REG - KSK Power Ventur PLC - Audited Results for the year ended 31 March 2017 <Origin Href="QuoteRef">KSK.L</Origin> - Part 2
27/07/2017 07:10
- Part 2: For the preceding part double click ID:nRSa2203Ma
Items that are or
may be reclassified
subsequently to
income statement
Foreign currency - - 4,029 - - - - 4,029 4,017 8,046
translation
differences
Available-for-sale
financial assets
- current year - - - - - (133) - (133) (108) (241)
(loss) / gain
- reclassification - - - - - (11) - (11) - (11)
to profit or loss
Total comprehensive - - 4,029 - - (93) (120,600) (116,664) (34,384) (151,048)
income / (expenses)
for the year
Balance as at 31 289 287,191 (143,123) 1,352 16,045 102,578 (175,303) 89,029 185,227 274,256
March 2017
(See accompanying
notes to the
Consolidated and
Company financial
statements)
1 The group
entities have
arrangements of
sharing of profits
with its non
-controlling
shareholders,
through which the
non controlling
shareholders are
entitled to a
dividend of 0.01%
of the face value
of the equity share
capital held and
the same is also
reflected in the
Consolidated income
statement. However,
the non controlling
interest disclosed
in the Consolidated
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
31 March 2017
(All amount in
thousands of US $,
unless otherwise
stated)
Issued capital Share premium Share application money Foreign currency translation reserve Other reserve Retained earnings TotalEquity
As at 1 April 2015 289 287,191 16,498 4,524 122 (18,927) 289,697
Refund of share - - (16,498) - - - (16,498)
application money
Equity-settled - - - - 47 47
share based payment
Transaction with - - (16,498) - 47 - (16,451)
owners
Loss for the year - - - - - (6,662) (6,662)
Other comprehensive
income
Foreign currency - - - 237 - - 237
translation
differences
Total comprehensive - - - 237 - (6,662) (6,425)
income / (expense)
for the year
Balance as at 31 289 287,191 - 4,761 169 (25,589) 266,821
March 2016
As at 1 April 2016 289 287,191 - 4,761 169 (25,589) 266,821
Equity-settled - - - - 16 - 16
share based payment
Transaction with - - - - 16 - 16
owners
Loss for the year - - - - - (6,666) (6,666)
Other comprehensive
income
Foreign currency - - - (5,238) - - (5,238)
translation
differences
Total comprehensive - - - (5,238) - (6,666) (11,904)
expense for the
year
Balance as at 31 289 287,191 - (477) 185 (32,255) 254,933
March 2017
(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
2017 2016 2017 2016
Cash inflow / (outflow) from operating activities
Loss before tax (173,999) (109,668) (6,666) (6,662)
Adjustment
Depreciation and amortization 100,478 91,068 - -
Finance cost 361,252 317,817 6,112 8,212
Finance income (7,694) (15,773) - -
Provision and impairment of trade receivable, PPE and other receivable 15,062 29,353 - 912
(Profit) / loss on sale of fixed assets, net (230) 5 - -
Others (28) (182) 9 (65)
Change in
Trade receivables and unbilled revenue (107,925) (222,093) - -
Inventories 9,633 (6,438) - -
Other assets (130,042) (12,111) (17) 214
Trade payables and other liabilities 72,278 71,699 48 260
Provisions and employee benefit liability (188) 346 - -
Cash generated from / (used in) operating activities 138,597 144,023 (514) 2,871
Taxes refund, net 5,836 80 - -
Net cash provided by / (used in) operating activities 144,433 144,103 (514) 2,871
Cash inflow / (outflow) from investing activities
Movement in restricted cash, net 23,281 50,487 - -
Purchase of property, plant and equipment and other non-current assets (188,637) (58,518) - -
Proceeds from sale of property, plant and equipment 4,110 2,605 - -
Purchase of financial assets (20,039) (4,910) - -
Proceeds from sale of financial assets 65 8,541 296 17,826
Dividend received 107 417 - -
Interest income received 11,893 14,099 - -
Net cash (used in) / provided by investing activities (169,220) 12,721 296 17,826
Cash inflow / (outflow) from financing activities
Proceeds from borrowings 713,642 501,317 2,958 52,843
Repayment of borrowings (219,914) (276,115) - (51,609)
Finance costs paid (483,091) (377,058) (2,785) (2,286)
Payment of derivative liabilities (9,523) (9,333) - -
Advance received for sale of investment 25,239 4,024 - -
Net proceeds from issue of shares and share application money in subsidiary to non-controlling interest 1,818 2,984 - -
Net refund of share application money - (16,498) - (16,498)
Net cash flow (used in) / provided by financing activities 28,171 (170,679) 173 (17, 550)
Effect of exchange rate changes 2,176 (10,854) (180) (3,018)
Net increase / (decrease) in cash and cash equivalent 5,560 (24,709) (225) 129
Cash and cash equivalents at the beginning of the year 16,024 40,733 1,194 1,065
Cash and cash equivalents at the end of the year (refer note 5) 21,584 16,024 969 1,194
(See accompanying notes to the Consolidated and Company financial statements)
NOTES TO CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS
for the year ended 31 March 2017
(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 have 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);
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 26 July 2017.
1.4. Financial period
The Consolidated and Company financial statements cover the period from 1 April 2016 to 31 March 2017, with comparative
figures from 1 April 2015 to 31 March 2016.
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:
These 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. This is based on the Group's assessment of the business, sectoral developments,
underlying economic environment as well as approach towards addressing the business challenges faced by operating assets to
achieve optimistic solutions thereto. The Group is making cautious efforts to preserve and maximize the economic value of
the underlying power generation assets and recognizes that dilution of equity interest at some of these power plants could
be the potential outcome and with support from the project stakeholders at each of such assets it would be able to address
the requirements of Going Concern at each of the same. However, the Group is exposed to a number of operational, legal,
financial, economic and political risks, including:
Capital structure
The Group is seeking additional equity financing and/or debt restructuring in respect of the KSK Mahanadi and other key
power plant projects in order to stabilise the projects development and the Groups financing and operating obligations. The
Group is currently pursuing a number of avenues in this regard and expects positive outcomes during late 2017. It is
anticipated by management that a number of the financing facilities will be restructured during the next 12 months and that
the Group's proportion of equity holdings in significant projects may be diluted as a result of these initiatives. However
there can be no certainty as to the outcome of these negotiations or the impact on the finances of the Group.
Financial
The Group requires funds for both short term operational needs as well as for long term investment programs, mainly in
construction projects for its power plants. As at 31 March 2017, the Group has net current liabilities of US $ 404,454 and
is dependent on a continuation of both short term and long term debt financing facilities. A number of the facilities that
are due to expire at or before 31 March 2018 are in the process of being extended and have a rollover clause in a number of
cases, and the Group may refinance and/or restructure certain short term borrowings into long term borrowings and will also
consider alternative sources of financing, where applicable. The Directors consider that facilities will remain available
to the Group based on current trading, current covenant compliance and ongoing discussions with the Group's primary lending
consortium regarding future facilities and arrangements in respect of current borrowings. During the year the Group
breached certain debt service covenant requirements in respect of loan facilities - the Group remains in active discussions
with its lenders with regard to the provision of facilities.
Operational
The Group continues to generate cash flows from current operations which are further expected to increase with improved PLF
in the existing 1200 MW KSK Mahanadi and Sai Wardha operations, and incremental cash flows upon expected commissioning of
another two units of 600 MW each and also on account of reduction in coal procurement costs with the new coal policy called
'SHAKTI'. Also in Sai Wardha, with recent COMPAT order, the Group is confident of reduction in overall coal price and
thereby increases in operating cash flow. These factors are key assumptions with regard to management's forecasts and
expectations.
Legal and claims
The Group is also involved in a number of on-going legal and claim matters. These may impact on the timing of receipt and
value of receivables recognised in the financial statements. For example, the Group has experienced delays and legal
challenge to the settlement of significant receivables, including c$220m recognized in respect of change in law claim under
PPA due to fuel input considerations, which the Group has recognized in accordance with the PPA, has obtained legal advice
in respect of and considered the recent ruling of Central Electrical Regulatory Commission and Honorable Supreme Court of
India in similarly placed power projects, as such management consider the entire claim as fully recoverable, and c$93m
recognized in the period due to fuel supply issues from Western Coalfields Limited and Coal India Limited, wherein the
Competition Appellate Tribunal and Honorable Competition Commission of India have ruled in favour of the Company.
Notwithstanding these rulings the Group has not forecast receipt of these amounts in the going concern cash flow analysis
prepared by management due to the uncertainty regarding timing of receipt. In addition the Group is subject to a number of
claims, whilst the Group considers that it has a strong position of defense in respect, these proceedings may result in
outflows that are not currently recognized. For further details refer to note 15 (b).
Political environment
Given the country and sector of operations the Group is exposed to political uncertainties that may result in changes in
government policy which may materially affect the business plans, of the Group and amounts recognised in the financial
statements.
Commitments
The Group also has significant capital commitments at the period-end of which a portion is due to be met during the next 12
months, primarily in respect of on-going plant construction projects at KSK Mahanadi. However, the Group currently has also
significant committed undrawn borrowing facilities, subject to certain conditions, amounting to approximately US $ 479,852
to meet its long term investment programmes. The Group has already entered in to Common Loan Agreement with the Lenders at
KSK Mahanadi with respect to cost overrun debt sanctioned of US $ 892,252 and the remaining draw down of these funds of US
$ 393,958 is not impacted by the current restructure negotiations or breaches on financing facilities. This will facilitate
drawing the balance of the debt depending upon the investment required for construction of project and resultant surpluses
of operational cash flows available to meet Group obligations.
Conclusion
Nonetheless Group monitors the situation on an on-going basis and plans alternative arrangements where possible. The
outcome of the above factors is subject to material uncertainty and may impact on the timing of the strategic development
of power plants, the Groups proportional equity holdings in significant projects and the going concern of the Group.
However, the Directors continue to have a reasonable expectation that the Company and 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 2016, 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 2016.
- IFRS 14 - Regulatory Deferral Accounts: IFRS 14 is an optional standard that allows an entity, whose activities are
subject to rate-regulation, to continue applying most of its existing accounting policies for regulatory deferral account
balances upon its first-time adoption of IFRS. Entities that adopt IFRS 14 must present the regulatory deferral accounts as
separate line items on the statement of financial position and present movements in these account balances as separate line
items in the statement of profit or loss and Other Comprehensive Income ('OCI'). The standard requires disclosure of the
nature of, and risks associated with, the entity's rate-regulation and the effects of that rate-regulation on its financial
statements. IFRS 14 is effective for annual periods beginning on or after 1 January 2016. Since the Group is not subject to
any rate regulation and is an existing IFRS preparer, this standard would not apply.
- IFRS 11 - Accounting for acquisition of interest in Joint Operations (Amendments): The amendments to IFRS 11
require that a joint operator accounting for the acquisition of an interest in a joint operation, in which the activity of
the joint operation constitutes a business, must apply the relevant IFRS 3 principles for business combinations accounting.
The amendments also clarify that a previously held interest in a joint operation is not re-measured on the acquisition of
an additional interest in the same joint operation while joint control is retained. In addition, scope exclusion has been
added to IFRS 11 to specify that the amendments do not apply when the parties sharing joint control, including the
reporting entity, are under common control of the same ultimate controlling party.
The amendments apply to both the acquisition of the initial interest in a joint operation and the acquisition of any
additional interests in the same joint operation and are prospectively effective for annual periods beginning on or after 1
January 2016, with early adoption permitted. These amendments are not expected to have any impact on the Group.
- IAS 16 & IAS 38 - Clarification of Acceptable Methods of Depreciations and Amortisation (Amendments): The amendments
clarify the principle in IAS 16 and IAS 38 that revenue reflects a pattern of economic benefits that are generated from
operating a business (of which the asset is part) rather than the economic benefits that are consumed through use of the
asset. As a result, a revenue-based method cannot be used to depreciate property, plant and equipment and may only be used
in very limited circumstances to amortise intangible assets. The amendments are effective prospectively for annual periods
beginning on or after 1 January 2016, with early adoption permitted. These amendments do not have any impact to the Group
given that the Group has not used a revenue-based method to depreciate its non-current assets.
- IAS 16 & IAS 41 - Agriculture: Bearer Plant (Amendments): The amendments change the accounting requirements for
biological assets that meet the definition of bearer plants. Under the amendments, biological assets that meet the
definition of bearer plants will no longer be within the scope of IAS 41. Instead, IAS 16 will apply. After initial
recognition, bearer plants will be measured under IAS 16 at accumulated cost (before maturity) and using either the cost
model or revaluation model (after maturity). The amendments also require that produce that grows on bearer plants will
remain in the scope of IAS 41 measured at fair value less costs to sell. For government grants related to bearer plants,
IAS 20 Accounting for Government Grants and Disclosure of Government Assistance will apply. The amendments are
retrospectively effective for annual periods beginning on or after 1 January 2016, with early adoption permitted. These
amendments do not have any impact to the Group as the Group does not have any bearer plants.
- IAS 27 - Equity method in Separate Financial Statements (Amendments): The amendments will allow entities to use
the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial
statements. Entities already applying IFRS and electing to change to the equity method in its separate financial statements
will have to apply that change retrospectively. For first-time adopters of IFRS electing to use the equity method in its
separate financial statements, they will be required to apply this method from the date of transition to IFRS. The
amendments are effective for annual periods beginning on or after 1 January 2016, with early adoption permitted. These
amendments will not have any impact on the Group's consolidated financial statements.
- IFRS 10, IFRS 12 and IAS 28 - Investment Entities: Applying the Consolidation Exception (Amendments): The
amendments address issues that have arisen in applying the investment entities exception under IFRS 10. The amendments to
IFRS 10 clarify that the exemption from presenting consolidated financial statements applies to a parent entity that is a
subsidiary of an investment entity, when the investment entity measures all of its subsidiaries at fair value.
Furthermore, the amendments to IFRS 10 clarify that only a subsidiary of an investment entity that is not an investment
entity itself and that provides support services to the investment entity is consolidated. All other subsidiaries of an
investment entity are measured at fair value. The amendments to IAS 28 allow the investor, when applying the equity method,
to retain the fair value measurement applied by the investment entity associate or joint venture to its interests in
subsidiaries.
These amendments must be applied retrospectively and are effective for annual periods beginning on or after 1 January 2016,
with early adoption permitted. These amendments are not expected to have any impact on the Group.
- IAS 1 - Disclosure Initiative (Amendments): The amendments to IAS 1 Presentation of Financial Statements clarify,
rather than significantly change, existing IAS 1 requirements. The amendments clarify:
- The materiality requirements in IAS 1
- That specific line items in the statement(s) of profit or loss and OCI and the statement of financial position may
be disaggregated
- That entities have flexibility as to the order in which they present the notes to financial statements
- That the share of OCI of associates and joint ventures accounted for using the equity method must be presented in
aggregate as a single line item, and classified between those items that will or will not be subsequently reclassified to
profit or loss
Furthermore, the amendments clarify the requirements that apply when additional subtotals are presented in the statement of
financial position and the statement(s) of profit or loss and OCI. These amendments are effective for annual periods
beginning on or after 1 January 2016, with early adoption permitted. These amendments are not expected to have any impact
on the Group.
- Annual Improvements 2012-2014 Cycle: These improvements are effective for annual periods beginning on or after 1
January 2016. They include:
- IFRS 5 Non-current Assets Held for Sale and Discontinued Operations: Assets (or disposal groups) are generally
disposed of either through sale or distribution to owners. The amendment clarifies that changing from one of these disposal
methods to the other would not be considered a new plan of disposal, rather it is a continuation of the original plan.
There is, therefore, no interruption of the application of the requirements in IFRS 5. This amendment must be applied
prospectively.
- IFRS 7 Financial Instruments: Disclosures
Servicing contracts: The amendment clarifies that a servicing contract that includes a fee can constitute continuing
involvement in a financial asset. An entity must assess the nature of the fee and the arrangement against the guidance for
continuing involvement in IFRS 7 in order to assess whether the disclosures are required. The assessment of which servicing
contracts constitute continuing involvement must be done retrospectively. However, the required disclosures would not need
to be provided for any period beginning before the annual period in which the entity first applies the amendments.
Applicability of the amendments to IFRS 7 to condensed interim financial statements: The amendment clarifies that the
offsetting disclosure requirements do not apply to condensed interim financial statements, unless such disclosures provide
a significant update to the information reported in the most recent annual report. This amendment must be applied
retrospectively.
- IAS 19 Employee Benefits: The amendment clarifies that market depth of high quality corporate bonds is assessed
based on the currency in which the obligation is denominated, rather than the country where the obligation is located. When
there is no deep market for high quality corporate bonds in that currency, government bond rates must be used. This
amendment must be applied prospectively.
- IAS 34 Interim Financial Reporting: The amendment clarifies that the required interim disclosures must either be in
the interim financial statements or incorporated by cross-reference between the interim financial statements and wherever
they are included within the interim financial report (e.g., in the management commentary or risk report). The other
information within the interim financial report must be available to users on the same terms as the interim financial
statements and at the same time. This amendment must be applied retrospectively.
These amendments are not expected to have any impact on the Group.
3. Acquisition and Dilution - change in non-controlling interest without change in control
Dilution in KSK Energy Ventures Limited
During the year ended 31 March 2017, 43,840,496 equity shares in KSK Energy Ventures Limited ("KEVL") were sold to non -
controlling interest. Pursuant to this the economic interest of the Group in KEVL has decreased from 68.17 percent to 57.83
percent resulting in a 10.34 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. The difference of US $ 34,514, between the fair value of the net consideration received US $
7,702 and the amount by which the non-controlling interest are adjusted US $ 42,216, is debited to 'Other reserve' within
consolidated statement of changes in equity and attributed to the owners of the Company.
Forfeiture of share warrant
During the 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.
During the year ended 31 March 2017, KPHL has not exercised the right of conversion of balance 69,856,800 warrants
resulting in forfeiture of the same. 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 $ 8,195 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.
Acquisition in KSK Mahanadi Power Company Limited
During the year ended 31 March 2017, the Group has issued additional 62,000,000 equity shares in KSK Mahanadi Power Company
Limited ("KMPCL") to KSK Energy Ventures Limited ("KEVL") and 97,360,000 equity shares to KSK Energy Company Private
Limited ("KECPL") at a face value of Rs 10 (US $ 0.16) at par.
Pursuant to above, the economic interest of the Group in KMPCL increased by 2.69 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 $ 454 by which the non controlling interest is adjusted,
is debited to 'other reserve' within Consolidated statement of changes in equity and attributed to the owners of the
company.
Dilution of KSK Water Infrastructure Private Limited
During the period ended 31 March 2017, the Group has transferred 30,000,000 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 4.62 percent in 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 $ 452 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.
Dilution of KSK Wind Energy Halagali Benchi Private Limited ('KWEHBPL'),KSK Wind Power Sankonahatti Athni Private Limited
('KWPSAPL') and KSK Wind Energy Mothalli Haveri Private Limited ('KWEMHPL')
During the period ended 31 March 2017, the Group has transferred 2,563,254 equity shares of Rs 10 (US $ 0.16) at par in
KWEHBPL, 2,544,485 equity shares of Rs 10 (US $ 0.16) at par in KWEMHPL, 2,544,481 equity shares of Rs 10 (US $ 0.16) at
par in KWPSAPL held by KSK Green Energy Pte Limited to KSK Electricity Financing India Private Limited.
Pursuant to above, the economic interest of the Group in KWEHBPL, KWEMHPL, KWPSAPL decreased by 31.83 percent each in
subsidiaries 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 $ 755 by which the non-controlling
interest is adjusted, is debited to 'other reserve' within consolidated statement of changes in equity and attributed to
the owners of the company.
Dilution of KSK Wind Power Aminabhavi Chikodi Private Limited ('KWPACPL')
During the period ended 31 March 2017, the Group has transferred 773,254 equity shares of Rs 10 (US $ 0.16) at par in
KWPACPL held by KSK Green Energy Pte Limited to KSK Electricity Financing India Private Limited
Pursuant to above, the economic interest of the Group in KWPACPL decreased by 9.56 percent 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 $ 111 by which the non-controlling interest is adjusted, is debited 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 5,410 5,177 - -
Loans and receivables 152,846 44,446 87 -
158,256 49,623 87 -
Non-current
Financial assets at fair value through profit or loss
- Derivative assets 40,297 45,872 - -
Available-for-sale investments 17,970 17,938 - -
Deposit with banks 9,079 4,994 - -
Loans and receivables 34,382 30,523 - -
Loans to and receivables to Joint Venture partner 1,533 1,501 - -
Loans to and receivable to subsidiaries - - 147,002 155,978
Investment in subsidiaries - - 226,888 226,842
103,261 100,828 373,890 382,820
Total 261,517 150,451 373,977 382,820
100,828
373,890
382,820
Total
261,517
150,451
373,977
382,820
Financial assets at fair value through profit or loss (held for trading)
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.
Derivative assets
Derivative assets include currency option contracts and currency forward contracts carried at fair value. Fair value of
currency options is determined by an independent valuer, which is the counterparty in the contracts. Fair value of currency
forwards is determined by mark to market value of the forward on the date of the financial position.
Loans and receivables
This primarily includes inter-corporate deposits of US $ 21,391 (2016: US $ 9,313), deferred loan origination costs
US $ Nil (2016: US $ 2,496), security deposit US $ 60,610 (2016: US $ 54,925), advance for investments US $ 1,637
(2016: US $ 1,603) and other financial assets US $ 103,590 (2016: US $ 6,632).
Investment in subsidiaries
Investment primarily includes unquoted investments in subsidiaries in the Company financial statements. The Company has
invested in 139,244,601 (2016: 139,244,601) equity shares in KEL, 12,000 (2016: 12,000) equity shares in KASL, 84,146,843
(2016: 84,146,843) equity shares in KGEPL and 1 (2016: 1) equity share in KSVP totalling to US $ 226,888 (2016: US $
226,842).
The Company is carrying investment and advances to subsidiaries amounting to US $ 291,270 (net of US $ 82,620 of borrowings
from subsidiaries) in the separate financial statement at cost. Even though the consolidated equity of the Group is US $
89,029 and the market capitalisation is c US $120,000, Management believes there are no permanent diminutions in the
investment value because the underlying power generating assets have significant inbuilt intrinsic value and long term
economic value. Also as against the net carrying value of US $ 291,270 investment by the Company, the aggregate equity
investment made across the various power project SPVs is significantly in excess of the carrying value. Therefore,
management believes that the lower consolidated equity vis a vis investment value is only a temporary event, and reflects
the commissioning and current operational challenges at the project SPVs as a result of the power sector in India as a
whole. This in no way interferes with the long term value held in the strategic assets via the investment in subsidiaries,
which are held for a long term purpose to generate yield returns over the economic life of the asset. Therefore management
has concluded that no impairment in the carrying value of the investment in subsidiaries at cost in the separate financial
statement is necessary at the current time.
Investment and other financial assets amounting to US $ 204,706 (2016: US $ 99,593) for the Group are subject to security
restrictions (refer note 7).
Impairment of financial assets
During the year ended 31 March 2017, the Group's available-for-sale financial asset of US $ Nil (2016: US $ 170) and loans
and receivable of US $ 308 (2016: US $ 16,481) were collectively impaired.
During the year ended 31 March 2017, the Company's loans and receivable of US $Nil (2016: US $ 912) were collectively
impaired and written off.
5. Cash and short-term deposits
Cash and short-term deposits comprise of the following:
Consolidated Company
2017 2016 2017 2016
Cash at banks and on hand 21,565 16,022 969 1,194
Short-term deposits 83,514 106,778 - -
Total 105,079 122,800 969 1,194
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 $ 83,457 (2016: US $ 106,739) in order to fulfil collateral
requirements (refer note 7).
For the purpose of cash flow statement, cash and cash equivalent comprise:
Consolidated Company
2017 2016 2017 2016
Cash at banks and on hand 21,565 16,022 969 1,194
Short-term deposits 83,514 106,778 - -
Total 105,079 122,800 969 1,194
Less: Restricted cash1 (83,495) (106,776) - -
Cash and cash equivalent 21,584 16,024 969 1,194
1Include deposits pledged for prevailing credit facilities from banks and deposits with maturity term of three months to
twelve months (refer note 7).
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 (2016: 500,000,000) at par value of £ 0.001 (US $
0.0013) per equity share amounting to US $ 650. The issued and fully paid up number of shares of the Company is 175,308,600
(2016: 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
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