Ksk Power Regulatory News (KSK)

22 November 2010

KSK Power Ventur plc

("KSK" or "the Company" or "the Group")

Interim results for the six months ended 30 September 2010

KSK Power Ventur plc, a leading developer and operator of private power plants in India, is pleased to announce its unaudited interim results for the six months ended 30 September 2010.

Operational Highlights

·; Operating thermal capacity increased to 549 MW

·; Additional operational wind generation capacity of 52 MW in place

·; Additional units under construction and further 313 MW power generation to commence in the next six months

·; Cumulative operational capacity expected to exceed 900 MW by March 2011 and aggregate gross generation to cross 2 billion kwh

·; KSK Mahanadi, a 3,600 MW power plant in Chhattisgarh is under active construction

·; Additional thermal projects and hydro projects over 6 GW in various stages of planning with certain of the projects under active progress on the ground, including land acquisition

Financial Highlights

·; Group revenue increased to $82.6m (2009: $24.4m)

o Commencement of power generation and associated revenues from VS Lignite and Wardha Warora assets

·; Gross Profit increased to $44.9m (2009: $12.1m)

·; Operating Profit increased to $40.3m (2009: $15m)

o Increase in administrative costs from increased labour costs and overheads to facilitate growth, depreciation on larger operating asset base as well as new business opportunities in KSK Energy Company and KSK Mineral Resources

·; Profit before tax of $35.5m (2009: $40.3m)

o Core power generation business recorded healthy growth during the current period.

o PBT over comparative previous period has been impacted by:

§ The inclusion of net finance income in 2009 which was non-recurring in 2010 (realisation gain of $9.5m on sale of GMDC shares)

§ Unrealised exchange gains of $11.5m in 2009 due to net foreign exchange gain primarily from restatement of foreign currency facilities and EPC contractor retention monies on the Warora and Chhattisgarh power projects

§ Increase in finance costs of $13.4m primarily on account of interest costs on the new generation assets under operations, temporary increases due to the margin financing for the additional stake in KSK Energy Ventures

·; Net profit up 29% at $37.3m (2009: $28.9m)

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

"I am pleased to announce that based on increased revenues from power generation, we are seeing enhanced financial performance from the Group in the first half of the year. We anticipate that these revenue streams will continue to grow in the second half.

"With the commencement of three power generation units of 135 MW each (VS Lignite and Unit-I & II of Wardha Warora) during recent months, the anticipated additional revenues are now coming through. The Indian listed subsidiary, KSK Energy Ventures Limited, expects to commission the third unit of Wardha Warora power plant in the next few weeks. The Group anticipates actualising and stabilising fuel supplies from the long term linkages with the Western coal fields during the second half, to limit dependence on short term market supplies of coal with respect to the Warora project.

"Construction on the 3,600 MW power project in Chhattisgarh is underway which will be significantly value accretive as the progress continues.

"These are exciting times for the Company with a number of further projects underway. We are confident in our ability to meet our longer term goals."

For further information, please contact: www.ksk.co.in

KSK Power Ventur plc +(91) 40 2355 9922 - 25

S. Kishore, Executive Director

K.A. Sastry, Executive Director

Arden Partners plc +44(0)20 7614 5917

Richard Day

Adrian Trimmings

Financial Dynamics +44(0)20 7831 3113

Jonathon Brill

Edward Westropp

Latika Shah

Directors Review

The period under review has seen an upsurge in the power generation activity and associated revenue accompanied by substantial decrease in net finance income compared to the previous year, resulting in continued growth in net profit for the period.

Overall, the financial performance for the period has been good with profitable underlying power plant operations. Over the next few years, the Company anticipates enhanced operating and financial performance on the power generation business under KSK Energy Ventures Limited and also expects to build the non-power generation business portfolio.

KSK Energy Ventures Limited ("KSKEV")

The Indian listed subsidiary KSKEV is currently operating five thermal power projects (one asset with only part capacity commissioned) and a new wind generation project all in aggregate over 600 MW of installed capacity and a further +300 MW expected to commission over the next few months.

The total power generation by the above assets during the period was 1,151 million units ("MU"), compared to 496 MU during the corresponding period in 2009. This includes approximately 81 MUs of renewable wind energy generated from the wind assets acquired in the period. In addition to current benefits from tax breaks, the Company intends to work towards tariff optimisation of the power sales for enhanced realisations with respect to such acquired assets.

During the first half of the year, the Company operated the smaller power plant at PLFs (plant load factor) often higher than 80% on account of successful stabilisation of the fuel supply arrangements. KSKEV is currently involved in stabilising the power plant operations post synchronisation, as well as fuel linkages with respect to the Wardha Warora project, for better PLFs during the second half of the year.

Among the planned thermal power projects, JR Power Gen is currently working on necessary permissions and land acquisition.

In regard to the hydro opportunities, KSKEV has made progress on the KSK Dibbin power project. Internationally regarded consultants have been retained to prepare a detailed project report to help obtain the necessary regulatory clearances for other hydro projects.

KSK Energy Company Private Limited ("KECPL")

This Indian subsidiary, KECPL, is pursuing various growth opportunities around power generation and is currently involved in a significant effort towards developing access to mineral resources. KECPL anticipates that this strategy will be beneficial to the current power generation business being pursued by KSKEV and will also provide an independent footprint for similar pursuits in the larger Indian energy market. During the period under review, operational activity has been sustained at the Gurha (E) lignite mine and new efforts, both collaboration and development activities, on large coal blocks have been initiated.

As part of the strategy to address global environmental concerns and to build a balanced energy portfolio to complement the thermal power generation initiatives of KSKEV, the Company is exploring opportunities in the wider renewable space, focused initially on wind and solar. The Company intends to build this new business on the principle of Grid parity to ensure that the Company has limited or no dependence on local governments for subsidies/grants or any incentive to undertake such power generation activity in a viable and commercially appropriate manner.

Financials

The consolidated operating revenue for the reporting period of the Group from power generating activities, mining activities and project development activities stood at $82.6m (2009: $24.4m). Gross profit on the operating revenue was $44.9m (2009: $12.1m). Operating profit for the period was $40.3m (2009: $15m) while profit before tax stood at $35.5m (2009: $40.3m). Profit after tax (before non-controlling interest) stood at $37.3m (2009: $28.9m) and earnings per share at $0.13 (2009: $0.13).

The consolidated cash balance (including restricted cash) at 30 September 2010 was $251.5m (against $276.9m at the beginning of the period) reflecting the higher investments in property plant and equipment as against the cash provided by financing activities. Similarly, the consolidated cash balance (net of restricted cash) at 30 September 2010 was $36.5m against $37.7m at the beginning of the period. It is anticipated that positive cash flows would begin to accrue from the various power plants in due course of 2011 and thereafter.

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the operational and financial review of our last annual report. These activities and factors have not materially changed to a large extent since the issue of the last annual report. However, the Group requires funds both for short-term operational needs as well as for long-term investment programmes mainly in growth projects. It is anticipated that with the commencement of additional capacity during the current half year and the capacity expected to commission during the next half year, that additional revenue streams and corresponding increase in cash flow from operations would provide necessary internal accruals for further equity requirements of the 3.6 GW Chhattisgarh power project. The current portion of the interest bearing loans and borrowings amounting to $611 m, mainly includes the short term borrowing facilities taken for the projects under construction, which will be adjusted / repaid against the disbursement proceeds of the long term project finance with respect to the power projects.

After making enquiries, we have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, we continue to adopt the going concern basis in preparing the Interim Financial Report.

Outlook

The Indian power generation business is witnessing new dynamics on account of new participants in the private power generation market during recent years, sustained fuel shortages, price rises, increased environmental activism on asset and fuel resources development. In addition, we are witnessing challenges associated with environmental clearances, challenges in timely development of ancillary infrastructure as well as the evolution of a market dynamics based operations and maintenance strategy for power plants. Also, the softer merchant power prices in the recent months are putting additional pressure on tariff realisations on rollover power purchase agreements. While it is our belief that the Group is pursuing an intrinsically sound business model, some of these emerging challenges and uncertainties associated with power generation business as a whole along with contractor performances and government regulations need to be closely monitored for sustained growth ahead. We believe that the KSK Group, with its wide range of established activities across the private power generation industry in India, is well placed to benefit further from these developments.

The Group intends to maintain its differentiation from competitors through active engagement with various project stakeholders, build-up of focused ground execution capabilities on both power generation businesses as well as ancillary business such as fuel block development, railway infrastructure, and pipeline and logistics operations for a rounded completion of asset opportunities. The Company seeks continuously to strive for fuel security and leverage brown field expansion opportunities in active consultation with and to support of the vital public stakeholders.

Insofar as planned renewable energy business is concerned, the Group is currently evaluating the various alternatives of investments, the current capital commitments and associated priorities for arriving at the appropriate structure and method of investments. These are exciting times for the Company with a number of further projects underway. We are confident in our ability to meet our longer term goals

Responsibility Statement

We confirm that to the best of our knowledge:

(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 the European Union;

(b) the Interim management report contained in this document includes a fair review of the information required by the Financial Services 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); and

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

By order of the Board

K A Sastry

Executive Director

A full set of interim figures can be found on the company website and below is a summary of the interim accounts.

INTERIM CONSOLIDATED AND COMPANY STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30 September 2010

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

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

Approved by the Board of Directors on 20 November 2010 and signed on behalf by:

S. Kishore K. A. Sastry

Executive Director Executive Director

INTERIM CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION

as at 30 September 2010

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

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

Approved by the Board of Directors on 20 November 2010 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 2009

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

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

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 September 2010

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

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

INTERIM COMPANY STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 September 2010

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

(See accompanying selected notes to the interim consolidated and Company financial statements)

INTERIM CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS

for the six months ended 30 September 2010

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

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

1Non cash transaction: The principal non cash transactions are issue of shares as consideration for the acquisition discussed in note 7(b) and acquisition of net assets of KSKEIEPL I and KSKEIEPL II as consideration for management fees discussed in note 10.