TIDMKSK
RNS Number : 5803T
KSK Power Ventur PLC
21 July 2015
KSK Power Ventur PLC
21 July 2015
KSK Power Ventur plc
("KSK" or the "Group" or the "Company")
Audited Results for the year ended 31 March 2015
KSK Power Ventur plc (KSK.L), the power project company listed
on the London Stock Exchange, with interests in multiple power
plants and businesses across India, announces the consolidated
audited results for the year ended 31 March 2015.
Financial Highlights
-- Gross Revenue increased by 13.8% to $ 382.3 m (2014: $ 335.9 m)
-- Gross Profit increased by 13.3% to $ 103.3 m (2014: $ 91.1 m)
-- Operating Profit* decreased by 30.1% to $ 40.6 m (2013: $ 58.0 m)
-- Loss before tax** moved to a loss of $ 160.1 m (2014: loss of $ 72.1 m)
-- Investments in Property Plant and Equipment increased 7.5% to $ 3,457 m (2014: $ 3,215 m)
* Includes the provision of a $ 24.59 million impairment in
respect of coal compensation at Sai Wardha based on the
understanding that rather than an immediate cash refund, the coal
supplier would prefer to pass on the benefit to the Company in the
form of revised discounted price charge mechanism for coal supplies
over the balance of the fuel supply period.
**This includes an unrealised exchange loss of $ 33.16 million
on account of the restatement of the foreign currency component of
certain bank financing facilities and trade payables.
These movements were due to the lower than expected PLF at Sai
Wardha as well as single 600 MW unit operations at KSK Mahanadi
owing to the transmission corridor constraints of national grid
restricting actual generation, and the resultant mismatches in
meeting overall financing costs. As a result, while the underlying
revenue and gross profit growth compared to the previous year shows
an increase, there has been a decrease in operating profit and an
increase in the loss before tax.
Comparison of results
Particulars 31 March 2015 31 March % change
2014
(USD m) (USD m)
Revenue 382.3 335.9 13.8%
Gross profit 103.3 91.1 13.3%
Operating profit 40.6 58.0 -30.1%
(Loss) / profit before
tax (160.1) (72.1) 122.0%
Average exchange rate Rs 61.1752 / Rs 60.4267
Rupee/USD $ / $
Notwithstanding the challenges across the sector and exchange
rate volatility expected to continue during the current year that
could create distortions to the Company's performance, the
combination of our underlying assets, our risk mitigation
strategies and certain recent positive developments should, in the
long term, assist in moving the Company back towards meeting market
expectations. However, in the short term, owing to capacity
utilisation rates remaining below the Board's initial plans, such
expectations are likely to be met gradually.
Operating Highlights
-- During the year operating assets generated 6,158 GWh as
against 5,757 GWh for the previous year, an increase of 7.6%, with
the following individual Plant Load Factors ("PLF"):
31 March 2015 31 March 2014
KSK Mahanadi ( 3,203
First 600 MW) GWh (61%) 1,088 GWh (62%)
Sai Wardha (540 1,174
MW) GWh (25%) 2,586 GWh (55%)
VS Lignite (135
MW) 851 GWh (72%) 902 GWh (76%)
Sai Regency (58
MW) 423 GWh (83%) 445 GWh (88%)
Sai Lilagar (86
MW) 148 GWh (20%) 341 GWh (45%)
Sitapuram Power
(43 MW) 343 GWh (91%) 342 GWh (91%)
Solar Project
(10 MW) 16 GWh (18%) 19 GWh (21%)
Wind project 33 GWh (20%)
Although there has been an increase in generation over the
previous year, the overall generation across the portfolio is below
expectations given the challenges currently facing all aspects of
the energy sector in India.
-- The 3.6 GW KSK Mahanadi power project is under construction
with further progress being made during the year, including:
o Commissioning of the two 600 MW units, along with
commissioning of the entire balance of plant as well
as ancillary common infrastructure facilities including
water, rail lines etc
o Varying construction progress on the final four 600
MW units
-- Full operation of the current 1,200 MW at KSK Mahanadi,
particularly the second 600 MW unit has been delayed due to
transmission corridor access issues and the Company has sought
intervention by the Central Electricity Regulatory Commission
(CERC) for commencement of 500 MW supplies to Tamil Nadu. The
Company has approached CERC and subsequent to the order dated
16(th) February 2015 a final implementation order has now been
issued by CERC on 3(rd) July 2015 to make the transmission corridor
access available for applicants. It is anticipated that Power Grid
(the state owned Transmission Company) will resolve the
transmission access shortly. Early supplies to Uttar Pradesh
DISCOMS of 300 MW have been enabled following the grant of the
Medium term Open Access (until October 2016) and KSK Mahanadi is
currently awaiting the scheduling of power upon Power grid's
notification.
-- Operating constraints at Sai Wardha with respect to coal
costs, open access and PPAs continued during the year. Favourable
decisions from the Competition Commission of India and the
Appellate Tribunal for Electricity have been obtained both with
respect to coal as well as a 25 year PPA with MSEDCL (a local state
utility company) and efforts are underway to obtain implementation
at the earliest. In the interim, short term power sale arrangements
are being undertaken and reduced asset utilisation levels mean
revenues and profitability will continue to experience marginal
improvements in the short term before full improvements are
realised.
Commenting on the results, T. L. Sankar, Chairman of KSK
said:
"The year 2015 witnessed the Company's power plants' aggregate
gross generation reach 6.16 TWhs. With the various challenges at
540 MW Sai Wardha and the 1,200 MW of the KSK Mahanadi operational
issues now being addressed, it is anticipated that, subject to the
commencement of the second unit of operations at KSK Mahanadi for
at least part of the current year, gross generation could achieve 9
TWhs during 2015-16.
Significant asymmetry that has occurred over the last three
years with respect to fuel and transmission issues has resulted in
low PLF requiring corrective action for the sector as a whole.
These results, are to be read in the context of not just distinct
circumstances across the Indian power sector, but together with the
overriding challenging times and accompanying economic environment
in India.
Whilst the issues at Sai Wardha have seen an improvement during
the first quarter of the current year, with partial resolution
through Fuel Supply Agreement amendments, the final execution of
the definitive agreement has been delayed due to a number of
localised factors. When this is successfully resolved,
profitability is expected to revert to the previously achieved
levels and Sai Wardha should be in a position to pursue potential
refinancing opportunities.
The phased construction of the KSK Mahanadi project is making
steady progress, with the first two 600 MW units already
commissioned. Once the transmission corridor issues are resolved by
the authorities, the plant is expected to achieve power generation
operations for a substantial part of the current financial year.
Further, interim coal imports from overseas through appropriate
collaborative arrangements that have been put in place, and
facilitated by working capital lenders, will provide sufficient
fuel for the planned generation from KSK Mahanadi.
In line with the Indian sector, the Company has suffered fuel
supply setbacks during the year, wherein both the FSA's with Goa
Industries Development Corporation ("GIDC") and Gujarat Mineral
Development Corporation ("GMDC") have become inoperable on account
of the cancellation of their respective coal blocks by Hon. Supreme
Court of India. In a recent development, the tapering linkage
contract has been discontinued by the Ministry of Coal and an
alternate Memorandum of Understanding based supplies has been
proposed as an interim arrangement until 31(st) March 2016. It is
expected that the Ministry of Power and Ministry of Coal are
currently planning a comprehensive new plan and structure wherein
the coal supply plans would be formulated to address needs of those
power plants that have physically progressed on the ground and with
PPA commitments to DSICOMS already made. KSK Mahanadi together with
multiple DSICOMS supply PPAs is pre-eminently qualified for
favourable consideration and accordingly necessary coal
requirements of KSK Mahanadi could be suitably addressed.
The Company is currently in discussions with both Government and
project stakeholders regarding the terms of existing drawn and
undrawn financial facilities in order to match these to the current
development and additional financing plans for KSK Mahanadi.
Discussions with all stakeholders regarding such arrangements have
been positive to date and the Company's lenders are supportive of
the proposed arrangements.
The additional debt funding for the KSK Mahanadi power project,
to cover the significant USD/INR currency fluctuation on project
imports, and the extended timelines, has been agreed by the
Consortium of Project Lenders and regulatory dispensation is
currently being sought. Nonetheless the Company monitors the
situation on an on-going basis and plans alternative arrangements
where necessary. The outcome of all of the above may impact on the
timing of the strategic development of the remaining four
units.
The consequent refinancing at the operational phase of 1,200 MW
at KSK Mahanadi and other decisions by the Project Lenders is
expected to provide an enabling framework for completion and
operation of the balance of units by 2017.
The year continued to be a difficult time for the entire power
sector in India and management have maintained their efforts to
address the various challenges in the operating projects. KSK's
bold growth initiative, from start-up to becoming a leading
independent power producer targeting c.3% of total Indian power
generation by 2017 (upon completion of all units of KSK Mahanadi),
demonstrates KSK's long term strategy and, upon successful
resolution of the various issues, demonstrates the potential for
profitability in this key area of the Indian economy.
KSK's performance during the year would not have been possible
without the valuable and appreciated support of its shareholders
who have enabled us to pursue appropriate business opportunities in
these challenging times."
For further information, please contact:
KSK Power Ventur plc
Mr. S. Kishore, Executive Director +91 40 2355 9922
Arden Partners plc
James Felix +44 (0)20 7614 5900
Key Business Updates
-- 3,600 MW KSK MAHANADI POWER PROJECT:
The construction activity at KSK Mahanadi, a large, single
location, greenfield private power plant continues, with
significant achievements during the year under review, and the
period up to this date:
o the first 600 MW unit under operation with 3,203 GWh of
generation during the year;
o the second 600 MW unit commissioned;
o phased construction of the remaining four 600 MW units are
planned to be built in two phases of 1,200 MW each;
o completion of the construction of the major part of the civil
works and common operation infrastructure at site;
o water pipeline infrastructure to meet the water requirements
of the entire power plants has been commissioned;
o switch yard and transformer yard commissioned, with back
charging of 400kV switchyard and transmission system enabling 'live
in live out' connectivity for evacuation of power generated into
the national grid;
o rail connectivity to the power plant for coal transportation
achieved.
Upon stabilised generation from the current 1,200 MW, the
Company's management would focus its efforts on expediting the
construction of the next 1,200 MW before the last 1,200 MW units
are then completed. Effective project execution on the ground has
been de-risked as each of the three 1,200 MW projects and their
associated expenditure and implementation are being monitored
individually.
ANCILLARY INFRASTRUCTURE INITIATIVE AT KSK MAHANADI
The Company's construction of the infrastructure to support the
KSK Mahanadi power project continued with the commissioning of the
entire water pipeline infrastructure and rail connectivity to the
power plant for transportation.
-- KSK Water Infrastructure:
Infrastructure works, including the construction of the 60km
pipelines and the pump stations for the supply of water for the
Mahanadi projectwere completed and are operational. The additional
intermediate reservoir works, sufficient to support the continuous
operation of all six 600 MW units, are expected to be completed
shortly for integration with the power plant.
-- Raigarh Champa Rail Infrastructure:
The Company's 15.7 km inward railway line connecting the
Mahanadi plant with the Indian Railways main line was completed
during the period, enabling the movement of coal into the power
plant. As regards the 65.5 km line connecting the Gare Pelma coal
block to the main line, owing to the issues regarding the coal
blocks, this is currently not being pursued until further clarity
emerges
-- KSK Mineral:
As regards the KSK Mineral Resources initiative, the Company has
brought a claim against Goa Industrial Development Corporation
(GIDC) for reimbursement of the entire mine development expenditure
support provided with respect to Gare Pelma III coal mine. GIDC has
confirmed that necessary claims for the same have been lodged by
them with the relevant authority concerned as provided for under
the Rules of the new coal mines statute, and a further update is
currently awaited.
540 MW SAI WARDHA POWER LIMITED (SWPL):
The total gross power generated during the review period was
1,174 GWh with an average Plant Load Factor (PLF) of 25%. This
reflected the challenging local operating environment, the fuel and
the open access grid constraints experienced by Sai Wardha
Power.
Post the favourable ruling by the Competition Commission of
India ("CCI") in favour of Sai Wardha during October 2014, while
the aspects of quality are being addressed through Western
Coalfields Limited's agreement to third party sampling post
amendment to the Fuel Supply Agreement, the vital amendment on the
pricing aspect which could enable a reduction in the cost of power
generation has not yet been achieved.
As regards long term power sale arrangements to commence
supplies for half of the capacity of the Sai Wardha project, the
Appellate Tribunal for Electricity ruled in favour of Sai Wardha in
February 2015 and PPA execution is expected. However, to ensure
enhanced asset utilisation, power supplies are being temporarily
supplied to the same utility on short term contracts, resulting in
enhanced PLFs during the first quarter.
The Company continues to use every effort to pursue the coal
price reduction and the granting of the necessary open access
permissions, which will ultimately lead to the enhanced utilisation
and profitability of the Sai Wardha plant.
-- 135 MW VS LIGNITE POWER PRIVATE LIMITED (VSLP):
The total gross power generated during the year was 851 GWh,
with an average PLF of 72%. The Company has been mandated by the
local state for power supplies under a long term PPA with a local
grid company and the Company is currently operating under a short
term PPA until March 2016. The Company is continuing its efforts to
secure necessary long term PPAs from the local grid as mandated by
the Government and is confident of achieving this during the
current year.
-- 86 MW SAI LILAGAR POWER LIMITED (SLPL):
The total gross power generated during the year was 148 GWh,
with an average PLF of 20%, primarily reflecting the transition
from Captive Power Plant to Independent Power Producer.
With the new PPA arrangements in place, asset utilisation is
expected to significantly improve and reach low to mid 80% PLF
levels over the next few quarters. As a result, the Company
anticipates increased generation, revenue and profitability from
the SLPL plant.
-- 58 MW SAI REGENCY POWER CORPORATION PRIVATE LIMITED (SRPCPL):
The total gross power generated in the combined cycle gas fired
power plant during the year was 423 GWh, with an average PLF of
83%. With the continuous supply of gas and an efficient operation,
the plant has produced an exceptional operational and financial
performance, which the Company expects to continue in the
future.
-- 43 MW SITAPURAM POWER LIMITED (SPL):
The total gross power generated during the year was 343 GWh,
with an average PLF of 91%. Although the fuel cost for the period
under review have increased due to an increase in coal prices from
the Singareni Collieries Company Limited, as well as from open
market purchases, the energy generated in the period has been
supplied to the captive consumers in accordance with the provisions
of the PPA, and the balance of power sold to local utilities.
-- 10 MW SAI MAITHILI SOLAR POWER PROJECT:
The total gross power generated during the year was 16 GWh, with
an average PLF of 18%. The 10 MW PV solar power generation plant is
located in the state of Rajasthan, operating under the Jawaharlal
Nehru National Solar Mission.
-- CONSTRUCTION OF ADDITIONAL SOLAR POWER GENERATION PLANTS:
In response to the continuing initiative of the Indian
Government, the Company is seeking to develop an additional 250 MW
of solar power generation projects in the medium term wherein the
first 50 MW is expected to be commissioned over the next few months
and an additional 50 MW planned to be commissioned before end of
the current financial year.
A number of early initiatives for the procurement of the
necessary panels and associated balance of plant equipment has been
finalised with selected vendors, with active support of the banks
who are ready to provide the requisite long term financing as may
be required.
WIND POWER GENERATION AND HYDRO POWER GENERATION INITIATIVE
The Company continues to pursue specific wind power generation
initiatives as well as work on the hydro project portfolio and
suitable collaboration opportunities. The first step was the
induction of North East Electric Power Corporation Limited, the
Government owned hydro power company, as an equity partner in the
120 MW Dibbin Hydro projects which is expected to experience
further progress.
EQUITY AND FINANCING ARRANGEMENTS
During May 2014, c. GBP40 million of equity was raised by KSK
Energy Ventures Limited ("KSKEV"), the Company's listed Indian
subsidiary, through a Qualified Institutional Placement.
Shareholder approval was also obtained for Company to subscribe for
up to 150 million warrants convertible into equivalent equity
shares at KSKEV, enabling Company to revert back to the earlier
held 74.94% interest in KSKEV. As at this date 10.95 million
warrants have been exercised resulting in Company's shareholding in
KSKEV increasing to 68.37 %.
During 2011 and thereafter, the Company secured debt financing
on, at the time, reasonably high pricing within its Indian holding
companies that enabled the earlier tender offer resulting in the
company owning a substantial interest in KSKEV, the subsidiary
which owns the interest in KSK Mahanadi Power Company Limited, as
well as the buyout of the entire minority of the KSK Mahanadi
project. Consequently, to provide the necessary liquidity to retire
part of the existing higher rate debt, the Company is pursuing
further refinancing opportunities on more favourable terms at the
operating project level.
The Company's main power plant initiative of KSK Mahanadi, based
on an extended implementation timeline, as well as the need to
reconcile the entire impact of INR/US$ exchange rate depreciation
as against INR 48/$ originally envisaged, is now estimated to be
completed with a total capital expenditure of US$ 4.1 billion
requiring $820 million of equity and US$ 3.28 billion of project
debt
US$ in millions First 1200 Second Third Total
MW + entire 1200 MW 1200 MW
Balance
of Plant
----------------- ------------- --------- --------- ------
Project debt 1,450 964 867 3,281
----------------- ------------- --------- --------- ------
Project equity 288 0.29 259 822
----------------- ------------- --------- --------- ------
The project expenditure incurred and balance to be incurred with
estimated distribution amongst the three 1,200 MW phases each is
shown as follows:
US$ in millions First 1200 Second Third Total
MW + entire 1200 MW 1200 MW
Balance
of Plant
-------------------- ------------- --------- --------- ------
Project Cost
(Estimated) 1,726 1,252 1,126 4,103
-------------------- ------------- --------- --------- ------
Already incurred 1,726 433 354 2,513
-------------------- ------------- --------- --------- ------
Yet to be incurred 819 771 1,590
-------------------- ------------- --------- --------- ------
Interest during
construction
( yet to be
incurred) 117 157
-------------------- ------------- --------- --------- ------
Of the remaining balance US$ 1,590 million required for the
capital expenditure program (comprising of c.US$ 819 million for
the next 1,200 MW and c.US$ 771 million for the last 1,200 MW)
until FY 2018, it is planned that initially undrawn debt already
committed, together with associated equity, would be used to
support project development.
Of the outstanding balance of US$ 1,400 million for the
remaining two phases of 1,200 MW each, US$ 1,120 million of project
debt has, in principle, been agreed to be provided by the Non-Bank
Institutions of the existing lenders consortium such as Power
Finance Corporation and others. This is subject to certain
regulatory approvals that are currently being pursued by project
lenders. As regards the US$ 280 million of additional equity, it
has been agreed with the lenders that monthly internal accruals
from the first 1,200 MW operating phase (after meeting fuel,
operating and financing cost) would be made available towards
sponsor equity.
It is expected that, with the existing PPA arrangements at
competitive tariff levels along with continued availability of coal
from Coal India under linkage, the current 1,200 MW phase operating
at 80% PLF could contribute to 8 TWh of gross generation, and is
expected to provide substantial internal cash flows after meeting
the entire financing cost of the current plant and facilities. In
addition, the Company expenditure on the balance of 2,400 MW
project would be incurred gradually over the next 24 to 30 months
thereby providing sufficient head room for internal accruals to be
the source of required equity.
Finally, the Company continues to evaluate proposals for further
strategic funding through potential participation by the EPC
Contractor, directly or indirectly, as well as strategic equity
collaboration by other potential participants. Therefore, in the
light of these various alternatives, the group does not have any
plans for further fund raises either at the KSK or KSKEV in the
foreseeable future
FINANCIAL PERFORMANCE
With a total operable capacity of 2,072 MW, the consolidated
operating revenue achieved was $ 382.3 m, with gross profit of $
103.2 m, operating profits at $ 40.6 m, a loss before tax of $
160.1 m, and a loss after tax of $ 69 m.
The net revenue increase, as a result of power generation from
the first 600 MW unit operations at KSK Mahanadi, is partially
reduced by the output reduction at Sai Wardha.
While gross profit has increased to $ 103.2 m, operating profits
reduced to $ 40.6 m due to higher general and administration
expenses, predominantly due to an impairment of $ 24.59 million of
coal recompense at Sai Wardha as well as other receivables.
The significant increase of finance costs from $ 166 m to $ 220
m resulted from increased borrowing levels with respect to
operational power plants, especially when taking into account $
33.55 m finance cost relating to Mahanadi full year operation
compared to the previous year. Also, the decrease in income is on
account of reduction in gain on currency option contract with
respect to Sai Wardha borrowings. As a result, the Company has
experienced a decrease in earnings before taxes.
The loss after tax has increased from $ 59 m to $ 69 m
reflecting a significant deferred tax asset at KSK Mahanadi on
account of investment allowance.
Business Strategy
The Company's business strategy has been fine tuned to focus on
consolidation of the operations of the installed capacity of 2,072
MW during FY 2015-16, wherein a portfolio PLF of 60% for the period
would enable the company to achieve gross generation of 9 Twh.
The high capital intensity and associated project debt required
to develop and grow the Company's power generation business,
coupled with high currency volatility and the current difficult
Indian policy environment, will impact the Company's overall
funding requirements and financial performance in the near term.
Work continues on a number of major initiatives in this regard and
with appropriate refinancing at KSK Mahanadi, cash flows are sought
to be conserved and cash accruals, post debt servicing of the 1,200
MW phase, are to be made available to support further progress of
remaining four units.
The challenge continues within the Indian power sector as a
whole to obtain fuel at the right price, and to achieve open access
for the supply of power to customers at sensible PPAs. However,
with significant long term PPAs signed at higher tariff rates, the
Company expects to secure the necessary further debt funding
required for its major capital projects, resulting in an improved
financial performance over time.
OUTLOOK
With unfulfilled demand for power generation in India expected
to continue to grow through the coming decade, the high quality of
the Company's expanding asset base, a proven execution capability,
an increasingly efficient business structure, and with secured fuel
supplies to the power plants, KSK is well positioned to address the
Indian power generation opportunities.
On the successful phased completion of the remaining units of
the 3.6 GW KSK Mahanadi power projects being added to the Company's
existing portfolio, the Board believes KSK will be one of India's
leading suppliers of power. However, in the short term the Board
expects revenues and underlying profit to remain below the Board's
initial expectations; in the long term such expectations are likely
to be met gradually.
An extract of the Audited Consolidated and Company Financial
Statements for the year ended 31 March 2015 is shown below.
A full set of accounts will be available from the Company
websites: www.kskplc.co.uk
PRINCIPAL RISKS AND UNCERTAINITIES
The business of the Group is subject to a variety of risks and
uncertainties which, if they occur may have a materially adverse
effect on the Group's business or financial condition, results or
future operations. The risks & uncertainties set out in this
document are not exhaustive and there may be risks of which the
Board is not aware or believes to be immaterial, which may, in the
future, adversely affect the Group's business. The risks and
uncertainties faced by the Group and the industry as a whole have
been previously provided in detail in the Annual Reports of the
Company and the Interim Statements. The majority of the risks
previously identified have not significantly changed. While the
Company attempts to address the same, the key risks and
uncertainties continued to be faced by the Group are as
follows:
-- Delays in government decisions or implementation of earlier
government decisions along with continual inconsistencies in
government policies across departments and retrospective amendments
to the existing policies or introduction of new policies;
-- Delays in providing necessary regulatory support and / or
dispensation as may be required for timely implementation of the
financing plans
-- Deviation from approved government policies and abuse of
market dominance position by certain contractual counter
parties;
-- Shortage of fuel and dependence on market based or imported
fuel which are subject to market vagaries and other
uncertainties;
-- Economic slowdown and negative sectoral outlook with
resultant impact on banking sector delays in agreed project
disbursements and timely availability of credit;
-- Delays in enforcement of contractual rights or legal remedies
with government counter parties undertaking fuel supplies, power
off take, transmission and open access amongst others;
-- PPA Counter parties going contrary to pre agreed
understanding and seeking benefits from the power generators that
are often in conflict with shareholder obligations to further the
business;
-- Unusual currency depreciation that adversely effects the cost of project imports, project implementation, and repayment obligations;
-- Logistics bottlenecks and other infrastructure constraints of various agencies;
-- Challenges in the development of support infrastructure for
the power projects including physical hindrances and delay in the
issue of permits and clearances associated with land acquisitions;
and
-- Political and economic instability, global financial turmoil
and the resultant fiscal and monetary policies as well as currency
depreciation resulting in increasing cost structures
-- Liquidity risk and project financing
Extract of Consolidated and Company financial statements for the
year ended 31 March 2015
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
as at 31 March
(All amounts in thousands of US $, unless otherwise stated)
Consolidated Company
---------------------- --------------------
Notes 2015 2014 2015 2014
---------- ---------- --------- ---------
ASSETS
Non-current
Property, plant and
equipment 3,456,914 3,215,282 - -
Intangible assets and
goodwill 12,188 20,245 - -
Investments and other
financial assets 4 130,491 154,577 403,902 366,767
Other non-current assets 102,646 98,461 - -
Trade and other receivables 2,845 3,422 - -
Deferred tax asset 128,104 33,269 - -
3,833,188 3,525,256 403,902 366,767
---------- ---------- --------- ---------
Current
Investments and other
financial assets 4 31,313 73,240 27 4
Other current assets 40,459 22,688 320 391
Trade and other receivables 154,212 158,139 - -
Inventories 32,453 24,588 - -
Cash and short-term
deposits 5 197,996 194,054 1,065 173
---------- ---------- --------- ---------
456,433 472,709 1,412 568
---------- ---------- --------- ---------
Assets held for sale - 18,456 - -
---------- ---------- --------- ---------
Total assets 4,289,621 4,016,421 405,314 367,335
---------- ---------- --------- ---------
EQUITY AND LIABILITIES
Issued capital 6 289 289 289 289
Share premium 6 287,191 287,191 287,191 287,191
Share application money 6 16,498 18,000 16,498 18,000
Foreign currency translation
reserve 6 (129,431) (113,933) 4,524 12,580
Revaluation reserve 6 1,418 2,614 - -
Capital redemption reserve 6 10,855 5,461 - -
Other reserves 6 147,317 143,615 122 10
Retained earnings /
(Accumulated deficit) 6 15,590 69,254 (18,927) (14,249)
---------- ---------- --------- ---------
Equity attributable
to owners of the Company 349,727 412,491 289,697 303,821
Non-controlling interests 6 203,374 169,782 - -
---------- ---------- --------- ---------
Total equity 553,101 582,273 289,697 303,821
---------- ---------- --------- ---------
Non-current liabilities
Loans and borrowings 7 2,722,596 1,943,926 - -
Other non-current financial
liabilities 8 26,862 28,193 - -
Trade and other payables 47,581 51,110 - -
Provisions 3,210 2,494 - -
Deferred revenue 2,824 4,974 - -
Employee benefit liability 711 495 - -
Deferred tax liabilities 33,777 31,567 - -
2,837,561 2,062,759 - -
---------- ---------- --------- ---------
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
as at 31 March
(All amounts in thousands of US $, unless otherwise stated)
Consolidated Company
Company
---------------------- ------------------
Notes 2015 2014 2015 2014
---------- ---------- -------- --------
Current liabilities
Loans and borrowings 7 521,953 944,750 114,245 62,028
Other current financial
liabilities 8 5,959 5,073 - -
Trade and other payables 369,590 400,460 1,372 1,486
Deferred revenue 310 740 - -
Taxes payable 1,147 1,910 - -
898,959 1,352,933 115,617 63,514
---------- ---------- -------- --------
Liabilities associated - 18,456 - -
with assets held for
sale
Total liabilities 3,736,520 3,434,148 115,617 63,514
---------- ---------- -------- --------
Total equity and liabilities 4,289,621 4,016,421 405,314 367,335
---------- ---------- -------- --------
(See accompanying notes to the Consolidated and Company
financial statements)
CONSOLIDATED AND COMPANY INCOME STATEMENT
for the year ended 31 March
(All amounts in thousands of US $, unless otherwise stated)
Consolidated Company
-------------------------- ------------------
Notes 2015 2014 2015 2014
------------ ------------ -------- --------
Revenue 9 382,307 335,866 - -
Cost of revenue (279,034) (244,720) - -
------------ ------------ -------- --------
Gross profit 103,273 91,146 - -
Other operating income 9,396 7,064 - -
Distribution costs (10,501) (11,014) - -
General and administrative
expenses (61,604) (29,169) (960) (1,041)
------------ ------------ -------- --------
Operating profit / (loss) 40,564 58,027 (960) (1,041)
Finance costs 10 (219,810) (165,969) (3,718) (3,719)
Finance income 11 19,135 35,819 - 560
------------ ------------ -------- --------
Loss before tax (160,111) (72,123) (4,678) (4,200)
Tax income 12 91,204 13,106 - -
-------- --------
Loss for the year (68,907) (59,017) (4,678) (4,200)
------------ ------------ -------- --------
Attributable to:
Owners of the Company (56,504) (49,039) (4,678) (4,200)
Non-controlling interests (12,403) (9,978) - -
-------- --------
(68,907) (59,017) (4,678) (4,200)
------------ ------------ -------- --------
(Loss) / earnings per
share
Weighted average number
of ordinary shares for
basic and diluted earnings
per share 175,308,600 160,565,712
Basic and diluted earnings
per share (US $) (0.32) (0.31)
(See accompanying notes to the Consolidated and Company
financial statements)
CONSOLIDATED AND COMPANY STATEMENT OF OTHER COMPREHENSIVE
INCOME
for the year ended 31 March
(All amounts in thousands of US $, unless otherwise stated)
Consolidated Company
--------------------- -------------------
2015 2014 2015 2014
--------- ---------- --------- --------
Loss for the year (68,907) (59,017) (4,678) (4,200)
Items that will never be
reclassified to income statement
Re-measurement of defined
benefit liability 94 859 - -
Income tax relating to re-measurement
of defined benefit liability 59 (254) - -
153 605 - -
--------- ---------- --------- --------
Items that are or may be
reclassified subsequently
to income statement
Foreign currency translation
differences (24,135) (52,881) (8,056) 6,160
Available-for-sale financial
assets
- current period losses (2,612) (1,755) - -
- reclassification to income
statement 693 2,986 - -
Reclassification of reserve (491) - - -
on deemed disposal of interest
in joint operation
Income tax relating to available
for sale financial asset 505 (188) - -
(26,040) (51,838) (8,056) 6,160
--------- ---------- --------- --------
Other comprehensive (loss)
/ income, net of tax (25,887) (51,233) (8,056) 6,160
--------- ---------- --------- --------
Total comprehensive (loss)
/ income for the year (94,794) (110,250) (12,734) 1,960
--------- ---------- --------- --------
Attributable to:
Owners of the Company (73,310) (83,106) (12,734) 1,960
Non-controlling interests (21,484) (27,144) - -
(94,794) (110,250) (12,734) 1,960
--------- ---------- --------- --------
(See accompanying notes to the Consolidated and Company
financial statements)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2014
(All amount in thousands of US $, unless otherwise stated)
---------------------------------------------------------------------------------------------------------------------------------------------------------------
Non Total
- equity
controlling
Attributable to owners of the Company interests
--------------------------------------------------------------------------------------------------------------- ------------ ----------
Issued Share Share Foreign Revaluation Capital Other Retained Total
capital premium application currency reserve redemption reserves earnings
money translation reserve
reserve
-------------------- -------- -------- ------------ ------------ ------------ ----------- --------- --------- -------------- ------------ ----------
As at 1 April 2013 263 253,890 - (78,535) 2,752 - 142,262 120,939 441,571 199,615 641,186
Issue of shares 26 33,301 - - - - - - 33,327 - 33,327
Receipt of share
application money - - 18,000 - - - - - 18,000 - 18,000
Change in
non-controlling
interests without
change in control - - - - - - 12 - 12 (12) -
Transfer of
economic
interest to
non-controlling
interests(1) - - - - - - - 2,677 2,677 (2,677) -
Equity-settled
share
based payment - - - - - - 10 - 10 - 10
Transfer of profit
to capital
redemption
reserve - - - - - 5,461 - (5,461) - - -
Net depreciation
transfer for
property,
plant and
equipment - - - - (138) - - 138 - - -
Transaction with
owners 26 33,301 18,000 - (138) 5,461 22 (2,646) 54,026 (2,689) 51,337
Loss for the year - - - - - - - (49,039) (49,039) (9,978) (59,017)
Other comprehensive
income
Items that will
never be
reclassified
to income statement
Re-measurement of
defined benefit
liability - - - - - - 803 - 803 56 859
Income tax relating
to re-measurement
of defined benefit
liability - - - - - - (254) - (254) - (254)
-------------------- -------- -------- ------------ ------------ ------------ ----------- --------- --------- -------------- ------------ ----------
Items that are or
may be reclassified
subsequently to
income statement
Foreign currency
translation
differences - - - (35,398) - - - - (35,398) (17,483) (52,881)
Available-for-sale
financial assets
- current period
(losses) / gains - - - - - - (2,063) - (2,063) 308 (1,755)
-reclassification
to profit or loss - - - - - - 2,986 - 2,986 - 2,986
Income tax relating
to
available-for-sale
financial asset - - - - - - (141) - (141) (47) (188)
Total comprehensive
(loss) / income
for the year - - - (35,398) - - 1,331 (49,039) (83,106) (27,144) (110,250)
-------- -------- ------------ ------------ ------------ ----------- --------- --------- -------------- ------------ ----------
Balance as at 31
March 2014 289 287,191 18,000 (113,933) 2,614 5,461 143,615 69,254 412,491 169,782 582,273
-------------------- -------- -------- ------------ ------------ ------------ ----------- --------- --------- -------------- ------------ ----------
(See accompanying notes to the Consolidated and Company financial statements)
(1) The group entities have arrangements of sharing of profits with its non-controlling
shareholders, through which the non controlling shareholders are entitled to
a dividend of 0.01% of the face value of the equity share capital held and
the same is also reflected in the Consolidated income statement. However, the
non controlling interest disclosed in the Statement of changes in equity is
calculated in the proportion of the actual shareholding as at the reporting
date.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2015
(All amount in thousands of US $, unless otherwise stated)
------------------------------------------------------------------------------------------------------------------------------------- ------------ ------------
Non - Total
controlling equity
Attributable to owners of the Company interests
--------------------------------------------------------------------------------------------------------------- ------------ ------------
Issued Share Share Foreign Revaluation Capital Other Retained Total
capital premium application currency reserve redemption reserves earnings
money translation reserve
reserve
-------------------- -------- -------- ------------ ------------ ------------ ----------- --------- --------- -------------- ------------ ----------
As at 1 April 2014 289 287,191 18,000 (113,933) 2,614 5,461 143,615 69,254 412,491 169,782 582,273
Refund of share
application money - - (1,502) - - - - - (1,502) - (1,502)
Change in
non-controlling
interests without
change in control - - - - - - 4,898 - 4,898 62,114 67,012
Transfer of
economic
interest to
non-controlling
interests(1) - - - - - - 7,038 7,038 (7,038) -
Equity-settled
share based
payment - - - - - - 112 - 112 - 112
Transfer of profit
to capital
redemption
reserve - - - - - 5,394 (5,394) - - -
Net depreciation
transfer for
property,
plant and
equipment - - - - (345) - - 345 - - -
Transaction with
owners - - (1,502) - (345) 5,394 5,010 1,989 10,546 55,076 65,622
Loss for the year - - - - - - - (56,504) (56,504) (12,403) (68,907)
Other comprehensive
income
Items that will
never be
reclassified
to income statement
Re-measurement
of defined benefit
liability - - - - - - 94 - 94 - 94
Income tax relating
to re-measurement
of defined benefit
liability - - - - - - 59 - 59 - 59
-------------------- -------- -------- ------------ ------------ ------------ ----------- --------- --------- -------------- ------------ ------------
Items that are
or may be
reclassified
subsequently to
income statement
Foreign currency
translation
differences - - - (15,498) - - - - (15,498) (8,637) (24,135)
Available-for-sale
financial assets
- current period
loss - - - - - - (2,004) - (2,004) (608) (2,612)
- reclassification
to profit or loss - - - - - - 693 - 693 - 693
Income tax relating
to
available-for-sale
financial asset - - - - - - 341 - 341 164 505
Reclassification
of reserves on
deemed disposal
of interest in
Joint operation - - - - (851) - (491) 851 (491) - (491)
Total comprehensive
expenses for the
year - - - (15,498) (851) - (1,308) (55,653) (73,310) (21,484) (94,794)
-------- -------- ------------ ------------ ------------ ----------- --------- --------- -------------- ------------ ------------
Balance as at 31
March 2015 289 287,191 16,498 (129,431) 1,418 10,855 147,317 15,590 349,727 203,374 553,101
-------------------- -------- -------- ------------ ------------ ------------ ----------- --------- --------- -------------- ------------ ------------
(See accompanying notes to the Consolidated and Company financial statements)
(1) The group entities have arrangements of sharing of profits with its non-controlling
shareholders, through which the non controlling shareholders are entitled to
a dividend of 0.01% of the face value of the equity share capital held and the
same is also reflected in the Consolidated income statement. However, the non
controlling interest disclosed in the Statement of changes in equity is calculated
in the proportion of the actual shareholding as at the reporting date.
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2015
(All amount in thousands of US $, unless otherwise stated)
Issued Share Share Foreign Other Accumulated Total
capital premium application currency reserve deficit equity
money translation
reserve
-------------------- --------------- ------------- ------------- ------------- --------- ------------ ---------
As at 1 April 2013 263 253,890 - 6,420 - (10,049) 250,524
Issue of shares 26 33,301 - - - - 33,327
Receipt of share
application
money - - 18,000 - - - 18,000
Equity-settled
share based
payment - - - - 10 - 10
--------------- ------------- ------------- ------------- --------- ------------ ---------
Transaction with
owners 26 33,301 18,000 - 10 - 51,337
Loss for the year - - - - - (4,200) (4,200)
Other comprehensive
income
Foreign currency
translation
differences - - - 6,160 - - 6,160
--------------- ------------- ------------- ------------- --------- ------------ ---------
Total comprehensive
income
/ (loss) for the
year - - - 6,160 - (4,200) 1,960
--------------- ------------- ------------- ------------- --------- ------------ ---------
Balance as at 31
March 2014 289 287,191 18,000 12,580 10 (14,249) 303,821
--------------- ------------- ------------- ------------- --------- ------------ ---------
As at 1 April 2014 289 287,191 18,000 12,580 10 (14,249) 303,821
Refund of share
application
money - - (1,502) - - - (1,502)
Equity-settled
share based
payment - - - - 112 112
--------------- ------------- ------------- ------------- --------- ------------ ---------
Transaction with
owners - - (1,502) - 112 - (1,390)
Loss for the year - - - - - (4,678) (4,678)
Other comprehensive
income
Foreign currency
translation
differences - - - (8,056) - - (8,056)
--------------- ------------- ------------- ------------- --------- ------------ ---------
Total comprehensive
loss
for the year - - - (8,056) - (4,678) (12,734)
--------------- ------------- ------------- ------------- --------- ------------ ---------
Balance as at 31
March 2015 289 287,191 16,498 4,524 122 (18,927) 289,697
-------------------- --------------- ------------- ------------- ------------- --------- ------------ ---------
(See accompanying notes to Consolidated and Company financial
statements)
CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS
for the year ended 31 March
(All amount in thousands of US $, unless otherwise
stated)
Consolidated Company
---------------------- --------------------
2015 2014 2015 2014
---------- ---------- --------- ---------
Cash inflow / (outflow) from
operating activities
Loss before tax (160,111) (72,123) (4,678) (4,200)
Adjustment
Depreciation and amortisation 58,733 43,926 - 1
Finance cost 218,693 154,829 3,857 3,242
Finance income (19,135) (35,819) - (1,554)
Provision and impairment of
trade receivable, PPE and other
receivable 31,070 9,068 - 335
Net loss on business combination 2,001 - - -
Loss / (profit) on sale of fixed
assets, net 142 (352) - -
Others (7,857) 869 112 10
Change in
Trade receivables and unbilled
revenue 1,687 (50,712) - -
Inventories (7,419) 1,658 - -
Other assets (7,391) (53,024) 31 (4,851)
Trade payables and other liabilities (17,202) 53,819 53 84
Provisions and employee benefit
liability 204 (566) - -
Cash generated from / (used
in) operating activities 93,415 51,573 (625) (6,933)
Taxes paid, net (3,945) (5,364) - -
---------- ---------- --------- ---------
Net cash provided by / (used
in) operating activities 89,470 46,209 (625) (6,933)
Cash inflow / (outflow) from
investing activities
Movement in restricted cash,
net (19,137) 123,310 - -
Purchase of property, plant
and equipment and other non-current
assets (222,891) (199,997) - -
Proceeds from sale of property,
plant and equipment 929 1,709 - -
Purchase of financial assets (27,770) (23,906) (46,353) (47,652)
Proceeds from sale of financial
assets 24,225 59,675 - -
Net cash flow on business combination (5,784) - - -
Dividend received 95 120 - -
Interest income received 16,738 31,350 - -
---------- ---------- --------- ---------
Net cash used in investing activities (233,595) (7,739) (46,353) (47,652)
Cash inflow / (outflow) from
financing activities
Proceeds from borrowings 995,211 1,252,455 62,876 7,663
Repayment of borrowings (533,352) (993,151) (10,490) -
Finance costs paid (398,627) (316,109) (3,103) (2,972)
Payment of derivative liability (4,552) (4,519) - -
Advance received against investment 14,939 - - -
Net proceeds from issue of shares
and share application money in
subsidiary to non-controlling
interest 63,371 2,303 - -
Net proceeds / repayment from
issue of shares and share application
money (1,502) 51,327 (1,502) 51,327
---------- ---------- --------- ---------
Net cash flow provided by /
(used in) financing activities 135,488 (7,694) 47,781 56,018
Effect of exchange rate changes (6,564) (18,676) 89 (1,547)
---------- ---------- --------- ---------
Net increase / (decrease) in
cash and cash equivalents (15,201) 12,100 892 (114)
Cash and cash equivalents at
the beginning of the year 55,934 43,834 173 287
---------- ---------- --------- ---------
Cash and cash equivalents at
the end of the year (refer note
5) 40,733 55,934 1,065 173
---------- ---------- --------- ---------
NOTES TO CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS
for the year ended 31 March 2015
(All amount in thousands of US $, unless otherwise stated)
1. Corporate information
1.1. General information
KSK Power Ventur plc ('the Company' or 'KPVP' or 'KSK' or
'Parent'), a limited liability corporation, is the Group's Parent
Company and is incorporated and domiciled in the Isle of Man. The
address of the Company's Registered Office, which is also principal
place of business, is Fort Anne, Douglas, Isle of Man, IM1 5PD. The
Company's equity shares are listed on the Standard List on the
official list of the London Stock Exchange.
1.2. Nature of operations
KSK Power Ventur plc, its subsidiaries and joint operations
(collectively referred to as 'the Group') are primarily engaged in
the development, ownership, operation and maintenance of private
sector power projects with multiple industrial consumers and
utilities in India.
KSK focused its strategy on the private sector power development
market, undertaking entire gamut of development, investment,
construction (for its own use), operation and maintenance of power
plant with supplies initially to heavy industrials operating in
India and now branching out to cater to the needs of utilities and
others in the wider Indian power sector.
The principal activities of the Group are described in note
9.
1.3. Statement of compliance responsibility statement
The Consolidated and Company financial statements contained in
this document have been prepared in accordance with International
Financial Reporting Standard and its interpretations as adopted by
the European Union (EU) ('IFRS') and the provisions of the Isle of
Man, Companies Act 1931-2004 applicable to companies reporting
under IFRS.
The financial statements were authorised for issue by the Board
of Directors on 20 July 2015.
1.4. Financial period
The Consolidated and Company financial statements cover the
period from 1 April 2014 to 31 March 2015, with comparative figures
from 1 April 2013 to 31 March 2014.
1.5. Basis of preparation
These Consolidated financial statements have been prepared on
the historical cost convention and on an accrual basis, except for
the following:
-- Derivative financial instruments that are measured at fair value;
-- Financial instruments that are designated as being at fair
value through profit or loss account upon initial recognition are
measured at fair value;
-- Available-for-sale financial assets that are measured at fair value; and
-- Net employee defined benefit (asset) / liability that are measured at fair value.
The financial statements of the Group and the Company have been
presented in United States Dollars ('US $'), which is the
presentation currency of the Company. All amounts have been
presented in thousands, unless specified otherwise.
Balances represent consolidated amounts for the Group, unless
otherwise stated. The Company's financial statement represents
separate financial statement of KPVP.
Going Concern: The financial statements have been prepared on
the going concern basis which assumes the Group and the Company
will have sufficient funds to continue its operational existence
for the foreseeable future, covering at least twelve months from
the date of signing these financial statements. The Group requires
funds for both short term operational needs as well as for long
term investment programmes, mainly in construction projects for its
power plants.
As at 31 March 2015, the Group had net current liabilities of US
$ 442,526 and is depending on a continuation of both short term and
long term debt financing facilities. Such financing is subject to
covenant and amortisation conditions. The Group also has
significant capital commitments at the year-end of which a portion
is due to be met during the year to 31 March 2016, primarily in
respect of on-going plant construction projects at KSK Mahanadi.
The Group is also involved in a number of on-going legal and claim
matters.
The Group continues to generate cash flows from current
operations which are further expected to increase with the full
load operation of two units of KSK Mahanadi plant and better plant
load factor in Sai Wardha. These two factors are key assumptions
with regard to management's forecasts and expectations. It is
forecast that the transmission corridor constraint on KSK Mahanadi
for the operation and sale of power from unit 2 and long term PPA
arrangement for Sai Wardha will be in place shortly. Should there
be further delays in these matters this may impact on the ability
of the Group to generate the cash flows for current financing
proposals being considered, described below.
In addition, a number of the facilities that are due to expire
at 31 March 2016 are in the process of being extended and have a
rollover clause in a number of cases, and the Group may refinance
and/or restructure certain short term borrowings into long
borrowings and will also consider alternative sources of financing,
where applicable. The Directors are confident that facilities will
remain available to the Group based on current trading, covenant
compliance and on going discussions with the Groups primary lending
consortium regarding future facilities and arrangements in respect
of current borrowings.
The Group currently had significant undrawn borrowing
facilities, subject to certain conditions, amounting to
approximately US $ 710,417 to meet its long term investment
programmes. However, the Group is currently in discussions with
stakeholders regarding the terms of such existing drawn and undrawn
financial commitments in order to match facilities to the current
development and financing plans for KSK Mahanadi. These proposals
require the regulatory consent of the Reserve Bank of India.
Discussions with all stakeholders regarding such arrangements have
been positive to date and the Groups lenders are supportive of
proposed arrangements. Nonetheless the Group monitors the situation
on an on-going basis and plans alternative arrangements where
necessary. The outcome of these discussions may impact on the
timing of the strategic development of this plant.
As a consequence, the Directors have a reasonable expectation
that the Company and Group are well placed to manage their business
risks and continue in operational existence for the foreseeable
future. Accordingly, the Directors continue to adopt the going
concern basis of accounting when preparing these financial
statements.
2. Changes in accounting policy and disclosure
The accounting policies adopted are consistent with those of the
previous financial year except for the adoption of new standards as
of 1 April 2014, noted below:
The Group has adopted the following new standards and amendments
to standards, including any consequential amendments to other
standards, with a date of initial application of 1 April 2014.
-- IFRS 10: Consolidated financial statements
-- IFRS 11: Joint arrangements
-- IFRS 12: Disclosure of interest in other entities
-- Recoverable amount disclosure for non-financial assets (Amendments to IAS 36)
-- Investment entities (Amendments to IFRS 10, IFRS 12 and IAS 27)
-- Offsetting financial assets and financial liabilities - Amendments to IAS 32
-- Novation of derivatives and continuation of hedge accounting - Amendments to IAS 39
The nature and the effect of the changes are further explained
below:
IFRS 10: Consolidated financial statements
IFRS 10 establishes the principal for the preparation and
presentation of consolidated financial statements with a new
definition of control. The investor controls an investee when it is
exposed to, or has rights to variable returns from its involvement
with the investee and has ability to affect those returns through
its power over the investee. This definition replaces the pervious
guidance on control and consolidation under IAS 27 (Separate
Financial Statements) and SIC 12 (Consolidation-Special Purpose
Entities). IFRS 10 does not have any impact on the financial
statements of the Group.
IFRS 11: Joint arrangements
IFRS 11 (Joint Arrangements) replaced IAS 31 (Interest in Joint
Ventures) and requires investments in joint arrangements classified
as either joint ventures or joint operations based on the rights
and obligations of the parties to the arrangement. Under this
standard, the Group has assessed its joint arrangements in order to
identify those which require to be classified as joint ventures
rather than joint operations. Joint operations arise where the
venturers are deemed to have joint control and have rights to the
assets and obligations for the liabilities of the arrangement as
opposed to having rights to the net assets of the arrangements.
Accordingly, a joint operator will recognise its share of the
operation's assets, liabilities, revenues and expenses in the
consolidated financial statements rather than its net share of the
result of the venture. IFRS 11 does not have any impact on the
financial statements of the Group.
IFRS 12: Disclosure of interest in other entities
IFRS 12 applies to entities that have an interest in a
subsidiary, a joint arrangement, an associate or unconsolidated
structured entities. IFRS 12 requires an entity to disclose
information that enables users of financial statements to evaluate
the nature and risk associated with the interest in other entities.
These disclosures are set out within the relevant notes to the
financial statements.
Recoverable amount disclosure for non-financial assets
(Amendments to IAS 36)
The amendment requires the disclosure of the recoverable amounts
for the assets or Cash Generating Unit (CGU) for which impairment
loss has been recognised or reversed during the period. The
amendment also expands and requires the disclosure when an asset's
or CGUs recoverable amount is determined on the basis of fair value
less cost of disposal. Accordingly, these disclosures are set out
within the relevant notes to the financial statements.
Investment entities (Amendments to IFRS 10, IFRS 12 and IAS
27)
The amendment provides an exception to the consolidation
requirement for entities that meet the definition of an investment
entity under IFRS 10 Consolidated Financial Statements and must be
applied retrospectively, subject to certain transition relief. The
exception to consolidation requires investment entities to account
for subsidiaries at fair value through profit or loss. These
amendments have no impact on the Group, since none of the entities
in the Group qualifies to be an investment entity under IFRS
10.
Offsetting financial assets and financial liabilities -
Amendments to IAS 32
The amendment clarifies the meaning of meaning of 'currently
have a legally enforceable right to set-off' and 'simultaneous
realisation and settlement'. The amendment clarify that to result
in offset of a financial asset and financial liability, a right to
set off must be available today rather than being contingent on a
future event and must be exercisable by any of the counterparties.
It must be legally enforceable in the normal course of business.
These amendments have no impact on the Group, since none of the
entities in the Group has any offsetting arrangements.
Novation of derivatives and continuation of hedge accounting -
Amendments to IAS 39
The amendment provides relief from discontinuing hedge
accounting when novation of a derivative designated as a hedging
instrument meets certain criteria and retrospective application is
required. These amendments have no impact on the Group as the Group
has not novated its derivatives during the current or prior
periods.
The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet
effective.
3. Acquisition and Dilution - change in non-controlling interest without change in control
a. Qualified Institutional Placement (QIP) by KSK Energy Ventures Limited ('KEVL')
During the year ended 31 March 2015, KEVL issued additional
40,404,040 equity shares of face value of Rs. 10 (US $ 0.16) each
at a premium of Rs. 89 (US $ 1.45) per share in the Indian domestic
market by way of Qualified Institutional Placement (QIP). The issue
was fully subscribed and KEVL raised Rs. 3,941,773,675 (US $
64,443) net of share issue expenses of Rs. 57,681,158 (US $ 943)
(net of tax).
Pursuant to the above, the ownership interest of the Group in
KEVL decreased from 74.94 percent to 67.61 percent resulting in a
7.33 percent decrease in the Group's controlling interest in a
subsidiary without loss of control. The aforesaid transaction is
accounted as an equity transaction, and no gain or loss is
recognised in the Consolidated income statement. The difference of
US $ 6,763, between the fair value of the net consideration
received (US $ 64,443) and the amount by which the non-controlling
interest are adjusted (US $ 57,680), is credited to 'Other reserve'
within Consolidated statement of changes in equity and attributed
to the owners of the company.
b. Warrant issue by KSK Energy Ventures Limited
During the year ended 31 March 2015, the group has issued
80,808,080 warrants of face value of Rs. 10 (US $ 0.16) each in KSK
Energy Ventures Limited ('KEVL'), an Indian Listed subsidiary to
KSK Power Holdings Limited ("KPHL") with an option to apply for and
be allotted equivalent number of equity shares of the face value of
Rs 10 (US $ 0.16) each at a premium of Rs. 89 (US $ 1.45) each on a
preferential basis.
Pursuant to above, KPHL acquired 9,214,700 shares of KSK Energy
Ventures Limited ('KEVL') resulting in increase of the ownership
interest of the Group in KEVL from 67.61 percent to 68.30 percent
resulting in a 0.69 percent additional interest in subsidiary. The
aforesaid transaction is accounted as an equity transaction, and
accordingly no gain or loss is recognised in the consolidated
income statement. An amount of US $ 1,057 by which the
non-controlling interest is adjusted debited to 'other reserve'
within consolidated statement of changes in equity and attributed
to the owners of the Company
c. Acquisition of VS Lignite Power Private Limited
During the year ended 31 March 2015, the Group has issued
additional 60,000,000 equity shares in VS Lignite Power Private
Limited ("VSLPPL") to KSK Electricity Financing India Private
Limited (KEFIPL) at face value of Rs 10 (US $ 0.16) each.
Pursuant to the above, the ownership interest of the Group in
VSLPPL increased from 74 percent to 83.75 percent resulting in a
9.75 percent additional interest in subsidiary. The aforesaid
transaction is accounted as an equity transaction, and no gain or
loss is recognised in the Consolidated income statement. An amount
of US $ 984 by which the non-controlling interest is adjusted
debited to 'Other reserve' within consolidated statement of changes
in equity and attributed to the owners of the company.
d. Dilution in KSK Mahanadi Power Company Limited
During the year ended 31 March 2015, the Group has issued
additional 536,600,000 equity shares in KSK Mahanadi Power Company
Limited ("KMPCL") to KSK Energy Ventures Limited ("KEVL") and Sai
Regency Power Corporation Private Limited ("SRPCPL") at a face
value of Rs 10 (US $ 0.16) at par.
Pursuant to above, the ownership interest of the Group in KMPCL
decreased by 0.59 percent in a subsidiary without loss of control.
The aforesaid transaction is accounted as an equity transaction,
and no gain or loss is recognised in the Consolidated income
statement. An amount of US $ 141 by which the non-controlling
interest is adjusted debited to 'other reserve' within consolidated
statement of changes in equity and attributed to the owners of the
company.
e. Dilution in KSK Dibbin Hydro Power Private Limited
During the year ended 31 March 2015, the Group has issued
additional 15,280,000 equity shares in KSK Dibbin Hydro Power
Private Limited ("KDHPPL") to North Eastern Electric Power
Corporation Limited (NEEPCO) at face value of Rs 10 (US $ 0.16)
each.
Pursuant to above, the ownership interest of the Group in KDHPPL
decreased from 100 percent to 81.01 percent resulting in a 18.99
percent decrease in Group's controlling interest in a subsidiary
without loss of control. The aforesaid transaction is accounted as
an equity transaction, and no gain or loss is recognised in the
consolidated income statement. The difference of US $ 257 between
the fair value of the net consideration received (US $ 2,498) and
the amount by which the non-controlling interest are adjusted (US $
2,241), is credited to 'Other reserve' within Consolidated
statement of changes in equity and attributed to the owners of the
company.
4. Investments and other financial assets
Consolidated Company
---------------- -----------------
2015 2014 2015 2014
------- ------- -------- -------
Current
Financial assets at fair
value through profit or loss
- held-for-trading 2,589 130 - -
Loans and receivables 28,724 72,333 27 4
Loans to and receivables
from Joint Venture partner - 777 - -
31,313 73,240 27 4
------- ------- -------- -------
Non-current
Financial assets at fair
value through profit or loss
- Derivative assets 49,702 50,196 - -
Available-for-sale investments 19,155 22,865 - -
Deposit with banks 8,102 10,953 - -
Loans and receivables 37,688 39,336 5,100 5,660
Loans to and receivables
from Joint Venture partner 15,844 31,227 - -
Loans to and receivable from
subsidiaries - - 171,676 133,873
Investment in subsidiaries - - 227,126 227,234
------- ------- -------- -------
130,491 154,577 403,902 366,767
------- ------- -------- -------
Total 161,804 227,817 403,929 366,771
------------------------------- ------- ------- -------- -------
Financial assets at fair value through profit or loss
The Group has invested into short-term mutual fund units and
equity securities in various companies being quoted on Indian stock
market which are designated as held for trading. The fair value of
the mutual fund units and equity securities are determined by
reference to published data.
Available-for-sale investment
The Group has investments in listed equity securities of various
companies being quoted on the Indian and London stock markets
respectively. The fair value of the quoted equity shares are
determined by reference to published data. The Group also holds
non-controlling interest (1%-25%) in unlisted entities which are in
the business of power generation and allied projects. The Group
designated these quoted and unquoted equity shares as
available-for-sale investment in accordance with the documented
investment strategy of the Group to manage and evaluate performance
of the equity shares on fair value basis. The fair value of
unquoted ordinary shares has been estimated using a relative
valuation using price earnings ratio / book value method. The
valuation requires management to make certain assumptions about the
inputs including size and liquidity.
Deposit with banks
This represents the deposits with the bank with the maturity
term of more than twelve months from the reporting date.
Derivative assets
A derivative asset includes currency option contracts and
currency forward contracts carried at fair value. Fair value of
currency option is determined by independent valuer which is the
counterparty in the contracts. Fair value of currency forward is
determined by mark to market value of forward on the date of
financial position.
Loans and receivables
This primarily includes inter-corporate deposits of US $ 7,852
(2014: US $ 9,941), deferred loan origination costs US $ Nil (2014:
US $ 4,424), security deposit US $ 40,809 (2014: US $ 51,206),
advance for investments US $ 2,492 (2014: US $ 2,610) and other
financial assets US $ 15,259 (2014: US $ 43,488).
Loans to and receivables from Joint Venture partner
This primarily includes the investment in debentures in the
joint operations, inter corporate deposit to joint operations and
redeemable preference share capital held in the joint
operations.
Loans to and receivable from subsidiaries
Loans to and receivable from subsidiary represents
inter-corporate deposits given by the Company to its wholly owned
subsidiaries.
Investment in subsidiaries
Investment primarily includes unquoted investments in
subsidiaries in the Company financial statements. The Company has
invested in 139,244,601 equity shares (2014: 139,244,601) in KEL,
12,000 equity shares (2014: 12,000) in KASL, 100,000,000 equity
shares (2014: 100,000,000) in KGPP, 84,146,843 equity shares (2014:
84,146,843) in KGEPL and 1 equity share (2014: 1) in KSVP totalling
to US $ 227,126 (2014: US $ 227,234).
Investment and other financial assets amounting to US $ 113,076
(2014: US $ 177,207) for the Group is subject to security
restrictions (refer note 7).
Impairment of financial assets
During the year ended 31 March 2015, the Group's
available-for-sale financial asset of US $ 693 (2014: US $ 2,986)
and loans and receivable of US $ 25,095 (2014: US $ 1,657) were
collectively impaired.
During the year ended 31 March 2015, the Company's loans and
receivable of US $ Nil (2014: US $ 335) were collectively impaired
and written off.
5. Cash and short-term deposits
Cash and short-term deposits comprise of the following:
Consolidated Company
---------------- -----------
2015 2014 2015 2014
------- ------- ----- ----
Cash at banks and on hand 40,730 55,810 1,065 173
Short-term deposits 157,266 138,244 - -
------- ------- ----- ----
Total 197,996 194,054 1,065 173
-------------------------- ------- ------- ----- ----
Short-term deposits are made for varying periods, depending on
the immediate cash requirements of the Group.
The Group has pledged its short-term deposits amounting US $
157,239 (2014: US $ 136,233) in order to fulfil collateral
requirements (refer note 7).
For the purpose of cash flow statement, cash and cash equivalent
comprise:
Consolidated Company
---------------------- -------------
2015 2014 2015 2014
---------- ---------- ------ -----
Cash at banks and on hand 40,730 55,810 1,065 173
Short-term deposits 157,266 138,244 - -
---------- ---------- ------ -----
Total 197,996 194,054 1,065 173
Less: Restricted cash(1) (157,263) (138,120) - -
---------- ---------- ------ -----
Cash and cash equivalent 40,733 55,934 1,065 173
--------------------------- ---------- ---------- ------ -----
(1) Include deposits pledged for availing credit facilities from
banks and deposits with maturity term of three months to twelve
months.
6. Issued share capital
Share capital
The Company presently has only one class of ordinary shares. For
all matters submitted to vote in the shareholders meeting, every
holder of ordinary shares, as reflected in the records of the
Company on the date of the shareholders' meeting, has one vote in
respect of each share held. All shares are equally eligible to
receive dividends and the repayment of capital in the event of
liquidation of the Company.
The Company has an authorised share capital of 500,000,000
equity shares (2014: 500,000,000) at par value of US $ 0.002 (GBP
0.001) per share amounting to US $ 998.The issued and fully paid up
number of shares of the company is 175,308,600 (2014: 175,308,600).
During the year the company has not issued/ bought back any
ordinary share.
During the previous year, the Company has raised US $ 33,327
(net of share issue expenses of US $ 755) by way of a placing of
15,930,000 equity shares of US $ 0.002 (GBP0.001) each with the
parent company and institutional investors at a premium of US $
2.14 (GBP 1.299) per share. The placing shares rank pari-passu in
all respects with the other ordinary shares including the right to
receive all dividends and other distributions.
Share application money represents amount received from
investors / parents pending allotment of ordinary shares.
Reserves
Share premium represents the amount received by the Group over
and above the par value of shares issued. Any transaction costs
associated with the issuing of shares are deducted from share
premium, net of any related income tax consequences.
Revaluation reserve comprises gains and losses due to the
revaluation of previously held interest of the assets acquired in a
business combination.
Foreign currency translation reserve is used to record the
exchange difference arising from the translation of the financial
statements of the Group entities and the same is not
distributable.
Capital redemption reserve represents statutory reserve required
to be maintained under local law of India on account of redemption
of capital. The reserve is credited equivalent to amount of capital
redeemed by debiting retained earnings and the same is not
distributable.
Other reserve represents the difference between the
consideration paid and the adjustment to net assets on change of
controlling interest, without change in control and the excess of
the fair value of share issued in business combination over the par
value of such shares. Any transaction costs associated with the
issuing of shares by the subsidiaries are deducted from other
reserves, net of any related income tax consequences. Further, it
also includes the loss / gain on fair valuation of
available-for-sale financial instruments and re-measurement of
defined benefit liability net of taxes and the same is not
distributable.
Retained earnings mainly represent all current and prior year
results as disclosed in the income statement and other
comprehensive income less dividend distribution.
7. Loans and borrowings
The loans and borrowings comprise of the following:
Interest Final Consolidated Company
rate Maturity
(range
%)
----------- ------------ ---------------------- -------------------
2015 2014 2015 2014
----------- ------------ ---------- ---------- -------- -------
Long-term
"project finance" 3.00 to
loans 17.25 June-28 2,760,503 2,153,328 - -
Short-term 0.00 to
loans 15.00 March-16 168,273 230,856 64,564 12,177
Buyers' credit 0.47 to
facility 3.30 March-16 148,687 372,892 49,681 49,851
Cash credit
and other
working capital 12.00
facilities to 16.00 March-16 111,305 99,823 - -
Redeemable
preference 0.01 to
shares 15.00 January-29 11,564 17,591 - -
0.01 to
Debentures 17.00 March-25 44,217 14,186 - -
---------- ---------- -------- -------
Total 3,244,549 2,888,676 114,245 62,028
--------------------- ------------------------ ---------- ---------- -------- -------
Total debt of US $ 3,244,549 (2014: US $ 2,888,676)
comprised:
-- Long-term "project finance" loans of the Group amounting US $
2,760,503 (2014: US $ 2,153,328) is fully secured on the property,
plant and equipment and other assets of subsidiaries and joint
operations that operate power stations, allied services and by a
pledge over the promoter's shareholding in equity and preference
capital of some of the subsidiaries and joint and corporate
guarantee provided by the Company.
-- The short term loans taken by the Group are secured by the
corporate guarantee provided by the Company, fixed deposits of the
Group and by pledge of shares held in the respective entities.
-- Buyer's credit facility is secured against property, plant
and equipment and other assets on pari-passu basis, pledge of fixed
deposits and corporate guarantee of KEVL. These loans bear interest
at LIBOR plus 25 to 300 basis points.
-- A number of the facilities that are due to expire at 31 March
2016 are in the process of being extended and have rollover clause
in a number of cases.
-- Cash credit and other working capital facilities are fully
secured against property, plant and equipment and other assets on
pari-passu basis with other lenders of the respective entities
availing the loan facilities.
-- Redeemable preference shares are due for repayment in 0-14
years.
-- Debentures are secured on the property, plant and equipment
and other assets of subsidiaries that operate power stations,
allied services and by a pledge over the promoter's shareholding in
equity capital of some of the subsidiaries.
Long-term "project finance" loan contains certain restrictive
covenants for the benefit of the facility providers and primarily
requires the Group to maintain specified levels of certain
financial ratios and operating results. The terms of the other
borrowings arrangements also contain certain restrictive covenants
primarily requiring the Group to maintain certain financial ratios.
As of 31 March 2015, the Group has complied with the relevant
significant covenants.
As at 31 March 2015, the Group has available US $ 710,417 of
undrawn long term committed borrowing facilities.
The fair value of borrowings at 31 March 2015 was US $ 3,244,549
(2014: US $ 2,888,676). The fair values have been calculated by
discounting cash flows at prevailing interest rates.
The interest-bearing loans and borrowings mature as follows:
Consolidated Company
-------------------- ---------------
2015 2014 2015 2014
--------- --------- ------- ------
Current liabilities
Amounts falling due within
one year 521,953 944,750 114,245 62,028
Non-current liabilities
Amounts falling due after
more than one year but not
more than five years 1,087,518 982,475 - -
Amounts falling due in more
than five years 1,635,078 961,451 - -
--------- --------- ------- ------
Total 3,244,549 2,888,676 114,245 62,028
---------------------------- --------- --------- ------- ------
8. Other financial liabilities
2015 2014
----------------------------------- ------ ------
Current
Option premium payable 5,506 5,020
Forward exchange forward contracts 453 53
------ ------
5,959 5,073
------ ------
Non-Current
Option premium payable 22,099 27,148
Interest rate swaps 4,763 1,045
------ ------
26,862 28,193
------ ------
Total 32,821 33,266
------------------------------------- ------ ------
9. Segment information
The Group has adopted the "management approach" in identifying
the operating segments as outlined in IFRS 8. Management has
analysed the information that the chief operating decision maker
reviews and concluded on the segment disclosure.
For management purposes, the Group is organised into business
units based on their services and has two reportable operating
segments as follows:
-- Power generating activities and
-- Project development activities
Management monitors the operating results of its business units
separately for the purpose of making decisions about resource
allocation and performance assessment. Segment performance is
evaluated based on operating profit or loss which in certain
respects, as explained in the table below, is measured differently
from operating profit or loss in the Consolidated financial
statements. Group financing (including finance costs and finance
income) and income taxes are managed on a Group basis and are not
allocated to operating segments. There is only one geographical
segment as all the operations and business is carried out in
India.
2015 Project Power Reconciling Consolidated
development generating / Elimination
activities activities activities
------------------------------- ------------- ------------ --------------- -------------
Revenue
External customers 105 382,202 - 382,307
Inter-segment 7,010 - (7,010) -
Total revenue 7,115 382,202 (7,010) 382,307
------------- ------------ --------------- -------------
Segment operating results 5,272 40,792 52 46,116
Unallocated operating
expenses, net (5,552)
Finance costs (219,810)
Finance income 19,135
-------------
Loss before tax (160,111)
Tax income 91,204
-------------
Loss after tax (68,907)
-------------
Segment assets 9,873 4,005,623 (1,742) 4,013,754
Unallocated assets 275,867
Total assets 4,289,621
-------------
Segment liabilities 438 320,007 (1,742) 318,703
Unallocated liabilities 3,417,817
Total liabilities 3,736,520
-------------
Other segment information
Depreciation and amortisation 126 58,528 79 58,733
Capital expenditure 21 417,194 204 417,419
------------------------------- ------------- ------------ --------------- -------------
2014 Project Power Reconciling Consolidated
development generating / Elimination
activities activities activities
------------------------------- ------------- ------------ --------------- -------------
Revenue
External customers 842 335,024 - 335,866
Inter-segment 7,097 - (7,097) -
Total revenue 7,939 335,024 (7,097) 335,866
------------- ------------ --------------- -------------
Segment operating results 5,885 55,748 157 61,790
Unallocated operating
expenses, net (3,763)
Finance costs (165,969)
Finance income 35,819
-------------
Loss before tax (72,123)
Tax income 13,106
-------------
Loss after tax (59,017)
-------------
Segment assets 12,901 3,790,232 (2,286) 3,800,847
Unallocated assets 215,574
Total assets 4,016,421
-------------
Segment liabilities 5,372 365,554 (2,286) 368,640
Unallocated liabilities 3,065,508
Total liabilities 3,434,148
-------------
Other segment information
Depreciation and amortisation 220 43,606 100 43,926
Capital expenditure 34 281,181 95 281,310
------------------------------- ------------- ------------ --------------- -------------
Notes to segment reporting:
(a) Inter-segment revenues are eliminated on consolidation.
(b) Profit / (loss) for each operating segment does not include
finance income and finance costs of US $
19,135 and US $ 219,810 respectively (2014: US $ 35,819 and US $ 165,969 respectively).
(c) Segment assets do not include deferred tax US $ 128,104
(2014: US $ 33,269), financial assets and other investments US $
103,263 (2014: US $ 128,277), short-term deposits with bank and
cash US $ 15,428 (2014: US $ 5,173), and corporate assets US $
29,072 (2014: US $ 48,855).
(d) Segment liabilities do not include deferred tax US $ 33,777
(2014: US $ 31,567), current tax payable US $ 1,147 (2014: US $
1,910), loans and borrowings US $ 3,244,549 (2014: US $ 2,888,676),
derivative liabilities US $ 32,821 (2014: US $ 33,266) and
corporate liabilities US $ 105,523 (2014: US $ 110,089).
(e) The Company operates in one business and geographic segment.
Consequently no segment disclosures of the Company are
presented.
10. Finance costs
Finance costs comprise:
Consolidated Company
---------------- -----------------------
2015 2014 2015 2014
------- ------- ---------------- -----
Interest expenses on loans
and borrowings (1) 158,361 94,974 1,381 761
Other finance costs 19,864 15,287 1,519 2,481
Impairment of financial assets
(2) 693 2,986 - -
Net loss on financial instrument
at fair value through profit
or loss (3) 4,355 - 560 -
Foreign exchange loss, net 34,281 51,153 258 477
Net loss on held-for-trading -
financial assets
on disposal - 1 - -
Unwinding of discounts 2,256 1,568 - -
------- ------- ---------------- -----
Total 219,810 165,969 3,718 3,719
--------------------------------- ------- ------- ---------------- -----
(1) Borrowing cost capitalised during the year amounting to US $
240,579 (2014: US $ 274,243) to property, plant and equipment at an
effective interest rate of 14.53% (2014: 14.39%).
(2) Impairment of financial assets relates to available-for-sale
financial asset of US $ 693 (2014: US $ 2,986).
(3) Net loss on financial instrument at fair value through
profit or loss above relates to foreign exchange forward contracts,
currency options and interest rate swap that did not qualify for
hedge accounting.
11. Finance income
The finance income comprises:
Consolidated Company
-------------- ------------------
2015 2014 2015 2014
------ ------ ------- ---------
Interest income
bank deposits 14,155 17,405 - -
loans and receivables 2,531 4,031 - -
Dividend income 297 120 - -
Net gain on held-for-trading
financial assets
on disposal 3 - - -
on re-measurement 32 13 - -
Unwinding of discount on security
deposits 2, 073 1,395 - -
Net gain on financial instrument
at fair value through profit
or loss (1) - 12,855 - 560
Gain on available-for- sale
financial assets disposed 44 - - -
------ ------ ------- ---------
Total 19,135 35,819 - 560
---------------------------------- ------ ------ ------- ---------
(1) Net gain on financial instrument at fair value through
profit or loss above relates to foreign exchange forward contracts,
currency options and interest rate swap that did not qualify for
hedge accounting.
12. Tax income / (expense)
The major components of income tax for the period ended 31 March
2015 and 31 March 2014 are:
2015 2014
------- -------
Current tax (1,490) (2,731)
Deferred tax 92,694 15,837
------- -------
Tax income reported in the income statement 91,204 13,106
-------------------------------------------- ------- -------
13. Related party transactions
Name of the Company Nature of relationship
------------------------------------- -----------------------
K&S Consulting Group Private Limited Group ultimate parent
(GUP)
Sayi Power Energy Limited Step-up holding
Sayi Energy Ventur Limited Parent
------------------------------------- -----------------------
Key management personnel and their relatives (KMP):
Name of the party Nature of relationship
-------------------- -----------------------
T L Sankar Chairman
S Kishore Executive Director
K A Sastry Executive Director
S R Iyer Director
Vladimir Dlouhy Director
Guy D Lafferty * Director
Abhay M Nalawade Director
Keith N Henry Director
K. V. Krishnamurthy Director of parent
-------------------- -----------------------
*Resigned with effect from 03 November 2014.
Particulars Consolidated Company
------------------- ------------------------------------------------------ ----------------------------------------------------------
2015 2014 2015 2014
------------------- -------------------------- ---------------------------- ----------------------------
Joint Parent KMP Joint Parent KMP Subsidiaries Parent KMP Subsidiaries Parent KMP
operations / GUP operations / GUP / /
GUP GUP
------------------- ----------- ------- ---- ----------- ------- ---- ------------- ------- ---- ------------- ------- ----
Transactions(1,2)
Corporate
support
services
fees 105 - - 106 - - - - - - - -
Interest
income 1,341 - - 2,650 - - - - - - - -
Interest - - - 10 - - - - - - - -
expense
Sale of - - - 1,313 - - - - - - - -
material
Capacity
charges
paid 6,736 - - 2,368 - - - - - - - -
Inter-corporate
deposits
and loans
given 9,638 56 - 31,157 - - 45,993 24 - 44,340 - -
Inter-corporate
deposits
and loans
refunded 514 65 - 23,335 - - - - - - - -
Loan taken 1,036 - - 1,526 - - 62,635 - - 77 - -
Repayment - - - 19 - - - - - - - -
of loan
taken
Receipt
of share
application
money - - - - 18,000 - - - - - 18,000 -
Refund of
share application
money - 1,502 - - - - - 1,502 - - - -
Issue of
shares - - - - 20,300 - - - - - 20,300 -
Investment - - - - - - - - - 84,147 - -
in subsidiaries
Equity-settled
share based
payment - - 112 - - 10 - - 112 - - 10
Managerial
remuneration
(3) - - 710 - - 541 - - 355 - - 211
----------- ------- ---- ----------- ------- ---- ------------- ------- ---- ------------- ------- ----
2015 2014 2015 2014
-------------------------- -------------------------- ---------------------------- ----------------------------
Balances
(1,2)
Interest
receivable 3,859 - - 3,586 - - - - - - - -
Interest - - - 9 - - - - - - - -
payable
Loans and
inter corporate
deposits
receivable 15,844 976 - 32,004 1,034 - 171,676 22 - 133,873 - -
Loans payable - - - - - - 62,955 - - 80 - -
Other receivable 18 - - 769 - - - - - - - -
Other payable 2,464 - - 1,521 - - - - - - - -
Guarantees
given 143 - - 150 - - 432,097 - - 483,110 - -
Managerial
remuneration
payable(3) - - 83 - - 131 - - 74 - - 86
------------------- ----------- ------- ---- ----------- ------- ---- ------------- ------- ---- ------------- ------- ----
(1) The transactions with related parties are made at terms
equivalent to those that prevail in arm's length transactions.
Outstanding balances at the period end are unsecured,
interest-bearing in case of loans and inter-corporate deposits and
non-interest bearing in case of other loans and advances and
settlement occurs in cash. For the year ended 31 March 2015, the
Group has not recorded any impairment of receivables relating to
amounts owed by related parties (2014: US $ Nil). This assessment
is undertaken each financial period through examining the financial
position of the related party and the market in which the related
party operates.
(2) The difference in the movement between the opening
outstanding balances, transactions during the year and closing
outstanding balances is on account of exchange adjustments, impact
of business combination and conversion into equity.
(3) Remuneration is net of accrual towards Gratuity, a defined
benefit plan, which is managed for the Group as a whole. However,
the annual accrual of this liability towards key management
personnel is not expected to be significant. There are no other
long term benefits and termination benefits which are payable to
the key management personnel.
14. Commitments and contingencies
Capital commitments
As at 31 March 2015, the Group is committed to purchase
property, plant and equipment for US $ 1,300,892 (2014: US $
1,589,164). In respect of its interest in joint operations the
Group is committed to incur capital expenditure of US $ 51 (2014:
US $ 1,153).
Legal and other claim
-- Sitapuram Power Limited (SPL) had certain claims and
receivables from its captive consumer namely Zuari Cement Limited
(ZCL) which were disputed. During the year, both the parties have
mutually settled the claim and the Group has written off the net
amount of US $ 782 pursuant to the settlement and have received the
entire balance amount outstanding from the captive customer.
-- Sai Lilagar Power Limited (SLPL) had certain claims and
receivables from its captive consumer namely Lafarge India Private
Limited (LIPL) which were disputed. LIPL had made certain claims
and the Group has given reply challenging the claims and made
various counter claims. During the year, both the parties have
mutually settled the claim and the Group has recognised a net gain
of US $ 603 pursuant to the settlement. Further LIPL has
transferred its entire shareholding in the company to the Group and
therefore SLPL has become a 100% subsidiary of the Group during the
year.
-- Sai Wardha Power Limited (SWPL) had certain claims and
receivables amounting to US $ 14,730 from its customer namely
Reliance Infrastructure Limited (RIL) relating to capacity charges
and change in law which were disputed. During the year, both the
parties have mutually settled the claim and the Group has received
an amount of US $ 15,157 pursuant to the settlement against all the
outstanding claims.
-- The Group has received claims for US $ 9,917 (2014: US $
10,624) from Joint Director General of Foreign Trade (DGFT) towards
the recovery of the duty drawbacks, earlier refunded. The Group had
earlier made claims for the refund of the duties paid on the
machinery and other items purchased for the construction of the
power projects under the scheme of deemed export benefit, which
were accepted and refunds were granted. The communications from the
DGFT regarding the recovery of the duties paid are based on the
interpretations by the Policy Interpretation Committee held on 15
March 2011. The Group contends that the above change in
interpretation requires an amendment to the foreign trade policy to
be legally enforceable in law. Since, no such amendment can be made
with retrospective effect, the Group believes that outcome of the
above dispute would be in favour of the Group and there would be no
material impact on the financial statements.
-- SWPL filed a claim against Maharashtra State Electricity
Distribution Company Limited (MSEDCL) towards recovery of the
amount withheld against supply of energy under Power Purchase
Agreement (including penalty on such amount) amounting to US $
11,636 (2014: US $ 11,434). The facility required for generation of
an agreed quantum of power was not ready as per an agreed schedule
on account of unexpected factors beyond the control of the Group,
the Group proposed to MSEDCL an arrangement to secure the energy
from alternate supplies for the short quantity required to meet the
obligation under the power purchase agreement. MSEDCL accepted the
proposal and also confirmed that the energy supplied from alternate
sources will also be subject to the tariff agreed under the power
purchase agreement. However, after initial payments for the period
April to June 2010, starting July 2010 to October 2010, MSEDCL did
not settle the entire dues billed and the certain amounts were
withheld without any explanation. The Group contended before
Maharashtra Electricity Regulatory Commission (MERC) that since the
energy supplied and billed was as per the terms agreed and the
similar bills of earlier months were paid by MSEDCL, there is no
cause to withhold the payments. However, MERC has dismissed the
petition. The group has filed an appeal before Appellate Tribunal
for Electricity (APTEL) against the order of MERC and APTEL also
rejected the appeal. The Group has filed an appeal before
Honourable Supreme Court of India. Pending adjudication, the Group
believes that the final outcome of the above dispute would be in
favour of the Group and there would be no material impact on the
financial statements.
-- SWPL has lodged a claim under the Coal Supply Agreement
relating to quality and price on Western Coalfields Limited (WCL),
the coal supplier, which was rejected by the latter. Aggrieved by
the same, the Group has filed petition with Competition Commission
of India (CCI), relating to abuse of dominant position by WCL and
Coal India Limited (CIL). The abuse relates to Pricing of Coal
under the Fuel Supply Agreement and supply of lower quality coal.
Having found prima facie case of abuse by WCL and CIL, the
Commission, on 22 January 2014, ordered an investigation of the
case by the Director General. Subsequently, the Director General
conducted a detailed investigation based on facts submitted by both
parties and submitted a report on 28 July 2014. Based on findings
of the Director General, Honourable Commission has passed an order
on 27 October 2014 in favour of the Group as far as price claim is
concerned whereas for the quality claim, the Commission has
referred to its earlier order dated 13 January 2014, of similar
case which is presently pending at Competition Appellate Tribunal
(COMPAT). WCL has preferred an appeal against the order of the CCI
before the COMPAT wherein hearing is presently underway. The Group
has filed a total claim of US $ 144,866 with COMPAT under provision
53N of The Competition Act, 2002
The Group is also in advance state of discussion with WCL for
working out an arrangement including the past claim. Also, current
discussions with the Fuel Supplier indicate the pass back of the
coal recompense over the coal supplies during the balance period of
the agreement. Pending settlement/ adjudication, though the Group
believes that the final outcome of the above matter would be in
favour of the Group, on prudent basis the Group has impaired the
earlier claim recognised of US $ 24,003 in the books of account.
Further adjustment if any, in the financial statement will be
carried out depending upon the final outcome of the above
matter.
-- VS Lignite Power Private Limited (VSLPPL) has receivables of
US $ 8,750 (2014: US $ 3,936) from its consumers representing taxes
including royalty, cess on clean energy, taxes on input fuel as
well as double adjustments for the security deposit, transmission
and SLDC charges and take or pay obligation which are disputed by
the consumers. The Group has an amount of US $ 4,000 access from
such customers as redeemable capital available for necessary
setoffs. Further, the Group contends that not only it has fulfilled
the contractually guaranteed supplies but also the amounts claimed
are as per the terms of the power purchase agreements. Aggrieved by
the order of Arbitrator and civil court, the Group has preferred an
appeal in Honourable High Court of Jodhpur. Pending outcome of the
same, the Group believes that the final determination of the above
dispute would be in favour of the Group and there would be no
material impact on the financial statements.
-- Other non-current assets include an amount of US $ 20,850
(2014: US $ 18,609) relating to Central Excise, VAT and Service Tax
receivable from the respective departments by SWPL. The SWPL is
registered as SEZ unit. A unit in SEZ is allowed to import goods
(purchase from local market is also treated as import) without
payment of Duty for the purpose of its authorised operations. The
exemption from the payment of duties and taxes are provided under
Section 26 of the SEZ Act, 2005. In respect of Service Tax, the
Group has already received a refund for the period from January
2013 to June 2013 and a favourable order from Central Excise &
Service Tax Appellate Tribunal (CESTAT) for the period March 2009
to June 2009 and claims for remaining period is pending before
CESTAT. Thus the Group is confident of receiving refund for the
remaining period as well. In respect of VAT claims the Group has
already received a refund for the financial year 2007-08 to 2010-11
and the Group is confident to receive the refund for the remaining
years as well. However, the excise duty refund claims were rejected
by the department stating that there are no provision of refund
under the SEZ Act to the Group and the refund, if any, can be
permissible to WCL, the supplier of coal. However the Group has
obtained a legal opinion from a reputed tax consultant stating that
the refund can be processed to the Group since the Group has born
the duty burden and accordingly the Group is very confident that
the entire amount is receivable.
-- The captive customers of the SWPL has deducted from the sales
invoices and paid an amount of US $ 9,575 and US $ 8,537 towards
Cross Subsidy Surcharge (CSS) levied by MSEDCL for the financial
year 2012-13 and 2013-14 respectively before ascertaining the
captive status of the plant at the end of financial year which was
against the express provisions of the Electricity Act, 2003 read
with the Electricity Rules, 2005. This arbitrary act of MSEDCL was
challenged before the MERC. MERC in its order clarified that the
CSS can be imposed only at the end of financial year after
ascertaining the captive status of the plant. For the financial
year 2013-14, despite MERC order, MSEDCL has not refunded the
amount collected as CSS. The Group has approached Honourable Bombay
High Court, Nagpur Bench through writ of mandamus directing MSEDCL
to refund the CSS collected. Honourable High Court vide order dated
27 March 2015 directed MSEDCL to refund the amount and
subsequently, MSEDCL has refunded the amount in the month of May
2015. In respect of financial year 2012-13, MERC asked SWPL to pay
CSS on ground of non-fulfilment of criteria of 51% supply to
captive users as per Rule 3 of the Electricity Rules, 2005.
Aggrieved by the said order of the MERC, the Group has filed an
appeal before the APTEL on the ground that the non-fulfilment of
captive criteria by the Group was attributed to the delay caused by
MSEDCL in granting open access to captive customers. Pending
adjudication of the same, the Group believes that there is a good
chance of succeeding before the APTEL and hence no adjustment
has been made in the financial statements.
-- KMPCL has levied capacity charges and transmission charges to
AP Discoms for the period from 16 June 2013 to 13 August 2013
amounting to US $ 13,935 (2014: US $ 14,590), on account of delayed
fulfilment of obligation under the PPA. AP Discoms have rejected
those claims and made the counter claim of US $ 3,765 (2014: US $
3,942) for failure to furnish advance final written notice of
commencement of supply of power as per article 4.1.2 of PPA. The
Group has preferred an appeal before APERC & TSERC for refund
of amount collected by Discoms by encashment of bank guarantee. The
Group's contention is that since the Discoms have failed to fulfil
the obligation as per PPA, there is default on part of Discoms and
the counter claim by Discoms is merely to negate the effect of
KMPCL claim of capacity charges. Pending adjudication of the case,
the Group believes that there is a good chance of succeeding before
the regulatory commissions and hence no adjustment has been made in
the financial statements.
-- The Group had entered into coal supply agreement with Goa
Industrial Development Corporation (GIDC) for sourcing coal from
the identified coal block i.e., Garepelma-III coal block. However,
pursuant to the Honourable Supreme Court Orders during August and
September 2014, Garepelma-III was de-allocated from GIDC. GIDC has
kept the group notified that is still pursuing with the Government
for allocation of this mine under the new coal statute and also has
filed a legal case before Honourable High Court of Delhi wherein
interim relief is granted in favor of GIDC. At the same time the
initial development of the Garepelma-III block was entrusted to
Group by GIDC, wherein the Group has incurred all the cost relating
to the development of mine. Government of India has promulgated the
Coal Mines (Special Provisions) Ordinance, 2014 which provides for
reimbursement of cost incurred towards land and mine infrastructure
by new allottee. Accordingly GIDC has made the claim for US $
42,073 for settlement before Nominated Authority appointed under
the Ordinance by Ministry of Coal. Pending final adjudication of
the case by Honourable High Court of Delhi or pending final
settlement of the claim by the Nominated Authority, the management
believes that the entire amount incurred by the Group is
recoverable and hence no adjustment has been made in the financial
statements.
-- KMPCL has levied claim for change in law on Andhra Pradesh
and Telangana Discoms amounting to US $ 94,109 (2014: US $ 41,672)
as per Article 10 of the PPA which was rejected by the later.
Aggrieved by the same the Group has preferred an appeal before
Andhra Pradesh Electricity Regulatory Commission ("APERC") and
Telangana State Electricity Regulatory Commission (TSERC)
respectively contending that subsequent to execution of the PPA,
the Government of India by Presidential Directive amended the coal
policy. As per the coal policy existing prior to 17 July 2013,
there was no restriction or provision with regard to the nature of
the PPA's to be entered into by persons to whom tapering linkages
were granted. However, the Presidential Directive restricted the
supply of coal to tapering linkages only when there is a long term
PPA. Further, the presidential directive, directs Coal India
Limited to enter Fuel Supply Agreement (FSA) for domestic coal of
65% of Annual Contracted Quantity only for the power plants having
normal coal linkages and meet the balance FSA obligation by
imported coal on a cost plus basis. Accordingly the Group has
recognised only US $ 32,938 (2014: US $ 14,585) out of the total
claim of US $ 94,109 (2014: US $ 41,672) in books of accounts on a
conservative basis. However, pending outcome of the case, the Group
is confident the entire amount claimed is fully recoverable.
In addition, the Group is also subject to various other legal
proceedings and claims which have arisen in the ordinary course of
business including claims before various tax authorities. The
Management does not reasonably expect that these legal proceedings,
when ultimately concluded and determined, will have a material and
adverse effect on the Group's results of operations or financial
conditions. The Group has accrued appropriate provision wherever
required.
Guarantees
-- The Company has guaranteed to unrelated parties for the loans
and non-fund based facilities availed by
subsidiaries for US $ 275,977 (2014: US $ 339,442) and
-- The Group guaranteed the performance of the joint ventures
under the power delivery agreements to unrelated parties. No
liability is expected to arise.
15. Financial Instruments
Carrying amounts versus fair values
The fair values of financial assets and financial liabilities,
together with the carrying amounts in the Consolidated statement of
financial position, are as follows:
Carrying amount Fair value Carrying amount Fair value
---------------------------------------- ---------------- ----------- ---------------- -----------
2015 2015 2014 2014
---------------------------------------- ---------------- ----------- ---------------- -----------
Non- current financial assets
Trade and other receivables 2,845 2,845 3,422 3,422
Equity securities - available-for-sale 19,155 19,155 22,865 22,865
Loans and receivables 53,532 53,532 70,563 70,563
Derivative assets 49,702 49,702 50,196 50,196
Non-current bank deposits 8,102 8,102 10,953 10,953
---------------- ----------- ---------------- -----------
Total non-current 133,336 133,336 157,999 157,999
---------------- ----------- ---------------- -----------
Current financial assets
Trade and other receivables 154,212 154,212 158,139 158,139
Equity securities - held for trading 152 152 97 97
Debt securities-held for trading 2,437 2,437 33 33
Loans and receivables 28,724 28,724 73,110 73,110
Cash and short-term deposits 197,996 197,996 194,054 194,054
---------------- ----------- ---------------- -----------
Total current 383,521 383,521 425,433 425,433
Total 516,857 516,857 583,432 583,432
---------------- ----------- ---------------- -----------
Non- current financial liabilities
Trade and other payables 47,581 47,581 51,110 51,110
Loans and borrowings 2,722,596 2,722,596 1,943,926 1,943,926
Interest rate swaps 4,763 4,763 1,045 1,045
Option premium payable 22,099 22,099 27,148 27,148
---------------- ----------- ---------------- -----------
Total non-current 2,797,039 2,797,039 2,023,229 2,023,229
---------------- ----------- ---------------- -----------
Current financial liabilities
Trade and other payables 369,590 369,590 400,460 400,460
Loans and borrowings 521,953 521,953 944,750 944,750
Foreign exchange forward contract 453 453 53 53
Option premium payable 5,506 5,506 5,020 5,020
---------------- ----------- ---------------- -----------
Total current 897,502 897,502 1,350,283 1,350,283
Total 3,694,541 3,694,541 3,373,512 3,373,512
---------------------------------------- ---------------- ----------- ---------------- -----------
The fair values of financial assets and financial liabilities,
together with the carrying amounts in the company statement of
financial position, are as follows:
Carrying amount Fair value Carrying amount Fair value
--------------------------------------- ---------------- ----------- ---------------- -----------
2015 2015 2014 2014
--------------------------------------- ---------------- ----------- ---------------- -----------
Non-current financial assets
Loans and receivables to subsidiaries 171,676 171,676 133,873 133,873
Loans and receivables 5,100 5,100 5,660 5,660
Total non-current 176,776 176,776 139,533 139,533
Current financial assets
Loans and receivables 27 27 4 4
Cash and short-term deposits 1,065 1,065 173 173
---------------- ----------- ---------------- -----------
Total current 1,092 1,092 177 177
Total 177,868 177,868 139,710 139,710
---------------- ----------- ---------------- -----------
Current financial liabilities
Trade and other payables 1,372 1,372 1,486 1,486
Loans and borrowings 114,245 114,245 62,028 62,028
Total current 115,617 115,617 63,514 63,514
--------------------------------------- ---------------- ----------- ---------------- -----------
Fair value hierarchy
The table below analyses recurring fair value measurements for
financial assets and financial liabilities. These fair value
measurements are categorised in to different levels in the fair
value hierarchy based on the inputs to valuation techniques used.
The different levels are defined as follows.
-- Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities.
-- Level 2: inputs other than quoted prices that are observable
for the asset or liability, either directly or indirectly.
-- Level 3: valuation techniques that include inputs for the
asset or liability that are not based on observable market data
(unobservable inputs).
2015 Level Level Level Total
1 2 3
---------------------------------------- ------- -------- -------- --------
Financial assets measured at
fair value
Equity securities - available-for-sale 511 - 18,644 19,155
Equity securities - held for
trading 152 - - 152
Debt securities-held for trading 2,437 - - 2,437
Derivative assets - 49,702 - 49,702
Total 3,100 49,702 18,644 71,446
------- -------- -------- --------
Financial liabilities measured
at fair value
Interest rate swaps - 4,763 - 4,763
Option premium payable - 27,605 - 27,605
Foreign exchange forward contract - 453 - 453
------- -------- -------- --------
Total - 32,821 - 32,821
---------------------------------------- ------- -------- -------- --------
The Group recognises transfers between levels of the fair value
hierarchy as of the end of the reporting year during which the
transfer has occurred. During the year ended 31 March 2015, there
were no transfers between Level 1 and Level 2 fair value
measurements.
Reconciliation of Level 3 fair value measurements of financial
assets:
2015 Available-for-sale Total
Unquoted
Equities
--------------------------------------------- ------------------- --------
Opening balance 21,439 21,439
Total gains or losses:
- in income statement - -
- in other comprehensive income
change in fair value of available
for sale financial asset (1,877) (1,877)
foreign currency translation difference (918) (918)
Settlements - -
Transfers into level 3 - -
------------------- --------
Closing balance 18,644 18,644
--------------------------------------------- ------------------- --------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PGUWWMUPAUCG
Ksk Power Ventur (LSE:KSK)
Historical Stock Chart
From May 2024 to Jun 2024
Ksk Power Ventur (LSE:KSK)
Historical Stock Chart
From Jun 2023 to Jun 2024