Jalipa Mine, We Expect a Higher PLF and a Stronger Growth Ahead

STRATEGIC REVIEW JSW ENERGY LIMITED • ANNUAL REPORT 2014-15 3 STRATEGIC REVIEW JSW ENERGY LIMITED • ANNUAL REPORT 2014-15 1 REVENUE FROM OPERATIONS Index ` Cr FY 2014-15 9,380 `9,380 cr Strategic Review FY 2013-14 (FY 2014-15) 8,705 JSW Energy at a Glance 4 Corporate Strategy 6 EBITDA Key Performance Indicators 8 ` Cr FY 2014-15 Chairman & Managing Director’s 10 3,854 ` Message 3,854 cr FY 2013-14 (FY 2014-15) 3,454 The Board of Directors 12 Energy + PROFIT AFTER TAX Pragmatism + 14 ` Cr FY 2014-15 Efficiency + 16 1,350 ` Consistency + 18 1,350 cr FY 2013-14 (FY 2014-15) 755 Strength + 20 Future + 22 DEEMED PLANT LOAD FACTOR Operational Review % 2014-15 Performance + 24 84% Sustainability and Environment 84% 2013-14 (FY 2014-15) 76% Empowering Communities 26 Strengthening our Green 28 Commitment Corporate Information 30 Statutory Reports Management Discussion 32 and Analysis Directors’ Report 44 Corporate Governance Report 88 Financials Standalone Financial Statements 10 14 Independent Auditor’s Report 106 Chairman & Managing Pragmatism + Balance Sheet 110 Director’s Message Statement of Profit and Loss 111 JSW Energy maintained a strong At JSW Energy, we take pride in our growth during the year, delivering a ability to take pragmatic decisions Cash Flow Statement 112 ` record net profit of 1,350 crores, a by balancing excessive optimism or Notes to Financial Statements 113 growth of 79% over the last year. pessimism with prudence. Consolidated Financial Statements Independent Auditor’s Report 143 Consolidated Balance Sheet 148 Consolidated Statement of 149 Profit and Loss Consolidated Cash Flow 150 Statement Notes to Consolidated Financial 151 Statements 22 26 Financial Highlights (Standalone) 185 Future + Empowering Communities Financial Highlights (Consolidated) 186 Notice 187 India’s strong structural growth story, At JSW Energy, we are guided by the E-Communication Registration backed by impending cyclical recovery belief that every life is important and augurs well for the Indian power must be given fair opportunities to Form sector. make the best out of it. Proxy Form Attendance Slip This Annual Report is available online at www.jsw.in/investors/energy/annual-reports 2 ENERGY+ ENERGY PLUS STRATEGIC REVIEW JSW ENERGY LIMITED • ANNUAL REPORT 2014-15 3 There is a new vigour at JSW Energy. It comes from a number of factors. We are one of the fastest growing and also one of the most financially robust power producers in India. We are fast spreading our positive the years. We have rapidly ramped up energy, enabling accelerated economic our capacities, while maintaining cost development of India. We play an efficiencies, backed by our operational important role in empowering the nation, experience. We have delivered consistent and in the lives of millions by providing performance by diversifying both our fuel the crucial resource of energy. In and sales mix and maintained a strong FY 2014-15, one of the most challenging balance sheet for pursuing sustainable years for the Indian economy, we growth. We believe that this will enable delivered a record performance and us to further strengthen our organisation, our highest ever profitability. We have grow our capacities, and generate confidently steered through the difficult exponential value. conditions of the Indian power sector, armed with pragmatism and patience. These key qualities have allowed us to invest capital prudently, an action At JSW Energy, we call that has stood us in good stead over this Energy Plus. 4 ENERGY+ JSW ENERGY AT A GLANCE JSW Energy, part of the O. P. Jindal Group, is one of India’s leading power producers. The Company has an operational thermal capacity of 3,140 MW and is in the process of acquiring 1,391 MW operational hydro capacity. Night View of Ratnagiri Plant As a part of a strategy to be an integrated power company, the Company has backward integrated into mining, with mines in Rajasthan and South Africa. The Company has also successfully entered into the Power Transmission and Power Trading sectors and set up a joint venture with Toshiba Corporation, Japan to provide one-stop solution for Engineering, Manufacturing, Procurement, Construction and Services (EMPCS) of Thermal Power Plant. HIGHLIGHTS FY 2014-15 NET GENERATION DEEMED PLANT LOAD FACTOR (PLF) FY 2014-15 FY 2013-14 20,307 MU 19% 84% 76% SALES MIX MERCHANT SALES LONG TERM SALES 44% 56% STRATEGIC REVIEW JSW ENERGY AT A GLANCE JSW ENERGY LIMITED • ANNUAL REPORT 2014-15 5 Business Segments Power Power Mining Power Trading Equipment Generation Transmission Manufacturing Overview Current operational Transmission line JV Kapurdi and Jalipa Engaged in power JV with Toshiba capacity: 3,140 MW with MSETCL: 2x400 lignite mines trading since June Corp., Japan for KV lines of 165 km (Rajasthan): Current 2006 Manufacturing of operational operating capacity super-critical steam 7 MTPA Handled trading turbine generators volume of 8.95 billion units in FY 2014-15 Toshiba JSW Power System Private Limited Toshiba JSW Power Systems Private Limited is a 75:25 Joint Venture (JV) between Toshiba Corporation, Japan (Toshiba) and JSW Group. The JV was initially incorporated to manufacture and market super-critical Steam Turbines and Generators for Thermal Power Plants ranging from 500 MW to 1,000 MW in India. The facility is located at Manali, about 18 km north of central Chennai, Tamil Nadu with a ground area of approximately 400,000 square meters. It was subsequently merged with Toshiba Thermal & Hydro Power Systems Company, a division of Toshiba India Private Limited to broaden the gamut from Manufacturing to One-stop Solution for Engineering, Manufacturing, Procurement, Construction and Services (EMPCS) of Thermal Power Plant. 6 ENERGY+ CORPORATE STRATEGY At JSW Energy, we have developed a corporate strategy framework that highlights our key corporate goals and action plan to meet them. Power Plant at Ratnagiri Our corporate strategy guides us to deploy diverse organisational resources 1Goal 2 optimally towards Selective Growth Diversification of a common goal. Fuel Mix and Off-take Arrangements Plan + Efficient capital + Increase proportion of allocation for organic Long Term PPAs* – growth goal to reach over 85% of the total + Pursue selective inorganic growth + Diversify both fuel opportunities which mix and source – will enhance cash thermal coal, lignite flows and be RoE and hydro accretive + Expanding geographical foot print with proximity to fuel source/load centres * Power Purchase Agreement STRATEGIC REVIEW CORPORATE STRATEGY JSW ENERGY LIMITED • ANNUAL REPORT 2014-15 7 Power Professionals in Control Room SBU-I (2x130 MW), Vijayanagar 3 4 5 Focus on Resource Strengthening Presence Prudent Balance Sheet Optimisation Across the Value Chain Management + Committed to a + Continue to evaluate + Retain prudent robust mix of opportunities across financial profile sustainable eco- the value chain – friendly technologies from mining, + Manage growth and equipment debt profile to capture + Best in class manufacturing, market opportunities equipment sourcing generation, for sustainable and maintenance transmission and growth distribution for + Focus on prudent O&M practices and creating long term higher plant value efficiencies 8 ENERGY+ KEY PERFORMANCE INDICATORS JSW Energy reported the highest ever turnover and profitability, aided by a record power production. Despite lower realisations, a higher plant load factor and lower fuel prices helped us to strengthen our operating margins further. STRATEGIC REVIEW KEY PERFORMANCE INDICATORS JSW ENERGY LIMITED • ANNUAL REPORT 2014-15 9 REVENUE FROM OPERATIONS EBITDA MARKET CAPITALISATION (`crores) (`crores) (`crores) 5-year CAGR 21.5% 5-year CAGR 22.8% 2014-15 2014-15 2014-15 9,380.16 3,853.52 19,549.45 2013-14 2013-14 2013-14 8,705.42 3,453.61 9,717.32 2012-13 2012-13 2012-13 8,934.30 3,006.62 8,971.10 2011-12 2011-12 2011-12 6,118.82 1,594.39 10,045.34 2010-11 2010-11 2010-11 4,302.08 1,697.23 11,750.99 Revenue from Operations is higher due to The EBITDA before exceptional items has JSW Energy’s marketcap increased by more increased generation, primarily at Barmer increased primarily on account of higher power than 100% during the year. plant, where there has been an increased generation due to enhanced fuel availability availability of Lignite from BLMCL, pursuant to and declining fuel cost. the MoEFCC approval. EBITDA MARGIN PROFIT FOR THE YEAR DIVIDEND PER SHARE (%) (`crores) (`) 5-year CAGR 12.5% 2014-15 2014-15 2014-15 40.1 1,349.51 2.00 2013-14 2013-14 2013-14 38.8 754.74 2.00 2012-13 2012-13 2012-13 32.9 903.65 2.00 2011-12 2011-12 2011-12 25.4 170.05 0.50 2010-11 2010-11 2010-11 38.3 841.82 1.00 Higher PLF and lower fuel cost lead to Profit for the year has increased primarily JSW Energy declared dividend of ` 2/- per improvement in EBITDA margins. on account of higher EBITDA, and decline in equity share of ` 10/- each. exceptional losses. 10 ENERGY+ CHAIRMAN & MANAGING DIRECTOR’S MESSAGE Dear Shareholders, The year 2014-15 was a landmark year for JSW Energy as we continued on our mission to energise India, our operations were robust, and we delivered a record financial performance. What made this possible was our philosophy of “Energy Plus”, which saw us base our operations on pragmatism and prudence. We were able to deliver on our strategy and retain our position as one of the most efficient power producers in India. With a stable government in India, efficient, resilient and financially healthy The Government has taken concrete there is renewed sense of optimism. power sector is essential to achieve this steps to increase fuel availability We are witnessing high-potential policy goal.

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