Half Yearly Report

RNS Number : 2473Y
KSK Power Ventur PLC
28 November 2014
 



 

KSK Power Ventur plc
("KSK" or the "Group" or the "Company")

 

Interim Results for the six months ended 30 September 2014

KSK Power Ventur plc (KSK.L), the power project company listed on the London Stock Exchange, with interests in multiple power plants and businesses across India, is pleased to announce the interim un-audited results for the six months ended 30 September 2014.

 

Financial Highlights 

 

·    Group Revenue increased by 17% to $ 175.86 m (H1 2013: $ 150.68 m)

·    Gross Profit decreased by 17% to $ 37.66 m (H1 2013: $ 45.27 m)

·    Operating Profit decreased by 6% to $ 28.62 m (H1 2013: $ 30.36 m)

·    Loss Before Tax reduced by 40% to $ 69.03 m* (H1 2013: $ 115.25 m)

·    Investment in Property Plant and Equipment increased 3% to $ 3,309.38 m** (H1 2013: $ 3,215.28 m)

 

*Includes an unrealised exchange loss of $ 17.82 million due to the restatement of the foreign currency denominated monetary assets and liabilities being recognized.

 

**Incremental capex has been limited at KSK Mahanadi power plant and support infrastructure pending clarification on the various regulatory aspects and the overall environment

 

 

Operating Highlights 

 

·      KSK's operating assets recorded an aggregate generation of 2,949 MWh compared to 2,563 MWh for the same period during the previous year, an increase of 15%, with the following individual Plant Load Factors  ("PLF"):

 


30 Sep 2014

30 Sep 2013

 

KSK Mahanadi (600 MW)

1,444 MWh

(55%)

-

-

Sai Wardha (540 MW)*

547 MWh

(23%)

1,507MWh

(64%)

VS Lignite (135 MW)

473 MWh

(80%)

503 MWh

(85%)

Sai Regency (58 MW)

217 MWh

(85%)

214 MWh

(84%)

Arasmeta (86 MW)**

95 MWh

(25%)

158 MWh

(42%)

Sitapuram Power (43 MW)

166 MWh

(88%)

171 MWh

(91%)

Solar Project (10 MW)

8 MWh

(19%)

10 MWh

(22%)

 

* PLF at Sai Wardha is expected to significantly rise to previous levels when alternative Power Purchase Agreements (PPAs) and additional scheduling with new industrial customers is implemented. 

 

** PLF at Arasemta expected to recover to earlier levels simultaneously with second unit operation at KSK Mahanadi, under a new PPA arrangement with Chhattisgarh state.

 

 

 

 

 

Key Performance Factors 

 

The Company's performance during the first half of the financial year and the key determining factors moving forward can be primarily summarised as

 

Potential reduction of fuel costs at Sai Wardha: On 27th October 2014, following a detailed investigation and report by the office of the Director General, a landmark ruling from the Honourable Competition Commission of India, confirming Sai Wardha's claims, held that the Fuel Supply Agreement between Western Coal Fields Limited and Sai Wardha was in contravention of the Competition Act. Western Coal Fields Limited has been directed to undertake the necessary modifications to the Fuel Supply Agreement (FSA) within 60 days. It is now expected that the earlier unfairness embedded in the pricing formulae for coal will be corrected allowing Sai Wardha's financial performance to start improving during the last three months of the year.

 

Lower asset utilisation at Sai Wardha:  While the above favourable ruling was only made very recently, during the first half of the year, the operating constraints with respect to coal supplies and costs, transmission corridor access and Power Purchase Agreements ("PPAs") continued, resulting in lower asset utilisation. While the Company has been seeking local regulatory intervention to enable enhanced utilisation through appropriate power agreements and transmission corridor access arrangements, a number of government owned new industrial customers, in the state of Maharashtra, are in discussion for direct offtake from the Sai Wardha power plant. These agreements, once concluded, could provide support for enhanced asset utilisation at Sai Wardha.

 

Efforts to address these issues are constantly being pursued and improvements are expected to occur over time. In the interim, reduced asset utilisation levels means revenue and profitability will be temporarily lower.

 

Higher asset utilisation at KSK Mahanadi:  Gradual increase in generation has been experienced during the first half of the year at KSK Mahanadi, with 550+ MWh during the initial three months increased to generation of 900+ MWh in the subsequent three months. The generation is anticipated to substantially increase further during the last three months of the year upon obtaining the necessary interstate transmission corridor access for the export of power from the second 600 MW unit to Tamil Nadu utility under a long term PPA, which was originally committed to by Power Grid (the Government of India owned Transmission Company) to commence in August 2014.

 

KSK Mahanadi entered into a Power Purchase Agreement during November 2013 with the Southern State of Tamil Nadu for 500 MW of power supplies with an attractive tariff awarded under a competitive bidding process. The newly constructed 2000 MW NEW-SR transmission Grid, commissioned in January 2014 was expected to provide the transmission corridor access for the commencement of scheduled supplies to Tamil Nadu during the first half of the year. However, after much delay, permission was granted on 22nd September 2014 to start with an initial 179 MW of supplies and gradually increase to the full quantity of the PPA of 500 MW to Tamil Nadu. This was subsequently withheld due to intervention by the Central Electricity Regulatory Commission based on an approach by certain other customers not granted such facility. A final decision on the matter is expected shortly that will determine the quantum of transmission corridor access that would be made available immediately to KSK Mahanadi for power supplies to Tamil Nadu.

 

Additionally, we have been working on the early commencement of supplies to Uttar Pradesh with respect to the 1000 MW PPA, again with an attractive tariff awarded under a competitive bidding process. Similarly, the commencement of supplies under the PPA would be subject to the availability of transmission corridor access for supplies to the Northern Region.  

 

The project enjoys a sustainable base for continued operations, subject to the necessary transmission corridor access, for commencement of supplies to the procuring utility customers. As a result, energy generation for the full year from the Company's generation assets is expected to be higher than the 6,500 MWh achieved during the previous year with the actual scale of increase depending on grant of interstate transmission corridor access by Power Grid.

 

Current Coal Supplies from Coal India:  While the Company continues to explore alternate arrangements to address the developments on coal blocks and alternate long term arrangements, KSK Mahanadi currently enjoys a tapering fuel supply agreement with South Eastern Coal Fields (subsidiary of Coal India) that supports the immediate operations of 1.2 GW.

 

While efforts will continue, over the coming months, to secure the domestic fuel commitments over long term, in the interim coal imports from overseas through appropriate collaborative arrangements which are in place, are expected to provide additional fuel for the planned power generation from KSK Mahanadi.

 

Long Term Coal Supplies at KSK Mahanadi:  The KSK Mahanadi power plant is configured based on the availability of long term fuel supplies from the Gare Pelma and Morga-II Coal blocks that were owned by state government undertakings. The supply coal was committed under long term Fuel Supply Agreements wherein the Company agreed to make available certain power supplies back to the state from the coal supplied. Following the Honourable Supreme Court of India's judgment dated 25th August, 2014 and subsequent order of 24th September, 2014 which cancelled the allocation of 204 Coal Blocks (including the Gare Pelma and Morga-II mines which were allotted earlier under the Government Dispensation) a new Coal Mines (Special provisions) Ordinance, 2014 was issued in October 2014.

 

The new statute, in addition to enabling direct allotment to Government Companies, allows power generation companies to directly secure domestic coal supplies through a public auction process. Draft rules and mechanisms are currently being formulated and it is expected that multiple coal mines could be made available under auction very shortly for eligible power generators. The Company is currently evaluating the various options and anticipates further progress at KSK Mahanadi to be contingent upon progress of these key aspects of fuel security being appropriately resolved.

 

Strategy Moving Forward 

 

With an operating base rising to over 2 GW, the Company's immediate objective would be to enhance the PLF across the various projects over the next few months to higher levels. This would provide a substantial increase in the gross generation, providing a much larger base to absorb the related costs as well as provide the requisite incremental cash flows to meet Company requirements.

 

While work continues on a number of major initiatives in this regard, further capital expenditure commitments on KSK Mahanadi will be, as far as practicable, suitably modified to match the visibility and availability of suitably priced coal, with reasonable certainty of the transmission corridor access to allow the Company to deliver power to the utility consumers.  The decision to proceed with the construction of each of the additional units will be concluded after due consultation with project lenders. When these matters are fully addressed, the Company has every confidence that it will secure the necessary further funding required to complete remaining major capital works, resulting in an improved financial performance over time. Such an approach would enable an equally higher control on additional indebtedness to be incurred by the Company to fund incremental capital expenditure program.

 

More importantly, the KSK Mahanadi assets continue to be intrinsically valuable and extremely attractive investments as large greenfield assets with significant common infrastructure for the entire facility already created and long term PPAs at reasonably attractive tariffs executed. The Management team continues to persist with efforts to address the new developments on fuel as well as other project aspects of KSK Mahanadi at the earliest as they would enable pursuit of additional future growth by the Company.

 

Commenting on the results, T. L. Sankar, Chairman of KSK said:

 

"These results are in the context of the extraordinary regulatory disruptions and difficult circumstances across the Indian power sector over the last 36 months and the challenging times and overall economic environment in India. The Company's management has continued its efforts to address the various challenges in its operating projects. Results are expected to further improve upon clarity emerging in the regulatory environment and the Company addressing the on-ground situations to co-ordinate planned generation with fuel supplies for the assets.

With a new government in New Delhi, decision making is coming through and Courts and Regulators are now seeking to establish a level playing field for power generation. Therefore, power generation is anticipated to play a central role in supporting the overall economic growth in the country over the next few years. With KSK's underlying assets, associated performance and opportunities, the Company is well positioned to be one of the more stable, valuable and sustainable players on the Indian power generation landscape.

 

KSK's performance during the period was only possible with the valuable and appreciated support of the various investors in the Company who have enabled us to pursue appropriate business opportunities in these challenging times."

 

For further information, please contact:

 

KSK Power Ventur plc

Mr. S. Kishore, Executive Director

Mr. K. A. Sastry, Executive Director

 

 

+91 40 2355 9922

Arden Partners plc

Richard Day

 

+44 (0)20 7614 5900

 

Asset Updates

 

·    3.6 GW KSK MAHANADI POWER PROJECT:

 

The total gross power generated in the plant during the review period was 1,444 MWh with an average PLF of 55%. Enhanced offtake from the first 600 MW unit coupled with the second 600 MW, which is physically complete and when it exports power will enable further improvement of the PLF during the second half of the financial year.

 

The construction activity at KSK Mahanadi, a large, single location, greenfield private power plant will continue in a phased manner with further unit commissioning now targeted over 2016 and 2017. The capital expenditure program on the construction of the remaining four units and associated infrastructure is conditional upon confirmation of availability of fuel supplies, transmission corridor access and other project aspects seamlessly synchronised for performance. 

 

·     540 MW SAI WARDHA POWER LIMITED (SWPL):

 

The total gross power generated in the plant during the review period was 547 MWh with an average PLF of 23%.  The low PLF reflects the challenging local operating environment and the fuel and transmission corridor access grid constraints experienced by the power plant.

 

While the Company is negotiating power sale arrangements to commence supplies for part of the capacity that was earlier being supplied to R-infra, the balance capacity that was earmarked to be supplied to captive industrial consumers under the long term PPA commitments also experienced limitations on transmission corridor access from the local grid. A number of alternate PPA arrangements are under discussion and it is anticipated that these could provide the necessary additional utilisation.

 

A number of developments early in the period, including unjustified higher coal prices, continued to adversely affect Sai Wardha Power's profitability and appropriate recompense from Western Coalfields Limited is being pursued to address this matter. The Company continues to use every effort to pursue coal price reduction and the granting of the necessary transmission corridor access permissions, which will ultimately lead to the enhanced utilisation and profitability of the Sai Wardha plant whereupon, profitability is expected to revert to the previously achieved levels.

 

·    135 MW VS LIGNITE POWER PRIVATE LIMITED (VSLP):

 

The total gross power generated in the plant during the year was 473 MWh, with an average PLF of 80%. The Company is continuing its efforts to secure necessary long term PPAs from the local grid as well as appropriate legal reliefs with respect to tariffs from industrial customers. The Company anticipates that industrial customers, who have previously experienced extremely high tariffs, will find the Company's power supplies and tariff proposition more attractive.  

                 

·    86 MW ARASMETA CAPTIVE POWER COMPANY LIMITED (ACPCL):

 

The total gross power generated in the plant during the year was 95 MWh, with an average PLF of 25%, primarily due to a graduated offtake under the long term PPA by the local utility, which was approved by the Regulatory Commission during May 2014.

 

With KSK Mahanadi under obligation to provide 225 MW to Chhattisgarh (the host state), an arrangement has been agreed, pursuant to consent by the state as well as project lenders at KSK Mahanadi, wherein 75 MW would be fulfilled from Arasmeta enabling the surplus power at KSK Mahanadi to be disposed at the higher tariff to other utilities.  Enhanced scheduling at Arasmeta would be synchronous to the second 600 MW unit operations at KSK Mahanadi. As a result, the Company anticipates increased plant utilisation, power generation and revenue from the Arasmeta plant.

 

·    58 MW SAI REGENCY POWER CORPORATION PRIVATE LIMITED (SRPCPL):

 

The total gross power generated in the combined cycle gas fired power plant during the year was 217 MWh, with an average PLF of 85%. With the continuous supply of gas and the efficient operation, the plant has produced an operational and financial performance, which the Company expects to continue in the future.

 

·    43 MW SITAPURAM POWER LIMITED (SPL):

 

The total gross power generated in the plant during the year was 166 MWh, with an average PLF of 88%. Although the fuel cost for the period under review has increased due to an increase in coal prices from the Singareni Collieries Company Limited, as well as from open market purchases, the energy generated in the period has been supplied to the captive consumers in accordance with the provisions of the PPA, with the balance of power sold to other customers.  

 

·    10 MW SAI MAITHILI SOLAR POWER PROJECT:

 

The total gross power generated in the plant during the year was 8 MWh, with an average PLF of 19%. The 10 MW PV solar power generation plant is located in the state of Rajasthan, operating under the Jawaharlal Nehru National Solar Mission.

 

·    ANCILLARY INFRASTRUCTURE INITIATIVE AT KSK MAHANADI  

 

•    KSK Water Infrastructure:

 

Infrastructure works, including the construction of the 60km pipelines and the pump stations for the supply of water for the Mahanadi project were completed and are operational. The additional intermediate reservoir works, sufficient to support the continuous operation of all six 600 MW units, are expected to be completed over the next few months.

 

•    Raigarh Champa Rail Infrastructure:

 

The Company's 15.7 km inward railway line connecting the Mahanadi plant with the Indian Railways main line was completed, enabling the movement of coal into the power plant. As regards the 65.5 km line connecting the Gare Pelma coal block to the main line, this will be implemented after further clarity on the status of Gare Pelma coal block and supplies under FSA are available.

 

•    KSK Mineral Resources:

 

Further developments and further support under this would be contingent upon the Government decision on the Gare Pelma III coal block, which is expected in the next few months.

 

RENEWABLE POWER GENERATION:

 

The Company continues to pursue specific wind power generation initiatives as well as work on the hydro project portfolio for appropriate collaboration opportunities. In response to the continuing initiative of the Indian Government, the Company is seeking to develop an additional 250 MW of solar power generation projects in the medium term. Necessary progress has been made and procurement advances have been paid to procure equipment at competitive prices. The Tamil Nadu Electricity Regulatory Commission has stipulated the necessary tariff arrangement and the Company is in discussion with Tamil Nadu for necessary PPA arrangements and execution of PPA at the earliest.

 

EQUITY AND FINANCING ARRANGEMENTS  

 

During the period, c. £40 million of equity was raised by KSK Energy Ventures Limited ("KSKEV"), KSK's listed Indian subsidiary, through a Qualified Institutional Placement. Pursuant to approval of Foreign Investment Promotion Board, which was obtained in September 2014, 80.8 million warrants convertible into equivalent equity shares at KSKEV have been allotted by KSKEV in favour of KSK, enabling KSK's interest in KSKEV at 72.90% level.

 

Earlier the Company secured debt financing within its Indian holding companies that enabled the earlier tender offer as well as the buyout of the entire minority of the KSK Mahanadi project, resulting in KSK owning a substantial interest in KSKEV, the subsidiary which owns the majority interest in KSK Mahanadi Power Company Limited. Also, the Company is pursuing further refinancing opportunities on more favourable terms at the operating project level as well to provide the necessary liquidity to retire part of the existing higher rate debt.

 

With some of the new developments addressed, the Company has every confidence that it will secure the necessary further funding as may be required, in appropriate formats, to complete remaining major capital expenditure, resulting in an enhanced operational profile and resultant improved financial performance over time.

 

OUTLOOK

 

With unfulfilled demand for power generation in India expected to continue to grow through the coming decade, coupled with the high quality of the Company's expanding asset base, a proven execution capability, and an increasingly efficient business structure, KSK is well positioned to address the Indian power generation opportunities. We anticipate further growth upon securing fuel supplies pursuant to the new statute. As outstanding issues are resolved, and with the successful phased completion of the balance of the units of the 3.6 GW KSK Mahanadi power project being added to the Company's existing portfolio, the Board believes KSK will be one of India's leading suppliers of power. 

 

PRINCIPAL RISKS AND UNCERTAINITIES

 

The business of the Company is subject to a variety of risks and uncertainties which, if they occur may have a materially adverse effect on the Company's business or financial condition, results or future operations. The risks & uncertainties set out in this document are not exhaustive and there may be risks of which the Board is not aware or believes to be immaterial, which may, in the future, adversely affect the Company's business. The risks and uncertainties faced by the Company and the industry as a whole have been previously provided in detail in the Annual Reports of the Company and the Interim Statements. The majority of the risks previously identified have not significantly changed. While the Company attempts to address the same, the key risks and uncertainties continued to be faced by the Company are as follows:

 

·   Delays in government decisions or implementation of earlier government decisions along with continual inconsistencies in government policies across departments and retrospective amendments to the existing policies or introduction of new policies;

·    Deviation from approved government policies and abuse of market dominance position by certain contractual counter parties;

·    Denial of fuel supplies pursuant to cancellations, shortage of fuel and dependence on market based or imported fuel which are subject to market vagaries and other uncertainties;

·    Economic slowdown and negative sectoral outlook with resultant impact on banking sector delays in agreed project disbursements and timely availability of credit;

·    Delays in enforcement of contractual rights or legal remedies with government counter parties undertaking fuel supplies, power off take, transmission corridor access amongst others;

·    PPA counter parties going contrary to pre agreed understanding and seeking benefits from the power generators that are often in conflict with shareholder obligations to further the business;

·    Unusual currency depreciation that adversely effects the cost of project imports, project implementation, and repayment obligations;

·    Logistics bottlenecks and other infrastructure constraints of various agencies;

·    Challenges in the development of support infrastructure for the power projects including physical hindrances and delay in the issue of permits and clearances associated with land acquisitions; and

·    Political and economic instability, global financial turmoil and the resultant fiscal and monetary policies as well as currency depreciation resulting in increasing cost structures. 

 

 

 

A full set of condensed interim unaudited consolidated financial statements will be available from the Company websites: www.kskplc.co.uk

 

An extract of the interim un-audited results for the six months ended 30 September 2014 is shown below.

 

 

 

Contents                                                                                                                                                                                                                                                                                                                                                                                                                                                

           INTERIM CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION                 

 

     INTERIM CONSOLIDATED AND COMPANY INCOME STATEMENT                                                   

                                                                                                                                            

INTERIM CONSOLIDATED AND COMPANY STATEMENT OF OTHER COMPREHENSIVE INCOME     

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY  

INTERIM COMPANY STATEMENT OF CHANGES IN EQUITY  

INTERIM CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS                                                     

NOTES TO INTERIM CONDENSED CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS                                                                                                                                                  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTERIM CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION

as at 30 September 2014

(All amount in thousands of US $, unless otherwise stated)



Consolidated

Company


Notes

30 September 2014

31 March 2014

30 September 2014

31 March 2014

ASSETS






Non-current 






Property, plant and equipment


3,309,384

3,215,282

-

-

Intangible assets and goodwill


19,611

20,245

-

-

Investments and other financial assets

5

149,005

154,577

398,760

366,767

Other non-current assets


97,189

98,461

-

-

Trade and other receivables


3,792

3,422

-

-

Deferred tax asset


50,534

33,269

-

-



3,629,515

3,525,256

398,760

366,767

Current






Investments and other financial assets

5

83,224

73,240

29

4

Other current assets


30,521

22,688

589

391

Trade and other receivables


170, 672

158,139

-

-

Inventories


27,017

24,588

-

-

Cash and short-term deposits

6

194,091

194,054

1,358

173



505,525

472,709

1,976

568

Assets held for sale


-

18,456

-

-

Total assets


4,135,040

4,016,421

400,736

367,335







EQUITY AND LIABILITIES






Issued capital


289

289

289

289

Share premium


287,191

287,191

287,191

287,191

Share application money


16,498

18,000

16,498

18,000

Foreign currency translation reserve


(125,124)

(113,933)

10,769

12,580

Revaluation reserve


2,567

2,614

-

-

Capital redemption reserve


10,942

5,461

-

-

Other reserves


151,284

143,615

68

10

Retained earnings / (Accumulated deficit)


21,607

69,254

(16,377)

(14,249)

Equity attributable to owners of the Company


365,254

412,491

298,438

303,821

Non-controlling interests


207,792

169,782

-

-

Total equity


573,046

582,273

298,438

303,821

Non-current liabilities






Interest-bearing loans and borrowings

7

2,576,970

1,943,926

-

-

Other non-current financial liabilities

8

26,189

28,193

-

-

Trade and other payables


51,093

51,110

-

-

Provisions


2,515

2,494

-

-

Deferred revenue


4,726

4,974

-

-

Employee benefit liability


460

495

-

-

Deferred tax liabilities


35,869

31,567

-

-



2,697,822

2,062,759

-

-







Current liabilities






Interest-bearing loans and borrowings

7

536,131

944,750

100,912

62,028

Other current financial liabilities

8

5,042

5,073

-

-

Trade and other payables


310,997

391,124

1,386

1,486

Deferred revenue


712

740

-

-

Other current liabilities


8,331

9,336

-

-

Taxes payable


2,959

1,910

-

-



864,172

1,352,933

102,298

63,514

Liabilities associated with assets held for sale


-

18,456

-

-

Total liabilities


3,561,994

3,434,148

102,298

63,514

Total equity and liabilities


4,135,040

4,016,421

400,736

367,335

 

(See accompanying notes to the interim condensed Consolidated and Company financial statements)

 

Approved by the Board of Directors on 27 November 2014 and signed on behalf by:

 

 

 

 

S. Kishore                                        K. A. Sastry

Executive Director                          Executive Director 

 

 

 

 

 

 

 

 

 

 

 

INTERIM CONSOLIDATED AND COMPANY INCOME STATEMENT

for the six months ended 30 September 2014

(All amount in thousands of US $, unless otherwise stated)

 



Consolidated

Company


Notes

30 September 2014

30 September 2013

30 September 2014

30 September 2013

Revenue

9

175,855

150,675

-

-

Cost of revenue


(138,191)

(105,402)

-

-

Gross profit


37,664

45,273

-

-







Other operating income


8,623

2,846

-

-

Distribution costs


(4,682)

(5,619)

-

-

General and administrative expenses


(12,981)

(12,136)

(474)

(633)

Operating profit / (loss)


28,624

30,364

(474)

(633)

Finance costs

10

(106,695)

(174,368)

(1,654)

(1,967)

Finance income

11

9,037

28,757

-

-

Loss before tax


(69,034)

(115,247)

(2,128)

(2,600)

Tax income

12

12,386

35,651

-

-

Loss for the period


(56,648)

(79,596)

(2,128)

(2,600)

Attributable to:






Owners of the Company


(44,600)

(63,198)

(2,128)

(2,600)

Non-controlling interests


(12,048)

(16,398)

-

-



(56,648)

(79,596)

(2,128)

(2,600)

Loss per share






Weighted average number of ordinary shares for basic and diluted earnings per share


175,308,600

159,378,600



Basic and diluted loss per share (US $) 

(0.25)

(0.40)



 

(See accompanying notes to the interim condensed Consolidated and Company financial statements)

 

Approved by the Board of Directors on 27 November 2014 and signed on behalf by:

 

 

 

 

 

S. Kishore                                        K. A. Sastry

Executive Director                          Executive Director 

 

 

 

 

 

 

 

 

 

 

 

INTERIM CONSOLIDATED AND COMPANY STATEMENT OF OTHER COMPREHENSIVE INCOME

for the six months ended 30 September 2014

(All amount in thousands of US $, unless otherwise stated)

 



Consolidated

Company


Notes

30 September 2014

30 September 2013

30 September 2014

30 September 2013

Loss for the period


(56,648)

(79,596)

(2,128)

(2,600)

Items that will never be reclassified to income statement






Re-measurement of defined benefit liability


111

349

-

-

Income tax relating to re-measurement of defined benefit liability


(40)

(112)

-

-









71

237

-

-

Items that are or may be reclassified subsequently to income statement






 Foreign currency translation differences


(16,926)

(78,368)

(1,811)

4,113

Available-for-sale financial assets






 - current period gain / (losses)


652

(2,428)

-

-

 - reclassification to income statement


33

2,370

-

-

Income tax relating to available for sale financial asset


59

37

-

-



(16,182)

(78,389)

(1,811)

4,113

Other comprehensive (expense) / income, net of tax


(16,111)

(78,152)

(1,811)

4,113

Total comprehensive (expense) / income for the period


(72,759)

(157,748)

(3,939)

1,513







Attributable to:






Owners of the Company


(55,042)

(116,089)

(3,939)

1,513

Non-controlling interests


(17,717)

(41,659)

-

-



(72,759)

(157,748)

(3,939)

1,513







 

(See accompanying notes to the interim condensed Consolidated and Company financial statements)

 

Approved by the Board of Directors on 27 November 2014 and signed on behalf by:

 

 

 

 

S. Kishore                                        K. A. Sastry

Executive Director                          Executive Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 


INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 September 2013

(All amount in thousands of US $, unless otherwise stated)

 


Attributable to owners of the Company




Issued capital (Amount)

Share premium

Foreign currency translation reserve

Revaluation reserve

Other reserves

Retained  earnings

Total

Non - controlling interests

Total equity

As at 1 April 2013 (Restated)

263

253,890

(78,535)

2,752

142,262

120,939

441,571

199,615

641,186

Issuance of equity shares by subsidiary

-

-

-

-

42

-

42

(42)

-

Transfer of economic interest to non-controlling interests1

-

-

-

-

-

2,152

2,152

(2,152)

-

Net depreciation transfer for property, plant and equipment

-

-

-

(94)

-

94

-

-

-

Transaction with owners

-

-

-

(94)

42

2,246

2,194

(2,194)

-

Loss for the period

-

-

-

-

-

(63,198)

(63,198)

(16,398)

(79,596)

Other comprehensive income










Items that will never be reclassified to income statement










Re-measurement of defined benefit liability

-

-

-

-

328

-

328

21

349

Income tax relating to re-measurement of defined benefit liability

-

-

-

-

(112)

-

(112)

-

(112)

Items that are or may be reclassified subsequently to income statement










Foreign currency translation differences

-

-

(53,091)

-

-

-

(53,091)

(25,277)

(78,368)

Available-for-sale financial assets










 - current period (losses) / gains

-

-

-

-

(2,414)

-

(2,414)

(14)

(2,428)

 - reclassification to profit or loss

-

-

-

-

2,370

-

2,370

-

2,370

Income tax relating to available-for-sale financial asset

-

-

-

-

28

-

28

9

37

Total comprehensive (expense) / income for the period

-

-

(53,091)

-

200

(63,198)

(116,089)

(41,659)

(157,748)

Balance as at 30 September 2013

263

253,890

(131,626)

2,658

142,504

59,987

327,676

155,762

483,438

 

(See accompanying notes to the interim condensed Consolidated and Company financial statements)

 

1 The group entities have arrangements of sharing of profits with its non-controlling share holders, 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 Consolidated income statement.  However, the non controlling interest disclosed in the Statement of changes in equity is calculated in the proportion of the actual shareholding as at the reporting date.

 

 

 

 

 

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2014

(All amount in thousands of US $, unless otherwise stated)


Attributable to owners of Company 

Non - controlling interests

Total equity


Issued capital

Share premium

Share application money

Foreign currency translation reserve

Revaluation reserve

Capital redemption reserve

Other reserves

Retained  earnings

Total

As at 1 April 2014

289

287,191

18,000

(113,933)

2,614

5,461

143,615

69,254

412,491

169,782

582,273

Refund of share application money

-

-

(1,502)

-

-

-

-

-

(1,502)

-

(1,502)

Issuance of equity shares by subsidiary (refer note 4a and 4b)

-

-

-

-

-

-

6,862

-

6,862

58,114

64,976

Transfer of economic interest to non-controlling interests1

-

-

-

-

-


-

2,387

2,387

(2,387)

-

Equity-settled share based payment

-

-

-

-

-

-

58

-

58

-

58

Transfer of profit to capital redemption reserve

-

-

-

-

-

5,481


(5,481)

-

-

-

Net depreciation transfer for property, plant and equipment

-

-

-

-

(47)

-

-

47

-

-

-

Transaction with owners

-

-

(1,502)

-

(47)

5,481

6,920

(3,047)

7,805

55,727

63,532

Loss for the period

-

-

-

-

-

-

-

(44,600)

(44,600)

(12,048)

(56,648)

Other comprehensive income












Items that will never be reclassified to income statement












Re-measurement of defined benefit liability

-

-

-

-

-

-

89

-

89

22

111

Income tax relating to re-measurement of defined benefit liability

-

-

-

-

-

-

(40)

-

(40)

-

(40)

Items that are or may be reclassified subsequently to income statement












Foreign currency translation differences

-

-

-

(11,191)

-

-

-

-

(11,191)

(5,735)

(16,926)

Available-for-sale financial assets












 - current period (losses) / gains

-

-

-

-

-

-

627

-

627

25

652

 - reclassification to profit or loss

-

-

-

-

-

-

33

-

33

-

33

Income tax relating to available-for-sale financial asset

-

-

-

-

-

-

40

-

40

19

59

Total comprehensive (expense) / income for the period

-

-

-

(11,191)

-

-

749

(44,600)

(55,042)

(17,717)

(72,759)

Balance as at 30 September 2014

289

287,191

16,498

(125,124)

2,567

10,942

151,284

21,607

365,254

207,792

573,046

(See accompanying notes to the interim condensed Consolidated and Company financial statements)

1 The group entities have arrangements of sharing of profits with its non-controlling share holders, 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 Consolidated income statement.  However, the non controlling interest disclosed in the Statement of changes in equity is calculated in the proportion of the actual shareholding as at the reporting date.

 

 

INTERIM COMPANY STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2014

(All amount in thousands of US $, unless otherwise stated)

 


Issued capital

Share premium

Share application money

Foreign currency translation reserve

Other reserve

Accumulated deficit

Total

equity

As at 1 April 2013

263

253,890

-

6,420

-

(10,049)

250,524

Transaction with owners

-

-

-

-

-

-

-

Loss for the period

-

-

-

-

-

(2,600)

(2,600)

Other comprehensive income








Foreign currency translation differences

-

-

-

4,113

-

-

4,113

Total comprehensive income / (expense) for the period

-

-

-

4,113

-

(2,600)

1,513

Balance as at 30 September 2013

263

253,890

-

10,533

 

-

(12,649)

252,037

 









As at 1 April 2014

289

287,191

18,000

12,580

10

(14,249)

303,821

Refund of share application money

-

-

(1,502)

-

-

-

(1,502)

Equity-settled share based payment

-

-

-

-

58


58

Transaction with owners

-

-

(1,502)

-

58

-

(1,444)

Loss for the period

-

-

-

-

-

(2,128)

(2,128)

Other comprehensive income

 

 

 

 

 

 


Foreign currency translation differences

-

-

-

(1,811)

-

-

(1,811)

Total comprehensive income / (expense) for the period

-

-

-

(1,811)

-

(2,128)

(3,939)

Balance as at 30 September 2014

289

287,191

16,498

10,769

 

68

(16,377)

298,438

 

 

(See accompanying notes to interim condensed Consolidated and Company financial statements)

 

 

 



 


INTERIM CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS

 

for the six months ended 30 September 2014

 

(All amount in thousands of US $, unless otherwise stated)

 


 Consolidated

 Company

 


 30 September 2014

 30 September 2013

 30 September 2014

 30 September 2013

 

 Cash inflow / (outflow) from operating activities





 

Loss before tax

(69,034)

(115,247)

(2,128)

(2,600)

 

 Adjustment





 

 Depreciation and amortization

29,723

18,656

-

-

 

 Finance cost

102,248

167,793

1,575

1,975

 

 Finance income

(9,037)

(28,757)

-

-

 

 Provision and impairment of trade receivable and other financial assets.

33

4,159

-

326

 

 (Profit) / loss on sale of fixed assets, net

212

(408)

-

-

 

 others 

112

237

58

-

 

 Change in 





 

 Trade receivables and unbilled revenue

(12,849)

(20,886)

-

-

 

 Inventories

(2,429)

(13,423)

-

-

 

 Other assets

(2,090)

(28,104)

(214)

195

 

 Trade payables and other liabilities

4,182

31,069

(65)

(68)

 

 Provisions and employee benefit liability

(35)

(263)

-

-

 

 Cash generated from /(used in) operating activities

41,036

14,826

(774)

(172)

 

 Taxes paid, net

(2,330)

(1,588)

-

-

 

 Net cash provided by / (used in) operating activities

38,706

13,238

(774)

(172)

 






 

 Cash inflow / (outflow) from investing activities





 

 Movement in restricted cash, net

(16,781)

76,244

-

-

 

Purchase of property, plant and equipment and other noncurrent assets

(234,785)

(133,593)

-

-

 

 Proceeds from sale of property, plant and equipment

38,914

772

-

-

 

 Purchase of financial assets

(32,738)

(12,458)

(34,758)

(5,009)

 

 Proceeds from sale of  financial assets

32,266

30,107

-

-

 

 Dividend received

93

70

-

-

 

 Finance income received

7,881

17,012

-

-

 

 Net cash flow used in investing activities 

(205,150)

(21,846)

(34,758)

(5,009)

 






 

 Cash inflow / (outflow) from financing activities





 

 Proceeds from borrowings

721,780

659,799

39,882

6,064

 

 Repayment of borrowings

(421,630)

(504,306)

-

-

 

 Finance costs paid

(202,933)

(145,840)

(2,447)

(1,161)

 

 Payment of derivative liability

(2,451)

(1,271)

-

-

 

 Net proceeds from issue of shares and share application money in subsidiary to non-controlling interest

64,976

446

-

-

 

 Refund of share application money

(3,285)

-

(1,502)

-

 

 Net cash flow provided by financing activities 

156,457

8,828

35,933

4,903

 

 Effect of exchange rate changes

(6,758)

(20,148)

784

-

 

 Net increase/(decrease) in cash and cash equivalent

(16,745)

(19,928)

1,185

(278)

 

 Cash and cash equivalents at the beginning of the period

55,934

43,834

173

287

 

 Cash and cash equivalents at the end of the period (note 6)

39,189

23,906

1,358

9

 






 

(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 2014                                                                                                  

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 27 November 2014.

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');

b.     the Interim management report contained in this document includes a fair review of the information required by the Financial Conduct Authority's Disclosure and Transparency Rules ("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 2014, 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 ended 30 September 2014. The comparative information required by IAS 1 were determined using IAS 34 and include comparative information as follows:

Statement of financial position                                                                                 :

31 March 2014 being the end of immediately preceding financial year.

Income statement, statement of comprehensive income, statement of changes in equity and statement of  cash flows

Six months ended 30 September 2013 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 at fair value.

 

The financial statements of the Group and the Company have been presented in United States Dollars ('US $'), which is the presentation currency of the Company. All amounts have been presented in thousands, unless specified otherwise.

Balances represent consolidated amounts for the Group, unless otherwise stated. The Company's financial statement represents separate financial statement of KPVP.

The financial statements have been prepared on going concern basis which assumes the Group and the Company will have sufficient funds to continue its operational existence for the foreseeable future covering twelve months. The Group requires funds both for short-term operational needs as well as for long-term capital investment programmes primarily at KMPCL and ancillary infrastructure projects for its power plants. The Group currently has net current liabilities of US $ 358,647. A number of the facilities that are due to expire by 30 September 2015 are typically extended and have rollover clause in a number of cases that would ultimately translate to non-current liabilities or sustained by nature of working capital facilities.

The Group continue to generate cash flows from the current operations which together with the available cash and short term deposits provides liquidity both in short-term as well as in long-term. Anticipated future cash flows and undrawn long term committed facilities of US $ 521,441 together with cash and short term deposits of US $ 194,091 as at 30 September 2014 on a consolidated basis are expected to be utilised to meet the liquidity requirement of the Group in the near future.

The Group's forecast and projections, taking into account reasonable possible changes in trading performance, show that the Group has sufficient financial resources, together with assets that are expected to generate free cash flow to the Group. As a consequence, the Directors have a reasonable expectation that the Company and the Group are well placed to manage their business risks and continue in operational existence for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis of accounting when preparing these financial statements.

2.     Changes in accounting policy and disclosure

The accounting policies adopted are consistent with those of the previous financial year.

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.

2.

 

4.     Dilution of ownership interest in a subsidiary

a. Qualified Institutional Placement (QIP) by KSK Energy Ventures Limited ('KEVL')  

During the period ended 30 September 2014, KEVL issued additional 40,404,040 equity shares of face value of Rs. 10 (US $ 0.17) each at a premium of Rs. 89 (US $ 1.48) per share in the Indian domestic market by way of Qualified Institutional Placement (QIP). The issue was fully subscribed and KEVL raised Rs. 3,911,991,680 (US $ 64,976) net of share issue expenses of Rs 88,008,280 (US $ 1,462).

Pursuant to the issuance of the additional equity shares the ownership interest of the Group in KEVL decreased from 74.94 percent to 67.61 percent resulting in a 7.33 percent deemed partial disposal of the Group's controlling interest in a subsidiary without loss of control.

The partial disposal of the investment in a subsidiary without loss of control is accounted as an equity transaction, and no gain or loss is recognised in the consolidated income statement. The difference of US $ 6,867, between the fair value of the net consideration received (US $ 64,976) and the amount by which the minority interest are adjusted (US $ 58,109), is credited to 'other reserve' within consolidated statement of changes in equity and attributed to the owners of the Company.

b. During the period ended 30 September 2014, the Group has issued additional 370,000,000 shares in KSK Mahanadi Power Company Limited ("KMPCL") to KSK Energy Ventures Limited ("KEVL") and Sai Regency Power Corporation Private Limited ("SRPCPL") at a face value of Rs 10 (US $ 0.17) at par. The above transaction has resulted in dilution of 0.31 % of interest in subsidiary to non-controlling interest.

The dilution of interest in subsidiary to non-controlling interest is accounted as an equity transaction, and accordingly no gain or loss is recognised in the consolidated income statement. The difference of US $ (5) between the fair value of the net consideration paid (US $ Nil) and the amount by which the non-controlling interest US $ 5 is adjusted are debited to 'other reserve' within consolidated statement of changes in equity and attributed to the owners of the Company.

 

5.     Investments and other financial assets

 


Consolidated

Company


30 September 2014

31 March
2014

30 September 2014

31 March
2014

Current





Financial assets at fair value through profit or loss





 -  held-for-trading

2,549

130

-

-

  -  Derivative assets

422

-

-

-

Loans and receivables

78,402

72,333

29

4

Loans to and receivables from  JV partners

1,851

777

-

-


83,224

73,240

29

4

Non-current





Financial assets at fair value through profit or loss





  -  Derivative assets

49,604

50,196

-

-

Available-for-sale investments

22,860

22,865

-

-

Deposit with banks

10,346

10,953

-

-

Loans and receivables

35,127

39,336

5,525

5,660

Loans to and receivables from JV partners

31,068

31,227

-

-

Loans to and receivable from subsidiaries

-

-

166,068

133,873

Investment in subsidiaries

-

-

227,167

227,234


149,005

154,577

398,760

366,767

Total

232,229

227,817

398,789

366,771

Impairment of financial assets

During the period ended 30 September 2014, the Group's available-for-sale financial asset of US $ 33 (31 March 2014: US $ 2,986) and loans and receivable of US $ Nil (31 March 2014: US $ 1,657) were collectively impaired.

During the period ended 30 September 2014, the Company's loans and receivable of US $ Nil (31 March 2014: US $ 335) were collectively impaired.

6.     Cash and short-term deposits

Cash and short-term deposits comprise of the following:


Consolidated

Company


30 September 2014

31 March
2014

30 September 2014

31 March
2014

Cash at banks and on hand

39,189

55,810

1,358

173

Short-term deposits

154,902

138,244

-

-

Total

194,091

194,054

1,358

173

         For the purpose of cash flow statement, cash and cash equivalent comprise:

 

 

Consolidated

Company


30 September 2014

30 September 2013

30 September 2014

30 September 2013

Cash at banks and on hand

39,189

23,793

1,358

9

Short-term deposits  

154,902

185,299

-

-

Total

194,091

209,092

1,358

9

Less: Restricted cash1

(154,902)

(185,186)

-

-

Cash and cash equivalent

39,189

23,906

1,358

9

1Include deposits pledged for availing credit facilities from banks and deposits with maturity term of three months to twelve months.

7.     Interest-bearing loans and borrowings

The interest-bearing loans and borrowings comprise of the following:

 



Final Maturity

Consolidated

Company


30 September 2014

31 March
2014

30 September 2014

31 March
2014

 

Long-term "project finance" loans


April-28

2,565,974

2,153,328

-

-

 

Short-term loans


December-15

202,096

230,856

52,059

12,177

 

Buyers' credit facility


September-16

188,419

372,892

48,853

49,851

 

Cash credit and other working capital facilities


September-15

101,024

99,823

-

-

 

Redeemable preference shares


February-28

11,760

17,591

-

-

 

Debentures


March-25

43,828

14,186

-

-

 

Total



3,113,101

2,888,676

100,912

62,028

 

The interest-bearing loans and borrowings mature as follows:


Consolidated

Company


30 September 2014

31 March
2014

30 September 2014

31 March
2014

Current liabilities





Amounts falling due within one year

536,131

944,750

100,912

62,028

Non-current liabilities





Amounts falling due after more than one year but not more than five years

920,802

982,475

-

-

Amounts falling due in more than five years

1,656,168

961,451

-

-

Total

3,113,101

2,888,676

100,912

62,028

 

Total debt of US $ 3,113,101 (31 March 2014: US $ 2,888,676) comprised:

·      Long-term "project finance" loans of the Group amounting US $ 2,565,974 (31 March 2014: US $ 2,153,328) is fully secured on the property, plant and equipment and other assets of joint venture and subsidiaries that operate power stations, allied services and by a pledge over the promoter's shareholding in equity and preference capital of some of the joint ventures and subsidiaries.

·      The short term loan taken by the Group is 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 the Company and KEVL.

·      A number of the facilities that are due to expire at 30 September 2015 are in the process of being extended and have 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 in 1-13 year.

·      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.

 

8.     Other financial liabilities



Consolidated




30 September 2014

31 March
2014

Current




Option premium payable



5,042

5,020

Provision for mark to market loss on derivative instruments



-

53




5,042

5,073

Non-Current





Option premium payable



24,620

27,148

Provision for mark to market loss on derivative instruments



1,569

1,045




26,189

28,193

Total



31,231

33,266

 

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.

Period ended 30 September 2014

Project development activities

Power generating activities

Reconciling / Elimination activities

Consolidated

 

Revenue





 

External customers

52

175,803

-

175,855

 

Inter-segment

4,122

-

(4,122)

-

 

Total revenue

4,174

175,803

(4,122)

175,855

 






Segment operating results

3,253

26,681

(540)

29,394

 

Unallocated operating expenses, net




(770)

 

Finance costs




(106,695)

 

Finance income




9,037

 

Loss before tax




(69,034)

 

Tax income




12,386

 

Loss after tax




(56,648)

 






 

Segment assets

11,720

3,894,662

(2,076)

3,904,306

 

Unallocated assets




230,734

 

Total assets




4,135,040

 






 

Segment liabilities

3,747

287,361

(2,076)

289,032

 

Unallocated liabilities




3,272,962

 

Total liabilities




3,561,994

 






 

Other segment information





 

Depreciation and amortisation

69

29,606

48

29,723

 

Capital expenditure

16

213,032

44

213,092

 

 

Period ended 30 September 2013

Project development activities

Power generating activities

Reconciling / Elimination activities

Consolidated

 

 






Revenue





 

External customers

54

150,621

-

150,675

 

Inter-segment

4,203

-

(4,203)

-

 

Total revenue

4,257

150,621

(4,203)

150,675

 

 






Segment operating results

3,206

30,311

(486)

33,031

 

Unallocated operating expenses, net




(2,667)

 

Finance costs




(174,368)

 

Finance income




28,757

 

Loss before tax




(115,247)

 

Tax income




35,651

 

Loss after tax




(79,596)

 






 

Segment assets

8,631

3,589,587

(1,624)

3,596,594

 

Unallocated assets




218,916

 

Total assets




3,815,510

 






 

Segment liabilities

3,026

495,356

(1,624)

496,758

 

Unallocated liabilities




2,835,314

 

Total liabilities




3,332,072

 






 

Other segment information





 

Depreciation and amortisation

142

18,461

53

18,656

 

Capital expenditure

3

206,372

45

206,420

 

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 $ 9,037 and              US $ 106,695 respectively (30 September 2013: US $ 28,757 and US $ 174,368 respectively).

(c)   Segment assets do not include deferred tax asset of US $ 50,534 (30 September 2013: US $ 42,858), financial assets and other investments US $ 137,097 (30 September 2013: US $ 133,113), short-term deposits with bank and cash US $ 11,987 (30 September 2013: US $ 7,075), and corporate assets US $ 31,116 (30 September 2013: US $ 35,870).

(d)   Segment liabilities do not include deferred tax US $ 35,869 (30 September 2013: US $ 25,523), current tax payable US $ 2,959 (30 September 2013: US $ 1,016), interest-bearing current and non-current borrowings US $ 3,113,101 (30 September 2013: US $ 2,734,043), derivative liabilities US $ 31,231 (30 September 2013: US $ 36,405) and corporate liabilities US $ 89,802 (30 September 2013: US $ 38,327).

(e)   The Company operates in one business and geographic segment. Consequently no segment disclosures of the Company are presented.

(f)    One customer in the power generating segment contributing revenues of US $ 88,392 (30 September 2013:                 US $ 60,951) accounted for 50.28% (30 September 2013: 40.47%) of the total segment revenue.

 

10.  Finance costs

Finance costs comprise:


Consolidated

Company


30 September 2014

30 September 2013

30 September 2014

30 September 2013

Interest expenses on loans and borrowings 1

              73,738

44,872

615

422

Other finance costs

              13,182

9,673

798

1,130

Provision for impairment of financial assets

33                     

2,370

-

-

Foreign exchange loss, net2

              18,730

116,649

 

241

415

Net loss on financial liability at fair value through profit or loss, net

112

-

-

-

Net loss on held-for-trading financial assets





    on re-measurement

-

2

-

-

Unwinding of discounts

900                   

 

802

-

-

Total

106,695

174,368

1,654

1,967

1Borrowing cost capitalised during the period amounting to US $ 117,520 (30 September 2013: US $ 134,276).

2 Includes loss on account of restatement of foreign currency denominated monetary assets and liabilities amounting to US $ 17,818 (30 September 2013: US $ 110,933).

11.  Finance income

The finance income comprises:



Consolidated




30 September 2014

30 September 2013

Interest income





    bank deposits



7,120

10,079

    loans and receivables



858

2,576

Dividend income



228

70

Net gain on held-for-trading financial assets





    on disposal



3

1

    on re-measurement



21

-

Unwinding of discount on security deposits



807

714

Net gain on financial liability at fair value through profit or loss , net



-

15,317

Total



9,037

28,757

 

12.  Tax income / (expense)

        The major components of income tax for the period ended 30 September 2014 and 30 September 2013 are:


30 September 2014

30 September 2013

 Current tax

(905)

(1,936)

 Deferred tax

13,291

37,587

Tax income reported in the income statement

12,386

35,651

13.  Related party transactions

Name of the Company

Nature of relationship

K&S Consulting Group Private Limited

Group ultimate parent (GUP)

Sayi Energy Ventur Limited

Parent

          Key management personnel and their relatives (KMP):

Name of the party

Nature of relationship

T L Sankar

 

Chairman

S Kishore

Executive Director

K A Sastry

Executive Director

S R Iyer

Director

Vladimir Dlouhy

Director

Abhay M Nalawade

Director

Guy D Lafferty*

Director

Keith N Henry

Director

K. V. Krishnamurthy

Director of parent

·    Resigned with effect from 05 November 2014

Related party transactions during the period

The following table provides the total amount of transactions that have been entered into with related parties and the outstanding balances at the end of the relevant financial period:

Particulars

Consolidated

Company

30 September 2014

30 September 2013

30 September 2014

30 September 2013

Joint Venture

Parent/GUP

KMP

Joint Venture

Parent/GUP

KMP

Subsidiaries

Parent/GUP

KMP

Subsidiaries

KMP

Transactions1,2












Corporate support services fees

53

-

-

54

-

-

-

-

-

-

-

Interest income

372

-

-

1,846

-

-

-

-

-

-

-

Interest expense

-

-

-

10

-

-

-

-

-

-

-

Sale of material

-

-

-

820

-

-

-

-

-

-

-

Capacity charges paid

1,275

-

-

403

-

-

-

-

-

-

-

Inter-corporate deposits and loans given

15,619

-

-

11,967

-

-

36,290

-

-

5,000

-

Inter-corporate deposits and loans refunded

(13,766)

-

-

(10,851)

-

-

-

-

-

-

-

Loan taken

-

-

-

1,176

-

-

38,649

-

-

78

-

Repayment of loan taken

-

-

-

(329)

-

-

-

-

-

-

-

Refund of share application money

-

1,502

-

-

-

-

-

1,502

-

-

-

Managerial remuneration 3

-

-

424

-

-

280

-

-

246

-

98







30 September 2014

30 September 2013

30 September 2014

30 September 2013

Balances 1,2












Interest receivable

3,829

-

-

3,695

-

-

-

-

-

-

-

-

-

Interest payable

9

-

-

9

-

-

-

-

-

-

-

-

-

Loans and inter corporate deposits receivable

32,919

1,005

-

26,070

983


166,068

-

 

-

-

-`

90,835

-

Loans payable

-

-

-

793

-

-

37,524

-

-

-

-

-

-

-

-

78

-

Other receivable 

581

-

-

26

-

-

-

-

-

-

-

-

-

Other payable

1,581

-

-

378

-

-

-

-

-

-

-

-

-

Guarantees given

146

-

-

-

-

-

468,139



188,883

-

Managerial remuneration payable3

-

-

109

-

-

73

-

-

 

-

-

87

-

-

-

52

1The 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. There have been no guarantees provided or received for any related party receivables or payables. For the period ended 30 September 2014, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (30 September 2013: US $ Nil). This assessment is undertaken each financial period through examining the financial position of the related party and the market in which the related party operates.

2 The difference in the movement between the opening outstanding balances, transactions during the period and closing outstanding balances is on account of exchange adjustments and conversion into equity.

 3 Remuneration is net of accrual towards Gratuity, a defined benefit plan, which is managed for the Company as a whole. However, the annual accrual of this liability towards key management personnel is not expected to be significant. There are no other long term benefits and termination benefits which are payable to the key management personnel.

14.  Commitments and contingencies

Capital commitments

As at 30 September 2014, the Group is committed to purchase property, plant and equipment for US $ 1,658,940(31 March 2014: US $ 1,589,164). In respect of its interest in joint ventures the Group is committed to incur capital expenditure of US $ 1,120 (31 March 2014: US $ 1,153). 

Guarantees

·      The Company has guaranteed the loans and non-fund based facilities availed by subsidiaries to unrelated parties for       US $ 337,258 (31 March 2014: US $ 339,442)  and

·      The Group guaranteed the performance of the joint ventures under the power delivery agreements to unrelated parties. No liability is expected to arise.

15.  Financial Instruments

Carrying amounts versus fair values

The fair values of financial assets and financial liabilities, together with the carrying amounts in the Interim condensed consolidated statement of financial position, are as follows:


Carrying amount

Fair value

September 2014

September 2014

Non- current financial assets



Trade and other receivables

3,792

3,792

Equity securities - available-for-sale

22,860

22,860

Loans and receivables

66,195

66,195

Derivative assets

49,604

49,604

Non-current bank deposits

10,346

10,346

Total non-current

152,797

152,797




Current financial assets



Trade and other receivables

170,672

170,672

Equity securities - held for trading

128

128

Debt securities-held for trading

2,421

2,421

Derivative assets

422

422

Loans and receivables

80,253

80,253

Cash and short-term deposits

194,091

194,091

Total current

447,987

447,987

Total            

600,784

600,784




Non- current financial liabilities



Trade and other payables

51,093

51,093

Interest bearing loans and borrowings

2,576,970

2,576,970

Interest rate swaps

1,569

1,569

Option premium payable

24,620

24,620

Total non-current

2,654,252

2,654,252




Current financial liabilities



Trade and other payables

310, 997

310,997

Interest bearing loans and borrowings

536,131

536,131

Option premium payable

5,042

5,042

Total current

852,170

852,170

Total

3,506,422

3,506,422

The fair values of financial assets and financial liabilities, together with the carrying amounts in the Interim condensed company statement of financial position, are as follows:


Carrying amount

Fair value

September 2014

September 2014

Non-current financial assets



Loans and receivables

5,525

5,525

Loans and receivables to subsidiaries

166,068

166,068

Total non-current

171,593

171,593

Current financial assets



Loans and receivables

29

29

Cash and short-term deposits

1,358

1,358

Total current

1,387

1,387

Total

172,980

172,980




Current financial liabilities



Trade and other payables

1,386

1,386

Interest bearing loans and borrowings

100,912

100,912

Total current

102,298

102,298

 

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 included within Level 1 that are 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).

 

30 September 2014

Level 1

Level 2

Level 3

Total

Financial assets measured at fair value





Equity securities - available-for-sale

1,904

-

20,956

22,860

Equity securities - held for trading

128

-

-

128

Debt securities-held for trading

2,421

-

-

2,421

Derivative assets

-

50,026

-

50,026

Total

4,453

50,026

20,956

75,435

Financial liabilities measured at fair value





Interest rate swaps

-

1,569

-

1,569

Option premium payable

-

29,662

-

29,662

Total

-

31,231

-

31,231

 

The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the transfer has occurred. During the six-month period ended 30 September 2014, there were no movements between Level 1, Level 2 and Level 3 fair value measurements.

Reconciliation of Level 3 fair value measurements of financial assets:

 

30 September 2014

Available-for-sale

Total


Unquoted Equities


Opening balance

21,439

21,439

Total gains or losses:



 - in income statement

-

-

 - in other comprehensive income

(483)

(483)

Settlements

-

-

Transfers into level 3

-

-

Closing balance

20,956

20,956

Total gains or losses for the period shown above, relates to available for sale securities held at the end of the reporting period.

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 P/B for 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 of 15%.

Level 3 fair value of the unquoted venture capital units has been determined using a discounted cash flow model. The valuation requires management to make certain assumptions about unobservable inputs to the model, of which the significant unobservable inputs are disclosed in the table below.

 

Average growth rate for cash flows in subsequent years                                                                3.00%

Discount rate                                                                                                                                          11.01%

 

Apart from the above, forecast cash flows for first five years is a significant unobservable input. The management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value. An increase in the forecast cash flows and the growth rate for cash flows in the subsequent periods would both lead to an increase in the fair value of the equity instruments. An increase in the discount rate used to discount the forecast cash flows would lead to a decrease in the fair value of the units. The significant unobservable inputs are not interrelated. The fair value of the units is not significantly sensitive to a reasonable change in the forecast cash flows or the discount rate, however it is to a reasonable change in the growth rate.

 

16.  Subsequent Event:

 

Issue of warrants by KSK Energy Ventures Limited ('KEVL')          

During the month of November 2014, KEVL issued and allotted 80,808,080 Warrants of face value of Rs. 10 (US $ 0.17) to KSK Power Holdings Limited ("KPHL") on preferential basis at a fixed price of Rs. 99 (US $ 1.61) which are convertible into equity shares not later than 18 months from the date of allotment.

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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