REG - KSK Power Ventur PLC - Audited Results for the year ended 31 March 2016 <Origin Href="QuoteRef">KSK.L</Origin> - Part 2
19/07/2016 07:05
- Part 2: For the preceding part double click ID:nRSS5256Ea
266,821
(See accompanying notes to Consolidated and Company financial statements)
CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS
for the year ended 31 March
(All amount in thousands of US $, unless otherwise stated)
Consolidated Company
2016 2015 2016 2015
Cash inflow / (outflow) from operating activities
Loss before tax (109,668) (160,111) (6,662) (4,678)
Adjustment
Depreciation and amortization 91,068 58,733 - -
Finance cost 317,817 218,693 8,212 3,857
Finance income (15,773) (19,135) - -
Provision and impairment of trade receivable, PPE and other receivable 29,353 31,070 912 -
Net loss on business combination - 2,001 - -
Loss on sale of fixed assets, net 5 142 - -
Others (182) (7,857) (65) 112
Change in
Trade receivables and unbilled revenue (222,093) 1,687 - -
Inventories (6,438) (7,419) - -
Other assets (12,111) (7,391) 214 31
Trade payables and other liabilities 71,699 (17,202) 260 53
Employee benefit liability 346 204 - -
Cash generated from / (used in) operating activities 144,023 93,415 2,871 (625)
Taxes refund / (paid), net 80 (3,945) - -
Net cash provided by / (used in) operating activities 144,103 89,470 2,871 (625)
Cash inflow / (outflow) from investing activities
Movement in restricted cash, net 50,487 (19,137) - -
Purchase of property, plant and equipment and other non-current assets (58,518) (222,891) - -
Proceeds from sale of property, plant and equipment 2,605 929 - -
Purchase of financial assets (4,910) (27,770) - (46,353)
Proceeds from sale of financial assets 8,541 24,225 17,826 -
Net cash flow on business combination - (5,784) - -
Dividend received 417 95 - -
Interest income received 14,099 16,738 - -
Net cash provided by / (used in) investing activities 12,721 (233,595) 17,826 (46,353)
Cash inflow / (outflow) from financing activities
Proceeds from borrowings 501,317 995,211 52,843 62,876
Repayment of borrowings (276,115) (533,352) (51,609) (10,490)
Finance costs paid (377,058) (398,627) (2,286) (3,103)
Payment of derivative liability (9,333) (4,552) - -
Advance received for sale of investment 4,024 14,939 - -
Net proceeds from issue of shares and share application money in subsidiary to non-controlling interest 2,984 63,371 - -
Net refund of share application money (16,498) (1,502) (16,498) (1,502)
Net cash flow (used in) / provided by financing activities (170,679) 135,488 (17, 550) 47,781
Effect of exchange rate changes (10,854) (6,564) (3,018) 89
Net increase / (decrease) in cash and cash equivalent (24,709) (15,201) 129 892
Cash and cash equivalents at the beginning of the year 40,733 55,934 1,065 173
Cash and cash equivalents at the end of the year (refer note 5) 16,024 40,733 1,194 1,065
(See accompanying notes to the Consolidated and Company financial statements)
KSK Power Ventur plc
NOTES TO CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS
for the year ended 31 March 2016
(All amount in thousands of US $, unless otherwise stated)
1. Corporate information
1.1. General information
KSK Power Ventur plc ('the Company' or 'KPVP' or 'KSK' or 'Parent'), a limited
liability corporation, is the Group's Parent Company and is incorporated and
domiciled in the Isle of Man. The address of the Company's Registered Office,
which is also principal place of business, is Fort Anne, Douglas, Isle of Man,
IM1 5PD. The Company's equity shares are listed on the Standard List on the
official list of the London Stock Exchange.
1.2. Nature of operations
KSK Power Ventur plc, its subsidiaries and joint operations (collectively
referred to as 'the Group') are primarily engaged in the development,
ownership, operation and maintenance of private sector power projects with
multiple industrial consumers and utilities in India.
KSK focused its strategy on the private sector power development market,
undertaking entire gamut of development, investment, construction (for its own
use), operation and maintenance of power plant with supplies initially to
heavy industrials operating in India and now branching out to cater to the
needs of utilities and others in the wider Indian power sector.
The principal activities of the Group are described in note 9.
1.3. Statement of compliance responsibility statement
a. The Consolidated and Company financial statements contained in this
document has been prepared in accordance with International Financial
Accounting Standard and its interpretations as adopted by European Union
('EU') and the provisions of the Isle of Man, Companies Act 1931-2004
applicable to companies reporting under IFRS and gives a true and fair view of
the assets, liabilities, financial position and the profit or loss of the
group as required by Disclosure and Transparency Rules ("DTR") 4.2.4R;
b. the management report contained in this document includes a fair review
of the information required by the Financial Conduct Authority's DTR 4.2.7R
(being an indication of important events that have occurred during the
financial year and their impact on the financial statements; and a description
of the principal risks and uncertainties year);
c. this document includes a fair review of the information required by DTR
4.2.8R (disclosure of related party transactions and changes therein);
The financial statements were authorised for issue by the Board of Directors
on 18 July 2016.
1.4. Financial period
The Consolidated and Company financial statements cover the period from 1
April 2015 to 31 March 2016, with comparative figures from 1 April 2014 to 31
March 2015.
1.5. Basis of preparation
These Consolidated financial statements have been prepared on the historical
cost convention and on an accrual basis, except for the following:
· Derivative financial instruments that are measured at fair value;
· Financial instruments that are designated as being at fair value through
profit or loss account upon initial recognition are measured at fair value;
· Available-for-sale financial assets that are measured at fair value; and
· Liabilities for cash-settled shared-based payment arrangements
· Net employee defined benefit (asset) / liability that is measured based
on actuarial valuation.
The financial statements of the Group and the Company have been presented in
United States Dollars ('US $'), which is the presentation currency of the
Company. All amounts have been presented in thousands, unless specified
otherwise.
Balances represent consolidated amounts for the Group, unless otherwise
stated. The Company's financial statement represents separate financial
statement of KPVP.
Going Concern: The financial statements have been prepared on the going
concern basis which assumes the Group and the Company will have sufficient
funds to continue its operational existence for the foreseeable future,
covering at least twelve months from the date of signing these financial
statements. The Group requires funds for both short-term operational needs as
well as for long-term investment programmes, mainly in construction projects
for its power plants. As at 31 March 2016, the Group had net current
liabilities of US $ 459,928 and is dependent on a continuation of both
short-term and long-term debt financing facilities. Such financing is subject
to covenant and amortisation conditions. The Group also has significant
capital commitments at the year-end of which a portion is due to be met during
the year ending 31 March 2017 (refer note 14(a)), primarily in respect of
on-going plant construction projects at KSK Mahanadi. The Group is also
involved in a number of on-going legal and claim matters the impact of which
is outlined in note 14(b). The Group continues to generate cash flows from
current operations which are further expected to increase with full year
operation of two units of KSK Mahanadi plant and better plant load factor in
Sai Wardha. These two factors are key assumptions with regard to management's
forecasts and expectations. It is forecast that the long-term PPA arrangement
for Sai Wardha will be in place shortly. Should there be further delays in
this matter this may impact on the ability of the Group to generate sufficient
cash flows for current financing proposals being considered, described below.
A number of the facilities that are due to expire at 31 March 2017 are in the
process of being extended and are renewable in a number of cases. In addition
the Group may refinance and/or restructure certain short-term borrowings into
long-term borrowings and will also consider alternative sources of financing,
wherever applicable. The Directors are confident that these facilities will
remain available to the Group based on current trading, covenant compliance
and ongoing discussions with the Group's primary lending consortium regarding
future facilities and arrangements in respect of current borrowings. The Group
currently had significant undrawn borrowing facilities, subject to certain
conditions, amounting to approximately US $ 969,740 to meet its long-term
investment programmes. The Group is in the process of completing the
documentation with various lenders in order to match facilities to the current
development and financing plan for KSK Mahanadi. As a consequence, the
Directors have a reasonable expectation that the Company and the Group are
well placed to manage their business risks and continue in operational
existence for the foreseeable future. Accordingly, the Directors continue to
adopt the going concern basis of accounting when preparing these financial
statements.
2. Changes in accounting policy and disclosure
The accounting policies adopted are consistent with those of the previous
financial year except for the adoption of new standards as of 1 April 2015,
noted below:
The Group has adopted the following new standards and amendments to standards,
including any consequential amendments to other standards, with a date of
initial application of 1 April 2015.
· IFRIC 21 Levies : IFRIC 21 clarifies that an entity recognises a
liability for a levy when the activity that triggers payment, as identified by
the relevant legislation, occurs. For a levy that is triggered upon reaching a
minimum threshold, the interpretation clarifies that no liability should be
anticipated before the specified minimum threshold is reached. Retrospective
application is required for IFRIC 21. This interpretation has no impact on the
Group as it has applied the recognition principles under IAS 37 Provisions,
Contingent Liabilities and Contingent Assets consistent with the requirements
of IFRIC 21 in prior years.
· Amendments to IAS 19 Defined Benefit Plans: Employee Contributions: IAS
19 requires an entity to consider contributions from employees or third
parties when accounting for defined benefit plans. Where the contributions are
linked to service, they should be attributed to periods of service as a
negative benefit. These amendments clarify that, if the amount of the
contributions is independent of the number of years of service, an entity is
permitted to recognise such contributions as a reduction in the service cost
in the period in which the service is rendered, instead of allocating the
contributions to the periods of service. This amendment is effective for
annual periods beginning on or after 1 February 2015. This amendment has no
impact on the Group, since none of the entities within the Group has defined
benefit plans with contributions from employees or third parties.
· Annual Improvements 2010-2012 Cycle: In the 2010-2012 annual
improvements cycle, the IASB issued seven amendments to six standards, which
included an amendment to IFRS 13 Fair Value Measurement. The amendment to IFRS
13 is effective immediately and, thus, for periods beginning at 1 February
2015, and it clarifies in the Basis for Conclusions that short-term
receivables and payables with no stated interest rates can be measured at
invoice amounts when the effect of discounting is immaterial. This amendment
to IFRS 13 has no impact on the Group.
· Annual Improvements 2011-2013 Cycle: In the 2011-2013 annual
improvements cycle, the IASB issued four amendments to four standards, which
included an amendment to IFRS 1 First-time Adoption of International Financial
Reporting Standards. The amendment to IFRS 1 is effective immediately and,
thus, for periods beginning at 1 January 2015, and clarifies in the Basis for
Conclusions that an entity may choose to apply either a current standard or a
new standard that is not yet mandatory, but permits early application,
provided either standard is applied consistently throughout the periods
presented in the entity's first IFRS financial statements. This amendment to
IFRS 1 has no impact on the Group, since the Group is an existing IFRS
preparer.
3. Acquisition and Dilution - change in non-controlling interest without
change in control
a. Acquisition and dilution in KSK Energy Ventures Limited
During the previous year ended 31 March 2015, the Group has issued 80,808,080
warrants of face value of Rs. 10 (US $ 0.16) each in KSK Energy Ventures
Limited ('KEVL'), an Indian Listed subsidiary to KSK Power Holdings Limited
("KPHL") with an option to apply for and be allotted equivalent number of
equity shares of the face value of Rs 10 (US $ 0.16) each at a premium of Rs.
89 (US $ 1.45) each on a preferential basis.
Pursuant to above, during the year ended 31 March 2016, KPHL acquired
1,736,580 shares of KSK Energy Ventures Limited ('KEVL'). Further, Group has
sold 1,087,511 equity shares to non - controlling interest. Pursuant to this
the economic interest of the Group in KEVL has decreased from 68.30 percent to
68.17 percent resulting in a 0.13 percent decrease in Group's controlling
interest in subsidiary without loss of control. The aforesaid transaction is
accounted as an equity transaction, and accordingly no gain or loss is
recognised in the consolidated income statement. An amount of US $ 772 by
which the non-controlling interest is adjusted and debited to 'other reserve'
within consolidated statement of changes in equity and attributed to the
owners of the Company.
b. Acquisition in KSK Mahanadi Power Company Limited
During the year ended 31 March 2016, the Group has issued additional
112,000,000 equity shares in KSK Mahanadi Power Company Limited ("KMPCL") to
KSK Energy Ventures Limited ("KEVL") and 273,330,000 equity shares to KSK
Energy Company Private Limited ("KECPL") at a face value of Rs 10 (US $ 0.16)
at par and 137,662,943 equity shares in KMPCL held by KSK Energy Limited
("KEL") has been transferred to KEVL
Pursuant to above, the economic interest of the Group in KMPCL increased by
0.81 percent in a subsidiary without loss of control. The aforesaid
transaction is accounted as an equity transaction, and no gain or loss is
recognised in the Consolidated income statement. Pursuant to this an amount
of US $ 259 by which the non controlling interest is adjusted, is credited to
'other reserve' within consolidated statement of changes in equity and
attributed to the owners of the company.
c. Dilution in KSK Dibbin Hydro Power Private Limited
During the year ended 31 March 2016, the Group has issued additional
12,650,000 equity shares in KSK Dibbin Hydro Power Private Limited ("KDHPPL")
to North Eastern Electric Power Corporation Limited (NEEPCO) at face value of
Rs 10 (US $ 0.16) each.
Pursuant to above, the economic interest of the Group in KDHPPL decreased from
55.33 percent to 47.72 percent resulting in 7.61 percent decrease in Group's
controlling interest in a subsidiary without loss of control. The aforesaid
transaction is accounted as an equity transaction, and no gain or loss is
recognised in the consolidated income statement. The difference of US $ 137
between the fair value of the net consideration received (US $ 1,931) and the
amount by which the non-controlling interest are adjusted (US $ 1,794), is
credited to 'Other reserve' within consolidated statement of changes in equity
and attributed to the owners of the company.
d. Dilution of KSK Wind Power Aminabhavi Chikodi Private Limited
During the year ended 31 March 2016 , the Group has transferred 1,800,000
equity shares of Rs 10/- each (US $ 0.16) in KSK Wind Power Aminabhavi Chikodi
Private Limited ("KWPACPL") held by KSK Green Energy Pte Limited ("KGEPL") to
KSK Energy Ventures Limited ("KEVL") at a face value of Rs 10 (US $ 0.16) at
premium of Rs 90 (US $ 1.37) each per share.
Pursuant to above, the economic interest of the Group in KWPACPL decreased
from 100 percent to 77.73 percent resulting in a 22.27 percent decrease in
Group's controlling interest in a subsidiary without loss of control. The
aforesaid transaction is accounted as an equity transaction, and no gain or
loss is recognised in the consolidated income statement. Pursuant to this an
amount of US $ 266 is debited to 'other reserve' within consolidated statement
of changes in equity and attributed to the owners of the company.
e. Dilution in Raigarh Champa Rail Infrastructure Private Limited
During the year ended 31 March 2016, the Group has transferred 65,018,090
equity shares of Rs 10 (US $ 0.16) at par in Raigarh Champa Rail
Infrastructure Private Limited ("RCRIPL") held by KSK Energy Company Private
Limited ("KECPL") to KSK Mahanadi Power Company Limited ("KMPCL")
Pursuant to above, the economic interest of the Group in RCRIPL decreased by
13.70 percent in a subsidiary without loss of control. The aforesaid
transaction is accounted as an equity transaction, and no gain or loss is
recognised in the consolidated income statement. Pursuant to this an amount
of US $ 269 by which the non-controlling interest is adjusted debited to
'other reserve' within consolidated statement of changes in equity and
attributed to the owners of the company.
f. Dilution of KSK Water Infrastructure Private Limited
During the year ended 31 March 2016 , the Group has transferred 40,277,990
equity shares of Rs 10 (US $ 0.16) at par in KSK Water Infrastructure Private
Limited ("KWIPL") held by KSK Energy Company Private Limited ("KECPL") to KSK
Mahanadi Power Company Limited ("KMPCL")
Pursuant to above, the economic interest of the Group in KWIPL decreased by
10.03 percent in a subsidiary without loss of control. The aforesaid
transaction is accounted as an equity transaction, and no gain or loss is
recognised in the Consolidated income statement. Pursuant to this an amount
of US $ 156 by which the non-controlling interest is adjusted credited to
'other reserve' within consolidated statement of changes in equity and
attributed to the owners of the company.
4. Investments and other financial assets
Current
Financial assets at fair value through profit or loss
- held-for-trading 5,177 2,589 - -
Loans and receivables 44,446 28,724 - 27
49,623 31,313 - 27
Non-current
Financial assets at fair value through profit or loss
- Derivative assets 45,872 49,702 - -
Available-for-sale investments (Refer note 14(b)(vi)) 17,938 19,155 - -
Deposit with banks 4,994 8,102 - -
Loans and receivables 30,523 37,688 - 5,100
Loans to and receivables from Joint Venture partner 1,501 15,844 - -
Loans to and receivable from subsidiaries - - 155,978 171,676
Investment in subsidiaries - - 226,842 227,126
100,828 130,491 382,820 403,902
Total 150,451 161,804 382,820 403,929
130,491
382,820
403,902
Total
150,451
161,804
382,820
403,929
Financial assets at fair value through profit or loss
The Group has invested into short-term mutual fund units and equity securities
in various companies being quoted on Indian stock market which are designated
as held for trading. The fair value of the mutual fund units and equity
securities are determined by reference to published data.
Available-for-sale investment
The Group has investments in listed equity securities of various companies
being quoted on the Indian and London stock markets respectively. The fair
value of the quoted equity shares are determined by reference to published
data. The Group also holds non-controlling interest (1%-25%) in unlisted
entities which are in the business of power generation and allied projects.
The Group designated these quoted and unquoted equity shares as
available-for-sale investment in accordance with the documented investment
strategy of the Group to manage and evaluate performance of the equity shares
on fair value basis. The fair value of unquoted ordinary shares has been
estimated using a relative valuation using price earnings ratio / book value
method. The valuation requires management to make certain assumptions about
the inputs including size and liquidity.
Deposit with banks
This represents the deposits with the bank with the maturity term of more than
twelve months from the reporting date.
Derivative assets
A derivative asset includes currency option contracts and currency forward
contracts carried at fair value. Fair value of currency option is determined
by independent valuer which is the counterparty in the contracts. Fair value
of currency forward is determined by mark to market value of forward on the
date of financial position.
Loans and receivables
This primarily includes inter-corporate deposits of US $ 9,313 (2015: US $
7,852), deferred loan origination costs US $ 2,496 (2015: US
$ Nil), security deposit US $ 54,925 (2015: US $ 40,809), advance for
investments US $ 1,603 (2015: US $ 2,492) and other financial assets US $
6,632 (2015: US $ 15,259).
Loans to and receivables from Joint Venture partner
This primarily includes the investment in debentures in the joint operations,
inter corporate deposit to joint operations and redeemable preference share
capital held in the joint operations.
Loans to and receivable from subsidiaries
Loans to and receivable from subsidiary represents inter-corporate deposits
given by the Company to its wholly owned subsidiaries.
Investment in subsidiaries
Investment primarily includes unquoted investments in subsidiaries in the
Company financial statements. The Company has invested in 139,244,601 equity
shares (2015: 139,244,601) in KEL, 12,000 equity shares (2015: 12,000) in
KASL, Nil equity shares (2015: 100,000,000) in GCSP (formerly KGPP),
84,146,843 equity shares (2015: 84,146,843) in KGEPL and 1 equity share (2015:
1) in KSVP totalling to US $ 226,842 (2015: US $ 227,126).
Investment and other financial assets amounting to US $ 99,593 (2015: US $
113,076) for the Group is subject to security restrictions (refer note 7).
Impairment of financial assets
During the year ended 31 March 2016, the Group's available-for-sale financial
asset of US $ 170 (2015: US $ 693) and loans and receivable of US $ 16,481
(2015: US $ 25,095) were collectively impaired.
During the year ended 31 March 2016, the Company's loans and receivable of US
$ 912 (2015: US $ Nil) were collectively impaired and written off.
5. Cash and short-term deposits
Cash and short-term deposits comprise of the following:
Consolidated Company
2016 2015 2016 2015
Cash at banks and on hand 16,022 40,730 1,194 1,065
Short-term deposits 106,778 157,266 - -
Total 122,800 197,996 1,194 1,065
Short-term deposits are made for varying periods, depending on the immediate
cash requirements of the Group.
The Group has pledged its short-term deposits amounting US $ 106,739 (2015: US
$ 157,239) in order to fulfil collateral requirements (refer note 7).
For the purpose of cash flow statement, cash and cash equivalent comprise:
Consolidated Company
2016 2015 2016 2015
Cash at banks and on hand 16,022 40,730 1,194 1,065
Short-term deposits 106,778 157,266 - -
Total 122,800 197,996 1,194 1,065
Less: Restricted cash1 (106,776) (157,263) - -
Cash and cash equivalent 16,024 40,733 1,194 1,065
1Include deposits pledged for availing credit facilities from banks and
deposits with maturity term of three months to twelve months.
6. Issued share capital
Share capital
The Company presently has only one class of ordinary shares. For all matters
submitted to vote in the shareholders meeting, every holder of ordinary
shares, as reflected in the records of the Company on the date of the
shareholders' meeting, has one vote in respect of each share held. All shares
are equally eligible to receive dividends and the repayment of capital in the
event of liquidation of the Company.
The Company has an authorised share capital of 500,000,000 equity shares
(2015: 500,000,000) at par value of US $ 0.002 (£ 0.001) per share amounting
to US $ 998.The issued and fully paid up number of shares of the Company is
175,308,600 (2015: 175,308,600). During the year Company has not issued/
bought back any ordinary share.
Share application money represents amount received from investors / parents
pending allotment of ordinary shares.
Reserves
Share premium represents the amount received by the Group over and above the
par value of shares issued. Any transaction costs associated with the issuing
of shares are deducted from share premium, net of any related income tax
consequences.
Revaluation reserve comprises gains and losses due to the revaluation of
previously held interest of the assets acquired in a business combination.
Foreign currency translation reserve is used to record the exchange difference
arising from the translation of the financial statements of the Group entities
and the same is not distributable.
Capital redemption reserve represents statutory reserve required to be
maintained under local law of India on account of redemption of capital. The
reserve is credited equivalent to amount of capital redeemed by debiting
retained earnings and the same is not distributable.
Other reserve represents the difference between the consideration paid and the
adjustment to net assets on change of controlling interest, without change in
control and the excess of the fair value of share issued in business
combination over the par value of such shares. Any transaction costs
associated with the issuing of shares by the subsidiaries are deducted from
other reserves, net of any related income tax consequences. Further, it also
includes the loss / gain on fair valuation of available-for-sale financial
instruments and re-measurement of defined benefit liability net of taxes and
the same is not distributable.
Retained earnings mainly represent all current and prior year results as
disclosed in the consolidated income statement and consolidated other
comprehensive income less dividend distribution.
7. Loans and borrowings
The loans and borrowings comprise of the following:
Interest rate (range %) Final Maturity Consolidated Company
% 2016 2015 2016 2015
Long-term "project finance" loans 2.78 to 16.75 June-2031 2,793,569 2,760,503 - -
Short-term loans 0.00 to 24.00 March-2017 158,762 168,273 80,798 64,564
Buyers' credit facility 0.87 to 3.02 March-2017 138,614 148,687 35,000 49,681
Cash credit and other working capital facilities 11.95 to 14.11 March-2017 194,255 111,305 - -
Redeemable preference shares 0.01 January-2029 5,817 11,564 - -
Debentures 0.01 to 17.00 March-2025 32,785 44,217 - -
Total 3,323,802 3,244,549 115,798 114,245
Total debt of US $ 3,323,802 (2015: US $ 3,244,549) comprised:
§ Long-term "project finance" loans of the Group amounting US $ 2,793,569
(2015: US $ 2,760,503) is fully secured on the property, plant and equipment
and other assets of subsidiaries and joint operations that operate power
stations, allied services and by a pledge over the promoter's shareholding in
equity and preference capital of some of the subsidiaries and joint operations
and corporate guarantee provided by the Company.
§ The short term loans taken by the Group are secured by the corporate
guarantee provided by the Company, fixed deposits of the Group and by pledge
of shares held in the respective entities.
§ Buyer's credit facility is secured against property, plant and equipment and
other assets on pari-passu basis, pledge of fixed deposits and corporate
guarantee of KEVL. These loans bear interest at LIBOR plus 25 to 300 basis
points.
§ A number of the facilities that are due to expire at 31 March 2017 are in
the process of being extended and have a rollover clause in a number of
cases.
§ Cash credit and other working capital facilities are fully secured against
property, plant and equipment and other assets on pari-passu basis with other
lenders of the respective entities availing the loan facilities.
§ Redeemable preference shares are due for repayment within 13 years.
§ Debentures are secured on the property, plant and equipment and other assets
of subsidiaries that operate power stations, allied services and by a pledge
over the promoter's shareholding in equity capital of some of the
subsidiaries.
Long-term "project finance" loan contains certain restrictive covenants for
the benefit of the facility providers and primarily requires the Group to
maintain specified levels of certain financial ratios and operating results.
The terms of the other borrowings arrangements also contain certain
restrictive covenants primarily requiring the Group to maintain certain
financial ratios. As of 31 March 2016, the Group has complied with the
relevant significant covenants, while there are few financial ratio which are
not met and management is in discussion with the lenders for addressing the
same. However, these does not have any significant impact on the Group..
As at 31 March 2016, the Group has available US $ 969,740 of undrawn long term
committed borrowing facilities.
The fair value of borrowings at 31 March 2016 was US $ 3,323,802 (2015: US $
3,244,549). The fair values have been calculated by discounting cash flows at
prevailing interest rates.
The interest-bearing loans and borrowings mature as follows:
Consolidated Company
2016 2015 2016 2015
Current liabilities
Amounts falling due within one year 623,600 521,953 115,798 114,245
Non-current liabilities
Amounts falling due after more than one year but not more than five years 925,489 1,087,518 - -
Amounts falling due in more than five years 1,774,713 1,635,078 - -
Total 3,323,802 3,244,549 115,798 114,245
8. Other financial liabilities
2016 2015
Current
Option premium payable 5,469 5,506
Foreign exchange forward contracts 629 453
6,098 5,959
Non-Current
Option premium payable 17,065 22,099
Interest rate swaps 6,174 4,763
23,239 26,862
Total 29,337 32,821
9. Segment information
The Group has adopted the "management approach" in identifying the operating
segments as outlined in IFRS 8. Management has analysed the information that
the chief operating decision maker reviews and concluded on the segment
disclosure.
For management purposes, the Group is organised into business units based on
their services and has two reportable operating segments as follows:
· Power generating activities and
· Project development activities
Management monitors the operating results of its business units separately for
the purpose of making decisions about resource allocation and performance
assessment. Segment performance is evaluated based on operating profit or loss
which in certain respects, as explained in the table below, is measured
differently from operating profit or loss in the Consolidated financial
statements. Group financing (including finance costs and finance income) and
income taxes are managed on a Group basis and are not allocated to operating
segments. There is only one geographical segment as all the operations and
business is carried out in India.
2016 Project development activities Power generating activities Reconciling / Elimination activities Consolidated
Revenue
External customers 33 674,514 - 674,547
Inter-segment 3,293 - (3,293) -
Total revenue 3,326 674,514 (3,293) 674,547
Segment operating results 738 161,362 880 162,980
Unallocated operating expenses, net (2,514)
Finance costs (296,470)
Finance income 26,336
Loss before tax (109,668)
Tax income 14,064
Loss after tax (95,604)
Segment assets 18,396 4,057,522 (14,031) 4,061,887
Unallocated assets 282,118
Total assets 4,344,005
Segment liabilities 2,786 394,420 (14,031) 383,175
Unallocated liabilities 3,545,090
Total liabilities 3,928,265
Other segment information
Depreciation and amortisation 77 90,913 78 91,068
Capital expenditure 4 193,275 31 193,310
2015 Project development activities Power generating activities Reconciling / Elimination activities Consolidated
Revenue
External customers 105 382,202 - 382,307
Inter-segment 7,010 - (7,010) -
Total revenue 7,115 382,202 (7,010) 382,307
Segment operating results 5,272 40,792 52 46,116
Unallocated operating expenses, net (5,552)
Finance costs (219,810)
Finance income 19,135
Loss before tax (160,111)
Tax income 91,204
Loss after tax (68,907)
Segment assets 9,873 4,005,623 (1,742) 4,013,754
Unallocated assets 275,867
Total assets 4,289,621
Segment liabilities 438 320,007 (1,742) 318,703
Unallocated liabilities 3,417,817
Total liabilities 3,736,520
Other segment information
Depreciation and amortisation 126 58,528 79 58,733
Capital expenditure 21 417,194 204 417,419
Notes to segment reporting:
(a) Inter-segment revenues are eliminated on consolidation.
(b) Profit / (loss) for each operating segment does not include finance
income and finance costs of US $ 26,336 and US $ 296,470 respectively (2015:
US $ 19,135 and US $ 219,810 respectively).
(c) Segment assets do not include deferred tax asset of US $ 141,327 (2015:
US $ 128,104), financial assets and other investments US $ 99,923 (2015: US $
103,263), short-term deposits with bank and cash US $ 8,551 (2015: US $
15,428), and corporate assets US $ 32,317 (2015: US $ 29,072).
(d) Segment liabilities do not include deferred tax US $ 37,596 (2015: US $
33,777), current tax payable US $ 1,243 (2015: US $ 1,147), interest-bearing
current and non-current borrowings US $ 3,323,802 (2015: US $ 3,244,549),
derivative liabilities US $ 29,337 (2015: US $ 32,821) and corporate
liabilities US $ 153,112 (2015: US $ 105,523).
(e) The Company operates in one business and geographic segment.
Consequently no segment disclosures of the Company are presented.
(f) Three customers in the power generating segment contributing revenues
of US $ 473,844 accounted for 70.02% (2015: One customers in the power
generating segment contributes revenues of US $ 196,893 accounting for 51.52%)
of the total segment revenue.
10. Finance costs
Finance costs comprise:
Consolidated Company
2016 2015 2016 2015
Interest expenses on loans and borrowings 1 268,611 158,361 1,065 1,381
Other finance costs 16,577 19,864 1,576 1,519
Impairment of financial assets 2 170 693 - -
Net loss on financial instrument at fair value through profit or loss 3 8,822 4,355 - 560
Foreign exchange loss, net - 34,281 2,333 258
Net loss on held -for-trading financial assets
on disposal 2 - - -
on re-measurement 6 - - -
Unwinding of discounts 2,282 2,256 - -
Total 296,470 219,810 4,974 3,718
1Borrowing cost capitalised during the year amounting to US $ 154,737 (2015:
US $ 240,579) to property, plant and equipment at an effective interest rate
of 15.25% (2015: 14.53%).
2 Impairment of financial assets relates to available-for-sale financial asset
of US $ 170 (2015: US $ 693).
3Net loss on financial instrument at fair value through profit or loss above
relates to foreign exchange forward contracts, currency options and interest
rate swap that did not qualify for hedge accounting.
11. Finance income
The finance income comprises:
2016 2015
Interest income
bank deposits 11,508 14,155
loans and receivables 2,044 2,531
Dividend income 510 297
Net gain on held-for-trading financial assets
on disposal - 3
on re-measurement - 32
Unwinding of discount on security deposits 1,704 1,704 2,073
Foreign exchange gain, net 10,563 -
Gain on available-for- sale financial assets disposed 7 44
Total 26,336 19,135
12. Tax income / (expense)
The major components of income tax for the year ended 31 March 2016 and 31
March 2015 are:
2016 2015
Current tax (1,392) (1,490)
Deferred tax 15,456 92,694
Tax income reported in the income statement 14,064 91,204
13. Related party transactions
Name of the related party Nature of relationship
K&S Consulting Group Private Limited Group ultimate parent (GUP)
Sayi Power Energy Limited Step-up holding
Sayi Energy Ventur Limited Parent
Key management personnel and their relatives (KMP):
Name of the KMP Nature of relationship
T L Sankar Chairman
S Kishore Executive Director
K A Sastry Executive Director
S R Iyer Director
Vladimir Dlouhy Director
Guy D Lafferty* Director
Abhay M Nalawade Director
Keith N Henry Director
K V Krishnamurthy Director of parent
* Resigned with effect from 03 November 2014.
Transactions1,2
Corporate support services fees 33 - - 105 - - - - - - - -
Interest income 515 - - 1,341 - - - - - - - -
Capacity charges paid - - - 6,736 - - - - - - - -
Inter-corporate deposits and loans given 901 19 - 9,638 56 - 4,258 9 - 45,993 24 -
Inter-corporate deposits and loans refunded 447 164 - 514 65 - 17,633 35 - - - -
Loan taken 272 430 - 1,036 - - 17,152 27 - 62,635 - -
Repayment of loan taken - 10 - - - - 993 10 - - - -
Refund of share application money - 16,498 - - 1,502 - - 16,498 - - 1,502 -
Equity-settled share based payment - - 47 - - 112 - - 47 - - 112
Managerial remuneration 3 - - 702 - - 710 - - 371 - - 355
Balances 1,2
Interest receivable 4,153 - - 3, 829 - - - - - - - -
Loans and inter corporate deposits receivable 1,501 784 - 15,844 976 - 155,978 - - 171,676 22 -
Loans payable 269 412 - - - - 80,785 13 - 62,955 - -
Other receivable 9 - - 18 - - - - - - - -
Other payable 2,408 165 - 2,464 - - - 165 - - - -
Guarantees given 135 - - 143 - - 465,202 - - 432,097 - -
Managerial remuneration payable3 - - 108 - - 83 - - 87 - - 74
-
108
-
-
83
-
-
87
-
-
74
1 The transactions with related parties are made at terms equivalent to those
that prevail in arm's length transactions. Outstanding balances at the period
end are unsecured, interest-bearing in case of loans and inter-corporate
deposits and non-interest bearing in case of other loans and advances and
settlement occurs in cash. For the year ended 31 March 2016, the Group has
recorded US $ 14,096 as impairment of receivables relating to amounts owed by
related parties (2015: US $ Nil). This assessment is undertaken each financial
period through examining the financial position of the related party and the
market in which the related party operates.
2 The difference in the movement between the opening outstanding balances,
transactions during the year and closing outstanding balances is on account of
exchange adjustments, impact of business combination, provision / write off
and conversion into equity.
3 Remuneration is net of share based payments and accrual towards Gratuity, a
defined benefit plan, which is managed for the Group as a whole. However, the
annual accrual of this liability towards key management personnel is not
expected to be significant. There are no other long term benefits and
termination benefits which are payable to the key management personnel.
14. Commitments and contingencies
a. Capital commitments
As at 31 March 2016, the Group is committed to purchase property, plant and
equipment for US $ 1,467,098 (2015: US $ 1,300,892). In respect of its
interest in joint operations the Group is committed to incur capital
expenditure of US $ 49 (2015: US $ 51).
b. Legal and other claim
i. SWPL filed a claim against Maharashtra State Electricity Distribution
Company Limited (MSEDCL) towards recovery of the amount withheld against
supply of energy under Power Purchase Agreement (including penalty on such
amount) amounting to US $ 11,008 (2015: US $ 11,636). The facility required
for generation of an agreed quantum of power was not ready as per an agreed
schedule on account of unexpected factors beyond the control of the Group, the
Group proposed to MSEDCL an arrangement to secure the energy from alternate
supplies for the short quantity required to meet the obligation under the
power purchase agreement. MSEDCL accepted the proposal and also confirmed that
the energy supplied from alternate sources will also be subject to the tariff
agreed under the power purchase agreement. However, after initial payments for
the period April to June 2010, starting July 2010 to October 2010, MSEDCL did
not settle the entire dues billed and the certain amounts were withheld
without any explanation. The Group contended before Maharashtra Electricity
Regulatory Commission (MERC) that since the energy supplied and billed was as
per the terms agreed and the similar bills of earlier months were paid by
MSEDCL, there is no cause to withhold the payments. However, MERC has
dismissed the petition. The Group has filed an appeal before Appellate
Tribunal for Electricity (APTEL) against the order of MERC and APTEL also
rejected the appeal. The Group has filed an appeal before Honourable Supreme
Court of India. Pending adjudication, the Group believes that the final
outcome of the above dispute would be in favour of the Group and there would
be no material impact on the financial statements. Pending final adjudication
of the matter, the Group has accrued necessary provision on prudent basis.
ii. VS Lignite Power Private Limited (VSLPPL) has receivables of US $ 7,787
(2015: US $ 8,750) from its consumers representing taxes including royalty,
cess on clean energy, taxes on input fuel as well as double adjustments for
the security deposit, transmission and SLDC charges and take or pay obligation
which are disputed by the consumers. In addition, the customers have also
raised demand towards supply or pay obligation which are disputed by the
Group. The Group has an amount of US $ 6,373 access from such customers as
redeemable preference and equity capital available for necessary setoffs.
Further, the Group contends that not only it has fulfilled the contractually
guaranteed supplies but also the amounts claimed are as per the terms of the
power purchase agreements. Aggrieved by the order of Arbitrator and civil
court, the Group has preferred an appeal in Honourable High Court of Jodhpur.
Pending outcome of the same, the Group believes that the final determination
of the above dispute would be in favour of the Group and there would be no
material impact on the financial statements.
iii. The captive customers of the SWPL has deducted from the sales invoices
and paid an amount of US$ 9,107 towards Cross Subsidy Surcharge ('CSS') levied
by MSEDCL for the financial year 2012-13 before ascertaining the captive
status of the plant at the end of financial year which was against the express
provisions of the Electricity Act 2003 read with the Electricity Rules, 2005.
MERC asked the Company to pay CSS on ground of non-fulfilment of criteria of
51% supply to captive users as per Rule 3 of the Electricity Rules 2005.
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