Preliminary Results

RNS Number : 6815V

KSK Power Ventur PLC

15 July 2009

 



For Immediate Release

15 July 2009

KSK Power Ventur plc 

('KSK' or 'the Company' or 'the Group')

Preliminary Results 

for the 12 months ended 31 March 2009

KSK Power Ventur plc (AIM:KSK), India's leading developer and operator of power plants, is pleased to announce its Preliminary Results for the 12 months ended 31 March 2009.

Financial Highlights

• Revenue increased 79% to $53.2m (2008: $29.8m)

• Gross Profit increased 75% to $19.8m (2008: $11.3m)

• Operating Profit increased 918% to $10.6m (2008: $1.0m)

• Profit before tax of $8.6m (2008: $53m)

  • 2009 - Includes $13.0m loss on account of impairment of GMDC Stock holding

  • 2008 - Includes income on disposal and re-measurement of investments of $47.7m

• Earnings per share of $0.04 (2008: $0.27)

Operational Highlights

KSK Energy Ventures - Significant progress on current power projects and broadening portfolio

4,500 MW of assets under operation, construction and development    

• Operational capacity of 144 MW 

• Plants under construction of 718 MW (to commission over next three quarters)

• Wardha Power 3,600 MW power plant in Chhattisgarh, EPC contract awarded and work at site to begin during 2009

Additional assets being planned

• Projects in the pipeline - 5,400 MW thermal projects where underlying progress towards definitive positions underway

• 1,000+ MW of hydro power (i.e. renewable energy) in Arunachal Pradesh

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

'The period under review has witnessed the beginning of stabilised operations of the Group's operating power plants and continual progress on the power plants under construction. The Indian subsidiary, KSK Energy Ventures is now anticipating that the commissioning of VS Lignite Power in August and phased commissioning of the Wardha Warora projects from the last quarter and through into early next year will result not only in cash flows and internal accruals, but also strengthen the development on the 3,600 MW power project in Chhattisgarh.

The Company's confidence in the underlying growth initiatives, despite one of the most turbulent times of the recent past in world financial and stock markets at the global level, is reflected in the new business pursuit in India under the KSK Energy Company.  We expect 2009-10 to be a substantial year for us to progress our forward looking initiatives. 

These are exciting times for the Company with a number of further projects underway. We remain on course to meet market expectations in 2009 and are confident in our ability to meet our longer term goals.'

For further information, please contact: www.ksk.co.in

KSK Power Ventur plc	+(91) 40 2355 9922 - 25
S. Kishore, Executive Director
K.A. Sastry, Executive Director
Arden Partners plc	[phone]
Richard Day
Adrian Trimmings
Buchanan Communications Limited	[phone]
Mark Edwards
Nicola Cronk

  CHAIRMAN'S STATEMENT

I am extremely pleased to report that this financial year 2008-09, our second full year of operations since admission of the Company's shares to trading on the AIM market of the London Stock Exchange, has been a successful year for the Company, marked by continual progress on construction of power plants by KSK Energy Ventures Limited (the Indian listed subsidiary), robust financial performance of operating assets, progress in various areas of the business under KSK Energy Company, and enhanced capability to handle new growth opportunities. 

Some of the Group's key developments during the year and recent months include:

1. Sustained construction activity is underway on three projects namely, the 135 MW VS Lignite power project, the 540 MW Wardha Warora project and the 43 MW Arasmeta expansion project. Not withstanding early development delays, these are now all on time and are expected to commission shortly.
2. Wardha Chhattisgarh (3,600 MW): Wardha Power Company has entered into a fuel supply agreement with Goa Industrial Development Corporation, who has been allotted Gare Pelma sector-III coal block in Chhattisgarh (such allotment to GIDC by Government of India), a fully explored block with estimated geological coal reserves of 215 million tons. With the availability of such additional fuel from Gare Pelma sector-III coal block in Chhattisgarh, this has allowed us to fast track development of an additional 1,800 MW of power generation capacity in the same location of Nariyara is being undertaken, where the Company is currently involved in setting up a 1,800 MW power plant based on coal supplies from Morga-II block by GMDC.
3. The Company has raised £32.5m of equity from the UK market, with the recent placing of new shares in KSK Power Ventur plc which was announced on 29 April 2009, to finance its various initiatives in the sector and also announced its plans to move to the Official list of the London Stock exchange and thereby broaden its base of investors. We are delighted with the strong support from our existing and new shareholders for this placing.
4. The Company has suffered a set back in the asset management business of the group through the investor decision to voluntarily liquidate the separately listed AIM company, KSK Emerging India Energy Fund which was managed by KSK Power Ventur plc. The Company as an asset manager has reserved its position with the Liquidators and is currently in discussions with investors for suitable mechanism to address the same in mutually acceptable manner.
5. The period has seen a consolidation of the Group's fuel access effort with various state mineral development corporations initiated in the previous years and execution of definitive agreements with underlying power plant companies with respect to project development and support.  Also new initiatives by KSK Mineral Resources to pursue new growth areas in the fuel collaboration business.
6. Recent efforts have been initiated to identify, evaluate and pursue various ancillary businesses associated with power generation activity in the areas of fuel sourcing, transmission and water infrastructure, In addition to recruitment of the necessary leadership team to lead such initiatives, the company is also looking forward to overseas fuel collaboration and negotiate potential acquisition opportunities both in power generation and associated businesses.
7. The company's Indian subsidiary, KSK Energy ventures Limited, has announced plans to setup a subsidiary with an explicit business objective of engaging in the business of power trading in India  and will look at long term opportunities of trading in surplus power of not only KSK sponsored power plants but also any additional planned / unplanned surplus of other power developers.
8. The Company's wholly owned subsidiary, KSK Energy Company, has initiated a broad collaboration with KSK Energy Ventures with the understanding of sharing of resources and credentials. KSK Energy Ventures will be given the opportunity of the first right of refusal with respect to any new fuel linkages / resources obtained by both companies collectively.

Financial Performance

The overall financial performance for the year was strong, due to continued development activities and profitable underlying power plant operations. The year's gross revenue increased 79% from $29.8m to $53.2m  while gross profits increased 75% from $11.3m to $19.8m. 

Tariffs

Looking at the current trend in the market, there is a clear reflection of deficit which is demonstrated by the high tariffs commanded in the margin. For the financial year 2008-09, almost 22 billion kwh were traded at a weighted average price of Rs 7.29 /kwh (c.15 US cents / kwh). Hence, short term power tariffs are looking attractive in the Indian market.

Project Opportunities Pipeline & Fees

During the year the Company has made continual progress on the power projects, from which, associated revenue realisation of project development fees and interest earned on risk capital will accrue in the coming years. However, with consolidated financial statements under IFRS, such fees realised are eliminated to the extent of the group's equity stake in the underlying projects.  Additionally, with the current progress on three power plants under construction, revenue from sales of power shall see a significant increase in the coming years. Upon commissioning of the Wardha Chhattisgarh project during 2012 and 2013, revenue from generation activity is expected to increase the Company's power revenues significantly.

Investments / Divestments

The Company's Investment interest in the Gujarat Mineral Development Corporation, which is listed on the Bombay Stock Exchange (ticker BSE: GMDC) has experienced a significant decline in market value. The Company has provided for unrealised impairment losses of $13.0m during the current year as reflected in the financial statements.

Additionally, during the year, the Company has acquired a small strategic equity interest in Asian Infrastructure Pte Limited, Singapore, a Group holding company with extensive interest in power plants, Indonesian coal mining interests and energy consulting. The Company has primarily utilised back to back facility from Axis Bank, Singapore to predominantly fund the investment position and the balance from internal sources. The Company is currently in discussion with Sponsors and other shareholders of Asian Infra to consolidate the Company's equity interests in a format that would further strategic initiatives of the Group. Further details on the same will be notified as and when they are concluded.

Also, the Company is currently under finalisation stage of concluding divestment of equity stake in the two small power projects of RVK and KPCL in favour of KVK Group. This is to ensure recovery of the Company's investment and channelled the energies and focus on the mineral business pursuit by KSK Mineral resources.

KSK Energy Company - The Group's unlisted Indian subsidiary has further progressed on a number of business initiatives:

KSK Mineral Resources Private Limited - Further to the effort on securing fuel supplies for the large power projects of the group along with supporting development and support agreements, the group has initiated efforts to explore strategic acquisition of overseas mineral interest along with contracts for undertaking activity of captive coal mining with respect to various power plants being setup under the group, like VS Lignite Power, Wardha Power Company and also collaboration with various government entities for multiple mineral interests. 

KSK Surya Photovoltaic Venture Private Limited - Exploring the opportunity for a manufacturing facility of solar photo voltaic panels (used in solar power generation) for supplies to domestic and overseas markets

KSK Investment Advisor Private Limited - An Advisor and Investment manager to third party investment funds from time to time. Currently provides services as:

• as Investment Advisor to KSK Asset Management Services Private Limited, Mauritius; and

• as Investment Manager to 'small is beautiful fund' subscribed by major public sector banks and financial institutions in India.

Further,  KSK Energy Company has recently incorporated a number of subsidiaries to pursue various ancillary businesses associated with power generation activity namely, KSK Water Infrastructure Private Limited, KSK Transmission Venture Private Limited, KSK Cargo Mover Private Limited amongst others.

Current Trading & Outlook

In the coming year, KSK will remain focused on the development and construction of its various power plant projects and increasing its total MW under development in India and also build towards a balanced portfolio of power generation assets.

We will be devoting significant management time and attention throughout the current year on closely monitoring of the construction activities of VSLP & Wardha Warora and progress on the Wardha Chhattisgarh Power Plant, together with new growth initiatives. 

The pursuit of  above power generation opportunities, newer renewable power manufacturing alternatives, collaboration with other developers, enabling access to newer coal resources are expected to significantly contribute to the Company's growth effort in the coming years. 

We are actively working on moving the listing of our shares in the UK to the Main Market of the London Stock Exchange, which is expected to be achieved by the Autumn of 2009.

We are looking forward to an exciting year ahead and appreciate the support of all our shareholders, as ever.

T L Sankar, Chairman

  CONSOLIDATED AND SEPARATE INCOME STATEMENT

for the year ended 31 March 2009

(All amount in thousands of U.S. $, unless otherwise stated)

		Consolidated			Separate
			Restated*
		2009	2008	2009		2008
Revenue…………………………………….		53,198	29,772	-		-
Cost of revenue…………………………….		(33,405)	(18,460)	-		-
Gross profit………………………………..		19,793	11,312	-		-
Other operating income/ (expenses)………..		1,538	(1,121)	5		-
Distribution costs……………………………		(1,802)	(830)	-		-
General and administrative expenses……….		(8,932)	(8,319)	(839)		(508)
Operating profit……………………………		10,597	1,042	(834)		(508)
Other income.……………………………….		-	7,600	-		-
Finance costs………………………………..		(25,493)	(14,731)	(2,256)		(121)
Finance income……………………………..		23,468	58,698	2,663		197
Excess of share of fair value of net assets acquired over cost…………………………………….		-	395	-		-
Profit/(loss) before tax……………………..		8,572	53,004	(427)		(432)
Tax expense / (income)……………………...		(800)	14,420	-		-
Profit/(loss) for the year……………………		9,372	38,584	(427)		(432)
Attributable to:
Equity holders of the parent…………………		5,718	34,992	(427)		(432)
Minority interests……………………………		3,654	3,592	-		-
		9,372	38,584	(427)		(432)
Earnings per share
Weighted average number of ordinary shares for basic and diluted earnings per share………..		128,878,505	128,878,505
Basic and diluted (U.S. $) ………………….		0.04	0.27

  CONSOLIDATED AND SEPARATE BALANCE SHEET

as at 31 March 2009

(All amount in thousands of U.S. $, unless otherwise stated) 

		Consolidated		Separate
			Restated*
		2009	2008	2009	2008
ASSETS
Non-current assets
Goodwill……………………………………….		73,030	95,521	-	-
Property, plant and equipment…………………		471,658	313,846	-	-
Other non-current assets……………………….		9,132	2,026	-	-
Investments and other financial assets………….		24,879	14,915	49,861	57,523
Trade and other receivables…………................		4,852	6,645	-	-
Deferred tax asset………………………………		8,387	1,100	-	-
			434,053	49,861	57,523
Current assets
Inventories………………………………………		2,286	1,761	-	-
Trade and other receivables…………………….		18,960	10,074	-	-
Investments and other financial assets…………..		113,662	83,929	30,000	-
Cash and short-term deposits…………………...		204,201	97,358	250	898
Other current assets……………………………..		9,283	8,849	1,140	4
		348,392	201,971	31,390	902
Non-current assets classified as held for sale…...		20,125	26,322	-	-
		368,517	228,293	31,390	902
Total assets……………………………………..		960,455	662,346	81,251	58,425
Equity and liabilities
Equity attributable to equity holders of the parent
Issued capital…………………………………..		216	216	216	216
Securities premium…………………………….		120,967	120,967	52,697	52,697
Translation reserve……………………………..		(42,639)	9,399	1,654	5,937
Revaluation reserve…………………………….		9,990	11,252	-	-
Other reserves…………………………………..		135,505	6,244	-	-
Retained earnings/ (Accumulated deficit)………		48,846	42,808	(1,059)	(632)
		272,885	190,886	53,508	58,218
Minority interests……………………………...		180,267	89,797	-	-
Total equity…………………………………….		453,152	280,683	53,508	58,218
Non-current liabilities
Trade and other payables……………………….		2,220	2,690	-	-
Interest-bearing loans and borrowings………….		229,903	156,877	-	-
Provisions……………………………………….		1,542	-	-	-
Deferred revenue…………………………………		3,227	3,014	-	-
Employee benefit liability………………………		36	38	-	-
Deferred tax liability……………………………		15,694	27,615	-	-
			190,234	-	-
Current liabilities
Trade and other payables……………………….		97,820	98,683	771	207
Interest-bearing loans and borrowings………….		123,641	89,211	-	-
Other current financial liabilities………………..		25,000	-	26,912	-
Other current liabilities…………………………..		7,800	3,535	60	-
Taxes payable…………………………………….		420	-	-	-
			191,429	27,743	207
Total liabilities………………………………….		507,303	381,663	27,743	207
Total equity and liabilities…………………….		960,455	662,346	81,251	58,425

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31March 2009

(All amount in thousands of U.S. $, unless otherwise stated)

	Attributable to equity holders of the parent							Minority Interests	Total equity
	Issued  capital  (No. of shares)	Issued capital  (amount)	Securities premium	Translation reserve	Revaluation reserve (Restated*)	Other reserves	Retained Earnings
At 1 April 2007……………………………	128,878,505	216	52,697	2,521	-	1,942	7,816	-	65,192
Foreign currency translation…………..……	-	-	-	6,878	-	-	-	-	6,878
Revaluation of property, plant and equipment on business combination.	-	-	-	-	11,252	-	-	-	11,252
Net income and expense for the year recognised directly in equity………………	-	-	-	6,878	11,252	-	-	-	18,130
Profit for the year…………………………...	-	-	-	-	-	-	34,992	3,592	38,584
Total income and expense for the year…..	-	-	-	6,878	11,252	-	34,992	3,592	56,714
Gain on dilution of controlling interest without loss of control in a joint venture ……………………………………..	-	-	-	-	-	4,302	-	-	4,302
Minority interests arising on business combination and direct issuance of equity shares by subsidiary………..…………….	-	-	-	-	-	-	-	86,205	86,205
Gain on dilution of controlling interest without loss of control in subsidiary……...	-	-	68,270	-	-	-	-	-	68,270
Balance as at 31 March 2008 (Restated*)	128,878,505	216	120,967	9,399	11,252	6,244	42,808	89,797	280,683
Foreign currency translation………………..	-	-	-	(52,038)	-	-	-	(46,013)	(98,051)
Net depreciation transfer for property, plant and equipment………………………………	-	-	-	-	(320)	-	320	-	-
Net loss of available-for-sale financial assets …………………………………………….	-	-	-	-	-	(139)	-	-	(139))
Net income and expense for the year recognised directly in equity………………	-	-	-	(52,038)	(320)	(139)	320	(46,013)	(98,190)
Profit for the year…………………………...	-	-	-	-	-	-	5,718	3,654	9,372
Total income and expense for the year…...	-	-	-	(52,038)	(320)	(139)	6,038	(42,359)	(88,818)
Minority interests arising on direct issuance of equity shares by a subsidiary…………	-	-	-	-	(942)	-	-	132,829	131,887
Gain of direct issuance of equity shares by a subsidiary, net of transaction costs…………	-	-	-	-	-	129,400	-	-	129,400
Balance as at 31 March 2009 ……………	128,878,505	216	120,967	(42,639)	9,990	135,505	48,846	180,267	453,152

  SEPARATE STATEMENT OF CHANGES IN EQUITY

for the year ended 31March 2009

(All amount in thousands of U.S. $, unless otherwise stated)

	Issued capital  (No. of shares)	Issued capital (amount)	Securities premium	Translation reserve	Accumulated deficit	Total equity
Balance as at 1 April 2007	128,878,505	216	52,697	(1,571)	(200)	51,142
Foreign currency translation…………………………………..	-	-	-	7,508	-	7,508
Net income and expense for the year recognised directly in equity…………………………………………………………	-	-	-	7,508	-	7,508
Loss for the year…………………………...............................	-	-	-	-	(432)	(432)
Total income and expense for the year…..…………………	-	-	-	7,508	(432)	7,076
Balance as at 31 March, 2008………………………………	128,878,505	216	52,697	5,937	(632)	58,218
Foreign currency translation………………………………….	-	-	-	(4,283))	-	(4,283)
Net income and expense for the year recognised directly in equity…………………………………………………………	-	-	-	(4,283)	-	(4,283)
Loss for the year…………………………...............................	-	-	-	-	(427)	(427)
Total income and expense for the year…..…………………	-	-	-	(4,283))	(427)	(4,710)
Balance as at 31 March, 2009………………..……………..	128,878,505	216	52,697	1,654	(1,059)	53,508

CONSOLIDATED AND SEPARATE CASH FLOW STATEMENT

For the year ended 31 March 2009

(All amount in thousands of U.S. $, unless otherwise stated)

		Consolidated				Separate
				Restated*
Particulars		2009		2008		2009		2008
		Consolidated				Separate
				Restated*
Particulars		2009		2008		2009		2008
(A) Cash inflow/ (outflow) from operating activities
Net profit/(loss) before tax………………………………………..		8,572		53,004		(427)		(432)
Adjustments
Loss on sale of equity interest in joint venture…………………….		-		2,031		-		-
Depreciation and amortization…………………………………….		5,298		3,048		-		-
Finance costs………………………………………………………		25,493		14,731		2,256		121
Finance income……………………………………………………		(6,877)		(52,338)		(1,043)		(197)
Provision for impairment of trade receivables…………………….		157		-		-		-
Others……………………………………………………………..		6		(396)		-		-
Changes in assets/liabilities
Trade receivables and unbilled revenues………………………….		797		(4,698)		-		-
Inventory…………………………………………………………..		(522)		168		-		-
Other assets……………………………………………………….		(11,490)		(1,597)		(936)		(1,157)
Trade payables and other liabilities……………………………….		3,629		1,150		90		(170)
Provisions and employee benefit liability……………………………		1,540		-		-		-
Taxes paid…………………………………………………………		(10,971)		(5,668)		-		-
Net cash provided by/(used in) operating activities……………		15,632		9,435		(60)		(1,835)
(B) Cash inflow/ (outflow) from investing activities
Movement in restricted cash………………………………………		(10,571)		20,905		-		14,165
Proceeds from sale of property, plant and equipment…………….		1		-		-		-
Purchase of property, plant and equipment……………………….		(196,842)		(7,915)		-		-
Sale of equity interest in joint venture……………………………		-		1,808		-		-
Purchase of financial instruments…………………………………		(146,014)		(61,396)		(19,553)
Proceeds from sale of financial instruments………………………		81,380		43,671		-
Payment for acquisition of earlier years………………………......		(34,121)		(24,254)		-
Dividend income…………………………………………………..		171		449		-
Finance income……………………………………………………		4,225		3,557		8		197
Net cash provided by/(used in) investing activities…………….		(301,771)		(23,175)		(19,545)		14,362
(C) Cash inflow/ (outflow) from financing activities
Proceeds from interest-bearing loans and borrowings………....….		520,993		329,663		25,000		-
Repayment of interest-bearing loans and borrowings………...........		(326,559)		(333,447)		-		(12,988)
Proceeds from finance lease arrangement…………………………		469		608		-		-
Finance charges…………………………………………………….		(24,019)		(14,500)		(1,922)		(121)
Net proceeds from issue of shares in subsidiary to minority interest...		257,757		90,016		-		-
Net cash provided by / (used in) financing activities…………….		428,641		72,340		23,078		(13,109)
(D) Effect of exchange rate changes on cash……………………..	(46,230)		(3,538)		(4,121)		190
Net increase/ (decrease) in cash and cash equivalents…………..	96,272		55,062		(648)		(392)
Cash and cash equivalents at the beginning of the year………….....	58,403		3,341		898		1,290
Cash and cash equivalents at the end of the year ………...............	154,675		58,403		250		898

SUMMARY OF NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS - Full notes contained in Annual Report

For the year ended 31 March 2009

(All amount in thousands of U.S. $, unless otherwise stated)

.

1.      Corporate information

1.1.       Nature of operations

KSK Power Ventur plc (‘the Company’ or ‘KPVP’), its subsidiaries and joint ventures (collectively referred to as ‘the Group’) are primarily engaged in the development, operation and maintenance of private sector power projects, predominantly through jointly controlled entities with heavy industrial companies in the India. 

The Group strategy for growth is to work with major international and Indian businesses and electricity distribution companies to ensure that they have access to dependable and cost effective source of electrical power through the development construction and operation of optimal sized power plants with appropriate fuel sources.

1.2.       Statement of compliance

The consolidated and separate financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretations as adopted by the European Union (EU) and the provisions of the Companies Act 1931-2004 applicable to companies reporting under IFRS.

1.3.       Financial period

The consolidated and separate financial statements cover the period from 1 April 2008 to 31 March 2009, with comparative figures from 1 April 2007 to 31 March 2008.

1.4.       General information

KSK Power Ventur plc, a limited liability corporation, is the Group’s ultimate 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 15-19 Althol Street, Douglas, Isle of Man 1M 11 LB. The Company’s equity shares are listed on the Alternate Investment Market (‘AIM’) operated by the London Stock Exchange.

The Financial statements were approved by the Board of Directors on 14 July 2009.

1.5.       Basis of consolidation

The consolidated financial statements incorporate the financial information of KSK Power Ventur plc, and its subsidiaries for the year ended 31 March 2009.

A subsidiary is defined as an entity controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Subsidiaries are fully consolidated from the date of acquisition, being the date on which control is acquired by the Group, and continue to be consolidated until the date that such control ceases.

The financial statements of the subsidiaries are prepared using same reporting period as the parent company, using consistent policies.

All Intra-Group balances, income and expenses and any resulting unrealized gains arising from intra-Group transactions are eliminated in full on consolidation.

Minority interests represent the portion of profit or loss and net assets that is not held by the Group and are presented separately in the consolidated income statement and within equity in the consolidated balance sheet, separately from parent shareholders’ equity. Acquisitions of additional stake or dilution of stake from/ to minority interests/ other venturer in the Group are accounted for using the entity method, whereby, the difference between the consideration paid or received and the book value of the share of the net assets is recognised in ‘other reserve’ within statement of changes in equity.

 

2.      Changes in accounting policy and disclosure

The accounting policies adopted are consistent with those of the previous financial year except as follows:

The Group adopted following new and amended IFRS as of 1 April 2008.

§         Amendments to IAS 39 – Reclassification of Financial Assets; and

§         IFRS 7 – Financial Instruments: Disclosures (IFRS 7);

3.      Dilution of ownership interest in a subsidiary

Initial Public Offering made by KSK Energy Ventures Limited (‘KEVL’)          

As of 1 April 2008, KSK Energy Limited (KEL) held 191,221,952 equity shares (65 percent equity ownership) in KSK Energy Ventures Limited (‘KEVL’). During the year ended 31 March 2009, KEVL issued additional 51,917,000 equity shares of face value of Rs. 10 (U.S. $0.25) each at a premium of Rs. 230 (U.S.$ 5.46) per share in the Indian domestic market by way of Initial Public Offering. The issue was fully subscribed and KEVL raised Rs. 12,460,080 (U.S. $ 268,142). The transaction cost incurred adjusted with the consideration received, net of deferred taxes amounting Rs. 165,020 (U.S. $3,530), is Rs. 318,535 (U.S. $6,855).

Pursuant to the issuance of the equity shares to general public the ownership interest of the Group in KEVL decreased from 65 percent to 55.25 percent resulting in a 9.75 percent deemed partial disposal of the Group’s controlling interest in a subsidiary without loss of control.

The Group accounted for partial disposal of the investment in a subsidiary without loss of control as an equity transaction, and no gain or loss is recognised in the income statement. The difference of U.S. $129,400, between the fair value of the net consideration received (U.S. $261,287) and the amount by which the minority interests are adjusted (U.S. $131,887), has been credited to ‘other reserve’ within statement of changes in equity and attributed to the equity holders of the parent.

Further, an adjustment to revaluation reserve attributed to the equity holders of the parent amounting U.S. $972 has been transferred to minority interest on the deemed disposal of the asset without loss of control.

4.      Segment information

For management purposes, the Group is organised into business units based on their services, and has two reportable operating segments as follows:

· Power generating units, and

· Project development services

No operating segments have been aggregated to form the above reportable operating segments.

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.

The Group accounts for inter-segment sales and transfers based on market prices.

Year ended 31 March 2009	Project development activities	Power generating activities	Reconciling/ Elimination activities	Consolidated
Revenue
External customer…………………..	6,170	47,028	-	53,198
Inter-segment……………………….	16,683	-	(16,683)	-
Total revenue………………………	22,853	47,028	(16,683)	53,198
Segment results (refer (vi) below).	21,263	8,396	(16,678)	12,981
Unallocated expenses, net………….				(2,384)
Finance costs, net…………………...				(25,493)
Finance income……………………..				23,468
Profit before tax……………………				8,572
Tax expense / (income)……………..				( 800 )
Profit after tax……………………..				9,372
Segment assets……………………..	23,507	596,408	-	619,915
Unallocated assets………………….				340,540
Total assets………………………				960,455
Segment liabilities………………….	2,220	109,496	-	111,716
Unallocated liabilities……………				395,587
Total liabilities……………………				507,303
Other segment information:
Depreciation………………………	276	5,010	12	5,298
Capital expenditure……………….	4,694	226,723	5,331	236,748

11.  Cash and short-term deposits

Cash and short term deposits comprise of the following:

	Consolidated		Separate
	2009	2008	2009	2008
Cash at banks and on hand…………………	8,563	46,476	250	898
Short-term deposits…………………………	195,638	50,882	-	-
Total ………………………………………	204,201	97,358	250	898

 Short-term deposits are made for varying periods, depending on the immediate cash requirements of the Group. They are recoverable on demand. 

 The Group has pledged a part of its short-term deposits amounting U.S. $49,526 (2008: $38,955) in order to fulfil collateral requirements.

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

	Consolidated
	2009	2008
Cash at banks and on hand………………………………………..	8,563	46,476
Short-term deposits ……………………………………………….	195,638	50,882
Less: Restricted cash……………………………………………….	(49,526)	(38,955)
Cash and cash equivalent…………………………………………	154,675	58,403

12.      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 Group 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 Group.

    The Company has an authorized share capital of 500,000,000 equity shares (2008: 500,000,000) at par value of
    U.S. $ 0.002 (£ 0.001) per share amounting to U.S. $998.

    The Company has issued share capital at par value of U.S. $ 0.002 (£ 0.001) per share. 

    Reserves

    Securities premium represents the amount received by the Group over and above the par value of shares issued
    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 are deducted from securities premium, net of any related
    income tax benefits.

    Revaluation reserve comprises gains and losses due to the revaluation of property, plant and equipment. 

    Translation reserve is used to record the exchange differences arising from the translation of the financial
    statements of the foreign subsidiaries and joint ventures.

    Other reserve represents the difference between the consideration paid and the adjustment to net assets on
    change of controlling interest, without change in control. Any transaction costs associated with the issuing of
    shares by the subsidiaries are deducted from other reserves, net of any related income tax benefits.

    Retained earnings include all current and prior period results as disclosed in the income statement less dividend
    distribution. 

13.  Interest-bearing loans and borrowings

The borrowings comprise of the following:

	Interest rate (range %)	Final Maturity
			2009	2008
Long-term 'project finance' loans…	9.02 to 16.62	1-Apr-21	193,349	158,026
Short-term loans……………………	7.03 to 14.79	10-Feb-10	83,818	76,249
Buyers' credit facility………………	4.07	9-Sep-09	48,333	-
Cash credit and other working capital facilities……………………………	12.81 to 14.11	Mar-12	21,906	5,108
Obligation under finance lease……	7.78	9-Jun-09	1	11
Share of loan in a joint venture……	0.01		6,137	6,694
Total………………………………			353,544	246,088

Total debt of U.S. $ 353,544 (2008: U.S. $ 246,088) comprised:

• Long-term 'project finance' loans of the Group amounting U.S. $ 193,349 (2008: U.S. $ 158,026) is fully secured on the property, plant and other assets of joint venture entities that operates power stations and by a pledge over the promoter's shareholding in equity and preferred capital of each joint venture entities.

• The short-term loan taken by the Group is secured by the corporate guarantee provided by the Company. 

• Buyers' credit facility, cash credit and other working capital facilities is fully secured against property, plant and other assets on pari-passu basis with other lenders of the respective entities availing the loan facilities. 

• Obligation under finance lease is secured against the asset purchased on lease. 

• Share of loan in a joint venture relates to Group's percentage of the joint venture preference share and share application money pending allotment contributed by joint venture partners. The preference share is due for repayment in full between 5 to 20 years. 

Long-term 'project finance' loan contains certain restrictive covenants for the benefit of the facility providers and primarily requires the Group to maintain specified levels of certain financial ratios and operating results. The terms of the other borrowings arrangements also contain certain restrictive covenants primarily requiring the Group to maintain certain financial ratios. As of 31 March 2009, the Group has met all the relevant covenants. 

The fair value of borrowings at 31 March 2009 was U.S. $ 352,808 (2008: $ 242,771). The fair values have been calculated by discounting cash flows at prevailing interest rates.

The borrowings mature as follows:

	Consolidated
	2009	2008
Current liabilities
Amounts falling due within one year……………	123,641	89,211
Non-current liabilities
Amounts falling due after more than one year but not more than five years…………………………………………	147,881	87,470
Amounts falling due in more than five years…….	82,022	69,407
Total……………………………………………..	353,544	246,088

The Group capitalised finance costs incurred during the year amounting U.S. $ 31,579 (2008: U.S. $ 9,813) at an effective interest rate of 12.41% (2008: 11.75%). 

14.  Subsequent events

Sale of available-for-sale equity security

During the year ended 31 March 2009, the Group recorded cumulative loss of U.S. $ 13,043 as an impairment loss in the income statement on account of significant decline in the fair value of its equity investment in Gujarat Development Mineral Corporation Limited (GMDC). 

Subsequent to the balance sheet date, the Group disposed 6,488,715 equity shares (of the total 6,988,574 equity shares held as at 31 March 2009) in GMDC for total cash consideration of U.S. $ 11,707. Considering that the equity shares are sold at value significantly higher than its quoted market price on the date of balance sheet (U.S. $ 4,927), the Company shall record a gain on disposal of equity shares amounting U.S. $ 6,780 during the year ending 31 March 2010. 

 

END

 

 

FR EAKXSFADNEEE