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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ksk Power Ventur Plc | LSE:KSK | London | Ordinary Share | IM00B1G29327 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMKSK
RNS Number : 5256E
KSK Power Ventur PLC
19 July 2016
KSK Power Ventur PLC
19 July 2016
KSK Power Ventur plc
("KSK" or the "Group" or the "Company")
Audited Results for the year ended 31 March 2016
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 2016.
Financial Highlights
-- Gross Revenue increased by 76% to $ 674.5 m (2015: $ 382.3 m) -- Gross Profit increased by 124% to $ 231.3 m (2015: $ 103.3 m) -- Operating Profit increased by 296% to $ 160.5 m (2015: $ 40.6 m) -- Loss before tax of $ 109.7 m (2015: loss of $ 160.1 m)
These movements are on account of higher power generation for the period (taking into account a partial year of operation of the entire 1,200 MW at KSK Mahanadi and moderate increase in PLF at Sai Wardha). It is anticipated that during the current year this could be further enhanced as a result of improved operating performance on the same installed generation capacity base.
Comparison of results
During the year, there has been further depreciation of Indian Rupees against the US Dollar and a comparison of results on constant currency basis has been tabulated below:
Hot Features
Premium
March 2016 translated
at March 2015 Rupee/$
exchange rate
Particulars 31 March 31 March % 31 March 31 March % Change
2016 2015 Change 2016 2015
($m) ($m) ($m) ($m)
Revenue* 674.5 382.3 76% 722.3 382.3 89%
Gross profit 231.3 103.3 124% 247.7 103.3 140%
Operating
profit 160.5 40.6 296% 171.8 40.6 324%
(Loss) / profit
before tax (109.7) (160.1) (32)% (117.4) (160.1) (27)%
Average exchange Rs 65.5051 Rs 61.1752 Rs 61.1752 Rs 61.1752
rate Rs/$
*Includes revenue of $ 110.60 million at KSK Mahanadi under change in law provision of the Power Purchase Agreements with State Utilities and Government of India directive but requiring determination by the Electricity Regulatory Commission before receipt of payment
It may be observed that on a constant currency basis, there has been significant improvement in all of the metrics, reflecting the robustness of the underlying business operations. Notwithstanding the challenges across the sector and with exchange rate volatility expected to continue during the current year, 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.
Operating Highlights
During the twelve month period, operating assets generated 9,987 GWh with an average portfolio plant load factor of 55%, (FY 2015: 6,158 GWh with a 34% load factor, FY 2014: 5,757 GWh with 32% load factor).
31 March 31 March 31 March 2014
2016 2015
KSK Mahanadi 6,368 3,203 1,088
( 1200 MW) GWh (60%)* GWh (30%)* GWh (10%)*
Sai Wardha 1856 1,174 2,586
(540 MW) GWh (39%) GWh (25%) GWh (55%)
VS Lignite 792 851
(135 MW) GWh (67%) GWh (72%) 902 GWh (76%)
Sai Regency 459 423
(58 MW) GWh (90%) GWh (83%) 445 GWh (88%)
Sai Lilagarh 172 148
(86 MW) GWh (23%) GWh (20%) 341 GWh (45%)
Sitapuram Power 324 343
(43 MW) GWh (86%) GWh (91%) 342 GWh (91%)
Solar Project
(10 MW) 17 GWh (19%) 16 GWh (18%) 19 GWh (21%)
Wind Project - - - - 33 GWh (20%)
9,987 6,158 5,757
TOTAL GWh (55%) GWh (34%) GWh (32%)
*KSK Mahanadi's PLF is calculated across the periods on the installed capacity base of 1200 MW although actual operations of this capacity only commenced substantially during the second half of FY 2016 (upon grant of the necessary transmission corridor access for supplying through the National Grid).
Commenting on the results, T. L. Sankar, Chairman of KSK said:
"The financial year to 31 March 2016 witnessed the Company's power plants' aggregate gross generation reaching close to 10 TWhs. With the various challenges and operational issues at Sai Wardha and KSK Mahanadi have now been addressed, it is anticipated that gross generation will continue to increase during 2016-17.
It is further anticipated that during the current year, the Government of India will use an auction process for coal linkages wherein coal linkage requirements of all Independent Power Producers (IPPs), with PPA commitments to DISCOMS already made, will be subject to auctions, resulting in a correction in fuel linkages for the sector as a whole. KSK Mahanadi with existing PPAs to multiple DISCOMS is well positioned to take advantage of the new policy and will be able to satisfy KSK's coal requirements.
The additional debt funding for the KSK Mahanadi power project, used to cover the significant $/Rs currency fluctuation on project imports and to extend timelines, has been agreed by the Consortium of Project Lenders and progress on the next two units has restarted, with an early completion anticipated. The Company is currently in discussions with a number of potential strategic and financial investors for equity participation at the KSK Mahanadi project. Discussions with all stakeholders regarding financing arrangements have been positive and the Company is confident that, with support of its lenders, progress on KSK Mahanadi can be achieved.
Our strong performance during the year would not have been possible without the continued support of our shareholders, who have enabled us to pursue business opportunities despite challenging market conditions"
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:
Construction of KSK Mahanadi, a large single location greenfield private power plant, has continued. There have been notable achievements during the year:
-- the initial 1200 MW unit under operation generated 6,368 GWh during the year;
-- construction of the next two 600 MW units was made possible by debt funding provided by the project lenders; and
-- progress on the remaining two 600 MW units is contingent upon equity funding.
The 3,600 MW plant is supported by robust infrastructure developed by the group companies of Raigarh Champa Rail Infrastructure and KSK Water Infrastructure. These companies are in the process of being merged into KSK Mahanadi.
540 MW SAI WARDHA POWER LIMITED (SWPL):
The total gross power generated during the review period was 1,856 GWh with an average Plant Load Factor ("PLF") of 39%. This reflected the challenging local operating environment, the fuel and the offtake constraints experienced by Sai Wardha Power.
Although there was a favourable ruling by the Competition Commission of India ("CCI") in favour of Sai Wardha in October 2014, the vital amendment to the pricing aspect of the FSA, which would have facilitated lower power generation costs, has not yet been implemented. Western Coal Fields appealed at the Competition Appellate Tribunal ("COMPAT"). A favourable final ruling would not only enable a price reduction but substantial claims of damages for the prior period being determined by the COMPAT.
Regarding long term power sale arrangements to commence supplies for half of the capacity of the Sai Wardha project, the Appellate Tribunal for Electricity ("APTEL") ruled in favour of Sai Wardha in February 2015 and PPA execution is expected.
The Company continues to make every effort to pursue the coal price reduction and implementation of the APTEL direction, which will ultimately lead to the enhanced utilisation and profitability of the Sai Wardha plant.
135 MW VS LIGNITE POWER PRIVATE LIMITED (VSLP):
Total gross power generated during the year was 792 GWh, with an average PLF of 67% reflecting the transition from Captive Power Plant to Independent Power Producers, as mandated by the Government. The Company has been supplying power to the local grid and is continuing its efforts to secure necessary long term PPAs from the local grid and anticipates achieving this during the current year.
86 MW SAI LILAGAR POWER LIMITED (SLPL):
Total gross power generated during the year was 172 GWh, with an average PLF of 23%, primarily reflecting the transition from Captive Power Plant to Independent Power Producer. With the new PPA arrangements addressed, 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):
Total gross power generated in the combined cycle gas fired power plant during the year was 459 GWh, with an average PLF of 90%. With the continuous supply of gas and an efficient operation, the plant has produced an exceptional operational and financial performance, which is expected to continue.
43 MW SITAPURAM POWER LIMITED (SPL):
Total gross power generated during the year was 324 GWh, with an average PLF of 86%. The fuel cost for the period under review has 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 generated has been sold to local utility companies.
10 MW SAI MAITHILI SOLAR POWER PROJECT:
Total gross power generated during the year was 17 GWh, with an average PLF of 19%. The 10 MW PV solar power generation plant is located in the state of Rajasthan, operating under the Jawaharlal Nehru National Solar Mission.
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 being pursued at a faster rate. 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.
WIND POWER 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 on suitable collaboration opportunities. North East Electric Power Corporation Limited, the Government owned hydro power company, has been inducted as an equity partner in the 120 MW Dibbin Hydro project being developed by KSK.
EQUITY AND FINANCING ARRANGEMENTS
The Company's shareholding in KSKEV has been maintained at 68.17%, with additional equity invested during the year. Such stake at the Indian listed subsidiary, which holds the entire power generation portfolio, has been possible on account of the initial equity as well as additional equity acquired, based on debt secured in 2011. The Company's financing plans include pursuing a number of initiatives including a secondary sale of project interests and refinancing opportunities on more favourable terms to provide the necessary liquidity to retire part of the existing high cost debt.
Due to the extended implementation timeline and the impact of the INR/$ exchange rate dropping from INR 48/$ originally envisaged at the project's conception to the current INR 68/$, KSK Mahanadi, along with the Rail and water infrastructure integrated, is now estimated to require a total capital expenditure at completion of $4,181 m.
The revised total capital expenditure consists of a phased investment plan wherein, at the first level, the existing investment of $2.5 billion is expected to increase to $ 3.52 billion Dollar for completion of the 2,400 MW (including the integration of the railway and water infrastructure assets as well expenditure already incurred on the last 1,200 MW unit) and progress further to $ 4.18 billion for the completed 3,600 MW operations.
Therefore, the incremental capital expenditure programme consists of estimated additional expenditure of $ 962 million for the 2,400 MW, and an additional expenditure of $ 657 million of incremental expenditure thereafter to complete the final 1,200 MW. Consequently, the Company is holding discussions and evaluating proposals for further strategic funding and equity collaboration at the asset level with various potential participants.
FINANCIAL PERFORMANCE
With a total operable capacity of 2,072 MW, the consolidated operating revenue achieved was $ 674.5 m, with a gross profit of $ 231.3 m, operating profits of $ 160.5 m, a loss before tax of $ 109.7 m, and a loss after tax of $ 95.6 m.
Net revenue increase is largely as a result of improved power generation at KSK Mahanadi as well as partially increased output levels at Sai Wardha. Revenues also include revenue of $ 110.60 million due to changes in law pursuant to the Power Purchase Agreements with State Utilities and Government of India directive. However this is subject to obtaining adjudication by the Electricity Regulatory Commission.
Gross profit has increased to $ 231.3 m; operating profit has increased to $ 160.5 m.
There was a significant increase of finance costs from $ 219.8 m to $296.5 m due to increased borrowing levels with respect to operational power plants, wherein $ 83.24 m increase at KSK Mahanadi on a year on year basis was mainly on account of second unit operations.
The loss after tax has increased from $ 68.9 m to $ 74.5 m reflecting higher deferred tax asset at KSK Mahanadi in the previous year.
Business Strategy
The Company's business strategy is to focus on consolidation of the operations of the installed capacity of 2,072 MW during FY 2016-17, whereby a higher portfolio PLF for the period would enable the Company to achieve gross generation exceeding 10 TWh.
The high capital expenditure and associated project debt required to develop and grow the Company's power generation business, coupled with adverse 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 at the Company on a number of major initiatives in this regard and with appropriate equity collaboration at KSK Mahanadi. The same coupled with potential cash accruals (post debt servicing) is anticipated to provide ample support.
Obtaining the right fuel at the right price within the Indian power sector and supplying power to customers at sensible PPAs continues to be the main challenge. However, with significant long term PPAs already signed at attractive tariff rates, the Company expects to secure the necessary partnerships required for its major capital project run by KSK Mahanadi, resulting in improved financial performance over time.
OUTLOOK
Demand for power generation in India is expected to grow over the next decade. The high quality of the Company's expanding asset base, a proven execution capability, an increasingly efficient business structure, and secured fuel supplies to the power plants means that, KSK is well positioned to address and take advantage of these opportunities.
Once the remaining units of the 3.6 GW KSK Mahanadi power projects are 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, but gradually improving over the longer term.
An extract of the Audited Consolidated and Company Financial Statements for the year ended 31 March 2016 is shown below.
A full set of accounts will be available from the Company website: www.kskplc.co.uk
PRINCIPAL RISKS AND UNCERTAINITIES
The business of the Company is subject to a variety of risks and uncertainties which, if they occur may have a materially adverse effect on the Company's business or financial condition, results or future operations. The risks and 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 Company's business. The risks and uncertainties faced by the Company 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 Company 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 or regulatory constraints on financing arrangements resulting in alternate financing arrangements, which make take more time than anticipated to fructify
-- 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 is 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 affects 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, project financing and sustainable debt levels against invested equity at projects
Extract of Consolidated and Company financial statements for the year ended 31 March 2016
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
as at 31 March
(All amounts in thousands of US $, unless otherwise stated)
Consolidated Company
---------------------- --------------------
Notes 2016 2015 2016 2015
---------- ---------- --------- ---------
ASSETS
Non-current
Property, plant and equipment,
net 3,370,932 3,456,914 - -
Intangible assets and
goodwill 11,382 12,188 - -
Investments and other
financial assets 4 100,828 130,491 382,820 403,902
Other non-current assets 52,620 102,646 - -
Trade and other receivables 2,593 2,845 - -
Deferred tax asset 141,327 128,104 - -
3,679,682 3,833,188 382,820 403,902
---------- ---------- --------- ---------
Current
Investments and other
financial assets 4 49,623 31,313 - 27
Other current assets 85,870 40,459 108 320
Trade and other receivables 367,139 154,212 - -
Inventories 38,891 32,453 - -
Cash and short-term deposits 5 122,800 197,996 1,194 1,065
---------- ---------- --------- ---------
664,323 456,433 1,302 1,412
---------- ---------- --------- ---------
Total assets 4,344,005 4,289,621 384,122 405,314
---------- ---------- --------- ---------
EQUITY AND LIABILITIES
Issued capital 6 289 289 289 289
Share premium 6 287,191 287,191 287,191 287,191
Share application money - 16,498 - 16,498
Foreign currency translation
reserve 6 (147,152) (129,431) 4,761 4,524
Revaluation reserve 6 1,385 1,418 - -
Capital redemption reserve 6 16,045 10,855 - -
Other reserves 6 146,234 147,317 169 122
(Accumulated deficit)
/ retained earnings 6 (56,670) 15,590 (25,589) (18,927)
---------- ---------- --------- ---------
Equity attributable to
owners of the Company 247,322 349,727 266,821 289,697
Non-controlling interests 168,418 203,374 - -
---------- ---------- --------- ---------
Total equity 415,740 553,101 266,821 289,697
---------- ---------- --------- ---------
Non-current liabilities
Loans and borrowings 7 2,700,202 2,722,596 - -
Other non-current financial
liabilities 8 23,239 26,862 - -
Trade and other payables 30,496 47,581 - -
Provisions 8,868 3,210 - -
Deferred revenue 2,556 2,824 - -
Employee benefit liability 1,057 711 - -
Deferred tax liabilities 37,596 33,777 - -
2,804,014 2,837,561 - -
---------- ---------- --------- ---------
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
as at 31 March
(All amounts in thousands of US $, unless otherwise stated)
Consolidated Company
---------------------- ------------------
Notes 2016 2015 2016 2015
---------- ---------- -------- --------
Current liabilities
Loans and borrowings 7 623,600 521,953 115,798 114,245
Other current financial
liabilities 8 6,098 5,959 - -
Trade and other payables 493,099 369,590 1,503 1,372
Deferred revenue 211 310 - -
Taxes payable 1,243 1,147 - -
1,124,251 898,959 117,301 115,617
---------- ---------- -------- --------
Total liabilities 3,928,265 3,736,520 117,301 115,617
---------- ---------- -------- --------
Total equity and liabilities 4,344,005 4,289,621 384,122 405,314
---------- ---------- -------- --------
CONSOLIDATED AND COMPANY INCOME STATEMENT
for the year ended 31 March
(All amounts in thousands of US $, unless otherwise stated)
Consolidated Company
-------------------------- ------------------
Notes 2016 2015 2016 2015
------------ ------------ -------- --------
Revenue 9 674,547 382,307 - -
Cost of revenue (443,211) (279,034) - -
------------ ------------ -------- --------
Gross profit 231,336 103,273 - -
Other operating income 1,675 9,396 - -
Distribution costs (8,640) (10,501) - -
General and administrative
expenses (63,905) (61,604) (1,688) (960)
------------ ------------ -------- --------
Operating profit / (loss) 160,466 40,564 (1,688) (960)
Finance costs 10 (296,470) (219,810) (4,974) (3,718)
Finance income 11 26,336 19,135 - -
------------ ------------ -------- --------
Loss before tax (109,668) (160,111) (6,662) (4,678)
Income tax 12 14,064 91,204 - -
-------- --------
Loss for the year (95,604) (68,907) (6,662) (4,678)
------------ ------------ -------- --------
Attributable to:
Owners of the Company (72,922) (56,504) (6,662) (4,678)
Non-controlling interests (22,682) (12,403) - -
-------- --------
(95,604) (68,907) (6,662) (4,678)
------------ ------------ -------- --------
(Loss) / earnings per
share
Weighted average number
of ordinary shares for
basic and diluted earnings
per share 175,308,600 175,308,600
Basic and diluted (loss)
/ earnings per share
(US $) (0.42) (0.32)
(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
--------------------- -------------------
2016 2015 2016 2015
---------- --------- -------- ---------
Loss for the year (95,604) (68,907) (6,662) (4,678)
Items that will never be
reclassified to income statement
Re-measurement of defined
benefit liability (114) 94 - -
Income tax relating to
re-measurement of defined
benefit liability 19 59 - -
(95) 153 - -
---------- --------- -------- ---------
Items that are or may be
reclassified subsequently
to income statement
Foreign currency translation
differences (28,412) (24,135) 237 (8,056)
Available-for-sale financial
assets
- current year gain /
(loss) (116) (2,612) - -
- reclassification to
income statement 163 693 - -
Reclassification of reserve - (491) - -
on deemed disposal of interest
in joint operation
Income tax relating to
available for sale financial
asset (456) 505 - -
(28,821) (26,040) 237 (8,056)
---------- --------- -------- ---------
Other comprehensive (expense)
/ income, net of tax (28,916) (25,887) 237 (8,056)
---------- --------- -------- ---------
Total comprehensive expense
for the year (124,520) (94,794) (6,425) (12,734)
---------- --------- -------- ---------
Attributable to:
Owners of the Company (91,017) (73,310) (6,425) (12,734)
Non-controlling interests (33,503) (21,484) - -
(124,520) (94,794) (6,425) (12,734)
---------- --------- -------- ---------
(See accompanying notes to the Consolidated and Company financial statements)
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 year
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.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2016
(All amount in thousands of US $, unless otherwise stated)
Non - Total
controlling equity
Attributable to owners of 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
2015 289 287,191 16,498 (129,431) 1,418 10,855 147,317 15,590 349,727 203,374 553,101
Refund of share
application
money - - (16,498) - - - - - (16,498) - (16,498)
Change in
non-controlling
interests
without
change in
control - - - - - - (756) - (756) 4,366 3,610
Transfer of
economic
interest to
non-controlling
interests(1) - - - - - - 5,819 5,819 (5,819) -
Equity-settled
share based
payment - - - - - - 47 - 47 - 47
Transfer of
profit
to capital
redemption
reserve - - - - - 5,190 (5,190) - - -
Net depreciation
transfer for
property, plant
and equipment - - - - (33) - - 33 - - - Transaction with owners - - (16,498) - (33) 5,190 (709) 662 (11,388) (1,453) (12,841) Loss for the year - - - - - - - (72,922) (72,922) (22,682) (95,604) Other comprehensive income Items that will never be reclassified to income statement Re-measurement of defined benefit liability - - - - - - (114) - (114) - (114) Income tax relating to re-measurement of defined benefit liability - - - - - - 19 - 19 - 19 ----------------- -------- -------- ------------ ------------ ------------ ----------- --------- --------- --------- ------------ ---------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2016
(All amount in thousands of US $, unless otherwise stated)
Attributable to owners of Company Non - Total
controlling equity
interests
---------------------------------------------------------------------------------------------------------- ------------ ----------
Issued Share Share Foreign Revaluation Capital Other Retained Total
capital premium application currency reserve redemption reserves earnings
money translation reserve
reserve
-------------------- -------- -------- ------------ ------------ ------------ ----------- --------- --------- --------- ------------ ----------
Items that are
or may be
reclassified
subsequently
to income statement
Foreign currency
translation
differences - - - (17,721) - - - - (17,721) (10,691) (28,412)
Available-for-sale
financial assets
- current year
loss - - - - - - (131) - (131) 15 (116)
- reclassification
to profit or
loss - - - - - - 163 - 163 - 163
Income tax relating
to
available-for-sale
financial asset - - - - - - (311) - (311) (145) (456)
Total comprehensive
expenses for
the year - - - (17,721) - - (374) (72,922) (91,017) (33,503) (124,520)
-------- -------- ------------ ------------ ------------ ----------- --------- --------- --------- ------------ ----------
Balance as at
31 March 2016 289 287,191 - (147,152) 1,385 16,045 146,234 (56,670) 247,322 168,418 415,740
-------------------- -------- -------- ------------ ------------ ------------ ----------- --------- --------- --------- ------------ ----------
(See accompanying notes to the Consolidated and Company financial statements)
(1) The group entities have arrangements of sharing of profits with its non-controlling share holders, 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'S STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2016
(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 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
--------- --------- ------------- ------------- --------- ------------ ---------
As at 1 April 2015 289 287,191 16,498 4,524 122 (18,927) 289,697
Refund of share application
money - - (16,498) - - - (16,498)
Equity-settled share based
payment - - - - 47 47
--------- --------- ------------- ------------- --------- ------------ ---------
Transaction with owners - - (16,498) - 47 - (16,451)
Loss for the year - - - - - (6,662) (6,662)
Other comprehensive income
Foreign currency
translation
differences - - - 237 - - 237
--------- --------- ------------- ------------- --------- ------------ ---------
Total comprehensive income
/ (expense) for the year - - - 237 - (6,662) (6,425)
--------- --------- ------------- ------------- --------- ------------ ---------
Balance as at 31 March 2016 289 287,191 - 4,761 169 (25,589) 266,821
---------------------------- --------- --------- ------------- ------------- --------- ------------ ---------
(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
---------------------- --------------------
2016 2015 2016 2015
---------- ---------- --------- ---------
Cash inflow / (outflow) from
operating activities
Loss before tax (109,668) (160,111) (6,662) (4,678)
Adjustment
Depreciation and amortization 91,068 58,733 - -
Finance cost 317,817 218,693 8,212 3,857
Finance income (15,773) (19,135) - -
Provision and impairment of trade
receivable, PPE and other receivable 29,353 31,070 912 -
Net loss on business combination - 2,001 - -
Loss on sale of fixed assets,
net 5 142 - -
Others (182) (7,857) (65) 112
Change in
Trade receivables and unbilled
revenue (222,093) 1,687 - -
Inventories (6,438) (7,419) - -
Other assets (12,111) (7,391) 214 31
Trade payables and other liabilities 71,699 (17,202) 260 53
Employee benefit liability 346 204 - -
Cash generated from / (used in)
operating activities 144,023 93,415 2,871 (625)
Taxes refund / (paid), net 80 (3,945) - -
---------- ---------- --------- ---------
Net cash provided by / (used
in) operating activities 144,103 89,470 2,871 (625)
Cash inflow / (outflow) from
investing activities
Movement in restricted cash,
net 50,487 (19,137) - -
Purchase of property, plant and
equipment and other non-current
assets (58,518) (222,891) - -
Proceeds from sale of property,
plant and equipment 2,605 929 - -
Purchase of financial assets (4,910) (27,770) - (46,353)
Proceeds from sale of financial
assets 8,541 24,225 17,826 -
Net cash flow on business combination - (5,784) - -
Dividend received 417 95 - -
Interest income received 14,099 16,738 - -
---------- ---------- --------- ---------
Net cash provided by / (used
in) investing activities 12,721 (233,595) 17,826 (46,353)
Cash inflow / (outflow) from
financing activities
Proceeds from borrowings 501,317 995,211 52,843 62,876
Repayment of borrowings (276,115) (533,352) (51,609) (10,490)
Finance costs paid (377,058) (398,627) (2,286) (3,103)
Payment of derivative liability (9,333) (4,552) - -
Advance received for sale of
investment 4,024 14,939 - -
Net proceeds from issue of shares
and share application money in
subsidiary to non-controlling
interest 2,984 63,371 - -
Net refund of share application
money (16,498) (1,502) (16,498) (1,502)
---------- ---------- --------- ---------
Net cash flow (used in) / provided (17,
by financing activities (170,679) 135,488 550) 47,781
Effect of exchange rate changes (10,854) (6,564) (3,018) 89
---------- ---------- --------- ---------
Net increase / (decrease) in
cash and cash equivalent (24,709) (15,201) 129 892
Cash and cash equivalents at
the beginning of the year 40,733 55,934 1,065 173
---------- ---------- --------- ---------
Cash and cash equivalents at
the end of the year (refer note
5) 16,024 40,733 1,194 1,065
---------- ---------- --------- ---------
(See accompanying notes to the Consolidated and Company financial statements)
KSK Power Ventur plc
NOTES TO CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS
for the year ended 31 March 2016
(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
a. The Consolidated and Company financial statements contained in this document has been prepared in accordance with International Financial Accounting Standard and its interpretations as adopted by European Union ('EU') and the provisions of the Isle of Man, Companies Act 1931-2004 applicable to companies reporting under IFRS and gives a true and fair view of the assets, liabilities, financial position and the profit or loss of the group as required by Disclosure and Transparency Rules ("DTR") 4.2.4R;
b. the management report contained in this document includes a fair review of the information required by the Financial Conduct Authority's DTR 4.2.7R (being an indication of important events that have occurred during the financial year and their impact on the financial statements; and a description of the principal risks and uncertainties year);
c. this document includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein);
The financial statements were authorised for issue by the Board of Directors on 18 July 2016.
1.4. Financial period
The Consolidated and Company financial statements cover the period from 1 April 2015 to 31 March 2016, with comparative figures from 1 April 2014 to 31 March 2015.
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 -- Liabilities for cash-settled shared-based payment arrangements
-- Net employee defined benefit (asset) / liability that is measured based on actuarial valuation.
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 2016, the Group had net current liabilities of US $ 459,928 and is dependent 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 ending 31 March 2017 (refer note 14(a)), 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 impact of which is outlined in note 14(b). The Group continues to generate cash flows from current operations which are further expected to increase with full year 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 long-term PPA arrangement for Sai Wardha will be in place shortly. Should there be further delays in this matter this may impact on the ability of the Group to generate sufficient cash flows for current financing proposals being considered, described below. A number of the facilities that are due to expire at 31 March 2017 are in the process of being extended and are renewable in a number of cases. In addition the Group may refinance and/or restructure certain short-term borrowings into long-term borrowings and will also consider alternative sources of financing, wherever applicable. The Directors are confident that these facilities will remain available to the Group based on current trading, covenant compliance and ongoing discussions with the Group's 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 $ 969,740 to meet its long-term investment programmes. The Group is in the process of completing the documentation with various lenders in order to match facilities to the current development and financing plan for KSK Mahanadi. As a consequence,
the Directors have a reasonable expectation that the Company and the 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 2015, 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 2015.
-- IFRIC 21 Levies : IFRIC 21 clarifies that an entity recognises a liability for a levy when the activity that triggers payment, as identified by the relevant legislation, occurs. For a levy that is triggered upon reaching a minimum threshold, the interpretation clarifies that no liability should be anticipated before the specified minimum threshold is reached. Retrospective application is required for IFRIC 21. This interpretation has no impact on the Group as it has applied the recognition principles under IAS 37 Provisions, Contingent Liabilities and Contingent Assets consistent with the requirements of IFRIC 21 in prior years.
-- Amendments to IAS 19 Defined Benefit Plans: Employee Contributions: IAS 19 requires an entity to consider contributions from employees or third parties when accounting for defined benefit plans. Where the contributions are linked to service, they should be attributed to periods of service as a negative benefit. These amendments clarify that, if the amount of the contributions is independent of the number of years of service, an entity is permitted to recognise such contributions as a reduction in the service cost in the period in which the service is rendered, instead of allocating the contributions to the periods of service. This amendment is effective for annual periods beginning on or after 1 February 2015. This amendment has no impact on the Group, since none of the entities within the Group has defined benefit plans with contributions from employees or third parties.
-- Annual Improvements 2010-2012 Cycle: In the 2010-2012 annual improvements cycle, the IASB issued seven amendments to six standards, which included an amendment to IFRS 13 Fair Value Measurement. The amendment to IFRS 13 is effective immediately and, thus, for periods beginning at 1 February 2015, and it clarifies in the Basis for Conclusions that short-term receivables and payables with no stated interest rates can be measured at invoice amounts when the effect of discounting is immaterial. This amendment to IFRS 13 has no impact on the Group.
-- Annual Improvements 2011-2013 Cycle: In the 2011-2013 annual improvements cycle, the IASB issued four amendments to four standards, which included an amendment to IFRS 1 First-time Adoption of International Financial Reporting Standards. The amendment to IFRS 1 is effective immediately and, thus, for periods beginning at 1 January 2015, and clarifies in the Basis for Conclusions that an entity may choose to apply either a current standard or a new standard that is not yet mandatory, but permits early application, provided either standard is applied consistently throughout the periods presented in the entity's first IFRS financial statements. This amendment to IFRS 1 has no impact on the Group, since the Group is an existing IFRS preparer.
3. Acquisition and Dilution - change in non-controlling interest without change in control a. Acquisition and dilution in KSK Energy Ventures Limited
During the previous 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, during the year ended 31 March 2016, KPHL acquired 1,736,580 shares of KSK Energy Ventures Limited ('KEVL'). Further, Group has sold 1,087,511 equity shares to non - controlling interest. Pursuant to this the economic interest of the Group in KEVL has decreased from 68.30 percent to 68.17 percent resulting in a 0.13 percent decrease in Group's controlling interest in subsidiary without loss of control. 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 $ 772 by which the non-controlling interest is adjusted and debited to 'other reserve' within consolidated statement of changes in equity and attributed to the owners of the Company.
b. Acquisition in KSK Mahanadi Power Company Limited
During the year ended 31 March 2016, the Group has issued additional 112,000,000 equity shares in KSK Mahanadi Power Company Limited ("KMPCL") to KSK Energy Ventures Limited ("KEVL") and 273,330,000 equity shares to KSK Energy Company Private Limited ("KECPL") at a face value of Rs 10 (US $ 0.16) at par and 137,662,943 equity shares in KMPCL held by KSK Energy Limited ("KEL") has been transferred to KEVL
Pursuant to above, the economic interest of the Group in KMPCL increased by 0.81 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. Pursuant to this an amount of US $ 259 by which the non controlling interest is adjusted, is credited to 'other reserve' within consolidated statement of changes in equity and attributed to the owners of the company.
c. Dilution in KSK Dibbin Hydro Power Private Limited
During the year ended 31 March 2016, the Group has issued additional 12,650,000 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 economic interest of the Group in KDHPPL decreased from 55.33 percent to 47.72 percent resulting in 7.61 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 $ 137 between the fair value of the net consideration received (US $ 1,931) and the amount by which the non-controlling interest are adjusted (US $ 1,794), is credited to 'Other reserve' within consolidated statement of changes in equity and attributed to the owners of the company.
d. Dilution of KSK Wind Power Aminabhavi Chikodi Private Limited
During the year ended 31 March 2016 , the Group has transferred 1,800,000 equity shares of Rs 10/- each (US $ 0.16) in KSK Wind Power Aminabhavi Chikodi Private Limited ("KWPACPL") held by KSK Green Energy Pte Limited ("KGEPL") to KSK Energy Ventures Limited ("KEVL") at a face value of Rs 10 (US $ 0.16) at premium of Rs 90 (US $ 1.37) each per share.
Pursuant to above, the economic interest of the Group in KWPACPL decreased from 100 percent to 77.73 percent resulting in a 22.27 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. Pursuant to this an amount of US $ 266 is debited to 'other reserve' within consolidated statement of changes in equity and attributed to the owners of the company.
e. Dilution in Raigarh Champa Rail Infrastructure Private Limited
During the year ended 31 March 2016, the Group has transferred 65,018,090 equity shares of Rs 10 (US $ 0.16) at par in Raigarh Champa Rail Infrastructure Private Limited ("RCRIPL") held by KSK Energy Company Private Limited ("KECPL") to KSK Mahanadi Power Company Limited ("KMPCL")
Pursuant to above, the economic interest of the Group in RCRIPL decreased by 13.70 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. Pursuant to this an amount of US $ 269 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.
f. Dilution of KSK Water Infrastructure Private Limited
During the year ended 31 March 2016 , the Group has transferred 40,277,990 equity shares of Rs 10 (US $ 0.16) at par in KSK Water Infrastructure Private Limited ("KWIPL") held by KSK Energy Company Private Limited ("KECPL") to KSK Mahanadi Power Company Limited ("KMPCL")
Pursuant to above, the economic interest of the Group in KWIPL decreased by 10.03 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. Pursuant to this an amount of US $ 156 by which the non-controlling interest is adjusted 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
---------------- -----------------
2016 2015 2016 2015
------- ------- ------- --------
Current
Financial assets at fair
value through profit or loss
- held-for-trading 5,177 2,589 - -
Loans and receivables 44,446 28,724 - 27
49,623 31,313 - 27
------- ------- ------- --------
Non-current
Financial assets at fair
value through profit or loss
- Derivative assets 45,872 49,702 - -
Available-for-sale investments
(Refer note 14(b)(vi)) 17,938 19,155 - -
Deposit with banks 4,994 8,102 - -
Loans and receivables 30,523 37,688 - 5,100
Loans to and receivables
from Joint Venture partner 1,501 15,844 - -
Loans to and receivable from
subsidiaries - - 155,978 171,676
Investment in subsidiaries - - 226,842 227,126
------- ------- ------- --------
100,828 130,491 382,820 403,902
------- ------- ------- --------
Total 150,451 161,804 382,820 403,929
------------------------------- ------- ------- ------- --------
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 $ 9,313 (2015: US $ 7,852), deferred loan origination costs US $ 2,496 (2015: US $ Nil), security deposit US $ 54,925 (2015: US $ 40,809), advance for investments US $ 1,603 (2015: US $ 2,492) and other financial assets US $ 6,632 (2015: US $ 15,259).
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 (2015: 139,244,601) in KEL, 12,000 equity shares (2015: 12,000) in KASL, Nil equity shares (2015: 100,000,000) in GCSP (formerly KGPP), 84,146,843 equity shares (2015: 84,146,843) in KGEPL and 1 equity share (2015: 1) in KSVP totalling to US $ 226,842 (2015: US $ 227,126).
Investment and other financial assets amounting to US $ 99,593 (2015: US $ 113,076) for the Group is subject to security restrictions (refer note 7).
Impairment of financial assets
During the year ended 31 March 2016, the Group's available-for-sale financial asset of US $ 170 (2015: US $ 693) and loans and receivable of US $ 16,481 (2015: US $ 25,095) were collectively impaired.
During the year ended 31 March 2016, the Company's loans and receivable of US $ 912 (2015: US $ Nil) were collectively impaired and written off.
5. Cash and short-term deposits
Cash and short-term deposits comprise of the following:
Consolidated Company
---------------- ------------
2016 2015 2016 2015
------- ------- ----- -----
Cash at banks and on hand 16,022 40,730 1,194 1,065
Short-term deposits 106,778 157,266 - -
------- ------- ----- -----
Total 122,800 197,996 1,194 1,065
-------------------------- ------- ------- ----- -----
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 $ 106,739 (2015: US $ 157,239) in order to fulfil collateral requirements (refer note 7).
For the purpose of cash flow statement, cash and cash equivalent comprise:
Consolidated Company
---------------------- --------------
2016 2015 2016 2015
---------- ---------- ------ ------
Cash at banks and on hand 16,022 40,730 1,194 1,065
Short-term deposits 106,778 157,266 - -
---------- ---------- ------ ------
Total 122,800 197,996 1,194 1,065
Less: Restricted cash(1) (106,776) (157,263) - -
---------- ---------- ------ ------
Cash and cash equivalent 16,024 40,733 1,194 1,065
--------------------------- ---------- ---------- ------ ------
(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 (2015: 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 (2015: 175,308,600). During the year Company has not issued/ bought back any ordinary share.
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 consolidated income statement and consolidated 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
%)
------------- ---------------------- --------------------
% 2016 2015 2016 2015
---------- ------------- ---------- ---------- -------- --------
Long-term "project 2.78 to
finance" loans 16.75 June-2031 2,793,569 2,760,503 - -
0.00 to
Short-term loans 24.00 March-2017 158,762 168,273 80,798 64,564
Buyers' credit 0.87 to
facility 3.02 March-2017 138,614 148,687 35,000 49,681
Cash credit and
other working 11.95
capital facilities to 14.11 March-2017 194,255 111,305 - -
Redeemable preference
shares 0.01 January-2029 5,817 11,564 - -
0.01 to
Debentures 17.00 March-2025 32,785 44,217 - -
---------- ---------- -------- --------
Total 3,323,802 3,244,549 115,798 114,245
----------------------- ---------- ------------- ---------- ---------- -------- --------
Total debt of US $ 3,323,802 (2015: US $ 3,244,549) comprised:
-- Long-term "project finance" loans of the Group amounting US $ 2,793,569 (2015: US $ 2,760,503) 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 operations 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 2017 are in the process of being extended and have a 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 within 13 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 2016, the Group has complied with the relevant significant covenants, while there are few financial ratio which are not met and management is in discussion with the lenders for addressing the same. However, these does not have any significant impact on the Group..
As at 31 March 2016, the Group has available US $ 969,740 of undrawn long term committed borrowing facilities.
The fair value of borrowings at 31 March 2016 was US $ 3,323,802 (2015: US $ 3,244,549). 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
-------------------- ----------------
2016 2015 2016 2015
--------- --------- ------- -------
Current liabilities
Amounts falling due within
one year 623,600 521,953 115,798 114,245
Non-current liabilities
Amounts falling due after
more than one year but not
more than five years 925,489 1,087,518 - -
Amounts falling due in more
than five years 1,774,713 1,635,078 - -
--------- --------- ------- -------
Total 3,323,802 3,244,549 115,798 114,245
---------------------------- --------- --------- ------- -------
8. Other financial liabilities
2016 2015
----------------------------------- ------ --------
Current
Option premium payable 5,469 5,506
Foreign exchange forward contracts 629 453
------ ------
6,098 5,959
------ ------
Non-Current
Option premium payable 17,065 22,099
Interest rate swaps 6,174 4,763
------ ------
23,239 26,862
------ ------
Total 29,337 32,821
------------------------------------- ------ ------
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.
2016 Project Power Reconciling Consolidated
development generating / Elimination
activities activities activities
------------------------------- ------------- ------------ --------------- -------------
Revenue
External customers 33 674,514 - 674,547
Inter-segment 3,293 - (3,293) -
Total revenue 3,326 674,514 (3,293) 674,547
------------- ------------ --------------- -------------
Segment operating
results 738 161,362 880 162,980
Unallocated operating
expenses, net (2,514)
Finance costs (296,470)
Finance income 26,336
-------------
Loss before tax (109,668)
Tax income 14,064
-------------
Loss after tax (95,604)
-------------
Segment assets 18,396 4,057,522 (14,031) 4,061,887
Unallocated assets 282,118
Total assets 4,344,005
-------------
Segment liabilities 2,786 394,420 (14,031) 383,175
Unallocated liabilities 3,545,090
Total liabilities 3,928,265
-------------
Other segment information
Depreciation and amortisation 77 90,913 78 91,068
Capital expenditure 4 193,275 31 193,310
------------------------------- ------------- ------------ --------------- -------------
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
------------------------------- ------------- ------------ --------------- -------------
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 $ 26,336 and US $ 296,470 respectively (2015: US $ 19,135 and US $ 219,810 respectively).
(c) Segment assets do not include deferred tax asset of US $ 141,327 (2015: US $ 128,104), financial assets and other investments US $ 99,923 (2015: US $ 103,263), short-term deposits with bank and cash US $ 8,551 (2015: US $ 15,428), and corporate assets US $ 32,317 (2015: US $ 29,072).
(d) Segment liabilities do not include deferred tax US $ 37,596 (2015: US $ 33,777), current tax payable US $ 1,243 (2015: US $ 1,147), interest-bearing current and non-current borrowings US $ 3,323,802 (2015: US $ 3,244,549), derivative liabilities US $ 29,337 (2015: US $ 32,821) and corporate liabilities US $ 153,112 (2015: US $ 105,523).
(e) The Company operates in one business and geographic segment. Consequently no segment disclosures of the Company are presented.
(f) Three customers in the power generating segment contributing revenues of US $ 473,844 accounted for 70.02% (2015: One customers in the power generating segment contributes revenues of US $ 196,893 accounting for 51.52%) of the total segment revenue.
10. Finance costs
Finance costs comprise:
Consolidated Company
---------------- ------------------------------------
2016 2015 2016 2015
------- ------- ------------------ ----------------
Interest expenses on loans
and borrowings (1) 268,611 158,361 1,065 1,381
Other finance costs 16,577 19,864 1,576 1,519
Impairment of financial assets
(2) 170 693 - -
Net loss on financial instrument
at fair value through profit
or loss (3) 8,822 4,355 - 560
Foreign exchange loss, net - 34,281 2,333 258
Net loss on held -for-trading
financial assets
on disposal 2 - - -
on re-measurement 6 - - -
Unwinding of discounts 2,282 2,256 - -
------- ------- ------------------ ----------------
Total 296,470 219,810 4,974 3,718
--------------------------------- ------- ------- ------------------ ----------------
(1) Borrowing cost capitalised during the year amounting to US $ 154,737 (2015: US $ 240,579) to property, plant and equipment at an effective interest rate of 15.25% (2015: 14.53%).
(2) Impairment of financial assets relates to available-for-sale financial asset of US $ 170 (2015: US $ 693).
(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:
2016 2015
----------------------------- ---------- ------
Interest income
bank deposits 11,508 14,155
loans and receivables 2,044 2,531
Dividend income 510 297
Net gain on held-for-trading
financial assets
on disposal - 3
on re-measurement - 32
Unwinding of discount on 1,704
security deposits 1,704 2,073
Foreign exchange gain, net 10,563 -
Gain on available-for- sale
financial assets disposed 7 44
---------- ------
Total 26,336 19,135
------------------------------- ---------- ------
12. Tax income / (expense)
The major components of income tax for the year ended 31 March 2016 and 31 March 2015 are:
2016 2015
------- -------
Current tax (1,392) (1,490)
Deferred tax 15,456 92,694
------- -------
Tax income reported in the income statement 14,064 91,204
-------------------------------------------- ------- -------
13. Related party transactions
Name of the related party 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 KMP 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
------------------- ------------------------------------------------------ ----------------------------------------------------------
2016 2015 2016 2015
------------------- -------------------------- ---------------------------- ----------------------------
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 33 - - 105 - - - - - - - -
Interest
income 515 - - 1,341 - - - - - - - -
Capacity - - - 6,736 - - - - - - - -
charges
paid
Inter-corporate
deposits
and loans
given 901 19 - 9,638 56 - 4,258 9 - 45,993 24 - Inter-corporate deposits and loans refunded 447 164 - 514 65 - 17,633 35 - - - - Loan taken 272 430 - 1,036 - - 17,152 27 - 62,635 - - Repayment of loan taken - 10 - - - - 993 10 - - - - Refund of share application money - 16,498 - - 1,502 - - 16,498 - - 1,502 - Equity-settled share based payment - - 47 - - 112 - - 47 - - 112 Managerial remuneration (3) - - 702 - - 710 - - 371 - - 355 Balances (1,2) Interest 3, receivable 4,153 - - 829 - - - - - - - - Loans and inter corporate deposits receivable 1,501 784 - 15,844 976 - 155,978 - - 171,676 22 - Loans payable 269 412 - - - - 80,785 13 - 62,955 - - Other receivable 9 - - 18 - - - - - - - - Other payable 2,408 165 - 2,464 - - - 165 - - - - Guarantees given 135 - - 143 - - 465,202 - - 432,097 - - Managerial remuneration payable(3) - - 108 - - 83 - - 87 - - 74 ------------------- ----------- ------- ---- ----------- ------- ---- ------------- ------- ---- ------------- ------- ----
(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 2016, the Group has recorded US $ 14,096 as impairment of receivables relating to amounts owed by related parties (2015: 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, provision / write off and conversion into equity.
(3) Remuneration is net of share based payments and 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
a. Capital commitments
As at 31 March 2016, the Group is committed to purchase property, plant and equipment for US $ 1,467,098 (2015: US $ 1,300,892). In respect of its interest in joint operations the Group is committed to incur capital expenditure of US $ 49 (2015: US $ 51).
b. Legal and other claim
i. 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 $ 11,008 (2015: US $ 11,636). 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. Pending final adjudication of the matter, the Group has accrued necessary provision on prudent basis.
ii. VS Lignite Power Private Limited (VSLPPL) has receivables of US $ 7,787 (2015: US $ 8,750) 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. In addition, the customers have also raised demand towards supply or pay obligation which are disputed by the Group. The Group has an amount of US $ 6,373 access from such customers as redeemable preference and equity 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.
iii. The captive customers of the SWPL has deducted from the sales invoices and paid an amount of US$ 9,107 towards Cross Subsidy Surcharge ('CSS') levied by MSEDCL for the financial year 2012-13 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. MERC asked the Company 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 Company has filed an appeal before the APTEL on the ground that the non-fulfilment of captive criteria by the company was attributed to the delay caused by MSEDCL in granting open access to captive customers. APTEL also rejected the appeal. However Company has filed review petition with APTEL. The Group has received favorable order for the financial year 2013-2014. 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.
iv. KSK Mahanadi, the Group's largest thermal power generation plant with two units fully operational and balance units in various stages of construction and commissioning is engaged in the generation and supply of power to four state utilities of Andhra Pradesh, Telangana, Tamil Nadu and Uttar Pradesh under Case 1 competitive bid Power Purchase Agreement (PPA). The respective PPAs in addition to the agreed tariff payable for the power supplied contains specific provisions providing for tariff adjustment payment to the generator on account of Change in law. The Change in law provision essentially provides reimbursement mechanism for all additional recurring or non-recurring expenditure incurred by the Generator towards new costs levied / incurred post the bidding point. These claims under the PPA cover both (a) Claim on account of various statutory duties, levies and cess levied by Central or State Governments or its instrumentalities; and (b) linkage coal shortfall compensation with respective to Presidential Directive and Ministry of Power Notification to all Electricity Regulators in India. KSK Mahanadi has made claims pursuant to the above PPA provisions in excess of US $ 193,517, wherein claim pertaining to taxes amounts to US $ 35,822 and claim on account of short supply of coal pursuant to the Presidential Directive amounts to US $ 157,695. However, notwithstanding its eligibility for the full claim as per the PPA, keeping in view the regulatory commitments by the Government instrumentalities, the necessary legal and administrative process that KSK Mahanadi has to pursue, on its internal evaluation of the facts and circumstances of the case on a prudent basis, KSK Mahanadi has recognised a portion of the claim aggregating to US $ 140,510 in the books of accounts until date, wherein US $ 109,351 pertains to the current year. KSK Mahanadi has in its notices to the utilities submitted that it qualifies for the composite scheme guidelines and hence Central Electrical Regulatory Commission (CERC) will be the relevant appropriate authority to adjudicate
the matter. While in the earlier period, the claims were to be determined by the State Regulators, pursuant to a recent ruling by the Appellate Tribunal of Electricity (APTEL) with respect to multiple power producers, the jurisdiction of CERC has been reaffirmed. Based on the bid guidelines, the PPA provisions and the legal advice that KSK Mahanadi has obtained, steps have been initiated to make appropriate amends in its claim petitions and filings before CERC. Based on the legal advice and recent ruling of CERC in similarly placed power project, KSK Mahanadi is confident that the entire claim amount is fully receivable.
v. 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 $ 13,183 (2015: US $ 13,935), on account of delayed fulfilment of obligation under the PPA. AP Discoms have rejected those claims and made the counter claim of US $ 3,562 (2015: US $ 3,765) 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.
vi. The Company had made investment of US $ 15,848 in Athena Projects Private Limited ('APPL') for acquisition of 25% stake. APPL in turn holds substantial investment in Teesta III hydro project. On 16.07.2009, the parties entered into a MOU providing for transfer of interest in 68,400,000 shares of Teesta III in favour of KSK Energy Company Private Limited ('KECPL'). The arrangement envisaged APPL to complete certain corporate actions. Thereafter, as a final arrangement a share sale and purchase agreement dated 5 April 2010 was executed between KECPL and APPL promoters that provided for acquisition of entire shares of US $ 15,848 in one year's time. Upon same being not honoured KECPL filed the petition with Company Law Board ('CLB'), Principal Bench, New Delhi which is currently pending. The aforesaid is the significant matter of minority protection and management believe that they have the good grounds for the favourable disposal of the case. Hence the Group continue to carry the investment in APPL at cost.
vii. 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, which provides for reimbursement of cost incurred towards land and mine infrastructure by new allottee. Accordingly GIDC has made the claim for US $ 39,802 for settlement before Nominated Authority appointed under the Ordinance by Ministry of Coal. Subsequent to the year end, Government of India, Ministry of Coal has directed to pay towards cost of compensation for geological report to all the prior allottee and accordingly the Group has received US $ 4,528. 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 accordingly the claim of US $ 39,802 has been reclassified under other receivable.
viii. Other non-current assets include an amount of US $ 16,502 (2015: US $ 20,850) relating to Central Excise, VAT and Service Tax receivable from the respective departments by SWPL. 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 March 2015 and a favourable order from Central Excise & Service Tax Appellate Tribunal (CESTAT) for the period March 2009 to December 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 for the financial year 2013-14 on adhoc basis however assessment is still pending. The Company has also received refund order for financial year 2011-12 and thus the Group is confident to receive the refund for the remaining years as well. The excise duty refund claims were rejected by the department stating that there are no provision of refund under the SEZ Act. The Company has filed an appeal with the CESTAT where in the CESTAT and the Large bench has mentioned that in respect of rebate on goods supplied from DTA to SEZ within India, the appeal would not lie to Appellate Tribunal under clause (b) of provision of Section 35(1) of Central Excise Act, however the Group has liberty to file revision application before Revisionary Authority, Government of India. Accordingly, the Company has filed a revisionary petition with Ministry of Finance, Department of Revenue. The Group is confident to receive the refund.
ix. The Group has received claims for US $ 9,807 (2015: US $ 10,367) 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.
x. SWPL has lodged a claim relating to quality and price on Western Coalfields Limited (WCL), the coal supplier for abuse of dominant position by WCL and Coal India Limited (CIL). 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 Commission before the COMPAT wherein hearing is presently underway. The Group has filed a total claim of US $ 137,045 with COMPAT under provision 53N of The Competition Act, 2002. Further Company has received a demand of US $ 11,494 from WCL towards short lifting of minimum quantity of coal which is also contested by the Company on various grounds including of inferior quality & high price. The Group believes that the final outcome of the above matters would be in favour of the group and adjustments if any will be incorporated in the financial statements after finalisation of the legal proceedings.
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 $ 319,535 (2015: US $ 275,977) 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
---------------------------------------- ---------------- ----------- ---------------- -----------
2016 2016 2015 2015
---------------------------------------- ---------------- ----------- ---------------- -----------
Non- current financial assets
Trade and other receivables 2,593 2,593 2,845 2,845
Equity securities - available-for-sale 17,938 17,938 19,155 19,155
Loans and receivables 32,024 32,024 53,532 53,532
Derivative assets 45,872 45,872 49,702 49,702
Non-current bank deposits 4,994 4,994 8,102 8,102
---------------- ----------- ---------------- -----------
Total non-current 103,421 103,421 133,336 133,336
---------------- ----------- ---------------- -----------
Current financial assets
Trade and other receivables 367,139 367,139 154,212 154,212
Equity securities - held for trading 115 115 152 152
Debt securities-held for trading 5,062 5,062 2,437 2,437
Loans and receivables 44,446 44,446 28,724 28,724
Cash and short-term deposits 122,800 122,800 197,996 197,996
---------------- ----------- ---------------- -----------
Total current 539,562 539,562 383,521 383,521
Total 642,983 642,983 516,857 516,857
---------------- ----------- ---------------- -----------
Non- current financial liabilities
Trade and other payables 30,496 30,496 47,581 47,581
Loans and borrowings 2,700,202 2,700,202 2,722,596 2,722,596
Interest rate swaps 6,174 6,174 4,763 4,763
Option premium payable 17,065 17,065 22,099 22,099
---------------- ----------- ---------------- -----------
Total non-current 2,753,937 2,753,937 2,797,039 2,797,039
---------------- ----------- ---------------- -----------
Current financial liabilities
Trade and other payables 493,099 493,099 369,590 369,590
Loans and borrowings 623,600 623,600 521,953 521,953
Foreign exchange forward contract 629 629 453 453
Option premium payable 5,469 5,469 5,506 5,506
---------------- ----------- ---------------- -----------
Total current 1,122,797 1,122,797 897,502 897,502
Total 3,876,734 3,876,734 3,694,541 3,694,541
---------------------------------------- ---------------- ----------- ---------------- -----------
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
--------------------------------------- ---------------- ----------- ---------------- -----------
2016 2016 2015 2015
--------------------------------------- ---------------- ----------- ---------------- -----------
Non-current financial assets
Loans and receivables to subsidiaries 155,978 155,978 171,676 171,676
Loans and receivables - - 5,100 5,100
Total non-current 155,978 155,978 176,776 176,776
Current financial assets
Loans and receivables - - 27 27
Cash and short-term deposits 1,194 1,194 1,065 1,065
---------------- ----------- ---------------- -----------
Total current 1,194 1,194 1,092 1,092
Total 157,172 157,172 177,868 177,868
---------------- ----------- ---------------- -----------
Current financial liabilities
Trade and other payables 1,503 1,503 1,372 1,372
Loans and borrowings 115,798 115,798 114,245 114,245
Total current 117,301 117,301 115,617 115,617
--------------------------------------- ---------------- ----------- ---------------- -----------
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 is 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).
2016 Level Level Level Total
1 2 3
--------------------------- ------ ------- ------- -------
Financial assets measured
at fair value
Equity securities
- available-for-sale 509 - 17,429 17,938
Equity securities
- held for trading 115 - - 115
Debt securities-held
for trading 5,062 - - 5,062
Derivative assets - 45,872 - 45,872
Total 5,686 45,872 17,429 68,987
------ ------- ------- -------
Financial liabilities
measured at fair value
Interest rate swaps - 6,174 - 6,174
Option premium payable - 22,534 - 22,534
Foreign exchange forward
contract - 629 - 629
------ ------- ------- -------
Total - 29,337 - 29,337
--------------------------- ------ ------- ------- -------
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 2016, there were no transfers between Level 1 and Level 2 fair value measurements.
Reconciliation of Level 3 fair value measurements of financial assets:
2016 Available-for-sale Total
Unquoted
Equities
--------------------------------------- ------------------- --------
Opening balance 18,644 18,644
Total gains or losses:
- in income statement 2 2
- in other comprehensive income
change in fair value of available
for sale financial asset (159) (159)
foreign currency translation
difference (1,004) (1,004)
Settlements (54) (54)
Transfers into level 3 - -
------------------- --------
Closing balance 17,429 17,429
--------------------------------------- ------------------- --------
16. Subsequent events:
Out of the total Warrants of 80,808,080 issued by KEVL to KSK Power Holdings Limited ("KPHL"), 10,951,280 warrants has been exercised and converted in to equity share capital of KEVL during March 2015 and April 2015. Balance warrants of 69,856,800 outstanding as at 31 March 2016 lapsed subsequent to the balance sheet date on account of non-exercise of option by KPHL and same shall stand forfeited.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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