadards) Rules, 2006, otified uder Sectio 133 of the Act ad other relevat provisios of the Act. As these are the Compay's first fiacial statemets prepared i accordace with Idia Accoutig Stadards (Id AS), Id AS 101, First-time adoptio of Idia Accoutig Stadards has bee applied. A explaatio of how the trasitio to Id AS has affected the previously reported fiacial positio, fiacial performace ad cash flows of the Compay is provided i Note 29. The fiacial statemets were authorised for issue by the Board of Directors o 27 May Fuctioal ad presetatio currecy These fiacial statemets are preseted i Idia Rupees (INR), which is also the Compay's fuctioal currecy. All amouts have bee rouded-off to the earest millio, uless otherwise stated. 2.3 Basis of measuremet These fiacial statemets have bee prepared o historical cost basis except for the followig items: Fiacial istrumets that are desigated as beig at fair value through profit or loss accout or through other comprehesive icome upo iitial recogitio are measured at fair value; Net employee defied beefit (asset) / liability that is measured based o actuarial valuatio. 3 Sigificat accoutig policies 3.1 Property, plat ad equipmet Property, plat ad equipmet are stated at cost, et of accumulated depreciatio ad/or accumulated impairmet losses, if ay. The cost icludes expeditures that are directly attributable to property plat ad equipmet such as employee cost, borrowig costs for log-term costructio projects etc., if recogitio criteria are met. Likewise, whe a major ispectio is performed, its costs are recogised i the carryig amout of the plat ad equipmet as a replacemet if the recogitio criteria are satisfied. Subsequet expediture is capitalised oly whe it is probable that the future ecoomic beefits associated with the expediture will flow to the Compay. All other repairs ad maiteace costs are recogised i statemet of profit ad loss. 62 KSK ENERGY VENTURES LIMITED

65 Depreciatio is computed, based o techical assessmet made by techical expert ad maagemet estimate, o straightlie basis over the estimated useful life which are cosistet with the useful life prescribed i Schedule II to the Compaies Act, The maagemet believes that these estimated useful lives are realistic ad reflect fair approximatio of the period over which the assets are likely to be used as follows: Nature of asset Buildigs 5-10 Electrical Works 1-10 Furiture & fixtures 1-10 Vehicles 8-10 Office equipmet & computers 3-6 Assets i the course of costructio are stated at cost ad ot depreciated util commissioed. Useful life (years) A item of property, plat ad equipmet is derecogised upo disposal or whe o future ecoomic beefits are expected from its use or disposal. Ay gai or loss arisig o derecogitio of the asset (calculated as the differece betwee the et disposal proceeds ad the carryig amout of the asset) is icluded i statemet of profit ad loss i the year the asset is derecogised. The assets residual values, useful lives ad methods of depreciatio are reviewed at each fiacial year ed, ad adjusted prospectively if appropriate. For trasitio to Id AS, the Compay has elected to cotiue with the carryig value of all of its property, plat ad equipmet recogised as of 1st April, 2015 (trasitio date) measured as per the previous GAAP ad use that carryig value as its deemed cost as of the trasitio date. 3.2 Itagible assets Itagible assets acquired separately are measured o iitial recogitio at cost. Followig iitial recogitio, itagible assets are carried at cost less ay accumulated amortisatio ad accumulated impairmet losses. Itagible assets with fiite lives are amortised over the useful ecoomic life ad assessed for impairmet wheever there is a idicatio that the itagible asset may be impaired. The amortisatio period ad the amortisatio method for a itagible asset with a fiite useful life are reviewed at least at the ed of each reportig period. Chages i the expected useful life or the expected patter of cosumptio of future ecoomic beefits embodied i the asset is accouted for by chagig the amortisatio period or method, as appropriate, ad are treated as chages i accoutig estimates. The amortisatio expese o itagible assets with fiite lives is recogised i the statemet of profit ad loss. Gais or losses arisig from derecogitio of a itagible asset are measured as the differece betwee the et disposal proceeds ad the carryig amout of the asset ad are recogised i the statemet of profit ad loss whe the asset is derecogised. Nature of asset Software 3 Useful life (years) For trasitio to Id AS, the Compay has elected to cotiue with the carryig value of all of its Itagible asset recogised as of 1st April, 2015 (trasitio date) measured as per the previous GAAP ad use that carryig value as its deemed cost as of the trasitio date. 3.3 No-curret assets held-for-sale No-curret assets ad disposal groups classified as held-for-sale are measured at lower of carryig amout ad fair value less costs to sell. No-curret assets ad disposal groups are classified as held-for-sale if their carryig amouts will be recovered through a sale trasactio rather tha through cotiuous use. This coditio is regarded as met oly whe the sale is highly probable ad the asset or disposal group is available for immediate sale i its preset coditio. Maagemet is committed to the sale, which should be expected to qualify for recogitio as a completed sale geerally withi oe year from the date of classificatio. Immediately before classificatio as held-for-sale or held-for-distributio, the assets, or compoets of a disposal group, are re-measured i accordace with the Compay s other accoutig policies. Thereafter, geerally the assets, or disposal group, are measured at the lower of their carryig amout ad fair value less costs to sell. Ay impairmet loss o a disposal ANNUAL REPORT

66 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) group is allocated first to goodwill, ad the to the remaiig assets ad liabilities o a pro rata basis, except that o loss is allocated to ivetories, fiacial assets, deferred tax assets, employee beefit assets which cotiue to be measured i accordace with the Compay s other accoutig policies. Impairmet losses o iitial classificatio as held-for-sale or held-for-distributio ad subsequet gais ad losses o re-measuremet are recogised i profit or loss. Gais are ot recogised i excess of ay cumulative impairmet loss. 3.4 Fiacial Istrumets Fiacial assets ad fiacial liabilities are recogised whe a etity becomes a party to the cotractual provisios of the istrumets. Fiacial assets ad fiacial liabilities are iitially measured at fair value. Trasactio costs that are directly attributable to the acquisitio or issue of fiacial assets ad fiacial liabilities (other tha fiacial assets ad fiacial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the fiacial assets or fiacial liabilities, as appropriate, o iitial recogitio. Trasactio costs directly attributable to the acquisitio of fiacial assets or fiacial liabilities at fair value through profit or loss are recogised immediately i profit or loss. 3.5 Fiacial assets Iitial recogitio & Measuremet All regular way purchases or sales of fiacial assets are recogised/derecogised o a trade date basis Subsequet measuremet For the purposes of subsequet measuremet, fiacial assets are classified i four categories: Debt istrumet at amortised cost Debt istrumet at fair value through other comprehesive icome (FVTOCI). Equity Istrumets measured at fair value through other comprehesive icome (FVTOCI) Debt istrumet, derivatives ad equity istrumets at fair value through profit or loss (FVTPL). Debt istrumets at amortised cost A debt istrumet is measured at the amortised cost if both the followig coditios are met: The asset is held withi a busiess model whose objective is to hold assets for collectig cotractual cash flows, ad Cotractual terms of the asset give rise o specified dates to cash flows that are solely paymets of pricipal ad iterest (SPPI) o the pricipal amout outstadig. After iitial measuremet, such fiacial assets are subsequetly measured at amortised cost usig the effective iterest rate (EIR) method. Amortised cost is calculated by takig ito accout ay discout or premium o acquisitio ad fees or costs that are a itegral part of the EIR. The EIR amortisatio is icluded i fiace icome i the profit or loss. The losses arisig from impairmet are recogised i the profit or loss. This category geerally applies to trade ad other receivables. Debt istrumet at FVTOCI A debt istrumet is classified as at the FVTOCI if both of the followig criteria are met: The objective of the busiess model is achieved both by collectig cotractual cash flows ad sellig the fiacial assets, ad The asset s cotractual cash flows represet SPPI. Debt istrumets icluded withi the FVTOCI category are measured iitially as well as at each reportig date at fair value. Fair value movemets are recogized i the other comprehesive icome (OCI). However, the Compay recogizes iterest icome, impairmet losses & reversals ad foreig exchage gai or loss i the P&L. O derecogitio of the asset, cumulative gai or loss previously recogised i OCI is reclassified from the equity to P&L. Iterest eared whilst holdig FVTOCI debt istrumet is reported as iterest icome usig the EIR method. Debt istrumet at FVTPL FVTPL is a residual category for debt istrumets. Ay debt istrumet, which does ot meet the criteria for categorizatio as at amortized cost or as FVTOCI, is classified as at FVTPL. I additio, the Compay may elect to desigate a debt istrumet, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such electio is allowed oly if doig so reduces or elimiates a measuremet or recogitio icosistecy (referred to as accoutig mismatch ). The Compay has ot desigated ay debt istrumet as at FVTPL. 64 KSK ENERGY VENTURES LIMITED

67 Debt istrumets icluded withi the FVTPL category are measured at fair value with all chages recogized i the P&L. Equity ivestmets All equity ivestmets i scope of Id AS 109 are measured at fair value. For the equity istrumets Compay may make a irrevocable electio to preset i other comprehesive icome subsequet chages i the fair value. The Compay makes such electio o a istrumet by-istrumet basis. The classificatio is made o iitial recogitio ad is irrevocable. If the Compay decides to classify a equity istrumet as at FVTOCI, the all fair value chages o the istrumet, excludig divideds, are recogized i the OCI. There is o recyclig of the amouts from OCI to P&L, eve o sale of ivestmet. However, the Compay may trasfer the cumulative gai or loss withi equity. Equity istrumets icluded withi the FVTPL category are measured at fair value with all chages recogized i the P&L. Derecogitio A fiacial asset (or, where applicable a part of a fiacial asset or part of a group of similar fiacial assets) is derecogised whe: The rights to receive cash flows from the asset have expired; or The Compay has trasferred its rights to receive cash flows from the asset or has assumed a obligatio to pay the received cash flows i full without material delay to a third party uder a pass-through arragemet; ad either (a) the Compay has trasferred substatially all the risks ad rewards of the asset, or (b) the Compay has either trasferred or retaied substatially all the risks ad rewards of the asset, but has trasferred cotrol of the asset. Impairmet of fiacial asset The Compay applies the expected credit loss model for recogisig impairmet loss o fiacial assets measured at amortised cost, trade receivables ad other cotractual rights to receive cash or other fiacial asset. For recogitio of impairmet loss o other fiacial assets ad risk exposure, the group determies that whether there has bee a sigificat icrease i the credit risk sice iitial recogitio. If credit risk has ot icreased sigificatly, 12-moth ECL is used to provide for impairmet loss. However, if credit risk has icreased sigificatly, lifetime ECL is used. If, i a subsequet period, credit quality of the istrumet improves such that there is o loger a sigificat icrease i credit risk sice iitial recogitio, the the etity reverts to recogisig impairmet loss allowace based o 12-moth ECL. Lifetime ECL are the expected credit losses resultig from all possible default evets over the expected life of a fiacial istrumet. The 12-moth ECL is a portio of the lifetime ECL which results from default evets that are possible withi 12 moths after the reportig date. ECL is the differece betwee all cotractual cash flows that are due to the group i accordace with the cotract ad all the cash flows that the etity expects to receive (i.e., all cash shortfalls), discouted at the origial EIR. Whe estimatig the cash flows, a etity is required to cosider: All cotractual terms of the fiacial istrumet (icludig prepaymet, extesio, call ad similar optios) over the expected life of the fiacial istrumet. However, i rare cases whe the expected life of the fiacial istrumet caot be estimated reliably, the the etity is required to use the remaiig cotractual term of the fiacial istrumet. Cash flows from the sale of collateral held or other credit ehacemets that are itegral to the cotractual terms. For trade receivables or ay cotractual right to receive cash or aother fiacial asset that result from trasactios that are expediet as permitted uder Id AS 109. This expected credit loss allowace is computed based o a provisio matrix which takes ito accout historical credit loss experiece ad adjusted for forward lookig iformatio. 3.6 Fiacial liabilities Iitial recogitio Fiacial liabilities withi the scope of Id AS 109 are classified as Fair value through profit or loss Other fiacial liability at amortised cost The Compay determies the classificatio of its fiacial liabilities at iitial recogitio. Fiacial liabilities are recogised iitially at fair value ad i the case of loas ad borrowigs, et of directly attributable trasactio costs. ANNUAL REPORT

68 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) Subsequet measuremet The subsequet measuremet of fiacial liabilities depeds o their classificatio as follows: Fiacial liabilities at fair value through profit or loss Fiacial liabilities at fair value through profit or loss iclude fiacial liabilities held for tradig ad fiacial liabilities desigated upo iitial recogitio as at fair value through profit or loss. Fiacial liabilities are classified as held for tradig if they are acquired for the purpose of sellig i the ear term. This category icludes derivative fiacial istrumets etered ito by the Compay that are ot desigated as hedgig istrumets i hedge relatioships as defied by Id AS 109. Separated embedded derivatives are also classified as held for tradig uless they are desigated as effective hedgig istrumets. Gais or losses o liabilities held for tradig are recogised i the statemet of profit ad loss. Fiacial liabilities desigated upo iitial recogitio at fair value through profit ad loss are desigated as such at the iitial date of recogitio, ad oly if criteria of Id AS 109 are satisfied. Loas ad borrowigs at amortised cost After iitial recogitio, loas ad borrowigs are subsequetly measured at amortised cost usig the effective iterest rate method. Gais ad losses are recogised i the statemet of profit ad loss whe the liabilities are derecogised as well as through the amortisatio process. Offsettig of fiacial istrumets Fiacial assets ad fiacial liabilities are offset ad the et amout reported i the Balace sheet if, ad oly if, there is a curretly eforceable legal right to offset the recogised amouts ad there is a itetio to settle o a et basis, or to realise the assets ad settle the liabilities simultaeously. Amortised cost of fiacial istrumets Amortised cost is computed usig the effective iterest method less ay allowace for impairmet ad pricipal repaymet or reductio. The calculatio takes ito accout ay premium or discout o acquisitio ad icludes trasactio costs ad fees that are a itegral part of the EIR. Derecogitio A fiacial liability is derecogised whe the obligatio uder the liability is discharged or cacelled or expires. Whe a existig fiacial liability is replaced by aother from the same leder o substatially differet terms, or the terms of a existig liability are substatially modified, such a exchage or modificatio is treated as a derecogitio of the origial liability ad the recogitio of a ew liability, ad the differece i the respective carryig amouts is recogised i the P&L. 3.7 Fair value measuremet Fair value is the price that would be received to sell a asset or paid to trasfer a liability i a orderly trasactio betwee market participats at the measuremet date, regardless of whether that price is directly observable or estimated usig aother valuatio techique. I estimatig the fair value of a asset or a liability, the Compay takes ito accout the characteristics of the asset or liability at the measuremet date. The fair value measuremet is based o the presumptio that the trasactio to sell the fiacial asset or settle the fiacial liability takes place either: I the pricipal market, or I the absece of a pricipal market, i the most advatageous market The pricipal or the most advatageous market must be accessible by the Compay. A fair value measuremet of a ofiacial asset takes ito accout a market participat s ability to geerate ecoomic beefits by usig the asset i its highest ad best use. Fair value measuremet ad / or disclosure purposes i these fiacial statemets is determied o such a basis, except for measuremets that have some similarities to fair value but are ot fair value, such as et realisable value i Id AS 2 or value i use i Id AS 36. The Compay- uses valuatio techiques that are appropriate i the circumstaces ad for which sufficiet data are available to measure fair value, maximisig the use of relevat observable iputs ad miimisig the use of uobservable iputs. All assets ad liabilities for which fair value is measured or disclosed i the fiacial statemets are categorised withi the fair value hierarchy, described as follows, based o the lowest level iput that is sigificat to the fair value measuremet as a whole: Level 1 Quoted (uadjusted) market prices i active markets for idetical assets or liabilities 66 KSK ENERGY VENTURES LIMITED

69 3.9 Reveue recogitio Reveue is recogised to the extet that it is probable that the ecoomic beefits associated with the trasactio will flow to the Compay, ad reveue ca be reliably measured. Reveue is measured at the fair value of the cosideratio received or receivable i accordace with the relevat agreemets, et of discouts, rebates ad other applicable taxes ad duties. Sale of electricity : Reveue from the sale of electricity is recogised whe eared o the basis of cotractual arragemet with the customers ad reflects the value of uits supplied icludig a estimated value of uits supplied to the customers betwee the date of their last meter readig ad year ed. Rederig of services : The Compay provides project developmet ad corporate support. Reveue from rederig of services is recogised i statemet of profit ad loss i the period i which the services are redered by referece to the stage of completio of the trasactio at the reportig date. The stage of completio is assessed o the basis of the actual services provided as a proportio of the total service to be provided. Iterest ad divided icome : Reveue from iterest is recogised o a accrual basis (usig the effective iterest rate method). Reveue from divideds is recogised whe the right to receive the paymet is established Taxes Curret icome tax Curret icome tax assets ad liabilities for the curret ad prior periods are measured at the amout expected to be recovered from or paid to the taxatio authorities. The tax rates ad tax laws used to compute the amout are those that are eacted or substatively eacted by the reportig date. Tax relatig to items recogised directly i equity is recogised i equity ad ot i the statemet of profit ad loss. Deferred icome tax Deferred icome tax is provided usig the liability method o temporary differeces at the reportig date betwee the tax bases of assets ad liabilities ad their carryig amouts for fiacial reportig purposes. Deferred icome tax liabilities are recogised for all taxable temporary differeces, except: Level 2 Valuatio techiques for which the lowest level iput that is sigificat to the fair value measuremet is directly or idirectly observable Level 3 Valuatio techiques for which the lowest level iput that is sigificat to the fair value measuremet is uobservable At each reportig date, the Maagemet aalyses the movemets i the values of assets ad liabilities which are required to be remeasured or re-assessed as per the Compay s - accoutig policies. For the purpose of fair value disclosures, the Compay has determied classes of assets ad liabilities o the basis of the ature, characteristics ad risks of the asset or liability ad the level of the fair value hierarchy as explaied above. 3.8 Foreig currecy traslatio I preparig the fiacial statemets of the Compay, trasactios i currecies other tha the etity s fuctioal currecy are recogised at the rate of exchage prevailig o the date of the trasactios. At the ed of each reportig period, moetary items deomiated i foreig currecies are traslated at the rates prevailig at that date. No-moetary assets ad liabilities that are measured i terms of historical cost i a foreig currecy are traslated usig the exchage rate at the date of the trasactio. No-moetary assets ad liabilities deomiated i foreig currecies that are stated at fair value are traslated to fuctioal currecy at foreig exchage rates rulig at the dates the fair value was determied. The gai or loss arisig o traslatio of o-moetary items measured at fair value is treated i lie with the recogitio of the gai or loss o the chage i fair value of the item (i.e., traslatio differeces o items whose fair value gai or loss is recogised i other comprehesive icome (OCI) or profit or loss are also recogised i OCI or profit or loss, respectively). Where the deferred icome tax liability arises from the iitial recogitio of goodwill or of a asset or liability i a trasactio that is ot a busiess combiatio ad, at the time of the trasactio, affects either the accoutig profit or taxable profit; I respect of taxable temporary differeces associated with ivestmets i subsidiaries ad iterests i joit operatios, where the timig of the reversal of the temporary differeces ca be cotrolled ad it is probable that the temporary differeces will ot reverse i the foreseeable future. Deferred icome tax assets are recogised for all deductible temporary differeces, the carry forward of uused tax credit ad ay uused tax losses. Deferred tax assets are recogised to the extet that it is probable that taxable profit will be available agaist which the deductible temporary differeces ad the carry forward of uused tax credits ad uused tax losses ca be utilised except: ANNUAL REPORT

70 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) Where the deferred icome tax asset relatig to the deductible temporary differece arises from the iitial recogitio of a asset or liability i a trasactio that is ot a busiess combiatio ad, at the time of the trasactio, affects either the accoutig profit or taxable profit or loss; I respect of deductible temporary differeces associated with ivestmets i subsidiaries ad iterests i joit operatios, deferred icome tax assets are recogised oly to the extet that it is probable that the temporary differeces will reverse i the foreseeable future ad taxable profit will be available agaist which the temporary differeces ca be utilised. The carryig amout of deferred icome tax assets is reviewed at each reportig date ad reduced to the extet that it is o loger probable that sufficiet taxable profit will be available to allow all or part of the deferred icome tax asset to be utilised. Urecogised deferred icome tax assets are reassessed at each reportig date ad are recogised to the extet that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred icome tax assets ad liabilities are measured at the tax rates that are expected to apply i the year whe the asset is realised or the liability is settled, based o tax rates (ad tax laws) that have bee eacted or substatively eacted at the reportig date. Deferred icome tax assets ad liabilities, relatig to items recogised outside statemet of profit ad loss is recogised outside statemet of profit ad loss. Deferred tax items are recogised i correlatio to the uderlyig trasactio either i other comprehesive icome or directly i equity. Deferred icome tax assets ad deferred icome tax liabilities are offset, if a legally eforceable right exists to set off curret tax assets agaist curret icome tax liabilities ad the deferred icome taxes relate to the same taxable etity ad the same taxatio authority Leases Compay as a lessee Operatig lease paymets are recogised as a expese i the statemet of profit ad loss o accrual basis Borrowig costs Borrowig costs directly attributable to the acquisitio, costructio or productio of qualifyig assets, that ecessarily take a substatial period of time to get ready for their iteded use or sale, are added to the cost of those assets. All other borrowig costs icludig trasactio costs are recogised i the statemet of profit ad loss i the year i which they are icurred, the amout beig determied usig the effective iterest rate method Impairmet of o-fiacial assets The Compay assesses at each reportig date whether there is a idicatio that a asset may be impaired. If ay idicatio exists, or whe aual impairmet testig for a asset is required, the Compay estimates the asset s recoverable amout. A asset s recoverable amout is the higher of a asset s or cash-geeratig uit s (CGU) fair value less costs to sell ad its value i use. Recoverable amout is determied for a idividual asset, uless the asset does ot geerate cash iflows that are largely idepedet of those from other assets or Groups of assets. Where the carryig amout of a asset or CGU exceeds its recoverable amout, the asset is cosidered impaired ad is writte dow to its recoverable amout. I assessig value i use, the estimated future cash flows are discouted to their preset value usig a pre-tax discout rate that reflects curret market assessmets of the time value of moey ad the risks specific to the asset. I determiig fair value less costs to sell, a appropriate valuatio model is used. These calculatios are corroborated by valuatio multiples, quoted share prices for publicly traded subsidiaries or other available fair value idicators. Impairmet losses of cotiuig operatios are recogised i the statemet of profit ad loss, except for property previously revalued where the revaluatio was take to equity. I this case the impairmet is also recogised i equity up to the amout of ay previous revaluatio. For assets excludig goodwill, a assessmet is made at each reportig date as to whether there is ay idicatio that previously recogised impairmet losses may o loger exist or may have decreased. If such idicatio exists, the Compay estimates the asset s or cash-geeratig uit s recoverable amout. A previously recogised impairmet loss is reversed oly if there has bee a chage i the assumptios used to determie the asset s recoverable amout sice the last impairmet loss was recogised. The reversal is limited so that the carryig amout of the asset does ot exceed its recoverable amout, or exceed the carryig amout that would have bee determied, et of depreciatio, had o impairmet loss bee recogised for the asset i prior years. Such reversal is recogised i the statemet of profit ad loss uless the asset is carried at revalued amout, i which case the reversal is treated as a revaluatio icrease. 68 KSK ENERGY VENTURES LIMITED

71 3.14 Cash ad short-term deposits Cash ad short-term deposits i the Balace Sheet comprise cash at baks ad o had ad short-term deposits. For the purpose of the cash flow statemet, cash ad cash equivalets cosist of cash ad readily covertible short-term deposits, et of restricted cash ad outstadig bak overdrafts Earigs per share The earigs cosidered i ascertaiig the Compay s earigs per share (EPS) comprise the et profit or loss for the period attributable to equity holders. The umber of shares used for computig the basic EPS is the weighted average umber of shares outstadig durig the year. Diluted earigs per share amouts are calculated by dividig the et profit attributable to equity holders (after adjustig for effects of all dilutive potetial equity shares) by the weighted average umber of ordiary shares outstadig durig the year plus the weighted average umber of shares that would be issued o coversio of all the dilutive potetial shares ito equity shares Provisios Provisios are recogised whe the Compay has a preset obligatio (legal or costructive) as a result of a past evet, it is probable that a outflow of resources embodyig ecoomic beefits will be required to settle the obligatio ad a reliable estimate ca be made of the amout of the obligatio. Where the Compay expects some or all of a provisio to be reimbursed, for example uder a isurace cotract, the reimbursemet is recogised as a separate asset but oly whe the reimbursemet is virtually certai. The expese relatig to ay provisio is preseted i the statemet of profit ad loss et of ay reimbursemet. If the effect of the time value of moey is material, provisios are discouted usig a curret pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discoutig is used, the icrease i the provisio due to the passage of time is recogised as a fiace cost Employee beefits Gratuity I accordace with Gratuity laws, the Compay provides for gratuity, a defied beefit retiremet pla ( the Gratuity Pla ) coverig eligible employees. The Gratuity Pla provides a lump-sum paymet to vested employees at retiremet, death, icapacitatio or termiatio of employmet, of a amout based o the respective employee's salary ad the teure of employmet. Liabilities with regard to the Gratuity pla are determied by actuarial valuatio, performed by a idepedet actuary, at each reportig date usig the projected uit credit method. The Compay fully cotributes all ascertaied liabilities to the gratuity fud admiistered ad maaged by Life Isurace Corporatio of Idia, a Govermet of Idia udertakig which is a qualified isurer. The Compay recogises the et obligatio of a defied beefit pla i its Balace sheet as a asset or liability, respectively i accordace with Id AS 19, Employee beefits. Re-measuremets of the et defied beefit liability, which comprise actuarial gais ad losses, the retur o pla assets (excludig iterest) ad the effect of the asset ceilig (if ay, excludig iterest), are recogised immediately i OCI. The Compay determies the et iterest expese / (icome) o the et defied beefit liability (asset) for the period by applyig the discout rate used to measure the defied beefit obligatio at the begiig of the aual period to the the-et defied beefit liability (asset), takig ito accout ay chages i the et defied beefit liability / (asset) durig the period as a result of cotributios ad beefit paymets. Net iterest expese ad other expeses related to defied beefit plas are recogised i profit or loss Providet fud Eligible employees of Compay receive beefits from a providet fud, which is a defied cotributio pla. Both the employee ad the Compay make mothly cotributios to the providet fud pla equal to a specified percetage of the covered employee's salary ad the employer cotributio is charged to statemet of profit ad loss. The beefits are cotributed to the govermet admiistered providet fud, which is paid directly to the cocered employee by the fud. The Compay has o further obligatio to the pla beyod its mothly cotributios. Employees State Isurace Scheme I additio, some employees of the Compay are covered uder Employees State Isurace Scheme Act 1948, which are also defied cotributio schemes recogized ad admiistered by Govermet of Idia. The Compay's cotributios to these schemes are recogized as expese i statemet of profit ad loss durig the period i which the employee reders the related service. The Compay has o further obligatio uder these plas beyod its mothly cotributios. ANNUAL REPORT

72 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) Short- term beefits Short-term employee beefit obligatios are measured o a udiscouted basis ad are expesed as the related service is provided. A liability is recogised for the amout expected to be paid towards bous if the Compay has a preset legal or costructive obligatio to pay this amout as a result of past service provided by the employee ad the obligatio ca be estimated reliably. 4 Sigificat accoutig judgemets, estimates ad assumptios The preparatio of fiacial statemets i coformity with Id AS requires maagemet to make certai critical accoutig estimates ad assumptios that affect the reported amouts of assets ad liabilities ad the disclosure of cotiget assets ad liabilities at the date of the fiacial statemets ad the reported amouts of reveues ad expeses durig the reportig period. The pricipal accoutig policies adopted by the Compay i the fiacial statemets are as set out above. The applicatio of a umber of these policies required the Compay to use a variety of estimatio techiques ad apply judgmet to best reflect the substace of uderlyig trasactios. The Compay has determied that a umber of its accoutig policies ca be cosidered sigificat, i terms of the maagemet judgmet that has bee required to determie the various assumptios uderpiig their applicatio i the fiacial statemets preseted which, uder differet coditios, could lead to material differeces i these statemets. The policies where sigificat estimates ad judgmets have bee made are as follows: Estimates ad assumptios The key assumptios cocerig the future ad other key sources of estimatio ucertaity at the reportig date, that have a sigificat risk of causig a material adjustmets to the carryig amouts of assets ad liabilities withi the ext fiacial year are discussed below: Estimatio of fair value of acquired fiacial assets ad fiacial liabilities: Whe the fair value of fiacial assets ad fiacial liabilities recorded i the Balace sheet caot be derived from active markets, their fair value is determied usig valuatio techiques icludig the discouted cash flow model. The iputs to these models are take from observable markets where possible, but where this is ot feasible, a degree of judgmet is required i establishig fair values. The judgmets iclude cosideratios of iputs such as liquidity risk, credit risk ad volatility. Chages i assumptios about these factors could affect the reported fair value of fiacial istrumets. U-collectability of trade receivables: Aalysis of historical paymet patters, customer cocetratios, customer creditworthiess ad curret ecoomic treds. If the fiacial coditio of a customer deteriorates, additioal allowaces may be required. Taxes: Ucertaities exist with respect to the iterpretatio of complex tax regulatios, chages i tax laws, ad the amout ad timig of future taxable icome. Give the log-term ature ad complexity of existig cotractual agreemets, differeces arisig betwee the actual results ad the assumptios made, or future chages to such assumptios, could ecessitate future adjustmets to tax icome ad expese already recorded. The Compay establishes provisios, based o reasoable estimates, for possible cosequeces of assessmet by the tax authorities. The amout of such provisios is based o various factors, such as experiece of previous tax assessmet ad differig iterpretatios of tax laws by the taxable etity ad the resposible tax authority. The Compay assesses the probability for litigatio ad subsequet cash outflow with respect to taxes. Deferred icome tax assets are recogised for all uused tax losses to the extet that it is probable that taxable profit will be available agaist which the losses ca be utilised. Sigificat maagemet judgmet is required to determie the amout of assets that ca be recogised, based upo the likely timig ad the level of future taxable profits together with future tax plaig strategies. Gratuity beefits: The cost of defied beefit plas ad the preset value of the obligatio are determied usig actuarial valuatios. A actuarial valuatio ivolves makig various assumptios which may differ from actual developmets i the future. These iclude the determiatio of the discout rate, future salary icreases ad mortality rates. Due to the complexity of the valuatio, the uderlyig assumptios ad its log-term ature, a defied beefit obligatio is highly sesitive to chages i these assumptios. All assumptios are reviewed at each reportig date. Actual results ca differ from estimates. 70 KSK ENERGY VENTURES LIMITED

73 Judgemet I the process of applyig the Compay s accoutig policies, maagemet has made the followig judgemets which have the most sigificat effect o the amouts recogised i the fiacial statemets: Useful lives of depreciable assets: Maagemet reviews the useful lives of depreciable assets at each reportig date, based o the expected utility of the assets to the Compay. Actual results, however, may vary due to techical obsolescece, particularly relatig to software ad iformatio techology equipmet. 5 Property, plat ad equipmet Deemed cost Lad- Buildigs Furiture Electrical Vehicles Office Total Capital Freehold fixtures works equipmet & work i Computers progress As at 1 April Additios Disposals/trasfers (143.98) (2.80) (0.09) (146.87) - As at 31 March As at 1 April Additios Disposals/trasfers (0.01) As at 31 March Depreicatio As at 1 April Additios Disposals/trasfers - (0.03) (0.02) (0.05) - As at 31 March As at 1 April Additios Disposals/trasfers As at 31 March Net book value As at 1 April As at 31 March As at 31 March (i) Property, plat ad equipmet with a carryig amout of Rs (31 March 2016: 95.41; 1 April 2015: ) is subject to security restrictios (refer ote 16) ANNUAL REPORT

74 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 6 Itagible assets Deemed cost Computer Total Itagible assets software uder developmet As at 1 April Additios As at 31 March As at 1 April Additios As at 31 March Depreicatio As at 1 April Additios As at 31 March As at 1 April Additios As at 31 March Net book value As at 1 April As at 31 March As at 31 March (i) Itagible assets with a carryig amout of Rs. Nil (31 March 2016: 0.16; 1 April 2015: 0.79) is subject to security restrictios (refer ote 16) 7 Ivestmets No curret ivestmets Ivestmets i equity istrumets At fair value through other comprehesive icome (uquoted,fully paid up ) As at As at As at 31 March March April ,636,363 (31 March 2016: 3,636,363; 1 April 2015: 3,636,363) Equity shares i Terra Eergy Limited. Ivestmet i subsidiary, at cost 10,500 (31 March 2016: 10,500; 1 April 2015: 10,500) Equity shares i KSK Narmada Power Compay Private Limited. 499,990 (31 March 2016: 499,990; 1 April 2015: 499,990) Equity shares i KSK Wid Eergy Private Limited 570,115,305 (31 March 2016: 570,115,305; 1 April 2015: 570,115,305) 7, , , Equity shares i KSK Electricity Fiacig Idia Private Limited. 72 KSK ENERGY VENTURES LIMITED

75 As at As at As at 31 March March April ,000 (31 March 2016: 150,000; 1 April 2015: 150,000) Equity shares i KSK Wardha Ifrastructure Private Limited. 10,500 (31 March 2016: 10,500; 1 April 2015: 10,500) Equity shares i KSK Vidarbha Power Compay Private Limited. 65,180,000 (31 March 2016: 65,180,000; 1 April 2015: ,180,000) Equity shares i KSK Dibbi Hydro Power Private Limited. 50,000 (31 March 2016: 50,000; 1 April 2015: 50,000) Equity shares i Kameg Dam Hydro Power Limited. 7,660,330 (31 March 2016: 7,660,330; 1 April 2015: 7,660,330) Equity shares i JR Power Ge Private Limited. 2,779,212,938 (31 March 2016: 2,675,212,937; 1 April 2015: 27, , , ,425,549,994) Equity shares i KSK Mahaadi Power Compay Limited. 26,947,602 (31 March 2016: 39,153,495; 1 April 2015: 36,500,028) Class A Equity shares i Sai Wardha Power Geeratio Limited. (formerly kow as Sai Wardha Power Limited) 50,000 (31 March 2016: 50,000; 1 April 2015: 50,000) Equity shares i KSK Upper Subasiri Hydro Eergy Limited. 1,000,000 (31 March 2016: 1,000,000; 1 April 2015: 1,000,000) Equity shares i KSK Dichag Power Compay Private Limited. 1,000,000 (31 March 2016: 1,000,000; 1 April 2015: 1,000,000) Equity shares i KSK Jameri Hydro Power Private Limited. 34,544,718 (31 March 2016: 34,544,718; 1 April 2015: 34,544,718) Equity shares i KSK Surya Photovoltaic Veture Limited. 1,800,000 (31 March 2016: 1,800,000; 1 April 2015: Nil) Equity shares i KSK Wid Power Amiabhavi Chikodi Private Limited 1,059,280 (31 March 2016: 1,059,280; 1 April 2015: 1,059,280) Equity shares i Tila Karali Hydro Electric Compay Private Limited. 98,077 (31 March 2016: 98,077; 1 April 2015: 13,077) Equity shares i Bheri Hydro Power Compay Private Limited. Ivestmets i equity istrumets (uquoted,fully paid up ) Ivestmet i subsidiary - equity portio of hybrid istrumet KSK Wid Eergy Private Limited Sai Regecy Power Corporatio Private Limited Sai Wardha Power Geeratio Limited (formerly kow as Sai Wardha Power Limited) JR Power Ge Private Limited KSK Dibbi Hydro Power Private Limited ANNUAL REPORT

76 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) As at As at As at 31 March March April 2015 Ivestmets i preferece shares (uquoted,fully paid up ) Ivestmet i subsidiary, at amortised cost 4,410,000 (31 March 2016: 4,410,000; 1 April 2015: 4,410,000) % optioally covertible cumulative redeemable preferece shares i KSK Wid Eergy Private Limited. 4,760,000 (31 March 2016: 4,760,000; 1 April 2015: 4,760,000) % covertible preferece shares i Sai Regecy Power Corporatio Private Limited. 882,820 (31 March 2016: 844,320; 1 April 2015: 761,600) % cumulative redeemable preferece shares i Tila Karali Hydro Electric Compay Private Limited 14,850,769 (31 March 2016: 14,850,769; 1 April 2015: 14,850,769) % Class B cumulative redeemable preferece i Sai Wardha Power Geeratio Limited.(formerly kow as Sai Wardha Power Limited) 17,107,223 (31 March 2016: 17,107,223; 1 April 2015: 17,107,223) % Class A redeemable preferece shares i Sai Wardha Power Geeratio Limited.(formerly kow as Sai Wardha Power Limited) 129,000,000 (31 March 2016: 129,000,000; 1 April 2015: 1, , , ,000,000) 15% Cumulative redeemable preferece shares i Sai Wardha Power Geeratio Limited. (formerly kow as Sai Wardha Power Limited) Ivestmets i Debetures (uquoted,fully paid up ) Ivestmet i subsidiary, at amortised cost 7,350,000 (31 March 2016: 7,350,000; 1 April 2015: 7,350,000) % Optioally covertible redeemable debetures i JR Power Ge Private Limited. 1,540,000 (31 March 2016: 1,540,000; 1 April 2015: 1,540,000) % Optioally covertible redeemable debetures i KSK Dibbi Hydro Power Private Limited. Ivestmets i Warrats (uquoted, partly paid up ) Ivestmet i subsidiary, at cost 123,000,000 (31 March 2016: 123,000,000; 1 April 2015: ,000,000) Warrats of Rs 10 each, partly paid up i KSK Surya Photovoltaic Veture Limited. 40, , , Aggregate amout of quoted ivestmets ad market value thereof Aggregate amout of uquoted ivestmets 40, , , Aggregate amout of impairmet i the value of ivestmets KSK ENERGY VENTURES LIMITED

77 8 Trade receivables No-curret No-curret Usecured, cosidered good As at As at As at 31 March March April 2015 Security deposits Advace for ivestmets Loas ad advaces , Curret Usecured, cosidered good , Loas ad advaces 1, Usecured, cosidered doubtful Loas ad advaces Less: Provisio for doubtful debts (75.49) (56.74) - No-curret Usecured, cosidered good 1, , , , As at As at As at 31 March March April 2015 Deposits with bak Iterest accrued Curret Usecured, cosidered good As at As at As at 31 March March April 2015 Usecured, cosidered good Curret Usecured, cosidered good , Trade receivable of Rs (31 March 2016: 1,016.68; 1 April 2015: ) for the Compay have bee pledged as security for borrowigs (refer ote 16) 9 Loas 10 Other fiacial assets Iterest accrued Other receivables The Compay has pledged its deposit with baks amoutig to Rs (31 March 2016: 3.60; 1 April 2015: 0.95) i order to fulfill collateral requiremets. ANNUAL REPORT

78 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 11 Deferred tax (liability) / assets Deferred icome tax at 31 March 2017 ad 31 March 2016 relates to the followig: Deferred icome tax assets 1 April 2016 Recogised i the Recogised i OCI 31 March 2017 icome statemet Property, plat ad equipmet Uused tax losses carried forward Deferred icome tax liabilities Others Deferred icome tax assets, et Deferred icome tax assets 1 April 2015 Recogised i the Recogised i OCI 31 March 2016 icome statemet Property, plat ad equipmet Uused tax losses carried forward Deferred icome tax liabilities Others Deferred icome tax assets, et I assessig the realisability of the deferred icome tax assets, maagemet cosiders whether some portio or all of the deferred icome tax assets will ot be realised. The ultimate realisatio of the deferred icome tax assets ad tax loss carry forwards is depedet upo the geeratio of future taxable icome durig the periods i which the temporary differeces become deductible. Maagemet cosiders the scheduled reversals of deferred tax liabilities, projected future taxable icome ad tax plaig strategy i makig this assessmet. Based o the level of historical taxable icome ad projectios of future taxable icome over the periods i which the deferred tax assets are deductible, maagemet believes that the Compay will realize the beefits of those recogised deductible differeces ad tax loss carry forwards. The amout of deferred tax assets cosidered realizable, however, could be reduced i the ear term if estimates of future taxable icome are reduced. The Compay has tax losses of Rs. 1, (31 March 2016: Rs ) that are available for offset agaist future taxable profits. Deferred tax assets have ot bee recogised i respect of these losses as they may ot be used to offset taxable profits. The Compay evaluated ad cocluded that it is ot probable that deferred tax assets o existig tax losses will be recovered fully. If the Compay were able to recogise all urecogised deferred tax assets, loss would decrease by Rs (31 March 2016: Rs ).The above tax losses expire at various dates ragig from 2018 to KSK ENERGY VENTURES LIMITED

79 Tax Recociliatio statemet Recociliatio betwee tax expese ad the product of accoutig profit multiplied by Idia s domestic tax rate for the years eded 31 March 2017 ad 31 March 2016 is as follows: As at As at 31 March March 2016 Accoutig Profit Before tax (875.01) (372.02) Eacted tax rate % % Tax o Profit at eacted rates Urecogised deferred tax assets (296.87) (90.92) Expediture / icome ot deductible for tax purpose (5.84) (37.01) No recogitio of DT o depreciatio (0.11) (0.82) I respect of earlier years Actual tax expeses Other assets No-curret Note : 1. The Compay has a defied beefit gratuity pla. Every employee who has completed five years or more of service gets a gratuity o departure at 15 days salary (last draw salary) for each completed year of service. The scheme is fuded with a isurace compay i the form of a qualifyig isurace policy. The followig table sets out the status of the gratuity pla as required uder Id AS 19 A. Net Beefit (asset) / liability As at As at As at 31 March March April 2015 Capital advaces Prepaid expeses Advace tax Balaces with statutory authorities Curret Prepaid expeses Advace for goods ad services Balaces with statutory authorities As at As at 31 March March 2016 Defied beefit obligatio Fair value of pla assets (9.38) (8.81) Beefit (asset) / liability (4.86) (4.55) ANNUAL REPORT

80 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) B. Defied beefit obligatio: As at As at 31 March March 2016 Defied beefit obligatio as at the begiig of the year Icluded i icome statemet Curret service cost Iterest cost Icluded i other comprehesive icome Remeasuremet loss / (gai) Actuarial losses/(gais) o obligatio (0.02) (1.48) (0.02) (1.48) Others Beefits paid (0.12) - (0.12) - Defied beefit obligatio as at the ed of the year C. Fair value of Pla Assets As at As at 31 March March 2016 Fair Value of Pla Assets Fair value of pla assets begiig of the period Icluded i icome statemet Iterest icome Icluded i other comprehesive icome Remeasuremet loss / (gai) Retur o pla asset (excludig amouts icluded i et iterest expese) Others Cotributios (0.04) 0.02 Beefits Paid (0.12) - (0.16) 0.02 Fair value of pla assets ed of the period KSK ENERGY VENTURES LIMITED

81 Net defied beefit liability (asset) As at As at 31 March March 2016 Balace (4.56) (2.89) Icluded i icome statemet Curret service cost Iterest cost / (icome) (0.36) (0.22) (0.28) (0.12) Icluded i other comprehesive icome Remeasuremet loss / (gai) Actuarial losses/(gais) o obligatio (0.06) (1.53) (0.06) (1.53) Others Beefits paid Defied beefit obligatio as at the ed of the year (4.90) (4.54) Asset iformatio Category of asset As at As at 31 March March 2016 Isurer maaged fud 100% 100% The pricipal assumptios used i determiig the obligatio towards the Compay s pla as show below: As at As at 31 March March 2016 Discout rate 7.45% 7.80% Salary escalatio 10.00% 10.00% Sesitivity aalysis Discout rate: The discout rate is based o the prevailig market yields of idia govermet securities as at balace sheet date for the estimated term of the obligatios 13 Cash ad cash equivalets As at 31 March 2017 As at 31 March 2016 Decrease Icrease Decrease Icrease Discout Rate (- / + 1% movemet 0.33 (0.29) 0.37 (0.32) Salary Growth Rate (- / + 1% movemet) (0.07) 0.08 (0.09) 0.07 As at As at As at 31 March March April 2015 Cash o had Balaces with baks O curret accouts ANNUAL REPORT

82 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 14 Other bak balaces 15 Share capital Note: As at As at As at 31 March March April 2015 Deposits with bak held as margi moey or security agaist guaratee or borrowigs Authorised As at As at As at 31 March March April ,000,000,000 (31 March 2016: 4,000,000,000; 1 April 2015: 4,000,000,000) equity shares of Rs.10/- each. 40, , , ,031,500,000 (31 March 2016: 1,031,500,000; 1 April 2015: 1,031,500,000) preferece shares of Rs.10/- each. 10, , , Issued, subscribed ad paid up Equity shares 50, , , ,985,774 (31 March 2016: 423,985,774; 1 April 2015: 422,249,194) equity shares of Rs.10/- each fully paid up. 4, , , , , , a b The compay has oly oe class of equity shares havig a par value of Rs 10/- per share. The holders of equity shares are etitled to receive divided as declared from time to time ad are etitled to votig rights proportioate to their shareholdig at the meetig of the shareholders. Recociliatio of umber of shares outstadig As at As at 31 March March 2016 Equity shares Outstadig at the begiig of the year 423,985, ,249,194 Coversio of warrats issued to promotor group - 1,736,580 Outstadig at the ed of the year 423,985, ,985,774 c Equity shares held by holdig compay ad its subsidiaries Holdig Compay As at As at As at 31 March March April 2015 No of shares held 157,191, ,938, ,150,109 % of shares held 37.07% 45.03% 45.27% Subsidiaries of Holdig Compay No of shares held 87,992,881 98,086,182 97,225,346 % of shares held 20.76% 23.13% 23.03% 80 KSK ENERGY VENTURES LIMITED

83 d Particulars of shareholders holdig more tha 5% of the shares a) Equity shares fully paid - up KSK Eergy Limited 16 Borrowigs As at As at As at 31 March March April 2015 No of shares held 157,191, ,938, ,150,109 % of shares held 37.07% 45.03% 45.27% KSK Eergy Compay Private Limited No of shares held 68,375,962 78,469,263 79,345,007 % of shares held 16.13% 18.51% 18.79% HDFC Trustee Compay Limited No of shares held 38,145,028 38,145,028 21,253,116 % of shares held 9.00% 9.00% 5.03% No curret Usecured As at As at As at 31 March March April 2015 Rupee term loas from others (refer ote 1 & 2) 4, , , Deferred paymet liabilities (refer ote 3) Curret Secured Loas repayable o demad 4, , , from baks (refer ote 4) 1, Loa agaist letter of credits (refer ote 5) Usecured Loa agaist deposits Loas ad advaces , , , , , , The above rupee term loas from others are secured by first pari-passu charge by way of mortgage/hypothecatio of all movable ad immovable properties of Sai Lilagar Power Geeratio Limited ad KSK Surya photovoltaic Veture Limited, Mortgage of HA lad of VS Ligite Power Private Limited. Further these loas are secured by pledge of certai equity shares of the Compay held by KSK Eergy Limited, the holdig compay ad corporate guratee give by KSK Eergy Limited ad VS Ligite Power Private Limited, hece the same has bee clasified as usecured. 2 The log term rupee term loas are repayable i quarterly istalmets with the last istalmet of respective loas are payable up to November The log term borrowigs carries a weightage average rate of iterest of % p.a. 3 Deferred paymet liability is repayable i March Loas repayable o demad are secured by first pari-passu charge o fixed assets, curret assets of the Compay ad corporate guaratee of KSK Power Vetur plc ad KSK Wid Eergy Private Limited. 5 Loas agaist letter of credit are secured by first pari-passu charge o all assets of the Compay. ANNUAL REPORT

84 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 17 Trade payables As at As at As at 31 March March April 2015 Dues to other tha micro ad small eterprises 1, , The Compay has ot received ay iformatio from suppliers or service providers, whether they are covered uder the "The Micro Small ad Medium Eterprises Developmet Act, 2006". Disclosure relatig to amout upaid at the year ed together with iterest payable, if ay, as required uder the said Act are ot ascertaiable. Trade payable are o-iterest bearig ad maily icludes amout payable to coal suppliers vedors i whose case credit period allowed is less tha 12 moths. Compay usually opes usace letter of credit i favour of the coal suppliers. Sice the average credit period is less tha 12 moths, the trade payable amout has bee classified as curret. 18 Other fiacial liabilitites No curret 19 Other curret liabilities As at As at As at 31 March March April 2015 Iterest accrued Curret Curret maturities of log-term debt , Iterest accrued Creditors for capital goods (icludig retetio moey) Salaries ad bous payable Advace received agaist issue of fiacial istrumets Other liabilites 1, , , , , , , , , Reveue from operatios As at As at As at 31 March March April 2015 Statutory liabilities Year eded Year eded 31 March March 2016 Corporate support services fees KSK ENERGY VENTURES LIMITED

85 21 Other icome Year eded Year eded 31 March March 2016 Iterest o fiacial istrumets Iterest icome o preferece shares Other iterest Uwidig of discout o preferece shares Uwidig of discout o debetures Uwidig of discout o trade receivable Profit o sale of fixed assets, et Miscellaeous icome Employee beefits expese Year eded Year eded 31 March March 2016 Salaries, wages ad bous Cotributio to providet ad other fuds (Refer ote. 12) Staff welfare expeses Other expeses Year eded Year eded 31 March March 2016 Ret Rates ad taxes Pritig ad statioery Commuicatio expeses Office expeses Travel ad coveyace Isurace charges Depository expeses Legal ad professioal charges Auditors' remueratio for audit fees for certificatio Repair ad maiteace Electricity expeses Directors sittig fees Advaces/receivable writte off Foreig exchage fluctuatios Corporate social resposibility Miscellaeous expeses ANNUAL REPORT

86 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 24 Fiace costs: Year eded Year eded 31 March March 2016 Iterest expese 1, Other borrowig cost Uwidig of discout , , Other comprehesive icome Items that will ot be reclassified to profit or loss 26 Cotiget liabilities : Year eded Year eded 31 March March 2016 Remeasuremets of the defied beefit plas; As at As at As at 31 March March April 2015 i) Bak guaratees ad letter of credits outstadig 2, , , ii) Corporate guaratees outstadig 44, , , iii) Service tax departmet has issued demad order to the Compay for paymet of service tax amoutig to Rs (icludig pealty) relatig to the disagreemet o availmet of Cevat Credit for the period April 2008 to September 2010 ad o -paymet of service tax. Further, a amout of Rs ( 31 March 2016: Rs.26.88; 1 April 2015: Rs ) has bee paid agaist the demad uder protest ad the balace demad is stayed. However, the Compay believes that the claims raised by the departmet are ot teable ad the Compay has filed a appeal agaist the said order before the CESTAT. 27 Earigs/(loss) per share (EPS) The Computatio of EPS as per Id AS 33 is set out below: Year eded Year eded 31 March March 2016 Net profit/(loss) after tax (874.95) (374.52) Net profit/(loss) attributable to shareholders for basic / diluted EPS (874.95) (374.52) Weighted average umber of shares outstadig for the purpose of calculatio of basic ad diluted EPS (i millio) Earigs/(loss) per share basic/diluted (i Rs.) (2.06) (0.88) 84 KSK ENERGY VENTURES LIMITED

87 28 Related party Disclosures: a) Parties where cotrol exists Name of the party K&S Cosultig Group Private Limited KSK Power Veture plc KSK Eergy Limited KSK Electricity Fiacig Idia Private Limited J R Power Ge Private Limited KSK Dibbi Hydro Power Private Limited Kameg Dam Hydro Power Limited KSK Narmada Power Compay Private Limited KSK Wid Eergy Private Limited KSK Vidarbha Power Compay Private Limited KSK Surya Photovoltaic Veture Limited Sai Maithili Power Compay Private Limited KSK Wardha Ifrastructure Private Limited KSK Mahaadi Power Compay Limited KSK Upper Subasiri Hydro Eergy Limited KSK Dichag Power Compay Private Limited KSK Jameri Hydro Power Private Limited Tila karali Hydro Electric Power Compay Limited Bheri Hydro Power Compay Private Limited Sai Regecy Power Corporatio Private Limited VS Ligite Power Private Limited Sai Wardha Power Geeratio Limited Sai Power pte Limited KSK Water Ifrastructures Private Limited KSK Wid Power Amiabhavi Chikodi Private Limited KSK Wid Eergy Halagali Bechi Private Limited KSK Wid Eergy Mothalli Haveri Private Limited KSK Wid Power Sakoahatti Athi Private Limited Field Miig Ispats Limited Sai Lilagar Power Geeratio Limited Relatioship Ultimate holdig compay Step-up holdig compay Holdig compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay Subsidiary compay b) Parties where sigificat ifluece exists ad where the trasactios have take place durig the period Name of the party Sitapuram Power Limited KSK Mieral Resources Private Limited KSK Eergy Compay Private Limited KSK Gree Eergy pte Ltd SN Nirma Ifra Projects Private Limited Raigarh Champa Rail Ifrastructure Private Limited KSK Eergy Resources Private Limited Relatioship Joit operatio Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Associate Fellow subsidiary ANNUAL REPORT

88 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) c) Key Maagemet persoel Name of the party Mr. S. Kishore Mr. K. A. Sastry Relatioship Whole-time Director Whole-time Director d) Related party trasactios Trasactios Particulars 31 March 2017 Fellow Holdig Subsidiaries Joit KMP subsidiaries Compay / operatio Step up holdig compay Project developmet ad corporate support fees Iterest icome Iterest expese Sale of goods Loas ad advace give/(repaid) , (icludig advace for ivestmets) Loas/security deposits take/(repaid) - (26.42) Maagerial remueratio Balaces at the year ed Amout receivable , Amout payable - - 2, Maagerial remueratio payable Trasactios Particulars 31 March 2016 Fellow Holdig Subsidiaries Joit KMP subsidiaries Compay / operatio Step up holdig compay Project developmet ad corporate support fees Iterest icome Iterest expese Sale of goods Loas ad advace give/(repaid) (1.40) 1, (306.82) - - (icludig advace for ivestmets) Loas/security deposits take/(repaid) Maagerial remueratio Balaces at the year ed Amout receivable - - 1, Amout payable , Maagerial remueratio payable KSK ENERGY VENTURES LIMITED

89 Particulars 1 April 2015 Balaces at the year ed e) Disclosure of loas ad advaces to subsidiaries pursuat to Schedule V of the Listig Obligatios ad Disclosure Requiremets) Regulatios, 2015: Loas ad advaces i the ature of loas give to subsidiaries: Fellow subsidiaries Subsidiaries Joit operatio KMP Amout receivable , Amout payable - 1, Maagerial remueratio payable Particulars Amout outstadig Maximum outstadig as at durig the year 31 March March March March 2017 KSK Dibbi Hydro Power Private Limited KSK Narmada Power Compay Private Limited KSK Vidarbha Power Compay Private Limited KSK Dichag Power Compay Private Limited KSK Jameri Hydro Power Private Limited Sai Lilagar Power Geeratio Limited , Sai Wardha Power Geeratio Limited KSK Electricity Fiacig Idia Private Limited 1, , KSK Mahaadi Power Compay Limited Sai Regecy Power Corporatio Private Limited Sai Maithili Power Compay Private Limited VS Ligite Power Private Limited KSK Water Ifrastructures Private Limited KSK Surya Photovoltaic Veture Limited , , , f) Equity held i subsidiaries ad step dow subsidiary have bee disclosed uder No curret Ivestmet", (see ote o 7). g) The holdig compay has pledged certai shares held i the Compay as security towards the borrowigs of the Compay. h) Corporate Guaratees of Rs. 74, (31 March 2016 Rs.40,930.97; 1 April 2015: 44,195.06), Bak guaratees of Rs. 2, (31 March 2016 Rs.3,386.60; 1 April 2015: 3,783.75) ad Letter of credit limits of Rs. 1, (31 March 2016 Rs.1,444.20; 1 April 2015: 1,766.66) has bee give by the Compay o behalf of subsidiaries ad fellow subsidiaries. i) Corporate Guaratees of Rs. 9, (31 March 2016 Rs.9,039.00; 1 April 2015: 10,300.00) has bee give by step-up holdig ad holdig Compay o behalf of the Compay. ANNUAL REPORT

90 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 29 First-time adoptio of Id-AS The Compay has adopted Id AS from 1st April, 2016 ad the date of trasitio to Id AS is 1st April, These beig the first fiacial statemets i compliace with Id AS, the impact of trasitio has bee accouted for i opeig reserves ad comparable periods have bee restated i accordace with Id AS 101 First-time Adoptio of Idia Accoutig Stadards. A explaatio of how the trasitio from Previous GAAP to Id AS has affected the Compay's fiacial positio, fiacial performace ad cash flows is set out i the followig tables ad otes. Followig are the applicable Id AS 101 optioal exemptios ad madatory exceptios applied i the trasitio from previous GAAP to Id AS. a Deemed cost of property, plat ad equipmet ad itagible assets The Compay has elected to cotiue with the carryig value of all its property, plat ad equipmets ad itagible assets recogised as of 1st April, 2015 measured as per the previous GAAP ad use that carryig value as its deemed cost o trasitio date. b Derecogitio of fiacial assets ad fiacial liabilities The Compay has applied the derecogitio requiremets of fiacial assets ad fiacial liabilities prospectively for trasactios occurrig o or after trasitio date. c Classificatio ad measuremet of fiacial assets The Compay has assessed classificatio ad measuremet of fiacial assets o the basis of facts ad circumstaces that exist as o trasitio date. d Impairmet of fiacial assets The Compay has applied impairmet requiremets of Id AS 109 retrospectively; however, as permitted by Id AS 101, it has used reasoable ad supportable iformatio that is available without udue cost or effort to determie the credit risk at the date that fiacial istrumets were iitially recogised i order to compare it with the credit risk at the trasitio date. Id AS 101 requires a etity to recocile equity, total comprehesive icome ad cash flows for the prior periods. The followig tables represets the recociliatios from previous GAAP to Id AS. i) Recociliatio of equity as at 1 April 2015 (date of trasitio): I. ASSETS 1 No-curret assets Notes to first- Previous Adjustmets Id AS time adoptio GAAP * (a) Property plat ad equipmet (b) Capital work i progress (c) Other itagible assets (d) Fiacial asset (i) Ivestmets 36, , (ii) Trade receivables (154.81) (iii) Loas 2, , (iv) Other fiacial asset (e) Deferred tax assets (et) (f) Other o-curret assets (19.28) , (163.47) 39, KSK ENERGY VENTURES LIMITED

91 2 Curret assets (a) Fiacial asset Notes to first- Previous Adjustmets Id AS time adoptio GAAP * (i) Trade receivables (ii) Cash ad bak balaces (iii) Other bak balaces (iv) Loas (v) Other fiacial asset (b) Curret tax assets (Net) (c) Other curret assets (2.37) II EQUITY AND LIABILITIES Equity 1, (2.37) 1, , (165.84) 41, (a) Equity share capital 10 4, (340.00) 4, (b) Other equity 8 28, (77.33) 28, No-curret liabilities (a) Fiacial liability 32, (417.33) 32, (i) Borrowigs 4 ad 5 3, (174.10) 3, Curret liabilities (a) Fiacial liability 3, (174.10) 3, (i) Borrowigs 1, , (ii) Trade payables (iii) Other fiacial liabilities 5 ad 10 3, , (b) Other curret liabilities (c) Short-term provisios (6.80) - 5, , , (165.84) 41, * The Previous GAAP figures have bee reclassified to coform to IND AS presetatio requiremet for the purpose of this ote ii) Recociliatio of equity as at 31 March 2016: I. ASSETS 1 No-curret assets Notes to first- Previous Adjustmets Id AS time adoptio GAAP * (a) Property plat ad equipmet 1 ad (146.68) (b) Capital work i progress (0.02) (c) Other itagible assets (d) Fiacial asset (i) Ivestmets 2 39, , (ii) Trade receivables (143.53) (iii) Loas (iv) Other fiacial asset ANNUAL REPORT

92 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) Notes to first- Previous Adjustmets Id AS time adoptio GAAP * (e) Deferred tax assets (et) (f) Other o-curret assets (24.00) Curret assets (a) Fiacial asset 40, (85.15) 40, (i) Trade receivables (ii) Cash ad bak balaces (iii) Other bak balaces (iv) Loas (v) Other fiacial asset (b) Curret tax assets (Net) (c) Other curret assets (2.37) , (2.37) 2, No-curret assets held for sale II EQUITY AND LIABILITIES Equity 42, , (a) Equity share capital 4, , (b) Other equity 8 27, , No-curret liabilities (a) Fiacial liability 31, , (i) Borrowigs 4 ad 5 5, (167.53) 5, (ii) Other fiacial liabilities Curret liabilities (a) Fiacial liability 5, (167.53) 5, (i) Borrowigs 1, , (ii) Trade payables (iii) Other fiacial liabilities 5 2, (2.37) 2, (b) Other curret liabilities (150.00) (c) Curret Tax liability (Net) , (152.37) 5, Liabilities associates with o-curret assets held for sale 42, , * The Previous GAAP figures have bee reclassified to coform to IND AS presetatio requiremet for the purpose of this ote 90 KSK ENERGY VENTURES LIMITED

93 iii) Recociliatio of total comprehesive icome for the year eded 31 March 2016: Notes to first- Previous Adjustmets Id AS time adoptio GAAP * I Reveue from operatios II Other icome 2, 3, 7 ad III Total reveue (I+II) IV Expeses Employee beefits expeses Other expeses (3.74) Fiace costs 4 ad , Depreciatio ad amortisatio expeses 1 ad (0.06) 7.22 Total expeses 1, , V Profit / (loss) before tax (III - IV) (552.45) (372.02) VI Tax expese / (icome) Curret tax I respect of earlier years Total tax expese / (icome) VII Profit / (loss) after tax (V - VI) (556.48) (376.05) VIII Other comprehesive icome Items that will ot be reclassified 7 ad to profit or loss Other comprehesive icome for the year IX Total Comprehesive Icome / (loss) (556.48) (374.52) for the year (VII+VIII) * The Previous GAAP figures have bee reclassified to coform to IND AS presetatio requiremet for the purpose of this ote iv) Impact of Id AS adoptio o the statemet of cash flows for the year eded 31 March 2016 Notes to first- Previous Adjustmets Id AS time adoptio GAAP Net cash from operatig activities Net cash from ivestig activity 11 (820.94) (11.28) (832.22) Net cash from fiacig activities 11 (36.73) (17.22) (53.95) Net icrease / (decrease) i cash ad cash equivalets (644.85) - (644.85) Cash ad cash equivalets as at 1 April Cash ad cash equivalets as at 31 March Notes to first-time adoptio: 1 Capital work i progress: Id AS 16 Property, plat ad equipmet, specifically excludes geeral ad admiistrative expediture from beig capitalised ad require it to be charged to the statemet of profit ad loss i the year i which they icur. Whereas guidace uder previous GAAP permits capitalisatio of these costs provided they are specifically attributable to costructio of a project, to the acquisitio of a fixed asset or brigig it to its workig coditio. This chage has reduced the carryig amout of capital work i progress by Rs with correspodig effect i profit or loss for the year eded 31 March ANNUAL REPORT

94 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 2 Fair valuatio of Ivestmets: Uder the previous GAAP, ivestmets i equity istrumets ad mutual fuds were classified as log-term ivestmets or curret ivestmets based o the iteded holdig period ad realisability. Log-term ivestmets were carried at cost less provisio for other tha temporary declie i the value of such ivestmets. Curret ivestmets were carried at lower of cost ad fair value. Uder Id AS, these ivestmets are required to be measured at fair value or amortised cost. The resultig fair value chages of these ivestmets (other tha equity istrumets desigated as at FVOCI) have bee recogised as equity portio of ivestmet i subsidiaries as at the date of trasitio ad subsequetly i the profit or loss for the year eded 31 March This icreased the retaied earigs by Rs as at 31 March 2016 (1 April Rs. Nil ). Further as per Id AS, sice ivestmet i preferece shares are held at amortised cost as the cotractual cash flows are solely paymets of iterest ad pricipal, iterest o such preferece shares have bee recogised as receivable from the issuer of such istrumets, for the period eded 31 March 2016 amoutig to Rs (1 April Rs ) 3 Trade Receivables: Uder Id AS, the fair value of a log term receivable that carries o iterest ca be measured as the preset value of all future cash receipts discouted usig the prevailig market rate(s) of iterest for a similar istrumet. However uder previous GAAP, the same are carried at trasactio price. The impact of measuremet at preset value o profit or loss for the year eded 31 March 2016 is Rs with decrease i retaied earigs as o date of trasitio, 1 April 2015 is Rs Deferred paymet liabilities: Uder Id AS, the fair value of a log term payables that carries o iterest ca be measured as the preset value of all future cash paymets discouted usig the prevailig market rate(s) of iterest for a similar istrumet. However uder previous GAAP, the same are carried at trasactio price. The impact of measuremet at preset value o profit or loss for the year eded 31 March 2016 is INR with icrease i retaied earigs as o date of trasitio, 1 April 2015 is INR Borrowigs: Id AS 109 requires trasactio costs icurred towards origiatio of borrowigs to be deducted from the carryig amout of borrowigs o iitial recogitio. These costs are recogised i the profit or loss over the teure of the borrowig as part of the iterest expese by applyig the effective iterest rate method. Uder previous GAAP, these trasactio costs were charged to profit or loss as ad whe icurred. Accordigly, borrowigs as at 31 March 2016 have bee reduced by Rs (1 April 2015: Rs ) with a correspodig adjustmet to other curret ad o curret assets. 6 Assets classified as held for sale: Uder previous GAAP, the cocept of disposal group held for sale does ot exist. Accordigly, assets ad liabilities of disposal group have ot bee preseted as held for sale. The group has disclosed property, plat ad equipmet held for sale uder No curret assets i accordace with AS 10 Accoutig for Fixed Assets. Id AS 105 No-curret Assets Held for Sale ad Discotiued Operatios requires disposal group to be idetified as held for sale if the carryig amout will recovered pricipally through a sale trasactio rather tha through cotiuig use ad a sale is cosidered highly probable. Cosequetly, the assets ad liabilities held for sale have bee preseted separately from the other assets ad other liabilities respectively i the balace sheet. There is o impact o the total equity or profit as a result of this adjustmet. 7 Re-measuremets of post-employmet beefit obligatios: Uder Id AS, re-measuremets i.e. actuarial gais ad losses ad the retur o pla assets, excludig amouts icluded i the et iterest expese o the et defied beefit liability are recogised i other comprehesive icome istead of profit or loss. Uder the previous GAAP, these re-measuremets were formig part of the profit or loss for the year. As a result of this chage, the profit for the year eded March 31, 2016 decreased by Rs There is o impact o the total equity as at 31 March KSK ENERGY VENTURES LIMITED

95 8 Retaied earigs: Retaied earigs as at 1 April 2015 ad 31 March 2016 has bee adjusted, cosequet to the above Id AS trasitio adjustmets. 9 Other comprehesive icome: Uder Id AS, all items of icome ad expese recogised i a period should be icluded i profit or loss for the period, uless a stadard requires or permits otherwise. Items of icome ad expese that are ot recogised i profit or loss but are show i the statemet of profit ad loss as other comprehesive icome icludes re-measuremets of defied beefit plas, foreig exchage differeces arisig o traslatio of foreig operatios, effective portio of gais ad losses o cash flow hedgig istrumets ad fair value gais or (losses) o FVOCI equity istrumets. The cocept of other comprehesive icome did ot exist uder previous GAAP. 10 Redeemable preferece shares The Compay had i issue redeemable preferece shares. The preferece shares carry fixed cumulative divided which is o-discretioary. Uder Idia GAAP, the preferece shares were classified as equity ad divided payable thereo was treated as distributio of profit. Uder Id AS, redeemable preferece shares are separated ito liability ad equity compoets based o the terms of the cotract. Iterest o liability compoet is recogised usig the effective iterest method. Thus the preferece share capital is reduced by Rs. Nil (1 April 2015: Rs ) with a correspodig icrease i borrowigs as liability compoet. Accordigly iterest expese ad divided tax for the year is recogised uder fiace costs due to which profit for the year eded 31 March 2016 has reduced by Rs (1 April 2015: ) Whereas uder previous GAAP, divideds where recogised o preferece shares as ad whe declared by the issuer. 11 Statemet of cash flows: The trasitio from previous GAAP to Id AS has ot had a material impact o the statemet of cash flows. 30 Fiacial risk maagemet objectives ad policies The Compay's pricipal fiacial liabilities comprises of loas ad borrowigs ad trade ad other payables. The mai purpose of these fiacial liabilities is to raise fiace for the Compay's operatios. The Compay has loas ad receivables, trade ad other receivables, ad cash ad short-term deposits that arise directly from its operatios. The Compay also hold ivestmets desigated at fair value through other comprehesive icome, at amortised cost ad at cost for ivestmet i subsidiaries The Compay s risk maagemet activities are subject to the maagemet directio ad cotrol uder the framework of Risk Maagemet Policy as approved by the Board of Directors of the Compay. The Maagemet esures appropriate risk goverace framework for the Compay through appropriate policies ad procedures ad that risks are idetified, measured ad maaged i accordace with the Compay s policies ad risk objectives. The Compay is exposed to market risk, credit risk ad liquidity risk. Market risk Market risk is the risk that the fair values of future cash flows of a fiacial istrumet will fluctuate because of chages i market prices. Market prices comprise three types of risk: iterest rate risk, currecy risk ad other price risk, such as equity risk. Fiacial istrumets affected by market risk iclude loas ad borrowigs, deposits, ivestmet at fair value through at other comprehesive icome. Iterest rate risk Iterest rate risk is the risk that the fair value or future cash flows of a fiacial istrumet will fluctuate because of chages i market iterest rates. The Compay's exposure to the risk of chages i market iterest rates relates primarily to the Compay's log-term debt obligatios with floatig iterest rates. The Compay maages its iterest rate risk by havig a balaced portfolio of fixed ad variable rate loas ad borrowigs. The sesitivity aalysis have bee carried out based o the exposure to iterest rates for istrumets ot hedged agaist iterest rate fluctuatio at the ed of the reportig period. The said aalysis has bee carried o the amout of floatig rate log term liabilities Outstadig at the ed of the reportig period. A 50 basis poit icrease or decrease represets maagemet s assessmet of the reasoably possible chage i iterest rates. ANNUAL REPORT

96 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) I case of fluctuatio i iterest rates by 50 basis poits ad all other variables were held costat, the Compay s profit before tax for the year would icrease or decrease as follows: Currecy Chage i basis poits Effect o profit before tax / equity Foreig currecy risk Foreig currecy risk is the risk that the fair value or future cash flows of a fiacial istrumet will fluctuate because of chages i foreig exchage rate. The majority of our assets are located i Idia where the Idia rupee is the fuctioal currecy. Currecy exposures also exist i the ature of reveue expediture ad services deomiated i currecies other tha the Idia Rupee. The Compay maages its foreig currecy risk by hedgig trasactios that are expected to realise i ear future by usig foreig currecy forward cotracts. Short-term foreig exchage exposures are hedged progressively based o their maturity. Log term exposures are ormally uhedged. The Compay's exposure to foreig currecy risk at the ed of the reportig period expressed i INR are as follows: Uhedged foreig currecy exposure Particulars of Uhedged foreig Currecy Exposure 31 March March 2016 INR +50 (6.27) (6.33) INR (50) Fiacial liabilities Particulars As at As at 31 March March 2016 Import creditors (icludig retetio moey) Fiacial assets - US $ 3.64 Receivable US $ 3.71 The Compay s exposure to foreig currecy arises where a Compay holds moetary assets ad liabilities deomiated i a currecy differet to the fuctioal currecy with US dollar beig the major foreig currecy exposure. Set out below is the impact of a 5% chage i the US dollar o profit ad equity arisig as a result of the revaluatio of the Compay s foreig currecy fiacial istrumets: 31 March 2017 Closig Effect of 5% stregtheig Effect of 5% stregtheig exchage rate of US $ o et earigs of US $ o total equity Uited States Dollar March 2016 Closig Effect of 5% stregtheig Effect of 5% stregtheig exchage rate of US $ o et earigs of US $ o total equity Uited States Dollar Equity price risk The Compay's ivestmets i ulisted equity securities are susceptible to market price risk arisig from ucertaities about future values of the ivestmet securities. The Board of Directors reviews ad approves all equity ivestmet decisios. At the reportig date, the Compay s exposure to ulisted equity securities other tha i subsidiaries was Rs (31 March 2016: Rs ; 1 April 2015: Rs ) 94 KSK ENERGY VENTURES LIMITED

97 Credit risk aalysis Credit risk is the risk that couter party will ot meet its obligatios uder a fiacial istrumet or customer cotract, leadig to a fiacial loss. The Compay is exposed to credit risk from its operatig activities (primarily for trade ad other receivables) ad from its ivestig activities, icludig short-term deposits with baks ad fiacial istitutios, ad other fiacial assets. The carryig value of fiacial assets represets the maximum exposure for credit risk. The maximum exposure to credit risk of each class of fiacial assets at the reportig date was as follows: Note Carryig value 31 March March April 2015 Ivestmets - at amortised cost 7 1, , , Trade receivables , Short term deposits with baks Loas 9 2, , , Other fiacial asset , , , The credit worthiess of customers / subsidiaries to which the Compay grats credit i the ormal course of the busiess is moitored regularly. The credit risk for liquid fuds ad other short-term fiacial assets is cosidered egligible, sice the couterparties are reputable baks with high quality exteral credit ratigs. The Compay s maximum exposure for fiacial guaratees are oted i ote 26. Liquidity risk aalysis The Compay s mai source of liquidity is its operatig busiesses. The treasury departmet uses regular forecasts of operatioal cash flow, ivestmet ad tradig collateral requiremets to esure that sufficiet liquid cash balaces are available to service o-goig busiess requiremets. The Compay maages its liquidity eeds by carefully moitorig scheduled debt servicig paymets for log-term fiacial liabilities as well as cash-outflows due i day-to-day busiess. Liquidity eeds are moitored i various time bads, o a day-to-day ad week-to-week basis, as well as o the basis of a rollig 90 day projectio. Log-term liquidity eeds for a 90 day ad a 30 day lookout period are idetified mothly. The Compay requires fuds both for short-term operatioal eeds as well as for log-term ivestmet programmes maily i costructio projects for its power plats. The followig is a aalysis of the Compay cotractual udiscouted cash flows payable uder fiacial liabilities at 31 March 2017: Curret No-curret Total withi 12 moths 1-5 years Later tha 5 years Borrowigs 3, , , , Trade ad other payables 1, , Other fiacial liabilities 3, , Total 8, , , , The followig is a aalysis of the Compay cotractual udiscouted cash flows payable uder fiacial liabilities at 31 March 2016: Curret No-curret Total withi 12 moths 1-5 years Later tha 5 years Borrowigs 3, , , , Trade ad other payables Other fiacial liabilities 2, , Total 6, , , , ANNUAL REPORT

98 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) The followig is a aalysis of the Compay cotractual udiscouted cash flows payable uder fiacial liabilities at 1 April 2015: Curret No-curret Total withi 12 moths 1-5 years Later tha 5 years Borrowigs 3, , , , Trade ad other payables Other fiacial liabilities 2, , Total 6, , , , Capital maagemet Capital icludes equity attributable to the equity holders of the paret ad debt. The primary objective of the Compay's capital maagemet is to esure that it maitais a strog credit ratig ad healthy capital ratios i order to support its busiess ad maximise shareholder value objectives iclude, amog others: Esure Compay s ability to meet both its log-term ad short-term capital eeds as a goig cocer; Costatly evolve multiple fudig alteratives equity ad /or preferece capital, seior ad /or subordiated debt, corporate loa facilities to arrive at a optimal capital mix; No chages were made i the objectives, policies or processes durig the year eded 31 March 2017 ad 31 March The Compay maitais a mixture of cash ad cash equivalets, log-term debt ad short-term committed facilities that are desiged to esure the Compay has sufficiet available fuds for busiess requiremets. The Compay et debt to equity ratio at the reportig date is as follows: As at As at As at 31 March March April 2015 Total borrowig 7, , , Less : Cash ad bak balaces (24.25) (53.84) (698.69) Less : Other bak balaces (303.49) (283.71) (117.53) Net debt 7, , , Equity 31, , , Total equity 31, , , Net debt to equity ratio KSK ENERGY VENTURES LIMITED

99 31 Fiacial Istrumets Carryig amouts versus fair values The fair values of fiacial assets ad fiacial liabilities, together with the carryig amouts i the statemet of fiacial positio are as follows: No- curret fiacial assets Carryig Fair Carryig Fair Carryig Fair amout value amout value amout value 31 March 31 March 31 March 31 March 1 April 1 April Ivestmet - At fair value through other comprehesive icome Trade receivables Loas , , Other fiacial asset Total o-curret 1, , , , , , Curret fiacial assets Trade receivables Cash ad bak balaces Other bak balaces Loas 1, , Other fiacial asset Total curret 2, , , , , , Total 3, , , , , , No- curret fiacial liabilities Borrowigs 4, , , , , , Other fiacial liabilities Total o-curret 5, , , , , , Curret fiacial liabilities Borrowigs 2, , , , , , Trade payables 1, , Other fiacial liabilities 4, , , , , , Total curret 7, , , , , , Total 12, , , , , , Fair value hierarchy The table below aalyses recurrig fair value measuremets for fiacial assets ad fiacial liabilities. These fair value measuremets are categorised i to differet levels i the fair value hierarchy based o the iputs to valuatio techiques used. The differet levels are defied as follows. Level 1: quoted prices (uadjusted) i active markets for idetical assets or liabilities. Level 2: iputs other tha quoted prices that is observable for the asset or liability, either directly or idirectly. Level 3: valuatio techiques that iclude iputs for the asset or liability that are ot based o observable market data (uobservable iputs). ANNUAL REPORT

100 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 31 March 2017 Level 1 Level 2 Level 3 Total Fiacial assets measured at fair value Equity securities - At fair value through other comprehesive icome Total Fiacial liabilities measured at fair value Total The Compay recogises trasfers betwee levels of the fair value hierarchy as of the ed of the reportig year durig which the trasfer has occurred. Durig the year eded 31 March 2017, there were o trasfers betwee Level 1 ad Level 2 fair value measuremets. Recociliatio of Level 3 fair value measuremets of fiacial assets: 31 March 2017 Total Opeig balace Total gais or losses - i icome statemet - - i other comprehesive icome chage i fair value of fiacial asset - Settlemets - Trasfers ito level 3 - Closig balace March 2016 Level 1 Level 2 Level 3 Total Fiacial assets measured at fair value Equity securities - At fair value through other comprehesive icome Total Fiacial liabilities measured at fair value Total The Compay recogises trasfers betwee levels of the fair value hierarchy as of the ed of the reportig year durig which the trasfer has occurred. Durig the year eded 31 March 2016, there were o trasfers betwee Level 1 ad Level 2 fair value measuremets. 98 KSK ENERGY VENTURES LIMITED

101 Recociliatio of Level 3 fair value measuremets of fiacial assets: 31 March 2016 Total Opeig balace Total gais or losses: - i icome statemet - - i other comprehesive icome chage i fair value of fiacial asset - Settlemets - Trasfers ito level 3 - Closig balace April 2015 Level 1 Level 2 Level 3 Total Fiacial assets measured at fair value Equity securities - At fair value through other comprehesive icome Total Fiacial liabilities measured at fair value Total Valuatio techiques Level 3 fair values for equity securities FVTOCI has bee determied by usig Comparable Compay Aalyses. This is a relative valuatio techique which ivolves comparig that compay s valuatio multiples to those of its peers. The multiples cosider for the valuatio is price to book value which is the adjusted for differeces that are directly related to the characteristics of equity istrumets beig valued such as discoutig factor for size ad liquidity etc. 33 Disclosure o Specified Bak Notes (SBN's) Durig the year, the Compay had specified bak otes or other deomiatio ote as defied i the MCA otificatio G.S.R. 308(E) dated March 31, 2017 o the details of Specified Bak Notes (SBN) held ad trasacted durig the period from November 8, 2016 to December, , the deomiatio wise SBNs ad other otes as per the otificatio is give below: Particulars SBNs* Other Deomiatio Total Notes Closig cash i had as o November 8, (+) Permitted receipts (-) Permitted paymets - (0.19) (0.19) (-) Amout deposited i Baks (0.21) - (0.21) Closig cash i had as o December 30, * For the purposes of this clause, the term Specified Bak Notes shall have the same meaig provided i the otificatio of the Govermet of Idia, i the Miistry of Fiace, Departmet of Ecoomic Affairs umber S.O. 3407(E), dated the 8th November, ANNUAL REPORT

102 Notes to fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 34 The compay is primarily egaged i the busiess of providig project developmet ad corporate support services. Accordigly there are o reportable segmet as per Idia Accoutig Stadard -108 "Operatig Segmets". 35 The Compay has icurred a amout of Rs (31 March, 2016: Rs ) towards Corporate Social Resposibility (CSR) as per Sectio 135 of the Compaies Act, 2013 ad is icluded i other expeses. Particulars 31 March March 2016 I cash Yet to be paid I cash Yet to be paid (a) Gross amout required to be sped (b) Amout sped o (i) Costructio/Acquisitio of asset (ii) O purpose other tha (i) above Total KSK Power Holdigs Limited has ot exercised the right of coversio of balace 6,98,56,800 share warrats withi th stipulated time i.e. 17 April Accordigly, as per the terms of issue, the warrats has lapsed ad Rs. 1, received as subscriber s moey towards the 6,98,56,800 share warrats stads forfeited ad credited to capital reserve. As per our report of eve date For Umamaheswara Rao & Co., Chartered Accoutats Firm Registratio No: S for ad o behalf of the Board Sd/- Sd/- Sd/- Sd/- Sd/- R R Dakshiamurthy S. Kishore K. A. Sastry V. Sambasiva Rao M. S. Phai Sekhar Parter Whole-time Director Whole-time Director Chief Fiacial officer Compay Secretary Membership No: DIN DIN Place: Hyderabad Date: 27 May KSK ENERGY VENTURES LIMITED

103 INDEPENDENT AUDITORS' REPORT o Cosolidated Fiacials Statemets To The Members of KSK Eergy Vetures Limited Report o the Cosolidated Id AS Fiacial Statemets We have audited the accompayig Cosolidated Id AS fiacial statemets of KSK Eergy Vetures Limited ("the Holdig Compay") ad its subsidiaries ad Joitly cotrolled etity (collectively referred to as 'the Compay' or 'the Group'), which comprises the Cosolidated Balace Sheet as at March 31, 2017, the Cosolidated Statemet of Profit ad Loss (icludig other Comprehesive icome),the Cosolidated statemet of Cash Flows ad the Cosolidated Statemet of Chages i Equity for the year the eded ad a summary of sigificat accoutig policies ad other explaatory iformatio (hereiafter referred to as Cosolidated Id AS fiacial statemets ). Maagemet's Resposibility for the Cosolidated Id AS Fiacial Statemets The Holdig Compay's Board of Directors is resposible for the preparatio of these Cosolidated Id AS fiacial statemets i terms of the requiremets of the Compaies Act, 2013 ( hereiafter referred to as 'the Act') that gives a true ad fair view of the Cosolidated Id AS fiacial performace icludig other comprehesive icome, cosolidated cash flows ad cosolidated chages i equity of the Group i accordace with the accoutig priciples geerally accepted i Idia, icludig the Idia Accoutig Stadards (Id AS) prescribed uder sectio 133 of the Act read with relevat rules issued there uder. The respective Board of Directors of the compaies icluded i the Group are resposible for maiteace of adequate accoutig records i accordace with the provisios of the Act for safeguardig of the assets of the Group ad for prevetig ad detectig frauds ad other irregularities; selectio ad applicatio of appropriate accoutig policies; makig judgmets ad estimates that are reasoable ad prudet; ad desig, implemetatio ad maiteace of adequate iteral fiacial cotrols, that were operatig effectively for esurig the accuracy ad completeess of the accoutig records, relevat to the preparatio ad presetatio of the Cosolidated Id AS fiacial statemets that give a true ad fair view ad are free from material misstatemet, whether due to fraud or error, which have bee used for the purpose of preparatio of the Cosolidated Id AS fiacial statemets by the Directors of the Holdig Compay, as aforesaid. Auditor's Resposibility Our resposibility is to express a opiio o these Cosolidated Id AS fiacial statemets based o our audit. We have take ito accout the provisios of the Act, the accoutig ad auditig stadards ad matters which are required to be icluded i the audit report uder the provisios of the Act ad the Rules made thereuder. We coducted our audit i accordace with the Stadards o Auditig specified uder Sectio 143(10) of the Act. Those Stadards require that we comply with ethical requiremets ad pla ad perform the audit to obtai reasoable assurace about whether the Cosolidated Id AS fiacial statemets are free from material misstatemet. A audit ivolves performig procedures to obtai audit evidece about the amouts ad the disclosures i the Cosolidated Id AS fiacial statemets. The procedures selected deped o the auditor's judgmet, icludig the assessmet of the risks of material misstatemet of the Cosolidated Id AS fiacial statemets, whether due to fraud or error. I makig those risk assessmets, the auditor cosiders iteral fiacial cotrol relevat to the Compay's preparatio of the Cosolidated Id AS fiacial statemets that give a true ad fair view i order to desig audit procedures that are appropriate i the circumstaces. A audit also icludes evaluatig the appropriateess of the accoutig policies used ad the reasoableess of the accoutig estimates made by the Group's Board of Directors, as well as evaluatig the overall presetatio of the Cosolidated Id AS fiacial statemets. We believe that the audit evidece we have obtaied is sufficiet ad appropriate to provide a basis for our audit opiio o the Cosolidated Id AS fiacial statemets. Opiio I our opiio adto the best of our iformatio ad accordig to the explaatios give to us, the aforesaid Cosolidated Id AS fiacial statemets give the iformatio required by the Act i the maer so required ad give a true ad fair view i coformity with the accoutig priciples geerally accepted i Idia icludig Id AS : (a) i the case of the Cosolidated Balace Sheet, of the state of affairs of the Compay as at March 31, 2017; ANNUAL REPORT

104 INDEPENDENT AUDITORS' REPORT o Cosolidated Fiacials Statemets (b) (c) (d) i the case of the Cosolidated Profit ad Loss Accout icludig other comprehesive icome, of the loss for the year eded o that date; i the case of the Cosolidated Cash Flow Statemet, of the cash flows for the year eded o that date; ad i the case of the Cosolidated chages i equity for the year eded o that date. Report o Other Legal ad Regulatory Requiremets 1. As required by sectio 143(3) of the Act, we report that: a. We have sought ad obtaied all the iformatio ad explaatios which to the best of our kowledge ad belief were ecessary for the purposes of our audit of our audit of the aforesaid cosolidated Id AS fiacial statemets. b. I our opiio, proper books of accout as required by law have bee kept by the Compay so far as it appears from our examiatio of those books. c. the cosolidated Balace Sheet, cosolidated Statemet of Profit ad Loss, the cosolidated statemet of Cash Flow ad the cosolidated Statemet of chages i equity dealt with by this Report are i agreemet with the books of accout. d. i our opiio, the aforesaid Cosolidated Id AS fiacial statemets comply with the Accoutig Stadards referred to i sectio 133 of compaies act 2013, read with relevat Rules issued thereuder. e. o the basis of writte represetatios received from the directors as o March 31, 2017, ad take o record by the Board of Directors, oe of the directors is disqualified as o March 31, 2017, from beig appoited as a director i terms of sub-sectio (2) of sectio 164(2) of the Compaies Act, f. With respect to the adequacy of the iteral fiacial cotrols over fiacial reportig of the compay ad the operatig effectiveess of such cotrols, refer to our separate report i 'Aexure A'; ad g. With respect to the other matters to be icluded i the Auditor's Report i accordace with Rule 11 of the Compaies (Audit ad Auditors) Rules, 2014, i our opiio ad to the best of our iformatio ad accordig to the explaatios give to us: i. The Compay has disclosed the impact of pedig litigatios o its fiacial positio i its Cosolidated Id AS fiacial statemets - Refer Note 35 to the Cosolidated Id AS fiacial statemets ii. iii. iv. The Compay has made provisio, as required uder the applicable law or accoutig stadards, for material foreseeable losses, if ay, o log-term cotracts icludig derivatives cotracts. Refer to Note 23 &24a to the Cosolidated Id AS fiacial statemets There were o amouts which were required to be trasferred to the Ivestor Educatio ad Protectio Fud by the Compay. the Compay has provided requisite disclosures i its Cosolidated Id AS fiacial statemet as to holdig as well as dealigs i specified Bak Notes durig the period from 8 November, 2016 to 30 December, 2016 ad these are i accordace with the books of accouts maitaied by the Compay. Refer to Note 45to the Cosolidated Id AS fiacial statemets. For UmamaheswaraRao& Co., Chartered Accoutats Sd/- R R Dakshiamurthy Parter ICAI MRN: FRN S Hyderabad Date: May 27, KSK ENERGY VENTURES LIMITED

105 Aexure - A to Auditors' Report Report o the Iteral Fiacial Cotrols uder Clause (i) of Sub-sectio 3 of Sectio 143 of the Compaies Act, 2013 ("the Act"): I cojuctio with our audit of the cosolidated fiacial statemets of the Compay as of ad for the year eded 31 March 2017, we have audited the iteral fiacial cotrols over fiacial reportig of KSK Eergy Vetures Limited ("the Holdig Compay") ad its subsidiary compaies which are compaies icorporated i Idia, as of that date. Maagemet's Resposibility for Iteral Fiacial Cotrols The Respective Board of Directors of the Holdig Compay ad its subsidiary compaies, which are compaies icorporated i Idia, are resposible for establishig ad maitaiig iteral fiacial cotrols based o the iteral cotrol over fiacial reportig criteria established by the Compay cosiderig the essetial compoets of iteral cotrol stated i the Guidace Note o Audit of Iteral Fiacial Cotrols over Fiacial Reportig issued by the Istitute of Chartered Accoutats of Idia ("ICAI'). These resposibilities iclude the desig, implemetatio ad maiteace of adequate iteral fiacial cotrols that were operatig effectively for esurig the orderly ad efficiet coduct of its busiess, icludig adherece to compay's policies, the safeguardig of its assets, the prevetio ad detectio of frauds ad errors, the accuracy ad completeess of the accoutig records, ad the timely preparatio of reliable fiacial iformatio, as required uder the Compaies Act, Auditors' Resposibility Our resposibility is to express a opiio o the Compay's iteral fiacial cotrols over fiacial reportig based o our audit. We coducted our audit i accordace with the Guidace Note o Audit of Iteral Fiacial Cotrols over Fiacial Reportig (the "Guidace Note") issued by ICAI ad the Stadards o Auditig, issued by ICAI ad deemed to be prescribed uder sectio 143(10) of the Compaies Act, 2013, to the extet applicable to a audit of iteral fiacial cotrols, both issued by the Istitute of Chartered Accoutats of Idia. Those Stadards ad the Guidace Note require that we comply with ethical requiremets ad pla ad perform the audit to obtai reasoable assurace about whether adequate iteral fiacial cotrols over fiacial reportig was established ad maitaied ad if such cotrols operated effectively i all material respects. Our audit ivolves performig procedures to obtai audit evidece about the adequacy of the iteral fiacial cotrols system over fiacial reportig ad their operatig effectiveess. Our audit of iteral fiacial cotrols over fiacial reportig icluded obtaiig a uderstadig of iteral fiacial cotrols over fiacial reportig, assessig the risk that a material weakess exists, ad testig ad evaluatig the desig ad operatig effectiveess of iteral cotrol based o the assessed risk. The procedures selected deped o the auditor's judgmet, icludig the assessmet of the risks of material misstatemet of the fiacial statemets, whether due to fraud or error. We believe that the audit evidece we have obtaied is sufficiet ad appropriate to provide a basis for our audit opiio o the Compay's iteral fiacial cotrols system over fiacial reportig. Meaig of Iteral Fiacial Cotrols over Fiacial Reportig A compay's iteral fiacial cotrol over fiacial reportig is a process desiged to provide reasoable assurace regardig the reliability of fiacial reportig ad the preparatio of fiacial statemets for exteral purposes i accordace with geerally accepted accoutig priciples. A compay's iteral fiacial cotrol over fiacial reportig icludes those policies ad procedures that (1) pertai to the maiteace of records that, i reasoable detail, accurately ad fairly reflect the trasactios ad dispositios of the assets of the compay; (2) provide reasoable assurace that trasactios are recorded as ecessary to permit preparatio of fiacial statemets i accordace with geerally accepted accoutig priciples, ad that receipts ad expeditures of the compay are beig made oly i accordace with authorisatios of maagemet ad directors of the compay; ad (3) provide reasoable assurace regardig prevetio or timely detectio of uauthorised acquisitio, use, or dispositio of the compay's assets that could have a material effect o the fiacial statemets. ANNUAL REPORT

106 Aexure - A to Auditors' Report Iheret Limitatios of Iteral Fiacial Cotrols over Fiacial Reportig Because of the iheret limitatios of iteral fiacial cotrols over fiacial reportig, icludig the possibility of collusio or improper maagemet override of cotrols, material misstatemets due to error or fraud may occur ad ot be detected. Also, projectios of ay evaluatio of the iteral fiacial cotrols over fiacial reportig to future periods are subject to the risk that the iteral fiacial cotrol over fiacial reportig may become iadequate because of chages i coditios, or that the degree of compliace with the policies or procedures may deteriorate. Opiio I our opiio, the Holdig Compay ad its subsidiary compaies, which are compaies icorporated i Idia, have, i all material respects, a adequate iteral fiacial cotrols system over fiacial reportig ad such iteral fiacial cotrols over fiacial reportig were operatig effectively as at 31 March 2017, based o the iteral cotrol over fiacial reportig criteria established by the Compay cosiderig the essetial compoets of iteral cotrol stated i the Guidace Note o Audit of Iteral Fiacial Cotrols Over Fiacial Reportig issued by the ICAI. For UmamaheswaraRao& Co., Chartered Accoutats Sd/- R R Dakshiamurthy Parter ICAI MRN: FRN S Hyderabad Date: May 27, KSK ENERGY VENTURES LIMITED

107 Cosolidated Balace Sheet as at 31 March 2017 (All amouts i Idia Rupees millio, except share data ad where otherwise stated) I ASSETS 1 No-curret assets (a) Property plat ad equipmet 9 134, , , (b) Capital work i progress 9 83, , , (c) Goodwill 10 1, , , (d) Other itagible assets 10 1, , (e) Itagible assets uder developmet (f) Fiacial asset (i) Ivestmets , (ii) Trade receivables (iii) Loas 13 2, , , (iv) Other fiacial asset 14 1, , (v) Derivative assets 2, , , (g) Deferred tax assets (et) 26 11, , , (h) Other o-curret assets 15 9, , , Curret assets 249, , , (a) Ivetories 16 1, , , (b) Fiacial asset Note As at As at As at 31 March March April 2015 (i) Ivestmets (ii) Trade receivables 12 29, , , (iii) Cash ad bak balaces 17 1, , (iv) Other bak balaces 18 5, , , (v) Loas 13 6, , , (vi) Other fiacial asset (c) Curret tax assets (Net) (d) Other curret assets 15 12, , , , , , No-curret assets held for sale TOTAL 306, , , ANNUAL REPORT

108 Cosolidated Balace Sheet as at 31 March 2017 (All amouts i Idia Rupees millio, except share data ad where otherwise stated) Note As at As at As at 31 March March April 2015 II EQUITY AND LIABILITIES Equity (a) Equity share capital 19 4, , , (b) Other equity 17, , , , , , (c) No cotrollig iterest 6, , , Total equity 28, , , No-curret liabilities (a) Fiacial liability (i) Borrowigs , , , (ii) Other fiacial liabilities , (iii) Derivative liabilities , , (b) Provisios (c) Deferred tax liabilities (et) (d) Other o curret liabilities , , , Curret liabilities (a) Fiacial liability (i) Borrowigs 20 22, , , (ii) Trade payables 21 12, , , (iii) Other fiacial liabilities 22 34, , , (iv) Derivative liabilities (b) Other curret liabilities (c) Curret Tax liability (Net) , , , Liabilities associates with o-curret assets held for sale TOTAL 306, , , See accompayig otes to Cosolidated fiacial statemets As per our report of eve date For Umamaheswara Rao & Co., Chartered Accoutats Firm Registratio No: S for ad o behalf of the Board Sd/- Sd/- Sd/- Sd/- Sd/- R R Dakshiamurthy S. Kishore K. A. Sastry V. Sambasiva Rao M. S. Phai Sekhar Parter Whole-time Director Whole-time Director Chief Fiacial officer Compay Secretary Membership No: DIN DIN Place: Hyderabad Date: 27 May KSK ENERGY VENTURES LIMITED

109 Cosolidated Statemet of Profit ad Loss for the year eded 31 March 2017 I Reveue from operatios 27 39, , II Other icome 28 1, III Total reveue (I+II) 41, , IV Expeses Cost of fuel cosumed 29 19, , Maufacturig expeses 30 2, , Employee beefits expeses 31 1, Other expeses 32 2, , Fiace costs 33 21, , Depreciatio ad amortisatio expeses 9 & 10 6, , Total expeses 55, , V Profit / (loss) before exceptioal (14,343.55) (5,918.69) items ad tax (III - IV) VI Exceptioal items 35(a)(xii) 6, VII Profit / (loss) before tax (V - VI) (8,288.35) (5,918.69) VIII Tax expese / (icome) Curret tax For the year I respect of earlier years Less : MAT credit etitlemet (66.12) (72.49) Deferred tax (1,353.16) (1,584.41) Total tax expese / (icome) (1,360.85) (1,578.89) IX Profit / (loss) after tax (VII - VIII) (6,927.50) (4,339.80) X Share of profit / (loss) of associate (68.71) - XI Profit / (loss) for the year (IX + X) (6,996.21) (4,339.80) Attributable to: Note Year eded Year eded 31 March March 2016 Equity holders of the paret (6,359.76) (4,142.11) No-cotrollig iterest (636.45) (197.69) (6,996.21) (4,339.80) ANNUAL REPORT

110 Cosolidated Statemet of Profit ad Loss for the year eded 31 March 2017 (All amouts i Idia Rupees millio, except share data ad where otherwise stated) XII Other comprehesive icome 34 Note Year eded Year eded 31 March March 2016 (i) (a) Items that will ot be reclassified to profit or loss (b) Icome tax relatig to items that will ot be reclassified to profit or loss (ii) Items that will be reclassified to profit or loss (1.28) 0.15 Other comprehesive icome for the year, et of tax Total comprehesive icome/(loss)(xi + XII) (6,994.87) (4,331.64) Attributable to: Equity holders of the paret (6,360.85) (4,132.74) No-cotrollig iterest (634.02) (198.90) (6,994.87) (4,331.64) XIII Earigs / (loss) per share (EPS): Basic ad diluted - face value of Rs 10 per share (Rs.) (15.00) (9.77) See accompayig otes to Cosolidated fiacial statemets As per our report of eve date For Umamaheswara Rao & Co., Chartered Accoutats Firm Registratio No: S for ad o behalf of the Board Sd/- Sd/- Sd/- Sd/- Sd/- R R Dakshiamurthy S. Kishore K. A. Sastry V. Sambasiva Rao M. S. Phai Sekhar Parter Whole-time Director Whole-time Director Chief Fiacial officer Compay Secretary Membership No: DIN DIN Place: Hyderabad Date: 27 May KSK ENERGY VENTURES LIMITED

111 Cosolidated Statemet of Chages i Equity for the year eded 31 March 2017 (All amouts i Idia Rupees millio, except share data ad where otherwise stated) A. Equity Share Capital Particulars No of Shares Amout Balace as at 1 April ,249,194 4, Chages i equity share capital durig the year : (i) Coversio of warrats issued to promoter group 1,736, Balace as at 31 March ,985,774 4, Balace as at 1 April ,985,774 4, Chages i equity share capital durig the year : - - Balace as at 31 March ,985,774 4, ANNUAL REPORT

112 Cosolidated Statemet of Chages i Equity for the year eded 31 March 2017 (All amouts i Idia Rupees millio, except share data ad where otherwise stated) B Other equity Attributable to the equity holders of the paret Reserves ad Surplus Items of OCI Securities Capital Capital Other Retaied Equity Foreig Actuarial Moey Total No- Total Premium reserve Redemptio reserve Earigs Istru- Exchage gais / received cotrollig equity Reserve reserve -mets traslatio (losses) agaist iterests through reserve share Other warrats Compre- -hesive Icome As at 1 April , , (46.56) (4.41) - 1, , , , Profit / (loss) for the year (4,142.11) (4,142.11) (197.69) (4,339.80) Other Comprehesive Icome Items that will ot be reclassified to profit or loss Gai / (loss) o fiacial istrumets at fair value through OCI Actuarial gai / (loss) (5.72) - (5.72) (1.49) (7.21) Tax impact Items that will be reclassified to profit or loss Foreig currecy traslatio reserve Total comprehesive icome (4,142.11) (4.21) - (4,132.74) (198.90) (4,331.64) Allotmet of shares (47.64) Trasfer of ecoomic iterest to (394.10) - o-cotrollig iterests Trasferred to Capital (340.00) Redemptio reserve Chage i o-cotrollig iterests (127.32) (127.32) 1, , without chage i cotrol Commo cotrol busiess combiatio (151.30) (151.30) Trasactio with ower (127.32) (47.64) , , As at 31 March , , (127.32) (2,399.40) (33.13) (4.26) (4.21) 1, , , , KSK ENERGY VENTURES LIMITED

113 Attributable to the equity holders of the paret Reserves ad Surplus Items of OCI Securities Capital Capital Other Retaied Equity Foreig Actuarial Moey Total No- Total Premium reserve Redemptio reserve Earigs Istrumets Exchage gais / received cotrollig equity Reserve reserve through traslatio (losses) agaist iterests Other reserve share Compre- warrats -hesive Icome As at 1 April , , (127.32) (2,399.40) (33.13) (4.26) (4.21) 1, , , , Profit / (loss) for the year (6,359.76) (6,359.76) (636.45) (6,996.21) Other Comprehesive Icome Items that will ot be reclassified to profit or loss Gai / (loss) o fiacial istrumets at (1.66) (1.66) - (1.66) fair value through OCI Actuarial gai / (loss) Tax impact (0.16) 1.02 Items that may be reclassified to profit or loss Foreig currecy traslatio reserve (1.28) - - (1.28) - (1.28) Total comprehesive icome (6,359.76) (1.66) (1.28) (6,360.85) (634.02) (6,994.87) Forfeiture of share warrats - 1, (1,728.96) Trasfer of ecoomic iterest to (237.88) - o-cotrollig iterests Chage i o-cotrollig iterests , without chage i cotrol Commo cotrol busiess combiatio (98.51) (98.51) (590.62) (689.13) Trasactio with ower - 1, (1,728.96) (46.59) As at 31 March , , , (8,619.79) (34.79) (5.54) (2.36) - 17, , , The group etities have arragemets of sharig of profits with its o-cotrollig shareholders, through which the o-cotrollig shareholders are etitled to a divided of 0.01% of the face value of the equity share capital held ad the same is also reflected i the Cosolidated statemet of profit or loss. However, the o cotrollig iterest disclosed i the Cosolidated statemet of chages i equity is calculated i the proportio of the actual shareholdig as at the reportig date. See accompayig otes to Cosolidated fiacial statemets As per our report of eve date For Umamaheswara Rao & Co., for ad o behalf of the Board Chartered Accoutats Firm Registratio No: S Sd/- Sd/- Sd/- Sd/- Sd/- R R Dakshiamurthy S. Kishore K. A. Sastry V. Sambasiva Rao M. S. Phai Sekhar Parter Whole-time Director Whole-time Director Chief Fiacial officer Compay Secretary Membership No: DIN DIN Place: Hyderabad Date: 27 May ANNUAL REPORT

114 Cosolidated Cash Flow Statemet for the year eded 31 March 2017 (All amouts i Idia Rupees millio, except share data ad where otherwise stated) CASH FLOW FROM OPERATING ACTIVITIES Loss before tax (8,288.35) (5,918.69) Adjustmets for Depreciatio ad amortisatio expeses 6, , Fiace cost 21, , Iterest icome (843.48) (523.67) Divided icome (13.57) (28.95) (Profit) / loss o sale of assets, et (14.56) 0.76 Bad debts / advaces writte off / provisio for doubtful debts Foreig exchage differeces Liability o loger required writte back (5.16) (2.05) Others, et (145.86) (81.59) Operatig profit before workig capital chages 20, , Adjustmets for workig capital Ivetories (793.03) Trade receivables (6,338.63) (14,450.53) Loas ad advaces (170.54) Other assets (8,370.88) (922.26) Trade payables 3, , Other liabilities ad provisios Cash geerated from operatios 10, , Icome tax (paid) / refud (31.15) Net cash from operatig activities 10, , CASH FLOW FROM INVESTING ACTIVITIES 31 March March 2016 Purchase of fixed assets icludig capital work-i-progress ad capital advaces (14,096.30) (1,865.48) Sale of fixed assets Advace received agaist sale of assets, et 2, Acquisitio of miority iterest / dilutio of iterest i subsidiaries, et (1,307.63) Acquisitio of subsidiaries (705.88) (182.99) (Purchase) / sale of curret ivestmets, et - (176.99) (Ivestmet) / redemptio of bak deposit (havig origial maturity more tha three moths) (0.04) (0.89) (Ivestmet) / redemptio of bak deposit (held as margi moey or security agaist guaratees or borrowigs) 1, Loas ad advaces give / repaid, et (2,125.90) (307.29) Iterest received Divided received Net cash used i ivestig activities (12,725.27) (2,255.01) 112 KSK ENERGY VENTURES LIMITED

115 31 March March 2016 CASH FLOW FROM FINANCING ACTIVITIES Proceeds from share issue, et of share issue expeses Proceeds from share issue ad applicatio moey i subsidiary Proceeds from log term borrowigs 37, , Repaymet of log term borrowigs (5,079.72) (3,436.18) Proceeds from short term borrowigs, et (1,493.90) 7, Proceed from / (repaymet of) other liabilities 1, , Paymet of fiace costs (30,530.47) (22,343.20) Net cash from / (used i ) fiacig activities 3, (4,216.53) Net icrease / (decrease) i cash ad cash equivalets (1,680.42) Effect of exchage rate chages (1.28) 0.09 Cash ad cash equivalets at the begiig of the year , Cash ad cash equivalets at the ed of the year (refer ote 17) 1, See accompayig otes to Cosolidated fiacial statemets As per our report of eve date For Umamaheswara Rao & Co., Chartered Accoutats Firm Registratio No: S for ad o behalf of the Board Sd/- Sd/- Sd/- Sd/- Sd/- R R Dakshiamurthy S. Kishore K. A. Sastry V. Sambasiva Rao M. S. Phai Sekhar Parter Whole-time Director Whole-time Director Chief Fiacial officer Compay Secretary Membership No: DIN DIN Place: Hyderabad Date: 27 May 2017 ANNUAL REPORT

116 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 1 Corporate Iformatio 1.1 KSK Eergy Vetures Limited ( KEVL or the Compay ), is a Public Compay domiciled i Idia ad icorporated uder the provisios of Compaies Act applicable i Idia. The Registered Office of the Compay is located at Jubilee Hills, Hyderabad Telagaa. 1.2 Nature of operatios KSK Eergy Vetures Limited, its subsidiaries, joit operatios ad associates (collectively referred to as the Group ) are primarily egaged i the developmet, owership, operatio ad maiteace of private sector power projects with multiple idustrial cosumers ad utilities i Idia. KSK focused its strategy o the private sector power developmet market, udertakig etire gamut of developmet, ivestmet, costructio (for its ow use), operatio ad maiteace of power plat with supplies iitially to heavy idustrials operatig i Idia ad ow brachig out to cater to the eeds of utilities ad others i the wider Idia power sector. The pricipal activities of the Group are described i ote Basis of Preparatio 2.1 Statemet of Compliace These fiacial statemets of the Group have bee prepared i accordace with Idia Accoutig Stadards (Id AS) as per the Compaies (Idia Accoutig Stadards) Rules, 2015 otified uder Sectio 133 of Compaies Act, 2013, (the 'Act') ad other relevat provisios of the Act. The Group's fiacial statemets up to ad for the year eded 31 March 2016 were prepared i accordace with the Compaies (Accoutig Stadards) Rules, 2006, otified uder Sectio 133 of the Act ad other relevat provisios of the Act. As these are the Group's first fiacial statemets prepared i accordace with Idia Accoutig Stadards (Id AS), Id AS 101, First-time adoptio of Idia Accoutig Stadards has bee applied. A explaatio of how the trasitio to Id AS has affected the previously reported fiacial positio, fiacial performace ad cash flows of the Compay is provided i Note 43. The fiacial statemets were authorised for issue by the Board of Directors o 27 May Fuctioal ad presetatio currecy These fiacial statemets are preseted i Idia Rupees (INR), which is also the Compay's fuctioal currecy. All amouts have bee rouded-off to the earest millio, uless otherwise stated. 2.3 Basis of measuremet These fiacial statemets of the Group have bee prepared o the historical cost covetio, except for the followig: Derivative fiacial istrumets that are measured at fair value; Fiacial istrumets that are desigated as beig at fair value through profit or loss accout or through other comprehesive icome upo iitial recogitio are measured at fair value; Net employee defied beefit (asset) / liability that is measured based o actuarial valuatio. 114 KSK ENERGY VENTURES LIMITED

117 3 Basis of cosolidatio 3.1 The cosolidated fiacial statemets icorporate the cosolidated fiacial statemets of the Compay ad its subsidiaries, joit operatios ad associates. Cotrol is achieved whe the Compay: has power over the ivestee; is exposed, or has rights, to variable returs from its ivolvemet with the ivestee; ad has the ability to use its power to affect its returs. The Compay reassesses whether or ot it cotrols a ivestee if facts ad circumstaces idicate that there are chages to oe or more of the three elemets of cotrol listed above. Whe the Compay has less tha a majority of the votig rights of a ivestee, it has power over the ivestee whe the votig rights are sufficiet to give it the practical ability to direct the relevat activities of the ivestee uilaterally. The Compay cosiders all relevat facts ad circumstaces i assessig whether or ot the Compay s votig rights i a ivestee are sufficiet to give it power, icludig: the size of the Compay s holdig of votig rights relative to the size ad dispersio of holdigs of the other vote holders; potetial votig rights held by the Compay, other vote holders or other parties; rights arisig from other cotractual arragemets; ad ay additioal facts ad circumstaces that idicate that the Compay has, or does ot have, the curret ability to direct the relevat activities at the time that decisios eed to be made, icludig votig patters at previous shareholders meetigs. Cosolidatio of a subsidiary begis whe the Compay obtais cotrol over the subsidiary ad ceases whe the Compay loses cotrol of the subsidiary. Specifically, icome ad expeses of a subsidiary acquired or disposed of durig the year are icluded i the cosolidated statemet of profit ad loss from the date the Compay gais cotrol util the date whe the Compay ceases to cotrol the subsidiary. Profit or loss ad each compoet of other comprehesive icome are attributed to the owers of the Compay ad to the o-cotrollig iterests. Total comprehesive icome of subsidiaries is attributed to the owers of the Compay ad to the o-cotrollig iterests eve if this results i the o-cotrollig iterests havig a deficit balace. Whe ecessary, adjustmets are made to the cosolidated fiacial statemets of subsidiaries to brig their accoutig policies ito lie with the Group s accoutig policies. All itragroup assets ad liabilities, equity, icome, expeses, ad cash flows relatig to trasactios betwee members of the Group are elimiated i full o cosolidatio. Chages i the Group's owership iterests i existig subsidiaries Chages i the Group s owership iterests i subsidiaries that do ot result i the Group losig cotrol over the subsidiaries are accouted for as equity trasactios. The carryig amouts of the Group s iterests ad the o-cotrollig iterests are adjusted to reflect the chages i their relative iterests i the subsidiaries. Ay differece betwee the amout by which the o-cotrollig iterests are adjusted ad the fair value of the cosideratio paid or received is recogised directly i equity ad attributed to owers of the Compay. Whe the Group loses cotrol of a subsidiary, a gai or loss is recogised i profit or loss ad is calculated as the differece betwee (i) the aggregate of the fair value of the cosideratio received ad the fair value of ay retaied iterest ad (ii) the previous carryig amout of the assets (icludig goodwill), ad liabilities of the subsidiary ad ay o-cotrollig iterests. All amouts previously recogised i other comprehesive icome i relatio to that subsidiary are accouted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or trasferred to aother category of equity as specified/permitted by applicable Id AS). The fair value of ay ivestmet retaied i the former subsidiary at the date whe cotrol is lost is regarded as the fair value o iitial recogitio for subsequet accoutig uder Id AS 109, or, whe applicable, the cost o iitial recogitio of a ivestmet i a associate or a joit operatio. ANNUAL REPORT

118 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 3.2 Particulars of Subsidiaries, Joit Operatios ad Associates: Subsidiary Compaies Name of the Pricipal The Compay's Pricipal Immediate Immediate Compay activities ecoomic percetage place of paret paret of holdig busiess holdig March March April March March April KSK Vidarbha Power Compay Power Idia KEVL Private Limited, ( KVPCPL ) geeratio KSK Narmada Power Compay Power Idia KEVL Private Limited ( KNPCPL ) geeratio KSK Wid Eergy Private Limited Power Idia KEVL ( KWEPL ) geeratio KSK Surya Photovoltaic Veture Power Idia KEVL Limited ( KSPVL ) geeratio KSK Wardha Ifrastructure Exploratio Idia KEVL Private Limited ( KWAIPL ) of atural / mieral resources. KSK Dibbi Hydro Power Power Idia KEVL Private Limited ( KDHPPL ) geeratio Kameg Dam Hydro Power Power Idia KEVL Limited ( KDHPL ) geeratio KSK Upper Subasiri Hydro Eergy Power Idia KEVL Limited ( KUSHEL ) geeratio KSK Jameri Hydro Power Private Power Idia KEVL Limited ( KJHPPL ) geeratio KSK Dichag Power Compay Power Idia KEVL Private Limited ( KDPCPL ) geeratio J R Power Ge Private Limited Power Idia KEVL ('JRPGL') geeratio KSK Wid Power Amiabhavi Chikodi Power Idia KEVL Private Limited ( KWPACPL ) geeratio Tila Karali Hydro Electric Compay Power Nepal KEVL Private Limited ( TKHECPL ) geeratio Bheri Hydro Power Compay Power Nepal KEVL Private Limited ( BHPCPL ) geeratio KSK Mahaadi Power Compay Power Idia KEVL Limited ( KMPCL ) geeratio KSK Electricity Fiacig Idia Ivestmet Idia KEVL Private Limited ( KEFIPL ) /Fiacig compay Sai Regecy Power Corporatio Power Idia KEFIPL Private Limited ( SRPCPL ) geeratio 116 KSK ENERGY VENTURES LIMITED

119 Name of the Pricipal The Compay's Pricipal Immediate Immediate Compay activities ecoomic percetage place of paret paret of holdig busiess holdig March March April March March April KSK Wid Eergy Halagali Bechi Power Idia KEFIPL Private Limited ( KWEHBPL ) geeratio KSK Wid Eergy Mothalli Haveri Power Idia KEFIPL Private Limited ( KWEMHPL ) geeratio KSK Wid Power Sakoahatti Athi Power Idia KEFIPL Private Limited ( KWPSAPL ) geeratio Sai Lilagar Power Geeratio Limited Power Idia KEFIPL ('SLPGL') (formerly Sai Lilagar geeratio Power Limited ('SLPL')) VS Ligite Power Private Power Idia KEFIPL Limited ( VSLPPL ) geeratio Sai Wardha Power Geeratio Limited Power Idia KEFIPL ( SWPGL ) (formerly Sai Wardha geeratio Power Limited ( SWPL )) Global Coal Sourcig Plc (GCSP) Coal Isle of SLPGL sourcig Ma compay Sai Power Pte Ltd ( SPPL ) Coal Sigapore KMPCL sourcig compay KSK Water Ifrastructures Private Limited ( KWIPL ) Water Idia KMPCL supply facility Sai Maithili Power Compay Power Private Limited ( SMPCPL ) geeratio Idia VSLPPL Field Miig ad Ispats Limited Exploratio Idia SWPGL ( FMIL ) of atural / mieral resources. Joit operatio ad associates Veturer Pricipal Percetage share holdig Name of the Compay place of busiess March March April Joit operatio Sitapuram Power Limited ('SPL') KEFIPL Idia Associates Raigarh Champa Rail Ifrastructure KMPCL Idia Private Limited ('RCRIPL') KSK Water Ifrastructures KMPCL Idia Private Limited ('KWIPL') ANNUAL REPORT

120 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 4 Sigificat Accoutig Policies 4.1 Property, plat ad equipmet Property, plat ad equipmet are stated at cost, et of accumulated depreciatio ad/or accumulated impairmet losses, if ay. The cost icludes expeditures that are directly attributable to property plat ad equipmet such as employee cost, borrowig costs for log-term costructio projects etc., if recogitio criteria are met. Likewise, whe a major ispectio is performed, its costs are recogised i the carryig amout of the plat ad equipmet as a replacemet if the recogitio criteria are satisfied. Subsequet expediture is capitalised oly whe it is probable that the future ecoomic beefits associated with the expediture will flow to the Compay. All other repairs ad maiteace costs are recogised i statemet of profit ad loss. The preset value of the expected costs of decommissioig of the asset after its use is icluded i the costs of the respective asset, if the recogitio criteria for provisio are met. Depreciatio is computed, based o techical assessmet made by techical expert ad maagemet estimate, o straightlie basis over the estimated useful life which are differet from the useful life prescribed i Schedule II to the Compaies Act, The maagemet believes that these estimated useful lives are realistic ad reflect fair approximatio of the period over which the assets are likely to be used as follows: Nature of asset Useful life (years) Buildigs 5-60 Plat ad equipmet 1-30 Railway sidig 4-60 Furiture & fixtures 1-10 Vehicles 8-10 Office equipmet 3-6 Computers 3-6 Assets i the course of costructio are stated at cost ad ot depreciated util commissioed. A item of property, plat ad equipmet is derecogised upo disposal or whe o future ecoomic beefits are expected from its use or disposal. Ay gai or loss arisig o derecogitio of the asset (calculated as the differece betwee the et disposal proceeds ad the carryig amout of the asset) is icluded i statemet of profit ad loss i the year the asset is derecogised. The assets residual values, useful lives ad methods of depreciatio are reviewed at each fiacial year ed, ad adjusted prospectively if appropriate. For trasitio to Id AS, the Group has elected to cotiue with the carryig value of all of its property, plat ad equipmet recogised as of 1st April, 2015 (trasitio date) measured as per the previous GAAP ad use that carryig value as its deemed cost as of the trasitio date. 4.2 Itagible assets Itagible assets acquired separately are measured o iitial recogitio at cost. Followig iitial recogitio, itagible assets are carried at cost less ay accumulated amortisatio ad accumulated impairmet losses. Itagible assets with fiite lives are amortised over the useful ecoomic life ad assessed for impairmet wheever there is a idicatio that the itagible asset may be impaired. The amortisatio period ad the amortisatio method for a itagible asset with a fiite useful life are reviewed at least at the ed of each reportig period. Chages i the expected useful life or the expected patter of cosumptio of future ecoomic beefits embodied i the asset is accouted for by chagig the amortisatio period or method, as appropriate, ad are treated as chages i accoutig estimates. The amortisatio expese o itagible assets with fiite lives is recogised i the statemet of profit ad loss. The preset value of the expected costs of decommissioig of the asset after its use is icluded i the costs of the respective asset, if the recogitio criteria for provisio are met. 118 KSK ENERGY VENTURES LIMITED

121 Gais or losses arisig from derecogitio of a itagible asset are measured as the differece betwee the et disposal proceeds ad the carryig amout of the asset ad are recogised i the statemet of profit ad loss whe the asset is derecogised. Nature of asset Useful life (years) Miig asset 20 Software 3 For trasitio to Id AS, the Group has elected to cotiue with the carryig value of all of its Itagible asset recogised as of 1st April, 2015 (trasitio date) measured as per the previous GAAP ad use that carryig value as its deemed cost as of the trasitio date. 4.3 Miig assets Developmet expediture icurred by or o behalf of the Compay is accumulated separately for each area of iterest i which ecoomically recoverable resources have bee idetified. Such expediture comprises cost directly attributable to the costructio of a mie ad the related ifrastructure. Oce a developmet decisio has bee take, the carryig amout of the exploratio ad evaluatio expediture i respect of the area of iterest is aggregated with the developmet expediture ad classified uder o-curret assets as developmet of mieral assets. A developmet of mieral assets is reclassified as a miig property at the ed of the commissioig phase, whe the mie is capable of operatig i the maer iteded by maagemet. No depreciatio is recogised i respect of developmet properties util they are reclassified as Miig property. Whe further developmet expediture is icurred i respect of a miig property after the commecemet of productio, such expediture is carried forward as part of the miig property whe it is probable that additioal future ecoomic beefits associated with the expediture will flow to the etity. Otherwise such expediture is classified as a cost of productio. Depreciatio is charged usig the uits of productio method, with separate calculatios beig made for each area of iterest. The uits of productio basis results i a depreciatio charge proportioal to the depletio of proved ad probable reserves. The cost of ormal o-goig operatioal strippig activities is accouted for i accordace with IND AS 2 Ivetories. The strippig activity asset is accouted for as a additio to, or as a ehacemet of, a existig asset ad classified as tagible or itagible accordig to the ature of the existig asset of which it form parts. 4.4 No-curret assets held-for-sale No-curret assets ad disposal groups classified as held-for-sale are measured at lower of carryig amout ad fair value less costs to sell. No-curret assets ad disposal groups are classified as held-for-sale if their carryig amouts will be recovered through a sale trasactio rather tha through cotiuous use. This coditio is regarded as met oly whe the sale is highly probable ad the asset or disposal group is available for immediate sale i its preset coditio. Maagemet is committed to the sale, which should be expected to qualify for recogitio as a completed sale geerally withi oe year from the date of classificatio. Immediately before classificatio as held-for-sale or held-for-distributio, the assets, or compoets of a disposal group, are re-measured i accordace with the Compay s other accoutig policies. Thereafter, geerally the assets, or disposal group, are measured at the lower of their carryig amout ad fair value less costs to sell. Ay impairmet loss o a disposal group is allocated first to goodwill, ad the to the remaiig assets ad liabilities o a pro rata basis, except that o loss is allocated to ivetories, fiacial assets, deferred tax assets, employee beefit assets which cotiue to be measured i accordace with the Compay s other accoutig policies. Impairmet losses o iitial classificatio as held-for-sale or held-for-distributio ad subsequet gais ad losses o re-measuremet are recogised i profit or loss. Gais are ot recogised i excess of ay cumulative impairmet loss. 4.5 Fiacial Istrumets Fiacial assets ad fiacial liabilities are recogised whe a etity becomes a party to the cotractual provisios of the istrumets. Fiacial assets ad fiacial liabilities are iitially measured at fair value. Trasactio costs that are directly attributable to the acquisitio or issue of fiacial assets ad fiacial liabilities (other tha fiacial assets ad fiacial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the fiacial assets or fiacial liabilities, as appropriate, o iitial recogitio. Trasactio costs directly attributable to the acquisitio of fiacial assets or fiacial liabilities at fair value through profit or loss are recogised immediately i profit or loss. ANNUAL REPORT

122 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 4.6 Fiacial assets Iitial recogitio & Measuremet All regular way purchases or sales of fiacial assets are recogised/derecogised o a trade date basis Subsequet measuremet For the purposes of subsequet measuremet, fiacial assets are classified i four categories: Debt istrumet at amortised cost Debt istrumet at fair value through other comprehesive icome (FVTOCI) Debt istrumet, derivatives ad equity istrumets at fair value through profit or loss (FVTPL) Equity Istrumets measured at fair value through other comprehesive icome (FVTOCI) Debt istrumets at amortised cost A debt istrumet is measured at the amortised cost if both the followig coditios are met: The asset is held withi a busiess model whose objective is to hold assets for collectig cotractual cash flows, ad Cotractual terms of the asset give rise o specified dates to cash flows that are solely paymets of pricipal ad iterest (SPPI) o the pricipal amout outstadig. After iitial measuremet, such fiacial assets are subsequetly measured at amortised cost usig the effective iterest rate (EIR) method. Amortised cost is calculated by takig ito accout ay discout or premium o acquisitio ad fees or costs that are a itegral part of the EIR. The EIR amortisatio is icluded i fiace icome i the profit or loss. The losses arisig from impairmet are recogised i the profit or loss. This category geerally applies to trade ad other receivables. Debt istrumet at FVTOCI A debt istrumet is classified as at the FVTOCI if both of the followig criteria are met: The objective of the busiess model is achieved both by collectig cotractual cash flows ad sellig the fiacial assets, ad The asset s cotractual cash flows represet SPPI. Debt istrumets icluded withi the FVTOCI category are measured iitially as well as at each reportig date at fair value. Fair value movemets are recogized i the other comprehesive icome (OCI). However, the Compay recogizes iterest icome, impairmet losses & reversals ad foreig exchage gai or loss i the P&L. O derecogitio of the asset, cumulative gai or loss previously recogised i OCI is reclassified from the equity to P&L. Iterest eared whilst holdig FVTOCI debt istrumet is reported as iterest icome usig the EIR method. Debt istrumet at FVTPL FVTPL is a residual category for debt istrumets. Ay debt istrumet, which does ot meet the criteria for categorizatio as at amortized cost or as FVTOCI, is classified as at FVTPL. I additio, the Compay may elect to desigate a debt istrumet, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such electio is allowed oly if doig so reduces or elimiates a measuremet or recogitio icosistecy (referred to as accoutig mismatch ). The Compay has ot desigated ay debt istrumet as at FVTPL. Debt istrumets icluded withi the FVTPL category are measured at fair value with all chages recogized i the P&L. Equity ivestmets All equity ivestmets i scope of Id AS 109 are measured at fair value. For the equity istrumets Compay may make a irrevocable electio to preset i other comprehesive icome subsequet chages i the fair value. The Compay makes such electio o a istrumet by-istrumet basis. The classificatio is made o iitial recogitio ad is irrevocable. If the Compay decides to classify a equity istrumet as at FVTOCI, the all fair value chages o the istrumet, excludig divideds, are recogized i the OCI. There is o recyclig of the amouts from OCI to P&L, eve o sale of ivestmet. However, the group may trasfer the cumulative gai or loss withi equity. 120 KSK ENERGY VENTURES LIMITED

123 Equity istrumets icluded withi the FVTPL category are measured at fair value with all chages recogized i the P&L. Derecogitio A fiacial asset (or, where applicable a part of a fiacial asset or part of a group of similar fiacial assets) is derecogised whe: The rights to receive cash flows from the asset have expired; or The Compay has trasferred its rights to receive cash flows from the asset or has assumed a obligatio to pay the received cash flows i full without material delay to a third party uder a pass-through arragemet? ad either (a) the Compay has trasferred substatially all the risks ad rewards of the asset, or (b) the Compay has either trasferred or retaied substatially all the risks ad rewards of the asset, but has trasferred cotrol of the asset Impairmet of fiacial asset The Compay applies the expected credit loss model for recogisig impairmet loss o fiacial assets measured at amortised cost, trade receivables ad other cotractual rights to receive cash or other fiacial asset. For recogitio of impairmet loss o other fiacial assets ad risk exposure, the group determies that whether there has bee a sigificat icrease i the credit risk sice iitial recogitio. If credit risk has ot icreased sigificatly, 12-moth ECL is used to provide for impairmet loss. However, if credit risk has icreased sigificatly, lifetime ECL is used. If, i a subsequet period, credit quality of the istrumet improves such that there is o loger a sigificat icrease i credit risk sice iitial recogitio, the the etity reverts to recogisig impairmet loss allowace based o 12-moth ECL. Lifetime ECL are the expected credit losses resultig from all possible default evets over the expected life of a fiacial istrumet. The 12-moth ECL is a portio of the lifetime ECL which results from default evets that are possible withi 12 moths after the reportig date. ECL is the differece betwee all cotractual cash flows that are due to the group i accordace with the cotract ad all the cash flows that the etity expects to receive (i.e., all cash shortfalls), discouted at the origial EIR. Whe estimatig the cash flows, a etity is required to cosider: All cotractual terms of the fiacial istrumet (icludig prepaymet, extesio, call ad similar optios) over the expected life of the fiacial istrumet. However, i rare cases whe the expected life of the fiacial istrumet caot be estimated reliably, the the etity is required to use the remaiig cotractual term of the fiacial istrumet. Cash flows from the sale of collateral held or other credit ehacemets that are itegral to the cotractual terms. For trade receivables or ay cotractual right to receive cash or aother fiacial asset that result from trasactios that are expediet as permitted uder Id AS 109. This expected credit loss allowace is computed based o a provisio matrix which takes ito accout historical credit loss experiece ad adjusted for forward lookig iformatio. 4.7 Fiacial liabilities Iitial recogitio Fiacial liabilities withi the scope of IND AS 109 are classified as Fair value through profit or loss Other fiacial liability at amortised cost The Compay determies the classificatio of its fiacial liabilities at iitial recogitio. Fiacial liabilities are recogised iitially at fair value ad i the case of loas ad borrowigs, et of directly attributable trasactio costs. The Compay s fiacial liabilities iclude trade ad other payables, loas ad borrowigs, fiacial guaratee cotracts ad other fiacial liabilities. Subsequet measuremet The subsequet measuremet of fiacial liabilities depeds o their classificatio as follows: Fiacial liabilities at fair value through profit or loss Fiacial liabilities at fair value through profit or loss iclude fiacial liabilities held for tradig ad fiacial liabilities desigated upo iitial recogitio as at fair value through profit or loss. Fiacial liabilities are classified as held for tradig if they are acquired for the purpose of sellig i the ear term. This category icludes derivative fiacial istrumets etered ito by the Compay that are ot desigated as hedgig ANNUAL REPORT

124 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) istrumets i hedge relatioships as defied by IND AS 109. Separated embedded derivatives are also classified as held for tradig uless they are desigated as effective hedgig istrumets. Gais or losses o liabilities held for tradig are recogised i the statemet of profit ad loss. Fiacial liabilities desigated upo iitial recogitio at fair value through profit ad loss are desigated at the iitial date of recogitio, ad oly if criteria of IND AS 109 are satisfied. Loas ad borrowigs at amortised cost After iitial recogitio, loas ad borrowigs are subsequetly measured at amortised cost usig the effective iterest rate method. Gais ad losses are recogised i the statemet of profit ad loss whe the liabilities are derecogised as well as through the amortisatio process. Fiacial guaratee cotracts Fiacial guaratee cotracts are those cotracts that require a paymet to be made to reimburse the holder for a loss it icurs because the specified debtor fails to make a paymet whe due i accordace with the terms of the bod. Fiacial guaratee cotracts are recogised iitially as a liability at fair value, adjusted for trasactio costs that are directly attributable to the issuace of the guaratee. Subsequetly, the liability is measured at the higher of the best estimate of the expediture required to settle the preset obligatio at the reportig date ad the amout recogised less cumulative amortisatio. Offsettig of fiacial istrumets Fiacial assets ad fiacial liabilities are offset ad the et amout reported i the Balace sheet if, ad oly if, there is a curretly eforceable legal right to offset the recogised amouts ad there is a itetio to settle o a et basis, or to realise the assets ad settle the liabilities simultaeously. Amortised cost of fiacial istrumets Amortised cost is computed usig the effective iterest method less ay allowace for impairmet ad pricipal repaymet or reductio. The calculatio takes ito accout ay premium or discout o acquisitio ad icludes trasactio costs ad fees that are a itegral part of the effective iterest rate. Derecogitio A fiacial liability is derecogised whe the obligatio uder the liability is discharged or cacelled or expires. Whe a existig fiacial liability is replaced by aother from the same leder o substatially differet terms, or the terms of a existig liability are substatially modified, such a exchage or modificatio is treated as a derecogitio of the origial liability ad the recogitio of a ew liability, ad the differece i the respective carryig amouts is recogised i the statemet of profit ad loss. 4.8 Derivative fiacial istrumets ad hedge accoutig Iitial recogitio ad subsequet measuremet The Compay uses derivative fiacial istrumets, such as forward currecy cotracts, iterest rate swaps future ad optios to hedge its foreig currecy risks, iterest rate risks, respectively. Such derivative fiacial istrumets are iitially recogised at fair value o the date o which a derivative cotract is etered ito ad are subsequetly re-measured at fair value. Derivatives are carried as fiacial assets whe the fair value is positive ad as fiacial liabilities whe the fair value is egative. Ay gais or losses arisig from chages i the fair value of derivatives are take directly to profit or loss Embedded derivatives Derivatives embedded i o-derivative host cotracts that are ot fiacial assets withi the scope of Id AS 109 are treated as separate derivatives whe their risks ad characteristics are ot closely related to those of the host cotracts ad the host cotracts are ot measured at FVTPL. 4.9 Fair value measuremet Fair value is the price that would be received to sell a asset or paid to trasfer a liability i a orderly trasactio betwee market participats at the measuremet date, regardless of whether that price is directly observable or estimated usig 122 KSK ENERGY VENTURES LIMITED

125 aother valuatio techique. I estimatig the fair value of a asset or a liability, the Compay takes ito accout the characteristics of the asset or liability at the measuremet date. The fair value measuremet is based o the presumptio that the trasactio to sell the fiacial asset or settle the fiacial liability takes place either: I the pricipal market, or I the absece of a pricipal market, i the most advatageous market The pricipal or the most advatageous market must be accessible by the Compay. A fair value measuremet of a ofiacial asset takes ito accout a market participat s ability to geerate ecoomic beefits by usig the asset i its highest ad best use. Fair value measuremet ad / or disclosure purposes i these fiacial statemets is determied o such a basis, except for measuremets that have some similarities to fair value but are ot fair value, such as et realisable value i Id AS 2 or value i use i Id AS 36. The Compay- uses valuatio techiques that are appropriate i the circumstaces ad for which sufficiet data are available to measure fair value, maximisig the use of relevat observable iputs ad miimisig the use of uobservable iputs. All assets ad liabilities for which fair value is measured or disclosed i the fiacial statemets are categorised withi the fair value hierarchy, described as follows, based o the lowest level iput that is sigificat to the fair value measuremet as a whole: Level 1 Quoted (uadjusted) market prices i active markets for idetical assets or liabilities Level 2 Valuatio techiques for which the lowest level iput that is sigificat to the fair value measuremet is directly or idirectly observable Level 3 Valuatio techiques for which the lowest level iput that is sigificat to the fair value measuremet is uobservable At each reportig date, the Maagemet aalyses the movemets i the values of assets ad liabilities which are required to be remeasured or re-assessed as per the Compay s - accoutig policies. For the purpose of fair value disclosures, the Compay has determied classes of assets ad liabilities o the basis of the ature, characteristics ad risks of the asset or liability ad the level of the fair value hierarchy as explaied above Ivetories Ivetories are stated at the lower of cost ad et realisable value. Costs icurred i brigig each product to its preset locatio ad coditios are accouted for as follows: Raw materials - purchase cost o Weighted average basis. Stores ad spares - purchase cost o a first i, first out basis. Net realisable value is the estimated sellig price i the ordiary course of busiess, less estimated costs of completio ad the estimated costs ecessary to make the sale Foreig currecy traslatio I preparig the fiacial statemets of the Compay, trasactios i currecies other tha the etity s fuctioal currecy are recogised at the rate of exchage prevailig o the date of the trasactios. At the ed of each reportig period, moetary items deomiated i foreig currecies are traslated at the rates prevailig at that date. Exchage differeces o moetary items are recogised i profit ad loss i the period i which they arise except for: exchage differeces o foreig currecy borrowigs relatig to assets uder costructio for future productive use, which are icluded i the cost of those assets whe they are regarded as a adjustmet to iterest costs o those foreig currecy borrowigs. No-moetary assets ad liabilities that are measured i terms of historical cost i a foreig currecy are traslated usig the exchage rate at the date of the trasactio. No-moetary assets ad liabilities deomiated i foreig currecies that are stated at fair value are traslated to fuctioal currecy at foreig exchage rates rulig at the dates the fair value was determied. The gai or loss arisig o traslatio of o-moetary items measured at fair value is treated i lie with the recogitio of the gai or loss o the chage i fair value of the item (i.e., traslatio differeces o items whose fair value gai or loss is recogised i other comprehesive icome (OCI) or profit or loss are also recogised i OCI or profit or loss, respectively). ANNUAL REPORT

126 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) The Group has elected to cotiue the policy adopted for accoutig for exchage differeces arisig from traslatio of log-term foreig currecy moetary items outstadig ad recogised i the fiacial statemets for the period edig immediately before the begiig of the first Id AS fiacial reportig period as per the previous GAAP Reveue recogitio Reveue is recogised to the extet that it is probable that the ecoomic beefits associated with the trasactio will flow to the Compay, ad reveue ca be reliably measured. Reveue is measured at the fair value of the cosideratio received or receivable i accordace with the relevat agreemets, et of discouts, rebates ad other applicable taxes ad duties. Sale of electricity : Reveue from the sale of electricity is recogised whe eared o the basis of cotractual arragemet with the customers ad reflects the value of uits supplied icludig a estimated value of uits supplied to the customers betwee the date of their last meter readig ad year ed. Further, claim towards tariff adjustmets ad taxes are recogised i accordace with the specific provisio of chage i law specified uder the power purchase agreemet with respective customers. Rederig of services : The Compay provides project developmet, corporate support ad fud maagemet services. Reveue from rederig of services is recogised i statemet of profit ad loss i the period i which the services are redered by referece to the stage of completio of the trasactio at the reportig date. The stage of completio is assessed o the basis of the actual services provided as a proportio of the total service to be provided. Deferred reveue : No-refudable cotributios received from the captive cosumers of the Compay are recogised as deferred reveue i the Balace sheet ad trasferred to statemet of profit ad loss o a systematic ad ratioal basis over life of the term of the relevat agreemet. Iterest ad divided icome : Reveue from iterest is recogised o a accrual basis (usig the effective iterest rate method). Reveue from divideds is recogised whe the right to receive the paymet is established. Isurace claim : Isurace claims are accouted based o certaity of realisatio. Sale of Verified Emissio Reductios (VERs) ad Certified Emissio Reductios (CERs) : Reveue from sale of Verified Emissio Reductios (VERs) ad Certified Emissio Reductios (CERs) is recogised o sale of eligible credits Taxes Curret icome tax : Curret icome tax assets ad liabilities for the curret ad prior periods are measured at the amout expected to be recovered from or paid to the taxatio authorities. The tax rates ad tax laws used to compute the amout are those that are eacted or substatively eacted by the reportig date. Tax relatig to items recogised directly i equity is recogised i equity ad ot i the statemet of profit ad loss. Deferred icome tax: Deferred icome tax is provided usig the liability method o temporary differeces at the reportig date betwee the tax bases of assets ad liabilities ad their carryig amouts for fiacial reportig purposes. Deferred icome tax liabilities are recogised for all taxable temporary differeces, except: Where the deferred icome tax liability arises from the iitial recogitio of goodwill or of a asset or liability i a trasactio that is ot a busiess combiatio ad, at the time of the trasactio, affects either the accoutig profit or taxable profit; I respect of taxable temporary differeces associated with ivestmets i subsidiaries ad iterests i joit operatios, where the timig of the reversal of the temporary differeces ca be cotrolled ad it is probable that the temporary differeces will ot reverse i the foreseeable future Deferred icome tax assets are recogised for all deductible temporary differeces, the carry forward of uused tax credit ad ay uused tax losses. Deferred tax assets are recogised to the extet that it is probable that taxable profit will be available agaist which the deductible temporary differeces ad the carry forward of uused tax credits ad uused tax losses ca be utilised except: Where the deferred icome tax asset relatig to the deductible temporary differece arises from the iitial recogitio of a asset or liability i a trasactio that is ot a busiess combiatio ad, at the time of the trasactio, affects either the accoutig profit or taxable profit or loss; 124 KSK ENERGY VENTURES LIMITED

127 I respect of deductible temporary differeces associated with ivestmets i subsidiaries ad iterests i joit operatios, deferred icome tax assets are recogised oly to the extet that it is probable that the temporary differeces will reverse i the foreseeable future ad taxable profit will be available agaist which the temporary differeces ca be utilised The carryig amout of deferred icome tax assets is reviewed at each reportig date ad reduced to the extet that it is o loger probable that sufficiet taxable profit will be available to allow all or part of the deferred icome tax asset to be utilised. Urecogised deferred icome tax assets are reassessed at each reportig date ad are recogised to the extet that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred icome tax assets ad liabilities are measured at the tax rates that are expected to apply i the year whe the asset is realised or the liability is settled, based o tax rates (ad tax laws) that have bee eacted or substatively eacted at the reportig date. Deferred icome tax assets ad liabilities, relatig to items recogised outside statemet of profit ad loss is recogised outside statemet of profit ad loss. Deferred tax items are recogised i correlatio to the uderlyig trasactio either i other comprehesive icome or directly i equity. Deferred icome tax assets ad deferred icome tax liabilities are offset, if a legally eforceable right exists to set off curret tax assets agaist curret icome tax liabilities ad the deferred icome taxes relate to the same taxable etity ad the same taxatio authority Leases The determiatio of whether a arragemet is, or cotais a lease is based o the substace of the arragemet at iceptio date, whether fulfilmet of the arragemet is depedet o the use of a specific asset or assets or the arragemet coveys a right to use the asset. Compay as a lessor Cotracts to lease assets are classified as fiace leases if they trasfer substatially all the risks ad rewards of owership of the asset to the customer. Leases where the Compay does ot trasfer substatially all the risks ad beefits of owership of the asset are classified as operatig leases. Fiace lease receivables are stated i the Balace sheet at the amout of the et ivestmet i the lease beig lower of their fair value ad preset value of the miimum lease paymets ad ay uguarateed residual value discouted at the iterest rate implicit i the lease. Fiace lease icome is allocated to accoutig periods so as to give a costat periodic rate of retur before tax o the et ivestmet. Uguarateed residual values are subject to regular review to idetify potetial impairmet. If there has bee a reductio i the estimated uguarateed residual value, the icome allocatio is revised ad ay reductio i respect of amouts accrued is recogised immediately. Compay as a lessee Operatig lease paymets are recogised as a expese i the statemet of profit ad loss o accrual basis Borrowig costs Borrowig costs directly attributable to the acquisitio, costructio or productio of qualifyig assets, that ecessarily take a substatial period of time to get ready for their iteded use or sale, are added to the cost of those assets. All other borrowig costs icludig trasactio costs are recogised i the statemet of profit ad loss i the year i which they are icurred, the amout beig determied usig the effective iterest rate method Impairmet of o-fiacial assets The Compay assesses at each reportig date whether there is a idicatio that a asset may be impaired. If ay idicatio exists, or whe aual impairmet testig for a asset is required, the Compay estimates the asset s recoverable amout. A asset s recoverable amout is the higher of a asset s or cash-geeratig uit s (CGU) fair value less costs to sell ad its value i use. Recoverable amout is determied for a idividual asset, uless the asset does ot geerate cash iflows that are largely idepedet of those from other assets or Groups of assets. Where the carryig amout of a asset or CGU exceeds its recoverable amout, the asset is cosidered impaired ad is writte dow to its recoverable amout. I assessig value i use, the estimated future cash flows are discouted to their preset value usig a pre-tax discout rate that reflects curret market assessmets of the time value of moey ad the risks specific to the asset. I determiig fair value less costs ANNUAL REPORT

128 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) to sell, a appropriate valuatio model is used. These calculatios are corroborated by valuatio multiples, quoted share prices for publicly traded subsidiaries or other available fair value idicators. Impairmet losses of cotiuig operatios are recogised i the statemet of profit ad loss, except for property previously revalued where the revaluatio was take to equity. I this case the impairmet is also recogised i equity up to the amout of ay previous revaluatio. For assets excludig goodwill, a assessmet is made at each reportig date as to whether there is ay idicatio that previously recogised impairmet losses may o loger exist or may have decreased. If such idicatio exists, the Compay estimates the asset s or cash-geeratig uit s recoverable amout. A previously recogised impairmet loss is reversed oly if there has bee a chage i the assumptios used to determie the asset s recoverable amout sice the last impairmet loss was recogised. The reversal is limited so that the carryig amout of the asset does ot exceed its recoverable amout, or exceed the carryig amout that would have bee determied, et of depreciatio, had o impairmet loss bee recogised for the asset i prior years. Such reversal is recogised i the statemet of profit ad loss uless the asset is carried at revalued amout, i which case the reversal is treated as a revaluatio icrease Cash ad short-term deposits Cash ad short-term deposits i the Balace Sheet comprise cash at baks ad o had ad short-term deposits. For the purpose of the cash flow statemet, cash ad cash equivalets cosist of cash ad readily covertible short-term deposits, et of restricted cash ad outstadig bak overdrafts Earigs per share The earigs cosidered i ascertaiig the Compay s earigs per share (EPS) comprise the et profit or loss for the period attributable to equity holders. The umber of shares used for computig the basic EPS is the weighted average umber of shares outstadig durig the year. Diluted earigs per share amouts are calculated by dividig the et profit attributable to equity holders (after adjustig for effects of all dilutive potetial equity shares) by the weighted average umber of ordiary shares outstadig durig the year plus the weighted average umber of shares that would be issued o coversio of all the dilutive potetial shares ito equity shares Provisios Geeral Provisios are recogised whe the Compay has a preset obligatio (legal or costructive) as a result of a past evet, it is probable that a outflow of resources embodyig ecoomic beefits will be required to settle the obligatio ad a reliable estimate ca be made of the amout of the obligatio. Where the Compay expects some or all of a provisio to be reimbursed, for example uder a isurace cotract, the reimbursemet is recogised as a separate asset but oly whe the reimbursemet is virtually certai. The expese relatig to ay provisio is preseted i the statemet of profit ad loss et of ay reimbursemet. If the effect of the time value of moey is material, provisios are discouted usig a curret pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discoutig is used, the icrease i the provisio due to the passage of time is recogised as a fiace cost Decommissioig ad restoratio liability The provisio for decommissioig ad restoratio costs arose o costructio of a power plat ad developmet of mies. Decommissioig ad restoratio costs are provided at the preset value of expected costs to settle the obligatio usig estimated cash flows ad are recogised as part of the cost of that particular asset. The cash flows are discouted usig appropriate rates. The uwidig of discout is expesed as icurred ad recogised i the statemet of profit ad loss as a fiace cost Employee beefits Gratuity I accordace with Gratuity laws, the Compay provides for gratuity, a defied beefit retiremet pla ( the Gratuity Pla ) coverig eligible employees. The Gratuity Pla provides a lump-sum paymet to vested employees at retiremet, death, 126 KSK ENERGY VENTURES LIMITED

129 icapacitatio or termiatio of employmet, of a amout based o the respective employee's salary ad the teure of employmet. Liabilities with regard to the Gratuity pla are determied by actuarial valuatio, performed by a idepedet actuary, at each reportig date usig the projected uit credit method. The Compay fully cotributes all ascertaied liabilities to the gratuity fud admiistered ad maaged by Life Isurace Corporatio of Idia, a Govermet of Idia udertakig which is a qualified isurer. The Compay recogises the et obligatio of a defied beefit pla i its Balace sheet as a asset or liability, respectively i accordace with IND AS 19, Employee beefits. Re-measuremets of the et defied beefit liability, which comprise actuarial gais ad losses, the retur o pla assets (excludig iterest) ad the effect of the asset ceilig (if ay, excludig iterest), are recogised immediately i OCI. The Compay determies the et iterest expese / (icome) o the et defied beefit liability (asset) for the period by applyig the discout rate used to measure the defied beefit obligatio at the begiig of the aual period to the the-et defied beefit liability (asset), takig ito accout ay chages i the et defied beefit liability / (asset) durig the period as a result of cotributios ad beefit paymets. Net iterest expese ad other expeses related to defied beefit plas are recogised i profit or loss. Providet fud Eligible employees of Compay receive beefits from a providet fud, which is a defied cotributio pla. Both the employee ad the Compay make mothly cotributios to the providet fud pla equal to a specified percetage of the covered employee's salary ad the employer cotributio is charged to statemet of profit ad loss. The beefits are cotributed to the govermet admiistered providet fud, which is paid directly to the cocered employee by the fud. The Compay has o further obligatio to the pla beyod its mothly cotributios. Employees State Isurace Scheme "Eligible employees of the Compay are covered uder Employees State Isurace Scheme Act 1948, which are also defied cotributio schemes recogized ad admiistered by Govermet of Idia.The Compay's cotributios to these schemes are recogized as expese i statemet of profit ad loss or capitalised to Property, plat ad equipmet as the case may be durig the period i which the employee reders the related service. The Compay has o further obligatio uder these plas beyod its mothly cotributios." Short- term beefits Short-term employee beefit obligatios are measured o a udiscouted basis ad are expesed as the related service is provided. A liability is recogised for the amout expected to be paid towards bous if the Compay has a preset legal or costructive obligatio to pay this amout as a result of past service provided by the employee ad the obligatio ca be estimated reliably Busiess combiatios - commo cotrol trasactios Busiess combiatios ivolvig etities that are cotrolled by the group are accouted for usig the poolig of iterests method as follows: The assets ad liabilities of the combiig etities are reflected at their carryig amouts. No adjustmets are made to reflect fair values, or recogise ay ew assets or liabilities. Adjustmets are oly made to harmoise accoutig policies. The balace of the retaied earigs appearig i the fiacial statemets of the trasferor is aggregated with the correspodig balace appearig i the fiacial statemets of the trasferee or is adjusted agaist geeral reserve. The idetity of the reserves are preserved ad the reserves of the trasferor become the reserves of the trasferee. The differece, if ay, betwee the amouts recorded as share capital issued plus ay additioal cosideratio i the form of cash or other assets ad the amout of share capital of the trasferor is trasferred to capital reserve ad is preseted separately from other capital reserves. ANNUAL REPORT

130 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 5 Sigificat accoutig judgemets, estimates ad assumptios The preparatio of fiacial statemets i coformity with IND AS requires maagemet to make certai critical accoutig estimates ad assumptios that affect the reported amouts of assets ad liabilities ad the disclosure of cotiget assets ad liabilities at the date of the fiacial statemets ad the reported amouts of reveues ad expeses durig the reportig period. The pricipal accoutig policies adopted by the Compay i the fiacial statemets are as set out above. The applicatio of a umber of these policies required the Compay to use a variety of estimatio techiques ad apply judgmet to best reflect the substace of uderlyig trasactios. The Compay has determied that a umber of its accoutig policies ca be cosidered sigificat, i terms of the maagemet judgmet that has bee required to determie the various assumptios uderpiig their applicatio i the fiacial statemets preseted which, uder differet coditios, could lead to material differeces i these statemets. The policies where sigificat estimates ad judgmets have bee made are as follows: Estimates ad assumptios The key assumptios cocerig the future ad other key sources of estimatio ucertaity at the reportig date, that have a sigificat risk of causig a material adjustmets to the carryig amouts of assets ad liabilities withi the ext fiacial year are discussed below: Estimatio of fair value of acquired fiacial assets ad fiacial liabilities: Whe the fair value of fiacial assets ad fiacial liabilities recorded i the Balace sheet caot be derived from active markets, their fair value is determied usig valuatio techiques icludig the discouted cash flow model. The iputs to these models are take from observable markets where possible, but where this is ot feasible, a degree of judgmet is required i establishig fair values. The judgmets iclude cosideratios of iputs such as liquidity risk, credit risk ad volatility. Chages i assumptios about these factors could affect the reported fair value of fiacial istrumets. U-collectability of trade receivables: Aalysis of historical paymet patters, customer cocetratios, customer credit-worthiess ad curret ecoomic treds. If the fiacial coditio of a customer deteriorates, additioal allowaces may be required. Further recoverability of various claims as per power purchase agreemet icludig chage i law claim are subject to adjudicate at appropriate regulatory authorities. Estimatio of liabilities for decommissioig ad restoratio costs: Provisios for decommissioig ad restoratio costs require assessmet of the amouts that the Compay will have to pay ad assumptios i terms of phasig ad discout rate. Taxes: Ucertaities exist with respect to the iterpretatio of complex tax regulatios, chages i tax laws, ad the amout ad timig of future taxable icome. Give the log-term ature ad complexity of existig cotractual agreemets, differeces arisig betwee the actual results ad the assumptios made, or future chages to such assumptios, could ecessitate future adjustmets to tax icome ad expese already recorded. The Compay establishes provisios, based o reasoable estimates, for possible cosequeces of assessmet by the tax authorities. The amout of such provisios is based o various factors, such as experiece of previous tax assessmet ad differig iterpretatios of tax laws by the taxable etity ad the resposible tax authority. The Compay assesses the probability for litigatio ad subsequet cash outflow with respect to taxes. Deferred icome tax assets are recogised for all uused tax losses to the extet that it is probable that taxable profit will be available agaist which the losses ca be utilised. Sigificat maagemet judgmet is required to determie the amout of deferred tax assets that ca be recogised, based upo the likely timig ad the level of future taxable profits together with future tax plaig strategies. Gratuity beefits: The cost of defied beefit plas ad the preset value of the obligatio are determied usig actuarial valuatios. A actuarial valuatio ivolves makig various assumptios which may differ from actual developmets i the future. These iclude the determiatio of the discout rate, future salary icreases ad mortality rates. Due to the complexity of the valuatio, the uderlyig assumptios ad its log-term ature, a defied beefit obligatio is highly sesitive to chages i these assumptios. All assumptios are reviewed at each reportig date. 128 KSK ENERGY VENTURES LIMITED

131 Capitalisatio of iterest expediture icurred o geeral borrowig fuds used for costructio of qualifyig assets:i respect of the geeral borrowed fuds used for costructig a qualifyig asset, maagemet determies the amout of borrowig costs eligible for capitalisatio by applyig a capitalisatio rate to the expediture o that asset. The capitalisatio rate is the average of the borrowig costs applicable to the geeral borrowigs of the Group that are outstadig durig the year, other tha borrowigs made specifically for the purpose of obtaiig a qualifyig asset. Actual results ca differ from estimates. Judgemet I the process of applyig the Compay s accoutig policies, maagemet has made the followig judgemets which have the most sigificat effect o the amouts recogised i the fiacial statemets: Useful lives of depreciable assets: Maagemet reviews the useful lives of depreciable assets at each reportig date, based o the expected utility of the assets to the Compay. Actual results, however, may vary due to techical obsolescece, particularly relatig to software ad iformatio techology equipmet. Provisio: The Compay is curretly defedig certai lawsuits where the actual outcome may vary from the amout recogised i the fiacial statemets. Noe of the provisios are discussed here i further details as that might seriously prejudice the Compay s positio i the related disputes. 6 Busiess combiatios - commo cotrol trasactios Acquisitio i KSK Water Ifrastructures Private Limited ( KWIPL ) KWIPL is egaged i the busiess of costructio, operatio ad maiteace of water supply facility, for trasportatio of water. Prior to 31 March 2016, the Group owed 35.9% of the shares of KWIPL. Effective 1 April 2016 the Group acquired a further 26.74% iterest i KWIPL i.e. by purchase of additioal 30,000,000 shares ad obtaied cotrol of KWIPL. Sice the Group ad KWIPL are ultimately cotrolled by the same paret both before ad after this busiess combiatio, the trasactio is recogised as commo cotrol busiess combiatio trasactio ad accordigly accouted for usig the poolig of iterests method. All the assets ad liabilities of the KWIPL are reflected at their carryig amouts. Acquisitio i KSK Wid Eergy Halagali Bechi Private Limited ( KWEHBPL ), KSK Wid Power Sakoahatti Athi Private Limited ( KWPSAPL ) ad KSK Wid Eergy Mothalli Haveri Private Limited ( KWEMHPL ) KWEHBPL, KWEMHPL ad KWPSAPL are egaged i the busiess of geeratio of electricity through wid power projects. The Group has acquired 99.61% iterest i each of the above compaies by purchase of 2,563,264 equity shares i KWEHBPL, 2,544,495 equity shares i KWEMHPL ad 2,544,491 equity shares i KWPSAPL ad obtaied cotrol. Sice the Group ad KWEHBPL, KWEMHPL ad KWPSAPL are ultimately cotrolled by the same paret both before ad after this busiess combiatio, the trasactio is recogised as commo cotrol busiess combiatio trasactio ad accordigly accouted for usig the poolig of iterests method. All the assets ad liabilities of above etities are reflected at their carryig amouts. 7 Acquisitio ad Dilutio chage i o-cotrollig iterest without chage i cotrol Acquisitio of KSK Wid Power Amiabhavi Chikodi Private Limited ( KWPACPL ) Durig the year eded 31 March 2017, the Group has further acquired 773,254 equity shares of Rs. 10 at par i KWPACPL. Pursuat to above, the ecoomic iterest of the Group i KWPACPL icreased by % without loss of cotrol. The aforesaid trasactio is accouted as a equity trasactio, ad o gai or loss is recogised i the cosolidated statemet of profit or loss. The differece of Rs. 0.9, betwee the amout of ivestmet made Rs ad the amout by which the ocotrollig iterest are adjusted Rs , is debited to 'Retaied Earigs' withi cosolidated statemet of chages i equity ad attributed to the owers of the Compay. Dilutio i KSK Mahaadi Power Compay Limited ( KMPCL ) Durig the year eded 31 March 2017, 62,000,000 equity shares have bee issued i KSK Mahaadi Power Compay Limited ( KMPCL ) to KSK Eergy Vetures Limited ( KEVL ) ad 97,360,000 equity shares to KSK Eergy Compay Private Limited ( KECPL ) at a face value of Rs 10 at par. ANNUAL REPORT

132 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) Pursuat to above, the ecoomic iterest of the Group i KMPCL decreased by 1.76 % without loss of cotrol. The aforesaid trasactio is accouted as a equity trasactio, ad o gai or loss is recogised i the statemet of profit or loss. Pursuat to this a amout of Rs by which the o cotrollig iterest is adjusted, is debited to other reserve withi Cosolidated statemet of chages i equity ad attributed to the owers of the compay." Dilutio i Sai Wardha Power Geeratio Limited ( SWPGL ) Durig the year eded 31 March 2017, 12,205,893 equity shares i SWPGL held by KSKEVL have bee trasferred to captive cosumers, pursuat to which ecoomic iterest of the group i SWPGL has bee decreased by 3.02 % without loss of cotrol. The aforesaid trasactio is accouted as a equity trasactio, ad o gai or loss is recogised i the statemet of profit or loss. Pursuat to above a amout of Rs by which the o cotrollig iterest is adjusted, is credited to other reserve withi Cosolidated statemet of chages i equity ad attributed to the owers of the compay. 8 Subsidiaries, Joit arragemet ad Associate Material subsidiaries ad o-cotrollig iterest (NCI) The Group cosists of a paret Compay, KSK Eergy Vetures Limited ad a umber of subsidiaries held directly ad idirectly by the Group which operate ad are icorporated predomiatly i Idia. Note 3.2 to the Cosolidated fiacial statemets lists details of the iterests i the subsidiaries. No-cotrollig iterests that are material to the Group relate to Sai Wardha Power Geeratio Limited ( SWPGL ), VS Ligite Power Private Limited ( VSLPPL ), Sai Regecy Power Corporatio Private Limited ( SRPCPL ), ad KSK Mahaadi Power Compay Limited ( KMPCL ). Name of subsidiary Pricipal place No-cotrollig iterest (%) of busiess 31 March March April 2015 SWPGL Idia VSLPPL Idia SRPCPL Idia KMPCL Idia Profit / (loss) attributable to NCI 31 March March 2016 SWPGL (35.43) (396.89) VSLPPL (258.54) (111.92) SRPCPL KMPCL (659.74) (160.97) Equity attributable to NCI 31 March March April 2015 SWPGL (589.94) (468.01) (128.90) VSLPPL (330.24) (71.73) SRPCPL KMPCL 6, , , The summarised fiacial iformatio of these subsidiaries is provided below. This iformatio is based o amouts before itercompay elimiatios. 130 KSK ENERGY VENTURES LIMITED

133 31 March 2017 SWPGL VSLPPL SRPCPL KMPCL No-curret assets 29, , , , Curret assets 10, , , No-curret liabilities 25, , , , Curret liabilities 17, , , , Net assets (3,051.58) (2,032.25) 3, , Carryig amout of NCI (589.94) (330.24) , Reveue 5, , , (Loss) / profit for the year (183.25) (1,591.01) (3,526.06) Other comprehesive icome (OCI) (3.09) Total comprehesive icome (182.08) (1,590.86) (3,529.15) (Loss) / profit attributable to NCI (35.43) (258.54) (659.74) OCI attributable to NCI (0.58) Cash flow from operatig activities 2, , Cash flow from ivestig activities (1,807.76) (11,794.30) Cash flow from fiacig activities (3,102.77) (368.32) 1, , Net Icrease / (decrease) i 7.39 (60.78) (27.47) cash ad cash equivalets 31 March 2016 SWPGL VSLPPL SRPCPL KMPCL No-curret assets 31, , , , Curret assets 5, , , , No-curret liabilities 25, , , , Curret liabilities 14, , , , Net assets (2,869.49) (441.39) 3, , Carryig amout of NCI (468.01) (71.73) , Reveue 7, , , , (Loss) / profit for the year (2,433.44) (688.74) (949.58) Other comprehesive (loss) / icome (1.33) (1.35) (1.27) (2.06) Total comprehesive (loss) / icome (2,434.77) (690.09) (951.64) (Loss) / profit attributable to NCI (396.89) (111.92) (160.97) OCI attributable to NCI (0.22) (0.22) (0.33) (0.35) Cash flow from operatig activities 2, , Cash flow from ivestig activities (263.18) (36.18) (433.47) Cash flow from fiacig activities (2,473.59) (595.87) (748.35) (1,748.44) Net Icrease / (decrease) i (87.85) (2.82) (218.29) cash ad cash equivalets ANNUAL REPORT

134 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 1 April 2015 SWPGL VSLPPL SRPCPL KMPCL No-curret assets 30, , , , Curret assets 6, , , No-curret liabilities 25, , , , Curret liabilities 12, , , , Net assets (802.13) , , Carryig amout of NCI (128.90) , Joit arragemet The Group has etered ito a joit arragemet through a separate legal etity called the Sitapuram Power Limited (SPL). SPL is egaged i the busiess of geeratio ad sale of electricity i Idia. The Group has a 49% participatig iterest i the arragemet. As per the cotractual terms of the agreemet, the Group ad other veturer joitly cotrol the operatio of SPL ad has a direct share i all of the assets employed by the arragemet ad is liable for its share of the liabilities icurred. The Group has therefore classified this arragemet as a joit operatio ad icluded its iterests i the assets, liabilities, reveue ad expeses i the appropriate lie items i the Cosolidated fiacial statemet, i accordace with the accoutig policy. Associate Raigarh Champa Rail Ifrastructure Private Limited ('RCRIPL') Particulars 31 March March 2016 No-curret assets 4, , Curret assets No-curret liabilities 3, , Curret liabilities Net assets 1, , Reveue (Loss) / profit for the year (112.53) (31.10) Other comprehesive icome (OCI) Total comprehesive icome (109.20) (31.04) Cash flow from operatig activities (40.37) Cash flow from ivestig activities (7.82) (63.32) Cash flow from fiacig activities (98.00) (21.78) Net Icrease / (decrease) i cash ad cash equivalets (146.19) KSK ENERGY VENTURES LIMITED

135 9 Property plat ad equipmet Lad- Buildigs Plat & Railway Furiture Vehicles Office Computer Total Capital Freehold Equipmet sidig & equipmet work i fixtures progress Deemed cost As at 1 April , , , , , , Additios , , , Deletios (144.15) (11.09) (0.94) (0.79) (0.84) (0.79) (4.78) - (163.38) - Adjustmets * , , As at 31 March , , , , , , As at 1 April , , , , , , Additios , , , Deletios (0.90) - (58.42) - - (0.94) - - (60.26) - Busiess combiatio , , Adjustmets * - (68.85) (350.81) (11.75) (431.41) - As at 31 March , , , , , , Depreciatio As at 1 April For the year , , Adjustmets / Deletios - (0.12) (0.03) - (0.05) (0.17) (3.14) - (3.51) - As at 31 March , , As at 1 April , , For the year , , Busiess combiatio Adjustmets / Deletios - - (58.57) - - (0.45) - - (59.02) - As at 31 March , , , Net book value As at 1 April , , , , , , As at 31 March , , , , , , As at 31 March , , , , , , Property, plat ad equipmet with a carryig amout of Rs. 219, (31 March 2016: Rs 192,881.16; 1 April 2015: Rs. 186,462.48) is subject to security restrictios (refer ote 20) * Adjustmets figures represets chages o accout of exchage rate ad price variatio. ANNUAL REPORT

136 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 10 Goodwill ad Itagible assets Deemed cost Goodwill Computer Miig Asset Total Itagible software assets uder developmet As at 1 April , , Additios - - 1, , As at 31 March , , , As at 1 April , , , Additios Trasfer (1.20) Busiess combiatio As at 31 March , , , Amortisatio As at 1 April For the year Busiess combiatio As at 31 March As at 1 April For the year Busiess combiatio As at 31 March 2017 ` Net book value As at 1 April , , As at 31 March , , , As at 31 March , , , Itagible assets with a carryig amout of Rs. 1, (31 March 2016: Rs 1,411.23; 1 April 2015: Rs ) is subject to security restrictios (refer ote 20). The goodwill acquired through busiess combiatios have bee allocated to the followig cash geeratig uits of the Group, for impairmet testig as follows: As at As at As at 31 March March April 2015 Sai Regecy Power Corporatio Private Limited Sitapuram Power Limited Sai Lilagar Power Geeratio Limited VS Ligite Power Private Limited Sai Wardha Power Geeratio Limited 1, , , KSK Mahaadi Power Compay Limited KSK Surya Photovoltaic Veture Limited Total 1, , , KSK ENERGY VENTURES LIMITED

137 The recoverable amout of the cash geeratig uit at 31 March 2017 was determied usig estimated fair value i use. The calculatio was based o a discouted cash flow valuatio over five years for each of the power statios, usig available market iformatio to reflect the amout that the Group estimates that it could have obtaied, at the reportig date. The calculatio was based o a discouted cash flow valuatio over five years for each of the power statios, usig available market iformatio to reflect the amout that the Group estimates that it could have obtaied, at the reportig date. The maagemet believes that ay reasoable possible chage i the key assumptios o which recoverable amout is based would ot cause the carryig amout to exceed its recoverable amout. Key assumptios used i value-i-use calculatios: The calculatio of value-i-use for the cash geeratig uits is most sesitive to the followig key assumptios: electricity prices; projected output; fuel costs; other operatig costs ad ivestmet; growth ad discout rates The Group s approach i determiig the key assumptios was as follows: Electricity prices were based o cotracted prices for electricity. Projected output was based o expected levels of output over the expected operatig lives of the power statios usig the Group s ow egieerig projectios which cosidered historical performace, plat degradatio, plat maiteace activity ad ivestmet, ad allowaces for scheduled timigs of outages. Fuel costs were based o cotracted ad projected commodity prices, for coal ad gas fuel, ad usig the Group s ow egieerig projectios for cosumptio havig cosidered historical cosumptio data ad projected plat performace. Other operatig costs ad ivestmet was estimated usig the Group s ow egieerig projectios, where relevat, ad havig cosidered historical performace, plat degradatio, plat maiteace activity ad ivestmet. The estimates of other operatig costs ad ivestmet used i the discouted cash flow projectio were cosistet with those used i the Group s three year busiess pla. I subsequet periods the growth rate applied to other operatig costs fully reflects the expected operatig lives of the power statios. Growth rates are based o published idustry research. The discout rate reflects the curret market assessmet of the risks specific to the cash geeratig uits. The discout rate was estimated based o the average percetage of a weighted average cost of capital for the idustry. The followig growth ad discout rates have bee cosidered for the purpose of the impairmet testig: As at As at As at 31 March March April 2015 Growth rate 3.00% 3.00% 3.00% Discout rate (pre tax) 11.39% 11.69% 12.15% ANNUAL REPORT

138 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 11 Ivestmets No-curret ivestmets Ivestmet i equity istrumets At fair value through other comprehesive icome (quoted, fully paid up) As at As at As at 31 March March April ,418 (31 March 2016: 364,418; 1 April 2015: 364,418) Equity shares of Thiru Aroora Sugars Limited (uquoted, fully paid up ) 3,636,363 (31 March 2016: 3,636,363; 1 April 2015: 3,636,363) Equity shares of Terra Eergy Limited 100,000 (31 March 2016: 100,000; 1 April 2015: Nil) Equity shares of KSK Gree Eergy Pte. Ltd Ivestmet I Associates uder equity method (uquoted, fully paid up ) 65,018,090 (31 Mar 2016: 65,018,090; 01 Apr 2015: Nil) Equity shares of Raigarh Champa Rail Ifrastructure Private Limited Nil (31 Mar 2016: 40,277,990; 01 Apr 2015: Nil) Equity shares of KSK Water Ifrastructures Private Limited (refer ote 6) Ivestmet i preferece istrumets Ivestmet I Joit Operatio At amortised cost (uquoted, fully paid up ) Sitapuram Power Limited Curret ivestmets At amortised cost (quoted, fully paid up) , Nil (31 March 2016: 334, ; 1 April 2015: 110, ) uits i IDFC Cash Fud - Daily Divided - (Direct pla) 33,812, (31 March 2016: Nil; 1 April 2015: Nil) uits i IDFC Ultra Short Term Fud - Daily Divided - (Direct Pla) Nil (31 March 2016: Nil; 1 April 2015: 41, ) uits i TATA Moey Market Fud Direct Pla - Daily Divided , , Aggregate amout of quoted ivestmets Aggregate market value of quoted ivestmets Aggregate amout of uquoted ivestmets , Aggregate amout of impairmet i the value of ivestmets KSK ENERGY VENTURES LIMITED

139 12 Trade receivables No curret (i) Trade receivable are iterest bearig ad are geerally due withi 1-60 days terms. (ii) Trade receivable of Rs. 29, (31 March 2016: Rs. 23,414.30; 1 April 2015: Rs. 9,301.88) for the Group have bee pledged as security for borrowigs (refer ote 20) (iii) The Compay is havig majority of receivables from State Distributio Compaies which are Govermet udertakigs ad compaies that are well established i reputed idustries egaged i their respective field of busiess. Hece they are secured from credit losses i the future. The movemet i the allowace for impairmet i respect of trade receivable durig the year was as follows: 31 March March 2016 Opeig balace Impairmet loss recogised Amout writte off Closig balace Loas As at As at As at 31 March March April 2015 Usecured, cosidered good Curret Secured, cosidered good , Usecured, cosidered good (refer ote 35) 28, , , Usecured, cosidered doubtful No Curret Trade receivables Provisio for doubtful debts - (145.86) - Usecured, cosidered good Curret 29, , , , , , As at As at As at 31 March March April 2015 Security deposits 2, , , Usecured, cosidered good 2, , , Loas ad advaces 3, , , Security deposit 2, , , Usecured, Doubtful Loas ad advaces Less: Provisio for doubtful advaces (37.50) (18.75) - 6, , , , , , ANNUAL REPORT

140 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 14 Other fiacial assets No Curret Usecured, cosidered good Curret The Compay has pledged its deposits with baks amoutig to Rs (31 March 2016: Rs ; 1 April 2015: Rs ) i order to fulfill collateral requiremets. 15 Other assets As at As at As at 31 March March April 2015 Advace for ivestmet , Deposits with baks Iterest accrued Usecured, cosidered good 1, , Iterest accrued Other receivables No-curret , , , As at As at As at 31 March March April 2015 Capital advaces 4, , , Advace tax Prepaid expeses Prepaid lease retals 2, , , Balaces with statutory authorities 1, , , Other assets Curret 9, , , Advace for goods ad services 5, , , Balaces with statutory authorities Prepaid expeses Prepaid lease retals Ubilled reveue Claims receivable 6, Usecured, Doubtful Capital / other advaces Less: Provisio for doubtful advaces (37.99) (37.99) - 12, , , , , , KSK ENERGY VENTURES LIMITED

141 16 Ivetories As at As at As at 31 March March April 2015 (At lower of cost or et realisable value) Fuel Fuel - i - trasit Stores ad spares 1, , , Stores ad spares-i-trasit , , , Ivetory of Rs. 1, (31 March 2016: Rs. 2,543.72; 1 April 2015: Rs. 1,750.69) for the Group is subject to security restrictios (refer ote 20) 17 Cash ad cash equivalets As at As at As at 31 March March April 2015 Cash o had Draft o had Balaces with baks; O curret accout 1, , , , Other bak balaces 19 Share capital As at As at As at 31 March March April 2015 Deposits with bak held as margi moey or security 5, , , agaist guaratees or borrowigs Deposit havig maturity of more tha three moths , , , Issued, subscribed ad paid up As at As at As at 31 March March April ,985,774 (31 March 2016: 423,985,774; 1 April 2015: 422,249,194) equity shares of Rs.10/- each fully paid up. 4, , , , , , a b The Compay has oly oe class of equity shares havig a par value of Rs 10/- per share. The holders of equity shares are etitled to receive divided as declared from time to time ad are etitled to votig rights proportioate to their shareholdig at the meetig of shareholders. Recociliatio of umber of shares outstadig As at As at 31 March March 2016 Equity shares Outstadig at the begiig of the year 423,985, ,249,194 Coversio of warrats issued to promoter group - 1,736,580 Outstadig at the ed of the year 423,985, ,985,774 ANNUAL REPORT

142 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) c Equity shares held by holdig compay ad its subsidiaries Holdig compay As at As at As at 31 March March April 2015 No of shares held 157,191, ,938, ,150,109 % of shares held 37.07% 45.03% 45.27% Subsidiaries of holdig compay No of shares held 87,992,881 98,086,182 97,225,346 % of shares held 20.76% 23.13% 23.03% d Particulars of the shareholders holdig more tha 5% of the shares Equity shares fully paid up KSK Eergy Limited 20 Borrowigs As at As at As at 31 March March April 2015 No of shares held 157,191, ,938, ,150,109 % of shares held 37.07% 45.03% 45.27% KSK Eergy Compay Private Limited No of shares held 68,375,962 78,469,263 79,345,007 % of shares held 16.13% 18.51% 18.79% HDFC Trustee Compay Limited No of shares held 38,145,028 38,145,028 21,253,116 % of shares held 9.00% 9.00% 5.03% No Curret Secured As at As at As at 31 March March April 2015 Debetures 1, , , Term loas Rupee loas from baks 116, , , Rupee loas from others 64, , , Foreig currecy loas 19, , , Hire purchase loa Usecured Preferece Shares Debetures 1, Foreig currecy loas - 3, , Deferred paymet liabilities , , , KSK ENERGY VENTURES LIMITED

143 Curret Secured Loas repayable o demad a Details of security provided for various credit facilities KSK Eergy Vetures Limited Rupee term loas from others are secured by first pari-passu charge by way of mortgage/hypothecatio of all movable ad immovable properties of Sai Lilagar Power Limited ad KSK Surya photovoltaic Veture Limited, Mortgage of HA lad of VS Ligite Power Private Limited. Further these loas are secured by pledge of certai equity shares of the Compay held by KSK Eergy Limited, the holdig compay ad corporate guaratee give by KSK Eergy Limited ad VS Ligite Power Private Limited. Loas repayable o demad are secured by first pari-passu charge o fixed assets, curret assets of the Compay ad corporate guaratee of KSK Power Vetur plc ad KSK Wid Eergy Private Limited. Loas agaist letter of credit are secured by first pari-passu charge o all assets of the Compay. Sai Wardha Power Geeratio Limited Rupee term loas from baks ad others, log term foreig currecy loas ad loas payable o demad are secured by first charge pari-passu by way of mortgage o the Compay's immovable properties ad hypothecatio of whole of the movable properties, both preset ad future. Pledge of certai equity shares of the Compay held by KSK Electricity Fiacig Idia Private Limited, Corporate guaratee give by KSK Eergy Vetures Limited. Loas agaist letter of credit are secured by letter of credit facility sactioed to KSK Eergy Vetures Limited. Sitapuram Power Limited Rupee term loa from bak is secured by first charge o all immovable ad movable assets icludig curret assets, both preset ad future. Pledge of certai equity ad preferece shares of the compay held by KSK Electricity Fiacig Idia Private Limited. Loas repayable o demad are secured by first charge o etire block of curret assets excludig receivables. VS Ligite Power Private Limited As at As at As at 31 March March April 2015 From baks 15, , , Foreig currecy loas 2, , , Loas agaist letters of credit 1, , , Loa agaist deposit 1, , , Usecured Loas repayable o demad From related parties , From others Loa agaist deposit - - 1, , , , , , , Rupee term loas from baks ad others are secured by first charge pari-passu by way of mortgage o all the compay's immovable properties ad hypothecatio of whole of the movable properties both preset ad future. Pledge of certai equity ad preferece shares of the compay held by KSK Electricity Fiacig Idia Private Limited. Corporate guaratee give KSK Eergy Vetures Limited Loas repayable o demad are secured by pari-passu first charge o fixed assets ad curret assets alog with term leders. ANNUAL REPORT

144 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) Sai Lilagar Power Geeratio Limited Rupee term loas from bak is secured by way of mortgage of all movable ad immovable assets. Pledge of certai equity shares of KSK Mahaadi Power Compay Limited, VS Ligite Power Private Limited, KSK Electricity Fiacig Idia Private Limited ad Sai Regecy Power Corporatio Private Limited ad equity shares of the compay. Further, the loa is also secured by pledge of certai fully paid up class A shares of the Compay ad Corporate Guaratee of KSK Eergy Vetures Limited. Loas repayable o demad are secured by hypothecatio of all preset ad future curret assets icludig reveues, receivables, escrow accout. Secod charge o the fixed assets of the compay created by way of Simple Mortgage Deed. Further, the loa is secured by pledge of certai shares of the Compay ad Corporate Guaratee of KSK Eergy Vetures Limited. KSK Mahaadi Power Compay Limited Rupee term loas, foreig currecy loas ad cash credit are secured by first charge over all immovable properties, movable properties, itagible assets, curret assets ad other assets (icludig assigmet of rights, titles, iterests, beefits, claims etc.) of the compay both preset ad future. Rupee sub debt loas are secured by secod charge over all immovable properties, movable properties, itagible assets, curret assets ad other assets (icludig assigmet of rights, titles, iterests, beefits, claims etc.) of the compay both preset ad future. Further secured by pledge of certai equity shares of the Compay, Corporate guaratee of KSK Eergy Compay Private Limited ad pledge of KSK Electricity Fiacig Idia Private Limited shares held by KSK Eergy Vetures Limited. Sai Regecy Power Corporatio Private Limited Rupee term loas from baks are secured by pari-passu charge by way of mortgage o all compay's immovable properties ad hypothecatio of movable properties. Pledge of certai equity shares of the compay held by KSK Electricity Fiacig Idia Private Limited. Loas repayable o demad are secured by first pari-passu charge o the etire curret assets of the compay icludig receivables,stores ad spares ad other curret assets Sai Maithili Power Compay Private Limited Rupee term loa from baks are secured by way of mortgage o all the Compay's immovable properties icludig lad ad hypothecatio of whole of the movable fixed assets ad curret assets both preset ad future. Pledge of shares of certai equity shares of the Compay. Corporate guaratee of KSK Eergy Vetures Limited ad VS Ligite Power Private Limited. Hire purchase loa is secured by pledge of vehicle purchased KSK Electricity Fiacig Idia Private Limited Debetures are secured by way of mortgage of lad ad pledge of certai equity shares of KSK Eergy Vetures Limited. b Loa agaist deposits are secured by pledge of deposits. 142 KSK ENERGY VENTURES LIMITED

145 c Repaymet terms of log-term borrowigs S No Name of the Compay Amout outstadig icluded i Log term Other Repaymet terms borrowigs curret liability Debetures 1 KSK Electricity Fiacig Idia 1, The debetures are repayable equally i Private Limited Mar 2021 ad Mar The debetures carry a iteral rate of retur of 17% p.a 2 KSK Electricity Fiacig Idia The debetures are optioally covertible Private Limited equity shares of Rs 10 /- each withi te years. The coupo rate of iterest is 0.00% p.a. 3 Sai Regecy Power Corporatio 1, N o c o v e r t i b l e d e b e t u r e s a r e Private Limited r e d e e m a b l e b y A u g T h e s e debetures carry iterest of 21% out of which 12% payable quarterly ad balace iterest at maturity. 4 KSK Wid Eergy Private Limited T h e d e b e t u r e s a r e o p t i o a l l y covertible ito equity shares of Rs 10 /- each after five years ad redeemable at the ed of te years from the date of allotmet. The coupo rate of iterest is 0.01% p.a. 5 KSK Surya Photovoltaic The debetures are optioally covertible Veture Limited ito equity shares of Rs 10 /- each withi te years. The coupo rate of iterest is 0.00% p.a. Term loa 1 KSK Eergy Vetures Limited 4, The log term Rupee loas are repayable i quarterly yearly istalmets with the last istalmet of respective loas are payable upto to Nov The log term borrowigs carries a weighted average rate of iterest of % p.a 2 Sai Wardha Power Geeratio 3, , The log term Rupee loas are repayable Limited (formerly Sai Wardha i quarterly istalmets with the last Power Limited) istalmet of respective loas are payable from Ju 2020 to Sep These loas carry a weighted average iterest rate of 13.61% p.a. 3 Sitapuram Power Limited The log term Rupee loa is repayable i quarterly istalmets with the last istalmet of the loa is payable by Mar This loa carries a weighted average iterest rate of 12.85% p.a ANNUAL REPORT

146 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) S No Name of the Compay Amout outstadig icluded i Log term Other Repaymet terms borrowigs curret liability 4 VS Ligite Power Private Limited 4, The log term Rupee loas are repayable i quarterly istalmets with the last istalmet of respective loas are payable from Nov 2020 to Jue These loas carry a weighted average iterest rate of 14.36% p.a. 5 Sai Lilagar Power Geeratio 1, The log term rupee loa is repayable i Limited (formerly Sai Lilagar quarterly istalmets with the first Power Limited) istalmet of loa commecig from Jauary 2016 ad edig i October The loas carry a weighted average iterest rate of 12.63% p.a. 6 Sai Regecy Power Corporatio 2, The log term Rupee loas are repayable Private Limited i quarterly istalmets with the last istalmet of respective loas are payable by March These loas carry a weighted average iterest rate of 12.33% p.a. 7 KSK Mahaadi Power 156, The log term Rupee loas are repayable Compay Limited i q u a r t e r l y i s t a l m e t s w i t h l a s t istalmet of respective loas payable by March These loas carry a weighted average iterest rate of 14.17% p a. 8 KSK Water Ifrastructures 5, The log term rupee loas are repayable i Private Limited quarterly istalmets with the last istallmet of respective loa payable by M a r c h T h e s e l o a s c a r r y a weightage average iterest rate of 13.71% p.a 9 Sai Maithili Power Compay The log term Rupee loa is repayable by Private Limited August 2031, i mothly ad quarterly istallmets. These loas carries a weighted average rate of iterest of 14.82% p.a 144 KSK ENERGY VENTURES LIMITED

147 Repaymet terms of log-term borrowigs cotiued S No Name of the Compay Amout outstadig icluded i Log term Other Repaymet terms borrowigs curret liability Foreig currecy loas 1 Sai Wardha Power Geeratio - 1, The log term foreig currecy loa is Limited (formerly Sai Wardha repayable from Jue 2014 to Jauary Power Limited) These carry a weighted average iterest rate of 4.42% p.a. 2 Sai Wardha Power Geeratio 15, The log term foreig currecy loa are Limited (formerly Sai Wardha repayable half yearly istalmets with the Power Limited) last istalmet payable by August The log term foreig currecy loas carry a weighted average iterest rate of 6.16% p.a. 3 KSK Mahaadi Power 3, The foreig currecy loas are repayable Compay Limited i structured quarterly istalmets c o m m e c i g f r o m J u e T h e weighted average rate of iterest is at aroud 4.50% per aum. 4 KSK Mahaadi Power T h e f o r e i g c u r r e c y l o a s a r e Compay Limited repayable with a optio to roll over upto five years from the iitial date of availmet ad the weighted average iterest rate is aroud 5.88%. p.a Preferece Shares 1 VS Ligite Power Private Limited The preferece shares are cumulatively redeemable at par over a period of 10 to 20 years from the date of allotmet ad carries ad iterest rate of 0.01% p.a 2 Sitapuram Power Limited The preferece shares are redeemable by August 2026 ad carries a iterest rate of 0.01% p.a. Hire purchase loa 1 Sai Maithili Power Compay Hire purchase loa is repayable i mothly Private Limited istallmet, with last istallmet due i August The loa carries weighted average iterest rate of 9% Deferred paymet liabilities: 1 KSK Eergy Vetures Limited Deferred paymet liability are repayable i Mar ANNUAL REPORT

148 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 21 Trade payable Trade payable are o-iterest bearig ad maily icludes amout payable to coal suppliers ad operatio ad maiteace vedors i whose case credit period allowed is less tha 12 moths. Group usually opes usace letter of credit i favour of the coal suppliers. Sice the average credit period is less tha 12 moths, the trade payable amout has bee classified as curret. 22 Other Fiacial liabilities 23 Derivative liabilities As at As at As at 31 March March April 2015 Trade payable 12, , , No Curret 12, , , As at As at As at 31 March March April 2015 Iterest accrued Creditor for capital goods (icludig retetio moey) , Curret , Curret maturities of log-term debt 4, , , Curret maturities of fiace lease obligatio Iterest accrued 8, , , Creditor for capital goods (icludig retetio moey) 13, , , Share applicatio moey i subsidiary held by others Fiace charges payable Salary ad bous payable Advace received agaist issue of fiacial istrumets 2, Other liabilities 4, , , No Curret 34, , , , , , As at As at As at 31 March March April 2015 Premium payable , , Iterest rate swap Curret , , Premium payable Forward cover , , , KSK ENERGY VENTURES LIMITED

149 24 Provisios As at As at As at 31 March March April 2015 No Curret For employee beefits (refer ote a) Provisio for Decommissioig cost (refer ote b) a. Employee beefit plas: The Compay has a defied beefit gratuity pla. Every employee who has completed five years or more of service gets a gratuity o departure at 15 days salary (last draw salary) for each completed year of service. The scheme is fuded with a isurace compay i the form of a qualifyig isurace policy. The followig table sets out the status of the gratuity pla as required uder IND AS 19 Net beefit liability As at As at As at 31 March March April 2015 Defied beefit obligatio Fair value of pla assets (87.80) (69.55) (62.74) Net Asset / (Liability)* (68.21) (53.61) (30.29) *Represets et of beefit asset of Rs (31 March 2016: Rs. 8.38; 1 April 2015: Rs. 6.69) Chages i the preset value of the defied beefit obligatio are as follows As at As at 31 March March 2016 Defied beefit obligatio as at the begiig of the year Icluded i Cosolidated icome statemet Curret service cost Iterest cost Icluded i Cosolidated other comprehesive icome Re-measuremet loss / (gai) Re-measuremet (or Actuarial) (gai) / loss arisig from: chage i fiacial assumptios experiece variace (i.e. Actual experiece vs assumptios) (5.51) 7.76 Others Acquisitio of subsidiaries Beefits paid (6.58) (5.54) (2.07) (5.54) Defied beefit obligatio as at the ed of the year ANNUAL REPORT

150 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) Chages i the fair value of pla assets are as follows Fair value of pla assets As at As at 31 March March 2016 Fair value of pla assets begiig of the year Icluded i Cosolidated icome statemet Iterest icome Icluded i other comprehesive icome Re-measuremet loss / (gai) Retur o pla asset (excludig amouts icluded i et iterest expese) Others Acquisitio of subsidiaries Cotributios Beefits paid (6.58) (5.54) Fair value of pla assets ed of the year Net defied beefit liability (asset) As at As at 31 March March 2016 Balace Icluded i Cosolidated icome statemet Curret service cost Iterest cost / (icome) Expeses Recogised i the Icome Statemet Re-measuremet loss / (gai) Actuarial (gais) o obligatio chage i fiacial assumptios experiece variace (i.e. Actual experiece vs assumptios) (5.51) 7.76 Retur o pla asset (excludig amouts icluded i et iterest expese) (0.48) (0.58) Others Chage i cotrollig stake Cotributios by employer (17.25) (6.92) (14.04) (6.92) Defied beefit obligatio as at the ed of the year Asset iformatio Category of Assets As at As at 31 March March 2016 Isurer maaged fuds 100% 100% 148 KSK ENERGY VENTURES LIMITED

151 The pricipal assumptios used i determiig the obligatio towards the Group s pla as show below: As at As at 31 March March 2016 Discout rate 7.45% 7.80% Rate of icrease i compesatio levels 10.00% 10.00% Sesitivity aalysis 31 March March 2016 Decrease Icrease Decrease lcrease Discout rate (-/+ 1% movemet) (21.18) (17.07) Salary growth Rate (-/+ 1% movemet) (15.34) (12.57) Discout rate: The discout rate is based o the prevailig market yields of Idia govermet securities as at the balace sheet date for the estimated term of the obligatios b. Provisio for restoratio cost As at 31 March 2017 Opeig balace Uwidig of discout Closig balace A provisio has bee recogised for restoratio costs associated with miig lad. The uwidig of the discout o the restoratio provisio is icluded as a fiace costs ad the discout rate assumed is 7.6%. 25 Other liabilities No Curret As at As at As at 31 March March April 2015 Deferred reveue Other Liabilities Curret Deferred reveue Statutory Liabilities , , , ANNUAL REPORT

152 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 26 Deferred tax (liability) / assets Deferred icome tax at 31 March 2017 ad 31 March 2016 relates to the followig: Deferred icome tax assets 1 April 2016 Recogised i the Recogised i Others 31 March 2017 icome statemet other comprehesive icome Property, plat ad equipmet Uused tax losses carried forward 17, , , MAT credit Others (84.36) Deferred icome tax liabilities 17, , , Property, plat ad equipmet 8, , Others , , Deferred icome tax asset, et 9, , , Deferred icome tax assets 1 April 2015 Recogised i the Recogised i Others 31 March 2016 icome statemet other comprehesive icome Property, plat ad equipmet 7.29 (1.51) Uused tax losses carried forward 14, , , MAT credit (0.05) Others Deferred icome tax liabilities 14, , (0.05) 17, Property, plat ad equipmet 6, , , Others (44.44) , , , Deferred icome tax asset, et 8, , (0.05) 9, Certai group compaies are etitled to avail exemptio uder sectio 80IA of the Icome Tax Act, 1961 from icome tax o profits of busiess. Based o the assessmet of the Compay, deferred tax as o 31 March 2017 has bee recogized oly to the extet the timig differeces arisig i the curret period which does ot get reversed withi the tax holiday period. I assessig the realisability of the deferred icome tax assets, maagemet cosiders whether some portio or all of the deferred icome tax assets will ot be realised. The ultimate realisatio of the deferred icome tax assets ad tax loss carry forwards is depedet upo the geeratio of future taxable icome durig the periods i which the temporary differeces become deductible. Maagemet cosiders the scheduled reversals of deferred tax liabilities, projected future taxable icome ad tax plaig strategy i makig this assessmet. Based o the level of historical taxable icome ad projectios of future taxable icome over the periods i which the deferred tax assets are deductible, maagemet believes that the Compay will realize the beefits of those recogised deductible differeces ad tax loss carry forwards. The amout of deferred tax assets cosidered realizable, however, could be reduced i the ear term if estimates of future taxable icome are reduced. 150 KSK ENERGY VENTURES LIMITED

153 The Group has tax losses i certai etities which arose i Idia of Rs. 7, (31 March 2016: Rs. 4,461.06) that are available for offset agaist future taxable profits. Deferred tax assets have ot bee recogised i respect of these losses as they may ot be used to offset taxable profits elsewhere i the Group ad they have arise i subsidiaries that have bee loss-makig for some time. The Group evaluated ad cocluded that it is ot probable that deferred tax assets o existig tax losses will be recovered. The subsidiaries have o taxable temporary differeces available that could partly support the recogitio of these losses as deferred tax assets. If the Group were able to recogise all urecogised deferred tax assets, loss would decrease by Rs. 2, (31 March 2016: Rs. 1,543.88).The above tax losses expire at various dates ragig from 2018 to As at 31 March 2017 ad 31 March 2016, there was o recogised deferred tax liability that would be payable o the uremitted earigs of certai of the Group's subsidiaries or joit operatios i the Group has determied that udistributed profits of its subsidiaries will ot be distributed i the foreseeable future; ad ii the Group cotrols the divided policy of the joitly cotrolled arragemets. The Group has determied that udistributed profits of its joitly cotrolled etities will ot be distributed i the foreseeable future. The temporary differeces associated with ivestmets i subsidiaries ad joit operatios, for which deferred tax liability has ot bee recogised aggregate to Rs. 5, (31 March 2016: Rs. 7,819.56) Tax recociliatio statemet Recociliatio betwee tax expese ad the product of accoutig profit multiplied by Idia s domestic tax rate for the years eded 31 March 2017 ad 31 March 2016 is as follows: Particulars 31 March March 2016 Accoutig profit/(loss) Before tax (8,288.35) (5,918.69) Eacted tax rates % % Tax o Profit at eacted rates (2,868.43) (2,048.34) Expediture ot deductible for tax purpose Icome exempted or taxed at lower rates (133.01) (442.42) Urecogised deferred tax assets 1, Chage i urecogised temporary differeces Others (161.49) (96.45) Actual tax expese (1,360.85) (1,578.89) ANNUAL REPORT

154 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 27 Reveue from operatios Year eded Year eded 31 March March 2016 Sale of electricity 39, , Corporate support service fees Other operatig icome Other icome Iterest icome Year eded Year eded 31 March March 2016 o fiacial istrumets o others Divided icome from ivestmet measured at amortised cost Profit o sale of fixed assets, et Isurace claim Foreig exchage gai, et Deferred reveue amortisatio Uwidig of discout o deposits ad receivables Miscellaeous icome Cost of fuel cosumed 1, Year eded Year eded 31 March March 2016 Coal 18, , Ligite Natural gas , Others Maufacturig expeses 39, , , , Year eded Year eded 31 March March 2016 Cosumptio of stores ad spares Operatio ad maiteace expeses 1, , Cost of import power Raw water charges , Repairs ad maiteace - plat ad equipmet , , KSK ENERGY VENTURES LIMITED

155 31 Employee beefit expeses Year eded Year eded 31 March March 2016 Salaries, wages ad bous 1, Cotributio to providet ad other fuds (refer ote 24(a)) Staff welfare expeses , Other expeses Year eded Year eded 31 March March 2016 Ret Rates ad taxes Travel ad coveyace Isurace charges Legal ad professioal charges Geeratio, trasmissio ad sellig expeses Remueratio to auditors Repairs ad maiteace buildig others Bad debts / receivables writte off Provisio for doubtful debts / receivables Corporate social resposibility Freight outward Foreig exchage loss, et Loss o sale of fixed assets Miscellaeous expeses Fiace costs 2, , Year eded Year eded 31 March March 2016 Iterest expese 20, , Other borrowig cost 1, Loss o derivatives istrumets - FVTPL Uwidig of Discout , , The borrowig cost attributable to the acquisitio or costructio of PPE amoutig to Rs. 9, (31 March 2016: Rs. 8,790.40) has bee capitalised. 34 Other Comprehesive Icome Year eded Year eded 31 March March 2016 Items that will ot be reclassified to profit or loss Gai / loss o fiacial istrumets at fair value through OCI (1.66) Remeasuremets of the defied beefit plas 3.26 (7.21) Icome tax relatig to above Items that may be reclassified to profit or loss Foreig currecy traslatio differeces (1.28) 0.15 (1.28) ANNUAL REPORT

156 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 35 Cotiget liabilities ad Commitmets a Cotiget liabilities (iii) Claims agaist the Group ot ackowledged as debt Rs. 1, (31 March 2016: Rs. 1, ; 1 April 2015: Rs ) (iv) Trade receivables icludes a amout of Rs. 13, (31 March 2016: Rs. 8,423.30; 1 April 2015: Rs. 2,064.50) receivable i KMPCL over multiple periods from various State Discoms both o accout of (a) various statutory duties, levies ad cess levied by Govermet ad Govermet istrumetality ad (b) pursuat to Miistry of Power directive with respect to the Presidetial directive o coal likages of Coal Idia. Based o the legal advice ad cosiderig recet rulig of Ho'ble Supreme Court & CERC i similar case, the Compay is cofidet that the etire amouts is receivable. (v) SWPGL had filed a claim agaist Maharashtra State Electricity Distributio Compay Limited ( MSEDCL ) towards recovery of the amout withheld agaist supply of eergy uder Power Purchase Agreemet (icludig pealty o such amout) amoutig to Rs (31 March 2016: Rs ; 1 April 2015: Rs ) The facility required for geeratio of the agreed quatum of power was ot ready as per agreed schedule o accout of uexpected factors beyod the cotrol of the Compay, the Compay proposed to MSEDCL, a arragemet to secure the eergy from alterate sources for the short quatity required to meet the obligatio uder the power purchase agreemet. MSEDCL, accepted the proposal ad also cofirmed that the eergy supplied from alterate sources will also be subject to the tariff agreed uder the power purchase agreemet. However, after iitial paymets for the period April to Jue 2010, startig July 2010 to October 2010, MSEDCL, did ot settle the etire dues billed ad the certai amouts were withheld without ay explaatio. The Compay coteded before Maharashtra Electricity Regulatory Commissio ( MERC ) that sice the eergy supplied ad billed was as per the terms agreed ad the similar bills of earlier moths were paid by MSEDCL, there is o cause to withhold the paymets. However, MERC has dismissed the petitio. The Compay has filed a appeal before Appellate Tribual for Electricity (APTEL) agaist the order of MERC ad APTEL also rejected the appeal. The Compay has filed a appeal before Hoorable Supreme Court of Idia. Durig the year eded 31 March 2017 the Compay received a ufavorable rulig o a claim agaist a state body MSEDCL as it was cocluded the claims if allowed were agaist public iterest ad accordigly Compay has impaired ad writte off the etire claim amout. (vi) Service tax departmet has issued demad order to the Compay for paymet of service tax amoutig to Rs (31 March 2016: Rs ; 1 April 2015: Rs ) (icludig pealty) relatig to the disagreemet o availmet of Cevat Credit for the period April 2008 to September 2010 ad o paymet of service tax. Further, a amout of Rs (31 March 2016: Rs 26.88; 1 April 2015: Rs 26.88) has bee paid agaist the demad ad the balace demad is stayed. However, the Compay believes that the claims raised by the departmet are ot teable ad the Compay has filed a appeal agaist the said order before the CESTAT. (vii) Other o curret assets iclude a amout of Rs (31 March 2016: ; 1 April 2015: Rs ) relatig to Cetral Excise receivable from the Excise departmets by SWPGL. The SWPGL is registered as SEZ uit. A uit i SEZ is allowed to import goods (purchase from local market is also treated as import) without paymet of Duty for the purpose of its authorised operatios. The exemptio from the paymet of duties ad taxes are provided uder Sectio 26 of the SEZ Act, However, the excise duty refud claims were rejected by the departmet statig that there are o provisio of refud uder the SEZ Act. However the Compay hase goe to CESTAT, wherei the CESTAT has decided that the Appeal is ot maitaiable with CESTAT, but lies with the Revisioery Authority, therefore the claims has bee filed with Jt. Secretary Govermet of Idia, Miistry of Fiace New Delhi, sice the Compay has bore the duty burde ad accordigly the Compay is cofidet that the etire amout is receivable. As at As at As at 31 March March April 2015 (i) Bak guaratees outstadig (ii) Corporate guaratees outstadig 5, , , (viii)the captive customers of the SWPGL has deducted from the sales ivoices a amout of Rs towards Cross Subsidy Surcharge ( CSS ) levied by MSEDCL for the fiacial year before ascertaiig the captive status of the plat at the 154 KSK ENERGY VENTURES LIMITED

157 ed of fiacial year which was agaist the express provisios of the Electricity Act 2003 read with the Electricity Rules, MERC asked the Compay to pay CSS o groud of o-fulfilmet of criteria of 51% supply to captive users as per Rule 3 of the Electricity Rules Aggrieved by the said order of the MERC, the Compay has filed a appeal before the APTEL o the groud that the o-fulfilmet of captive criteria by the compay was attributed to the delay caused by MSEDCL i gratig ope access to captive customers. APTEL also rejected the appeal. Aggrieved by this, the Compay has filed petitio with Hoourable Supreme Court of Idia. Pedig adjudicatio of the same, the compay believes that there is a good chace of succeedig ad hece o adjustmet has bee made i the fiacial statemets. (ix) KMPCL has levied capacity charges ad trasmissio charges to Adhra Pradesh(AP) ad Telagaa Discoms for the period from 16th Jue, 2013 to 13th August, 2013 amoutig to Rs (31 March 2016: Rs ; 1 April 2015: Rs ), o accout of delayed fulfilmet of obligatio uder the PPA. Adhra Pradesh & Telagaa Discoms have rejected those claims ad made the couter claim of Rs (31 March 2016: Rs ; 1 April 2015: Rs ) for failure to furish advace fial writte otice of commecemet of supply of power as per article of PPA. The Group has preferred a appeal before APERC for refud of amout collected by Discoms by ecashmet of bak guaratee. The Group s cotetio is that sice the Discoms have failed to fulfil the obligatio as per PPA, there is default o part of Discoms ad the couter claim by Discoms is merely to egate the effect of KMPCL claim of capacity charges. Pedig adjudicatio of the case, the Group is believes that there is a good chace of succeedig before the regulatory commissios ad hece o adjustmet has bee made i the fiacials statemets. (x) The Group has received claims for Rs (31 March 2016: ; 1 April 2015: Rs ) from Joit Director Geeral of Foreig Trade (JDGFT) towards the recovery of the duty drawbacks, earlier refuded. The compay had earlier made claims for the refud of the duties paid o the machiery ad other items purchased for the costructio of the power projects uder the scheme of deemed export beefit, which were accepted ad refuds were grated. The commuicatio from the JDGFT regardig the recovery of the duties paid are based o the iterpretatios by the Policy Iterpretatio Committee held o 15 March 2011.The compay coteds that the above chage i iterpretatio requires a amedmet to the foreig trade policy to be legally eforceable i law. The relevat amedmets has ow bee icorporated i the policy. Sice the amedmets made shall have prospective effect oly, the compay believes that outcome of the above dispute should be i favour of the compay ad there should be o material impact o the fiacial statemets. (xi) VSLPPL has receivables of Rs (31 March 2016: Rs : 1 April 2015: Rs ) from its cosumers represetig taxes icludig royalty, cess o clea eergy, taxes o iput fuel as well as double adjustmets for the security deposit, trasmissio ad SLDC charges ad take or pay obligatio which are disputed by the cosumers. The Group has a amout of Rs (31 March 2015: Rs ) access from such customers as redeemable capital available for ecessary setoffs. Further, the Group coteds that ot oly it has fulfilled the cotractually guarateed supplies but also the amouts claimed are as per the terms of the power purchase agreemets. Aggrieved by the order of Arbitrator, civil court ad High Court the Group has preferred a appeal i Hoourable Supreme Court of Idia. Pedig outcome of the same, the Group believes that the fial determiatio of the above dispute would be i favour of the Group ad there would be o material impact o the fiacial statemets. (xii) SWPGL has lodged a claim relatig to quality ad price o Wester Coalfields Limited (WCL), the coal supplier for abuse of domiat positio by WCL ad Coal Idia Limited (CIL). Hoourable Competitio Commissio of Idia ( Commissio ) has passed a order o 27 October 2014 i favour of the Group as far as price claim is cocered whereas for the quality claim, the Commissio has referred to its earlier order dated 13 Jauary 2014, of similar case which is presetly pedig at Competitio Appellate Tribual (COMPAT). WCL has preferred a appeal agaist the order of the Commissio before the COMPAT wherei durig the year eded 31 March 2017, COMPAT has upheld the order give by Commissio agaist which WCL has preferred a appeal before the Hoourable Supreme Court of Idia. The Group has filed a total claim of Rs. 15, with COMPAT uder provisio 53N of The Competitio Act, Further SWPGL has received a demad of Rs from WCL towards short liftig of miimum quatity of coal which is also cotested by the SWPGL o various grouds icludig of iferior quality & high price ad as such has ot bee provided for. Cosequet to reiteratig ad upholdig, i etirety, the earlier favourable order of Ho ble Competitio Commissio of Idia by COMPAT the Group has recogised a claim of Rs. 6, durig the year eded 31 March The Group believes that the fial outcome of the above matters would be i favour of the group ad compay is cofidet that the etire amout is fully recoverable. ANNUAL REPORT

158 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) I additio, the Group is also subject to various other legal proceedigs ad claims which have arise i the ordiary course of busiess icludig claims before various tax authorities. The Maagemet does ot reasoably expect that these legal proceedigs, whe ultimately cocluded ad determied, will have a material or adverse effect o the Group s results of operatios or fiacial coditios. The Group has accrued appropriate provisio wherever required. b Estimated amout of cotracts remaiig to be executed o capital accout ad ot provided for i the Compay, its Subsidiaries ad Joit Operatios: As at As at As at 31 March March April 2015 Estimated value of cotracts remaiig to be executed o 64, , , capital accout ot provided for c Other commitmets As at As at As at 31 March March April 2015 Obligatio for miimum quatity of fuel 56, , , Operatig Leases The Cosolidated etities have etered i to certai operatig lease agreemets. A amout of Rs (31 March 2016: Rs. 85.3) paid uder such agreemets has bee disclosed as Ret uder other expeses i the Cosolidated Profit ad Loss statemet ad expediture durig costructio period, pedig allocatio. 37 Earigs/(loss) per Share (EPS) The computatio of EPS as per Id AS 33 is set out below: Year eded Year eded 31 March March 2016 Net profit / (loss) after tax ad miority iterest (6,359.76) (4,142.11) Net profit attributable to shareholders - for basic / diluted EPS (6,359.76) (4,142.11) Weighted average umber of shares outstadig for the purpose of calculatio of basic ad diluted EPS (i millio) Earigs per share basic / diluted (i Rs.) (15.00) (9.77) 156 KSK ENERGY VENTURES LIMITED

159 38 Segmet Reportig The Segmet report of the Group has bee prepared i accordace with the Idia Accoutig Stadard 108 Operatig Segmet. There is oly oe reportable geographical segmet as per Idia Accoutig Stadard 108. For the purpose of reportig busiess segmets, the Group is egaged i two segmets, viz., Project developmet ad power geeratio. Project Power Recocilig/ 31 March 2017 developmet geeratig Elimiatio Total activities activities activities Reveue , (179.59) 39, Segmet Result , , Uallocated icome (et) 7, Fiace costs (21,945.11) Loss before tax (8,288.35) Tax icome 1, Loss for the year (6,927.50) Segmet assets , (201.81) 283, Uallocated assets 23, Total assets 306, Segmet liabilities , (201.81) 43, Uallocated liabilities 234, Total liabilities 278, Other segmet iformatio Depreciatio / amortisatio , , Capital expediture , , Project Power Recocilig/ 31 March 2016 developmet geeratig Elimiatio Total activities activities activities Reveue , (215.70) 43, Segmet Result , , Uallocated icome (et) Fiace costs (17,081.75) Loss before tax (5,918.69) Tax icome 1, Loss for the year (4,339.80) Segmet assets 1, , (929.65) 243, Uallocated assets 21, Total assets 265, Segmet liabilities , (929.65) 34, Uallocated liabilities 195, Total liabilities 230, Other segmet iformatio Depreciatio / amortisatio , , Capital expediture , , ANNUAL REPORT

160 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) Project Power Recocilig/ 1 April 2015 developmet geeratig Elimiatio Total activities activities activities Segmet assets 1, , (109.17) 224, Uallocated assets 17, Total assets 241, Segmet liabilities , (109.17) 23, Uallocated liabilities 179, Total liabilities 203, Three customers i the power geeratig segmet cotributig reveues of Rs. 30, accouted for 78.10% (31 March 2016: Three customers i the power geeratig segmet cotributig reveues of Rs. 30, accouted for 69.74%) of the total segmet reveue. 39 Related party disclosure a Parties where cotrol exists S No. Name of the party Relatioship 1 K&S Cosultig Group Private Limited Ultimate holdig compay 2 KSK Power Vetur plc Step up holdig compay 3 KSK Eergy Limited Holdig compay (For detail list of subsidiaries see ote 3.2) b Parties where sigificat ifluece exists ad where the trasactios have take place durig the year S No. Name of the party Relatioship 1 KSK Eergy Compay Private Limited Fellow subsidiary 2 KSK Mieral Resources Private Limited Fellow subsidiary 3 KSK Wid Eergy Nadgao Athi Private Limited Fellow subsidiary 4 KSK Wid Eergy Madurai Ms Puram Private Limited Fellow subsidiary 5 KSK Wid Eergy Tirupur Elayamuthur Private Limited Fellow subsidiary 6 KSK Wid Eergy Tuticori Rajapudukudi Private Limited Fellow subsidiary 7 Marudhar Miig Private Limited Fellow subsidiary 8 SN Nirma Ifra Projects Private Limited Fellow subsidiary 9 KSK Ivestmet Advisor Private Limited Fellow subsidiary 10 KSK Eergy Resources Private Limited Fellow subsidiary 11 KSK Gree Eergy pte Ltd Fellow subsidiary 12 Raigarh Champa Rail Ifrastructure Private Limited Associate 13 Sitapuram Power Limited Joit operatio c Key Maagemet Persoel ad relatives S No. Name of the party Relatioship 1 S. Kishore Whole-time Director 2 K. A. Sastry Whole-time Director 158 KSK ENERGY VENTURES LIMITED

161 d Related party trasactios 31 March 2017 Joit Associate Fellow Holdig KMP Particulars operatio subsidiaries Compay / Step up holdig compay Trasactios Project developmet ad corporate support fees Iterest icome Fuel ad water charges Loas accepted / (repaid) (1,166.96) - - Loas ad advaces give / (repaid) 6.37 (594.48) 2, (icludig advace for ivestmets) Maagerial remueratio Balaces at the year ed Amout receivable , Amout payable Debetures outstadig Maagerial remueratio payable March 2016 Joit Associate Fellow Holdig KMP Particulars operatio subsidiaries Compay / Step up holdig compay Trasactios Project developmet ad corporate support fees Iterest icome Fuel ad water charges - - 2, Purchase of assets - - 1, Loas accepted / (repaid) - - 1, Loas ad advaces give / (repaid) - - 2, , (icludig advace for ivestmets) Maagerial remueratio Balaces at the year ed Amout receivable , , Amout payable , Debetures outstadig Maagerial remueratio payable ANNUAL REPORT

162 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 31 March 2015 Particulars Joit Fellow KMP operatio subsidiaries e Balaces at the year ed Amout receivable , Amout payable Debetures outstadig Maagerial remueratio payable The Group has give corporate guaratees of Rs. 9, (31 March 2016: Rs.16,277.93; 1 April 2015: Rs.17,278.00) ad bak guaratees of Rs. Nil (31 March 2016: Rs. 9.41; 1 April 2015: Rs. 9.41) o behalf of fellow subsidiaries. f The Group has obtaied corporate guaratees of Rs.13, (31 March 2016: Rs.10,739.00; 1 April 2015: Rs. 19,267.88) from step-up holdig compay ad Rs.1, (31 March 2016: Rs.1,000.00; 1 April 2015 : Nil) from holdig compay. * The above trasactios do ot iclude reimbursemet of expeses. 40 Fiacial risk maagemet objectives ad policies The Group's pricipal fiacial liabilities, other tha derivatives, comprises of loas ad borrowigs ad trade ad other payables. The mai purpose of these fiacial liabilities is to raise fiace for the Group's operatios. The Group has loas ad receivables, trade ad other receivables, ad cash ad short-term deposits that arise directly from its operatios. The Group also hold ivestmets desigated at fair value through OCI ad at amortised cost ad eter ito derivative trasactio. The Group s risk maagemet activities are subject to the maagemet directio ad cotrol uder the framework of Risk Maagemet Policy as approved by the Board of Directors. The Maagemet esures appropriate risk goverace framework for the Group through appropriate policies ad procedures ad that risks are idetified, measured ad maaged i accordace with the Group s policies ad risk objectives. I the ordiary course of busiess, the Group is exposed to market risk, credit risk ad liquidity risk. Market risk Market risk is the risk that the fair values of future cash flows of a fiacial istrumet will fluctuate because of chages i market prices. Market prices comprise three types of risk: iterest rate risk, currecy risk ad other price risk, such as equity risk ad commodity risk. Fiacial istrumets affected by market risk iclude loas ad borrowigs, deposits, ivestmet at fair value through profit or loss ad OCI ad derivative fiacial istrumets. The sesitivity aalysis i the followig sectios relate to the positio as at 31 March 2017 ad 31 March The followig assumptios have bee made i calculatig the sesitivity aalyses: The sesitivity of the relevat profit or loss statemet item is the effect of the assumed chages i respective market risk. This is based o the fiacial asset ad fiacial liabilities held at 31 March 2017 ad 31 March Balace sheet sesitivity relates to derivatives ad fiacial istrumets at FVTOCI. Iterest rate risk Iterest rate risk is the risk that the fair value or future cash flows of a fiacial istrumet will fluctuate because of chages i market iterest rates. The Group's exposure to the risk of chages i market iterest rates relates primarily to the Group's log-term debt obligatios with floatig iterest rates. The Group maages its iterest rate risk by havig a balaced portfolio of fixed ad variable rate loas ad borrowigs. To maage iterest rate risk, the Group eters i to iterest rate swaps, i which it agrees to exchage at specified itervals, the differece betwee fixed ad variable rate iterest amouts calculated by referece to a agreed upo otioal pricipal amout. 160 KSK ENERGY VENTURES LIMITED

163 The followig table demostrates the sesitivity to a reasoably possible chage i iterest rates o that portio of loas ad borrowigs affected, after the impact of hedge accoutig. With all other variables held costat, the Group s profit before tax is affected through the impact o floatig rate borrowigs as follows: Currecy Chage i Effect o profit before tax / equity basis poits 31 March March 2016 INR +50 (665.37) (470.88) USD +50 (70.59) (85.38) INR USD Foreig currecy risk Foreig currecy risk is the risk that the fair value or future cash flows of a fiacial istrumet will fluctuate because of chages i foreig exchage rate. The majority of our assets are located i Idia where the Idia rupee is the fuctioal currecy. Currecy exposures also exist i the ature of capital expediture ad services deomiated i currecies other tha the Idia Rupee. Group borrowigs are deomiated i both Idia Rupees ad Uited States Dollars, while a large portio of cash ad liquid ivestmets are held i Idia rupee. Some fiacial assets ad liabilities are ot held i the fuctioal currecy of the respective subsidiary. Cosequetly, currecy fluctuatios may have a large impact o Group fiacial results. Foreig currecy exposures are maaged through a group-wide hedgig policy. The policy is reviewed periodically to esure that the risk from fluctuatig currecy exchage rates is appropriately maaged. Short-term foreig exchage exposures relatig to capital expediture are hedged progressively based o their maturity. Log term exposures are ormally uhedged, however the Group had hedged some of the log term loas by eterig i to currecy optios. The carryig amout of the Group s fiacial assets ad liabilities i differet currecies are as follows: Derivative Istrumets ad Uhedged foreig currecy exposure Derivative cotracts etered ad outstadig Particulars As at As at As at 31 March March April 2015 Currecy optios Hedge of foreig currecy loas Rs. 10, Rs. 10, Rs. 9, Particulars of Uhedged foreig Currecy Exposure US $ US $ US $ Forward cotracts Hedge of foreig currecy loas Rs Rs. 2, Rs. 2, US $ 7.18 US $ US $ Particulars As at As at As at 31 March March April 2015 Loas Rs. 11, Rs. 14, Rs. 13, US $ US $ US $ Iterest o loas Rs Rs Rs US $ US $ 8.14 US $ 5.66 Import creditors (icludig retetio moey) Rs. 11, Rs. 7, Rs. 16, US $ US $ US $ Receivable Rs Rs Rs US $ 4.41 US $ 6.09 US $ 4.69 Premium payable Rs Rs Rs US $ 2.65 US $ 0.87 US $ 0.90 Cash with Bak Rs Rs Rs CNY 0.04 CNY 0.04 CNY 0.06 Cash with Bak Rs Rs Rs US $ 0.00 US $ 0.03 US $ 0.01 ANNUAL REPORT

164 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) The Group s exposure to foreig currecy arises where a Group compay holds moetary assets ad liabilities deomiated i a currecy differet to the fuctioal currecy of that etity with Uited States Dollar beig the major foreig currecy exposure of the Group s mai operatig subsidiaries. Set out below is the impact of a 5% chage i the Uited States Dollar o profit ad equity arisig as a result of the revaluatio of the Group s foreig currecy fiacial istrumets: Closig Effect of 5% Effect of 5% 31 March 2017 exchage rate stregtheig of stregtheig of US $ o et US $ o total earigs equity Uited States Dollar (1,193.31) (1,193.31) Closig Effect of 5% Effect of 5% 31 March 2016 exchage rate stregtheig of stregtheig of US $ o et US $ o total earigs equity Uited States Dollar (1,094.09) (1,094.09) Equity price risk The Group's ivestmets i listed ad ulisted equity securities are susceptible to market price risk arisig from ucertaities about future values of the ivestmet securities. The Group maages the equity price risk through diversificatio ad placig limits o idividual ad total equity istrumets. The Board of Directors reviews ad approves all equity ivestmet decisios. At the reportig date, the Group s exposure to ulisted equity securities was Rs (31 March 2016: Rs.1,219.22; 1 April 2015: Rs.160) ad the exposure to listed equity securities at fair value was Rs (31 March 2016: Rs ; 1 April 2015: Rs.9.26). A decrease of 10% o the Idia market idex would have a after tax impact of Rs (31 March 2016: Rs. 1.28) o the icome or equity attributable to the Group, depedig o whether or ot the declie is sigificat ad prologed. A icrease of 10% i the value of the Idia market idex would impact icome or equity by similar amouts. Commodity price risk The Group is affected by the price volatility of certai commodities which is moderated by optimisig the procuremet uder fuel supply agreemet. Its operatig activities require the o-goig purchase or cotiuous supply of fuel. Therefore the Group moitors its purchases closely to optimise the price. Credit risk aalysis Credit risk is the risk that couterparty will ot meet its obligatios uder a fiacial istrumet or customer cotract, leadig to a fiacial loss. The Group is exposed to credit risk from its operatig activities (primarily for trade ad other receivables) ad from its ivestig activities, icludig short-term deposits with baks ad fiacial istitutios, ad other fiacial assets. The carryig value of fiacial assets represets the maximum exposure for credit risk. The maximum exposure to credit risk of each class of fiacial assets at the reportig date was as follows: Note Carryig value 31 March March April 2015 Ivestmets - At amortised cost Trade receivables 12 29, , , Short term deposits with baks 18 5, , , Loas 13 8, , , Other fiacial asset 14 1, , , , , , KSK ENERGY VENTURES LIMITED

165 Majority of trade receivable are secured by collateral ad other credit ehacemet ad amout reflected above are before ettig of such collateral ad other credit ehacemet. The Group has exposure to credit risk from a limited customer group o accout of supply of power. However, the Group esures cocetratio of credit does ot sigificatly impair the fiacial assets sice the customers to whom the exposure of credit is take are well established ad reputed idustries egaged i their respective field of busiess. The credit worthiess of customers to which the Group grats credit i the ormal course of the busiess is moitored regularly. The credit risk for liquid fuds ad other short-term fiacial assets is cosidered egligible, sice the couterparties are reputable baks with high quality exteral credit ratigs. The Group's/ Compay s maximum exposure for fiacial guaratees are oted i ote 35. The Group s maagemet believes that all the above fiacial assets, except as metioed i ote 12 & 13, are ot impaired for each of the reportig dates uder review ad are of good credit quality (refer ote 35) Liquidity risk aalysis The Group s mai source of liquidity is its operatig busiesses. The treasury departmet uses regular forecasts of operatioal cash flow, ivestmet ad tradig collateral requiremets to esure that sufficiet liquid cash balaces are available to service o-goig busiess requiremets. The Group maages its liquidity eeds by carefully moitorig scheduled debt servicig paymets for log-term fiacial liabilities as well as cash-outflows due i day-to-day busiess. Liquidity eeds are moitored i various time bads, o a day-to-day ad week-to-week basis, as well as o the basis of a rollig 90 day projectio. Log-term liquidity eeds for a 90 day ad a 30 day lookout period are idetified mothly. The Group requires fuds both for short-term operatioal eeds as well as for log-term ivestmet programmes maily i costructio projects for its power plats. As at 31 March 2017, the Group has et curret liabilities of Rs. 13, The Group cotiues to geerate cash flows from the curret operatios which are further expected to icrease with 3rd & 4th uit of KSK Mahaadi plat comig ito operatio i ext year ad better plat load factor i Sai Wardha. I additio, a umber of the facilities that are due to expire at 31 March 2018 are i the process of beig exteded ad have a rollover clause i a umber of cases ad the Group may refiace ad/or restructure certai short-term borrowigs ito log-term borrowigs ad will also cosider alterative sources of fiacig, where applicable. Further, the Group had sigificat udraw borrowig facilities, subject to certai coditios, amoutig to approximately Rs. 31, to meets its log term ivestmet programmes. The followig is a aalysis of the Group cotractual udiscouted cash flows payable uder fiacial liabilities at 31 March 2017: Curret No-curret withi years Later tha Total moths 5 years Borrowigs 54, , , , Trade payables 12, , Other fiacial liabilities 29, , Derivative liabilities , Total 96, , , , The followig is a aalysis of the Group cotractual udiscouted cash flows payable uder fiacial liabilities at 31 March 2016: Curret No-curret withi years Later tha Total moths 5 years Borrowigs 49, , , , Trade payables 9, , Other fiacial liabilities 22, , Derivative liabilities , , Total 81, , , , ANNUAL REPORT

166 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) The followig is a aalysis of the Group cotractual udiscouted cash flows payable uder fiacial liabilities at 1 April 2015: Curret No-curret withi years Later tha Total moths 5 years Borrowigs 40, , , , Trade payables 4, , Other fiacial liabilities 16, , , Derivative liabilities , , Total 62, , , , Capital maagemet Capital icludes equity attributable to the equity holders ad debt. The primary objective of the Group's capital maagemet is to esure that it maitais a strog credit ratig ad healthy capital ratios i order to support its busiess ad maximise shareholder value objectives iclude, amog others: Esure Group s ability to meet both its log-term ad short-term capital eeds as a goig cocer; Costatly evolve multiple fudig alteratives equity ad /or preferece capital, seior ad /or subordiated debt, corporate loa facilities to arrive at a optimal capital mix; Deploymet of capital i Special Purpose Vehicles ( SPVs ) i a timely maer ad as appropriate to the project developmet uder pursuit; Evolutio ad fialisatio of capital holdig levels i uderlyig SPV s, with balace capital cotributios by customers, coivestors (fiacial or otherwise), if ay; Periodic review of the existig capitalisatio levels i various parts of the busiess for potetial post costructio refiacig ad ay capital release(s) uder such refiacig; ad Fie tue capital deploymet decisios to eable adequate retur to shareholders. The Group maages its capital structure ad makes adjustmets to it, i light of chages i ecoomic coditios. To maitai or adjust the capital structure, the Group may adjust the divided paymet to shareholders, retur capital to shareholders or issue ew shares. No chages were made i the objectives, policies or processes durig the year eded 31 March 2017 ad 31 March The Group maitais a mixture of cash ad cash equivalets, log-term debt ad short-term committed facilities that are desiged to esure the Group has sufficiet available fuds for busiess requiremets. The Group et debt to equity ratio at the reportig date is as follows: As at As at As at 31 March March April 2015 Total borrowig 230, , , Less : Cash ad bak balaces (1,229.94) (537.60) (2,217.93) Less : Other bak balaces (5,350.19) (6,988.68) (7,478.77) Net debt 224, , , Equity 28, , , Total equity 28, , , Net debt to equity ratio KSK ENERGY VENTURES LIMITED

167 41 Fiacial Istrumets Carryig amouts versus fair values The fair values of fiacial assets ad fiacial liabilities, together with the carryig amouts i the Cosolidated statemet of fiacial positio are as follows: No- curret fiacial assets Carryig Fair Carryig Fair Carryig Fair amout value amout value amout value 31 March March April 2015 Ivestmets - At fair value through other comprehesive icome Ivestmets - At amortised cost Trade receivables Loas 2, , , , , , Other fiacial asset 1, , , , Derivative assets 2, , , , , , Total o-curret 6, , , , , , Curret fiacial assets Ivestmets - At amortised cost Trade receivables 29, , , , , , Cash ad bak balaces 1, , , , Other bak balaces 5, , , , , , Loas 6, , , , , , Other fiacial asset Total curret 42, , , , , , Total 49, , , , , , No- curret fiacial liabilities Borrowigs 204, , , , , , Other fiacial liabilities , , Derivative liabilities , , , , Total o-curret 205, , , , , , Curret fiacial liabilities Borrowigs 22, , , , , , Trade payables 12, , , , , , Other fiacial liabilities 34, , , , , , Derivative liabilities Total curret 69, , , , , , Total 275, , , , , , ANNUAL REPORT

168 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) 42 Fair value hierarchy The table below aalyses recurrig fair value measuremets for fiacial assets ad fiacial liabilities. These fair value measuremets are categorised i to differet levels i the fair value hierarchy based o the iputs to valuatio techiques used. The differet levels are defied as follows. Level 1: quoted prices (uadjusted) i active markets for idetical assets or liabilities. Level 2: iputs other tha quoted prices that is observable for the asset or liability, either directly or idirectly. Level 3: valuatio techiques that iclude iputs for the asset or liability that are ot based o observable market data (uobservable iputs). 31 March 2017 Level 1 Level 2 Level 3 Total Fiacial assets measured at fair value Equity securities - At fair value through other comprehesive icome Derivative assets - 2, , Total , , Fiacial liabilities measured at fair value Iterest rate swaps Optio premium payable - 1, , Foreig exchage forward cotract Total - 1, , The Group recogises trasfers betwee levels of the fair value hierarchy as of the ed of the reportig year durig which the trasfer has occurred. Durig the year eded 31 March 2017, there were o trasfers betwee Level 1 ad Level 2 fair value measuremets. Recociliatio of Level 3 fair value measuremets of fiacial assets: 31 March 2017 FVTOCI Total Uquoted Equities Opeig balace Total gais or losses: - i icome statemet i other comprehesive icome chage i fair value of fiacial asset - - foreig currecy traslatio differece - - Settlemets - - Trasfers ito level Closig balace KSK ENERGY VENTURES LIMITED

169 31 March 2016 Level 1 Level 2 Level 3 Total Fiacial assets measured at fair value Equity securities - At fair value through other comprehesive icome Derivative assets - 3, , Total , , Fiacial liabilities measured at fair value Iterest rate swaps Optio premium payable - 1, , Foreig exchage forward cotract Total - 1, , The Group recogises trasfers betwee levels of the fair value hierarchy as of the ed of the reportig year durig which the trasfer has occurred. Durig the year eded 31 March 2016, there were o trasfers betwee Level 1 ad Level 2 fair value measuremets. Recociliatio of Level 3 fair value measuremets of fiacial assets: 31 March 2016 FVTOCI Total Uquoted Equities Opeig balace Acquisitios Total gais or losses: - i icome statemet i other comprehesive icome chage i fair value of fiacial asset - - foreig currecy traslatio differece - - Settlemets - - Trasfers ito level Closig balace March 2015 Level 1 Level 2 Level 3 Total Fiacial assets measured at fair value Equity securities - At fair value through other comprehesive icome Derivative assets - 3, , Total , , Fiacial liabilities measured at fair value Iterest rate swaps Optio premium payable - 1, , Foreig exchage forward cotract Total - 2, , ANNUAL REPORT

170 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) Valuatio techiques Level 2 fair values for simple over-the-couter derivative fiacial istrumets are based o broker quotes. Those quotes are tested for reasoableess by discoutig expected future cash flows usig market iterest rate for a similar istrumet at the measuremet date. Fair values reflect the credit risk of the istrumet ad iclude adjustmets to take accout of the credit risk of the Group etity ad couterparty whe appropriate. Level 3 fair values for equity securities at FVTOCI has bee determied by usig Comparable Compay Aalyses. This is a relative valuatio techique which ivolves comparig that compay s valuatio multiples to those of its peers. The multiples cosider for the valuatio is price to book value which is the adjusted for differeces that are directly related to the characteristics of equity istrumets beig valued such as discoutig factor for size ad liquidity etc. 43 First-time adoptio of Id-AS The Group has adopted Id AS from 1 April, 2016 ad the date of trasitio to Id AS is 1 April, These beig the first fiacial statemets i compliace with Id AS, the impact of trasitio has bee accouted for i opeig reserves ad comparable periods have bee restated i accordace with Id AS First-time Adoptio of Idia Accoutig Stadards. A explaatio of how the trasitio from Previous GAAP to Id AS has affected the Compay's fiacial positio, fiacial performace ad cash flows is set out i the followig tables ad otes. Followig are the applicable Id AS 101 optioal exemptios ad madatory exceptios applied i the trasitio from previous GAAP to Id AS. a. Deemed cost of property, plat ad equipmet ad itagible assets The Group has elected to cotiue with the carryig value of all its property, plat ad equipmet ad itagible assets recogised as of 1 April, 2015 measured as per the previous GAAP ad use that carryig value as its deemed cost o trasitio date. b. Derecogitio of fiacial assets ad fiacial liabilities The Group has applied the derecogitio requiremets of fiacial assets ad fiacial liabilities prospectively for trasactios occurrig o or after trasitio date. c. Exchage differeces o log term foreig currecy borrowigs The Group has elected to cotiue the policy adopted for accoutig for exchage differeces arisig from traslatio of log-term foreig currecy moetary items outstadig ad recogised i the fiacial statemets for the period edig immediately before the begiig of the first Id AS fiacial reportig period as per the previous GAAP. d. Classificatio ad measuremet of fiacial assets The Group has assessed classificatio ad measuremet of fiacial assets o the basis of facts ad circumstaces that exist as o trasitio date. e. Impairmet of fiacial assets The Group has applied impairmet requiremets of Id AS 109 retrospectively; however, as permitted by Id AS 101, it has used reasoable ad supportable iformatio that is available without udue cost or effort to determie the credit risk at the date that fiacial istrumets were iitially recogised i order to compare it with the credit risk at the trasitio date. Id AS 101 requires a etity to recocile equity, total comprehesive icome ad cash flows for the prior periods. The followig tables represets the recociliatios from previous GAAP to Id AS. 168 KSK ENERGY VENTURES LIMITED

171 I) Recociliatio of equity as at 1 April 2015 (date of trasitio): I. ASSETS 1 No-curret assets Notes to first Previous Adjustmets ld AS -time GAAP * adoptio (a) Property plat ad equipmet 1 137, (3,130.14) 134, (b) Capital work i progress 2 52, (846.65) 51, (c) Goodwill 1, , (d) Other itagible assets (e) Itagible assets uder developmet (f) Fiacial asset (i)ivestmets (ii)trade receivables (154.81) (iii)loas 7 1, (168.81) 1, (iv)other fiacial asset (v)derivative assets 8 1, , , (g) Deferred tax assets (et) 9 8, , (h) Other o-curret assets 1, 7, 13 8, , , Curret assets 213, (1,030.77) 212, (a) Ivetories 1, , (b) Fiacial asset (i) Ivestmets (ii)trade receivables 9, , (iii)cash ad bak balaces 2, , (iv)other bak balaces 7, , (v)loas 4, , (vi)other fiacial asset (c) Curret tax assets (Net) (d) Other curret assets 1, 8, 13 5, (2,473.68) 2, , (2,473.68) 28, , (3,504.45) 241, ANNUAL REPORT

172 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) Notes to first Previous Adjustmets ld AS -time GAAP * adoptio II EQUITY AND LIABILITIES Equity (a) Equity share capital 11 4, (340.00) 4, (b) Other equity 20 28, (1,141.98) 27, , (1,481.98) 31, (c) No cotrollig iterest 6, , Total equity 38, (1,264.70) 37, No-curret liabilities (a) Fiacial liability (i)borrowigs 6, 10, 11, , (2,887.69) 155, (ii)other fiacial liabilities 10, 11 1, , (iii)derivative liabilities , , (b) Provisios (c) Deferred tax liabilities (et) (60.57) (d) Other o curret liabilities 11, , (491.77) 160, Curret liabilities (a) Fiacial liability (i)borrowigs 15, , (ii)trade payables 17 5, (129.75) 4, (iii)other fiacial liabilities 8, 13 23, (1,969.64) 21, (iv)derivative liabilities (b) Other curret liabilities (c) Short-term provisios (6.80) - (d) Curret Tax liability (Net) (7.81) , (1,747.98) 42, , (3,504.45) 241, * The Previous GAAP figures have bee reclassified to coform to IND AS presetatio requiremet for the purpose of this ote 170 KSK ENERGY VENTURES LIMITED

173 ii) Recociliatio of equity as at 31 March 2016: Notes to first Previous Adjustmets ld AS -time GAAP * adoptio I. ASSETS 1 No-curret assets (a) Property plat ad equipmet 1, , (2,918.79) 134, (b) Capital work i progress 2, 19 57, (720.54) 56, (c) Goodwill 15 2, (107.22) 1, (d) Other itagible assets 3 1, , (e) Itagible assets uder developmet (f) Fiacial asset (i) Ivestmets 4 1, , (ii)trade receivables (143.53) (iii)loas 7 1, (132.41) 1, (iv)other fiacial asset 7 2, , (v)derivative assets 8 1, , , (g) Deferred tax assets (et) 9 10, (222.58) 9, (h) Other o-curret assets 1, 7, 13 8, , , (2,111.06) 222, Curret assets (a) Ivetories 2, , (b) Fiacial asset (i) Ivestmets (ii)trade receivables 23, , (iii)cash ad bak balaces (iv)other bak balaces 6, , (v)loas 4, , (vi)other fiacial asset (c) Curret tax assets (Net) (d) Other curret assets 1, 8, 13 6, (2,305.60) 4, , (2,305.60) 43, No-curret assets held for sale , (4,269.90) 265, ANNUAL REPORT

174 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) Notes to first Previous Adjustmets ld AS -time GAAP * adoptio II EQUITY AND LIABILITIES Equity (a) Equity share capital 4, , (b) Other equity 20 23, (321.48) 23, , (321.48) 27, (c) No cotrollig iterest 7, (207.05) 7, Total equity 35, (528.53) 34, No-curret liabilities (a) Fiacial liability (i) Borrowigs 6, 10, 11, , (2,634.10) 166, (ii)other fiacial liabilities 10, (iii)derivative liabilities , , (b) Provisios (c) Deferred tax liabilities (et) (d) Other o curret liabilities 11, 12 1, (1,116.42) Curret liabilities (a) Fiacial liability 171, (1,796.64) 169, (i) Borrowigs 23, , (ii)trade payables 17 9, (235.70) 9, (iii)other fiacial liabilities 8, 13, 14 28, (2,250.55) 26, (iv)derivative liabilities (b) Other curret liabilities (c) Curret Tax liability (Net) (4.38) , (2,094.73) 60, Liabilities associates with o-curret assets held for sale 269, (4,269.90) 265, * The Previous GAAP figures have bee reclassified to coform to IND AS presetatio requiremet for the purpose of this ote 172 KSK ENERGY VENTURES LIMITED

175 iii) Recociliatio of total comprehesive icome for the year eded 31 March 2016: Notes to first Previous Adjustmets ld AS -time GAAP * adoptio I Reveue from operatios 16 43, (287.81) 43, II Other icome 7, 10, 11, III Total reveue (I+II) 44, (184.05) 44, IV Expeses Cost of fuel cosumed 17 20, (105.68) 20, Maufacturig expeses 3, (7.48) 3, Employee beefits expeses 8, (6.24) Other expeses 1, 2, 11, 16 2, (187.46) 2, Fiace costs 7, 8, 11, 19 17, (413.19) 17, Depreciatio ad amortisatio expeses 1 5, , Total expeses 50, (620.14) 49, V Profit / (loss) before exceptioal items ad tax (III - IV) (6,354.78) (5,918.69) VI Exceptioal items VII Profit / (loss) before tax (V - VI) (6,354.78) (5,918.69) VIII Tax expese / (icome) Curret tax For the year I respect of earlier years Less : MAT credit etitlemet 9 (68.86) (3.63) (72.49) Deferred tax 9 (1,421.48) (162.93) (1,584.41) Total tax expese / (icome) (1,416.07) (162.82) (1,578.89) IX Profit / (loss) after tax (VII - VIII) (4,938.71) (4,339.80) X Share of profit/(loss) of associate XI Profit / (loss) for the period (IX - X) (4,938.71) (4,339.80) Attributable to: Equity holders of the paret (4,562.12) (4,142.11) No-cotrollig iterest (376.59) (197.69) XII Other comprehesive icome (4,938.71) (4,339.80) Items that will ot be reclassified to profit or loss 18, Icome tax relatig to items that will ot be reclassified to profit or loss 9, Items that will be reclassified to profit or loss Other comprehesive icome for the period, et of tax Total comprehesive icome /(loss) (4,938.71) (4,331.64) Attributable to: Equity holders of the paret (4,562.12) (4,132.74) No -cotrollig iterest (376.59) (198.90) (4,938.71) (4,331.64) *The Previous GAAP figures have bee reclassified to coform to IND AS presetatio requiremet for the purpose of this ote ANNUAL REPORT

176 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) iv) Impact of Id AS adoptio o the statemet of cash flows for the year eded 31 March 2016: Notes to first Previous Adjustmets ld AS -time GAAP adoptio Net cash from operatig activities 22 4, , Net cash from ivestig activities 22 (2,298.61) (2,255.01) Net cash from fiacig activities 22 (4,140.94) (75.59) (4,216.53) Net icrease / (decrease) i cash ad cash equivalets (1,680.44) 0.02 (1,680.42) Cash ad cash equivalets as at 1 April , , Effect of exchage rate chages o cash ad cash equivalets (0.05) 0.09 Cash ad cash equivalets as at 31 March (0.03) Notes to first-time adoptio: 1 Lease: As per Id AS 17, paymets for leasehold lad uder a operatig lease (cosiderig that it has idefiite ecoomic life), shall be recogised as a expese o a straight-lie basis over the lease term uless aother systematic basis is more represetative of the time patter of the user s beefit. Amouts paid over ad above the lease retals due is show as prepaid expeses uder other assets. However uder previous GAAP the same has bee recorded ad classified uder Property, plat ad equipmet. 2 Capital work i progress: Id AS 16 Property, plat ad equipmet, specifically excludes geeral ad admiistrative expediture from beig capitalised ad require it to be charged to the statemet of profit ad loss i the year i which they icur. Whereas guidace uder previous GAAP permits capitalisatio of these costs provided they are specifically attributable to costructio of a project, to the acquisitio of a fixed asset or brigig it to its workig coditio. This chage has reduced the carryig amout of capital work i progress by Rs M with correspodig effect i profit or loss for the year eded 31 March Other itagible assets: Uder Id AS, cost of a item of property, plat ad equipmet or itagible assets icludes the iitial estimate of the costs of dismatlig ad removig the item ad restorig the site o which it is located, the obligatio for which a etity icurs either whe the item is acquired or as a cosequece of havig used the item durig a particular period for purposes other tha to produce ivetories durig that period. Such cost of decommissioig, restoratio or similar liability is to be added to or deducted from the cost of the asset to which it relates; the adjusted depreciable amout of the asset is the depreciated prospectively over its remaiig useful life. A first-time adopter will ot eed to estimate what provisio would have bee calculated at earlier reportig dates. Istead, the decommissioig liability is calculated at the date of trasitio ad it is assumed that the same liability (adjusted oly for the time value of moey) existed whe the asset was first acquired/ costructed. However uder previous GAAP, o such cocept exists. Due to this chage, profit or loss has reduced for the year eded 31 March 2016 by Rs M ad retaied earigs as at 1 April 2015 by Rs M o accout of icrease i amortisatio of such itagible. 4 Fair valuatio of Ivestmets: Uder the previous GAAP, ivestmets i equity istrumets ad mutual fuds were classified as log-term ivestmets or curret ivestmets based o the iteded holdig period ad realisability. Log-term ivestmets were carried at cost less provisio for other tha temporary declie i the value of such ivestmets. Curret ivestmets were carried at lower of cost ad fair value. 174 KSK ENERGY VENTURES LIMITED

177 Uder Id AS, these ivestmets are required to be measured at fair value or amortised cost. The resultig fair value chages of these ivestmets (other tha equity istrumets desigated as at FVOCI) have bee recogised i retaied earigs as at the date of trasitio ad subsequetly i the profit or loss for the year eded 31 March Fair value chages with respect to ivestmets i equity istrumets desigated as at FVOCI have bee recogised i FVOCI Equity ivestmets reserve as at the date of trasitio ad subsequetly i the other comprehesive icome for the year eded 31 March This decreased other reserves by Rs M as at 31 March 2016 (1 April Rs M). 5 Trade Receivables: Uder Id AS, the fair value of a log term receivable that carries o iterest shall be measured at the preset value of all future cash receipts discouted usig the prevailig market rate(s) of iterest for a similar istrumet. Cosequetly the total equity has decreased by Rs as at 31 March 2016 (as at 1 April 2015: Rs ) However uder previous GAAP, the same are carried at trasactio price. 6 Deferred paymet liabilities: Uder Id AS, the fair value of a log term payables that carries o iterest ca be measured as the preset value of all future cash paymets discouted usig the prevailig market rate(s) of iterest for a similar istrumet. However uder previous GAAP, the same are carried at trasactio price. The impact of measuremet at preset value o profit or loss for the year eded 31 March 2016 is Rs M with icrease i retaied earigs as o date of trasitio, 1 April 2015 is Rs M 7 Security deposits: Uder the previous GAAP, iterest free security deposits (that are refudable i cash o completio of the cotract term) are recorded at their trasactio value. Uder Id AS, all fiacial assets are required to be recogised at fair value. Accordigly, the group has fair valued these security deposits uder Id AS. Differece betwee the fair value ad trasactio value of the security deposit has bee recogised as prepaid expeses. 8 Fair valuatio of foreig currecy forward & optio cotract: Forward Cotract: Uder previous GAAP, the group applied the requiremets of Accoutig Stadard 11 - The effects of chages i foreig exchage rates, to accout for pricipal swap etered for hedgig foreig exchage risk related to recogised borrowigs. At the iceptio of the swap, the forward premium was separated ad amortised as expese over the teure of the swap. The uderlyig borrowig ad the swap were restated at the closig spot exchage rate. Uder Id AS, derivatives which are ot desigated as hedgig istrumets are fair valued with resultig chages beig recogised i profit or loss. The fair valuatio of swap resulted i a loss of Rs M as at 31 March 2016 (1 April 2015 Rs M). The uamortised premium amoutig to Rs M as at 31 March 2016 (1 April 2015 Rs M) was adjusted agaist retaied earigs ad amortised premium for the year eded 31 March 2016 of Rs M has bee reversed. Cosequetly, the total equity as at 31 March 2016 decreased by Rs M (1 April Rs M). The loss for the year eded 31 March 2016 icreased by Rs M as a result of the fair value chage o the pricipal swap ad reversal of the premium amortisatio. Optio cotract: As per Id AS, such derivative fiacial istrumets are iitially recogised at fair value o the date o which a derivative cotract is etered ito ad are subsequetly re-measured at fair value. Derivatives are carried as fiacial assets whe the fair value is positive ad as fiacial liabilities whe the fair value is egative. Cosequet to above, profit ad loss has icreased by Rs M for the year eded 31 March Deferred taxes: Idia GAAP requires deferred tax accoutig usig the icome statemet approach, which focuses o differeces betwee taxable profits ad accoutig profits for the period. Id AS 12 requires etities to accout for deferred taxes usig the balace sheet approach, which focuses o temporary differeces betwee the carryig amout of a asset or liability i the balace sheet ad its tax base. The applicatio of Id AS 12 approach has resulted i recogitio of deferred tax o ew ANNUAL REPORT

178 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) temporary differeces which was ot required uder Idia GAAP. I additio, the various trasitioal adjustmets lead to temporary differeces. Accordig to the accoutig policies, the Group has to accout for such differeces. Deferred tax adjustmets are recogised i correlatio to the uderlyig trasactio either i retaied earigs or a separate compoet of equity. O the date of trasitio, the et impact o deferred tax balaces is of Rs M (31 March 2016: Rs ). Moreover as per Id AS, balace of Mat credit etitlemet is recogised uder deferred icome taxes as the defiitio of deferred tax assets icludes the amouts of icome taxes recoverable i future period i respect of the carry forward of uused tax credits also. The same uder previous GAAP has bee recogised uder other o-curret assets. 10 Compoud fiacial istrumets: Uder Id AS 32, etities should split compoud fiacial istrumets ito separate equity ad liability compoets. Id AS 101 provides that if the liability compoet is o loger outstadig at the date of trasitio, a first-time adopter does ot have to separate it from the equity compoet. Uder previous GAAP the total amout of fiacial istrumets was required to be classified uder liability. Cosequet to above, total equity as at 31 March 2016 icreased by Rs M (1 April 2015: Rs. 1, M) Chage i the fair value of liability compoet at the ed of the reportig period is recogised as fiace cost for the period. Due to this, profit for the year eded 31 March 2016 has decreased by Rs M 11 Redeemable preferece shares The group has i issue redeemable preferece shares. The preferece shares carry fixed cumulative divided which is odiscretioary. Uder Idia GAAP, the preferece shares were classified as equity ad divided payable thereo was treated as distributio of profit. Uder Id AS, redeemable preferece shares are classified as liability based o the terms of the cotract. Iterest o liability compoet is recogised usig the effective iterest method. Thus the preferece share capital is reduced by Rs. Nil (1 April 2015: Rs M) with a correspodig icrease i borrowigs as liability compoet. Accordigly iterest expese ad divided tax for the year is recogised uder fiace costs due to which equity as at 31 March 2016 has reduced by Rs M (1 April 2015: Rs M) Further as per Id AS, sice ivestmet i preferece shares are held at amortised cost as the cotractual cash flows are solely paymets of iterest ad pricipal, iterest o such preferece shares have bee recogised as receivable from the issuer of such istrumets, as at 31 March 2016 amoutig to Rs M (as at 1 April Rs M) Whereas uder previous GAAP, divideds where recogised o preferece shares as ad whe declared by the issuer. 12 Deferred Reveue: As per Id AS, the o-refudable cotributios received from captive cosumers of the Group i the form of preferece shares redeemable at Rs. 1 at the ed of the agreemet are recogised as deferred reveue i the balace sheet ad trasferred to statemet of profit or loss o a systematic ad ratioal basis over life of the term of the relevat agreemet. However uder previous GAAP, the same are recogised uder share capital/ miority iterest. Due to this chage the loss for the year eded 31 March 2016 has decreased by Rs M ad retaied earigs as o 1 April 2015 icreased by Rs M 13 Borrowigs: Id AS 109 requires trasactio costs icurred towards origiatio of borrowigs to be deducted from the carryig amout of borrowigs o iitial recogitio. These costs are recogised i the profit or loss over the teure of the borrowig as part of the iterest expese by applyig the effective iterest rate method. 176 KSK ENERGY VENTURES LIMITED

179 Uder previous GAAP, these trasactio costs were charged to profit or loss (or capitalised as part of property plat ad equipmet) as ad whe icurred. Accordigly, borrowigs as at 31 March 2016 have bee reduced by Rs. 2, M (1 April Rs. 2, M) with correspodig adjustmet of Rs M (1 April 2015: Rs M) to property, plat ad equipmet (et of cumulative depreciatio impact), to capital work i progress of Rs M (1 April Rs M), to retaied earigs of Rs M (1 April Rs M) ad balace to uamortised portio of processig fee of Rs M (1 April Rs M) 14 Assets classified as held for sale: Uder previous GAAP, the cocept of disposal group held for sale does ot exist. Accordigly, assets ad liabilities of disposal group have ot bee preseted as held for sale. The group has disclosed property, plat ad equipmet held for sale uder No curret assets i accordace with AS 10 Accoutig for Fixed Assets. Id AS 105 No-curret Assets Held for Sale ad Discotiued Operatios requires disposal group to be idetified as held for sale if the carryig amout will recovered pricipally through a sale trasactio rather tha through cotiuig use ad a sale is cosidered highly probable. Cosequetly, the assets ad liabilities held for sale have bee preseted separately from the other assets ad other liabilities respectively i the balace sheet. There is o impact o the total equity or profit as a result of this adjustmet. 15 Goodwill: As per Id AS 110 Cosolidated Fiacial Statemets, chages i a paret s owership iterest after cotrol is obtaied that do ot result i a chage i cotrol of the subsidiary are accouted for as equity trasactios. Thus, if the paret maitais cotrol, it will recogise o gai or loss i the statemet of profit or loss upo sellig a subsidiary s shares. Similarly, the paret will ot record ay additioal goodwill to reflect its subsequet purchases of additioal shares i a subsidiary if there is o chage i cotrol. Istead, the carryig amout of the o-cotrollig iterest will be adjusted to reflect the chage i the o-cotrollig iterest s owership iterest i the subsidiary. Ay differece betwee the amout by which the ocotrollig iterest is adjusted ad the fair value of the cosideratio paid or received is recogised i equity ad attributed to the paret s equity holders. The group has recogised the differece betwee the amout by which o-cotrollig iterest is adjusted ad the fair value of the cosideratio paid i other reserves withi equity. 16 Reveue: As per defiitio of Reveue uder Id AS 18, the Compay will recogise reveue at the fair value of cosideratio received or receivable. Ay sales icetive, discouts or rebates i ay form, icludig cash discouts give to customers will be cosidered as sellig price reductios ad accouted as reductio from reveue. Uder previous GAAP, some of these costs were icluded i Other expeses. 17 Strippig cost: Uder previous GAAP, Strippig costs icurred durig the productio stage of a mie are deferred based o the strippig ratio ad charged to the icome statemet. However as per Id AS, the cost of ormal o-goig operatioal strippig activities is accouted for i accordace with Id AS 2 - Ivetories. The strippig activity asset is accouted for as a additio to, or as a ehacemet of, a existig asset ad classified as tagible or itagible accordig to the ature of the existig asset of which it form parts. Due to this chage, loss for the period eded 31 March 2016 reduced by Rs M o accout of decrease i cost of cosumptio (as at 1 April 2015: Rs ) 18 Re-measuremets of post-employmet beefit obligatios: Uder Id AS, re-measuremets i.e. actuarial gais ad losses ad the retur o pla assets, excludig amouts icluded i the et iterest expese o the et defied beefit liability are recogised i other comprehesive icome istead of profit or loss. Uder the previous GAAP, these re-measuremets were formig part of the profit or loss for the year. As a result of this ANNUAL REPORT

180 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) chage, the profit for the year eded March 31, 2016 decreased by Rs M. There is o impact o the total equity as at 31 March Borrowig cost: Id AS 23 recogises the cocept of group borrowig costs wherei, i some circumstaces it is appropriate for the group to iclude all borrowigs of the paret ad its subsidiaries whe computig a weighted average of the borrowig costs; i other circumstaces, it is appropriate for each subsidiary to use a weighted average of the borrowig costs applicable to its ow borrowigs. Uder previous GAAP, this optio is ot available. Accordigly, loss for the period eded 31 March 2016 decreased by Rs M as a result of decrease i fiace cost expese. 20 Retaied earigs: Retaied earigs as at 1 April 2015 ad 31 March 2016 has bee adjusted, cosequet to the above Id AS trasitio adjustmets. 21 Other comprehesive icome: Uder Id AS, all items of icome ad expese recogised i a period should be icluded i profit or loss for the period, uless a stadard requires or permits otherwise. Items of icome ad expese that are ot recogised i profit or loss but are show i the statemet of profit ad loss as other comprehesive icome icludes re-measuremets of defied beefit plas, foreig exchage differeces arisig o traslatio of foreig operatios, effective portio of gais ad losses o cash flow hedgig istrumets ad fair value gais or (losses) o FVOCI equity istrumets. The cocept of other comprehesive icome did ot exist uder previous GAAP. 22 Statemet of cash flows: The trasitio from previous GAAP to Id AS has ot had a material impact o the statemet of cash flows. 178 KSK ENERGY VENTURES LIMITED

181 44 Additioal Iformatio, as required uder Schedule III to the Compaies Act, 2013, of eterprises cosolidated as Subsidiary / Associates / Joit operatios Net Assets, i.e., total Share i Share i other Share i total assets mius total profit or (loss) comprehesive comprehesive liabilities icome icome 31 March 2017 As % of As % of As % of As % of cosolidated cosolidated cosolidated cosolidated et assets Amout profit or loss Amout profit or loss Amout profit or loss Amout Paret % 31, % (875.01) 2.28 % % (874.95) Subsidiaries Idia Sai Wardha Power Geeratio Limited (3.96)% (3,051.58) 2.60 % (183.25) % % (182.08) Field Miig ad Ispats Limited 0.00 % % (0.09) 0.00 % % (0.09) VS Ligite Power Private Limited (2.64)% (2,032.25) % (1,591.01) 5.70 % % (1,590.86) Sai Maithili Power Compay Private Limited 0.47 % % (12.88) 9.89 % % (12.62) Sai Lilagar Power Geeratio Limited (0.63)% (483.82) % (855.64) 4.94 % % (855.51) KSK Electricity Fiacig Idia Private Limited 6.24 % 4, (1.53)% % 0.02 (1.53)% Sai Regecy Power Corporatio Private Limited 4.47 % 3, (2.29)% % 0.39 (2.30)% KSK Wid Eergy Halagali Bechi Private Limited 0.15 % (0.13)% % - (0.13)% 9.13 KSK Wid Eergy Mothalli Haveri Private Limited 0.05 % (0.19)% % - (0.19)% KSK Wid Power Sakoahatti Athi Private Limited 0.11 % (0.15)% % - (0.15)% KSK Mahaadi Power Compay Limited % 34, % (3,526.06) (117.49)% (3.09) % (3,529.15) KSK Water Ifrastructures Private Limited 2.65 % 2, % (219.32) % % (213.71) KSK Wid Eergy Private Limited (0.23)% (173.59) 0.18 % (12.94) (63.12)% (1.66) 0.21 % (14.60) Kameg Dam Hydro Power Limited 1.22 % % (1.94) 0.00 % % (1.94) KSK Dibbi Hydro Power Private Limited 1.39 % 1, (0.12)% % - (0.12)% 8.37 KSK Narmada Power Compay Private Limited 0.00 % % (0.01) 0.00 % % (0.01) KSK Wardha Ifrastructure Private Limited 0.00 % 1.76 (0.00)% % - (0.00)% 0.15 KSK Vidarbha Power Compay Private Limited (0.00)% (2.07) 0.00 % (0.02) 0.00 % % (0.02) J R Power Ge Private Limited 1.71 % 1, % (1.04) 0.00 % % (1.04) KSK Upper Subasiri Hydro Eergy Limited 1.92 % 1, % (0.33) 0.00 % % (0.33) KSK Jameri Hydro Power Private Limited 0.07 % % (0.11) 0.00 % % (0.11) KSK Dichag Power Compay Private Limited 0.09 % % (0.03) 0.00 % % (0.03) KSK Surya Photovoltaic Veture Limited 1.35 % 1, % (0.60) (15.59)% (0.41) 0.01 % (1.01) KSK Wid Power Amiabhavi Chikodi Private Limited 0.07 % (0.18)% % - (0.18)% Foreig Tila Karali Hydro Electric Compay Private Limited 0.09 % % (0.33) 0.00 % % (0.33) Bheri Hydro Power Compay Private Limited 0.01 % % (0.02) 0.00 % % (0.02) Sai Power Pte LTD (0.25)% (194.31) 1.00 % (70.66) 0.00 % % (70.66) Global Coal Sourcig Plc 0.13 % (0.60)% % - (0.60)% Associates Idia Raigarh Champa Rail Ifrastructure Private Limited 0.75 % % (68.71) % (68.71) ANNUAL REPORT

182 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) Net Assets, i.e., total Share i Share i other Share i total assets mius total profit or (loss) comprehesive comprehesive liabilities icome icome 31 March 2017 As % of As % of As % of As % of cosolidated cosolidated cosolidated cosolidated et assets Amout profit or loss Amout profit or loss Amout profit or loss Amout Joit Operatios Idia Sitapuram Power Limited (0.04)% (31.37) 0.11 % (8.08) 0.00 % % (8.08) 100% 77, % (7,061.17) 100% % (7,058.54) No-cotrollig iterest i all subsidiaries - 6, (2.43) Adjustmets arisig out of cosolidatio - (55,394.23) (1.29) Cosolidated et assets / Share i total - 28, (6,359.76) - (1.09) - (6,360.85) comprehesive icome 180 KSK ENERGY VENTURES LIMITED

183 Net Assets, i.e., total Share i Share i other Share i total assets mius total profit or (loss) comprehesive comprehesive liabilities icome icome 31 March 2016 As % of As % of As % of As % of cosolidated cosolidated cosolidated cosolidated et assets Amout profit or loss Amout profit or loss Amout profit or loss Amout Paret % 32, % (376.04) % % (374.51) Subsidiaries (Group's share) Idia Sai Wardha Power Geeratio Limited (3.57)% (2,869.50) % (2,433.44) (16.58)% (1.33) % (2,434.77) Field Miig ad Ispats Limited 0.00 % % (0.02) 0.00 % % (0.02) VS Ligite Power Private Limited (0.55)% (441.39) % (688.74) (16.83)% (1.35) % (690.09) Sai Maithili Power Compay Private Limited 0.47 % (0.06)% % 0.17 (0.07)% 3.01 Sai Lilagar Power Geeratio Limited 0.46 % % (201.06) (5.74)% (0.46) 4.49 % (201.52) KSK Electricity Fiacig Idia Private Limited 5.85 % 4, % (104.14) (1.12)% (0.09) 2.32 % (104.23) Sai Regecy Power Corporatio Private Limited 4.09 % 3, (9.55)% (15.84)% (1.27) (9.54)% KSK Mahaadi Power Compay Limited % 36, % (949.58) (25.69)% (2.06) % (951.64) KSK Wid Eergy Private Limited (0.20)% (158.98) 0.41 % (18.23) % % (4.80) Kameg Dam Hydro Power Limited 1.17 % % (3.45) 0.00 % % (3.45) KSK Dibbi Hydro Power Private Limited 1.32 % 1, (0.18)% % - (0.18)% 7.88 KSK Narmada Power Compay Private Limited 0.00 % % % % - KSK Wardha Ifrastructure Private Limited 0.00 % 1.61 (0.00)% % - (0.00)% 0.11 KSK Vidarbha Power Compay Private Limited (0.00)% (2.06) 0.00 % (0.02) 0.00 % % (0.02) J R Power Ge Private Limited 1.64 % 1, % (1.59) 0.00 % % (1.59) KSK Upper Subasiri Hydro Eergy Limited 1.85 % 1, % (0.37) 0.00 % % (0.37) KSK Jameri Hydro Power Private Limited 0.06 % % (0.11) 0.00 % % (0.11) KSK Dichag Power Compay Private Limited 0.09 % % (0.05) 0.00 % % (0.05) KSK Surya Photovoltaic Veture Limited 1.30 % 1, % (0.84) 0.25 % % (0.82) KSK Wid Power Amiabhavi Chikodi Private Limited 0.05 % (0.25)% % - (0.25)% Foreig Tila Karali Hydro Electric Compay Private Limited 0.09 % % (0.56) 0.00 % % (0.56) Bheri Hydro Power Compay Private Limited 0.01 % % (0.04) 0.00 % % (0.04) Sai Power Pte LTD (0.16)% (128.71) 1.24 % (55.66) 0.00 % % (55.66) Global Coal Sourcig Plc (0.13)% (103.98) 2.55 % (114.92) 0.00 % % (114.92) ANNUAL REPORT

184 Notes to Cosolidated fiacial statemets (All amouts i Idia Rupees millio, except share data ad where otherwise stated) Net Assets, i.e., total Share i Share i other Share i total assets mius total profit or (loss) comprehesive comprehesive liabilities icome icome 31 March 2016 As % of As % of As % of As % of cosolidated cosolidated cosolidated cosolidated et assets Amout profit or loss Amout profit or loss Amout profit or loss Amout Associates Idia Raigarh Champa Rail Ifrastructure Private Limited 0.81 % % % % - KSK Water Ifrastructures Private Limited 0.50 % % % % - Joit Operatios Idia Sitapuram Power Limited (0.03)% (23.30) 0.09 % (4.12) (7.11)% (0.57) 0.10 % (4.69) 100% 80, % (4,500.90) 100% % (4,492.88) No-cotrollig iterest i all subsidiaries - (7,244.06) Adjustmets arisig out of cosolidatio - (38,167.70) Cosolidated et assets / Share i total - 34, (4,142.11) (4,132.74) comprehesive icome 182 KSK ENERGY VENTURES LIMITED

185 45 Disclosure o Specified Bak Notes (SBNs) Durig the year, the Group had specified bak otes or other deomiatio ote as defied i the MCA otificatio G.S.R. 308(E) dated March 30, 2017 o the details of Specified Bak Notes (SBN) held ad trasacted durig the period from November 8, 2016 to December, , the deomiatio wise SBNs ad other otes as per the otificatio is give below: Particulars SBNs* Other Total deomiatio otes Closig cash i had as o November 8, (+) Permitted receipts (-) Permitted paymets - (2.63) (2.63) (-) Amout deposited i Baks (2.48) (0.00) (2.48) Closig cash i had as o December 30, * For the purposes of this clause, the term Specified Bak Notes shall have the same meaig provided i the otificatio of the Govermet of Idia, i the Miistry of Fiace, Departmet of Ecoomic Affairs umber S.O. 3407(E), dated the 8th November, KSK Power Holdigs Limited has ot exercised the right of coversio of balace 6,98,56,800 share warrats withi stipulated time i.e. 17th April Accordigly, as per the terms of issue, the warrats has lapsed ad Rs. 1, received as subscriber s moey towards the 6,98,56,800 share warrats stads forfeited ad credited to capital reserve. As per our report of eve date For Umamaheswara Rao & Co., Chartered Accoutats Firm Registratio No: S for ad o behalf of the Board Sd/- Sd/- Sd/- Sd/- Sd/- R R Dakshiamurthy S. Kishore K. A. Sastry V. Sambasiva Rao M. S. Phai Sekhar Parter Whole-time Director Whole-time Director Chief Fiacial officer Compay Secretary Membership No: DIN DIN Place: Hyderabad Date: 27 May 2017 ANNUAL REPORT

186 Statemet cotaiig saliet features of the fiacial statemet of Subsidiaries/Associate Compaies/Joit Operatios (Pursuat to first proviso to sub-sectio (3) of sectio 129 read with rule 5 of Compaies (Accouts) Rules, 2014) i the prescribed Form AOC-1 relatig to subsidiary compaies) Part A : Subsidiaries Sl. Name of the Reportig Reportig Exchage Share Other Total Total Ivestmets Turover Profit / Provisio Profit after Proposed % of Date of No Subsidiary period currecy Rate as at capital equity assets Liabilities (loss) for taxatio taxatio Divided share- acquisitio Compay 31 March (Excludig before - holdig 2017 share taxatio capital ad reserves) 1 Sai Wardha 31-Mar-17 Idia 1 4, (5,740.00) 40, , , (183.75) Jul-06 Power Geeratio Rupee Limited 2 Field Miig ad 31-Mar-17 Idia (0.06) (0.03) - (0.03) Feb-11 Ispats Limited Rupee 3 VS Ligite Power 31-Mar-17 Idia 1 1, (3,563.13) 9, , (1,684.73) (6.50) (1,678.23) Ju-07 Private Limited Rupee 4 Sai Maithili Power 31-Mar-17 Idia , (12.83) Jul-06 Compay Private Rupee Limited 5 Global Coal 31-Mar-17 GBP (0.72) (0.39) - (0.39) Ju-15 Sourcig Plc (GBP) 6 Global Coal 31-Mar-17 Idia (78.96) 1, (35.16) - (35.16) Ju-15 Sourcig Plc (INR) Rupee 7 Sai Lilagar Power 31-Mar-17 Idia (1,238.82) 5, , (855.64) - (855.64) Ju-07 Geeratio Rupee Limited 8 KSK Electricity 31-Mar-17 Idia 1 5, (893.22) 16, , , Ja-08 Fiacig Idia Rupee Private Limited 9 Sai Regecy 31-Mar-17 Idia , , , , , Ju-07 Power Corporatio Rupee Private Limited 10 KSK Wid Eergy 31-Mar-17 Idia Ja-17 Halagali Bechi Rupee Private Limited 11 KSK Wid Eergy 31-Mar-17 Idia Ja-17 Mothalli Haveri Rupee Private Limited 12 KSK Wid Power 31-Mar-17 Idia Ja-17 Sakoahatti Rupee Athi Private Limited 13 KSK Mahaadi 31-Mar-17 Idia 1 36, (1,961.97) 229, , , , (5,339.55) (1,813.50) (3,526.06) Ju-09 Power Compay Rupee Limited 14 Sai Power Pte 31-Mar-17 USD (3.09) (1.05) - (1.05) Ja-13 LTD (USD) 184 KSK ENERGY VENTURES LIMITED

187 Sl. Name of the Reportig Reportig Exchage Share Other Total Total Ivestmets Turover Profit / Provisio Profit after Proposed % of Date of No Subsidiary period currecy Rate as at capital equity assets Liabilities (loss) for taxatio taxatio Divided share- acquisitio Compay 31 March (Excludig before - holdig 2017 share taxatio capital ad reserves) 15 Sai Power Pte 31-Mar-17 Idia (199.78) 1, , (70.66) - (70.66) Ja-13 LTD (INR) Rupee 16 KSK Water 31-Mar-17 Idia 1 1, , , (162.73) (219.32) Apr-16 Ifrastructures Rupee Private Limited 17 KSK Wid 31-Mar-17 Idia (178.59) (12.94) - (12.94) Jul-06 Eergy Private Rupee Limited 18 Kameg Dam 31-Mar-17 Idia , (1.94) - (1.94) Dec-07 Hydro Power Rupee Limited 19 KSK Dibbi 31-Mar-17 Idia , Dec-07 Hydro Power Rupee Private Limited 20 KSK Narmada 31-Mar-17 Idia (0.04) (0.01) - (0.01) Jul-06 Power Compay Rupee Private Limited 21 KSK Wardha 31-Mar-17 Idia Jul-06 Ifrastructure Rupee Private Limited 22 KSK Vidarbha 31-Mar-17 Idia (2.18) (0.02) - (0.02) Jul-06 Power Compay Rupee Private Limited 23 J R Power Ge 31-Mar-17 Idia , , (1.04) - (1.04) Ja-08 Private Limited Rupee 24 KSK Upper 31-Mar-17 Idia , , (0.33) - (0.33) Ju-10 Subasiri Hydro Rupee Eergy Limited 25 KSK Jameri 31-Mar-17 Idia (0.11) - (0.11) Dec-10 Hydro Power Rupee Private Limited 26 KSK Dichag 31-Mar-17 Idia (0.03) - (0.03) Dec-10 Power Compay Rupee Private Limited 27 Bheri Hydro 31-Mar-17 Nepallie (3.03) - - (0.04) - (0.04) Feb-12 Power Compay Rupee Private Limited (NR) 8 ANNUAL REPORT

188 Sl. Name of the Reportig Reportig Exchage Share Other Total Total Ivestmets Turover Profit / Provisio Profit after Proposed % of Date of No Subsidiary period currecy Rate as at capital equity assets Liabilities (loss) for taxatio taxatio Divided share- acquisitio Compay 31 March (Excludig before - holdig 2017 share taxatio capital ad reserves) 28 Bheri Hydro 31-Mar-17 Idia (1.85) - - (0.02) - (0.02) Feb-12 Power Compay Rupee Private Limited (NR) 29 Tila Karali 31-Mar-17 Nepallie (14.01) (0.54) - (0.54) Sep-10 Hydro Electric Rupee Compay Private Limited (NR) 30 Tila Karali 31-Mar-17 Idia (9.05) (0.33) - (0.33) Sep-10 Hydro Electric Rupee Compay Private Limited (INR) 31 KSK Surya 31-Mar-17 Idia , (0.60) - (0.60) Feb-08 Photovoltaic Rupee Veture Limited 32 KSK Wid Power 31-Mar-17 Idia Ja-16 Amiabhavi Rupee Chikodi Private Limited 1 Names of subsidiaries which are yet to commece operatios : Field Miig ad Ispats Limited, Kameg Dam Hydro Power Limited, KSK Dibbi Hydro Power Private Limited, KSK Narmada Power Compay Private Limited, KSK Wardha Ifrastructure Private Limited, KSK Vidarbha Power Compay Private Limited, J R Power Ge Private Limited, KSK Upper Subasiri Hydro Eergy Limited, KSK Jameri Hydro Power Private Limited, KSK Dichag Power Compay Private Limited, Bheri Hydro Power Compay Private Limited, Tila Karali Hydro Electric Compay Private Limited, KSK Surya Photovoltaic Veture Limited, KSK Wid Power Amiabhavi Chikodi Private Limited, KSK Wid Eergy Halagali Bechi Private Limited, KSK Wid Eergy Mothalli Haveri Private Limited ad KSK Wid Power Sakoahatti Athi Private Limited. 2 Names of subsidiaries which have bee liquidated or sold durig the year. Noe 3 Sai Lilagar Power Geeratio Limited, VS Ligite Power Private Limited, Sai Regecy Power Corporatio Private Limited,KSK Wid Eergy Halagali Bechi Private Limited, KSK Wid Eergy Mothalli Haveri Private Limited, KSK Wid Power Sakoahatti Athi Private Limited ad Sai Wardha Power Geeratio Limited are subsidiaries of KSK Electricity Fiacig Idia Private Limited, which is 100% subsidiary of the Compay. 4 Global Coal Sourcig Plc is a subsidiary of Sai Lilagar Power Geeratio Limited. 5 Field Miig Ispats Limited is a subsidiary of Sai Wardha Power Geeratio Limited 6 Sai Power Pte LTD ad KSK Water Ifrastructures Private Limited are subsidiaries of KSK Mahaadi Power Compay Limited 7 Sai Maithili Power Compay Private Limited is a subsidiary of VS Ligite Power Private Limited. 8 The fiacial year of the subsidiary eds o 15 July every year, however for the purpose of cosolidatio the accouts of the subsidiary is beig prepared ad cosidered upto 31 March KSK ENERGY VENTURES LIMITED

189 Busiess Review Statutory Report Fiacial Statemets Part B : Associates ad Joit Operatios Statemet pursuat to Sectio 129 (3) of the Compaies Act, 2013 related to Associate Compaies ad Joit Operatios Sl. Name of Latest Shares of Associate/Joit Operatio held Descriptio of Reaso why Networth Profit / (Loss) for the year Date of No Associate audited by the compay o the year ed how there the Associate/ attributable to acquisitio /Joit Balace is sigificat Joit operatio Shareholdig Operatio Sheet No. Amout of Exted of ifluece is ot as per latest Cosidered i Not Cosidered Date Ivestmet Holdig % cosolidated audited Cosolidatio i Cosolidatio i Associate/ Balace Joit Sheet Operatio 1 Sitapuram 31-Mar-17 2,440, There is NA (31.53) (8.08) - 31-Aug-06 Power sigificat 3 Limited ifluece due to shareholdig ad joit cotrol over the ecoomic activities. 2 Raigarh 31-Mar-17 65,018, There is NA (68.71) - 30-Mar-16 Champa Rail sigificat Ifrastructure ifluece due Private Limited to shareholdig 1 Sitapuram Power Limited is a joit veture of KSK Electricity Fiacig Idia Private Limited, which is 100% subsidiary of the Compay. 2 Raigarh Champa Rail Ifrastructure Private Limited is associate of KSK Mahaadi Power Compay Limited. 3 The fiacial year of the joit operatio eds o 31 December every year, however for the purpose of cosolidatio the accouts of the joit operatio is beig prepared ad cosidered upto 31 March Names of associates or joit vetures which are yet to commece operatios: Noe 5 Names of associates or joit vetures which have bee liquidated or sold durig the year: Noe for ad o behalf of the Board Sd/- Sd/- Sd/- Sd/- S. Kishore K. A. Sastry V. Sambasiva Rao M. S. Phai Sekhar Place: Hyderabad Whole-time Director Whole-time Director Chief Fiacial officer Compay Secretary Date: 27 May 2017 DIN DIN ANNUAL REPORT

190 Notice of the Aual Geeral Meetig Notice is hereby give that the Seveteeth Aual Geeral Meetig of the Members of the Compay will be held o Moday, 25 September 2017 at Plot No. 694, Road No. 33, Jubilee Hills, Hyderabad , Telagaa, Idia at A.M. to trasact the followig busiess: ORDINARY BUSINESS: 1. To receive, cosider ad adopt the audited fiacial statemets (icludig cosolidated fiacial statemets) of the Compay for the fiacial year eded 31 March 2017 ad the reports of the Board of Directors ad Auditors thereo. 2. To re-appoit Mr. K. Bapi Raju (DIN: ), who retires by rotatio ad who beig eligible, offers himself for reappoitmet as a Director. 3. To appoit Statutory Auditors of the Compay ad fix their remueratio. To cosider ad, if thought fit, to pass, with or without modificatio(s), the followig resolutio as a Ordiary Resolutio: "RESOLVED THAT pursuat to the provisios of Sectio 139, 142 ad other applicable provisios, if ay, of the Compaies Act, 2013 ("Act") (icludig ay statutory modificatios or re-eactmet thereof, for the time beig i force) ad the Compaies (Audit ad Auditors) Rules, 2014, as ameded from time to time, M/s. Jawahar ad Associates, Chartered Accoutats, Hyderabad (Firm Registratio No S) be ad is hereby appoited as the Statutory Auditors of the Compay, to hold office for a period of five years from the coclusio of this Aual Geeral Meetig ("AGM") till the coclusio of twety secod AGM to be held i the caledar year 2022 (subject to ratificatio of their appoitmet at every AGM if so required uder the Act), at such remueratio, as may be mutually agreed betwee the Board of Directors of the Compay ad the Statutory Auditors." SPECIAL BUSINESS: 4. To cosider ad if thought fit, to pass with or without modificatio(s), the followig resolutio as a Special Resolutio: "RESOLVED THAT pursuat to Sectio 23, 41, 42, 62, 71 ad other applicable provisios, if ay, of the Compaies Act, 2013 (icludig ay statutory modificatios or re-eactmet thereof, for the time beig i force) ad the applicable rules made thereuder ad subject to ad i accordace with ay other applicable law or regulatio, i Idia or outside Idia, icludig without limitatio, the provisios of the Securities ad Exchage Board of Idia (Issue of Capital ad Disclosure Requiremets) Regulatios, 2009 (the "SEBI ICDR Regulatios") (icludig ay statutory modificatio or re-eactmet thereof, for the time beig i force), Securities ad Exchage Board of Idia (Listig Obligatios ad Disclosure Requiremets) Regulatios, 2015, the provisios of Foreig Exchage Maagemet Act, 1999, as ameded, icludig the Foreig Exchage Maagemet (Trasfer or Issue of Security by a Perso Residet Outside Idia) Regulatios, 2000, as ameded, the Issue of Foreig Currecy Covertible Bods ad Ordiary Shares (Through Depository Receipt Mechaism) Scheme, 1993, as ameded, ad i accordace with the rules, regulatios, guidelies, otificatios, circulars ad clarificatios issued thereo from time to time by the Govermet of Idia ("GOI"), the Reserve Bak of Idia ("RBI"), the Securities ad Exchage Board of Idia ("SEBI"), the Registrar of Compaies (the "RoC") ad/ or ay other competet authorities ad subject to ay required approvals, cosets, permissios ad / or sactios of ay Govermet Departmet(s), the SEBI, the RoC, the RBI ad ay other appropriate statutory, regulatory or other authority ad subject to such coditios ad modificatios as may be prescribed, stipulated or imposed by ay of them while gratig such approvals, cosets, permissios ad / or sactios, which may be agreed to by the Board of Directors of the Compay (hereiafter called the "Board" which term shall be deemed to iclude ay committee which the Board has costituted or may hereiafter costitute to exercise its powers icludig the power coferred by this Resolutio), the coset, authority ad approval of the Compay be ad is hereby accorded to the Board to create, issue, offer ad allot (icludig with provisios for reservatio o firm ad/or competitive basis, of such part of issue ad for such categories of persos icludig employees of the Compay as may be permitted), through a placemet documet/offer documet ad/or prospectus ad/or offer letter ad/or offerig circular, from time to time, i oe or more traches, whether rupee deomiated or deomiated i foreig currecy, i the course of iteratioal ad/or domestic offerig(s) i oe or more foreig markets ad/or domestic market, for a value of up to ` 5,000 Crores or ay other currecies, represetig such umber of Equity Shares, Preferece Shares whether Cumulative or No-cumulative / Redeemable / Covertible at the optio of the Compay ad / or at the optio of the 188 KSK ENERGY VENTURES LIMITED

191 holders of the security, Global Depository Receipts (GDRs), America Depository Receipts (ADRs), Foreig Currecy Covertible Bods (FCCBs), Foreig Currecy Exchageable Bods (FCEBs) ad/or Equity Shares through Depository Receipt Mechaism ad/or Fully Covertible Debetures (FCDs) ad/or through a Istitutioal Placemet program uder Chapter VIII of the ICDR Regulatios ad/or No- Covertible Debetures (NCDs) with or without warrats, or ay other fiacial istrumets covertible ito or liked to Equity Shares ad/or ay other istrumets ad/or combiatio of istrumets with or without detachable warrats with a right exercisable by the warrat holders to covert or subscribe to the Equity Shares or otherwise, i registered or bearer form (hereiafter collectively referred to as the "Securities") or ay combiatio of Securities to ay eligible ivestors icludig but ot limited to foreig /o-residet or residet ivestors whether qualified istitutioal buyers, istitutios/baks, icorporated bodies, mutual fuds, trustees, stabilizig aget or otherwise, foreig istitutioal ivestors, veture capital fuds, foreig veture capital ivestors, qualified foreig ivestors, alterative ivestmet fuds, multilateral ad bilateral fiacial istitutios, State Idustrial Developmet Corporatios, isurace compaies, providet fuds, pesio fuds, isurace fuds set up by army, avy or air force of the Uio of Idia, isurace fuds ad/or idividuals, bodies corporate, compaies (private or public) or other etities, authorities ad/or ay other categories of ivestors, whether they be holders of equity shares of the Compay or ot (collectively called the "Ivestors") icludig allotmet i exercise of a gree shoe optio, if ay, by the Compay, through private placemet(s) or public issue(s), at such time or times, at such price or prices, at a discout or premium to the market price or prices, icludig discouts as permitted uder applicable law i such maer ad o such terms ad coditios icludig security, rate of iterest, coversio etc., as may be decided by ad deemed appropriate by the Board i its absolute discretio icludig the discretio to determie the categories of ivestors to whom the offer, issue ad allotmet shall be made to the exclusio of all other categories of ivestors at the time of such issue ad allotmet cosiderig the prevailig market coditios ad other relevat factors wherever ecessary i cosultatio with the lead maagers or other advisor(s) for such issue(s), as the Board i its absolute discretio may deem fit ad appropriate. RESOLVED FURTHER THAT if ay issue of Securities is made by way of a Qualified Istitutios Placemet i terms of Chapter VIII of the SEBI ICDR Regulatios (hereiafter referred to as "Eligible Securities" withi the meaig of the SEBI ICDR Regulatios), the allotmet of the Eligible Securities, or ay combiatio of Eligible Securities as may be decided by the Board shall be completed withi twelve moths from the date of this Resolutio or such other time as may be allowed uder the SEBI ICDR Regulatios from time to time at such a price beig ot less tha the price determied i accordace with the pricig formula provided uder Chapter VIII of the SEBI ICDR Regulatios. The Compay may, i accordace with applicable law, also offer a discout of ot more tha 5% or such percetage as permitted uder applicable law o the price calculated i accordace with the pricig formula provided uder the SEBI ICDR Regulatios. RESOLVED FURTHER THAT i the evet that Equity Shares are issued to qualified istitutioal buyers uder Chapter VIII of the SEBI ICDR Regulatios, the relevat date for the purpose of pricig of the Equity Shares shall be the date of the meetig i which the Board decides to ope the proposed issue of Equity Shares ad i the evet that covertible securities (as defied uder the SEBI ICDR Regulatios) are issued to qualified istitutioal buyers uder Chapter VIII of the SEBI ICDR Regulatios, the relevat date for the purpose of pricig of such securities, shall be the date of the meetig i which the Board decides to ope the issue of such covertible securities. RESOLVED FURTHER THAT without prejudice to the geerality of the above, the aforesaid issue of Securities may have all or ay terms or combiatio of terms icludig as to coditios i relatio to paymet of iterest, additioal iterest, premia o redemptio, prepaymet ad ay other debt service paymets whatsoever ad all such matters as are provided i Securities offerigs of this ature icludig terms for issue of such Securities or variatio of the coversio price of the Security durig the teure of the Securities ad the Compay is also etitled to eter ito ad execute all such arragemets as the case may be with ay lead maagers, uderwriters, bakers, fiacial istitutios, solicitors, advisors, guarators, depositories, custodias ad other itermediaries i such offerigs of Securities ad to remuerate all such agecies icludig the paymet of commissios, brokerage, fees or paymet of their remueratio for their services or the like ad also to seek the listig of such Securities o oe or more Stock Exchages. RESOLVED FURTHER THAT the Board or ay committee thereof be ad is hereby authorized to issue ad allot such umber of shares as may be required to be issued ad allotted upo coversio of ay Securities referred to above or as may be ecessary i accordace with the terms of the offerig, all such shares beig pari-passu with the the existig shares of the Compay i all respects. ANNUAL REPORT

192 Notice of the Aual Geeral Meetig RESOLVED FURTHER THAT for the purpose of givig effect to ay issue or allotmet of Securities or istrumets represetig the same, as described above, the Board or ay Committee thereof be ad is hereby authorized o behalf of the Compay to do all such acts, deeds, matters ad thigs as it may at its discretio deem ecessary or desirable for such purpose, icludig but ot limited to fializatio ad approval for the prelimiary as well as placemet documet or offer documet(s), determiig the form ad maer of the issue, icludig the class of ivestors to whom the Securities are to be issued ad allotted, utilisatio of issue proceeds, umber of Securities to be allotted, issue price, face value, discouts permitted uder applicable law (ow or hereafter), premium amout o issue/coversio of the Securities if ay, rate of iterest, executio of various trasactio documets, creatio of mortgage / hypothecatio / charge o the Compay's assets ad properties i accordace with the provisios of the Compaies Act, 2013 i respect of ay Securities as may be required either o paripassu basis or otherwise, without beig required to seek ay further coset or approval of the members or otherwise to the itet they shall be deemed to have give their approval thereto expressly by the authority of this resolutio. RESOLVED FURTHER THAT the Board be ad is hereby authorised to accept ay modificatio(s) i the proposal as may be required by the authorities ivolved i such issues but subject to such coditios as the SEBI/GOI/RBI or such other appropriate authorities may impose at the time of their approval ad as agreed to by the Board. RESOLVED FURTHER THAT the Board be ad is hereby authorized to egage / appoit the lead maagers, uderwriters, guarators, depositories, custodias, registrars, stabilizig aget, trustees, bakers, advisors ad all such agecies as may be ivolved or cocered i such offerigs of Securities ad to remuerate them by way of commissio, brokerage, fees or the like ad also to eter ito ad execute all such arragemets, agreemets, memorada, documets etc., with such agecies ad to seek the listig of such Securities o oe or more atioal ad/ or iteratioal stock exchage(s). RESOLVED FURTHER THAT the Board be ad is hereby authorised to delegate all or ay of the powers herei coferred to ay Committee of Directors or ay Whole-time Directors or ay other Officer or Officers of the Compay to give effect to the aforesaid resolutio." Place: Hyderabad Date: 29 August 2017 CIN: L45204TG2001PLC Regd. Off: /82/A/431/A, Road No.22, Jubilee Hills, Hyderabad Ph: ; Fax: By order of the Board Sd/- M.S. Phai Sekhar Compay Secretary 190 KSK ENERGY VENTURES LIMITED

193 NOTES 1. A Explaatory Statemet pursuat to Sectio 102(1) of the Compaies Act, 2013, relatig to the Special Busiess to be trasacted at the Aual Geeral Meetig (AGM) is aexed hereto. 2. A member etitled to atted ad vote at the AGM, is etitled to appoit a proxy to atted ad vote i the AGM istead of himself / herself, ad the proxy so appoited eed ot be a member of the Compay. The istrumet appoitig proxy should, however, be deposited at the registered office of the Compay ot less tha 48 hours before the commecemet of the AGM. A perso ca act as a proxy o behalf of a maximum of fifty members ad holdig i the aggregate ot more tha te percet of the total share capital of the Compay carryig votig rights. A member holdig more tha te percet of the total share capital of the Compay carryig votig rights may appoit a sigle perso as proxy ad such perso shall ot act as a proxy for ay other perso or shareholder. 3. Details as required i sub-regulatio (3) of Regulatio 36 of the Listig Regulatios i respect of the Director seekig reappoitmet at the AGM, forms itegral part of the otice. 4. Members are requested to brig their attedace slip alog with their copy of Aual Report to the AGM. 5. I case of joit holders attedig the AGM, oly such joit holder who is higher i the order of ames will be etitled to vote. 6. Members who hold shares i dematerialized form are requested to write their Cliet ID ad DP ID umbers ad those who hold shares i physical form are requested to write their Folio Number i the attedace slip for attedig the AGM. 7. Corporate Members itedig to sed their authorized represetatives are requested to sed a duly certified copy of the Board resolutio authorizig their represetatives to atted ad vote at the AGM o their behalf. 8. M/s. Karvy Computershare Private Limited, Hyderabad acts as the Compay's Registrar ad Share Trasfer Aget for physical trasfer of shares ad all correspodece may be addressed directly to them. I respect of shares held i Electroic form, shareholders may sed requests or correspod through their respective Depository Participats. 9. The Register of Directors ad Key Maagerial Persoel ad Register of Cotracts or Arragemets maitaied uder Sectio 170 ad Sectio 189 of the Compaies Act 2013 respectively will be available for ispectio to the members at the AGM. 10. The route map to the veue of AGM is furished herewith ad forms part of the Notice. 11. The Register of Members ad Share Trasfer books will remai closed from 18 September 2017 to 25 September 2017 (both days iclusive) i coectio with the AGM to be held o 25 September The Securities ad Exchage Board of Idia (SEBI) has madated the submissio of Permaet Accout Number (PAN) by every participat i securities market. Members holdig shares i electroic form are, therefore, requested to submit their PAN to their Depository Participats with whom they are maitaiig their demat accouts. Members holdig shares i physical form ca submit their PAN to the Registrar. 13. The aual report for the fiacial year icludig otice of the Seveteeth AGM of the Compay is beig set through electroic mode oly to those shareholders, whose addresses are registered with the Compay /depository participats. The aual report is also available o the Compay s website, i.e. The physical copy of the aual report is beig set to those members who have ot registered their addresses with the Compay/depository participat i permitted mode. The members will be etitled to a physical copy of the aual report for the fiacial year upo sedig a request to the Compay. Members, who have ot registered their addresses so far or who would like to update their addresses already registered, are requested to register/update their addresses to receive all commuicatio icludig Aual Report, Notices, Circulars, etc. from the Compay i electroic mode i lieu of physical copy (i order to save usage of paper) - i respect of electroic shareholdig through their respective Depository Participats; - i respect of physical shareholdig by sedig a request to the Compay's Share Trasfer Aget, metioig therei their folio umber ad address. ANNUAL REPORT

194 Notice of the Aual Geeral Meetig 14. All documets referred to i the accompayig Notice are ope for ispectio at the Registered Office of the Compay betwee 11:00 a.m. ad 3:00 p.m. o ay workig day till the date of AGM. 15. Remote e-votig: I compliace with Sectio 108 of the Compaies Act, 2013 ad Rule 20 of the Compaies (Maagemet ad Admiistratio) Rules, 2014, as ameded from time to time, ad Regulatio 44 of the SEBI (LODR) Regulatios, 2015 ad Secretarial Stadard o Geeral Meetigs (SS2) issued by the Istitute of Compay Secretaries of Idia, members are provided with the facility to exercise their right to vote at the AGM by electroic meas ad the busiess may be trasacted through remote e- votig services provided by Karvy Computershare Private Limited. a) The facility for votig through poll will also be made available at the AGM ad the members attedig the AGM, who have ot already cast their vote through remote e-votig shall be able to exercise their right at the AGM through poll. Members who have cast their votes by remote e-votig prior to the AGM may atted the AGM but shall ot etitle to cast their votes agai. The istructio for remote e-votig is aexed to the Notice. b) The Board of Directors of the Compay has appoited Mr. V. Pavaa Sriivasa Rao, Practicig Compay Secretary as Scrutiizer to scrutiise the poll ad remote e-votig process i a fair ad trasparet maer. c) Votig rights shall be reckoed o the paid-up value of shares registered i the ame of the member / beeficial ower (i case of electroic shareholdig) as o the cut-off date i.e. 18 September d) A perso, whose ame is recorded i the register of members or i the register of beeficial owers maitaied by the depositories as o the cut-off date, i.e. 18 September 2017, shall be etitled to avail the facility of remote e-votig / Poll. e) The remote e-votig facility will be available durig the followig period ad shall be disabled by Karvy upo expiry of period: Commecemet of remote e-votig: From 9.00 a.m. (IST) o 21 September 2017 Ed of remote e-votig : Up to 5.00 p.m. (IST) o 24 September 2017 f) The Scrutiizer, after scrutiisig the votes cast at the meetig (Poll) ad through remote e-votig, will, ot later tha two days of coclusio of the Meetig, make a cosolidated scrutiizer's report ad submit the same to the Chairma. The results declared alog with the cosolidated scrutiizer's report shall be placed o the website of the Compay ad o the website of Karvy The results shall simultaeously be commuicated to the Stock Exchages. g) Subject to receipt of requisite umber of votes, the Resolutios shall be deemed to be passed o the date of the Meetig, i.e. 25 September Process for remote e-votig: A. The Compay has made arragemets with Karvy Computershare Private Limited for facilitatig remote e-votig to eable the Shareholders to cast their vote electroically. [for members whose addresses are registered with the Compay / Depository) Participat(s)]: a. Lauch iteret browser by typig the URL: b. Eter the logi credetials (i.e. User ID ad password). I case of physical folio, User ID will be EVEN (E-Votig Evet Number) xxxx followed by folio umber. I case of Demat accout, User ID will be your DP ID ad Cliet ID. However, if you are already registered with Karvy for e-votig, you ca use your existig User ID ad password for castig your vote. c. After eterig these details appropriately, click o "LOGIN". d. You will ow reach password chage Meu wherei you are required to madatorily chage your password. The ew password shall comprise of miimum 8 characters with at least oe upper case (A- Z), oe lower case (a-z), oe umeric value (0-9) ad a special character (@,#,$, etc.,). The system will prompt you to chage your password ad update your cotact details like mobile umber, ID etc. o first logi. You may also eter a secret questio ad aswer of your choice to retrieve your password i case you forget it. It is strogly recommeded that you do ot share your password with ay other perso ad that you take utmost care to keep your password cofidetial. e. You eed to logi agai with the ew credetials. 192 KSK ENERGY VENTURES LIMITED

195 f. O successful logi, the system will prompt you to select the "EVENT" i.e., 'Name of the Compay" g. O the votig page, eter the umber of shares (which represets the umber of votes) as o the Cut-off Date uder "FOR/AGAINST" or alteratively, you may partially eter ay umber i "FOR" ad partially "AGAINST" but the total umber i "FOR/AGAINST" take together shall ot exceed your total shareholdig as metioed herei above. You may also choose the optio ABSTAIN. If the Member does ot idicate either "FOR" or "AGAINST" it will be treated as "ABSTAIN" ad the shares held will ot be couted uder either head. h. Members holdig multiple folios/demat accouts shall choose the votig process separately for each folio/demat accouts. i. Votig has to be doe for each item of the otice separately. I case you do ot desire to cast your vote o ay specific item, it will be treated as abstaied. j. You may the cast your vote by selectig a appropriate optio ad click o "Submit". k. A cofirmatio box will be displayed. Click "OK" to cofirm else "CANCEL" to modify. Oce you have voted o the resolutio(s), you will ot be allowed to modify your vote. Durig the votig period, Members ca logi ay umber of times till they have voted o the Resolutio(s). l. Corporate/Istitutioal Members (i.e. other tha Idividuals, HUF, NRI etc.) are also required to sed scaed certified true copy (PDF Format) of the Board Resolutio/Authority Letter etc., together with attested specime sigature(s) of the duly authorised represetative(s), to the Scrutiizer at cssriivasacs@gmail.com with a copy marked to evotig@karvy.com. The scaed image of the above metioed documets should be i the amig format " Corporate Name_Evet No." (B) I case of Members receivig physical copy of Notice [for Members whose IDs are ot registered with the Compay/Depository Participats (s)]: i. E-Votig Evet Number XXXX (EVEN), User ID ad Password are provided i the AGM Notice form. ii. Please follow all steps from Sl. No. 16. A (a) to 16. A (l) above to cast your vote by electroic meas. Votig at AGM: The Members, who have ot cast their vote through Remote e-votig ca exercise their votig rights at the AGM. The Compay will make ecessary arragemets i this regard at the AGM Veue. Members who have already cast their votes by Remote e-votig are eligible to atted the Meetig; however those Members are ot etitled to cast their vote agai i the Meetig. A Member ca opt for oly sigle mode of votig i.e. through Remote e-votig or votig at the AGM. If a Member casts votes by both modes the votig doe through Remote e-votig shall prevail ad vote at the AGM shall be treated as ivalid. OTHER INSTRUCTIONS a. I case of ay query ad/or grievace, i respect of votig by electroic meas, Members may refer to the Help & Frequetly Asked Questios (FAQs) ad E-votig user maual available at the dowload sectio of (Karvy Website) or cotact Mr. Aada. K, Maager, Karvy Computershare Private Limited, Karvy Seleium Tower B, Plot 31-32, Gachibowli, Fiacial District, Naakramguda, Hyderabad or at evotig@karvy.com or phoe o or call Karvy's toll free No for ay further clarificatios. b. You ca also update your mobile umber ad id i the user profile details of the folio which may be used for sedig future commuicatio(s). c. The remote e-votig period commeces o 21 September 2017 (9.00 A.M. IST) ad eds o 24 September 2017 (5.00 P.M. IST). Durig this period, Members of the Compay, holdig shares either i physical form or i dematerialized form, as o the cut-off date of 18 September 2017, may cast their votes electroically. The remote e-votig module shall be disabled for votig thereafter. A perso who is ot a Member as o the cut-off date should treat this Notice for iformatio purposes oly. Oce the vote o a resolutio(s) is cast by the Member, the Member shall ot be allowed to chage it subsequetly. d. The votig rights of Members shall be i proportio to their share of the paid up equity share capital of the Compay as o the cut-off date i.e. 18 September ANNUAL REPORT

196 Notice of the Aual Geeral Meetig e. I case a perso has become a Member of the Compay after dispatch of AGM Notice but o or before the cut-off date for E- votig i.e., 18 September 2017, he/she may obtai the User ID ad Password i the maer as metioed below : i. If the mobile umber of the member is registered agaist Folio No./ DP ID Cliet ID, the member may sed SMS: MYEPWD <space> E-Votig Evet Number+Folio No. or DP ID Cliet ID to Example for NSDL: MYEPWD <SPACE> IN Example for CDSL: MYEPWD <SPACE> Example for Physical: MYEPWD <SPACE> XXXX ii. If address or mobile umber of the member is registered agaist Folio No. / DP ID Cliet ID, the o the home page of the member may click "Forgot Password" ad eter Folio No. or DP ID Cliet ID ad PAN to geerate a password. iii. Member may call Karvy's toll free umber iv. Member may sed a request to evotig@karvy.com. However, Karvy shall edeavour to sed User ID ad Password to those ew Members whose mail ids are available. 194 KSK ENERGY VENTURES LIMITED

197 STATEMENT PURSUANT TO SECTION 102 (1) OF THE COMPANIES ACT, 2013 (the Act) Item No. 3: Appoitmet of Statutory Auditors (This Statemet is provided though strictly ot required as per Sectio 102 of the Act.) The Compaies Act, 2013 ('the Act') was otified effective 1 April Sectio 139 of the Act lays dow the criteria for appoitmet ad madatory rotatio of statutory auditors. Pursuat to Sectio 139 of the Act ad the Rules made thereuder, it is madatory for a Compay to rotate the statutory auditors o completio of maximum term permitted uder the said Sectio. The existig statutory auditors, M/s. Umamaheshwara Rao & Co., Chartered Accoutats, Hyderabad has bee actig as statutory auditors of the Compay sice iceptio of the Compay ad have completed te years with the Compay by the time Act was otified ad pursuat to Sectio 139(2) of the Act ad the rules otified i this regard, the existig auditors will be completig the maximum umber of trasitioal period (three years) at the esuig seveteeth AGM. Based o the recommedatio of Audit Committee ad Board of Directors o 27 May 2017, M/s. Jawahar ad Associates, Chartered Accoutats, Hyderabad, (ICAI Firm Registratio No S) have bee cosidered to be appoited as Statutory Auditors of the Compay to hold office for a period of five years from the coclusio of Seveteeth AGM held o 25 September 2017 till the coclusio of the twety secod Aual Geeral Meetig of the Compay i the caledar year 2022 (subject to ratificatio by the shareholders at each AGM). M/s. Jawahar ad Associates have coseted to their appoitmet as Statutory Auditors ad have cofirmed that if appoited, their appoitmet will be i accordace with Sectio 139 read with Sectio 141 of the Act. The Board commeds the Ordiary Resolutio set out at Item No. 3 of the Notice for approval by the Members. Noe of the Directors or Key Maagerial Persoel of the Compay or their relatives is, i ay way, cocered or iterested i the Resolutio set out at Item No. 3 of the Notice. Item No. 4 Approval for issue of Securities The Compay is i the busiess of developmet ad operatio of various power projects. The busiess, by its ature, is dyamic ad competitive, which may ecessitate chages i busiess pla ad/or fudig plas to support project costructio ad o goig operatios as well as avail of ew opportuities, augmet existig power geeratio capacity of the Compay to meet the liquidity requiremets, competitive threats, icludig those that may ot be curretly evisaged. These chages, if ay, i the busiess pla ad/or fudig plas shall be made keepig i mid the iterests of the Compay. The Compay has ivested i various dowstream power geeratio compaies ad proposes to cotiue makig such ivestmets i the future, either directly or through ay subsidiaries, associate compaies, joit vetures or affiliates. Further, the Compay has to support its dowstream power geeratio compaies experiecig cost & time over rus ad fuel security issues, workig capital shortages amog other market costraits. The Compay is also required to explore ecessary ivestmet, acquisitio / divestmet requiremets. While, such support to the dowstream power geeratio compaies ad other requiremets could be fuded, partially through iteral accruals ad corporate debt facilities, i view of the substatial capital requiremets for the busiess, issuace of fresh capital would be required. Also, of late certai of the ivestmets both at the Compay as well as the subsidiaries is beig proposed to be i the form of a quassi equity / covertible istrumets that could ultimately covert ito equity at the Compay upo certai pre agreed evets ad triggers. The Compay plas to raise such log term resources, iter-alia, to meet its proposed capital expediture requiremets with respect to the power projects uder set up or operatios, icludig those of its subsidiaries, associate compaies, joit vetures ad affiliates ad geeral corporate purposes. With a explicit uderstadig that such fuds could be raised, based o various factors through issue of such securities liked with equity shares of the Compay or a combiatio thereof, as may be determied by the Board of Directors of the Compay or ay committee thereof (the "Board") i its sole discretio, the coset of the shareholders is beig sought by a special resolutio to eable the Board of Directors or a duly costituted committee thereof to ANNUAL REPORT

198 Notice of the Aual Geeral Meetig issue securities as cotemplated i the resolutio set out above (foud to be expediet ad i the iterest of the Compay). Hece this is a eablig resolutio. Sice the proposed Special Resolutio may result i issue of shares of the Compay otherwise tha to the existig members of the Compay coset of the members is beig sought pursuat to the provisios of Sectios 23, 41, 42, 62, 71 ad all other applicable provisios of the Compaies Act, 2013 ad the SEBI (LODR) Regulatios, 2015 The authority grated to the Board by way of such special resolutio will eable the Board, i cosultatio with the lead maagers, advisors ad ay other itermediaries that may be retaied from time to time to issue such umber of securities ad, i case of ay securities covertible ito or exchageable with equity shares of the Compay, such umber of equity shares as may be required to be issued upo such coversio or exchage, as applicable, uder the terms of the issue ad the provisios of applicable laws ad regulatios. A eablig resolutio was passed at the previous Aual Geeral Meetig held o 24 September, 2016 to raise ` 5,000 Crore ad the same is valid for 12 moths. Pursuat to the approval, o fuds were raised. The Board proposes a similar resolutio which is valid for a period of 12 moths to eable the Compay to raise fuds at a appropriate time based o the market coditios ad busiess strategy. The Directors or Key Maagerial persoel of the Compay or their relatives may be deemed to be cocered or iterested i the special resolutio to the extet of securities issued/allotted to them or to the Compaies/istitutios i which ay of them is a Director or Member, if ay. The Board commeds the special resolutio set out i item No.4 of the accompayig otice for the approval of the members. Place: Hyderabad Date: 29 August 2017 CIN: L45204TG2001PLC Regd. Off: /82/A/431/A, Road No.22, Jubilee Hills, Hyderabad Ph: ; Fax: By order of the Board Sd/- M.S. Phai Sekhar Compay Secretary 196 KSK ENERGY VENTURES LIMITED

199 Brief Profile of Director seekig Re-appoitmet as required uder Sub-Regulatio (3) of Regulatio 36 of the SEBI (LODR) Regulatios, 2015 Item No. 2: Mr. K. Bapi Raju Name of the Director Mr. K. Bapi Raju Date of Birth 53 years (2 March 1964) Qualificatio Expertise Relatioship with other directors ad KMP Name(s) of listed etities i which Directorship held Name of listed etities i which Committee membership/chairmaship held Total shares held by him i the Compay Bachelor of Sciece degree i Electroics ad Commuicatios from Adhra Uiversity Mr K. Bapi Raju has more tha two decades of experiece i the iformatio techology idustry. He leads the corporate affairs fuctio of the Group ad is also actively ivolved i formulatig its corporate strategy. Not related to ay other Director or Key Maagerial persoel KSK Eergy Vetures Limited Member of Fiace ad Authorisatio Committee of KSK Eergy Vetures Limited Nil ANNUAL REPORT

200 Route Map to the AGM Veue Veue Plot No KSK ENERGY VENTURES LIMITED

201 ATTENDANCE SLIP I/we, hereby record my/our presece at the Seveteeth Aual Geeral Meetig of KSK Eergy Vetures Limited held o Moday, 25 September 2017 at AM at Plot No. 694, Road No. 33, Jubilee Hills, Hyderabad ad at every adjourmet thereof. DP ID: No. of Shares held: Name ad Address of the Shareholder(s): Regd. Folio/ Cliet ID No.: If Shareholder(s), please sig here If Proxy, please metio ame ad sig here Name of Proxy Sigature Notes : 1. Shareholder / Proxy-holder, as the case may be, is requested to produce the attedace slip duly siged at the etrace of the Meetig veue. 2. Members are requested to advise the chage of their address, if ay, to Karvy Computer Share Pvt. Ltd. PROXY FORM [Pursuat to Sectio 105(6) of the Compaies Act, 2013 ad Rule 19(3) of the Compaies (Maagemet ad Admiistratio) Rules, 2014 Name ad Address of the Member(s)... id:... Folio No./Cliet ID:... DP ID:... No. of Shares held:... I/We, beig the member(s) of KSK Eergy Vetures Limited, hereby appoit: 1. Name:... Address:... Id:... Sigature:..., or failig him 2. Name:... Address:... Id:... Sigature:..., or failig him 3. Name:... Address:... Id:... Sigature:... as my/our proxy to atted ad vote (o a poll/e-votig) for me/us ad o my/our behalf at the seveteeth Aual Geeral Meetig of KSK Eergy Vetures Limited to be held o Moday, 25 September 2017 at AM. at Plot No. 694, Road No. 33, Jubilee Hills, Hyderabad ad at ay adjourmet thereof i respect of such resolutios as are idicated below: ANNUAL REPORT

202 Resolutios For Agaist Abstai Ordiary Busiess 1. Adoptio of audited fiacial statemets (icludig audited cosolidated fiacial statemets) for the Fiacial Year eded 31 March 2017 ad the Reports of the Directors ad Auditors thereo 2. Re-appoitmet of Mr. K. Bapi Raju, Director who retires by rotatio 3. Appoitmet of Statutory Auditors ad fixatio of their remueratio Special Busiess 4. Approval for issue of securities Siged this day of 2017 Sigature of Shareholder Affix Reveue Stamp Sigature of Proxy holder(s) Please put a ü i the appropriate colum agaist the resolutios idicated i the Box. Note: The proxy form to be effective, should be duly stamped, completed, siged ad must be retured so as to reach the Registered Office of the Compay, ot less tha 48 hours before the time for holdig the aforesaid meetig. The proxy eed ot be a Member of the Compay. 200 KSK ENERGY VENTURES LIMITED

203 CORPORATE SUSTAINABILITY INITIATIVES