REG - KSK Power Ventur PLC - Audited Results for the year ended 31 March 2017 <Origin Href="QuoteRef">KSK.L</Origin> - Part 3
27/07/2017 07:07
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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 %) Finalmaturity Consolidated Company
2017 2016 2017 2016
Long-term "project finance" loans 3.51 to 19.75 April-38 3,342,527 2,793,569 - -
Short-term loans 0.00 to 26.00 March-20 142,953 158,762 83,921 80,798
Buyers' credit facility 1.53 to 4.17 March-18 81,238 138,614 35,000 35,000
Cash credit and other working capital facilities 10.90 to 17.50 March-18 241,918 194,255 - -
Redeemable preference shares 0.01 January-29 5,940 5,817 - -
Debentures 0.01 to 21.00 March-25 51,256 32,785 - -
Total 3,865,832 3,323,802 118,921 115,798
The interest-bearing loans and borrowings mature as follows:
Consolidated Company
2017 2016 2017 2016
Current liabilities
Amounts falling due within one year 598,827 623,600 118,921 115,798
Non-current liabilities
Amounts falling due after more than one year but not more than five years 1,208,631 925,489 - -
Amounts falling due in more than five years 2,058,374 1,774,713 - -
Total 3,865,832 3,323,802 118,921 115,798
Total debt of US $ 3,865,832 (2016: US $ 3,323,802) comprised:
§ Long-term "project finance" loans of the Group amounting US $3,342,527 (2016: US $ 2,793,569) 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, pledge of 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.
§ A number of the facilities that are due to expire at 31 March 2018 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 next 12 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 2017, the Group has complied with the relevant significant covenants, while there
are few financial ratios which are not met and management is in discussion with the lenders for addressing the same.
However, these do not have any significant impact on the Group.
The lenders are evaluating the strategic debt restructuring ('SDR') option; this will involve debt / equity swap or new
equity investment in respect of SWPGL and VSLPPL.
As at 31 March 2017, the Group has available US $ 479,852 of undrawn long term committed borrowing facilities.
The fair value of borrowings at 31 March 2017 was US $ 3,865,832 (2016: US $ 3,323,802). The fair values have been
calculated by discounting cash flows at prevailing interest rates.
8. Other financial liabilities
2017 2016
Current
Option premium payable 7,248 5,469
Foreign exchange forward contracts 388 629
7,636 6,098
Non-Current
Option premium payable 12,040 17,065
Interest rate swaps 1,775 6,174
13,815 23,239
Total 21,451 29,337
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.
2017 Project development activities Power generating activities Reconciling / Elimination activities Consolidated
Revenue
External customers 281 590,977 - 591,258
Inter-segment 2,674 - (2,674) -
Total revenue 2,955 590,977 (2,674) 591,258
Segment operating results 1,469 178,500 - 179,969
Unallocated operating expenses, net . (1,418)
Finance costs (360,244)
Finance income 7,694
Loss before tax (173,999)
Tax income 15,103
Loss after tax (158,896)
Segment assets 5,084 4,634,084 (4,616) 4,634,552
Unallocated assets 300,745
Total assets 4,935,297
Segment liabilities 655 513,180 (4,616) 509,219
Unallocated liabilities 4,151,822
Total liabilities 4,661,041
Other segment information
Depreciation and amortisation 38 100,398 42 100,478
Capital expenditure 1 407,575 - 407,576
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
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 $ 7,694 and
US $ 360,244 respectively (2016: US $ 26,336 and US $ 296,470 respectively).
(c) Segment assets do not include deferred tax asset of US $ 167,951 (2016: US $ 141,327), financial assets and other
investments US $ 103,144 (2016: US $ 99,923), short-term deposits with bank and cash US $ 7,163 (2016: US $ 8,551), and
corporate assets US $ 22,487 (2016: US $ 32,317).
(d) Segment liabilities do not include deferred tax US $ 45,429 (2016: US $ 37,596), current tax payable US $ 1,658
(2016: US $ 1,243), interest-bearing current and non-current borrowings US $ 3,865,832 (2016: US $ 3,323,802), derivative
liabilities US $ 21,451(2016: US $ 29,337) and corporate liabilities US $ 217,452 (2016: US $ 153,112).
(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 $ 461,763 accounted for 77.75%
(2016: Three customers in the power generating segment contributing revenues of US $ 473,844 accounted for 70.02% ) of the
total segment revenue.
10. Other operating income
Other operating income comprises:
Consolidated
2017 2016
Income from management fees 94 226
Claims received / receivable1 94,805 893
Deferred revenue amortisation 117 115
Gain on disposal of property, plant and equipment, net 225 -
Other operating income 426 441
Total 95,667 1,675
1 Claims received includes an amount of US $ 90,173 (2016: US $ Nil) relating to quality and price claim receivable
from a Coal supplier (refer note 15 (b) (x)).
11. Finance costs
Finance costs comprise:
Consolidated Company
2017 2016 2017 2016
Interest expenses on loans and borrowings 1 327,516 268,611 1,080 1,065
Other finance costs 21,376 16,577 1,737 1,576
Impairment of financial assets 2 - 170 - -
Net loss on financial instrument at fair value through profit or loss 3 7,308 8,822 - -
Foreign exchange loss, net 2,105 - 3,114 2,333
Net loss on held for trading financial assets
on disposal - 2 - -
on re-measurement - 6 - -
Unwinding of discounts 1,939 2,282 - -
Total 360,244 296,470 5,931 4,974
1Borrowing cost amounting to US $ 157,720 (2016: US $ 154,737) is capitalised during the year to property, plant and
equipment at an effective interest rate of 14.80% (2016: 15.25%).
2 Impairment of financial assets relates to available-for-sale financial asset of US $ Nil (2016: US $ 170).
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.
12. Finance income
The finance income comprises:
2017 2016
Interest income
bank deposits 4,511 11,508
loans and receivables and trade receivable 1,584 2,044
Dividend income 203 510
Net gain on held for trading financial assets
on disposal 30 -
on re-measurement 23 -
Unwinding of discount on security deposits 1,332 1,704
Foreign exchange gain, net - 10,563
Reclassification adjustment in respect of available-for- sale instrument disposed 11 7
Total 7,694 26,336
13. Tax income / (expense)
The major components of income tax for the year ended 31 March 2017 and 31 March 2016 are:
2017 2016
Current tax (932) (1,392)
Deferred tax 16,035 15,456
Tax income reported in the income statement 15,103 14,064
14. 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 IyerS R Iyer Director
Vladimir Dlouhy Director
Abhay M Nalawade Director
Keith N Henry Director
K V Krishnamurthy Director of parent
The table below set out transactions with related parties that occurred in the normal course of trading.
Transactions1,2
Corporate support services fees 33 - - 33 - - - - - - - -
Interest income 523 - - 515 - - - - - - - -
Inter-corporate deposits and loans given - - - 901 19 - 108 - - 4,258 9 -
Inter-corporate deposits and loans refunded - - - 447 164 - 489 - - 17,633 35 -
Loans taken 458 12 - 272 430 - 1,926 12 - 17,152 27 -
Repayment of loan taken 114 10 - - 10 - 86 10 - 993 10 -
Refund of share application money - - - - 16,498 - - - - - 16,498 -
Equity-settled share based payment - - 16 - - 47 - - 16 - - 47
Managerial remuneration3 - - 665 - - 702 - - 343 - - 371
Balances1,2
Interest receivable 4,780 - - 4,153 - - - - - - - -
Loans and inter corporate deposits receivable 1,533 802 - 1,501 784 - 147,002 - - 155,978 - -
Loans payable 377 583 - 269 412 - 82,620 176 - 80,785 13 -
Other receivable - - - 9 - - - - - - - -
Other payable 2,785 - - 2,408 165 - - - - - 165 -
Guarantees given - - - 135 - - 416,031 - - 465,202 - -
Managerial remuneration payable3 - - 98 - - 108 - - 74 - - 87
Managerial remuneration payable3
-
-
98
-
-
108
-
-
74
-
-
87
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 2017,
the Group has recorded US $ 28 as impairment of receivables relating to amounts owed by related parties (2016: US
$ 14,096). 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.
15. Commitments and contingencies
a. Capital commitments
As at 31 March 2017, the Group is committed to purchase property, plant and equipment for US $ 1,247,291 (2016: US $
1,467,098).
b. Legal and other claim
As a part of the environment and activities of the Group, the Group is exposed to a number of litigation and claim matters
which may significantly impact receivables or payables. No significant developments have occurred in respect of these
matters during the year except disclosed below.
i. SWPGL had 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 (2016: US $ 11,008). 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. During the year ended 31 March 2017 the group
received an unfavorable ruling on a claim against a state body MSEDCL as it was concluded the claims if allowed were
against public interest and accordingly group has impaired and written off the entire claim amount.
ii. VSLPPL has receivables of US $ 7,952 (2016: US $ 7,787) 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 $ 6,508 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, civil and high court, the Group has preferred an appeal in
Honourable Supreme Court. Pending outcome of the same, the Group based on the opinion of legal counsel 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 SWPGL has deducted from the sales invoices and paid an amount of US$ 9,300 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 SWPGL 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. Aggrieved by the said order of the MERC, SWPGL has filed an appeal before the
APTEL on the ground that the non-fulfilment of captive criteria by the SWPGL was attributed to the delay caused by MSEDCL
in granting open access to captive customers. APTEL also rejected the appeal, aggrieved by this the Group has filed
petition with Honourable Supreme Court of India. Pending adjudication of the same, the Group believes that there is a good
chance of succeeding and hence no adjustment has been made in the consolidated financial statements. Pending final
adjudication of the matter the Group has accrued necessary provision on a prudent basis.
iv. KSK Mahanadi, the Group's largest thermal power generation plant with two units fully operational and balance units
in various stages of construction and commissioning is engaged in the generation and supply of power to four state
utilities of Andhra Pradesh, Telangana, Tamil Nadu and Uttar Pradesh under Case 1 competitive bid Power Purchase Agreement
(PPA). The respective PPAs in addition to the agreed tariff payable for the power supplied contains specific provisions
providing for tariff adjustment payment to the generator on account of Change in law. The Change in law provision
essentially provides reimbursement mechanism for all additional recurring or non-recurring expenditure incurred by the
Generator towards new costs levied / incurred post the bidding point. These claims under the PPA cover both (a) Claim on
account of various statutory duties, levies and cess levied by Central or State Governments or its instrumentalities; and
(b) linkage coal shortfall compensation with respective to Presidential Directive and Ministry of Power Notification to all
Electricity Regulators in India. KSK Mahanadi has made claims pursuant to the above PPA provisions in excess of US $
290,750, wherein claim pertaining to taxes amounts to US $ 81,287 and claim on account of short supply of coal
pursuant to the Presidential Directive amounts to US $ 209,463. However, notwithstanding its eligibility for the full claim
as per the PPA, keeping in view the regulatory commitments by the Government instrumentalities, the necessary legal and
administrative process that KSK Mahanadi has to pursue, on its internal evaluation of the facts and circumstances of the
case on a prudent basis, KSK Mahanadi has recognised a portion of the claim aggregating to US $ 220,934 in the books of
accounts until date, wherein US $ 77,472 pertains to the current year. KSK Mahanadi has in its notices to the utilities
submitted that it qualifies for the composite scheme guidelines and hence Central Electrical Regulatory Commission (CERC)
will be the relevant appropriate authority to adjudicate the matter. While in the earlier year, the claims were to be
determined by the State Regulators, pursuant to a recent ruling by the Appellate Tribunal of Electricity (APTEL) with
respect to multiple power producers, the jurisdiction of CERC has been reaffirmed. Based on the bid guidelines, the PPA
provisions and the legal advice that KSK Mahanadi has obtained, Group has made necessary amendments in its claim petitions
and filed before CERC. Based on the legal advice and recent ruling of Honourable Supreme Court of India in similarly placed
power project, KSK Mahanadi is confident that the entire claim amount is receivable.
v. KSK Mahanadi has levied capacity charges and transmission charges to AP Discoms for the period from 16 June 2013 to
13 August 2013 amounting to US $ 13,463 (2016: US $ 13,183), on account of delayed fulfilment of obligation under the PPA.
AP Discoms have rejected those claims and made the counter claim of US $ 3,637 (2016: US $ 3,562) for failure to furnish
advance final written notice of commencement of supply of power as per the provision of PPA. The Group has preferred an
appeal before APERC & TSERC for refund of amount collected by Discoms by encashment of bank guarantee. The Group's
contention is that since the Discoms have failed to fulfil the obligation as per PPA, there is default on part of Discoms
and the counter claim by Discoms is merely to negate the effect of KSK Mahanadi claim of capacity charges. Pending
adjudication of the case, the Group believes that there is a good chance of succeeding before the regulatory commissions
and hence no adjustment has been made in the consolidated financial statements.
vi. The Company had made investment of US $ 16,184 (2016: US $ 15,848) in Athena Projects Private Limited ('APPL') for
acquisition of 25% stake. APPL in turn holds substantial investment in Teesta III hydro project. On 16.07.2009, the parties
entered into a MOU providing for transfer of interest in 68,400,000 shares of Teesta III in favour of KSK Energy Company
Private Limited ('KECPL'). The arrangement envisaged APPL to complete certain corporate actions. Thereafter, as a final
arrangement a share sale and purchase agreement dated 5 April 2010 was executed between KECPL and APPL promoters that
provided for acquisition of entire shares of US $ 16,184 (2016: US $ 15,848) in one year's time. Upon same being not
honoured KECPL filed the petition with National Company Law Tribunal ('NCLT'), Principal Bench, New Delhi which is
currently pending. The aforesaid is the significant matter of minority protection and management believe that they have the
good grounds for the favourable disposal of the case. Hence the Group continue to carry the investment in APPL at cost.
vii. The Group had entered into coal supply agreement with Goa Industrial Development Corporation (GIDC) for sourcing
coal from the identified coal block i.e., Garepelma-III coal block. However, pursuant to the Honourable Supreme Court
Orders during August and September 2014, Garepelma-III was de-allocated from GIDC. GIDC has kept the group notified that is
still pursuing with the Government for allocation of this mine under the new coal statute and also has filed a legal case
before Honourable High Court of Delhi wherein interim relief is granted in favor of GIDC. At the same time the initial
development of the Garepelma-III block was entrusted to Group by GIDC, wherein the Group has incurred all the cost relating
to the development of mine. Government of India has promulgated the Coal Mines (Special Provisions) Ordinance, which
provides for reimbursement of cost incurred towards land and mine infrastructure by new allottee. Accordingly GIDC has made
the claim for US $ 40,844 for settlement before Nominated Authority appointed under the Ordinance by Ministry of Coal.
During the year end, Government of India, Ministry of Coal has directed to pay towards cost of compensation for geological
report to all the prior allottee and accordingly the Group has received US $ 4,624. Pending final adjudication of the case
by Honourable High Court of Delhi or pending final settlement of the claim by the Nominated Authority, the management
believes that the entire amount incurred by the Group is recoverable and accordingly the balance claim of US $ 36,220 has
been reclassified under other receivable.
viii. Other non-current assets include an amount of US $ 8,934 (2016: US $ 8,749) relating to Central Excise receivable
from the excise departments by SWPGL. SWPGL is registered as SEZ unit. A unit in SEZ is allowed to import goods (purchase
from local market is also treated as import) without payment of Duty for the purpose of its authorised operations. The
exemption from the payment of duties is provided under Section 26 of the SEZ Act, 2005. The excise duty refund claims were
rejected by the department stating that there are no provisions of refund under the SEZ Act. The Company has filed an
appeal with the CESTAT where in the CESTAT and the Large bench has mentioned that in respect of rebate on goods supplied
from DTA to SEZ within India, the appeal would not lie to Appellate Tribunal under clause (b) of provision of Section 35(1)
of Central Excise Act, however the Group has liberty to file revision application before Revisionary Authority, Government
of India. Accordingly, the Company has filed a revisionary petition with Ministry of Finance, Department of Revenue. The
Group is confident to receive the refund.
ix. The Group has received claims for US $ 9,580 (2016: US $ 9,807) from Joint Director General of Foreign Trade (DGFT)
towards the recovery of the duty drawbacks, earlier refunded. The Group had earlier made claims for the refund of the
duties paid on the machinery and other items purchased for the construction of the power projects under the scheme of
deemed export benefit, which were accepted and refunds were granted. The communications from the DGFT regarding the
recovery of the duties paid are based on the interpretations by the Policy Interpretation Committee held on 15 March 2011.
The Group contends that the above change in interpretation requires an amendment to the foreign trade policy to be legally
enforceable in law. Since, no such amendment can be made with retrospective effect, the Group believes that outcome of the
above dispute would be in favour of the Group and there would be no material impact on the financial statements and as such
no provision for claim has been made.
x. SWPGL has lodged a claim relating to quality and price on Western Coalfields Limited (WCL), the coal supplier for
abuse of dominant position by WCL and Coal India Limited (CIL). Honourable Competition Commission of India ('Commission')
has passed an order on 27 October 2014 in favour of the Group as far as price claim is concerned whereas for the quality
claim, the Commission has referred to its earlier order dated 13 January 2014, of similar case which is presently pending
at Competition Appellate Tribunal (COMPAT). WCL has preferred an appeal against the order of the Commission before the
COMPAT wherein during the year ended 31 March 2017, COMPAT has upheld the order given by Commission against which WCL has
preferred an appeal before the Honourable Supreme Court of India. The Group has filed a total claim of US $ 239,950 with
COMPAT under provision 53N of The Competition Act, 2002. Further SWPGL has received a demand of US $ 11,737 from WCL
towards short lifting of minimum quantity of coal which is also contested by the SWPGL on various grounds including of
inferior quality & high price and as such has not been provided for. Consequent to reiterating and upholding, in entirety,
the earlier favourable order of Hon'ble Competition Commission of India by COMPAT the Group has recognised a claim of US $
90,173 during the year ended 31 March 2017. The Group believes that the final outcome of the above matters would be in
favour of the group and company is confident that the entire amount is fully recoverable.
In addition, the Group is also subject to various other legal proceedings and claims which have arisen in the ordinary
course of business including claims before various tax authorities. The Management does not reasonably expect that these
legal proceedings, when ultimately concluded and determined, will have a material or adverse effect on the Group's results
of operations or financial conditions. The Group has accrued appropriate provision wherever required.
16. Financial Instruments
Carrying amounts versus fair values
The fair values of financial assets and financial liabilities, together with the carrying amounts in the Consolidated
statement of financial position are as follows:
Non-current financial assets
Trade and other receivables 2,717 2,717 2,593 2,593
Equity securities - available-for-sale 17,970 17,970 17,938 17,938
Loans and receivables 35,915 35,915 32,024 32,024
Derivative assets 40,297 40,297 45,872 45,872
Non-current bank deposits 9,079 9,079 4,994 4,994
Total non-current 105,978 105,978 103,421 103,421
Current financial assets
Trade and other receivables 457,018 457,018 367,139 367,139
Equity securities - held for trading 141 141 115 115
Debt securities-held for trading 5,269 5,269 5,062 5,062
Loans and receivables 152,846 152,846 44,446 44,446
Cash and short-term deposits 105,079 105,079 122,800 122,800
Total current 720,353 720,353 539,562 539,562
Total 826,331 826,331 642,983 642,983
Non-current financial liabilities
Trade and other payables 64,961 64,961 30,496 30,496
Loans and borrowings 3,267,005 3,267,005 2,700,202 2,700,202
Interest rate swaps 1,775 1,775 6,174 6,174
Option premium payable 12,040 12,040 17,065 17,065
Total non-current 3,345,781 3,345,781 2,753,937 2,753,937
Current financial liabilities
Trade and other payables 648,733 648,733 493,099 493,099
Loans and borrowings 598,827 598,827 623,600 623,600
Foreign exchange forward contract 388 388 629 629
Option premium payable 7,248 7,248 5,469 5,469
Total current 1,255,196 1,255,196 1,122,797 1,122,797
Total 4,600,977 4,600,977 3,876,734 3,876,734
1,255,196
1,255,196
1,122,797
1,122,797
Total
4,600,977
4,600,977
3,876,734
3,876,734
The fair values of financial assets and financial liabilities, together with the carrying amounts in the Company statement
of financial position are as follows:
Non-current financial assets
Loans and receivables to subsidiaries 147,002 147,002 155,978 155,978
Total non-current 147,002 147,002 155,978 155,978
Current financial assets
Loans and receivables 87 87 - -
Cash and short-term deposits 969 969 1,194 1,194
Total current 1,056 1,056 1,194 1,194
Total 148,058 148,058 157,172 157,172
Current financial liabilities
Trade and other payables 1,203 1,203 1,503 1,503
Loans and borrowings 118,921 118,921 115,798 115,798
Total current 120,124 120,124 117,301 117,301
115,798
Total current
120,124
120,124
117,301
117,301
Fair value hierarchy
The table below analyses recurring fair value measurements for financial assets and financial liabilities. These fair value
measurements are categorised in to different levels in the fair value hierarchy based on the inputs to valuation techniques
used. The different levels are defined as follows.
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices that is observable for the asset or liability, either directly or indirectly.
• Level 3: valuation techniques that include inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
2017 Level 1 Level 2 Level 3 Total
Financial assets measured at fair value
Equity securities - available-for-sale 496 - 17,474 17,970
Equity securities - held for trading 141 - - 141
Debt securities-held for trading 5,269 - - 5,269
Derivative assets - 40,297 - 40,297
Total 5,906 40,297 17,474 63,677
Financial liabilities measured at fair value
Interest rate swaps - 1,775 - 1,775
Option premium payable - 19,288 - 19,288
Foreign exchange forward contract - 388 - 388
Total - 21,451 - 21,451
The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting year during which
the transfer has occurred. During the year ended 31 March 2017, there were no transfers between Level 1 and Level 2 fair
value measurements.
Reconciliation of Level 3 fair value measurements of financial assets:
2017 Available-for-sale Total
Unquoted equities
Opening balance 17,429 17,429
Total gains or losses:
- in income statement - -
- in other comprehensive income
change in fair value of available for sale financial asset (314) (314)
foreign currency translation difference 359 359
Settlements - -
Transfers into level 3 - -
Closing balance 17,474 17,474
Total gains or losses for the year shown above, relates to available for sale securities held at the end of the reporting
year
2016 Level 1 Level 2 Level 3 Total
Financial assets measured at fair value
Equity securities - available-for-sale 509 - 17,429 17,938
Equity securities - held for trading 115 - - 115
Debt securities-held for trading 5,062 - - 5,062
Derivative assets - 45,872 - 45,872
Total 5,686 45,872 17,429 68,987
Financial liabilities measured at fair value
Interest rate swaps - 6,174 - 6,174
Option premium payable - 22,534 - 22,534
Foreign exchange forward contract - 629 - 629
Total - 29,337 - 29,337
During the year ended 31 March 2016, there were no transfers between Level 1 and Level 2 fair value measurements.
Reconciliation of Level 3 fair value measurements of financial assets:
31 March 2016 Available-for-sale Total
Unquoted equities
Opening balance 18,644 18,644
Total gains or losses:
- in income statement 2 2
- in other comprehensive income
change in fair value of available for sale financial asset (159) (159)
foreign currency translation difference (1,004) (1,004)
Settlements (54) (54)
Transfers into level 3 - -
Closing balance 17,429 17,429
Valuation techniques
Level 2 fair values for simple over-the-counter derivative financial instruments are based on broker quotes. Those quotes
are tested for reasonableness by discounting expected future cash flows using market interest rate for a similar instrument
at the measurement date. Fair values reflect the credit risk of the instrument and include adjustments to take account of
the credit risk of the Group entity and counterparty when appropriate.
Level 3 fair values for equity securities-available for sale has been determined by using Comparable Company Analyses. This
is a relative valuation technique which involves comparing that company's valuation multiples to those of its peers. The
multiples consider for the valuation is price to book value which is then adjusted for differences that are directly
related to the characteristics of equity instruments being valued such as discounting factor for size and liquidity etc.
This information is provided by RNS
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