RNS Number : 9598R
KSK Power Ventur PLC
26 November 2012
26 November 2012
KSK Power Ventur plc
("KSKPV" or the "Company")
Interim Results for the six months ended 30 September 2012
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 2012.
Financial Highlights
· Group Revenue increased 9% to $198.62 m (H1 2011: $182.97m)
· Gross Profit increased 28% to $70.33 m (H1 2011: $54.98m)
· Operating Profit increased 33% to $58.30 m (H1 2011: $43.92m)
· Profit before tax increased to $34.27 m (H1 2011: loss of $35.94m )
· Investments in Property Plant and Equipment increased 16% to $3,118 m (Mar 2012: $2,686 m)
The underlying revenue growth of 30% at the rupee level has been strong and profitability for the period has been in line with management expectation given the current trading environment. However, the currency depreciation of the Indian Rupee against the US Dollar of c.20%, since September 2011, has led to reporting of more moderate revenue growth of 9% in US Dollar terms and the associated performance. This is illustrated in the table below.
Comparison of results
As published
Sep 12 translated at Sep 2011 Rupee/USD exchange rate
Particulars
30 Sep 2012 (In USD m)
30 Sep 2011 (In USD m)
% change
30 Sep 2012 (In USD m)
30 Sep 2011 (In USD m)
% change
Revenue
198.62
182.97
9%
238.18
182.97
30%
Gross Profit
70.33
54.98
28%
84.33
54.98
53%
Operating profit
58.30
43.92
33%
69.91
43.92
59%
Profit/(loss) Before Tax
34.27
(35.94)
195%
41.09
(35.94)
214%
Average exchange rate Rupee/USD
Rs 54.85/$
Rs 45.74/$
20%
Rs 45.74/$
Rs 45.74/$
-
Operating Highlights
· Operating capacity of 881 MW recorded an aggregate generation of 2,744 million units ("MU") as against 2,252 MU with operating capacity of 933 MW for the similar period in 2011, with the following individual Plant Load Factors ("PLF")
Wardha Warora (540 MW)
1,728 MU
(73%)
VS Lignite (135 MW)
420 MU
(71%)
Sai Regency (58 MW)
227 MU
(89%)
Arasmeta & Arasmeta Expansion (86 MW)
168 MU
(44%)
Sitapuram Power (43 MW)
165 MU
(87%)
Wind Project (19 MW)
37 MU
(44%)
· The 3,600 MW KSK Mahanadi power project is under construction with good progress being made
o Immediate focus and priority continues on the commissioning of the first two units of 600 MW each during 2013, along with the development of ancillary common infrastructure facilities, as well as the commencement of fuel supplies;
o Back charging of 400kV Switchyard completed in Aug-12 and Turbine Generator box up for the first unit was successfully completed in first week of November 2012 and the second unit, expected to be completed in the fourth quarter of FY2012-13.;
o Continued progress is being made on the balance of the four units of 600 MW each.
Commenting on the results, T.L.Sankar, Chairman of KSK said:
"The operational results are very satisfactory given the current challenging times and economic environment.
The period under consideration continues to be a difficult time for the power sector in India. The Group has continued its efforts to address the various challenges and continues to make good progress in the KSK Mahanadi project. As regards fuel arrangements for this large project, while pursuing and anticipating a suitable resolution of the Morga-II Coal block issue by the Government of India, the Group anticipates that in the immediate term fuel supplies from Tapering Linkage from Coal India as well as supplies from Gare Pelma will enable us to take forward the initially planned power generation from KSK Mahanadi.
In addition to the resolution of fuel supply issues through the interim and long term supply arrangements using a mix of appropriate sources, a major effort is now being required of the management to address various supply chain challenges with respect to operational assets and addressing on the ground challenges to synchronise planned generation with fuel supplies for construction assets.
We anticipate that despite these challenges in the Power sector and the continuing exchange rate volatility through the current year, that will create potential distortions to immediate term consolidated financials (as a result of accounting treatment with respect to translation differences of currencies), the underlying assets and associated performance will continue to meet expectations. 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 Mr. S. Kishore, Executive Director Mr. K. A. Sastry, Executive Director
+91 40 2355 9922
Arden Partners plc Richard Day / Adrian Trimmings
+44 (0)20 7614 5900
Key Business Updates
OPERATING POWER PLANTS
· 540 MW WARDHA POWER COMPANY LIMITED (WPCL):
The total gross power generated in the plant during the review period stood at 1728 MU with an average Plant Load Factor (PLF) of 73%, notwithstanding the planned maintenance shut down during the period. Supplies of lower cost coal from cost plus linkage coal block has now commenced and the Company continues its efforts to optimize the supply chain to realise further cost savings, accompanied by the sale of power under open access, to improve plant utilization and the profit margins of the Company. The Company continues to pursue its earlier efforts on debt refinancing and expects to conclude them shortly, in the second half of the year, which should further enhance financial performance.
· 135 MW VS LIGNITE POWER PRIVATE LIMITED (VSLP):
The total gross power generated in the plant during the review period stood at 420 MU with an average PLF of 71%. The PLF% for the first six months of the financial year 2012-13 has been on the lower side due to the outage during September 2012, but we are anticipating the uninterrupted efficient operation of the Plant in the latter half of the year, will enable annualized PLF at anticipated levels of 78%. 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.
· 86 MW ARASMETA CAPTIVE POWER COMPANY PRIVATE LIMITED (ACPCPL):
The total gross power generated in the plant during the first half year stood at 168 MU with an average PLF of 44% primarily on account of the limited off take by Lafarge India. With the coal supply agreement for an additional 43 MW having been executed with Coal India's subsidiary South Eastern Coalfields Limited (SECL), the Company anticipates that increased consumption by Lafarge India will lead to the improved asset utilization, and the associated strengthening of revenue realization at the plant.
· 58 MW SAI REGENCY POWER CORPORATION PRIVATE LIMITED (SRPCPL):
The total gross power generated in the plant during the review period stood at 227 MU with an average PLF of 89% in the combined cycle gas based power plant. With the continuous supply of gas and the 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 165 MU with an average PLF of 87%. Though the fuel cost for the review period has increased due to increases in coal prices from the Singareni Collieries Company, as well as from Open Market purchases. The entire energy generated in the period has been purchased by the captive consumers with the fuel cost increase being passed through to the captive customers.
· 19 MW WIND ASSETS
These wind assets (nine Wind Turbine machines of 2.1 MW each) generated 37 MU with an average PLF of 44%, during the first half year of FY2012-13. Since the period under review accounts for the significant period of the production season (being the pre-monsoon and monsoon period) it is anticipated that annualised PLF for the full year will stabilize around mid-twenties.
CONSTRUCTION PROGRESS ON 3.6 GW KSK MAHANADI POWER PROJECT:
The construction activity of KSK Mahanadi, a large, single location, greenfield private power plant, is now in full swing, with more than 10,000 workers at the project site. As regards to the on-site construction progress:
· Boiler drum lifting has been achieved for the initial three units of 600 MW each and it is anticipated that boiler light up for the first unit of 600 MW, on a test basis, will be achieved within the next 60 days and the boiler hydro test for the second unit is anticipated to be completed before the year end;
· Turbine generator box up for the first unit was successfully completed in the first week of November 2012
· Shell casting for both the chimneys is complete, with flue duct fabrication works and insertion completion is in progress;
· Switch Yard and Transformer Yard is ready for operation, with back charging of 400kV Switchyard completed in August 2012;
· Transmission system complete with necessary towers and one double circuit transmission line fully complete, with second line under advanced progress
· The entire 60 km pipeline laying work for the water intake system for the power plant has been completed. The water reservoir inside the plant is completed,
· The construction works for rail connectivity of the power plant to the Indian Rail network is at an advanced stage, with track linking in progress
CONSTRUCTION PROGRESS ON 10 MW SOLAR POWER PROJECT:
The Group continued its efforts in developing the 10 MW PV solar power generation plant in the state of Rajasthan under the Jawaharlal Nehru National Solar Mission, linked with a power purchase agreement for 25 years with the prescribed government agency. Significant progress has been made on the project. We have achieved debt tie-up, executed an EPC contract, started site preparation works and are anticipating completion of the plant construction in the next three to six months.
OUTLOOK
While the economic outlook in the short and medium term continues to be challenging and the government policy and decision making uncertainties continuing, the Indian economic growth potential and unfulfilled demand for power generation is expected to only continue and grow through the coming decade. KSK is well positioned in this regard and we expect significant unit commissioning in the coming year, as increased asset utilisation and lower cost fuel supply arrangements are implemented.
With an exciting portfolio of power assets and appropriate fuel arrangements secured, the Group has a strong and sustainable power generation portfolio.
An extract of the Interim Condensed Consolidated and Company Financial Statements for the six months ended 30 September 2012 is shown below. A full set of accounts is available from the Company website: www.kskplc.co.uk
PRINCIPAL RISKS AND UNCERTAINITIES
The business of the Group is subject to a variety of risks and uncertainties which, if they occur may have a materially adverse effect on the Group's business or financial condition, results or future operations. The risks & uncertainties set out in this document are not exhaustive and there may be risks of which the Board is not aware or believes to be immaterial, which may, in the future, adversely affect the Group's business. The risks & uncertainties faced by the Group and the industry as a whole are provided in detail in the Annual Report of the Company for the year 2011-12. Majority of the risks identified in the Annual Report have not changed. while the Company attempts to address the same, the key risks & uncertainties continued to be faced by the Group are as follows:
o Delays in government decisions or implementation of earlier government decisions along with continual inconsistencies in government policies across any departments and any retrospective amendments to the existing policies or introduction of new policies
o Shortage of fuel and dependence on market based / imported fuel which are subject to the market vagaries and other uncertainties
o Economic slowdown and negative sectoral outlook with resultant impact on the banking sector delays in agreed project disbursements
o 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
o Logistics bottlenecks and other infrastructure constraints of various agencies
o Challenges in development of support infrastructure for the power projects including physical hindrances and delay in issue of permits and clearances associated with land acquisitions
o Political and economic instability and global financial turmoil and resultant fiscal & monetary policies as well as currency depreciation resulting in increasing cost structures
DIRECTORS RESPONSIBILITIES IN RESPECT OF CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT
The directors are responsible for preparing the condensed consolidated interim financial statements in accordance with applicable law and regulations. In addition, the directors have elected to prepare the condensed consolidated interim financial statements in accordance with International Financial Reporting Standards.
The condensed consolidated 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 interim financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with International Financial Reporting Standards; and
• prepare the condensed consolidated 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 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
o The condensed set of interim consolidated 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
o 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 financial statements; and a description of the principal risks & uncertainties for the remaining six months of the year.
o 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
INDEPENDENT REVIEW REPORT
INTERIM CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
as at 30 September 2012
(All amount in thousands of US $, unless otherwise stated)
Consolidated
Company
Notes
30 September 2012
31 March 2012
30 September 2012
31 March 2012
(Unaudited)
(Audited)
(Unaudited)
(Audited)
ASSETS
Non-current
Property, plant and equipment
3
3,118,451
2,685,771
1
1
Intangible assets and goodwill
23,189
23,589
-
-
Other non-current assets
62,200
58,722
-
-
Investments and other financial assets
4
96,459
109,356
310,579
309,853
Trade and other receivables
3,514
5,995
-
-
Deferred tax asset
20,679
14,273
-
-
3,324,492
2,897,706
310,580
309,854
Current
Inventories
34,314
21,960
-
-
Trade and other receivables
133,510
97,805
-
-
Investments and other financial assets
4
81,046
85,461
332
332
Cash and short-term deposits
5
292,736
417,585
1,030
1,598
Other current assets
36,067
39,648
44
75
577,673
662,459
1,406
2,005
Total assets
3,902,165
3,560,165
311,986
311,859
EQUITY AND LIABILITIES
Issued capital
263
263
263
263
Share premium
253,890
253,890
253,890
253,890
Foreign currency translation reserve
(62,509)
(58,783)
13,491
12,217
Revaluation reserve
2,806
2,859
-
-
Other reserves
141,040
140,189
-
-
Retained earnings / (Accumulated deficit)
121,716
98,407
(9,915)
(8,455)
Equity attributable to owners of the Company
457,206
436,825
257,729
257,915
Non-controlling interests
199,399
188,192
-
-
Total equity
656,605
625,017
257,729
257,915
Non-current liabilities
Trade and other payables
7
52,372
48,981
-
-
Interest-bearing loans and borrowings
6
1,509,210
1,409,050
-
-
Provisions
2,538
2,480
-
-
Deferred revenue
10,059
9,150
-
-
Employee benefit liability
825
947
-
-
Deferred tax liability
34,910
37,699
-
-
1,609,914
1,508,307
-
-
Current liabilities
Trade and other payables
7
414,056
287,701
1,286
1,469
Interest-bearing loans and borrowings
6
1,210,968
1,128,911
52,971
52,475
Deferred revenue
985
984
-
-
Other current liabilities
5,893
6,417
-
-
Taxes payable
3,744
2,828
-
-
1,635,646
1,426,841
54,257
53,944
Total liabilities
3,245,560
2,935,148
54,257
53,944
Total equity and liabilities
3,902,165
3,560,165
311,986
311,859
(See accompanying notes to the interim condensed Consolidated and Company financial statements)
Approved by the Board of Directors on 24 November 2012 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 2012
(All amount in thousands of US $, unless otherwise stated)
Consolidated
Company
Notes
30 September 2012
30 September 2011
30 September 2012
30 September 2011
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Revenue
8
198,620
182,966
-
-
Cost of revenue
(128,295)
(127,990)
-
-
Gross profit
70,325
54,976
-
-
Other operating income / (expense), net
864
(266)
42
-
Distribution costs
(2,610)
(862)
-
-
General and administrative expenses
(10,280)
(9,931)
(413)
(385)
Operating profit / (loss)
58,299
43,917
(371)
(385)
Finance costs
9
(58,150)
(98,221)
(1,089)
(1,427)
Finance income
10
34,117
18,369
-
737
Profit / (loss) before tax
34,266
(35,935)
(1,460)
(1,075)
Tax income
11
1,738
225
-
-
Profit / (loss) for the period
36,004
(35,710)
(1,460)
(1,075)
Attributable to:
Owners of the Company
25,541
(19,949)
(1,460)
(1,075)
Non-controlling interests
10,463
(15,761)
-
-
36,004
(35,710)
(1,460)
(1,075)
Earnings / (loss) per share
Weighted average number of ordinary shares for basic and diluted earnings per share
159,378,600
151,789,145
Basic and diluted (US $)
0.16
(0.13)
(See accompanying notes to the interim condensed Consolidated and Company financial statements)
Approved by the Board of Directors on 24 November 2012 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 2012
(All amount in thousands of US $, unless otherwise stated)
Consolidated
Company
Notes
30 September 2012
30 September 2011
30 September 2012
30 September 2011
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Profit / (loss) for the period
36,004
(35,710)
(1,460)
(1,075)
Other comprehensive income
Foreign currency translation differences
(5,775)
(69,367)
1,274
2,216
Available-for-sale financial assets
- current period gains / (losses)
(328)
(494)
-
-
- reclassification to profit or loss
1,153
1,061
-
-
Reclassification of reserve on deemed disposal of interest in joint venture
-
(2,485)
-
-
Income tax relating to available for sale financial asset
59
-
-
-
Other comprehensive income, net of tax
(4,891)
(71,285)
1,274
2,216
Total comprehensive income for the period
31,113
(106,995)
(186)
1,141
Attributable to:
Owners of the Company
22,666
(61,549)
(186)
1,141
Non-controlling interests
8,447
(45,446)
-
-
31,113
(106,995)
(186)
1,141
(See accompanying notes to the interim condensed Consolidated and Company financial statements)
Approved by the Board of Directors on 24 November 2012 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 2011 (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 2011 (Audited)
151,789,145
251
194,435
(260)
6,219
217,112
97,336
515,093
335,595
850,688
Deferred tax on share issue expenses
-
-
-
-
-
(421)
-
(421)
-
(421)
Non-controlling interests arising on business combination
-
-
-
-
-
-
-
-
14,077
14,077
Acquisition of non-controlling interests without change in control
-
-
-
-
-
-
-
-
(9)
(9)
Transfer of economic interest to non-controlling interests1
-
-
-
-
-
-
320
320
(320)
-
Net depreciation transfer for property, plant and equipment
-
-
-
-
(64)
-
64
-
-
-
Transaction with owners
-
-
-
-
(64)
(421)
384
(101)
13,748
13,647
Profit/(loss) for the period
-
-
-
-
-
-
(19,949)
(19,949)
(15,761)
(35,710)
Other comprehensive income
Foreign currency translation differences
-
-
-
(39,422)
-
-
-
(39,422)
(29,945)
(69,367)
Available-for-sale financial assets
- current period gains / (losses)
-
-
-
-
-
(369)
-
(369)
(125)
(494)
- reclassification to profit or loss
-
-
-
-
-
676
-
676
385
1,061
Reclassification of reserves on deemed disposal of interest in Joint venture
-
-
-
-
(3,239)
(2,485)
3,239
(2,485)
-
(2,485)
Total comprehensive income for the period
-
-
-
(39,422)
(3,239)
(2,178)
(16,710)
(61,549)
(45,446)
(106,995)
Balance as at 30 September 2011 (Unaudited)
151,789,145
251
194,435
(39,682)
2,916
214,513
81,010
453,443
303,897
757,340
(See accompanying notes to interim condensed 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 statement of comprehensive income. However, the non-controlling interest disclosed in Statement of changes in equity is calculated in the proportion of the actual shareholding as at the reporting date.
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 (Audited)
159,378,600
263
253,890
(58,783)
2,859
140,189
98,407
436,825
188,192
625,017
Issuance of equity shares by subsidiary
-
-
-
-
-
-
-
-
475
475
Transfer of economic interest to non-controlling interests1
-
-
-
-
-
-
(2,285)
(2,285)
2,285
-
Net depreciation transfer for property, plant and equipment
-
-
-
-
(53)
-
53
-
-
-
Transaction with owners
-
-
-
-
(53)
-
(2,232)
(2,285)
2,760
475
Profit for the period
-
-
-
-
-
-
25,541
25,541
10,463
36,004
Other comprehensive income
Foreign currency translation differences
-
-
-
(3,726)
-
-
-
(3,726)
(2,049)
(5,775)
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
-
-
-
(3,726)
-
851
25,541
22,666
8,447
31,113
Balance as at 30 September 2012 (Unaudited)
159,378,600
263
253,890
(62,509)
2,806
141,040
121,716
457,206
199,399
656,605
(See accompanying notes to interim condensed 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 statement of comprehensive income. However, the non controlling interest disclosed in Statement of changes in equity is calculated in the proportion of the actual shareholding as at the reporting date.
INTERIM COMPANY STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2012
(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 2011 (Audited)
151,789,145
251
194,435
7,511
(4,577)
197,620
Loss for the period
-
-
-
-
(1,075)
(1,075)
Other comprehensive income
Foreign currency translation differences
-
-
-
2,216
-
2,216
Total comprehensive income for the period
-
-
-
2,216
(1,075)
1,141
Balance as at at 30 September 2011 (Unaudited)
151,789,145
251
194,435
9,727
(5,652)
198,761
As at 1 April 2012 (Audited)
159,378,600
263
253,890
12,217
(8,455)
257,915
Loss for the period
-
-
-
-
(1,460)
(1,460)
Other comprehensive income
Foreign currency translation differences
-
-
-
1,274
-
1,274
Total comprehensive income for the period
-
-
-
1,274
(1,460)
(186)
Balance as at 30 September 2012 (Unaudited)
159,378,600
263
253,890
13,491
(9,915)
257,729
(See accompanying notes to interim condensed Consolidated and Company financial statements)
INTERIM CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS
for the six months ended 30 September 2012
(All amount in thousands of US $, unless otherwise stated)
Consolidated
Company
30 September 2012
30 September 2011
30 September 2012
30 September 2011
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Cash inflow / (outflow) from operating activities
Profit / (loss) before tax
34,266
(35,935)
(1,460)
(1,075)
Adjustment
Depreciation and amortization
19,645
21,114
-
-
Finance cost
56,982
92,312
1,085
1,427
Finance income
(25,007)
(18,369)
-
(690)
Impairment of other assets
1,168
1,084
-
-
Loss on re-measurement of equity interest
-
1,640
-
-
others
(35)
(171)
-
-
Change in working capital assets and liabilities
Trade receivables and unbilled revenue
(37,850)
(39,068)
-
-
Inventories
(12,354)
(12,126)
-
-
Other assets
5,227
(5,885)
31
(126)
Trade payables and other liabilities
16,604
18,327
(196)
500
Provisions and employee benefit liability
(122)
(232)
-
-
Cash generated from / (used in) operation activities
58,524
22,691
(540)
36
Taxes paid, net
(6,212)
(3,486)
-
-
Net cash provided by / (used in) operating activities
52,312
19,205
(540)
36
Cash inflow / (outflow) from investing activities
Movement in restricted cash
22,041
(11,685)
-
9,980
Purchase of property, plant and equipment & other non-current assets
(283,566)
(302,865)
-
(1)
Proceed from sale of wind mill undertaking
11,458
-
-
-
Purchase of financial instruments
(80,498)
(78,296)
(37)
(18)
Proceeds from sale of financial instruments
86,176
76,206
-
-
Net cash flow on business combination
-
4,015
-
-
Dividend income
140
22
-
-
Finance income
21,094
15,182
-
37
Net cash flow (used in)/provided by investing activities
(223,155)
(297,421)
(37)
9,998
Cash inflow / (outflow) from financing activities
Proceeds from borrowings
557,776
626,408
-
-
Repayment of borrowings
(343,153)
(236,915)
(9,300)
Interest paid
(145,444)
(94,470)
(361)
(1,427)
Net proceeds from issue of shares and share application money in subsidary to non-controlling interest
3,877
204
-
-
Net cash flow provided by / (used in) financing activities
73,056
295,227
(361)
(10,727)
Net increase/(decrease) in cash and cash equivalent
(97,787)
17,011
(938)
(693)
Cash and cash equivalent at the beginning of the period
120,186
61,215
1,598
1,512
Effect of exchange rate changes
(5,021)
(32,615)
370
(87)
Cash and cash equivalent at the end of the period (note 10)
17,378
45,611
1,030
732
(See accompanying notes to the interim condensed Consolidated and Company financial statements)
NOTES TO INTERIM CONDENSED CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS
for the six months ended 30 September 2012
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 24 November 2012.
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";
b. the Interim management report contained in this document includes a fair review of the information required by the Financial Services 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 2012, 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 2012. The comparative information required by IAS 1 were determined using IAS 34 and include comparative information as follows:
Statement of financial position :
31 March 2012 being the end of immediately preceding financial year.
Statement of comprehensive income, statement : of changes in equity and statement of cash flows
Six months ended 30 September 2011 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 Financial Reporting Standards ("IFRS").
These interim condensed Consolidated and Company 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 are measured at fair value;
· employee defined benefit assets are recognised as the net total of the fair value of plan assets, plus unrecognised past service cost and unrecognised actuarial losses, less unrecognised actuarial gains and the present value of the defined benefit obligation
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 at least twelve months. Management forecast of group operations, especially as regards to 881 MW of operational capacities indicate sustained generation and associated revenue and profitabilities under current operating cost structures and that it will be able to meet its debt facility interest and repayment obligations. As regards the construction assets of 3600 MW and 10 MW respectively, the Management estimates are based on existing construction plans and that sufficient fund will be continue to be available as per financaing agreements for continuance of the projects construction. Given these the Group has assumed the going concern basis of preparation for these financial statements are appropriate.
.
2. 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.
3. Property, plant and equipment, net
The property, plant and equipment of the Group comprise:
Land and buildings
Power stations
Mining property
Other plant and equipment
Assets under construction
Total
Cost
As at 1 April 2011 (Audited)
159,535
576,888
10,237
8,724
1,226,634
1,982,018
Additions
75,148
277,465
-
2,217
958,154
1,312,984
Business combination
32,769
218,638
-
372
198
251,977
Disposals /transfer
(21,440)
(183,827)
-
(925)
(332,385)
(538,577)
Exchange difference
(22,118)
(84,547)
(1,314)
(1,145)
(157,398)
(266,522)
As at 31 March 2012 (Audited)
223,894
804,617
8,923
9,243
1,695,203
2,741,880
As at 1 April 2012 (Audited)
223,894
804,617
8,923
9,243
1,695,203
2,741,880
Additions
1,680
5,591
-
616
481,674
489,561
Disposals / transfer
(19)
(14)
-
(4)
(1,146)
(1,183)
Exchange difference
(3,051)
(10,981)
(121)
(128)
(21,866)
(36,147)
As at 30 September 2012 (Unaudited)
222,504
799,213
8,802
9,727
2,153,865
3,194,111
Depreciation and impairment
As at 1 April 2011 (Audited)
3,709
19,388
521
3,254
-
26,872
Additions
5,699
34,534
615
1,810
-
42,658
Disposals / adjustments
(531)
(8,557)
-
(606)
-
(9,694)
Asset derecognised
-
-
-
-
2,861
2,861
Exchange difference
(884)
(5,039)
(109)
(556)
-
(6,588)
As at 31 March 2012 (Audited)
7,993
40,326
1,027
3,902
2,861
56,109
As at 1 April 2012 (Audited)
7,993
40,326
1,027
3,902
2,861
56,109
Additions
2,703
15,772
248
846
-
19,569
Disposals / adjustments
(1)
-
-
(3)
-
(4)
Exchange difference
(5)
55
(3)
(22)
(39)
(14)
As at 30 September 2012 (Unaudited)
10,690
56,153
1,272
4,723
2,822
75,660
Net book value
As at 30 September 2012 (Unaudited)
211,814
743,060
7,530
5,004
2,151,043
3,118,451
As at 31 March 2012 (Audited)
215,901
764,291
7,896
5,341
1,692,342
2,685,771
4. Investments and other financial assets
Consolidated
Company
30 September 2012
31 March 2012
30 September 2012
31 March 2012
(Unaudited)
(Audited)
(Unaudited)
(Audited)
Current
Financial assets at fair value through profit or loss
- held-for-trading
13,780
4,384
-
-
Loans and receivables
44,891
58,950
332
332
Loans to and receivables from JV partners
22,375
22,127
-
-
81,046
85,461
332
332
Non-current
Available-for-sale investments
30,175
30,774
-
-
Deposit with banks
35,765
47,929
-
-
Loans and receivables
25,412
25,476
9,225
9,225
Loans to and receivables from JV partners
5,107
5,177
-
-
Loans to and receivable from subsidiaries
-
-
157,944
157,213
Investment in subsidiaries
-
-
143,410
143,415
96,459
109,356
310,579
309,853
Total
177,505
194,817
310,911
310,185
Impairment of financial assets
During the period ended 30 September 2012, available-for-sale financial asset of US $ 1,168 (31 March 2012: US $ 572) and loans and receivable of US $ Nil (31 March 2012: US $ 1,669) were collectively impaired.
5. Cash and short-term deposits
Cash and short-term deposits comprise of the following:
Consolidated
Company
30 September 2012
31 March 2012
30 September 2012
31 March 2012
(Unaudited)
(Audited)
(Unaudited)
(Audited)
Cash at banks and on hand
14,499
113,900
1,030
1,598
Short-term deposits
278,237
303,685
-
-
Total
292,736
417,585
1,030
1,598
For the purpose of cash flow statement, cash and cash equivalent comprise:
Consolidated
Company
30 September 2012
30 September 2011
30 September 2012
30 September 2011
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Cash at banks and on hand
14,499
44,600
1,030
732
Short-term deposits
278,237
289,674
-
3,060
Total
292,736
334,274
1,030
3,792
Less: Restricted cash1
(275,358)
(288,663)
- 1,030
(3,060)
Cash and cash equivalent
17,378
45,611
1,030
732
1Include deposits pledged for availing credit facilities from banks and deposits with maturity term of three months and more.
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 2012
31 March 2012
30 September 2012
31 March 2012
(Unaudited)
(Audited)
(Unaudited)
(Audited)
Long-term project finance loans
3.16 to 16.50
March-26
1,583,834
1,471,250
-
-
Short-term loans
9.25 to 12.25
September-13
354,413
312,172
52,971
52,475
Buyers credit facility
1.77 to 3.64
September-13
631,529
595,487
-
-
Cash credit and other working capital facilities
12 to 15.89
September-13
124,274
132,563
-
-
Redeemable preference shares
0.01 to 14.11
February-28
26,128
26,489
-
-
Total
2,720,178
2,537,961
52,971
52,475
The interest-bearing loans and borrowings mature as follows:
Consolidated
Company
30 September 2012
31 March 2012
30 September 2012
31 March 2012
(Unaudited)
(Audited)
(Unaudited)
(Audited)
Current liabilities
Amounts falling due within one year
1,210,968
1,128,911
52,971
52,475
Non-current liabilities
Amounts falling due after more than one year but not more than five years
1,021,524
952,419
-
-
Amounts falling due in more than five years
487,686
456,631
-
-
Total
2,720,178
2,537,961
52,971
52,475
7. Trade and other payables
Consolidated
Company
30 September 2012
31 March 2012
30 September 2012
31 March 2012
(Unaudited)
(Audited)
(Unaudited)
(Audited)
Current
Trade payables
385,051
266,213
1,286
1,469
Share application money
4,030
2,156
-
-
Interest payable
24,975
19,332
-
-
414,056
287,701
1,286
1,469
Non-current
Trade payables
52,372
48,981
-
-
52,372
48,981
-
-
Total
466,428
336,682
1,286
1,469
Trade payables are non-interest bearing and are normally settled on 45 days terms.
§ Long-term trade payables are non-interest bearing and will be settled in 1-6 years.
§ Share application money represents application money paid by investor/customers for subscribing to equity/preference shares in subsidiaries as at the reporting date.
§ Interest payable is normally settled monthly throughout the financial year.
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 2012 (Unaudited)
Project development activities
Power generating activities
Reconciling / Elimination activities
Consolidated
Revenue
External customer
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
4,328
55,362
(476)
59,214
Unallocated operating expenses, net
(915)
Finance costs
(58,150)
Finance income
34,117
Profit before tax
34,266
Tax income
1,738
Profit after tax
36,004
Segment assets
22,603
3,690,458
(2,797)
3,710,264
Unallocated assets
191,901
Total assets
3,902,165
Segment liabilities
3,140
454,137
(2,797)
454,480
Unallocated liabilities
2,791,070
Total liabilities
3,245,560
Other segment information
Depreciation and amortisation
197
19,402
46
19,645
Capital expenditure
140
489,327
94
489,561
Period ended 30 September 2011 (Unaudited)
Project development activities
Power generating activities
Reconciling/ Elimination activities
Consolidated
Revenue
External customer
1,455
181,511
-
182,966
Inter-segment
2,670
-
(2,670)
-
Total revenue
4,125
181,511
(2,670)
182,966
Segment operating results (see note (f) below)
1,932
42, 205
(470)
43,667
Unallocated operating expenses, net
250
Finance costs
(98,221)
Finance income
18,369
Loss before tax
(35,935)
Tax income
225
Loss after tax
(35,710)
Segment assets
20,094
2,717,777
(1,793)
2,736,078
Unallocated assets
368,404
Total assets
3,104,482
Segment liabilities
3,438
343,327
(1,793)
344,972
Unallocated liabilities
2,002,170
Total liabilities
2,347,142
Other segment information
Depreciation and amortisation
233
20,419
462
21,114
Capital expenditure
5,698
422,881
28,561
457,140
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 $ 34,117 and US $ 58,150 respectively (30 September 2011: US $ 18,369 and US $ 98,221 respectively).
(c) Segment assets do not include deferred tax US $ 20,679 (30 September 2011: US $ 19,678), financial assets and other investments US $ 122,620 (30 September 2011: US $ 151,377), short-term deposits with bank and cash US $ 16,396 (30 September 2011: US $ 76,617), and corporate assets US $ 32,206 (30 September 2011: US $ 120,732).
(d) Segment liabilities do not include deferred tax US $ 34,910 (30 September 2011:US $ 38,446), current tax payable US $ 3,744 (30 September 2011: US $ 1,366), interest-bearing current and non-current borrowings US $ 2,720,178 (30 September 2011: US $ 1,933,140) and corporate liabilities US $ 32,248 (30 September 2011: US $ 29,218)
(e) The Company operates in one business and geographic segment. Consequently no segment disclosures of the Company are presented.
(f) Includes loss on re-measurement of existing equity amounting to US $Nil (30 September 2011: US $ 1,640),
(g) One customer in the power generating segment contributing revenues of US $ 90,606 accounted for 45.89% of the total segment revenue (30 September 2011: One customers in the power generating segment contributing revenues of US $ 100,585 accounted for 55.14% of the total segment revenue).
9. Finance costs
Finance costs comprise:
Consolidated
Company
30 September 2012
30 September 2011
30 September 2012
30 September 2011
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Interest expenses on loans and borrowings 1
54,130
52,034
728
146
Other finance costs
2,295
3,214
2
1,281
Provision for impairment of financial assets
1,168
1,084
-
-
Net loss on financial liability at fair value through profit or loss
-
465
-
-
Foreign exchange loss, net2
-
40,735
359
-
Net loss on held-for-trading financial assets
on disposal
4
-
-
-
on re-measurement
-
40
-
-
Unwinding of discounts
553
649
-
-
Total
58,150
98,221
1,089
1,427
1Borrowing cost capitalised during the period amounting to US $ 99,670 (30 September 2011: US $ 54,674)
2 Includes loss on account of restatement of foreign currency loans and trade payables amounting to US $ Nil (30 September 2011: US $ 36,354).
10. Finance income
The finance income comprises:
Consolidated
Company
30 September 2012
30 September 2011
30 September 2012
30 September 2011
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Interest income
bank deposits
13,624
13,802
-
34
loans and receivables
2,942
3,495
-
83
Dividend income
383
474
-
-
Net gain on held-for-trading financial assets
on disposal
-
25
-
-
on re-measurement
22
-
-
-
Unwinding of discount on security deposits
465
550
-
-
Foreign exchange gain, net1
16,666
-
-
620
Reclassification adjustment in respect of available-for- sale financial assets disposed
15
23
-
-
Total
34,117
18,369
-
737
1 Includes gain on account of restatement of foreign currency loans and trade payables amounting to US $ 7,545 (30 September 2011: US $ Nil).
11. Tax income / (expense)
The major components of income tax for the period ended 30 September 2012 and 2011are:
30 September 2012
30 September 2011
(Unaudited)
(Unaudited)
Current tax
(5,671)
(2,934)
Deferred tax
7,409
3,159
Tax income reported in the income statement
1,738
225
Income tax expense is recognised based on Management's best estimate of the weighted average annual income tax rate expected for the full financial year applied to the pre-tax income of the interim period. The Group's consolidated effective tax rate for the six months ended 30 September 2012 was (5.07) % (six months ended 30 September 2011 was 0.63%). The change in effective tax rate was caused mainly on account of higher recognition of deferred tax assets in WPCL during the current interim period ended 30 September 2012.
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
For detail list of subsidiaries and joint ventures see note 1.5
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 2012
30 September 2011
30 September 2012
30 September 2011
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Joint Venture
GUP
KMP
Joint Venture
GUP
KMP
Subsidiaries
KMP
Subsidiaries
KMP
Transactions1
Project development fees and corporate support services fees
1,164
-
-
1,455
-
-
-
-
-
-
Interest income
2,044
-
-
1,305
-
-
-
-
-
-
Inter-corporate deposits and loans given
3,986
26
-
7,005
-
-
48
-
18
-
Inter-corporate deposits and loans refunded
(3,478)
-
-
(230)
-
-
-
-
-
-
Managerial remuneration 2
-
-
318
-
-
273
-
100
-
78
30 September 2012
30 September 2011
30 September 2012
30 September 2011
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Balances 1
Interest receivable
3,570
-
-
2,648
-
-
-
-
-
-
Loans and inter corporate deposits receivable
26,290
-
-
25,997
-
-
157,954
-
30,106
-
Other receivable
1,192
1,159
-
1,307
-
-
-
-
-
-
Managerial remuneration payable2
-
-
26
-
-
63
-
-
-
42
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 2012, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (30 September 2011: 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 2012, the Group is committed to purchase property, plant and equipment for US $ 1,575,752(31 March 2012: US $ 1,920,436). In respect of its interest in joint ventures the Group is committed to incur capital expenditure of US $ 1,332 (31 March 2012: US $ 1,219).
Legal claim
· Wardha Power Company Limited (WPCL) 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 amounting to US $ 12,964. During the period since, the facility required for generation of the agreed quantum of power was not ready as per agreed schedule on account of unexpected factors beyond the control of the group, the group proposed MSEDCL for arranging the energy from alternate sources 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 against the order of MERC. The group believes that the final outcome of the above dispute should be in favour of the Group and there should be no material impact on the financial statements.
· VS Lignite Power Private Limited (VSLPPL) has certain receivables 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 which are disputed by the consumers. The Group contended before the arbitration panel that the amounts levied as part of the invoicing represents taxes on generation as per the terms of the power delivery agreement and hence to be pass through. However, the arbitration panel has dismissed the petition against which the group has preferred an appeal in civil court. The group believes that the final determination of the above dispute would be in favour of the Group and there should be no material impact on the financial statements.
· Arasmeta Captive Power Company Private Limited (ACPCPL) has certain claims and receivables from its captive consumer namely Lafarge India Private Limited (LIPL) which are disputed by LIPL. The Group contends that the amounts claimed are as per the terms of the power purchase agreements dated 10 February 2005 and 01 November 2007. The High Court of Chhattisgarh has given an interim order in the case directing the customers to pay for the electricity supplied within three days of the receipt of the bills. Against the order of High court, the customer has preferred an appeal in Supreme Court. Pending disposal of the appeal, the group believes that the final determination of the above dispute would be in favour of the Group and there should be no material impact on the financial statements.
Guarantees
· The Company has guaranteed the loans and non-fund based facilities availed by subsidiaries to unrelated parties for US $ 219,729 (31 March 2012: US $ 222,856) and
· The Group guaranteed the performance of the joint ventures under the power delivery agreements to unrelated parties. No liability is expected to arise.
Independent Review Report to KSK Power Ventur Plc
Introduction
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2012 which comprises the consolidated and company income statement, consolidated and company statement of comprehensive income, consolidated and company statement of financial position, consolidated and company statement of changes in equity, consolidated and company statement of cash flows and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Services Authority ("the UK FSA"). Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FSA.
As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as issued by the IASB.
The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as issued by the IASB.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2012 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as issued by the IASB and the DTR of the UK FSA.
M R Kelly, Responsible Individual
For and on behalf of KPMG Audit LLC
Chartered Accountants
Douglas, Isle of Man
This information is provided by RNS
The company news service from the London Stock Exchange
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