Dear Shareholders,

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

Performance Highlights

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

Rs. in million

Standalone

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

Consolidated

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

Review of Operations

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

Principal Power Assets

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

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

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

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

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

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

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

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

Material changes and commitments

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

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

Review of Business

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

Share Capital

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

Subsidiaries / Joint Ventures / Associates

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

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

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

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

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

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

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

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

Corporate Governance

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

Management Discussion and Analysis Report

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

Directors and Key Managerial Personnel

Independent Directors & Non-Executive Directors

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

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

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

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

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

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

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

Key Managerial Personnel

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

Meetings of the Board

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

Performance Evaluation

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

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

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

Remuneration Policy

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

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

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

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

Particulars of Employees

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

Directors’ Responsibility Statement

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

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

- they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

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

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

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

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

Audit Committee

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

Corporate Social Responsibility Committee

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

1. Education

2. Health and Family welfare

3. Sustainable development

4. Infrastructure development

5. Cultural and Community Support

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

Statutory Auditors

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

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

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

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

Secretarial Audit Report

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

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

Cost Audit

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

Whistle Blower Policy/Vigil Mechanism

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

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

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

Transfer to Reserves

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

Deposits from Public

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

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

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

Internal Control Systems

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

Loans, Guarantees or Investments under Section 186 ofthe Act

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

Contracts and arrangements with Related Parties

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

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

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

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

Risk Management Policy

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

Annual Return

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

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

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

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

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

A. Conservation of Energy:

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

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

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

B. Technology Absorption:

i. The efforts made towards technology absorption: NIL

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

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

No technology has been imported during the past 3 years.

a. The details of technology import: -NIL

b. The year of import: -NIL

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

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

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

C. Foreign Exchange Earnings and Outgo:

Acknowledgements

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

On behalf of the Board

Sd/-

Hyderabad T.L. Sankar

Date: 11.08.2018 Chairman