REG - KSK Power Ventur PLC - Audited Results for the year ended 31 March 2014 <Origin Href="QuoteRef">KSK.L</Origin> - Part 2
06/09/2014 16:32
- Part 2: For the preceding part double click ID:nRSO2888Ma
Re-measurement of - - - - 523 - 523 - 523
defined benefit
liability
Income tax relating to - - - - (159) - (159) - (159)
re-measurement of
defined benefit
liability
Items that are or may
be reclassified
subsequently to income
statement
Foreign currency - - (19,654) - - - (19,654) (8,916) (28,570)
translation differences
Available-for-sale
financial assets
- current period - - - - (3,079) - (3,079) 28 (3,051)
(losses) / gains
- reclassification to - - - - 4,258 - 4,258 - 4,258
profit or loss
Income tax relating to - - - - 26 - 26 9 35
available-for-sale
financial asset
Total comprehensive - - (19,654) - 1,569 24,406 6,321 5,584 11,905
income / (loss) for the
year
Balance as at 31 March 263 253,890 (78,535) 2,752 142,262 120,939 441,571 199,615 641,186
2013 (Restated*)
(See accompanying notes
to the 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 18.
1 The Group entities
have arrangements of
sharing of profits with
its non-controlling
shareholders, through
which the non
controlling
shareholders are
entitled to a dividend
of 0.01% of the face
value of the equity
share capital held and
the same is also
reflected in the
Consolidated income
statement. However,
the non controlling
interest disclosed in
the Statement of
changes in equity is
calculated in the
proportion of the
actual shareholding as
at the reporting date.
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
for the year ended 31
March 2014
(All amount in
thousands of US $,
unless otherwise
stated)
Attributable to owners of the Company Non - controlling interests Total equity
Issued capital Share premium Share application money Foreign currency translation reserve Revaluation reserve Capital redemption reserve Other reserves Retained earnings Total
As at 1 April 2013 263 253,890 - (78,535) 2,752 - 142,262 120,939 441,571 199,615 641,186
(Restated*)
Issue of shares (Note 26 33,301 - - - - - - 33,327 33,327
8)
Receipt of share - - 18,000 - - - - - 18,000 - 18,000
application money
Issuance of equity - - - - - - 12 - 12 (12) -
shares by subsidiary
(note 3 and 4 )
Transfer of economic - - - - - - - 2,677 2,677 (2,677) -
interest to non
-controlling interests1
Equity-settled share - - - - - - 10 - 10 - 10
based payment
Transfer of profit to - - - - - 5,461 - (5,461) - - -
capital redemption
reserve
Net depreciation - - - - (138) - - 138 - - -
transfer for property,
plant and equipment
Transaction with owners 26 33,301 18,000 - (138) 5,461 22 (2,646) 54,026 (2,689) 51,337
Loss for the year - - - - - - - (49,039) (49,039) (9,978) (59,017)
Other comprehensive
income
Items that will never
be reclassified to
income statement
Re-measurement of - - - - - - 803 - 803 56 859
defined benefit
liability
Income tax relating to - - - - - - (254) - (254) - (254)
re-measurement of
defined benefit
liability
Items that are or may
be reclassified
subsequently to income
statement
Foreign currency - - - (35,398) - - - - (35,398) (17,483) (52,881)
translation differences
Available-for-sale
financial assets
- current period - - - - - - (2,063) - (2,063) 308 (1,755)
(losses) / gains
- reclassification to - - - - - - 2,986 - 2,986 - 2,986
profit or loss
Income tax relating to - - - - - - (141) - (141) (47) (188)
available-for-sale
financial asset
Total comprehensive - - - (35,398) - - 1,331 (49,039) (83,106) (27,144) (110,250)
(expense) / income for
the year
Balance as at 31 March 289 287,191 18,000 (113,933) 2,614 5,461 143,615 69,254 412,491 169,782 582,273
2014
(See accompanying notes
to the 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 18.
1 The group entities
have arrangements of
sharing of profits with
its non-controlling
shareholders, through
which the non
-controlling
shareholders are
entitled to a dividend
of 0.01% of the face
value of the equity
share capital held and
the same is also
reflected in the
Consolidated income
statement. However,
the non-controlling
interest disclosed in
the Statement of
changes in equity is
calculated in the
proportion of the
actual shareholding as
at the reporting date.
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended
(All amount in thousands of US $, unless otherwise stated)
Issued capital Share premium Share application money Foreign currency translation reserve Other reserve Accumulated deficit Totalequity
As at 1 April 2012 263 253,890 - 12,217 - (8,455) 257,915
Loss for the year - - - - - (1,594) (1,594)
Other comprehensive income
Foreign currency translation differences - - - (5,797) - - (5,797)
Total comprehensive loss for the year - - - (5,797) - (1,594) (7,391)
Balance as at 31 March 2013 263 253,890 - 6,420 - (10,049) 250,524
As at 1 April 2013 263 253,890 - 6,420 - (10,049) 250,524
Issue of shares 26 33,301 - - - - 33,327
Receipt of share application money - - 18,000 - - - 18,000
Equity-settled share based payment - - - - 10 - 10
Transaction with owners 26 33,301 18,000 - 10 - 51,337
Loss for the year - - - - - (4,200) (4,200)
Other comprehensive income
Foreign currency translation differences - - - 6,160 - - 6,160
Total comprehensive profit / (loss) for the year - - - 6,160 - (4,200) 1,960
Balance as at 31 March 2014 289 287,191 18,000 12,580 10 (14,249) 303,821
(See accompanying notes to Consolidated and Company financial statements)
CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS
for the year ended 31 March
(All amount in thousands of US $, unless otherwise stated)
Consolidated Company
2014 2013 (Restated*) 2014 2013
Cash inflow / (outflow) from operating activities
(Loss) / profit before tax (72,123) 37,464 (4,200) (1,594)
Adjustment
Depreciation and amortization 43,926 39,492 1 -
Finance cost 154,829 120,984 3,242 2,341
Finance income (35,819) (28,008) (1,554) (1,586)
Provision and impairment of trade receivable, PPE and other advances 9,068 8,958 335 -
(Profit) / loss on sale of fixed assets, net (352) 458 - -
Others 869 17 10 -
Change in
Trade receivables and unbilled revenue (50,712) (28,347) - -
Inventories 1,658 (4,286) - -
Other assets (53,024) (12,305) (4,851) (845)
Trade payables and other liabilities 53,819 1,573 84 (126)
Provisions and employee benefit liability (566) 103 - -
Cash generated from /(used in) operating activities 51,573 136,103 (6,933) (1,810)
Taxes paid, net (5,364) (10,440) - -
Net cash provided by / (used in) operating activities 46,209 125,663 (6,933) (1,810)
Cash inflow / (outflow) from investing activities
Movement in restricted cash, net 123,310 35,969 - -
Purchase of property, plant and equipment and other non-current assets (199,997) (394,515) - -
Proceeds from sale of property, plant and equipment 1,709 4,815 - -
Proceed from sale of wind mill undertaking (PPE) - 11,069 - -
Purchase of financial assets (23,906) (103,168) (47,652) -
Proceeds from sale of financial assets 59,675 121,337 - 1,184
Dividend received 120 482 - -
Finance income received 31,350 37,460 - -
Net cash flow provided by / (used in) investing activities (7,739) (286,551) (47,652) 1,184
Cash inflow / (outflow) from financing activities
Proceeds from borrowings 1,252,455 1,202,714 7,663 1,515
Repayment of borrowings (993,151) (786,440) - (240)
Finance costs paid (316,109) (314,275) (2,972) (1,997)
Payment of Derivative liability (4,519) (24) - -
Net proceeds from issue of shares and share application money in subsidiary to non-controlling interest 2,303 4,478 - -
Net proceeds from issue of shares and share application money 51,327 - 51,327 -
Net cash flow provided by / (used in) financing activities (7,694) 106,453 56,018 (722)
Effect of exchange rate changes (18,676) (21,917) (1,547) 37
Net increase/(decrease) in cash and cash equivalent 12,100 (76,352) (114) (1,311)
Cash and cash equivalents at the beginning of the year 43,834 120,186 287 1,598
Cash and cash equivalents at the end of the year (note 7) 55,934 43,834 173 287
(See accompanying notes to the 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 18.
EXTRACT OF NOTES TO CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS
for the year ended 31 March 2014
(All amount in thousands of US $, unless otherwise stated)
1. Corporate information
1.1. General information
KSK Power Ventur plc ('the Company' or 'KPVP' or 'KSK' or 'Parent'), a limited liability corporation, is the Group's Parent
Company and is incorporated and domiciled in the Isle of Man. The address of the Company's Registered Office, which is
also principal place of business, is Fort Anne, Douglas, Isle of Man, IM1 5PD. The Company's equity shares are listed on
the Standard List on the official list of the London Stock Exchange.
1.2. Nature of operations
KSK Power Ventur plc, its subsidiaries and joint ventures (collectively referred to as 'the Group') are primarily engaged
in the development, operation and maintenance of private sector power projects, predominantly through subsidiaries and
jointly controlled entities with multiple industrial consumers and utilities in India with next level of growth coming
through large base load power plant subsidiaries.
KSK focused its strategy on the private sector power development market, undertaking entire gamut of development,
investment, construction (for its own use), operation and maintenance of power plant with supplies initially to heavy
industrials operating in India and now branching out to cater to the needs of utilities and others in the wider Indian
power sector.
The principal activities of the Group are described in note 11.
1.3. Statement of compliance responsibility statement
The Consolidated and Company financial statements contained in this document have been prepared in accordance with
International Financial Reporting Standard and its interpretations as adopted by the European Union (EU) ('IFRS') and the
provisions of the Isle of Man, Companies Act 1931-2004 applicable to companies reporting under IFRS.
The financial statements were authorised for issue by the Board of Directors on 11 July 2014.
1.4. Financial period
The Consolidated and Company financial statements cover the period from 1 April 2013 to 31 March 2014, with comparative
figures from 1 April 2012 to 31 March 2013. In addition, statement of financial position as at 1 April 2012 presented in
these consolidated financial statements due to retrospective application of certain accounting policies.
1.5. Basis of preparation
These Consolidated financial statements have been prepared on the historical cost convention and on an accrual basis,
except for the following:
· Derivative financial instruments that are measured at fair value;
· Financial instruments that are designated as being at fair value through profit or loss account upon initial
recognition are measured at fair value;
· Available-for-sale financial assets that are measured at fair value; and
· Net employee defined benefit (asset) / liability that are measured at fair value.
The financial statements of the Group and the Company have been presented in United States Dollars ('US $'), which is the
presentation currency of the Company. All amounts have been presented in thousands, unless specified otherwise.
Balances represent consolidated amounts for the Group, unless otherwise stated. The Company's financial statement
represents separate financial statement of KPVP.
Going Concern: The financial statements have been prepared on 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. 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 $ 880,224, with
short term facilities including current maturities of long term debts expiring in March 2015 totalling US $ 944,750 and a
committed capital spend of US $ 1,589,164. The Group continues 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.
Further, within current liabilities is an amount of long term debt of US $ 140,863 classified as the current portion of
debt borrowed for KSK Mahanadi Power Project. As there has been time overrun in the project by approx. two years, a time
and cost overrun proposal was submitted to the lead lender for approval of the re-scheduling of the DCCO (Date of
commencement of commercial operation) and accordingly a consequential shift in the repayment date from 30 June 2014 to 30
June 2016. The same has been approved by the board of the lead lender of the project. Hence, an amount of US $ 140,863 will
not be materialised till 30 June 2016.
Anticipated future cash flow, including QIP proceeds of US $ 65,072 (refer note 19) and undrawn long term committed
facilities of US $ 1,135,523 together with cash and short term deposits of US $ 194,054 (including restricted cash) as at
31 March 2014 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 at 31
March 2015 are in the process of being extended and have a rollover clause in a number of cases.
The Group's forecast and projections, taking into account reasonable possible changes in trading performance, show that the
Group has sufficient financial resources, together with assets that are expected to generate free cash flow to the Group.
As a consequence, the Directors have a reasonable expectation that the Company and the Group are well placed to manage
their business risks and continue in operational existence for the foreseeable future. Accordingly, the Directors continue
to adopt the going concern basis of accounting when preparing these financial statements.
2. Changes in accounting policy and disclosure
The accounting policies adopted are consistent with those of the previous financial year except for the adoption of new
standards as of 1 April 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, accordingly, the Group has included
additional disclosures in this regard.
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 consolidated income statement and statement of other 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 19R 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 18.
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 have been written off to income statement. The effect of the adoption of IFRIC 20 is explained in Note
18.
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. Acquisition of non-controlling interest
During the year ended 31 March 2014, the Group has issued additional 30,148,613 shares in KSK Mahanadi Power Company
Limited ("KMPCL") to KSK Energy Limited ("KEL") at a face value of Rs 10 (US $ 0.17) at par. The above transactions
resulted in acquisition of 0.26 % of non-controlling interest.
The acquisition of interest in subsidiary from non-controlling interest is accounted as an equity transaction, and
accordingly no gain or loss is recognised in the Consolidated income statement. The difference of US $ (29) between the
fair value of the net consideration paid (US $ Nil) and the amount by which the non-controlling interest (US $ 29) is
adjusted are debited to 'other reserve' within consolidated statement of changes in equity and attributed to the owners of
the Company.
4. Dilution on Issuance of Equity Shares by Subsidiaries
During the year ended 31 March 2014, the Group has issued additional 78,000,000 shares in KSK Mahanadi Power Company
Limited ("KMPCL") to Sai Wardha Power Limited ("SWPL") at a face value of Rs 10 (US $ 0.17) at par. The above transactions
resulted in dilution of 0.42 % of non-controlling interest.
The dilution of interest in subsidiary from non-controlling interest is accounted as an equity transaction, and accordingly
no gain or loss is recognised in the Consolidated income statement. The difference of US $ 41 between the fair value of the
net consideration paid (US $ Nil) and the amount by which the non-controlling interest (US $ (41)) is adjusted are credited
to 'other reserve' within consolidated statement of changes in equity and attributed to the owners of the Company.
5. Disposal group held for sale
The assets and liabilities related to Sai Regency Wind division (part of the power generation segment) have been presented
as held for sale following the approval of the group's management and shareholders on 03 March 2014 to sell Sai Regency
wind division. The transaction was completed by May 2014.
· Impairment loss relating to the disposal group
Impairment loss of US $ 1,476 for write down of the disposal group to the lower of its carrying amount and its fair value
less cost to sell have been included in General and administrative expenses. The impairment losses have been applied to
reduce the carrying amount of property plant and equipment within the disposal group.
· Assets and liabilities of disposal group held for sale
At 31 March 2014, the disposal group was stated at fair value less cost to sell and comprised the following assets and
liabilities
Particulars 2014
Property, plant and equipment 16,452
Trade receivables 334
Loans and receivables 1,670
Assets held for sale 18,456
Interest bearing loans and borrowings 13,475
Deferred tax liabilities 4,981
Liabilities associated with assets held for sale 18,456
· Cumulative income or expense included in OCI
There are no cumulative incomes or expenses included in OCI relating to the disposal group.
· Measurement of fair values
In accordance with IFRS 5, the assets and liabilities held for sale were written down to their fair value less costs to
sell. This is a non-recurring fair value which has been measured based on definitive agreement entered into with third
party and is therefore within level 1 of the fair value hierarchy.
6. Investments and other financial assets
Consolidated Company
2014 2013 2014 2013
Current
Financial assets at fair value through profit or loss
- held-for-trading 130 3,293 - -
Loans and receivables 72,333 66,429 4 9,557
Loans to and receivables from JV partners 777 11,742 - -
73,240 81,464 4 9,557
Non-current
Financial assets at fair value through profit or loss
- Derivative assets 50,196 - - -
Available-for-sale investments 22,865 26,354 - -
Deposit with banks 10,953 31,208 - -
Loans and receivables 39,336 24 264 5,660 -
Loans to and receivables from JV partners 31,227 16,219 - -
Loans to and receivable from subsidiaries - - 133,873 151,877
Investment in subsidiaries - - 227,234 143,314
154,577 98,045 366,767 295,191
Total 227,817 179,509 366,771 304,748
Financial assets at fair value through profit or loss
The Group has invested into short-term mutual fund units and equity securities in various companies being quoted on Indian
stock market. The fair value of the mutual fund units and equity securities are determined by reference to published data.
Available-for-sale investment
The Group has investments in listed equity securities of various companies being quoted on the Indian and London stock
markets respectively. The fair value of the quoted equity shares are determined by reference to published data. The Group
also holds non-controlling interest (1%-25%) in unlisted entities which are in the business of power generation and allied
projects. The Group designated these unquoted equity shares as available-for-sale investment in accordance with the
documented investment strategy of the Group to manage and evaluate performance of the equity shares on fair value basis.
The fair value of unquoted ordinary shares has been estimated using a relative valuation using price earnings ratio / book
value method. The valuation requires management to make certain assumptions about the inputs including size and liquidity.
Deposit with banks
This represents the deposits with the bank with the maturity term of more than twelve months from the reporting date.
Loans and receivables
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