Arkay Energy Rameswarm Limited (AERL)

Active

Arkay Energy Rameswarm Limited (“AERL”) developed a 95.3 MW natural gas based power project at Ramnathpuram, Tamil Nadu in two phases in February 2006 and July 2006. AERL was owned by Ind-Barath Power Infra Private Ltd.(81%). The power plant was commissioned in February 2006. Power was sold to PTC India on merchant basis. Pursuant to an agreement dated April 6, 2009, as amended on October 22, 2009, AERL sells 45.0 MW of power per month to PTC India at an average tariff of Rs. 5.90 per kWh. The agreement is valid until March 31, 2014, however the current tariff is valid until May 31, 2010, after which it is subject to renegotiation. AERL is permitted to produce and sell an additional 4.5 MW per month to PTC India at the same rate. The total project cost was estimated to be INR 2614 million (US$59.3 million). The project reached financial closure in 2005. The AERL Power Project was funded through a combination of equity contributions from our Company and other nvestors preference share capital from our Company and secured debt. As of March 31, 2010, the total equity share capital investment made by our Company in AERL is Rs. 581.13 million. As of March 31, 2010 the preference share investment made by the Company in AERL is Rs. 361.85 million. AERL entered into four agreements to provide debt financing for the AERL Power Project: • On March 22, 2005, AERL entered into a subscription agreement to issue up to Rs. 1,000.00 million in principal amount of non-convertible debentures to IDFC. Since April 2007, we have redeemed debentures for an aggregate principal amount of Rs. 430.73 million. As of March 31, 2010, debentures aggregating Rs. 569.27 million in principal amount remains outstanding. • AERL has entered into financing agreements with Axis Bank, Union Bank of India and IDBI Bank for an aggregate amount of Rs. 1,033.50 million. As of March 31, 2010, Rs. 445.42 million in principal amount remains outstanding and the debt availed from Union Bank of India has been repaid in full.

High