Shakti Sustainable Energy Foundation Follow on Grant making operations of SSEF Appendix A - Statement of Work This Statement of Work,

dated July XX, 2013 (this SOW), is made by Ernst & Young LLP (we or EY) and Shakti Sustainable Energy Foundation (you or SSEF), pursuant to the Agreement, dated July XX, 2013 (the Agreement), between EY and SSEF. Except as otherwise set forth in this SOW, this SOW incorporates by reference, and is deemed to be a part of, the Agreement. The additional terms and conditions of this SOW shall apply only to the advisory Services covered by this SOW and not to Services covered by any other Statement of Work pursuant to the Agreement. Capitalized terms used, but not otherwise defined, in this SOW shall have the meanings in the Agreement, and references in the Agreement to you or SSEF shall be deemed references to you. Scope of services We will undertake a review of grant making operations of SSEF. The review shall be conducted to meet the following objectives:

Current procedures on Pre-grant evaluations of grantees: review the process followed for assessment of the grantees and the criteria followed for evaluation in terms of their type of entity, nature of operations, experience, technical capacity, financial capacity, etc. Current procedures on Project evaluations and milestone assessments: review the system and procedure for formulation/ evaluation of projects and assessing milestones to be achieved through grant operations. Grant making policies and procedures:

Review of SSEFs revised Finance Manual which incorporates a separate section for grant procedures Review of SSEFs updated grant-making practices, including due diligence and proposed grantee reviews (identify gaps between actual practice and manual); and Conflict of Interest policy and procedures

Review policies and procedures covering the entire lifecycle of the grant operations. Identify gaps and scope for improvement keeping in view the coverage of the revised manual, generally followed best practices for such operations and broad comparison with ClimateWorks grant process document. Review current grant making practices of SSEF on a sample basis for typical grant disbursements. Identify the gaps in the existing grant making practice and check for compliance and adherence to the Manual and policies and procedures (e.g., whether the actual practice of grant sanction, disbursement and monitoring etc. is in compliance with the existing grants manual and policies and procedures. Review of the upgraded grant approval and monitoring system (FLUXX, including roles and responsibilities): Review organization structure and distribution of work between sections and segregation of duties, roles and responsibilities assigned to various officials at various stages of the grant process, delegation of powers for approval, Usage of FLUXX system Review of staff responsibilities throughout the work flow: Assess on a broad basis, considering the job that needs to be done compared with the staff capability deployed on the job:-

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Shakti Sustainable Energy Foundation Follow on Grant making operations of SSEF Appendix A - Statement of Work

SSEFs performance in handling expanded responsibility for grant making and increased in volume of grants and program contracts. Progress made assessing grantee capacity and budgets, review and assess a full range of technical proposals, evaluate and measure grantee performance, Review the communication with grantee staff, and Review current methods for grant transactions in accordance with Indian GAAP and tax requirements?

Budget review, approval and tracking for grantees (tax and legal compliance in India): Review system to prepare grant budget, approve the budget, track variations in the budget from actual, providing physical and financial targets for grant. The tax and legal compliance includes review of system followed by Shakti for complying with the provisions relating to deduction of tax at source on payment to grantees, FCRA and other commercial taxes. Ability to comply with ClimateWorks grant award covenants: Review existing Climate Works grant award covenants and assessing the adequacy of the system to ensure compliance with the same and assess reasons why there have been gaps and recommendation for improvement Grant report evaluations: Review the reports submitted by grantees and ensuring compliance with the terms of grant.

The review shall be performed in three inter-related stages as follows: Stage-1: Project planning a) Conduct an opening meeting with SSEF key staff and finalize the expectations and timelines; b) Appointment of Single Point of Contact for project coordination; c) Communication of the preliminary list of documents and information required for the Grant systems review; and d) Pre-field ground work including desk review of key documents Stage-2: Field work and execution a) Conduct interviews and gain understanding of the grant making processes and activities at SSEF; b) Identify key risks by performing a What can go wrong analysis; c) Perform a GAP analysis and identify weaknesses in the design of the existing controls; d) Perform sample walkthrough and document review to validate effectiveness of controls in place; e) Discussion and agree issues identified with SSEF Stage-3: Reporting and communication a) Identify process improvement opportunities in consultation with SSEF; b) Co-develop recommendations c) Submission of draft report along with the recommendations d) Finalization of report after discussion with SSEF management

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Shakti Sustainable Energy Foundation Follow on Grant making operations of SSEF Appendix A - Statement of Work EY team shall conduct meetings with employees of SSEF and obtain As-Is understanding of its activities, its people, functions, processes etc. EY shall collect appropriate documentary evidence pertaining to each of the areas/ function reviewed by it and perform transaction walkthrough to validate process understanding. Ernst & Young team shall conduct review of the complete grant cycle of 6-8 samples grants in consultation with SSEF. EY will prepare the following Report* and deliver draft report for comments on or before August 31, 2013: The report will include:

Summary of processes reviewed Changes observed Recommendations for necessary improvements Identification of potential risks and/or lack of internal controls Actionable steps to help SSEFoperations with timelines classified as immediate, short and long term

Based on our comments the draft report, EY shall deliver the final report to SSEF. * Reports is defined in the General Terms and Conditions as including all information, advice, recommendations or other content of any reports, presentations or other communications we provided by EY. Your specific obligations The management of SSEF shall:

Designate a competent employee or employees, preferable within senior management, to be responsible for the engagement. SSEF has designated Mr. Krishan Dhawan as this individual. Ensure that EY has access to appropriate documents, records, information, resources, including the involvement of the concerned departmental functionaries/process owners/concerned staff of SSEF and where required gather information from relevant staff of CWF during the engagement and in finalization of the deliverables (or relevant sections thereof).

Limitations on scope When reviewing SSEF with reference to the above evaluation, EY will not:

Perform ongoing control monitoring activities or other control activities that affect the execution of transactions or ensure that transactions are properly executed and/or accounted for; Perform routine activities in connection with the SSEFs or its project partners operating processes that are equivalent to those of an ongoing compliance or quality control function; Determine which, if any, recommendations should be implemented; Act on behalf of SSEF management in reporting to their Board of Trustees or Governing Board;

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Shakti Sustainable Energy Foundation Follow on Grant making operations of SSEF Appendix A - Statement of Work

Authorize, execute or consummate transactions or otherwise exercise authority on behalf of the SSEF; Prepare source documents on transactions; Have custody of assets; and Act in any capacity equivalent to a member of management or an employee of SSEF.

Further, we will not identify, address or correct any errors or defects in SSEFs or its partners computer systems, other devices or components thereof (Systems), whether or not due to imprecise or ambiguous entry, storage, interpretation or processing or reporting of data. We will not be responsible for any defect or problem arising out of or related to data processing in any Systems. Specific additional terms and conditions Our work will not express any form of assurance. None of the Services or any Reports will constitute any legal opinion or advice. We will not conduct a review specifically to detect fraud or illegal acts. Notwithstanding anything to the contrary in the Agreement or this SOW, we do not assume any responsibility for any third-party products, programs or services, their performance or compliance with your specifications or otherwise. Timetable Unless otherwise agreed, and subject to the General Terms and Conditions of the Agreement, we expect to perform the Services during the period from July XX, 2013 to August 31, 2013. Contacts You have identified Mr. Mr. Krishan Dhawan, as your contact with whom we should communicate about these Services. Your contact at EY for these Services will be Mr. Parul Soni. Fees The General Terms and Conditions of the Agreement address our fees and expenses generally. The fixed fee for the Services as currently contemplated, will be INR XXXX). In addition, SSEF shall reimburse EY for direct and allocated expenses incurred in connection with the performance of the Services. Direct expenses shall include reasonable and customary out-of-pocket expenses incurred in connection with the performance of the Services, for items such as travel, meals, applicable bank charges on inward remittances and other expenses specifically related to this engagement. Allocated expenses, in the form of a ten percent administration surcharge on direct expenses, represent a recovery of expenses such as printing & stationery, telecommunication costs, other levies/ taxes, costs that are not always identifiable to specific engagements. SSEF shall also pay service tax (@12.36% of the fixed fee) in connection with the above Services.

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Shakti Sustainable Energy Foundation Follow on Grant making operations of SSEF Appendix A - Statement of Work EY shall bill SSEF for its fees, expenses and applicable taxes, if any, as they are incurred, in accordance with the below/attached schedule:

50% on signing of contract; and 50% on submission of final report.

Payment is due upon receipt of EYs invoices

In witness whereof, the parties have executed this SOW as of the date set forth above.
Ernst & Young LLP

By:____________________________ Name: Mr. Parul Soni Title: Executive Director Shakti Sustainable Energy Foundation By:____________________________ Name: Mr. Krishan Dhawan Title: Chief Executive Officer

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Shakti Sustainable Energy Foundation Follow on Grant making operations of SSEF Appendix A - Statement of Work

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