RNS Number : 2368U
KSK Power Ventur PLC
29 November 2013
29 November 2013
KSK Power Ventur plc
("KSKPV" or the "Company")
Interim Results for the six months ended 30 September 2013
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, is pleased to announce the interim un-audited results for the six months ended 30 September 2013.
Financial Highlights
· Group Revenue decreased by 24 % to $ 150.68 m (H1 2012: $ 198.62 m)
· Gross Profit decreased by 36% to $ 45.27 m (H1 2012: $ 70.77 m)
· Operating Profit decreased by 48% to $ 30.36 m (H1 2012: $ 58.68 m)
· Profit before tax** decreased to a loss of $ (115.24) m (H1 2012: $ 34.65 m)
· Investments in Property Plant and Equipment* decreased by 7% to $ 3,037 m (Mar 2013: $ 3,273 m)
· Cash and cash equivalents held at 30 Sep 2013 of $ 209.09m
*Actually increased by 6.9% on constant currency basis, but headline decrease purely on account of translation difference from base currency as INR 63.00 per USD at closing utilized against INR 54.66 per USD at March 2013
**An unrealized exchange loss of USD 111 million on account of the restatement of the foreign currency component of bank financing facilities and trade payables being recognized. Similarly aggregate revenues of USD 33.22 million on account of Power Purchase Agreement ("PPA") supplies at KSK Mahanadi have not been taken into reported revenues but capitalized, being generated during the Reliability Run Test Phase of the first 600 MW Unit of the Project. This is now fully up and running.
The underlying revenue decrease of 18% at the Rupee level has been primarily due to the lower Plant Load Factors ("PLF") as a result of the extended monsoon. This has directly impacted tariff realizations. In addition to the current trading environment across India and the currency depreciation of the Indian Rupee against the US Dollar, this has led to reporting revenue reduction of 24% in US Dollar terms. This is illustrated in the table below.
Comparison of results
As published
Sep 13 translated at Sep 2012 Rupee/USD exchange rate
Particulars
30 Sep 2013 (In USD m)
30 Sep 2012 (In USD m)
% change
30 Sep 2013 (In USD m)
30 Sep 2012 (In USD m)
% Change
Revenue
150.68
198.62
-24%
162.17
198.62
-18%
Gross Profit
45.27
70.77
-36%
48.73
70.77
-31%
Operating profit
30,36
58,68
-48%
32,68
58,68
-44%
Profit/(loss) Before Tax
(115.25)
34.65
-433%
(124.04)
34.65
-458%
Average exchange rate Rupee/USD
Rs 59.04/$
Rs 54.86/$
7.63%
Rs 54.86/$
Rs 54.86/$
-
The full year is expected to see an upward movement in power generation on account of an uninterrupted contribution in the second half from the ongoing operations being complemented by the revenues from Mahanadi coming in. Profitability will still essentially depend on addressing issues with Western Coal Fields in Wardha, executing the Fuel Supply Agreement (for the Tapering Linkage) and achieving coal supplies in KSK Mahanadi under the FSA that has been long overdue from the Government. Any further delays will result in dependence on high cost market or imported coal over the interim period, with pressure on margins in the immediate term.
The Group has completed the necessary debt refinancing at Wardha but the recent USD / INR volatility post completion has eroded some of the planned benefits, while continuing to be value accretive post hedging costs. During the period, the Company has refinanced high cost Indian currency denominated borrowing with lower cost US $ denominated borrowing for US $250m in order to reduce the interest payments. At the same time, the Company has hedged the exchange and interest rate risks by taking Currency Option (Call Spread) and Interest Rate Swaps for approximately65% of ECB exposure and 50% of interest exposure respectively. The Company has accounted such instruments as a financial liability at fair value through the profit and loss account, resulting in a derivative asset amounting to US $ 52 m, derivative liability amounting to US $36m and net gain on option valuation of US$15m. However, US $ denominated debt has resulted in unrealized forex loss of US$27m on restatement at the closing rate.
Operating Highlights
Operating capacity of 891 MW recorded an aggregate generation of 2,591 million units ("MU") as against 2,744 MU for the similar period in 2012, with the following individual PLF.
6 Months (2013)
6 Months (2012)
Wardha Warora
540 MW
1507 MU (64%)
1728 MU (73%)
VS Lignite
135 MW
503 MU (85%)
420 MU (71%)
Sai Regency
58 MW
214 MU (84%)
227 MU (89%)
Arasmeta
86 MW
158 MU (42%)
168 MU (44%)
Sitapuram
43 MW
171 MU (91%)
165 MU (85%)
Wind Project
19 MW
27 MU (32%)
37 MU (44%)
Sai Maithili Solar
10 MW
10 MU (22%)
-
With the extended monsoon and other factors the aggregate portfolio PLF achieved has been 66% against 71% for the similar period in 2012. The energy generation for the year as a whole to 31 March 2014, should be higher than the 5.5 billion units achieved in the year ended 31 March 2013. The exact quantum will depend substantially on the KSK Mahanadi units production profile post Reliability Run Test ("RRT") phases.
The 3,600 MW KSK Mahanadi power project is under construction with the following developments:
o First 600 MW Unit has been synchronized and initial power generation to the Utilities have since commenced.
o Development of ancillary common infrastructure facilities has been achieved enabling sustained power generation
o Immediate focus and priority continues on the commissioning of the second unit of 600 MW before the end of the current financial year;
o Execution of the Fuel Supply Agreement under Tapering Linkage and commencement of fuel supplies thereto are the immediate targets for achievement; and
o Progress is being made on the balance of the four units of 600 MW each and necessary discussion has been initiated with the EPC Contractor on the same.
Commenting on the results, T.L.Sankar, Chairman of KSK said:
"Operational progress has been made notwithstanding the current challenging times and economic environment across India, especially with committed/ contractually guaranteed obligations not being fulfilled by Government and Government agencies.
The Group has continued its efforts to address various challenges and continues to make good progress on the ground with the KSK Mahanadi project. Exchange rate volatility and unrealized exchange losses reflect the industry wide scenario of project costs increasing in line with sharp depreciation of the Rupee and the resulting impact on imports of capital goods and costs across all power projects in India.
Fuel supply issues continue through the interim and long term and suitable arrangements with a mix of appropriate sources are being worked on. Management is also addressing various supply chain challenges to ensure planned generation capacity is synchronized with the availability of fuel supplies.
Notwithstanding the consequential effects on our financial results, the underlying assets and associated performance continues to meet expectations in these difficult times with potential for further improvements.
We look forward to the years ahead as KSK emerges as one of the more stable players in the Indian power generation landscape."
For further information, please contact:
KSK Power Ventur plc +91 40 2355 9922
Mr. S. Kishore, Executive Director
Mr. K. A. Sastry, Executive Director
Arden Partners plc +44 (0)20 7614 5900
Richard Day / Adrian Trimmings
KEY BUSINESS UPDATES
540 MW WARDHA POWER COMPANY LIMITED (WPCL)
The total gross power generated in the plant during the review period stood at 1507 MU with an average Plant Load Factor (PLF) of 64%, primarily on account of the extended monsoon during the period and improved plant utilization is planned for the second half of the financial year.
While supplies of coal from cost plus linkage coal block has commenced and the company has been recently invited to execute a Fuel Supply Agreement for the balance quantity, the company has pointed out the concerns to the coal company as well as initiated appropriate steps to realise the recompense and appropriate solution for the future.
Open Access is a statutory provision for permission to carry power from the point of generation to the destination of use. While this is granted for all captive power plants as a matter of right, the same has been provided only for part of the requirement at Wardha and the balance still requires to be provided by the State power company. This delay in the granting of Open Access by the State Company for supplies to industrial consumers has limited the Company's unit utilization and the company is pursuing necessary remedies with respect to the same. Also the Company is exploring suitable alternate / renewal arrangement for R-Infra committed capacity of 260 MW starting 1 April 2014 at attractive tariff levels.
135 MW VS LIGNITE POWER PRIVATE LIMITED (VSLP)
The total gross power generated in the plant during the review period stood at 503 MU with an average PLF of 85%. The Company is continuing its efforts to secure appropriate legal reliefs with respect to tariffs from industrial customers. The Company anticipates that industrial customers, who have been experiencing extremely high alternate tariffs, will find our power plant supplies attractive and agree to our proposition. Similarly the sale of the balance power to the local utility is expected to be similarly firmed up, with recent power purchase arrangements finalized by the state with alternate vendors under a competitive bidding process.
86 MW ARASMETA CAPTIVE POWER COMPANY PRIVATE LIMITED (ACPCPL)
The total gross power generated in the plant during the first half year stood at 158 MU with an average PLF of 42% primarily on account of the limited off take by Lafarge India. However with alternate sale arrangement with Chhattisgarh, it is anticipated that the PLF for the second half will significantly increase and will lead to improved asset utilization, and the associated strengthening of revenue realization at the plant. Cost optimization for coal supplies from South Eastern Coalfields Limited (SECL) will be pursued for enhancing margins and profitability.
58 MW SAI REGENCY POWER CORPORATION PRIVATE LIMITED (SRPCPL)
The total gross power generated in the plant during the review period stood at 214 MU with an average PLF of 84% in the combined cycle gas based power plant. With the continuous supply of gas and efficient operation, the plant has provided an exceptional operational and financial performance and the Company expects this to continue in the future.
43 MW SITAPURAM POWER LIMITED (SPL)
The total gross power generated in the plant during the first half of the year stood at 171MU with an average PLF of 91%. The energy generated in the period has been purchased by the captive consumers with balance supplied to the local utility.
19 MW WIND ASSETS
These wind assets (nine Wind Turbine machines of 2.1 MW each) , on account of constrained generation on account of grid factors ,generated 27 MU with an average PLF of 32% during the first half of FY2013-14 . It is anticipated that annualized PLF for the full year will stabilize around 20%.
10 MW SOLAR ASSETS
The Sai Maithili solar plant generated approx. 10 MU with an average PLF of 22%, during the first half of FY2013-14, reflecting the increasing attractive of solar power generation.
On the strength of the above generation as well as new opportunities, it is anticipated that the Group would pursue more solar power generation projects in the immediate future with a 50 MW Solar Power Project under immediate pursuit.
PROGRESS ON 3.6 GW KSK MAHANADI POWER PROJECT:
The construction activity of KSK Mahanadi, a large, single location, Greenfield private power plant, is continuing, with more than 7000+ workers at the project site.
As regards to the on-site construction progress:
· First 600 MW Unit fully functional with all associated ancillary infrastructure commissioned;
· Power generated is being supplied in accordance with the Grid code and PPA arrangements. Revenue recognition (Post RRT) to commence in the current quarter.
· It is anticipated that boiler light up for the second unit of 600 MW, on a test basis, will be achieved within the next 45 days and the turbine generator box up is also anticipated to be completed around the same time;
· Boiler drum lifting for the third unit has also been completed and erection of pressure parts are expected to be accelerated in due course;
· Flue duct fabrication works and insertion completion in the second chimney for the second 600 MW units is in progress;
· The entire 60 km pipeline laying work for the water intake system for the power plant has been completed and currently used for water transport; and
· The rail connectivity of the power plant to the Indian Rail network is completed with movement of rakes into the plant commenced.
As regards capex requirements for completion of the balance units at KSK Mahanadi, the project was originally appraised at imports at rates of Rs 48 / USD on the offshore component. The recent sharp movement in the exchange rate to the Rs 62 to Rs 65 / USD level necessitates enhanced debt funding by the Project Lenders, required during 2014 and 2015. The Project lenders are aware of the matter and have commenced appropriate evaluation and approval of a suitable plan which shall be notified upon finalization, which is expected to take the next six months. Partial mitigation is envisaged through securing further foreign currency based senior debt to meet project imports and avoid any immediate effect of currency conversion and steps have been already initiated in this regard. Also, under the local regulations, a substantial part of the letters of credit and short term loans which have already been provided by Project Lenders for Project imports will be rolled over effectively to the next two financial years. Also enhanced debt funding at KSK Mahanadi by the Project Lenders is being enabled by efforts to tie up Power Purchase Agreements with higher tariff realization.
FINANCIAL
The Group's revenues for the six months ended 30th September 2013 were $ 150.6 m. They were generated from the Group's portfolio of generating assets, with a total of 891 MW of capacity across various Indian states.
Cash generated by operations during the period was $13.24. As at 30 Sep 2013, cash and cash equivalents totalled $209.09m. The strengthening of the Dollar to the Rupee has no day-to-day operational effect on the Group, although it does impact on overseas supplies based capex requirements as well as foreign currency based facilities which tend to be priced in US Dollars.
OUTLOOK
With an exciting portfolio of power assets and appropriate fuel arrangements secured, the Group has a strong and sustainable power generation portfolio. While underlying cash generation from operations has been positive, much depends on the ability to address the various issues at Wardha and KSK Mahanadi for enhanced cash accrual. Decisions have to come through at the Government of India levels, with promised commitments to be fulfilled by the Government and respective agencies in order for the Company to meet market expectations which remain constrained.
The Indian economic growth potential and unfulfilled demand for power generation is expected only to continue to grow through the coming decade. KSK is well positioned in this regard and we expect two units at Mahanadi to be fully commissioned in the current year. We continue to pursue initiatives to increase asset utilization, realize higher tariffs with new Power Purchase Agreements and secure lower cost fuel supply arrangements.
An extract of the Interim Condensed Consolidated and Company Financial Statements for the six months ended 30 September 2013 is shown below.
A full set of the interim accounts is available from the Company website www.kskplc.co.uk
DIRECTORS RESPONSIBILITIES IN RESPECT OF CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT
The directors are responsible for preparing the condensed consolidated and company interim financial statements in accordance with applicable law and regulations. In addition, the directors have elected to prepare the condensed consolidated and company interim financial statements in accordance with International Financial Reporting Standards - IAS 34 Interim Financial Statements
The condensed consolidated and company interim financial statements are required to state of affairs of the Group and of the profit or loss of the Group for that period. In preparing condensed consolidated and company interim financial statements, the directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgments and estimates that are reasonable and prudent;
· state whether they have been prepared in accordance with International Financial Reporting Standards IAS 34 Interim Financial Statements; and
· prepare the condensed consolidated and company interim financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Group and to allow for the preparation of consolidated and company interim financial statements. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation governing the preparation and dissemination of financial statements may differ from one jurisdiction to another.
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge the condensed set of interim consolidated and company financial statements have been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting; and give a true and fair view of the assets, liabilities and profit of the group as a whole by DTR 4.2.4R. The interim management report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of interim consolidated and company financial statements; and a description of the principal risks & uncertainties for the remaining six months of the year. The interim management report includes a fair view of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein) that have materially affected the financial position or performance of the entity during that period
S.Kishore KA Sastry
Executive Director Executive Director
Contents
INTERIM CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
INTERIM CONSOLIDATED AND COMPANY INCOME STATEMENT
INTERIM CONSOLIDATED AND COMPANY STATEMENT OF COMPREHENSIVE INCOME
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
INTERIM COMPANY STATEMENT OF CHANGES IN EQUITY
INTERIM CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS
NOTES TO INTERIM CONDENSED CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS
INTERIM CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
as at 30 September 2013
(All amount in thousands of US $, unless otherwise stated)
Consolidated
Company
Notes
30 September 2013
31 March 2013 (Restated*)
30 September 2013
31 March 2013
ASSETS
Non-current
Property, plant and equipment
3,036,502
3,273,471
-
1
Intangible assets and goodwill
19,302
22,326
-
-
Investments and other financial assets
4
148,645
98,045
303,939
295,191
Other non-current assets
61,528
67,406
-
-
Trade and other receivables
4,588
6,272
-
-
Deferred tax asset
42,858
15,649
-
-
3,313,423
3,483,169
303,939
295,192
Current
Investments and other financial assets
4
76,914
81,464
9,237
9,557
Other current assets
42,056
42,490
735
883
Trade and other receivables
134,356
116,252
-
-
Inventories
39,669
26,246
-
-
Cash and short-term deposits
5
209,092
305,264
9
287
502,087
571,716
9,981
10,727
Total assets
3,815,510
4,054,885
313,920
305,919
EQUITY AND LIABILITIES
Issued capital
263
263
263
263
Share premium
253,890
253,890
253,890
253,890
Foreign currency translation reserve
(131,626)
(78,535)
10,533
6,420
Revaluation reserve
2,658
2,752
-
-
Other reserves
142,504
142,262
-
-
Retained earnings / (Accumulated deficit)
59,987
120,939
(12,649)
(10,049)
Equity attributable to owners of the Company
327,676
441,571
252,037
250,524
Non-controlling interests
155,762
199,615
-
-
Total equity
483,438
641,186
252,037
250,524
Non-current liabilities
Interest-bearing loans and borrowings
6
1,687,279
1,834,526
-
-
Other non-current financial liabilities
7
31,385
-
-
-
Trade and other payables
55,795
59,782
-
-
Provisions
2,287
2,541
-
-
Deferred revenue
6,764
8,403
-
-
Employee benefit liability
798
1,061
-
-
Deferred tax liabilities
25,523
35,985
-
-
1,809,831
1,942,298
-
-
Current liabilities
Interest-bearing loans and borrowings
6
1,046,764
1,021,122
60,578
54,119
Other current financial liabilities
7
5,020
-
-
-
Trade and other payables
459,680
438,664
1,305
1,276
Deferred revenue
805
928
-
-
Other current liabilities
8,956
9,258
-
-
Taxes payable
1,016
1,429
-
-
1,522,241
1,471,401
61,883
55,395
Total liabilities
3,332,072
3,413,699
61,883
55,395
Total equity and liabilities
3,815,510
4,054,885
313,920
305,919
See accompanying notes to the interim condensed Consolidated and Company financial statements)
* The comparative information has been restated so as to reflect the adoption of new accounting standards, details of which have been set out in note 15.
Approved by the Board of Directors on 28 November 2013 and signed on behalf by:
S. Kishore K. A. Sastry
Executive Director Executive Director
INTERIM CONSOLIDATED AND COMPANY INCOME STATEMENT
for the six months ended 30 September 2013
(All amount in thousands of US $, unless otherwise stated)
Consolidated
Company
Notes
30 September 2013
30 September 2012 (Restated*)
30 September 2013
30 September 2012
Revenue
8
150,675
198,620
-
-
Cost of revenue
(105,402)
(127,852)
-
-
Gross profit
45,273
70,768
-
-
Other operating income
2,846
864
-
42
Distribution costs
(5,619)
(2,610)
-
-
General and administrative expenses
(12,136)
(10,339)
(633)
(413)
Operating profit / (loss)
30,364
58,683
(633)
(371)
Finance costs
9
(174,368)
(58,150)
(1,967)
(1,089)
Finance income
10
28,757
34,117
-
-
(Loss) / profit before tax
(115,247)
34,650
(2,600)
(1,460)
Tax income / (expense)
11
35,651
1,752
-
-
(Loss) / profit for the period
(79,596)
36,402
(2,600)
(1,460)
Attributable to:
Owners of the Company
(63,198)
25,884
(2,600)
(1,460)
Non-controlling interests
(16,398)
10,518
-
-
(79,596)
36,402
(2,600)
(1,460)
(Loss) / earnings per share
Weighted average number of ordinary shares for basic and diluted earnings per share
159,378,600
159,378,600
Basic and diluted (loss) / earnings per share (US $)
(0.40)
0.16
(See accompanying notes to the interim condensed Consolidated and Company financial statements)
* The comparative information has been restated so as to reflect the adoption of new accounting standards, details of which have been set out in note 15.
Approved by the Board of Directors on 28 November 2013 and signed on behalf by:
S. Kishore K. A. Sastry
Executive Director Executive Director
INTERIM CONSOLIDATED AND COMPANY STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 September 2013
(All amount in thousands of US $, unless otherwise stated)
Consolidated
Company
Notes
30 September 2013
30 September 2012 (Restated*)
30 September 2013
30 September 2012
(Loss) / profit for the period
(79,596)
36,402
(2,600)
(1,460)
Items that will never be reclassified to income statement
Re-measurement of defined benefit liability
349
304
-
-
Income tax relating to re-measurement of defined benefit liability
(112)
(101)
-
-
237
203
-
-
Items that are or may be reclassified subsequently to income statement
Foreign currency translation differences
(78,368)
(5,760)
4,113
1,274
Available-for-sale financial assets
- current period losses
(2,428)
(328)
-
-
- reclassification to income statement
2,370
1,153
-
-
Income tax relating to available for sale financial asset
37
59
-
-
(78,389)
(4,876)
4,113
1,274
Other comprehensive (expense) / income, net of tax
(78,152)
(4,673)
4,113
1,274
Total comprehensive (expense) / income for the period
(157,748)
31,729
1,513
(186)
Attributable to:
Owners of the Company
(116,089)
23,242
1,513
(186)
Non-controlling interests
(41,659)
8,487
-
-
(157,748)
31,729
1,513
(186)
(See accompanying notes to the interim condensed Consolidated and Company financial statements)
* The comparative information has been restated so as to reflect the adoption of new accounting standards, details of which have been set out in note 15.
Approved by the Board of Directors on 28 November 2013 and signed on behalf by:
S. Kishore K. A. Sastry
Executive Director Executive Director
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2012
(All amount in thousands of US $, unless otherwise stated)
Attributable to owners of the Company
Non-controlling interests
Total equity
Issued capital (No. of shares)
Issued capital (Amount)
Share premium
Foreign currency translation reserve
Revaluation reserve
Other reserves
Retained earnings
Total
As at 1 April 2012 (Restated *)
159,378,600
263
253,890
(58,881)
2,859
140,415
99,475
438,021
188,442
626,463
Issuance of equity shares by subsidiary
-
-
-
-
-
-
-
-
475
475
Transfer of economic interest to non-controlling interests1
-
-
-
-
-
-
(2,317)
(2,317)
2,317
-
Net depreciation transfer for property, plant and equipment
-
-
-
-
(53)
-
53
-
-
-
Transaction with owners
-
-
-
-
(53)
-
(2,264)
(2,317)
2,792
475
Profit for the period
-
-
-
-
-
-
25,884
25,884
10,518
36,402
Other comprehensive income
Items that will never be reclassified to incomestatement
Re-measurement of defined benefit liability
-
-
-
-
-
319
-
319
(15)
304
Income tax relating to re-measurement of defined benefit liability
-
-
-
-
-
(101)
-
(101)
-
(101)
Items that are or may be reclassified subsequently to income statement
Foreign currency translation differences
-
-
-
(3,711)
-
-
-
(3,711)
(2,049)
(5,760)
Available-for-sale financial assets
- current period gains / (losses)
-
-
-
-
-
(361)
-
(361)
33
(328)
- reclassification to profit or loss
-
-
-
-
-
1,153
-
1,153
-
1,153
Income tax relating to available-for-sale financial asset
-
-
-
-
-
59
-
59
-
59
Total comprehensive income for the period
-
-
-
(3,711)
-
1,069
25,884
23,242
8,487
31,729
Balance as at 30 September 2012
159,378,600
263
253,890
(62,592)
2,806
141,484
123,095
458,946
199,721
658,667
(See accompanying notes to interim condensed Consolidated and Company financial statements)
* The comparative information has been restated so as to reflect the adoption of new accounting standards, details of which have been set out in note 15.
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 statement of comprehensive income. 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 six months ended 30 September 2013
(All amount in thousands of US $, unless otherwise stated)
Attributable to owners of the Company
Non - controlling interests
Total equity
Issued capital (No. of shares)
Issued capital (Amount)
Share premium
Foreign currency translation reserve
Revaluation reserve
Other reserves
Retained earnings
Total
As at 1 April 2013 (Restated*)
159,378,600
263
253,890
(78,535)
2,752
142,262
120,939
441,571
199,615
641,186
Issuance of equity shares by subsidiary
-
-
-
-
-
42
-
42
(42)
-
Transfer of economic interest to non-controlling interests1
-
-
-
-
-
-
2,152
2,152
(2,152)
-
Net depreciation transfer for property, plant and equipment
-
-
-
-
(94)
-
94
-
-
-
Transaction with owners
-
-
-
-
(94)
42
2,246
2,194
(2,194)
-
Loss for the period
-
-
-
-
-
-
(63,198)
(63,198)
(16,398)
(79,596)
Other comprehensive income
Items that will never be reclassified to income statement
Re-measurement of defined benefit liability
-
-
-
-
-
328
-
328
21
349
Income tax relating to re-measurement of defined benefit liability
-
-
-
-
-
(112)
-
(112)
-
(112)
Items that are or may be reclassified subsequently to income statement
Foreign currency translation differences
-
-
-
(53,091)
-
-
-
(53,091)
(25,277)
(78,368)
Available-for-sale financial assets
- current period (losses) / gains
-
-
-
-
-
(2,414)
-
(2,414)
(14)
(2,428)
- reclassification to profit or loss
-
-
-
-
-
2,370
-
2,370
-
2,370
Income tax relating to available-for-sale financial asset
-
-
-
-
-
28
-
28
9
37
Total comprehensive (expense) / income for the period
-
-
-
(53,091)
-
200
(63,198)
(116,089)
(41,659)
(157,748)
Balance as at 30 September 2013
159,378,600
263
253,890
(131,626)
2,658
142,504
59,987
327,676
155,762
483,438
(See accompanying notes to the interim condensed Consolidated and Company financial statements)
* The comparative information has been restated so as to reflect the adoption of new accounting standards, details of which have been set out in note 15.
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 Consolidated income statement. However, the non controlling interest disclosed in the Statement of changes in equity is calculated in the proportion of the actual shareholding as at the reporting date.
COMPANY STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2013
(All amount in thousands of US $, unless otherwise stated)
Issued capital (No. of shares)
Issued capital (Amount)
Share premium
Foreign currency translation reserve
Accumulated deficit
Total equity
As at 1 April 2012
159,378,600
263
253,890
12,217
(8,455)
257,915
Transaction with owners
-
-
-
-
-
-
Loss for the period
-
-
-
-
(1,460)
(1,460)
Other comprehensive income
Foreign currency translation differences
-
-
-
1,274
-
1,274
Total comprehensive (expense) / income for the period
-
-
-
1,274
(1,460)
(186)
Balance as at 30 September 2012
159,378,600
263
253,890
13,491
(9,915)
257,729
As at 1 April 2013
159,378,600
263
253,890
6,420
(10,049)
250,524
Transaction with owners
-
-
-
-
-
-
Loss for the period
-
-
-
-
(2,600)
(2,600)
Other comprehensive income
Foreign currency translation differences
-
-
-
4,113
-
4,113
Total comprehensive income / (expense) for the period
-
-
-
4,113
(2,600)
1,513
Balance as at 30 September 2013
159,378,600
263
253,890
10,533
(12,649)
252,037
(See accompanying notes to interim condensed Consolidated and Company financial statements)
CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS
for the six months ended 30 September 2013
(All amount in thousands of US $, unless otherwise stated)
Consolidated
Company
30 September 2013
30 September 2012 (Restated*)
30 September 2013
30 September 2012
Cash inflow / (outflow) from operating activities
(Loss) / profit before tax
(115,247)
34,650
(2,600)
(1,460)
Adjustment
Depreciation and amortization
18,656
19,645
-
-
Finance cost
167,793
56,982
1,975
1,085
Finance income
(28,757)
(25,007)
-
-
Provision and impairment of trade receivable and other advances
4,159
1,168
326
-
(Profit) / loss on sale of fixed assets, net
(408)
(3)
-
-
others
237
283
-
-
Change in working capital
Trade receivables and unbilled revenue
(20,886)
(37,850)
-
-
Inventories
(13,423)
(12,354)
-
-
Other assets
(28,104)
5,227
195
31
Trade payables and other liabilities
31,069
16,161
(68)
(196)
Provisions and employee benefit liability
(263)
(120)
-
-
Cash generated from /(used in) operating activities
14,826
58,782
(172)
(540)
Taxes paid, net
(1,588)
(6,212)
-
-
Net cash provided by / (used in) operating activities
13,238
52,570
(172)
(540)
Cash inflow / (outflow) from investing activities
Movement in restricted cash, net
76,244
22,041
-
-
Purchase of property, plant and equipment and other non current assets
(133,593)
(283,834)
-
-
Proceeds from sale of property, plant and equipment
772
-
-
-
Proceed from sale of wind mill undertaking
-
11,458
-
-
Purchase of financial instruments
(12,458)
(80,498)
(5,009)
(37)
Proceeds from sale/disposal of financial instruments
30,107
86,176
-
-
Dividend income
70
140
-
-
Finance income
17,012
21,094
-
-
Net cash flow provided / (used in) by investing activities
(21,846)
(223,423)
(5,009)
(37)
Cash inflow / (outflow) from financing activities
Proceeds from borrowings
659,799
557,776
6,064
-
Repayment of borrowings
(504,306)
(343,153)
-
-
Finance costs paid
(145,840)
(145,444)
(1,161)
(361)
Payment of option premium
(1,271)
-
-
-
Net proceeds from issue of shares and share application money in subsidiary to non-controlling interest
446
3,877
-
-
Net cash flow provided by / (used in) financing activities
8,828
73,056
4,903
(361)
Effect of exchange rate changes
(20,148)
(5,011)
-
370
Net increase/(decrease) in cash and cash equivalent
(19,928)
(102,808)
(278)
(568)
Cash and cash equivalent at the beginning of the period
43,834
120,186
287
1,598
Cash and cash equivalent at the end of the period (note 5)
23,906
17,378
9
1,030
(See accompanying notes to the interim condensed Consolidated and Company financial statements)
* The comparative information has been restated so as to reflect the adoption of new accounting standards, details of which have been set out in note 15.
NOTES TO INTERIM CONDENSED CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS
for the six months ended 30 September 2013
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.
The financial statements were authorised for issue by the Board of Directors on 28 November 2013.
1.2. Statement of compliance /responsibility statement
a. the condensed set of financial statements contained in this document has been prepared in accordance with International Accounting Standard-34 ("IAS 34"), "Interim Financial Reporting" as adopted by European Union ('EU');
b. the Interim management report contained in this document includes a fair review of the information required by the Financial Conduct Authority's Disclosure and Transparency Rules ("DTR") 4.2.7R (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the 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);
d. the interim condensed Consolidated and Company financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2013, which have been prepared in accordance with IFRSs.
e. The financial information set out in these financial statements does not constitute statutory accounts. The financial statement is unaudited but has been reviewed by KPMG Audit LLC and their report is set out at the end of this document.
1.3. Financial period
The interim condensed Consolidated and Company financial statements are for the six months ended 30 September 2013. The comparative information required by IAS 1 were determined using IAS 34 and include comparative information as follows:
Statement of financial position :
31 March 2013 being the end of immediately preceding financial year.
Income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows
Six months ended 30 September 2012 being the comparable interim period of the immediate preceding financial year.
1.4. Basis of preparation
These interim condensed Consolidated and Company financial statements have been prepared under International Accounting Standards-34- "Interim Financial Reporting" as adopted by European Union.
These interim condensed Consolidated financial statements have been prepared on the historical cost convention and on an accrual basis, except for the following:
· derivative financial instruments that are measured at fair value;
· financial instruments that are designated as being at fair value through profit or loss account upon initial recognition are measured at fair value;
· available-for-sale financial assets that are measured at fair value; and
· Net employee defined benefit (asset) / liability.
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 financial statements have been prepared on going concern basis which assumes the Group and the Company will have sufficient funds to continue its operational existence for the foreseeable future covering twelve months.The Group requires funds both for short-term operational needs as well as for long-term investment programmes mainly in construction projects for its power plants. The Group currently has net current liabilities of US $ 1,020,154, with short term facilities expiring in September 2014 totalling US $ 872,319 and a committed capital spend of US $ 1,343,080. The Group continue to generate cash flows from the current operations which together with the available cash and short term deposits provides liquidity both in short-term as well as in long-term. Anticipated future cash flows and undrawn long term committed facilities of US $ 1,019,168 together with cash and short term deposits of US $ 209,092 as at 30 September 2013 on a consolidated basis, are expected to be utilised to meet the on-going capital investment programme and liquidity requirement of the Group in the near future. In addition, a number of the facilities that are due to expire by 30 September 2014 are in the process of being extended and have rollover clause in a number of cases.
Further, exchange rate volatility and the unrealized exchange loss reflect the industry wide scenario of project costs increasing in line with sharp depreciation of the Rupee and resultant impact on import of capital goods. The project lenders are appraised of the matter and have commenced appropriate evaluation and approval of suitable remedial plan. Any resultant requirement of additional equity for completion of the project is planned to be suitable addressed both from internal accruals and appropriate fund raise.
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 2013, 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 2013.
· IFRS 13 Fair Value Measurement
· Presentation of items of Other Comprehensive Income (Amendments to IAS 1)
· IAS 19 Employee Benefits (2011)
· IFRIC 20 stripping cost in the production phase of surface mine
· IFRS 7 Financial instruments Disclosures - offsetting Financial Assets and Financial Liabilities
· Annual Improvements to IFRS 2009-2011 cycle
The nature and the effect of the changes are further explained below.
IFRS 13 Fair Value Measurement
IFRS 13 establishes a single framework for measuring fair value and making disclosures about fair value measurements, when such measurements are required or permitted by other IFRSs. In particular, it unifies the definition of fair value as the price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants at the measurement date. It also replaces and expands the disclosure requirements about fair value measurements in other IFRSs, including IFRS 7 Financial Instruments: Disclosures. Some of these disclosures are specifically required in interim financial statements for financial instruments; accordingly, the Group has included additional disclosures in this regard (see Note 14).
In accordance with the transitional provisions of IFRS 13, the Group has applied the new fair value measurement guidance prospectively, and has not provided any comparative information for new disclosures. Notwithstanding the above, the change had no significant impact on the measurements of the Group's assets and liabilities
Presentation of items of Other Comprehensive Income (Amendments to IAS 1)
As a result of the amendments to IAS 1, the Group has modified the presentation of items of other comprehensive income in its interim condensed consolidated income statement and statement of comprehensive income, to present separately items that would be reclassified to profit or loss in the future from those that would never be. Comparative information has also been re-presented accordingly. The adoption of the amendment to IAS 1 has no impact on the recognised assets, liabilities and comprehensive income of the Group.
IAS 19 Employee Benefits (2011)
IAS 19R includes a number of amendments to the accounting for defined benefit plans, including actuarial gains and losses that are now recognised in other comprehensive income (OCI) and permanently excluded from profit and loss; expected returns on plan assets that are no longer recognised in profit or loss, instead, there is a requirement to recognise interest on the net defined benefit liability (asset) in profit or loss, calculated using the discount rate used to measure the defined benefit obligation, and; unvested past service costs are now recognised in profit or loss at the earlier of when the amendment occurs or when the related restructuring or termination costs are recognised. Other amendments include new disclosures, such as, quantitative sensitivity disclosures.
In case of the Group, the transition to IAS 19R had an impact on the net defined benefit plan obligations due to the difference in accounting for interest on plan assets and unvested past service costs. The effect of the adoption of IAS 19R is explained in Note 15
IFRIC 20 stripping cost in the production phase of surface mine
This interpretation applies to waste removal (stripping) costs incurred in surface mining activity, during the production phase of the mine. Under the interpretation, the costs from this waste removal activity (stripping) which provide improved access to ore is recognised as a non-current asset (stripping activity asset) when certain criteria are met, whereas the cost of normal on-going operational stripping activities are accounted for in accordance with IAS 2 Inventories. The stripping activity asset is accounted for as an addition to, or as an enhancement of, an existing asset and classified as tangible or intangible according to the nature of the existing asset of which it form parts.
In case of the Group, the transition to IFRIC 20 had an impact on trade and other payable as the existing stripping cost liability balances has been written off to income statement. The effect of the adoption of IFRIC 20 is explained in Note 15.
IFRS 7 Financial instruments Disclosures - offsetting Financial Assets and Financial Liabilities
The amendment requires an entity to disclose information about rights to set-off financial instruments and related arrangements (e.g., collateral agreements). The disclosures would provide users with information that is useful in evaluating the effect of netting arrangements on an entity's financial position. The new disclosures are required for all recognised financial instruments that are set off in accordance with IAS 32. The disclosures also apply to recognised financial instruments that are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether the financial instruments are set off in accordance with IAS 32. As the Group is not setting off financial instruments in accordance with IAS 32 and does not have relevant offsetting arrangements, the amendment does not have an impact on the Group.
The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
3. Significant accounting judgements, estimates and assumptions
There have been no significant changes in the significant accounting judgments, estimates and assumptions applied for the purposes of the preparation of these interim condensed Consolidated and Company financial statements.
2.
4. Investments and other financial assets
Consolidated
Company
30 September 2013
31 March 2013
30 September 2013
31 March 2013
Current
Financial assets at fair value through profit or loss
- held-for-trading
1,714
3,293
-
-
Loans and receivables
63,187
66,429
9,237
9,557
Loans to and receivables from JV partners
12,013
11,742
-
-
76,914
81,464
9,237
9,557
Non-current
Financial assets at fair value through profit or loss
- Call option asset - premium
32,930
-
-
-
- Call option asset - option valuation
19,100
-
-
-
Available-for-sale investments
21,064
26,354
-
-
Deposit with banks
15,443
31,208
-
-
Loans and receivables
46,051
24 264
-
-
Loans to and receivables from JV partners
14,057
16,219
-
-
Loans to and receivable from subsidiaries
-
-
90,825
151,877
Investment in subsidiaries
-
-
213,114
143,314
148,645
98,045
303,939
295,191
Total
225,559
179,509
313,176
304,748
Impairment of financial assets
During the period ended 30 September 2013, the Group's available-for-sale financial asset of US $ 2,370 (31 March 2013: US $ 4,363) and loans and receivable of US $ 1,680 (31 March 2013: US $ 2,466) were collectively impaired.
During the period ended 30 September 2013, the Company's loans and receivable of US $ 326 (31 March 2013: US $ Nil) were collectively impaired.
5. Cash and short-term deposits
Cash and short-term deposits comprise of the following:
Consolidated
Company
30 September 2013
31 March 2013
30 September 2013
31 March 2013
Cash at banks and on hand
23,793
39,875
9
287
Short-term deposits
185,299
265,389
-
-
Total
209,092
305,264
9
287
For the purpose of cash flow statement, cash and cash equivalent comprise:
Consolidated
Company
30 September 2013
30 September 2012
30 September 2013
30 September 2012
Cash at banks and on hand
23,793
14,499
9
1,030
Short-term deposits
185,299
278,237
-
-
Total
209,092
292,736
9
1,030
Less: Restricted cash1
(185,186)
(275,358)
-
-
Cash and cash equivalent
23,906
17,378
9
1,030
1Include deposits pledged for availing credit facilities from banks and deposits with maturity term of three months to twelve months.
6. Interest-bearing loans and borrowings
The interest-bearing loans and borrowings comprise of the following:
Interest rate (range %)
Final Maturity
Consolidated
Company
30 September 2013
31 March 2013
30 September 2013
31 March 2013
Long-term "project finance" loans
3.39 to 16.75
March-26
1,839,296
1,908,435
-
-
Short-term loans
9.35 to 17.00
September-14
193,714
245,113
10,578
4,514
Buyers' credit facility
0.92 to 2.66
September-14
566,886
562,951
50,000
49,605
Cash credit and other working capital facilities
10.00 to 14.50
September-14
111,719
113,295
-
-
Redeemable preference shares
0.01 to 15.00
February-28
22,428
25,854
-
-
Total
2,734,043
2,855,648
60,578
54,119
The interest-bearing loans and borrowings mature as follows:
Consolidated
Company
30 September 2013
31 March 2013
30 September 2013
31 March 2013
Current liabilities
Amounts falling due within one year
1,046,764
1,021,122
60,578
54,119
Non-current liabilities
Amounts falling due after more than one year but not more than five years
882,706
1,184,566
-
-
Amounts falling due in more than five years
804,573
649,960
-
-
Total
2,734,043
2,855,648
60,578
54,119
Total debt of US $ 2,734,043 (31 March 2013: US $ 2,855,648) comprised:
· Long-term "project finance" loans of the Group amounting US $ 1,839,296 (31 March 2013: US $ 1,908,435) is fully secured on the property, plant and equipment and other assets of joint venture and subsidiaries that operate power stations, allied services and by a pledge over the promoter's shareholding in equity and preference capital of some of the joint ventures and subsidiaries.
· The short term loan taken by the Group is 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 KSK Energy Ventures Limited.
· 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.
7. Other financial liabilities
Consolidated
30 September 2013
31 March 2013
Current
Option premium payable
5,020
-
5,020
-
Non-Current
Provision for mark to market loss on derivative instruments
1,732
-
Option premium payable
29,653
-
31,385
-
Total
36,405
-
8. 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.
Period ended 30 September 2013
Project development activities
Power generating activities
Reconciling / Elimination activities
Consolidated
Revenue
External customers
54
150,621
-
150,675
Inter-segment
4,203
-
(4,203)
-
Total revenue
4,257
150,621
(4,203)
150,675
Segment operating results
3,206
30,311
(486)
33,031
Unallocated operating expenses, net
(2,667)
Finance costs
(174,368)
Finance income
28,757
Loss before tax
(115,247)
Tax income
35,651
Loss after tax
(79,596)
Segment assets
8,631
3,589,587
(1,624)
3,596,594
Unallocated assets
218,916
Total assets
3,815,510
Segment liabilities
3,026
495,356
(1,624)
496,758
Unallocated liabilities
2,835,314
Total liabilities
3,332,072
Other segment information
Depreciation and amortisation
142
18,461
53
18,656
Capital expenditure
3
206,372
45
206,420
Period ended 30 September 2012
Project development activities
Power generating activities
Reconciling / Elimination activities
Consolidated
Revenue
External customers
1,164
197,456
-
198,620
Inter-segment
4,445
-
(4,445)
-
Total revenue
5,609
197,456
(4,445)
198,620
Segment operating results
4,329
55,754
(476)
59,607
Unallocated operating expenses, net
(924)
Finance costs
(58,150)
Finance income
34,117
Profit before tax
34,650
Tax income
1,752
Profit after tax
36,402
Segment assets
22,603
3,690,753
(2,797)
3,710,559
Unallocated assets
191,923
Total assets
3,902,482
Segment liabilities
3,140
451,906
(2,797)
452,249
Unallocated liabilities
2,791,564
Total liabilities
3,243,816
Other segment information
Depreciation and amortisation
197
19,402
46
19,645
Capital expenditure
140
489,010
94
489,244
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 $ 28,757 and US $ 174,368 respectively (30 September 2012: US $ 34,117 and US $ 58,150 respectively).
(c) Segment assets do not include deferred tax asset of US $ 42,858 (30 September 2012: US $ 20,679), financial assets and other investments US $ 133,113 (30 September 2012: US $ 122,620), short-term deposits with bank and cash US $ 7,075 (30 September 2012: US $ 16,396), and corporate assets US $ 35,870 (30 September 2012: US $ 32,228).
(d) Segment liabilities do not include deferred tax US $ 25,523 (30 September 2012:US $ 35,394), current tax payable US $ 1,016 (30 September 2012: US $ 3,744), interest-bearing current and non-current borrowings US $ 2,734,043 (30 September 2012: US $ 2,720,178), other financial liability US $ 36,405 (30 September 2012: US $ Nil) and corporate liabilities US $ 38,327 (30 September 2012: US $ 32,248).
(e) One customer in the power generating segment contributing revenues of US $ 60,951 (30 September 2012: US $ 90,606) accounted for 40.47% (30 September 2012: 45.89%) of the total segment revenue.
9. Finance costs
Finance costs comprise:
Consolidated
Company
30 September 2013
30 September 2012
30 September 2013
30 September 2012
Interest expenses on loans and borrowings 1
44,872
54,130
422
728
Other finance costs
9,673
2,295
1,130
2
Provision for impairment of financial assets
2,370
1,168
-
-
Foreign exchange loss, net2
116,649
-
415
359
Net loss on held-for-trading financial assets
on disposal
-
4
-
-
on re-measurement
2
-
-
-
Unwinding of discounts
802
553
-
-
Total
174,368
58,150
1,967
1,089
1Borrowing cost capitalised during the period amounting to US $ 134,276 (30 September 2012: US $ 99,670).
2 Includes loss on account of restatement of foreign currency loans and trade payables amounting to US $ 110,933 (30 September 2012: US $ Nil)
10. Finance income
The finance income comprises:
Consolidated
30 September 2013
30 September 2012
Interest income
bank deposits
10,079
13,624
loans and receivables
2,576
2,942
Dividend income
70
383
Net gain on held-for-trading financial assets
on disposal
1
-
on re-measurement
-
22
Unwinding of discount on security deposits
714
465
Net gain on financial liability at fair value through profit or loss , net
15,317
-
Foreign exchange gain, net1
-
16,666
Reclassification adjustment in respect of available-for- sale financial assets disposed
-
15
Total
28,757
34,117
1 Includes gain on account of restatement of foreign currency loans and trade payables amounting to US $ Nil (30 September 2012: US $ 8,250)
11. Tax income / (expense)
The major components of income tax for the period ended 30 September 2013 and 30 September 2012 are:
30 September 2013
30 September 2012
Current tax
(1,936)
(5,671)
Deferred tax
37,587
7,423
Tax income reported in the income statement
35,651
1,752
12. Related party transactions
Name of the Company
Nature of relationship
K&S Consulting Group Private Limited
Group ultimate parent (GUP)
Sayi Energy Ventur Limited
Parent
Key management personnel and their relatives (KMP):
Name of the party
Nature of relationship
T L Sankar
Chairman
S Kishore
Executive Director
K A Sastry
Executive Director
S R Iyer
Director
Vladimir Dlouhy
Director
Abhay M Nalawade
Director
K. V. Krishnamurthy
Director of parent
Related party transactions during the period
The following table provides the total amount of transactions that have been entered into with related parties and the outstanding balances at the end of the relevant financial period:
Particulars
Consolidated
Company
30 September 2013
30 September 2012
30 September 2013
30 September 2012
Joint Venture
GUP
KMP
Joint Venture
GUP
KMP
Subsidiaries
KMP
Subsidiaries
KMP
Transactions1
Project development fees and corporate support services fees
54
-
-
1,164
-
-
-
-
-
-
Interest income
1,846
-
-
2,044
-
-
-
-
-
-
Interest expense
10
-
-
-
-
-
-
-
-
-
Sale of material
820
-
-
-
-
-
-
-
-
-
Capacity charges
403
-
-
-
-
-
-
-
-
-
Inter-corporate deposits and loans given
11,967
-
-
3,986
26
-
5,000
-
48
-
Inter-corporate deposits and loans refunded
(10,851)
-
-
(3,478)
-
-
-
-
-
-
Loan taken
1,176
-
-
-
-
-
78
-
-
-
Repayment of loan taken
(329)
-
-
-
-
-
-
-
-
-
Managerial remuneration 2
-
-
280
-
-
318
-
98
-
100
30 September 2013
30 September 2012
30 September 2013
30 September 2012
Balances 1
Interest receivable
3,695
-
-
3,570
-
-
-
-
-
-
Interest payable
9
-
-
-
-
-
-
-
-
Loans and inter corporate deposits receivable
26,070
983
26,290
1,159
-
90,835
-
157,954
-
Loans payable
793
-
-
-
-
-
78
-
-
-
Other receivable
26
-
-
1,192
-
-
-
-
-
-
Other payable
378
-
-
-
-
-
-
-
-
-
Managerial remuneration payable2
-
-
73
-
-
26
-
-
-
-
1The 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. There have been no guarantees provided or received for any related party receivables or payables. For the period ended 30 September 2013, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (30 September 2012: 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 Remuneration is net of accrual towards Gratuity, a defined benefit plan, which is managed for the Company 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.
13. Commitments and contingencies
Capital commitments
As at 30 September 2013, the Group is committed to purchase property, plant and equipment for US $ 1,343,080 (31 March 2013: US $ 1,429,536). In respect of its interest in joint ventures the Group is committed to incur capital expenditure of US $ 966 (31 March 2013: US $ 1,114).
Guarantees
· The Company has guaranteed the loans and non-fund based facilities availed by subsidiaries to unrelated parties for US $ 215,549 (31 March 2013: US $ 207,945) and
· The Group guaranteed the performance of the joint ventures under the power delivery agreements to unrelated parties. No liability is expected to arise.
14. Financial Instruments
Carrying amounts versus fair values
The fair values of financial assets and financial liabilities, together with the carrying amounts in the Interim condensed consolidated statement of financial position, are as follows:
Carrying amount
Fair value
September 2013
September 2013
Non- current financial assets
Trade and other receivables
4,588
4,588
Equity securities - available-for-sale
21,064
21,064
Loans and receivables
60,108
60,108
Call option asset - Premium
32,930
32,930
Call option asset - Option valuation
19,100
19,100
Non-current bank deposits
15,443
15,443
Total non-current
153,233
153,233
Current financial assets
Trade and other receivables
134,356
134,356
Equity securities - held for trading
123
123
Debt securities-held for trading
1,591
1,591
Loans and receivables
75,200
75,200
Cash and short-term deposits
209,092
209,092
Total current
420,362
420,362
Total
573,595
573,595
Non- current financial liabilities
Trade and other payables
55,795
55,795
Interest bearing loans and borrowings
1,687,279
1,687,279
Interest rate swaps
1,732
1,732
Option premium payable
29,653
29,653
Total non-current
1,774,459
1,774,459
Current financial liabilities
Trade and other payables
459,680
459,680
Interest bearing loans and borrowings
1,046,764
1,046,748
Option premium payable
5,020
5,020
Total current
1,511,464
1,511,448
Total
3,285,923
3,285,907
The fair values of financial assets and financial liabilities, together with the carrying amounts in the Interim condensed company statement of financial position, are as follows:
Carrying amount
Fair value
September 2013
September 2013
Non-current financial assets
Loans and receivables
90,825
90,825
Investment in subsidiaries
213,114
213,114
Total non-current
303,939
303,939
Current financial assets
Loans and receivables
9,237
9,237
Cash and short-term deposits
9
9
Total current
9,246
9,246
Total
313,185
313,185
Current financial liabilities
Trade and other payables
1,305
1,305
Interest bearing loans and borrowings
60,578
60,578
Total current
61,883
61,883
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 included within Level 1 that are observable for the asset or liability, either directly or indirectly.
• Level 3: valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
30 September 2013
Level 1
Level 2
Level 3
Total
Financial assets measured at fair value
Equity securities - available-for-sale
1,900
-
19,164
21,064
Equity securities - held for trading
123
-
-
123
Debt securities-held for trading
1,591
-
-
1,591
Call option asset - Premium
-
32,930
-
32,930
Call option asset - Option valuation
-
19,100
-
19,100
Total
3,614
52,030
19,164
74,808
Financial liabilities measured at fair value
Interest rate swaps
-
1,732
-
1,732
Option premium payable
-
34,673
-
34,673
Total
-
36,405
-
36,405
The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the transfer has occurred. During the six-month period ended 30 September 2013, there were no transfers between Level 1 and Level 2 fair value measurements. However an amount of US $ 18,885 has been transferred from Level 2 to Level 3.
Reconciliation of Level 3 fair value measurements of financial assets:
30 September 2013
Available-for-sale
Total
Unquoted Equities
Opening balance
322
322
Total gains or losses:
- in income statement
-
-
- in other comprehensive income
(43)
(43)
Settlements
-
-
Transfers into level 3
18,885
18,885
Closing balance
19,164
19,164
Total gains or losses for the period shown above, relates to available for sale securities held at the end of the reporting period.
Valuation techniques
Level 2 fair values for simple over-the-counter derivative financial instruments are based on broker quotes. Those quotes are tested for reasonableness by discounting expected future cash flows using market interest rate for a similar instrument at the measurement date. Fair values reflect the credit risk of the instrument and include adjustments to take account of the credit risk of the Group entity and counterparty when appropriate.
Level 3 fair values for equity securities-available for sale has been determined by using Comparable Company Analyses. This is a relative valuation technique which involves comparing that company's valuation multiples to those of its peers. The multiples consider for the valuation is P/B for book value which is then adjusted for differences that are directly related to the characteristics of equity instruments being valued such as discounting factor for size and liquidity of 15%.
Level 3 fair value of the unquoted venture capital units has been determined using a discounted cash flow model. The valuation requires management to make certain assumptions about unobservable inputs to the model, of which the significant unobservable inputs are disclosed in the table below.
Average growth rate for cash flows in subsequent years 3.00%
Discount rate 12.52%
Apart from the above, forecast cash flows for first five years is a significant unobservable input. The management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value. An increase in the forecast cash flows and the growth rate for cash flows in the subsequent periods would both lead to an increase in the fair value of the equity instruments. An increase in the discount rate used to discount the forecast cash flows would lead to a decrease in the fair value of the units. The significant unobservable inputs are not interrelated. The fair value of the units is not significantly sensitive to a reasonable change in the forecast cash flows or the discount rate, however it is to a reasonable change in the growth rate.
15. Note on change in accounting policy
Consequent to amendments in new accounting standards as enumerated in note 2, the Group has restated the statement of financial performance and position of the Group for the six month period ended 30 September 2012 and the year ended 31 March 2013 so as to show the impact of applicable accounting standards for the Group. The impact of adoption of these new accounting standards is as follows:
A. Income statement, Statement of comprehensive income and statement of financial positionfor the six months ended 30 September 2013
Income Statement
IFRIC 20
IAS 19 R
Total
Cost of revenue
1,285
-
1,285
General and administrative expenses
-
(145)
(145)
Tax income / (expense)
(477)
118
(359)
(Loss) / profit for the period
808
(27)
781
Attributable to:
Owners of the Company
577
(6)
571
Non-controlling interests
231
(21)
210
808
(27)
781
Statement of Comprehensive Income
(Loss) / profit for the period
808
(27)
781
Re-measurement of defined benefit liability
-
349
349
Income tax relating to re-measurement of defined benefit liability
-
(112)
(112)
Foreign currency translation differences
(306)
-
(306)
Total
502
210
712
Attributable to:
Owners of the Company
326
210
536
Non-controlling interests
176
-
176
502
210
712
IFRIC 20
IAS 19 R
Total
Property, plant and equipment
-
576
576
Foreign currency translation reserve
(390)
(83)
(473)
Other reserves
-
803
803
Retained earnings / (accumulated deficit)
2,318
(156)
2,162
Equity attributable to owners of the Company
1,928
564
2,492
Non-controlling interests
502
(4)
498
Deferred tax liability
1,250
1
1,251
Employee benefit liability
-
15
15
Trade and other payables
(3,680)
-
(3,680)
B. Income statement, Statement of comprehensive income for the six months ended 30 September 2012
Income Statement
As reported at 30 September 2012
IFRIC 20
IAS 19 R
As restated at 30 September 2012
Revenue
198,620
-
-
198,620
Cost of revenue
(128,295)
443
-
(127,852)
Gross profit
70,325
443
-
70,768
Other operating income
864
-
-
864
Distribution costs
(2,610)
-
-
(2,610)
General and administrative expenses
(10,280)
-
(59)
(10,339)
Operating profit / (loss)
58,299
443
(59)
58,683
Finance costs
(58,150)
-
-
(58,150)
Finance income
34,117
-
-
34,117
(Loss) / profit before tax
34,266
443
(59)
34,650
Tax income / (expense)
1,738
(88)
102
1,752
(Loss) / profit for the period
36,004
355
43
36,402
Attributable to:
Owners of the Company
25,542
312
30
25,884
Non-controlling interests
10,462
43
13
10,518
36,004
355
43
36,402
Statement of Comprehensive Income
(Loss) / profit for the period
36,004
355
43
36,402
Items that will never be reclassified to income statement
Re-measurement of defined benefit liability
-
-
304
304
Income tax relating to re-measurement of defined benefit liability
-
-
(101)
(101)
Total
-
-
203
203
Items that are or may be reclassified subsequently to income statement
Foreign currency translation differences
(5,775)
(6)
21
(5,760)
Available-for-sale financial assets
-
- current period losses
(328)
-
-
(328)
- reclassification to income statement
1,153
-
-
1,153
Income tax relating to available for sale financial asset
59
-
-
59
Other comprehensive (expense) / income, net of tax
(4,891)
(6)
21
(4,876)
Total comprehensive (expense) / income for the period
31,113
349
267
31,729
Attributable to:
Owners of the Company
22,667
307
268
23,242
Non-controlling interests
8,446
42
(1)
8,487
31,113
349
267
31,729
C. Statement of financial position for the year ended 31 March 2013.
As reported at 31 March 2013
IFRIC 20
IAS 19 R
As restated at 31 March 2013
Property, plant and equipment
3,273,033
-
438
3,273,471
Foreign currency translation reserve
(78,380)
(139)
(16)
(78,535)
Other reserves
141,674
-
588
142,262
Retained earnings / (Accumulated deficit)
119,337
1,741
(139)
120,939
Equity attributable to owners of the Company
439,536
1,602
433
441,571
Non-controlling interests
199,290
326
(1)
199,615
Deferred tax liability
35,063
926
(4)
35,985
Employee benefit liability
1,050
-
11
1,061
Trade and other payables
441,518
(2,854)
-
438,664
D. Statement of financial position for the year ended 1 April 2012
As reported at 1 April 2012
IFRIC 20
IAS 19 R
As restated at 1 April 2012
Property, plant and equipment
2,685,771
-
49
2,685,820
Foreign currency translation reserve
(58,783)
(102)
4
(58,881)
Other reserves
140,189
-
226
140,415
Retained earnings / (Accumulated deficit)
98,407
1,252
(184)
99,475
Equity attributable to owners of the Company
436,825
1,150
46
438,021
Non-controlling interests
188,192
252
(2)
188,442
Deferred tax liability
37,699
401
(2)
38,098
Employee benefit liability
947
-
7
954
Trade and other payables
287,701
(1,803)
-
285,898
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGGMGGUPWGRR
