We have audited the attached Balance Sheet of KSK ENERGY VENTURES
 LIMITED as at 31 March, 2012, the Profit and Loss Statement for the
 year ended on that date annexed thereto and the Cash Flow Statement for
 the year ended on that date.  The financial statements are the
 responsibility of the Company''s management. Our responsibility is to
 express an opinion on these financial statements based on our audit.
 
 We conducted our audit in accordance with auditing standards generally
 accepted in India. Those Standards require that we plan and perform the
 audit to obtain reasonable assurance about whether the financial
 statements are free of material misstatement. An audit includes
 examining, on a test basis, evidence supporting the amounts and
 disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 As required by the Companies (Auditors'' Report) Order, 2003 and
 amendment order 2004 issued by the Central Government of India in terms
 of sub-section (4A) of Section 227 of the Companies Act, 1956, we
 enclose in the Annexure a statement on the matters specified in
 paragraphs 4 and 5 of the said order.
 
 Further to our comments in the Annexure referred to above, we report
 that:
 
 i.  We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 ii.  In our opinion, proper books of account as required by law have
 been kept by the company, so far as appears from our examination of
 such books.
 
 iii. The Balance Sheet, Profit and Loss Statement and Cash Flow
 Statement dealt with by this report are in agreement with the Books of
 account of the Company.
 
 iv.  In our opinion, the Balance Sheet, Profit and Loss Statement and
 Cash Flow Statement dealt with by this report comply with the
 Accounting Standards, referred to in sub-section (3C) of Section 211 of
 the Companies Act, 1956.
 
 v.  On the basis of written representations received from the
 directors, as on 31 March, 2012, and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 31 March, 2012 from being appointed as a director in terms of clause
 (g) of sub-section (1) of Sec. 274 of the Companies Act, 1956;
 
 vi.  In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts, read with the Notes
 there on, the information required by the Companies Act, 1956, in the
 manner so required and give a true and fair view in conformity with the
 accounting principles generally accepted in India;
 
 a.  In the case of the Balance Sheet, of the state of affairs of the
 Company as at 31 March, 2012.
 
 b.  In the case of the Profit and Loss Statement of the Company, of the
 profit of the Company for the year ended on that date.
 
 c.  In the case of Cash Flow Statement, of the cash flows of the
 Company forthe year ended on that date.
 
 Referred to in paragraph 1 of our report of even date:
 
 In our opinion and according to the information and explanations given
 to us:
 
 1.  The Company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets.
 
 The Company has a fixed programme of Physical verification of its fixed
 assets which, in our opinion, is reasonable having regard to the size
 of the Company and the nature of its assets. Management has physically
 verified the fixed assets during the year. No material discrepancies
 were noticed on such verification.
 
 During the year, the Company disposed off all its fixed assets (Wind
 Turbine Generators with land appurtenant there to) relating to power
 generation undertaking besides some other assets. In our opinion, it
 does not affect going concern of the entity.
 
 2.  The Clause relating to Inventories is not applicable to the
 company, as the Company has not carried out any manufacturing activity.
 
 3.  (a) During the year, the Company has granted unsecured loans and
 advances from time to time to fourteen Companies covered in register
 maintained under section 301 of the Companies Act, 1956. The maximum
 amount involved during the year was Rs. 842.09 croresandtheyear-end
 balance of such loans was Rs 577.29 crores.
 
 In our opinion, the rate of interest and other terms and conditions of
 such loans and advances made are not prima facie prejudicial to the
 interests of the Company.
 
 (b) During the year, the Company has taken unsecured loans from one
 Company covered in the register maintained under section 301 of the
 Companies Act, 1956. The maximum amount involved during the year was
 Rs.89.05 crores and year- end balance of such loan was Rs. 41.76 crores
 
 In our opinion, the rate of interest and other terms and conditions of
 such loans and advances made are not prima facie prejudicial to the
 interests of the Company.
 
 (c) The payment and receipt of interest is regular both in cases of the
 loans given and loans accepted and the loans are recoverable or payable
 on demand.
 
 4.  In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business. We have
 not observed any major weakness in the internal control system during
 the course of the audit.
 
 5.  According to the information and explanations given to us, we are
 of the opinion that there are no contracts or arrangements referred to
 in section 301 of the Companies Act, 1956, particulars of which are
 required to be entered into the register maintained under that section.
 
 6.  The Company has not accepted any deposits from the public.
 
 7.  In our opinion, the Company has an Internal Audit System
 commensurate with its size and the nature of its business.
 
 8.  The maintenance of cost records has been prescribed by the Central
 government under clause (d) of sub section (1) of Section 209 of the
 Act, such accounts and records have been made and maintained.
 
 9.  (a) According to the information and explanations given to us and
 on the basis of examination of books of accounts, the Company is
 regular in depositing undisputed statutory dues including Provident
 fund, Investor Education and Protection Fund, Employee''s State
 Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom duty,
 Excise duty, Cess and other statutory dues with the appropriate
 authority''s and as at 31 March 2012 no undisputed statutory dues were
 outstanding for more than six months from the date they became payable.
 
 (b) There were no dues in respect of Income tax, Sales tax, Wealth tax,
 Customs duty, Excise duty and Cess that have not been deposited with
 the appropriate authorities on account of any dispute.
 
 (c) Details of dues which have not been deposited on 31 March2012 on
 account of dispute are furnished below
 
 Name of the 
 statue        Nature of 
               dues          Forum where    
                             pending       Period to which    Amount
                                           amount relates    (In Crores)
 
 Finance 
 Act, 1994     Service Tax   CESTAT        April, 2008 to      50.56
                                           September, 2010
 
 10.  The Company has no accumulated losses at the end of the financial
 year and it has not incurred cash losses in the current and immediately
 preceding financial year.
 
 11.  The Company has not defaulted in payment of dues to any Financial
 Institution/Banks.
 
 12.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13.  The Company is not a chit fund, nidhi, mutual benefit fund or a
 society. Accordingly, the provisions of clause 4 (xiii) of the
 Companies (Auditor''s Report) Order, 2003 are not applicable to the
 company.
 
 14.  As per the information and explanations given to us, the Company
 is not dealing or trading in shares, securities, debentures and other
 investments.
 
 15.  In our opinion and according to the information and explanations
 given to us, the terms and conditions of guarantees given by the
 Company for loans taken by others from banks or financial institutions
 are not prima facie prejudicial to the interests of the Company.
 
 16.  During the year, the Company has not raised any term loans. In our
 opinion, the term loans raised earlier have been applied forthe purpose
 for which they were raised.
 
 17.  According to the information and explanations given to us and on
 an overall examination of the Balance sheet of the Company, we report
 that no funds raised on short term basis have been utilized for long
 term investment.
 
 18.  The Company has not made any preferential allotment of shares to
 companies/firms/parties covered in the register maintained under
 section 301 of the Act, 1956.
 
 19.  The Company has not issued any debentures and accordingly the
 provisions of clause 4 (xix) of the Companies (Auditor''s Report) Order,
 2003 are not applicable to the Company.
 
 20.  During the year, the Company has not raised money by public issue
 and accordingly the provisions of clause 4 (xx) of the Companies
 (Auditor''s Report) Order, 2003 are not applicable to the Company.
 
 21.  No fraud on or by the Company has been noticed or reported during
 the year.
 
                                            For Umamaheswara Rao & Co.,
 
                                                Chartered Accountants
 
                                         Firm Registration No.004453S 
 
                                                                 Sd/-
 
                                               (R.R. Dakshina Murthy)
 
                                                             Partner
 
 Place: Hyderabad                              Membership No: 211639
 
 Date : 5 May 2012