KSK Energy Ventures Ltd Management Discussions.

Indian Economy Outlook

India has emerged as the fastest growing major economy in the world as per the Central Statistics Organisation (CSO) and International Monetary Fund (IMF) and it is expected to be one of the top three economic powers of the world over the next 10-15 years, backed by its strong democracy and partnerships. Indias GDP is estimated to have increased 6.6 per cent in 2017-18 and is expected to grow 7.3 per cent in 2018-19.

The year 2017-18 has been remarkable for Indias global image as a promising investment destination. In recognition of the reforms carried out by the Government, Moodys Investor Service upgraded Indias sovereign credit rating to Baa2 from the lowest investment grade of Baa3 after a period of 13 years. India ranked 100 among 190 countries assessed by the Doing Business Team in the Ease of Doing Business Report, 2018 with an improvement of 30 ranks over its previous rank of 130 in the Ease of Doing Business Report 2017. Against the backdrop, there have been various investments in various sectors of the economy. The M&A activity in India increased 53.3 per cent to US $ 77.6 billion in 2017 while private equity (PE) deals reached US $ 24.4 billion. The Indian governments favourable policy regime and robust business environment have ensured that foreign capital keeps owing into the country. The government has taken many initiatives in recent years such as relaxing FDI norms across sectors such as defence, PSU oil re neries, telecom, power exchanges and stock exchanges among others. According to Department of Industrial Policy and Promotion (DIPP), the total FDI investments in India during 2017-18 stood at US $ 44.86 billion, indicating the governments effort to improve ease of doing business and relaxation in FDI norms is yielding results. Data for 2017-18 indicates that the services sector attracted the highest FDI equity in ow of US $ 6.71 billion, followed by telecommunication - US $ 6.21 billion and computer software and hardware - US $ 6.15 billion. Most recently, the total FDI in ows for the month of March 2018 touched US $ 3.31 billion. India emerged as the top recipient of green eld FDI In ows from the Commonwealth, as per trade review released by the Commonwealth in 2018. As per the Economic Survey of India 2017-18, after registering Gross Domestic Product (GDP) growth of over 7 per cent for the third year in succession in 2016-17, the Indian economy registered a slower growth, estimated to be 6.5 per cent in 2017-18, as per the rst Advance Estimates released by CSO. This is slightly lower than the range of 6.5 per cent to 6.75 per cent being projected based on recent developments. However even with lower growth for 2017-18, GDP growth has averaged 7.3 per cent for the period from 2014-15 to 2017-18, which is the highest among the major economies of the world. Given that this growth has been achieved in a milieu of lower in ation, improved current account balance and notable reduction in scal deflicit to GDP ratio makes it all more creditable. In addition to the introduction of GST, the year also witnessed significant steps being undertaken towards resolution of problems associated with non-performing assets of the banks, further liberalization of FDI etc., thus strengthening the momentum of reforms. After remaining in negative territory for a couple of years, growth of exports rebounded into positive one during 2016-17 and strengthened further in 2017-18. Concerns have been expressed about growing protectionist tendencies in some countries and it remains to be seen as to how the situation unfolds. Additionally, average crude oil (Indian basket) prices have risen in 2017-18 and going by the recent trends, the average crude oil prices could rise further by another 10- 15 per cent in 2018-19. Some of these factors could have dampening effect on GDP growth in the coming year. However, with world growth likely to witness moderate improvement in 2018, expectation of greater stability in GST, likely recovery in investment levels and ongoing structural reforms, among others, should be supporting higher growth. On balance, countrys economic performance should witness an improvement in 2018-19.

Power Sector:

Performance Highlights:

The overall Generation (including generation from grid connected renewable sources) in the country has increased from 1241.689 BU during 2016-17 to 1306.614 BU during 2017-18, with growth rate of 5.23%.

The Power Supply position in the country has marginally declined, since during the FY 2017-18, the supply gap in terms of energy has increased to 8567 MUs as against shortfall of energy of 7595 MUs in FY 2016-17. The shortfall in peak demand has also marginally increased to 3314 MW in FY 2017-18 from 2608 MW in FY 2016-17.


The total electricity generation for the FY 2017 - 18 was 1201.543 BU as compared to 1155.085 BU for the previous year. The aggregate Plant Load Factor for the FY 2017-18 stood at 60.67% compared to 59.88% during the previous year.

Year PLF Sector-wise PLF (%)
% Central State Private
2009-10 77.5 85.5 70.9 83.9
2010-11 75.1 85.1 66.7 80.7
2011-12 73.3 82.1 68 69.5
2012-13 69.9 79.2 65.6 64.1
2013-14 65.6 76.1 59.1 62.1
2014-15 64.46 73.96 59.83 60.58
2015-16 62.29 72.52 55.41 60.49
2016-17 59.88 71.98 54.35 55.73
2017-18 60.67 72.35 56.83 55.32

The Plant Load Factor of Thermal Power Stations is an index of utilization of the installed capacity. Therefore, even though there was increase in generation compared to the previous year, lot of thermal power plants were left stranded due to various reasons like lack of demand, availability of fuel etc.

The fall in Plant Load Factors of Independent Power Producers (IPPs) from 83.9% to 55.32% between 2010 to 2018 also re ects the inherent challenges and contrasts in the policy paradigms of new power generation capacities that have resulted in prolonged period of challenges and uncertainty across the Indian power sector.


Recognizing the need for development of the national grid, thrust was given to enhance the capacity of inter-regional links in a phased manner. Working in this direction, all the ve regional grids are now interconnected through synchronous links. An extensive network of Transmission lines has been developed over the years for evacuating power produced by different electricity generating stations and distributing the same to the consumers. Depending upon the quantum of power and the distance involved, lines of appropriate voltages are laid. The nominal Extra High Voltage lines in vogue are 800 kV HVDC & 765kV, 400 kV, 230/220 kV, 110 kV and 66kV AC lines. These have been installed by all the SEBs and by Generation, Transmission & Distribution utilities including those in Central Sector.

Development of High Capacity Power Transmission Corridors (HCPTCs)

Being the nodal agency for grant of Long Term Access (LTA), POWERGRID has undertaken development of high capacity power transmission corridors for evacuation of large quantum of power from various Independent Power Producers (IPPs) mainly coming up in resource rich states/coastal locations, i.e Odisha, Jharkhand, Sikkim, Madhya Pradesh, Chhattisgarh, Tamil Nadu, Andhra Pradesh, etc. Accordingly, to transmit this power to various load centres located across the states and regions, implementation of 11 nos of HCPTCs has been planned by POWERGRID in consultation with CEA, IPPs & bene ciaries. Central Electricity Regulatory Commission (CERC) has already granted regulatory approval for 11 nos. of HCPTCs at an estimated cost of

Rs 750,000 million. Implementation of HCPTCs is progressing as per schedule with completion in a phased manner matching with generation projects. In fact some of the elements under HCPTCs of Chhattisgarh and Odisha have already been commissioned and balance elements of HCPTCs are expected to be completed progressively as per requirement.


The various reforms like Deen Dayal Upadhaya Gram Jyoti Yojana (DDUGJY), Ujwal Discom Assurance Yojana (UDAY), National Smart Grid Mission (NSGM), Revised Tariff Policy, 2016 were launched for development of the Distribution sector. Under the UDAY scheme, as of 31 March, 2018, 32 states and UTs have signed up and bonds for more than Rs. 2.32 lakh crore have been issued by the state governments and tariff revisions have happened in 25 states/UTs since the beginning of the scheme. In order to bring uniformity in power procurement by the DISCOMs and also to promote competition in electricity sector, DEEP (Discovery of Efficient Electricity Price) e-bidding portal was launched. In the rst stage, portal was launched for procurement of short term power (i.e. up to One year). The scope of the portal has been extended for procurement of power for medium term also.

Introduction of SHAKTI - (Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India)

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has approved the signing of Fuel Supply Agreement (FSA) with the Letter of Assurance (LoA) holders. Allocation of linkages for power sector shall be based on auction of linkages or through Power Purchase Agreement (PPA) based on competitive bidding of tariffs except for the State and the central power generating companies and the exceptions provided in Tariff Policy, 2016. Coal drawl will be permitted against valid long term PPAs and to be concluded medium term PPAs. The intended benefits of the policy include : l Coal available to all Power Plants in transparent and objective manner. l Auction to be made on the basis of linkage allocations to IPPs; cheaper and affordable POWER FOR ALL. l The stress on account of non-availability of linkages to power sector projects shall be overcome. Good for the infrastructure and banking sector. l PPA holders to reduce tariff for linkage; direct benefit of reduced tariff to Discom/consumers.

The rst round of SHAKTI was successfully conducted by Coal India Limited, resulting in 10 companies participating in the auction representing a cumulative capacity of approx.9044 MW and booked from 8 available sources a cumulative quantity of approx. 27.18 million tonnes per annum (MTPA). This is expected to result in an annual generation of over 47 billion units per annum from the linkage coal and a savings in tariff of approximately Rs. 125crores / annum for period up to 25 years.


The Indian power sector itself has an investment potential of US $ 250 billion in the next 4-5 years, providing immense opportunities in power generation, distribution, transmission and equipment, according to Union Minister of Coal, Power and Renewable Energy. The Governments immediate goal is to generate two trillion units (kilowatt hours) of energy by 2019. This means doubling the current production capacity to provide 24x7 electricity for residential, industrial, commercial and agriculture use. Capital intensive nature of the industry and strenuous process of regulatory approval and land acquisition makes it dif cult for new entrants there by existing players reaching their highest potential. In April, 2018, the Government of India approved a pilot scheme for procurement of power of 2.5 GW aggregate power for three years on competitive basis under medium term with commissioned projects but without Power Purchase Agreement. It aims to revive commissioned power plant which were unable to sell electricity in the absence of valid PPAs. Therefore, the current metamorphosis at the Indian power sector carries both an opportunity and threat. If handled appropriately, through reconsidered business approach and collaborations, long term economic value could be preserved as well as realised and if not properly handled, the same could lead to challenges to private power generation, distressed projects adding to the growing bad loan portfolios of project lenders.


While the company attempts to address various risks, the key risks and uncertainties continued to be faced by the group are as follows: l The actions of lending banks and other financial institutions at subsidiaries level under RBIs revised framework for resolution of stressed assets have resulted in a significant number of the wider groups power plants and subsidiaries ceasing to be subsidiaries of the Group with material impact on the Groups business going forward. l Uncertainty on Companys investment and receivables in some of the subsidiaries whose lenders have invoked the pledge of majority shares of subsidiaries. l Liquidity risk, project financing and sustainable debt levels against invested equity at projects l Delay in Government decisions or implementation of earlier Government decisions along with continual inconsistencies in Government policies across departments and retrospective amendments to the existing policies or introduction of new policies l Delay in providing necessary regulatory support and / or dispensation as may be required for timely implementation of the financing plans or regulatory constraints on financing arrangements resulting in alternate financing arrangements, which may take more time than anticipated to fructify l Deviation from approved Government policies and abuse of market dominance position by certain contractual counterparties l Shortage of fuel and dependence on market based or imported fuel which is subject to market vagaries and other uncertainties l Economic slowdown and negative sectoral outlook with resultant impact on banking sector delays in agreed project disbursements and timely availability of credit l Delays in enforcement of contractual rights or legal remedies with Government counter parties undertaking fuel supplies, power offtake, transmission and open access amongst others l PPA Counter parties going contrary to pre-agreed understanding and seeking benefits from the power generators that are often in conflict with shareholder obligations to further the business l Unusual currency depreciation that adversely affects the cost of project imports, project implementation and repayment obligations l Logistics bottlenecks and other infrastructure constraints of various agencies l Challenges in the development of support infrastructure for the power projects including physical hindrances and delay in the issue of permits and clearances associated with land acquisitions l Political and economic instability, global financial turmoil and the resultant scal and monetary policies as well as currency depreciation resulting in increasing cost structures


The Company has an internal control system, which provides protection to all its assets against loss from unauthorised use and for correct reporting of transactions. The internal control systems are further supplemented by internal audit carried out by an independent rm of Chartered Accountants and periodical review by the management. The Audit Committee of the Board addresses issues raised by both the Internal and Statutory Auditors.

The internal control systems are implemented : l To safeguard the Companys assets from loss or damage l To keep constant check on cost structure l To provide adequate financial and accounting controls and implement accounting standards


During the year, operating assets generated 8,124GWh with an average portfolio plant load factor of 42% (FY17: 9,402 GWh with a 52% load factor). The Plant wise details are tabulated below:

31 March 2018 31 March 2017
GWh (%) GWh (%)
KSK Mahanadi (1200 MW) 5,876* 56% 6,731 64%
Sai Wardha (540 MW) 1,130 24% 1395 29%
VS Lignite (135 MW) 436 37% 474 40%
Sai Regency (58 MW) 420 83% 379 75%
Sai Lilagar (86 MW) 96 13% 124 16%
Sitapuram Power (43 MW) 148 52%# 281 75%
Sai Maithili (10 MW) 18 21% 18 21%
TOTAL 8,124 42% 9,402 52%

*KSK Mahanadis 3rd 600 MW unit commissioned during the year but effective operational PLF based on 1200 MW of installed capacity #Sitapuram Power generation data of FY 18 until 31.12.2017

3,600 MW KSK Mahanadi Power Company Limited: l The third 600 MW unit has been commissioned during the year with aggregate generation achieved of 5876 GWh. l Arrangements to ensure power requirement of various State Distribution Companies (Discoms) continue to be ful lled to the extent possible through plant generation as well as alternate sources, pending remaining units being fully commissioned and made operational. l Debt resolution at the power plant (post the new resolution framework noti ed by RBI in February 2018) and merger of Raigarh Champa Rail Infrastructure SPV and KSK Water Infrastructure SPV into KSK Mahanadi continue to be pursued. l The Lenders Consortium at KSK Mahanadi Power Company Limited (KSK Mahanadi) along with Lenders consortium at the Water and Railway infrastructure SPVs have invoked the shares pledged with them as security for the financial facilities. Consequent to the invocation of pledge all three Companies ceased to be Subsidiaries and Associate Company respectively and the same will substantially impact the financial position of the Company moving forward.

540 MW Sai Wardha Power Generation Limited: l The total gross power generated during the review period was 1130 GWh as against the 1,395 GWh during FY 2017. This re ected the continued challenging local operating environment, the fuel and the off take constraints experienced by Sai Wardha and resultant pressure on working capital and resultant operational deterioration l While the lenders Consortium had approved an Outside Strategic Debt Restructuring (SDR) process during April 2017, under earlier regulations for necessary resolution, post the new resolution framework noti ed by RBI in February 2018, notices of defaults with respect to credit facilities availed under the respective Facility agreements have been received from Lenders consortium and debt resolution is being pursued l During the year, the lenders of Sai Wardha acquired the majority equity control by invocation of shares pledged with them and resultantly it has ceased to be subsidiary of the Company. l As regards the nal legal appeal led by Western Coal Fields Limited and Coal India Limited, the same is pending before the Honble Supreme Court of India and the nal hearing on the appeal is expected to commence shortly. A favourable nal ruling would not only enable a price reduction but also allow substantial claims of damages for the prior period to be determined by the NCLAT under the Provisions of Competition Statute. l As regards long term power sale arrangements to commence delivery for half of the capacity of the Sai Wardha project to the local utility, the appeal against the Appellate Tribunal for Electricity ("APTEL") has also been adjudicated by the Honble Supreme Court in April and follow-up action has been initiated.

135 MW VS Lignite Power Private Limited: l The total gross power generated during the year was 436 GWh as against the 474 GWh during FY 2017, re ecting the challenges experienced on the movement to an Independent Power Plant (IPP) imposed under a local mandate by the Government. l Delay in execution of long term PPA as mandated under the Rider agreement of January 2015 coupled with challenges on interim sale arrangement has increased the financial stress on the project and an appropriate resolution plan is required to address the situation in entirety.

86 MW Sai Lilagar Power Generation Limited: l The total gross power generated during the year was 96 GWh as against 124 GWh during the previous year re ecting the wider trend on addressing coal supplies for sustained generation. Commencement of coal supplies under the SHAKTI

Auction to undertake power supplies is essential for power plant viability. l Notices of defaults with respect to credit facilities availed based on security of this power station have also been received and effort underway to address the same in the best possible manner.

58 MW Sai Regency Power Corporation Private Limited: l The total gross power generated in the combined cycle gas red power plant during the year was 420 GWh as against 379 GWh during FY 2017 re ecting the restoration achieved with predominant gas supplies by ONGC under the new auction mechanism and balance gas supplies from GAIL.

10 MW Sai Maithili Solar Power Project: l The total gross power generated during the year was 18 GWh as against 18 GWh during the previous year. The 10 MW PV solar power generation plant of Sai Maithili is located in the state of Rajasthan, operating under the Jawaharlal Nehru National Solar Mission with a long term PPA.

43 MW Sitapuram Power Limited: l The total gross power generated during the 9 months until Dec 2017 was 148 GWh as against 281 GWh during the previous year. Zuari Cement Limited, Holding Company of Sitapuram Power Limited has taken over entire 49% shareholding held by the Company and in result it has ceased to be Joint Venture of the Company.


All gures given in the review are in Indian Rupee million unless otherwise stated.

Fifinancial Highlights: Rs in million

Particulars 31 March 2018 31 March 2017 % variance
Revenue from operations 31,490 39,386 -20
Gross pro t 10,373 16,535 -37
EBITDA 6,243 12,791 -51
Loss after tax (17,014) (6,927) 146

These movements are on account of lower than expected PLF at KSK Mahanadi accompanied by factors like deconsolidation of Sai Wardha and VSLP pursuant to lenders decision of change in management and disposal of Joint venture Sitapuram Power to co-venturer. Further, pursuant to the RBI Circular dated 12 February, 2018 and lenders decision to consider the change in management outside NCLT, lenders have invoked shares equivalent to Rs. 25,713.72 million in KMPCL held by the Group. Consequent to the above, the Group has derecognised the related carrying values of assets and liabilities of KMPCL along with its subsidiaries i.e. KSK Water Infrastructures Private Limited (KWIPL), Sai Power Pte Ltd (SPPL) and associate i.e. Raigarh Champa Rail Infrastructure Private Limited (RCRIPL) with effect from 27 March, 2018.

Principal activity and overview

KSK Group is primarily engaged in the development; ownership, operation and maintenance of power generation assets in India. KSK focused its strategy on the private sector power development market, undertaking entire gamut of development, investment, construction, operation and maintenance of power plant with supplies initially to industrial consumers operating in India and now branching out to cater to the needs of utilities and others in the wider Indian power sector.

Operating Results:

Rs in million

Particulars March 2018 March 2017 Variance % variance
Revenue 31,490 39,386 (7,896) -20
Cost of revenue (19,014) (19,959) (945) -5
Manufacturing expenses (2,103) (2,892) (789) -27
Gross Pro t 10,373 16,535 (6,162) -37

Generation, revenues and cost of revenue

The total revenue from operation of the Group has decreased by Rs. 7,896 million re ecting a year on year decrease of 20% as a result of lower than expected power generation at KSK Mahanadi and effect of deconsolidation of Sai Wardha and VSLP. Revenues for the year 2018 also include revenue of Rs. 6,228 million (2017: Rs. 5,025 million) at KSK Mahanadi under change in law provision of the Power Purchase Agreements with State Utilities and Government of India directive but requiring determination by the Electricity Regulatory Commission before receipt of payment.

Cost of revenue also decreased by Rs. 945 million re ecting a year on year decrease of 5%. The decrease is mainly due to deconsolidation of Sai Wardha and VSLP and decreased operation at KSK Mahanadi. However, cost of revenue continued to remain at higher levels as compared to the management expectation largely on account of delay in granting linkage coal to KSK Mahanadi by the Government of India which could actualise only in the month of March, 2018.

Gross Pro t

Gross pro t of the Group decreased from Rs. 16,535 million to Rs. 10,373 million, re ecting a year on year decrease of 37%. Decrease as explained above is mainly on account of lower PLF at KSK Mahanadi and deconsolidation effect of Sai Wardha and VSLP.

The following table and charts shows year on year trend in revenue and gross pro t

Earnings before Interest, depreciation and tax (EBITDA)

Rs in million

Particulars March 2018 March 2017 Variance %
Gross Pro t 10,373 16,535 (6,162) -37%
Employee benefit expenses (836) (1,119) (283) -25%
Other general & administrative expenses (3,294) (2,626) 668 25%
EBITDA 6,243 12,791 (6,548) -51%

EBITDA of the Group has decreased by 51% from Rs. 12,791 million in FY 2017 to Rs. 6,243 million in FY 2018 mainly due to decline in gross pro t along with increase in general and administrative expense by 25%.

The following chart shows the year on year trend in EBITDA of the Group.

Pro t / (loss) for the year

Rs in million

Particulars March 2018 March 2017 Variance %
EBITDA 6,243 12,791 (6,548) -51%
Finance costs (21,843) (21,945) (102) 0%
Depreciation and amortisation (5,998) (6,823) (825) -12%
Other income and exceptional items 2,981 7,689 (4,708) -61%
Loss before tax (18,617) (8,288) 10,329 125%
Tax income 1,604 1,361 243 18%
Loss for the year (17,013) (6,927) 10,086 146%

Movement in loss for the year from Rs. 6,927 million to Rs. 17,013 million is mainly because of the following: l Decrease in nance costs by Rs. 102 million from Rs. 21,945 million to Rs. 21,843 million re ecting year on year decrease of 1%. The decrease is on account of deconsolidation of Sai Wardha and VSLP. However decrease in nance cost due to deconsolidation of Sai Wardha and VSLP have been offset to the extent of Rs. 3,679 million on account of increased borrowing levels at KSK Mahanadi mainly on account of commencement of third unit being operational for part of the year. l Decrease in depreciation and amortization expenses from Rs. 6,823 million in FY 2017 to Rs. 5,998 million in FY 2018 is mainly on account of deconsolidation of Sai Wardha and VSLP. However decrease in depreciation due to deconsolidation of Sai Wardha and VSLP have been offset to the extent of Rs. 598 million on account of increased depreciation at KSK

Mahanadi mainly on account of commencement of third unit being operational for part of the year. l Decrease in other income (including exceptional) from Rs. 7,689 million to Rs 2,981 million mainly on account of recognition of claim of Rs. 6,055 million relating to inferior quality and excess price receivable from a coal supplier in Sai Wardha after favorable ruling at COMPAT in the previous year. Income from insurance claims also decreased by Rs. 311 million and interest income on deposits/receivables have also witnessed decrease amounting to Rs. 545 million. l During current year group has recognised net gain of Rs. 8,406 million on account of deconsolidation of KSK Mahanadi, Sai Wardha, VSLP and disposal of Sitapuram power. Further, Group has impaired its investment in various Hydro, Solar, Thermal under constructed projects amounting to Rs. 6,206 million. l Increase in tax income from Rs. 1,361 million to Rs. 1,604 million re ects recognition of deferred tax asset at KSK Mahanadi on carry forward of losses.

Segmental analysis

The Group is currently engaged in two business segments, namely, power generation and power development. Net revenues from its power generation segment have decreased from Rs. 39,367 million in FY 2017 to Rs. 31,489 million in FY 2018. Net revenues from its project development segment have decreased from Rs. 19 million in FY 2017 to Rs. 2 million in FY 2018. The power generation segment contributed 99.99% revenue of the Groups total revenue in both financial years 2018 and 2017.

Fifinancial position and cash ows

The capital employed of the Group was Rs. 32,841 million as at 31 March, 2018 and decreased by Rs. 226,337 million as compared to 31 March, 2017. The Group incurred Rs. 29,464 million mainly towards capital expenditure relating to continuous construction and development activities at our 6 x 600 MW Mahanadi power plant during FY 2018.

The loan portfolio of the Group comprises a combination of domestic and foreign currency loans. The aggregate outstanding indebtedness as at 31 March, 2018 stood at Rs. 23,694 million and decreased by Rs. 207,249 million compared to FY 2017. The decrease is mainly on account of deconsolidation of KSK Mahanadi, KSK Water Infra, Sai Wardha, VSLP and disposal of Sitapuram Power. Net customer receivables as at 31 March, 2018 stood at Rs. 313 million as compared to Rs. 29,538 million as at previous year. Lower trade receivables are mainly due to deconsolidation of KSK Mahanadi, Sai Wardha, VSLP and disposal of Sitapuram Power.

Cash accruals from operations before working capital changes are lower in FY 2018 by Rs. 11,345 million as compared to FY 2017 mainly due to lower PLF at KSK Mahanadi and deconsolidation of Sai Wardha and VSLP. Apart from deployment of cash for capital expenditure, the Group repaid some of its long term loans amounting to Rs. 1,522 million and availed fresh disbursement of borrowings amounting to Rs. 32,263 million. Consequently, there is net cash out ow of Rs. 1,071 million for the FY 2018.

Going Concern

The Group has incurred net loss during the current year as well in the previous years with resultant defaults in payment of interest and instalments dues to banks and financial institutions. Further as discussed at note 8 to the consolidated financial statements, the Group has residual investments and receivables pursuant to invocation of shares pledged. However, the Group has been making appropriate representation and is in discussion with the respective lenders to nd an appropriate resolution plan at each of the assets. The Group continues to prepare the financial statements as going-concern.


Based on the business model of the Company, changing business conditions in Power Sector and associated challenges for the Company, HR has focussed on empowering and integration of functions to increase effectiveness of delivery leading to optimization of manpower and cost reduction. The human resources had been transitioned from handling specialised roles to additional multiple areas of work. Senior Management was actively involved in mentoring and counselling of KSK employees and Contractor employees in the transition process. Total manpower of the Group at the end of financial year is 953.


KSK actively contribute to the social and economic development of the communities to build a better and environmentally sustainable way of life for all stake-holders. The Groups sustainability initiatives towards community are essentially focused on ve thrust areas; Education, Health, Socio- economic empowerment, infrastructure development and cultural and social contribution.

KSKs holistic approach to the issues in education sector in India focuses on addressing the critical issues of quality, access, equity, infrastructure and bridging the urban-rural disparity. KSK is committed to ensure that healthcare is more easily available to all. The group believes that socio-economic empowerment of our communities alone can help us ensure sustainability of the development that we undertake. KSK is committed to develop /renewing Common property Resources that are critical for rural economy. The Group proactively seeks to deepen its relationship with local communities. Building relationship for us is sharing and being part of the joys and sorrows of our communities. KSK is currently engaged through its CSR programme by building Sustainable Communities across 68 Villages in 6 States around 8 Project Locations covering 7037 project affected families and the villlages they reside in. KSK supported infrastructure projects in the state of Chhattisgarh through Sanjeevani Hospital project. The hospital has taken forward the initiative of exclusive paediatric cardiac services totally free of cost to all irrespective of caste, creed, colour, religion and nation.

As on the date more than 55,836 Outpatient Cardiac consultations and 6,091 state of art cardiac surgeries were performed free of cost and total 21, 136 rural children were screened through outreach screening program for early detection of cardiac ailments.


Certain statements in this Management Discussion and Analysis describing the Companys business plans estimates and expectations, numerical or otherwise, may be Forward looking statements within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those expressed or implied. Important developments that could affect the Companys operations include economic conditions, government permissions, significant changes in political and regulatory environment in India, tax laws, litigation, labour relations and interest costs amongst others.