REG - KSK Power Ventur PLC - Half Yearly Report <Origin Href="QuoteRef">KSK.L</Origin> - Part 2
30/11/2016 07:07
- Part 2: For the preceding part double click ID:nRSd5134Qa
16,022 40,733 1,194 1,065
Cash and cash equivalents at the end of the period (refer note 7) 69,791 42,752 1,939 2,099
(See accompanying notes to the interim condensed Consolidated and Company financial statements)
NOTES TO INTERIM CONDENSED CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS
for the six months ended 30 September 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.
The financial statements were authorised for issue by the Board of Directors on 29 November 2016.
1.2. Statement of compliance /responsibility statement
a. the condensed set of financial statements contained in this document has been prepared in accordance with
International Accounting Standard 34 ("IAS 34"), "Interim Financial Reporting" as adopted by European Union ('EU') 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 Interim 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 first six
months of the financial year and their impact on the condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of the year);
c. this document includes a fair review of the information required by DTR 4.2.8R (disclosure of related party
transactions and changes therein);
d. the interim condensed Consolidated and Company financial statements should be read in conjunction with the annual
financial statements for the year ended 31 March 2016, which have been prepared in accordance with IFRSs.
e. The financial information set out in these financial statements does not constitute statutory accounts. The
financial statement is unaudited but has been reviewed by KPMG Audit LLC and their report is set out at the end of this
document.
1.3. Financial period
The interim condensed Consolidated and Company financial statements are for the six months period ended 30 September 2016.
The comparative information required by IAS 1 were determined using IAS 34 and include comparative information as follows:
Statement of financial position : 31 March 2016 being the end of immediately preceding financial year.
Income statement, statement of other comprehensive income, statement of changes in equity and statement of cash flows Six months ended 30 September 2015 being the comparable interim period of the immediate preceding financial year.
1.4. Basis of preparation
These interim condensed Consolidated and Company financial statements have been prepared under International Accounting
Standards-34- "Interim Financial Reporting" as adopted by the European Union.
These interim condensed Consolidated and Company financial statements have been prepared on the historical cost convention
and on an accrual basis, except for the following:
· derivative financial instruments that are measured at fair value;
· financial instruments that are designated as being at fair value through profit or loss account upon initial
recognition are measured at fair value;
· available-for-sale financial assets that are measured at fair value; and
· Net employee defined benefit (asset) / liability that are 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 30 September 2016, the Group and Company have net current liabilities of US $ 493,688 and US $ 117,206 and is
depending 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 period-end of which a
portion is due to be met during the year to 30 September 2017 (refer note 16(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 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 operations and also on account of expected commissioning of another two units of 600
MW each over the foreseeable future. Also in Sai Wardha, with recent MERC order clarifying non applicability of additional
surcharge as well on captive power supplies, Captive PPA attractiveness has been enhanced PPA arrangements for the balance
two units are expected to be in place shortly. These factors are key assumptions with regard to management's forecasts and
expectations. However, the Group has experienced delays and legal challenge to the settlement of receivables in respect of
change in law (refer note 16(c)) and generation, reducing cash conversion of revenue and therefore liquidity.
In addition, a number of the facilities that are due to expire at 30 September 2017 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 borrowings and will also consider alternative sources of financing, where applicable. The Directors
are confident that 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 $ 692,431 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. This will facilitate drawing the balance debt
depending upon the investment required for construction of project and resultant surpluses of operational cash flows
available to meet company obligations. In addition the Group is seeking additional equity financing in respect of the KSK
Mahanadi plant in order to stabilise the project 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 2016 / early 2017.
Nonetheless Group monitors the situation on an on-going basis and plans alternative arrangements where possible. The
outcome of these discussions may impact on the timing of the strategic development of this plant and the going concern of
the group.
As a consequence, the Directors 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 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 & IAS 28 - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
(Amendments) : The amendments address the conflict between IFRS 10 and IAS 28 in dealing with the loss of control of a
subsidiary that is sold or contributed to an associate or joint venture. The amendments clarify that the gain or loss
resulting from the sale or contribution of assets that constitute a business, as defined in IFRS 3, between an investor and
its associate or joint venture, is recognised in full. Any gain or loss resulting from the sale or contribution of assets
that do not constitute a business, however, is recognised only to the extent of unrelated investors' interests in the
associate or joint venture. These amendments must be applied prospectively 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.
- 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. Significant accounting Judgements, estimates and assumptions
There have been no significant changes in the significant accounting judgments, estimates and assumptions applied for the
purposes of the preparation of these interim condensed Consolidated and Company financial statements.
4. Acquisition and Dilution - change in non-controlling interest without change in control
Dilution in KSK Energy Ventures Limited
During the period ended 30 September 2016, the Group has sold 192,518 equity shares in KSK Energy Ventures Limited ("KEVL")
to non - controlling interest. Pursuant to this the economic interest of the Group in KEVL has decreased from 68.17 percent
to 68.12 percent resulting in a 0.05 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 interim condensed consolidated income statement. The difference of US $ 147, between the fair value of the net
consideration received US $ 84 and the amount by which the non-controlling interest are adjusted US $ 231, 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 period ended 30 September 2016, 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 $ 8,223 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 period ended 30 September 2016, 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 0.65 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 interim
condensed consolidated income statement. Pursuant to this an amount of US $ 327 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 Water Infrastructure Private Limited
During the period ended 30 September 2016, 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 7.07 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 interim
condensed consolidated income statement. Pursuant to this an amount of US $ 174 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.
5. Property, plant and equipment, net
The property, plant and equipment of the Group comprise:
Land and buildings Power stations Mining property Other plant and equipment Assets under construction Total
Cost
As at 1 April 2015 431,675 2,207,813 12,839 9,111 961,023 3,622,461
Additions 12,912 1,888 - 694 177,816 193,310
Impaired - - - - (3,874) (3,874)
Transfer 14,957 39,346 - - (54,303) -
Disposals/adjustments (135) (256) - (212) - (603)
Exchange difference (23,305) (119,196) (693) (491) (50,416) (194,101)
As at 31 March 2016 436,104 2,129,595 12,146 9,102 1,030,246 3,617,193
As at 1 April 2016 436,104 2,129,595 12,146 9,102 1,030,246 3,617,193
Additions 3,894 351 - 97 276,169 280,511
Transfer - 16,753 - - (16,753) -
Disposals/adjustments (2,204) - - (24) - (2,228)
Exchange difference (3,421) (16,705) (95) (70) (12,183) (32,474)
As at 30 September 2016 434,373 2,129,994 12,051 9,105 1,277,479 3,863,002
Depreciation
As at 1 April 2015 22,337 134,173 2,254 6,783 - 165,547
Additions 12,054 77,308 607 972 - 90,941
Disposals / adjustments (17) (61) - (179) - (257)
Exchange difference (1,343) (8,121) (129) (377) - (9,970)
As at 31 March 2016 33,031 203,299 2,732 7,199 - 246,261
As at 1 April 2016 33,031 203,299 2,732 7,199 - 246,261
Additions 7,085 42,935 323 380 - 50,723
Disposals / adjustments (12) - - (23) - (35)
Exchange difference (232) (1,433) (20) (54) - (1,739)
As at 30 September 2016 39,872 244,801 3,035 7,502 - 295,210
Net book value
As at 30 September 2016 394,501 1,885,193 9,016 1,603 1,277,479 3,567,792
As at 31 March 2016 403,073 1,926,296 9,414 1,903 1,030,246 3,370,932
6. Investments and other financial assets
Current
Financial assets at fair value through profit or loss
- held-for-trading 5,741 5,177 - -
Loans and receivables 56,220 44,446 87 -
61,961 49,623 87 -
Non-current
Financial assets at fair value through profit or loss
- Derivative assets 44,980 45,872 - -
Available-for-sale investments 17,799 17,938 - -
Deposit with banks 7,274 4,994 - -
Loans and receivables 33,920 30,523 - -
Loans to and receivables from Joint Venture partner 1,489 1,501 - -
Loans to and receivable from subsidiaries - - 149,130 155,978
Investment in subsidiaries - - 226,825 226,842
105,462 100,828 375,955 382,820
Total 167,423 150,451 376,042 382,820
100,828
375,955
382,820
Total
167,423
150,451
376,042
382,820
Impairment of financial assets
During the period ended 30 September 2016, the Group's available-for-sale financial asset of US $ Nil (31 March 2016:
US $ 170) and loans and receivable of US $ 17 (31 March 2016: US $ 16,481) were collectively impaired and written
off.
During the period ended 30 September 2016, the Company's loans and receivable of US $ Nil (31 March 2016: US $ 912) were
collectively impaired and written off.
7. Cash and short-term deposits
Cash and short-term deposits comprise of the following:
Consolidated Company
30 September 2016 31 March 30 September 2016 31 March
2016 2016
Cash at banks and on hand 69,772 16,022 1,939 1,194
Short-term deposits 91,124 106,778 - -
Total 160,896 122,800 1,939 1,194
For the purpose of cash flow statement, cash and cash equivalent comprise:
Consolidated Company
30 September 2016 30 September 2015 30 September 2016 30 September 2015
Cash at banks and on hand 69,772 42,750 1,939 2,099
Short-term deposits 91,124 158,320 - -
Total 160,896 201,070 1,939 2,099
Less: Restricted cash1 (91,105) (158,318) - -
Cash and cash equivalent 69,791 42,752 1,939 2,099
1Include deposits pledged for availing credit facilities from banks and deposits with maturity term of three months to
twelve months.
8. 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 (31 March 2016: 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 (31 March 2016 175,308,600). During the period 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.
9. Loans and borrowings
The loans and borrowings comprise of the following:
Final Maturity Consolidated Company
30 September 2016 31 March 30 September 2016 31 March
2016 2016
Long-term "project finance" loans April-38 3,040,444 2,793,569 - -
Short-term loans September-17 130,678 158,762 83,360 80,798
Buyers' credit facility September-17 101,837 138,614 35,000 35,000
Cash credit and other working capital facilities September-17 248,001 194,255 - -
Redeemable preference shares January-29 5,771 5,817 - -
Debentures March-25 48,253 32,785 - -
Total 3,574,984 3,323,802 118,360 115,798
The interest-bearing loans and borrowings mature as follows:
Consolidated Company
30 September 2016 31 March 30 September 2016 31 March
2016 2016
Current liabilities
Amounts falling due within one year 623,697 623,600 118,360 115,798
Non-current liabilities
Amounts falling due after more than one year but not more than five years 1,075,652 925,489 - -
Amounts falling due in more than five years 1,875,635 1,774,713 - -
Total 3,574,984 3,323,802 118,360 115,798
§ Long-term "project finance" loans of the Group amounting US $ 3,040,444 (31 March 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, 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 30 September 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.
10. Other financial liabilities
30 September 2016 31 March
2016
Current
Option premium payable 6,365 5,469
Foreign exchange forward contracts 2,413 629
8,778 6,098
Non-Current
Option premium payable 14,533 17,065
Interest rate swaps 5,406 6,174
19,939 23,239
Total 28,717 29,337
11. Segment information
The Group has adopted the "management approach" in identifying the operating segments as outlined in IFRS 8. Management has
analysed the information that the chief operating decision maker reviews and concluded on the segment disclosure.
For management purposes, the Group is organised into business units based on their services and has two reportable
operating segments as follows:
· Power generating activities and
· Project development activities
Management monitors the operating results of its business units separately for the purpose of making decisions about
resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which in
certain respects, as explained in the table below, is measured differently from operating profit or loss in the
Consolidated financial statements. Group financing (including finance costs and finance income) and income taxes are
managed on a Group basis and are not allocated to operating segments. There is only one geographical segment as all the
operations and business is carried out in India.
Period ended 30 September 2016 Project development activities Power generating activities Reconciling / Elimination activities Consolidated
Revenue
External customers 16 315,384 - 315,400
Inter-segment 1,326 - (1,326) -
Total revenue 1,342 315,384 (1,326) 315,400
Segment operating results 934 50,475 294 51,703
Unallocated operating expenses, net . (794)
Finance costs (178,151)
Finance income 10,354
Loss before tax (116,888)
Tax income 13,315
Loss after tax (103,573)
Segment assets 9,457 4,333,236 (6,213) 4,336,480
Unallocated assets 300,174
Total assets 4,636,654
Segment liabilities 591 491,784 (6,213) 486,162
Unallocated liabilities 3,838,179
Total liabilities 4,324,341
Other segment information
Depreciation and amortisation 24 50,731 30 50,785
Capital expenditure 1 280,509 1 280,511
Period ended 30 September 2015 Project development activities Power generating activities Reconciling / Elimination activities Consolidated
Revenue
External customers 17 245,448 - 245,465
Inter-segment 1,738 - (1,738) -
Total revenue 1,755 245,448 (1,738) 245,465
Segment operating results 1,016 27,916 371 29,303
Unallocated operating expenses, net (626)
Finance costs (184,721)
Finance income 9,551
Loss before tax (146,493)
Tax income 48,832
Loss after tax (97,661)
Segment assets 10,396 3,893,883 (4,474) 3,899,805
Unallocated assets 329,050
Total assets 4,228,855
Segment liabilities 8,438 345,490 (4,474) 349,454
Unallocated liabilities 3,454,161
Total liabilities 3,803,615
Other segment information
Depreciation and amortisation 43 51,276 40 51,359
Capital expenditure 3 89,891 29 89,923
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 $ 10,354 and
US $ 178,151 respectively (30 September 2015: US $ 9,551 and US $ 184,721respectively).
(c) Segment assets do not include deferred tax asset of US $ 154,124 (30 September 2015: US $ 169,620), financial assets
and other investments US $ 109,452 (30 September 2015: US $ 108,289), short-term deposits with bank and cash US $ 9,770 (30
September 2015: US $ 24,244), and corporate assets US $ 26,828 (30 September 2015: US $ 26,897).
(d) Segment liabilities do not include deferred tax US $ 37,455 (30 September 2015: US $ 32,111), current tax payable US
$ 1,313 (30 September 2015: US $ 2,621), interest-bearing current and non-current borrowings US $ 3,574,984 (30 September
2015: US $ 3,258,129), derivative liabilities US $ 28,717 (30 September 2015: US $ 30,743) and corporate liabilities US $
195,710 (30 September 2015: US $ 130,557).
(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 $ 243,613 accounted for 77.19%
(30 September 2015: Two customers in the power generating segment contributing revenues of US $ 144,648 accounted for
58.93% ) of the total segment revenue.
12. Finance costs
Finance costs comprise:
Consolidated Company
30 September 2016 30 September 2015 30 September 2016 30 September 2015
Interest expenses on loans and borrowings 1 152,512 147,261 621 600
Other finance costs 11,047 8,579 860 786
Impairment of financial assets 2 - 26 - -
Net loss on financial instrument at fair value through profit or loss 3 2,538 1,048 - -
Foreign exchange loss, net 10,821 26,792 2,375 311
Unwinding of discounts 1,233 1,015 - -
Total 178,151 184,721 3,856 1,697
1Borrowing cost capitalised during the period amounting to US $ 78,105 (30 September 2015: US $ 65,935).
2 Impairment of financial assets relates to available-for-sale financial asset of US $ Nil (30 September 2015: US $ 26).
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.
13. Finance income
The finance income comprises:
30 September 2016 30 September 2015
Interest income
bank deposits 3,584 6,779
loans and receivables 5,684 1,482
Dividend income 126 289
Net gain on held-for-trading financial assets
on disposal 17 4
on re-measurement 13 70
Unwinding of discount on security deposits 923 927
Reclassification adjustment in respect of available for sale instrument disposed 7 -
Total 10,354 9,551
14. Tax income / (expense)
The major components of income tax for the period ended 30 September 2016 and 30 September 2015 are:
30 September 2016 30 September 2015
Current tax (373) (2,178)
Deferred tax 13,688 51,010
Tax income reported in the income statement 13,315 48,832
15. Related party transactions
The table below set out transactions with related parties that occurred in the normal course of trading.
Transactions
Corporate support services fees 16 - - 17 - - - - - - - -
Interest income 262 - - 263 - - - - - - - -
Inter-corporate deposits and loans given - - - 48 30 - 53 - - 5,339 - -
Inter-corporate deposits and loans refunded - - - - (132) - (514) - - (3,977) - -
Loan taken 349 5 - - 425 - 1,802 5 - 14 - -
Repayment of loan taken - - - - - - 29 - - - - -
Refund of share application money - - - - 2,759 - - - - - 2,759 -
Equity-settled share based payment - - 8 - - 24 - - 8 - - 24
Managerial remuneration - - 335 - - 328 - - 175 - - 161
Balances
Interest receivable 4,384 - - 3,896 - - - - - - - -
Loans and inter corporate deposits receivable 1,489 776 - 15,002 799 - 149,130 - - 173,387 23 -
Loans payable 616 412 - - 413 - 82,476 17 - 61,970 - -
Other receivable 17 - 10 - - - - - - - -
Other payable 2,354 167 - 1,373 - - - 167 - - - -
Guarantees given - - - 135 - - 461,553 - - 465,087 - -
Managerial remuneration payable - - 99 - - 117 - - 79 - - 79
-
99
-
-
117
-
-
79
-
-
79
16. Commitments and contingencies
a. Capital commitments
As at 30 September 2016, the Group is committed to purchase property, plant and equipment for US $ 1,292,052 (31
March 2016: US $ 1,467,098). In respect of its interest in joint operations the Group is committed to incur capital
expenditure of US $ 48 (31 March 2016: US $ 49).
b. Guarantees
· The Company has guaranteed to unrelated parties for the loans and non-fund based facilities availed by subsidiaries
for US $ 292,219 (31 March 2016: US $ 319,535) and
· The Group guaranteed the performance of the joint ventures under the power delivery agreements to unrelated parties.
No liability is expected to arise.
c. 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 period except disclosed below. Litigation and other matters are disclosed in detail in note number 29 in
31 March 2016 financials.
i. SWPL 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 $ 10,922 (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 period ended 30 September 2016 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. 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 $
237,941, wherein claim pertaining to taxes amounts to US $ 58,841 and claim on account of short supply
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