TO THE MEMBERS OF KARMA ENERGY LIMITED
 
 The Directors are pleased to present this fifth Annual Report and the
 Audited Statement of Accounts for the year ended March 31, 2012.
 
 1.  FINANCIAL RESULTS
 
                                                       (Rs. in lakh)
 
 Particulars                            2011-2012         2010-2011
 
 Total Income including exceptional 
 items                                    2982.78           1761.37
 
 Profit Before Depreciation               1188.86            833.16
 
 Less : Depreciation                       793.44            760.77
 
 Profit Before Tax                         395.42             72.39
 
 Less : Income Tax                         160.91             27.00
 
 Less : Deferred Tax                        (0.38)           (34.16)
 
 Profit After Tax                          234.89             79.55
 Add : Balance brought forward from
 
 previous year                              11.81             (0.53)
 
 Additions on amalgamation                 (67.98)              --
 
 Balance Available for appropriation       178.72             79.02
 
 Director''s Recommendation for 
 Appropriation :
 
 Transfer to General Reserve                  --                 --
 Proposed Dividend on Equity Shares @5%
 
 (2010 - 2011: 5 %)                         57.82             57.82
 
 Dividend Tax                                9.38              9.38
 
 Surplus Carried to Balance Sheet          111.52             11.81
 
 The consolidated Financial Statements of the Company and its
 subsidiaries, prepared in accordance with Accounting Standard 21
 prescribed under Companies (Accounting Standards) Rules form part of
 the Annual Report and Accounts.
 
 2.  DIVIDEND
 
 Your Directors have recommended a dividend at 5 % (Re.0.50 per share)
 on equity shares (Previous year : 5 % ). The dividend, together with
 the tax on distributed profit, will absorb a sum of Rs.67.20 Lakh and
 will be paid to those shareholders whose names stand registered in the
 Register of members of the Company as on the book closure date.
 
 3 PERFORMANCE
 
 During the year the Total Income of the Company was Rs.2982.78 Lakh as
 compared to Rs.1761.37 Lakh in the previous year. The Profit before
 depreciation achieved was Rs.1188.86 Lakh (Previous year - Rs.833.16
 Lakh). The Profit after Tax registered was Rs.234.89 Lakh (Previous
 year Rs.79.55 Lakh).
 
 4.  SUBSIDIARY COMPANIES
 
 Your company has 8 subsidiary companies namely Almi Hydro- Electric
 Projects Ltd, Baledh Energy Projects Ltd, Batot Hydro Power Ltd,
 Brahmanvel Energy Ltd, Greenweiz Projects Ltd, Joiner Hydro Power
 Projects Ltd, Khandesh Energy Projects Ltd and Vajharpada Energy Ltd.
 All subsidiary companies are SPV''s executing power projects which are
 in different stages of development except Greenweiz Projects Limited is
 in the business of carrying out operation & maintenance of wind farms.
 Batot Hydro Power Ltd commissioned its 3.5 MW small hydro power project
 in June, 2012.
 
 In accordance with the Circular No. 5/12/2007-CL-III dated 8th
 February, 2011 issued by the Ministry of Corporate Affairs, Government
 of India has granted general exemption from attaching the Balance
 Sheet, Statement of Profit and Loss Account and other documents of the
 subsidiary companies with the Balance Sheet of the Company. However the
 financial information of the subsidiary companies is disclosed in the
 Annual Report in compliance with the said circular. The company will
 make available the Annual Accounts of the subsidiary companies and the
 related detailed information to any member of the Company who may be
 interested in obtaining the same. The annual accounts of the subsidiary
 companies will also be kept open for inspection at the Registered
 office of the Company and that of the respective subsidiary companies.
 The Consolidated Financial statements presented by the company include
 the financial results of its subsidiary companies.
 
 The statement pursuant to Section 212 of the Companies Act, 1956
 containing the details of the Company''s subsidiaries as at 31st March,
 2012, is attached to the Annual Accounts.
 
 5.  MERGER OF AVIRODH FINANCIAL SERVICES LTD WITH THE COMPANY :
 
 Avirodh Financial Services Ltd amalgamated with the Company with effect
 from appointed date 1st April 2011 pursuant to the sanction of Scheme
 of Amalgamation by the Hon''ble High Court of Bombay vide their order
 dated 13th April, 2012. Consequently the Financials of said Avirodh
 Financial Services Limited have been incorporated in the financials of
 the company for 2011-12.
 
 6.  DIRECTORS
 
 Shri Upkarsingh Kohli was appointed as a Additional Director on 9th
 November, 2011 in accordance with Section 260 of the Companies Act,
 1956 and Article 46 of the company''s Articles of Association and will
 cease to hold office at this Annual General Meeting and is eligible for
 appointment. During the year under review M/s. IREDA withdrew the
 nomination of their nominee Director Shri. Sumant Chadha with effect
 from 24th October, 2011 in view of repayment of entire term loan
 facility availed by the Company. Your Board places on record their
 appreciation of the valuable contribution made by Shri. Sumant Chadha
 during his tenure as Nominee Director on the Board of the Company.
 
 In accordance with the provisions of the Companies Act, 1956 and the
 Articles of Association of the Company, Shri. Neelkamal V.  Siraj and
 Shri. Dharmendra G. Siraj retire by rotation and, being eligible have
 offered themselves for re-appointment.
 
 Attention of the Members is invited to the relevant items in the notice
 of the Annual General Meeting and the explanatory statement thereto.
 
 7.  DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217 (2AA) of the Companies Act, 1956, your
 Directors confirm:
 
 i) that in the preparation of the annual accounts for the year ended
 31st March, 2012, the applicable accounting standards have been
 followed along with proper explanation relating to material departures;
 
 ii) that the Directors have selected such accounting policies and
 applied them consistently and made judgement 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 31st March, 2012 and of the profit of
 the Company for the year ended on that date ;
 
 iii) that the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of Companies Act, 1956 for safeguarding the assets of the
 Company for preventing and detecting fraud and other irregularities;
 and
 
 iv) that the Directors have prepared the annual accounts on a going
 concern basis.
 
 8.  PARTICULARS OF THE EMPLOYEES
 
 The Company does not have any employee whose particulars are required
 to be given under the provisions of Section 217 (2A) of the Companies
 Act, 1956, read with the Companies (Particulars of Employees) Rules,
 1975, as amended up to date.
 
 9.  DISCLOSURE OF PARTICULARS
 
 Pursuant to Section 217(1) (e) of the Companies Act, 1956 read with
 Companies (Disclosure of particulars in the report of the Board of
 Directors) Rules, 1988 has to Report on the matters covered by this
 section.
 
 As the Company is in the field of Wind Farm development and not
 manufacturing, the relevant provisions relating to conservation of
 technology absorption are not applicable. However as the Company is in
 the field of wind farm development and promoting green energy, it is
 directly contributing to reducing dependency on fossil fuel and thus
 conserving the fossil fuel.
 
 The earnings and outgo in foreign exchange was Nil during the year.
 
 10.  FIXED DEPOSITS
 
 Your Company has not accepted any Fixed Deposits within the meaning of
 Section 58A of the Companies Act, 1956.
 
 11.  AUDITORS
 
 Messrs. U.B. Sura & Co. Chartered Accountants and Messrs.  Shyam C.
 Agarwal & Co., Chartered Accountants, Statutory Auditors of the Company
 retire as Auditors at the forthcoming Annual General Meeting and have
 given their consent for re- appointment. The members will be required
 to appoint Auditors for the current year and fix their remuneration.
 
 As required under the provisions of Section 224 of the Companies Act,
 1956, the Company has obtained a written confirmation from
 
 the above Auditors proposed to be re-appointed to the effect that their
 re-appointment, if made at the ensuing Annual General Meeting will be
 within the limits specified in Section 224(1B) of the Companies Act,
 1956.
 
 12.  COST AUDITORS
 
 The Central Government had approved the appointment of M/s. K N
 Satyanarayan for conducting Cost Audit for the financial year 2011-12
 As per the requirement of the central Government and pursuant to
 Section 233B of the Act, the audit of the cost accounts of Electricity
 companies are required to be audited from financial year beginning
 April 2011 Therefore pursuant to the approval of Ministry of Corporate
 Affairs, M/s. K. N. Satyanarayan having registration no. 7004 has been
 appointed as Cost Auditor for auditing the company''s cost accounting
 records maintained as per Cost Accounting Records (Electricity
 Industry) Rules, 2011, relating to power generated for the financial
 year ended March 31, 2012.
 
 Pursuant to the recommendation of the Audit committee, the Board of
 Directors have appointed M/s. K. N. Satyanarayan as the cost Auditors
 of the Company for conducting the Cost Audit Records of the Company for
 the financial year 2012-13 which has been approved by the Central
 Government.
 
 13.  AUDITORS'' REPORT
 
 The observations of the Auditors in their report, read with notes
 annexed to the accounts, are self-explanatory.
 
 14.  CORPORATE GOVERNANCE
 
 Your Company has complied with Corporate Governance requirement as per
 the Clause 49 of the Listing Agreement. A report on Corporate
 Governance forms part of this report. A certificate from the Statutory
 Auditors of the Company confirming compliance of the Corporate
 Governance is appended to the Report on Corporate Governance.
 
 15.  MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion
 and Analysis Report as required under the Listing Agreement with the
 Stock Exchanges is annexed forming part of this report.
 
 16.  ACKNOWLEDGEMENT
 
 Your Directors express their grateful appreciation for the assistance
 and co-operation received from Government Authorities, Bankers, Lending
 Institutions, Suppliers and Customers during the year under review.
 Your Directors place on record their appreciation for the committed
 services of the executives and staff of the Company.
 
                                          For and on behalf of the Board
 
 Place : Mumbai
 
 Date : 13th August, 2012                            Dharmendra G. Siraj
 
                                                                Chairman