Ksk Power Regulatory News (KSK)

29 November 2013

KSK Power Ventur plc

("KSKPV" or the "Company")

Interim Results for the six months ended 30 September 2013

KSK Power Ventur plc (KSK.L), the power project company listed on the London Stock Exchange, with interests in multiple power plants and businesses across India, is pleased to announce the interim un-audited results for the six months ended 30 September 2013.

Financial Highlights

· Group Revenue decreased by 24 % to $ 150.68 m (H1 2012: $ 198.62 m)

· Gross Profit decreased by 36% to $ 45.27 m (H1 2012: $ 70.77 m)

· Operating Profit decreased by 48% to $ 30.36 m (H1 2012: $ 58.68 m)

· Profit before tax** decreased to a loss of $ (115.24) m (H1 2012: $ 34.65 m)

· Investments in Property Plant and Equipment* decreased by 7% to $ 3,037 m (Mar 2013: $ 3,273 m)

· Cash and cash equivalents held at 30 Sep 2013 of $ 209.09m

*Actually increased by 6.9% on constant currency basis, but headline decrease purely on account of translation difference from base currency as INR 63.00 per USD at closing utilized against INR 54.66 per USD at March 2013

**An unrealized exchange loss of USD 111 million on account of the restatement of the foreign currency component of bank financing facilities and trade payables being recognized. Similarly aggregate revenues of USD 33.22 million on account of Power Purchase Agreement ("PPA") supplies at KSK Mahanadi have not been taken into reported revenues but capitalized, being generated during the Reliability Run Test Phase of the first 600 MW Unit of the Project. This is now fully up and running.

The underlying revenue decrease of 18% at the Rupee level has been primarily due to the lower Plant Load Factors ("PLF") as a result of the extended monsoon. This has directly impacted tariff realizations. In addition to the current trading environment across India and the currency depreciation of the Indian Rupee against the US Dollar, this has led to reporting revenue reduction of 24% in US Dollar terms. This is illustrated in the table below.

Comparison of results

The full year is expected to see an upward movement in power generation on account of an uninterrupted contribution in the second half from the ongoing operations being complemented by the revenues from Mahanadi coming in. Profitability will still essentially depend on addressing issues with Western Coal Fields in Wardha, executing the Fuel Supply Agreement (for the Tapering Linkage) and achieving coal supplies in KSK Mahanadi under the FSA that has been long overdue from the Government. Any further delays will result in dependence on high cost market or imported coal over the interim period, with pressure on margins in the immediate term.

The Group has completed the necessary debt refinancing at Wardha but the recent USD / INR volatility post completion has eroded some of the planned benefits, while continuing to be value accretive post hedging costs. During the period, the Company has refinanced high cost Indian currency denominated borrowing with lower cost US $ denominated borrowing for US $250m in order to reduce the interest payments. At the same time, the Company has hedged the exchange and interest rate risks by taking Currency Option (Call Spread) and Interest Rate Swaps for approximately65% of ECB exposure and 50% of interest exposure respectively. The Company has accounted such instruments as a financial liability at fair value through the profit and loss account, resulting in a derivative asset amounting to US $ 52 m, derivative liability amounting to US $36m and net gain on option valuation of US$15m. However, US $ denominated debt has resulted in unrealized forex loss of US$27m on restatement at the closing rate.

Operating Highlights

Operating capacity of 891 MW recorded an aggregate generation of 2,591 million units ("MU") as against 2,744 MU for the similar period in 2012, with the following individual PLF.

With the extended monsoon and other factors the aggregate portfolio PLF achieved has been 66% against 71% for the similar period in 2012.  The energy generation for the year as a whole to 31 March 2014, should be higher than the 5.5 billion units achieved in the year ended 31 March 2013. The exact quantum will depend substantially on the KSK Mahanadi units production profile post Reliability Run Test ("RRT") phases.

The 3,600 MW KSK Mahanadi power project is under construction with the following developments:

o First 600 MW Unit has been synchronized and initial power generation to the Utilities have since commenced.

o Development of ancillary common infrastructure facilities has been achieved enabling sustained power generation

o Immediate focus and priority continues on the commissioning of the second unit of 600 MW before the end of the current financial year;

o Execution of the Fuel Supply Agreement under Tapering Linkage and commencement of fuel supplies thereto are the immediate targets for achievement; and

o Progress is being made on the balance of the four units of 600 MW each and necessary discussion has been initiated with the EPC Contractor on the same.

Commenting on the results, T.L.Sankar, Chairman of KSK said:

"Operational progress has been made notwithstanding the current challenging times and economic environment across India, especially with committed/ contractually guaranteed obligations not being fulfilled by Government and Government agencies.

The Group has continued its efforts to address various challenges and continues to make good progress on the ground with the KSK Mahanadi project. Exchange rate volatility and unrealized exchange losses reflect the industry wide scenario of project costs increasing in line with sharp depreciation of the Rupee and the resulting impact on imports of capital goods and costs across all power projects in India.

Fuel supply issues continue through the interim and long term and suitable arrangements with a mix of appropriate sources are being worked on. Management is also addressing various supply chain challenges to ensure planned generation capacity is synchronized with the availability of fuel supplies.

Notwithstanding the consequential effects on our financial results, the underlying assets and associated performance continues to meet expectations in these difficult times with potential for further improvements.

We look forward to the years ahead as KSK emerges as one of the more stable players in the Indian power generation landscape."

For further information, please contact:

KSK Power Ventur plc +91 40 2355 9922

Mr. S. Kishore, Executive Director

Mr. K. A. Sastry, Executive Director

Arden Partners plc +44 (0)20 7614 5900

Richard Day / Adrian Trimmings

KEY BUSINESS UPDATES

540 MW WARDHA POWER COMPANY LIMITED (WPCL)

The total gross power generated in the plant during the review period stood at 1507 MU with an average Plant Load Factor (PLF) of 64%, primarily on account of the extended monsoon during the period and improved plant utilization is planned for the second half of the financial year.

While supplies of coal from cost plus linkage coal block has commenced and the company has been recently invited to execute a Fuel Supply Agreement for the balance quantity, the company has pointed out the concerns to the coal company as well as initiated appropriate steps to realise the recompense and appropriate solution for the future.

Open Access is a statutory provision for permission to carry power from the point of generation to the destination of use. While this is granted for all captive power plants as a matter of right, the same has been provided only for part of the requirement at Wardha and the balance still requires to be provided by the State power company. This delay in the granting of Open Access by the State Company for supplies to industrial consumers has limited the Company's unit utilization and the company is pursuing necessary remedies with respect to the same. Also the Company is exploring suitable alternate / renewal arrangement for R-Infra committed capacity of 260 MW starting 1 April 2014 at attractive tariff levels.

135 MW VS LIGNITE POWER PRIVATE LIMITED (VSLP)

The total gross power generated in the plant during the review period stood at 503 MU with an average PLF of 85%. The Company is continuing its efforts to secure appropriate legal reliefs with respect to tariffs from industrial customers. The Company anticipates that industrial customers, who have been experiencing extremely high alternate tariffs, will find our power plant supplies attractive and agree to our proposition. Similarly the sale of the balance power to the local utility is expected to be similarly firmed up, with recent power purchase arrangements finalized by the state with alternate vendors under a competitive bidding process.

86 MW ARASMETA CAPTIVE POWER COMPANY PRIVATE LIMITED (ACPCPL)

The total gross power generated in the plant during the first half year stood at 158 MU with an average PLF of 42% primarily on account of the limited off take by Lafarge India. However with alternate sale arrangement with Chhattisgarh, it is anticipated that the PLF for the second half will significantly increase and will lead to improved asset utilization, and the associated strengthening of revenue realization at the plant. Cost optimization for coal supplies from South Eastern Coalfields Limited (SECL) will be pursued for enhancing margins and profitability.

58 MW SAI REGENCY POWER CORPORATION PRIVATE LIMITED (SRPCPL)

The total gross power generated in the plant during the review period stood at 214 MU with an average PLF of 84% in the combined cycle gas based power plant. With the continuous supply of gas and efficient operation, the plant has provided an exceptional operational and financial performance and the Company expects this to continue in the future.

43 MW SITAPURAM POWER LIMITED (SPL)

The total gross power generated in the plant during the first half of the year stood at 171MU with an average PLF of 91%. The energy generated in the period has been purchased by the captive consumers with balance supplied to the local utility.

19 MW WIND ASSETS

These wind assets (nine Wind Turbine machines of 2.1 MW each) , on account of constrained generation on account of grid factors ,generated 27 MU with an average PLF of 32% during the first half of FY2013-14 . It is anticipated that annualized PLF for the full year will stabilize around 20%.

10 MW SOLAR ASSETS

The Sai Maithili solar plant generated approx. 10 MU with an average PLF of 22%, during the first half of FY2013-14, reflecting the increasing attractive of solar power generation.

On the strength of the above generation as well as new opportunities, it is anticipated that the Group would pursue more solar power generation projects in the immediate future with a 50 MW Solar Power Project under immediate pursuit.

PROGRESS ON 3.6 GW KSK MAHANADI POWER PROJECT:

The construction activity of KSK Mahanadi, a large, single location, Greenfield private power plant, is continuing, with more than 7000+ workers at the project site.

As regards to the on-site construction progress:

· First 600 MW Unit fully functional with all associated ancillary infrastructure commissioned;

· Power generated is being supplied in accordance with the Grid code and PPA arrangements. Revenue recognition (Post RRT) to commence in the current quarter.

· It is anticipated that boiler light up for the second unit of 600 MW, on a test basis, will be achieved within the next 45 days and the turbine generator box up is also anticipated to be completed around the same time;

· Boiler drum lifting for the third unit has also been completed and erection of pressure parts are expected to be accelerated in due course;

· Flue duct fabrication works and insertion completion in the second chimney for the second 600 MW units is in progress;

· The entire 60 km pipeline laying work for the water intake system for the power plant has been completed and currently used for water transport; and

· The rail connectivity of the power plant to the Indian Rail network is completed with movement of rakes into the plant commenced.

As regards capex requirements for completion of the balance units at KSK Mahanadi, the project was originally appraised at imports at rates of Rs 48 / USD on the offshore component. The recent sharp movement in the exchange rate to the Rs 62 to Rs 65 / USD level necessitates enhanced debt funding by the Project Lenders, required during 2014 and 2015. The Project lenders are aware of the matter and have commenced appropriate evaluation and approval of a suitable plan which shall be notified upon finalization, which is expected to take the next six months. Partial mitigation is envisaged through securing further foreign currency based senior debt to meet project imports and avoid any immediate effect of currency conversion and steps have been already initiated in this regard. Also, under the local regulations, a substantial part of the letters of credit and short term loans which have already been provided by Project Lenders for Project imports will be rolled over effectively to the next two financial years. Also enhanced debt funding at KSK Mahanadi by the Project Lenders is being enabled by efforts to tie up Power Purchase Agreements with higher tariff realization.

FINANCIAL

The Group's revenues for the six months ended 30th September 2013 were $ 150.6 m. They were generated from the Group's portfolio of generating assets, with a total of 891 MW of capacity across various Indian states.

Cash generated by operations during the period was $13.24. As at 30 Sep 2013, cash and cash equivalents totalled $209.09m. The strengthening of the Dollar to the Rupee has no day-to-day operational effect on the Group, although it does impact on overseas supplies based capex requirements as well as foreign currency based facilities which tend to be priced in US Dollars.

OUTLOOK

With an exciting portfolio of power assets and appropriate fuel arrangements secured, the Group has a strong and sustainable power generation portfolio. While underlying cash generation from operations has been positive, much depends on the ability to address the various issues at Wardha and KSK Mahanadi for enhanced cash accrual. Decisions have to come through at the Government of India levels, with promised commitments to be fulfilled by the Government and respective agencies in order for the Company to meet market expectations which remain constrained.

The Indian economic growth potential and unfulfilled demand for power generation is expected only to continue to grow through the coming decade. KSK is well positioned in this regard and we expect two units at Mahanadi to be fully commissioned in the current year. We continue to pursue initiatives to increase asset utilization, realize higher tariffs with new Power Purchase Agreements and secure lower cost fuel supply arrangements.

An extract of the Interim Condensed Consolidated and Company Financial Statements for the six months ended 30 September 2013 is shown below.

A full set of the interim accounts is available from the Company website www.kskplc.co.uk

DIRECTORS RESPONSIBILITIES IN RESPECT OF CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT

The directors are responsible for preparing the condensed consolidated and company interim financial statements in accordance with applicable law and regulations. In addition, the directors have elected to prepare the condensed consolidated and company interim financial statements in accordance with International Financial Reporting Standards - IAS 34 Interim Financial Statements

The condensed consolidated and company interim financial statements are required to state of affairs of the Group and of the profit or loss of the Group for that period. In preparing condensed consolidated and company interim financial statements, the directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgments and estimates that are reasonable and prudent;

· state whether they have been prepared in accordance with International Financial Reporting Standards IAS 34 Interim Financial Statements; and

· prepare the condensed consolidated and company interim financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Group and to allow for the preparation of consolidated and company interim financial statements. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation governing the preparation and dissemination of financial statements may differ from one jurisdiction to another.

RESPONSIBILITY STATEMENT

We confirm that to the best of our knowledge the condensed set of interim consolidated and company financial statements have been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting; and give a true and fair view of the assets, liabilities and profit of the group as a whole by DTR 4.2.4R. The interim management report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of interim consolidated and company financial statements; and a description of the principal risks & uncertainties for the remaining six months of the year. The interim management report includes a fair view of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein) that have materially affected the financial position or performance of the entity during that period

S.Kishore KA Sastry

Executive Director Executive Director

Contents

INTERIM CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION

INTERIM CONSOLIDATED AND COMPANY INCOME STATEMENT

INTERIM CONSOLIDATED AND COMPANY STATEMENT OF COMPREHENSIVE INCOME

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

INTERIM COMPANY STATEMENT OF CHANGES IN EQUITY

INTERIM CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS

NOTES TO INTERIM CONDENSED CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS

INTERIM CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION

as at 30 September 2013

(All amount in thousands of US $, unless otherwise stated)

See accompanying notes to the interim condensed Consolidated and Company financial statements)

* The comparative information has been restated so as to reflect the adoption of new accounting standards, details of which have been set out in note 15.

Approved by the Board of Directors on 28 November 2013 and signed on behalf by:

S. Kishore K. A. Sastry

Executive Director Executive Director

INTERIM CONSOLIDATED AND COMPANY INCOME STATEMENT

for the six months ended 30 September 2013

(All amount in thousands of US $, unless otherwise stated)

(See accompanying notes to the interim condensed Consolidated and Company financial statements)

* The comparative information has been restated so as to reflect the adoption of new accounting standards, details of which have been set out in note 15.

Approved by the Board of Directors on 28 November 2013 and signed on behalf by:

S. Kishore K. A. Sastry

Executive Director Executive Director

INTERIM CONSOLIDATED AND COMPANY STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30 September 2013

(All amount in thousands of US $, unless otherwise stated)

(See accompanying notes to the interim condensed Consolidated and Company financial statements)

* The comparative information has been restated so as to reflect the adoption of new accounting standards, details of which have been set out in note 15.

Approved by the Board of Directors on 28 November 2013 and signed on behalf by:

S. Kishore K. A. Sastry

Executive Director Executive Director

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 September 2012

(All amount in thousands of US $, unless otherwise stated)

(See accompanying notes to interim condensed Consolidated and Company financial statements)

* The comparative information has been restated so as to reflect the adoption of new accounting standards, details of which have been set out in note 15.

1 The group entities have arrangements of sharing of profits with its non-controlling shareholders, through which the non-controlling shareholders are entitled to a dividend of 0.01% of the face value of the equity share capital held and the same is also reflected in statement of comprehensive income. However, the non-controlling interest disclosed in the Statement of changes in equity is calculated in the proportion of the actual shareholding as at the reporting date.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 September 2013

(All amount in thousands of US $, unless otherwise stated)

(See accompanying notes to the interim condensed Consolidated and Company financial statements)

* The comparative information has been restated so as to reflect the adoption of new accounting standards, details of which have been set out in note 15.

1 The group entities have arrangements of sharing of profits with its non-controlling share holders, through which the non controlling shareholders are entitled to a dividend of 0.01% of the face value of the equity share capital held and the same is also reflected in Consolidated income statement. However, the non controlling interest disclosed in the Statement of changes in equity is calculated in the proportion of the actual shareholding as at the reporting date.

COMPANY STATEMENT OF CHANGES IN EQUITYfor the six months ended 30 September 2013

(All amount in thousands of US $, unless otherwise stated)

(See accompanying notes to interim condensed Consolidated and Company financial statements)

CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS

for the six months ended 30 September 2013

(All amount in thousands of US $, unless otherwise stated)

(See accompanying notes to the interim condensed Consolidated and Company financial statements)

* The comparative information has been restated so as to reflect the adoption of new accounting standards, details of which have been set out in note 15.

NOTES TO INTERIM CONDENSED CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS

for the six months ended 30 September 2013

1. Corporate information

1.1. General information

KSK Power Ventur plc ('the Company' or 'KPVP' or 'KSK' or 'Parent'), a limited liability corporation, is the Group's parent Company and is incorporated and domiciled in the Isle of Man. The address of the Company's Registered Office, which is also principal place of business, is Fort Anne, Douglas, Isle of Man, IM1 5PD. The Company's equity shares are listed on the Standard List on the official list of the London Stock Exchange.

The financial statements were authorised for issue by the Board of Directors on 28 November 2013.

1.2. Statement of compliance /responsibility statement

a. the condensed set of financial statements contained in this document has been prepared in accordance with International Accounting Standard-34 ("IAS 34"), "Interim Financial Reporting" as adopted by European Union ('EU');

b. the Interim management report contained in this document includes a fair review of the information required by the Financial Conduct Authority's Disclosure and Transparency Rules ("DTR") 4.2.7R (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year);

c. this document includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein);

d. the interim condensed Consolidated and Company financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2013, which have been prepared in accordance with IFRSs.

e. The financial information set out in these financial statements does not constitute statutory accounts. The financial statement is unaudited but has been reviewed by KPMG Audit LLC and their report is set out at the end of this document.

1.3. Financial period

The interim condensed Consolidated and Company financial statements are for the six months ended 30 September 2013. The comparative information required by IAS 1 were determined using IAS 34 and include comparative information as follows:

1.4. Basis of preparation

These interim condensed Consolidated and Company financial statements have been prepared under International Accounting Standards-34- "Interim Financial Reporting" as adopted by European Union.

These interim condensed Consolidated financial statements have been prepared on the historical cost convention and on an accrual basis, except for the following:

· derivative financial instruments that are measured at fair value;

· financial instruments that are designated as being at fair value through profit or loss account upon initial recognition are measured at fair value;

· available-for-sale financial assets that are measured at fair value; and

· Net employee defined benefit (asset) / liability.

The financial statements of the Group and the Company have been presented in United States Dollars ('US $'), which is the presentation currency of the Company. All amounts have been presented in thousands, unless specified otherwise.

Balances represent consolidated amounts for the Group, unless otherwise stated.

The financial statements have been prepared on going concern basis which assumes the Group and the Company will have sufficient funds to continue its operational existence for the foreseeable future covering twelve months.The Group requires funds both for short-term operational needs as well as for long-term investment programmes mainly in construction projects for its power plants. The Group currently has net current liabilities of US $ 1,020,154, with short term facilities expiring in September 2014 totalling US $ 872,319 and a committed capital spend of US $ 1,343,080. The Group continue to generate cash flows from the current operations which together with the available cash and short term deposits provides liquidity both in short-term as well as in long-term. Anticipated future cash flows and undrawn long term committed facilities of US $ 1,019,168 together with cash and short term deposits of US $ 209,092 as at 30 September 2013 on a consolidated basis, are expected to be utilised to meet the on-going capital investment programme and liquidity requirement of the Group in the near future. In addition, a number of the facilities that are due to expire by 30 September 2014 are in the process of being extended and have rollover clause in a number of cases.

Further, exchange rate volatility and the unrealized exchange loss reflect the industry wide scenario of project costs increasing in line with sharp depreciation of the Rupee and resultant impact on import of capital goods. The project lenders are appraised of the matter and have commenced appropriate evaluation and approval of suitable remedial plan. Any resultant requirement of additional equity for completion of the project is planned to be suitable addressed both from internal accruals and appropriate fund raise.

2. Changes in accounting policy and disclosure

The accounting policies adopted are consistent with those of the previous financial year except for the adoption of new standards as of 1 April 2013, noted below:

The Group has adopted the following new standards and amendments to standards, including any consequential amendments to other standards, with a date of initial application of 1 April 2013.

· IFRS 13 Fair Value Measurement

· Presentation of items of Other Comprehensive Income (Amendments to IAS 1)

· IAS 19 Employee Benefits (2011)

· IFRIC 20 stripping cost in the production phase of surface mine

· IFRS 7 Financial instruments Disclosures - offsetting Financial Assets and Financial Liabilities

· Annual Improvements to IFRS 2009-2011 cycle

The nature and the effect of the changes are further explained below.

IFRS 13 Fair Value Measurement

IFRS 13 establishes a single framework for measuring fair value and making disclosures about fair value measurements, when such measurements are required or permitted by other IFRSs. In particular, it unifies the definition of fair value as the price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants at the measurement date. It also replaces and expands the disclosure requirements about fair value measurements in other IFRSs, including IFRS 7 Financial Instruments: Disclosures. Some of these disclosures are specifically required in interim financial statements for financial instruments; accordingly, the Group has included additional disclosures in this regard (see Note 14).

In accordance with the transitional provisions of IFRS 13, the Group has applied the new fair value measurement guidance prospectively, and has not provided any comparative information for new disclosures. Notwithstanding the above, the change had no significant impact on the measurements of the Group's assets and liabilities

Presentation of items of Other Comprehensive Income (Amendments to IAS 1)

As a result of the amendments to IAS 1, the Group has modified the presentation of items of other comprehensive income in its interim condensed consolidated income statement and statement of comprehensive income, to present separately items that would be reclassified to profit or loss in the future from those that would never be. Comparative information has also been re-presented accordingly. The adoption of the amendment to IAS 1 has no impact on the recognised assets, liabilities and comprehensive income of the Group.

IAS 19 Employee Benefits (2011)

IAS 19R includes a number of amendments to the accounting for defined benefit plans, including actuarial gains and losses that are now recognised in other comprehensive income (OCI) and permanently excluded from profit and loss; expected returns on plan assets that are no longer recognised in profit or loss, instead, there is a requirement to recognise interest on the net defined benefit liability (asset) in profit or loss, calculated using the discount rate used to measure the defined benefit obligation, and; unvested past service costs are now recognised in profit or loss at the earlier of when the amendment occurs or when the related restructuring or termination costs are recognised. Other amendments include new disclosures, such as, quantitative sensitivity disclosures.

In case of the Group, the transition to IAS 19R had an impact on the net defined benefit plan obligations due to the difference in accounting for interest on plan assets and unvested past service costs. The effect of the adoption of IAS 19R is explained in Note 15

IFRIC 20 stripping cost in the production phase of surface mine

This interpretation applies to waste removal (stripping) costs incurred in surface mining activity, during the production phase of the mine. Under the interpretation, the costs from this waste removal activity (stripping) which provide improved access to ore is recognised as a non-current asset (stripping activity asset) when certain criteria are met, whereas the cost of normal on-going operational stripping activities are accounted for in accordance with IAS 2 Inventories. The stripping activity asset is accounted for as an addition to, or as an enhancement of, an existing asset and classified as tangible or intangible according to the nature of the existing asset of which it form parts.

In case of the Group, the transition to IFRIC 20 had an impact on trade and other payable as the existing stripping cost liability balances has been written off to income statement. The effect of the adoption of IFRIC 20 is explained in Note 15.

IFRS 7 Financial instruments Disclosures - offsetting Financial Assets and Financial Liabilities

The amendment requires an entity to disclose information about rights to set-off financial instruments and related arrangements (e.g., collateral agreements). The disclosures would provide users with information that is useful in evaluating the effect of netting arrangements on an entity's financial position. The new disclosures are required for all recognised financial instruments that are set off in accordance with IAS 32. The disclosures also apply to recognised financial instruments that are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether the financial instruments are set off in accordance with IAS 32. As the Group is not setting off financial instruments in accordance with IAS 32 and does not have relevant offsetting arrangements, the amendment does not have an impact on the Group.

The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

3. Significant accounting judgements, estimates and assumptions

There have been no significant changes in the significant accounting judgments, estimates and assumptions applied for the purposes of the preparation of these interim condensed Consolidated and Company financial statements.

2.

4. Investments and other financial assets

Impairment of financial assets

During the period ended 30 September 2013, the Group's available-for-sale financial asset of US $ 2,370 (31 March 2013: US $ 4,363) and loans and receivable of US $ 1,680 (31 March 2013: US $ 2,466) were collectively impaired.

During the period ended 30 September 2013, the Company's loans and receivable of US $ 326 (31 March 2013: US $ Nil) were collectively impaired.

5. Cash and short-term deposits

Cash and short-term deposits comprise of the following:

For the purpose of cash flow statement, cash and cash equivalent comprise:

1Include deposits pledged for availing credit facilities from banks and deposits with maturity term of three months to twelve months.

6. Interest-bearing loans and borrowings

The interest-bearing loans and borrowings comprise of the following:

The interest-bearing loans and borrowings mature as follows:

Total debt of US $ 2,734,043 (31 March 2013: US $ 2,855,648) comprised:

· Long-term "project finance" loans of the Group amounting US $ 1,839,296 (31 March 2013: US $ 1,908,435) is fully secured on the property, plant and equipment and other assets of joint venture and subsidiaries that operate power stations, allied services and by a pledge over the promoter's shareholding in equity and preference capital of some of the joint ventures and subsidiaries.

· The short term loan taken by the Group is secured by the corporate guarantee provided by the Company, fixed deposits of the Group and by pledge of shares held in the respective entities.

· Buyer's credit facility is secured against property, plant and equipment and other assets on pari-passu basis, pledge of fixed deposits and corporate guarantee of KSK Energy Ventures Limited.

· Cash credit and other working capital facilities are fully secured against property, plant and equipment and other assets on pari-passu basis with other lenders of the respective entities availing the loan facilities.

7. Other financial liabilities

8. Segment information

The Group has adopted the "management approach" in identifying the operating segments as outlined in IFRS 8. Management has analysed the information that the chief operating decision maker reviews and concluded on the segment disclosure.

For management purposes, the Group is organised into business units based on their services and has two reportable operating segments as follows:

· Power generating activities and

· Project development activities

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which in certain respects, as explained in the table below, is measured differently from operating profit or loss in the Consolidated financial statements. Group financing (including finance costs and finance income) and income taxes are managed on a Group basis and are not allocated to operating segments. There is only one geographical segment as all the operations and business is carried out in India.

Notes to segment reporting:

(a) Inter-segment revenues are eliminated on consolidation.

(b) Profit / (loss) for each operating segment does not include finance income and finance costs of US $ 28,757 and US $ 174,368 respectively (30 September 2012: US $ 34,117 and US $ 58,150 respectively).

(c) Segment assets do not include deferred tax asset of US $ 42,858 (30 September 2012: US $ 20,679), financial assets and other investments US $ 133,113 (30 September 2012: US $ 122,620), short-term deposits with bank and cash US $ 7,075 (30 September 2012: US $ 16,396), and corporate assets US $ 35,870 (30 September 2012: US $ 32,228).

(d) Segment liabilities do not include deferred tax US $ 25,523 (30 September 2012:US $ 35,394), current tax payable US $ 1,016 (30 September 2012: US $ 3,744), interest-bearing current and non-current borrowings US $ 2,734,043 (30 September 2012: US $ 2,720,178), other financial liability US $ 36,405 (30 September 2012: US $ Nil) and corporate liabilities US $ 38,327 (30 September 2012: US $ 32,248).

(e) One customer in the power generating segment contributing revenues of US $ 60,951 (30 September 2012: US $ 90,606) accounted for 40.47% (30 September 2012: 45.89%) of the total segment revenue.

9. Finance costs

Finance costs comprise:

1Borrowing cost capitalised during the period amounting to US $ 134,276 (30 September 2012: US $ 99,670).

2 Includes loss on account of restatement of foreign currency loans and trade payables amounting to US $ 110,933 (30 September 2012: US $ Nil)

10. Finance income

The finance income comprises:

1 Includes gain on account of restatement of foreign currency loans and trade payables amounting to US $ Nil (30 September 2012: US $ 8,250)

11. Tax income / (expense)

The major components of income tax for the period ended 30 September 2013 and 30 September 2012 are:

12. Related party transactions

Key management personnel and their relatives (KMP):

Related party transactions during the period

The following table provides the total amount of transactions that have been entered into with related parties and the outstanding balances at the end of the relevant financial period: