Energy Development Company Ltd

To The Shareholders

INTRODUCTION

The Directors present their Fourteenth Annual Report and Audited Statements of Accounts for the year ended 31st March, 2009.

FINANCIAL RESULTS

The Financial Results of the Company are elaborated in the annexed Management Discussion and Analysis Report. The highlights are as under :

DIVIDEND

The Directors recommend for consideration of the Shareholders, at the ensuing Annual General Meeting, payment of dividend of Re.1/- per share (10 per cent) for the year ended on 31st March, 2009. The amount of dividend and tax thereon aggregates to Rs. 3.217 crores.

Dividend paid for the year ended 31st March, 2008 was Re.1/- per share (10 per cent). The amount of dividend and tax thereon aggregates to Rs. 3.217 crores.

OPERATIONS

Detailed information on the operations of different business segments of the company are covered in Management Discussion and Analysis Report.

NEW PROJECTS

During the year your company has successfully commissioned 7MW Ullankal Hydro Electric Project in the State of Kerala and also a 1.5 MW Wind Mill at Chitradurga in Kamataka.

PREFERENTIAL ALLOTMENT

In terms of the resolution passed under section 81(1 A) of the Companies Act, 1956 at the Extra Ordinary General Meeting of the members of the Company, held on 27.08.2008, your Board allotted 40,00,000 convertible warrants on 11.09.2008 by way of private placement, at a price of Rs.135/- per warrant (including a premium of Rs.125/-) out of which 22,00,000 warrants were allotted to the promoters / promoters group of the company and rest to persons / entities other than promoter / promoters' group. The Warrant holders have already paid Rs.13.50/- per warrant and have the option to convert the warrants into equivalent number of equity shares of Rs. 10/- each fully paid-up, on payment of balance subscription amount of Rs.121.50/- per warrant, in one or more trenches, within the period of 18 months from the said date of allotment. The entire money (Rs. 5.4 crores) raised through the issue of aforesaid warrants, have been fully utilized for the purposes mentioned in the explanatory statement to the Notice calling the aforesaid Extra Ordinary General Meeting.

DELISTING OF EQUITY SHARES

As decided in the last Annual General Meeting, the shares of the Company were voluntarily delisted from the Bangalore Stock Exchange Limited, with effect from 16th December, 2008 and The Calcutta Stock Exchange Association Limited, with effect from 27th January, 2009.

The equity shares of your Company remain listed with the Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

SUBSIDIARY COMPANY

M/s. Ayyappa Hydro Power Limited (AHPL) continues to be a wholly owned subsidiary of your Company.

AHPL is setting up a 15 MW Karikkayam Hydro Power Project in the state of Kerala. Necessary land for the project facilities is already in possession. Barring unforeseen circumstances the project is likely to be operational in the financial year 2010-11.

The statement pursuant to Section 212 of the Companies Act, 1956 in respect of the Subsidiary Company, is separately annexed and forms part of the Annual Report.

Your Company has also acquired 100% Equity Shares of M/s. Dhanashree Projects Private Ltd w.e.f 20.05.2009, and of M/s. EDCL Power Projects Ltd. w.e.f. 28.05.2009, and accordingly they have now become wholly owned subsidiaries of the Company.

MANGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Clause 49 of the Listing Agreement with the stock exchanges, the Management's Discussion and Analysis Report for the year under review, is given under a separate section and forms part of the Annual Report.

CORPORATE GOVERNANCE

The Company has complied with all the mandatory requirements of Corporate Governance, as stipulated in Clause 49 of the Listing Agreement with the stock exchanges. A report on Corporate Governance together with the Auditors' Certificate on the compliance of conditions of Corporate Governance is given in a separate section and forms part of the Annual Report. Further, a declaration signed by the Executive Director, affirming compliance with the Code of Conduct by all the Board members and senior management personnel along with a Certificate from CEO/CFO required under clause 49(V) of the Listing Agreement are also given therein.

CONSOLIDATED FINANCIAL STATEMENTS

The directors also present the audited consolidated financial statements incorporating the duly audited financial statements of the subsidiary, viz. Ayyappa Hydro Power Limited and as prepared in compliance with the accounting standards and listing agreements.

DIRECTORS

Mr. Gouri Prasad Goenka, Mr. Inder Chand Jain and Mr. Sanjay Kumar Gupta, Directors, retire by rotation and being eligible offer themselves for re-appointment. Your Board has also received Form 'DD-A' pursuant to the Companies (Disqualification of Directors under section 274(l)(g) of the Companies Act, 1956) Rules, 2003, confirming that they have not incurred any disqualification, under section 274(l)(g) of the Companies Act, 1956. Your Board recommend their re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956 with regard to the Directors' Responsibility Statement, the Board of Directors confirms that:-

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departures;

(b) the selected accounting policies were applied consistently and the Directors 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 as at the end of the financial year on 31st March, 2009 and of the Profit or Loss of the company, for the year ended on that date.

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

(d) the annual accounts have been prepared on a going concern basis.

PARTICULARS OF ENERGY CONSERVATION, ETC.

Particulars in respect of conservation of energy and technology absorption required under Section 217(l)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, are given in a separate annexure, attached hereto and forms part of this report. There is no foreign exchange earning or outgo.

AUDITORS' REPORT

The Auditors' Report to the Shareholders of the Company does not contain any qualification, reservation or adverse remarks.

AUDITORS

The Auditors, M/s. Lodha & Co., Chartered Accountants, vacate their office at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. They have furnished a certificate to the effect that their proposed appointment, if made will be in accordance with the limits specified under section 224 (1-B) of the Companies Act, 1956. Your Board recommend their re-appointment from the conclusion of the ensuing Annual General Meeting, till the conclusion of the next Annual General Meeting.

PERSONNEL

Your Directors wish to acknowledge the support and valuable contributions made by the employees, at all levels. We continue to train and motivate our workforce to enhance their contribution towards the goals of your Company.

Particulars of employees, as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are given in a separate annexure, attached hereto and forms part of this report.

ACKNOWLEDGEMENTS

Your Directors express their sincere appreciation to the Banks, Central and State Governments and the Company's valued investors for their continued co-operation and support.

Your Directors also take this opportunity to acknowledge the dedicated efforts made by workers, staff and officers, at all level for their contribution to the success achieved by the Company.

INFORMATION PURSUANT TO THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988.

(A) CONSERVATION OF ENERGY

Electricity consumption in Power House auxiliaries is mainly for running governor, cooling water pumps, and ventilation, air conditioning and lighting purposes. Effective energy conservation measures are being taken in general and also ensuring that electricity consumption in these auxiliaries is kept at the minimum.

The company does not fall under the category of industries specified in the schedule to the said Rules, accordingly, information in Form A, is not required to be given.

(B) TECHNOLOGY ABSORPTION

Every effort was made to ensure that various equipments relating to the company's power projects correspond to state of the art technology. No specific expenditure on Research and Development is envisaged.

PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975

Employed throughout the year and in receipt of the remuneration of Rs. 24 lacs or more per annum.

Notes :

1) Remuneration includes salary and House Rent Allowance.

2) Appointment is made for a period of five (5) years w.e.f. 01/08/2006. Other terms and conditions are as per the Shareholders' Resolution and Rules of the Company.

3) Mr. Amar Singh is husband of Mrs. Pankaja Kumari Singh, Director.