Ksk Power Regulatory News (KSK)

KSK Power Ventur plc

Interim Management Statement

KSK Power Ventur plc ("KSKPV" or "the Company"), the power project company listed on the London Stock Exchange, with interests in multiple power plants and businesses across India, today issues its Interim Management Statement for the period from 1 April 2011 to the date of this announcement. References to "the Group" are to KSKPV and its subsidiary companies.

Operational Power Plant Sites

·; 540 MW Wardha Warora Power project: The anticipated coal linkage supplies from Western Coal Fields have commenced during the period and are expected to reduce significantly dependence on e-auction coal in the ensuing quarters. While some coal may still be imported, the Company is looking to expedite the support to Western Coal Fields Limited on supplies from cost plus coal blocks, so as to ensure that the long term fuel security for the power plant is fully addressed. The total gross power generated in the plant during the last 4 ½ months stood at 1064 MU with the month of May recording the highest generation of 271 MU. We anticipate this to stabilize around 300 - 320 MU of gross generation per month during the coming months.

In addition to the Power Purchase Agreement ("PPA") with Reliance Infra for part of the capacity on attractive commercial rates for KSKPV, the Company is currently seeking expedited approval of open access to commence contracted supplies to various other industrial consumers.

·; 135 MW VS Lignite Power project: The total gross power generated in the plant during the last 4 ½ months stood at 324 MU with the month of June recording the highest generation of 89 MU. The Company looks forward to maintaining the current generation momentum and will undertake to ensure the appropriate sales mix between captive Industrial consumers and local utility is achieved, as well as operating the power plant in a manner so as to maximise revenue and cash flows, as well as sustaining the business operations.

·; 58 MW Sai Regency Power Project: This gas based plant has passed another milestone in April, with the cumulative generation of 1,500 MU from commencement and continues to provide good performance on plant load factor (PLF) and financial parameters. The total gross power generated in the plant during the last 4 ½ months stood at 168 MU, with the month of April recording the highest generation of 39 MU. The Company anticipates, subject to the general availability of higher quantities of natural gas in the immediate region, to continue this performance in the ensuing quarters at these levels

Wind based power generation at the Sai Regency site (total capacity of 18.9 MW) had total gross power generated during the last 4 ½ months at 17.6MU, with power sales to captive industrial customers rather than traditional sale arrangement to local utilities

·; 86 MW Arasmeta Power project: With partial generation from the expansion project as well as moderate generation from the first 43 MW unit, the total gross power generated in the plant during the last 4 ½ months stood at 170 MU with the month of May recording the highest generation of 47 MU. In addition to supplies to Lafarge's two cement units under a long term PPA, the Company will be supplying the balance of the power to other industries/utilities in the region. Upon full operation of both units, we anticipate this to stabilize around 48 - 50 MU of gross generation per month during the coming months

·; 43 MW Sitapuram Power project: With partial shut downs due to local unrests, the total gross power generated in the plant during the last 4 ½ months stood at 108 MU with the month of April recording highest generation of approx 30 MU. The plant supplies power to Zuari Cement's two cement units under a long term PPA, with the Company aiming to supply the balance power to local utilities in the region.

·; 52.5 MW KSK Wind Power Project: The total gross power generated in these wind units during the last 4 ½ months stood at 56 MU with power sales initially to local utility but now switching to PPA's with industrial customers under captive supplies model.

Projects under Construction

KSK Mahanadi (3.6 GW)

In addition to completion of land acquisition, obtaining environment clearance and execution of Implementation Agreement with the Chhattisgarh Government, the Power Purchase Agreement with GUVNL, EPC contracts with SEPCO of China have also been executed and the civil works at site have made considerable progress.

The construction activity of this large, single location, greenfield private power plant has seen good progress during the recent months. Foundation and boiler structural erection works for the first three units have either been completed or in advanced completion. Boiler drum lifting of two units was achieved during the April-June quarter in 2011 and the boiler construction works are progressing at a good pace.

The main contractor SEPCO, with various sub contractors, namely Simplex, SEW Infra, Punj Lloyd, Petron, Power Mech and Larsen & Toubro, are all fully mobilised on site and are undertaking respective works. With a construction workforce of more than 6,000 personnel on site, construction activity on the main power house and the rest of the plant has been steadily progressing with the planned critical milestone of the main power house for the first two units expected to be completed before the end of the current calendar year. Efforts on the associated water intake infrastructure, power evacuation as well as railway siding are also on track.

The Group of Ministers ("GOM") continues to consider the recent stipulations by the Ministry of Environment and Forest concerning land rights and forest clearance confirmation in regard to the Gare Pelma Coal Block. Insofar as Morga-II of Gujarat Mineral Development Company is concerned, the continuing uncertainty as a result of this has resulted in extensive diligence on the project progress by the Government of India. It is anticipated that a solution could be offered by the Government, during the current quarter, for alternative remedies in the event that any forest clearance is not provided for Morga-II.

JR Power 1.8 GW

As previously announced, this thermal initiative of the Group has experienced initial progress in Orissa, based on coal supplies from the Naini coal block by Pondicherry Industrial Promotion Development and Investment Corporation (PIPDIC). It is expected that progress on the necessary land acquisition and subsequent finalization of the necessary equipment contracts and tie-up of capital to begin the project construction

Hydro Initiatives

Construction is due to commence shortly at the 120 MW KSK Dibbin power project. The build time for this is anticipated to be 36 months after securing the final environmental clearance, which is expected in the current quarter.

The detailed project reports and geo technical studies for the larger hydro projects in Arunachal Pradesh have been completed and the Group anticipates collaboration with large reputed power plant developers as a potential basis to move forward to the next stage of development of these hydro initiatives totaling close to 3+ GW.

Wind Initiatives

The Group has set up and holds 100% of a Singapore incorporated renewable holding company called KSK Green Energy Pte Limited, which they will use to undertake various new wind energy initiatives. This will allow the Company to look to secure the participation of other financial investors/strategic partners to take its renewable portfolio forward.

Financial Highlights

The financial performance during the second half is expected to far exceed the first half of the current year, both on account of seasonality factors associated with certain industrial consumers as well as stabilization of certain key factors. The performance during the period under review has been held back due to the increase in fuel costs, which is slowly improving, as the coal linkages have started arriving at Wardha Warora. We expect margins to improve starting the Jul-Sep quarter.

Interest charges have increased as the Reserve Bank has raised country level interest rates. The Company is looking at a number of ways to mitigate this in the coming months.

Consolidation of stake in Indian subsidiary - Tender Offer

Further to the public announcement dated 17 May 2011, the Company through its subsidiaries has filed a Draft Letter of Offer on 27 May 2011 with the Securities Exchange Board of India ("SEBI") to acquire up to an additional 20% of shares in KSK Energy Ventures Limited, (KSKEV), the Indian Subsidiary listed on the National Stock Exchange of India Limited ("NSE") and the Bombay Stock Exchange Limited ("BSE") under the SEBI (SAST) Regulations. Upon completion of the Open Offer and assuming full acceptance of the Open Offer, KSKPV's interest would consolidate further to 74.94% of the voting share capital of KSKEV. This is currently under processing at SEBI, the local regulator.

Outlook

The Indian economy is expected to continue to see growth in demand for power generation through the coming decade. KSKPV through its various operations is well positioned to be one of the major players in India in delivering the required new capacity.

The Board continues the planned execution of construction at KSK Mahanadi while pursuing the other new development opportunities. We believe this will increase the installed base of the Group to 5 GW by 2014 with an existing pipeline of opportunities of 6+ GW placing KSKPV amongst the larger power developers in the Indian market.

We anticipate being able to announce further details on these developments over the coming weeks.

For further information, please contact:

KSK Power Ventur plc

Mr. S. Kishore, Executive Director

Mr. K. A. Sastry, Executive

Director +91 40 2355 9922

Arden Partners plc

Richard Day / Adrian Trimmings +44 (0)20 7614 5900