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KSK Energy Ventures Ltd.

BSE: 532997 Sector: Infrastructure
NSE: KSK ISIN Code: INE143H01015
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VOLUME 71982
52-Week high 4.36
52-Week low 0.69
P/E
Mkt Cap.(Rs cr) 42
Buy Price 0.98
Buy Qty 1496.00
Sell Price 1.00
Sell Qty 62134.00
OPEN 1.00
CLOSE 0.99
VOLUME 71982
52-Week high 4.36
52-Week low 0.69
P/E
Mkt Cap.(Rs cr) 42
Buy Price 0.98
Buy Qty 1496.00
Sell Price 1.00
Sell Qty 62134.00

KSK Energy Ventures Ltd. (KSK) - Director Report

Company director report

Dear Shareholders

Your Directors have the pleasure in presenting the Eighteenth Annual Report togetherwith 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 issummarized below:

Rs. in million

Particulars Standalone Consolidated
2017-18 2016-17 2017-18 2016-17
Income 24.93 198.49 31490.17 39385.83
Operating expenditure (654.61) (112.78) (25247.91) (26595.20)
Operating profit (629.68) 85.71 6242.26 12790.63
Add: Other income 139.79 377.27 780.28 1633.64
Less: Finance cost (1380.60) (1333.89) (21842.80) (21945.11)
Less: Depreciation (2.16) (4.09) (5997.75) (6822.71)
Add: Exceptional items (1888.84) - 2200.37 6055.20
Profit/(loss) before tax (PBT) (3761.50) (875.01) (18617.63) (8288.35)
Tax expense / (income) (73.83) - (1603.72) (1360.85)
Net profit/(loss) after tax (3835.33) (875.01) (17013.91) (6927.50)
Share of profit /(loss) of Associate - - (111.15) (68.71)
Other comprehensive income (1.32) 0.06 (4.60) 1.34
Total comprehensive income (3836.65) (874.95) (17129.66) (6994.87)
Earnings per share (EPS) (Rs.)
Basic and Diluted (9.05) (2.06) (33.64) (15.00)

Standalone

During the year under review income of the Company stood at Rs. 24.93 million.Further there is increase in the operating expenditure resulting in operating loss ofRs. 629.68 million. With high nance cost increase in operating expenditure and decreaseof other income the Company reported a loss of Rs. 3836.65 million.

Consolidated

During the year under review the consolidated revenue of the group has decreased byRs. 7895.66 million as a result of lower than expected PLF at KSK Mahanadi anddeconsolidation of Sai Wardha Power and VS Lignite. As a result operating pro t has alsodecreased by Rs. 6547.58 million. With high nance cost and depreciation and lower otherincome loss before tax for the year has gone up by Rs. 10329.28 million and stood at Rs.18617.63 million.

Review of Operations

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

Principal Power Assets

KSK's principal power projects are as follows:-Operational power plants l KSK Mahanadia 3600 MW coal based power plant in Chhattisgarh - three units of 600 MW each are underoperation; l Sai Wardha a 540 MW coal based power plant in Maharashtra; l VS Lignite a135 MW lignite based power plant in Rajasthan; l Sai Lilagar (formerly Arasmeta) a 86 MWcoal based power plant in Chhattisgarh; l Sai Regency a 58 MW natural gas based powerplant in Tamilnadu and l 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 held49% equity was taken over by Zuari Cement Limited Holding Company of Sitapuram in linewith 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 withLenders consortium at the Water and Railway infrastructure SPVs have invoked the sharespledged with them as security for the financial facilities. Consequent to the invocationof pledge at KSK Mahanadi it ceased to be subsidiary of the Company and the same willsubstantially 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 financialyear 2017-18 has been outlined in the "Management Discussion and AnalysisReport".

Share Capital

The paid up equity share capital as on 31 March 2018 was Rs.4239.86 million comprisingof 423985744 (Forty Two Crore Thirty Nine Lakh Eighty Five Thousand and Seven HundredForty Four) equity shares of Rs.10/- each.

Subsidiaries / Joint Ventures / Associates

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

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

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

Pursuant to the provisions of Section 136 of the Act the financial statementsincluding consolidated financial statements are being made available on the website of theCompany www.ksk.co.in. The financial statements of subsidiary companies will be availablefor inspection during business hours at the registered of ce of the Company and also onthe website of the Company. Policy for determining material subsidiaries of the Company isavailable 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 AssociateCompanies 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 andresultantly Sai Wardha and its subsidiary Field Mining and Ispats Limited have ceased tobe subsidiary of the Company. Zuari Cement Limited Holding Company of Sitapuram PowerLimited has taken over entire 49% shareholding held by the Company and in result it hasceased to be Joint Venture of the Company.

Further after the end of the financial year project consortium lenders of KSK MahanadiPower Company Limited (KSK Mahanadi) KSK Water Infrastructures Private LimitedSubsidiaries and RaigarhChampa Rail Infrastructure Limited Associate Company have invokedmajority of shares pledged with them as security for the financial facilities and as aresult all three Companies and Sai Power Pte. Ltd. subsidiary of KSK Mahanadi have ceasedto be Subsidiaries and Associate Company respectively.

Corporate Governance

Pursuant to SEBI (LODR) Regulations 2015 (hereinafter referred to as "ListingRegulations") a detailed report on Corporate Governance is given in this AnnualReport. A Certificate from the Statutory Auditors of the Company regarding compliance withconditions 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 ListingRegulations is provided in a separate section and forms an integral part of this AnnualReport.

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 February2018. Mrs. Savita Jyoti Mr. Anil Kumar Kutty and Mrs. K. Kusuma Mani KumariNon-Executive Directors have resigned with effect from 11 November 2017 09 April 2018and 30 May 2018 respectively.

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

Mr. Abhay M. Nalawade Ms. Alankrita Soni and Mr. K. Bapi Raju are proposed to beappointed as Directors under the provision of section 160 of the Act at the ensuing AnnualGeneral Meeting.

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

Brief pro les 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 forreference of shareholders.

During the year the Non-Executive Directors of the Company had no pecuniaryrelationship or transactions with the Company. The Company has received declaration fromall the Independent Directors of the Company confirming that they meet the criteria ofindependence as prescribed under the applicable provisions of Section 149 of the Act andunder Listing Regulations.

Key Managerial Personnel

Mr. V. Sambasiva Rao Chief Fifinancial Of cer and Mr. M.S. Phani Sekhar CompanySecretary have resigned with effect from 30 May 2018. Mr. Ranjith Kumara Shetty has beenappointed as Company Secretary and Compliance Of cer with effect from 30 May 2018.

Meetings of the Board

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

Performance Evaluation

As per the provisions of the Act and Listing Regulations the Board carried out annualevaluation of the Board's performance its Committees and individual Directors.

Board performance evaluation evaluation of Committees and individual Directors iscarried out through a questionnaire encompassing upon various areas that provide aninsight and feedback into the functioning of the Board its Committees individualDirectors and areas of development.

In a separate meeting of independent directors performance of non-independentdirectors performance of the Board as a whole performance of the Chairman and qualityquantity and timeliness of ow of information between the Company management and the Boardwas evaluated.

Remuneration Policy

In terms of the provisions of Section 178(3) of the Act and Regulation 19 read withSchedule II Part D of Listing Regulations the Nomination and Remuneration Committee isresponsible for formulating the criteria for determining quali cations positiveattributes and independence of a Director.

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

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

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial 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 ofSection 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended is annexed herewith andmarked 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 thebest of their knowledge and ability confirm that: l in the preparation of annual financialstatements the applicable accounting standards have been followed and there are nomaterial departures; l they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the loss of the Company for that period; l proper and sufficientcare has been taken for the maintenance of adequate accounting records in accordance withthe provisions of this Act for safeguarding the assets of the Company and for preventingand detecting fraud and other irregularities; l annual financial statements have beenprepared on a going concern basis; l they have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; l proper systems are in place to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

Audit Committee

The Audit Committee of the Company constituted in terms of Section 177(1) of the Actand 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 andattendance particulars of the Audit Committee are included in the Corporate GovernanceReport 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 theAct. The Group's sustainability initiatives towards community are essentially focused onve 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 aCSR Policy. The composition of the Committee contents of CSR Policy and report on CSRactivities carried out during the financial year ended 31 March 2018 in the formatprescribed under Rule 8 of Companies (Corporate Social Responsibility Policy) Rules 2014is 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 RegistrationNo. 001281S) have been appointed as Statutory Auditors of the Company to hold of ce fromthe conclusion of the 17th Annual General Meeting held on 25 September 2017 for 5consecutive years till the conclusion of the 22nd Annual General Meeting of the Company inthe calendar year 2022 (subject to rati cation by the shareholders at each Annual GeneralMeeting if so required under the Act). Companies Amendment Act 2017 omitted the rstproviso to Section 139 of Companies Act 2013 that requires rati cation of appointment ofauditor at every annual general meeting.

Explanation to Statutory Auditors' Quali cation / Comment on the Company's financialstatements

The Auditors' Quali cation has been appropriately dealt with in Note No. 35 and 36 ofthe Notes to the standalone audited financial statements and in Note No. 8 of the Notes tothe consolidated audited financial statements. The Auditors' Report is enclosed with thefinancial statements in this Annual Report.

Secretarial Audit Report

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

There is no quali cation reservation adverse remark or disclaimer by the SecretarialAuditor in his Secretarial Audit Report and hence no explanation or comments of the Boardis required in this matter.

Cost Audit

The Company is not required to maintain cost records and cost audit as per section 148of 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 VigilMechanism for employees including Directors of the Company to report genuine concerns. Theprovisions of this policy are in line with the provisions of Section 177(9) of the Act andRegulation 22 of Listing Regulations.

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

Dividend

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

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 ofSection 73 of the Act and the Companies (Acceptance of Deposits) Rules 2014.

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

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

Internal Control Systems

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

Loans Guarantees or Investments under Section 186 of the Act

Particulars of loans given investments made guarantees given and securities providedare 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 onthe Company's website at the web link http://ksk.co.in/ourpolicies.php There are nomaterially significant related party transactions made by the company with related partieswhich may have potential conflict with interest of the company at large. As a matter ofpolicy your Company carries out transactions with related parties on an arms' lengthbasis.

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

Further the Company has not entered into any contract or arrangement or transactionwith its related parties which is not at arm's length during the financial year 31 March2018. Suitable disclosure as required by the Accounting Standard-18 (AS-18) and/or IndianAccounting 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 identifyingevaluating and cost-effectively controlling risks to ensure that any residual risks are atan acceptable level. Whilst it is not possible to eliminate risk absolutely effort isunderway to actively promote and apply best practices at all levels and to all itsactivities including its dealing with external partners.

Annual Return

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

Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013

The company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Work place (PreventionProhibition and Redressal) Act 2013.

There were no complaints received pursuant to the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 for the year ended 31 March2018.

Details of Conservation of Energy Technology Absorption Foreign Exchange Earnings andOutgo

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) TheCapital investment on energy conservation equipments: -N.A. B. Technology Absorption: i.The efforts made towards technology absorption: NIL ii. The benefits derived like productimprovement cost reduction product development or import substitution: NIL iii. Detailsof technology imported during the past 3 years: No technology has been imported during thepast 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 whereabsorption has not taken place and the reasons thereof: - NIL iv. The expenditure incurredon Research and Development: -N.A.

C. Foreign Exchange Earnings and Outgo:

Rs. in million

Particulars 2017-18 2016-17
Exchange Earnings - -
Foreign Exchange Outgo - -

Acknowledgements

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

On behalf of the Board
Sd/-
Hyderabad T.L. Sankar
Date: 11.08.2018 Chairman