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RNS Number : 0478H
KSK Power Ventur PLC
26 November 2015
 

 

 

KSK Power Ventur PLC

26 November 2015

 

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

Interim Results for the half year ended 30 Sep 2015

 

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, announces its interim results for the half year ended 30 Sep 2015.

 

Financial Highlights 

 

·      Gross Revenue increased by 40% to $ 245.47 m (H1 2015: $ 175.86 m)

·      Gross Profit increased by 40% to $ 52.64 m (H1 2015: $ 37.66 m)

·      Operating Profit remains constant at $ 28.68 m (H1 2015: $ 28.62 m)

·      Loss before tax* moved to a loss of  $ 146.49 m (H1 2015: loss of $ 69.03 m)

·      Investments in Property Plant and Equipment** decreased 4% to $ 3,313 m (March 2015: $ 3,457 m)

 

*This includes an unrealised exchange loss of $ 27.93 million due to restatement of the foreign currency component of certain bank financing facilities and trade payables.

 

** Underlying increase of 1 % on a constant currency basis, but headline decrease on account of translation difference from base currency of INR 66.2958 per $ at closing as against INR 62.6788 per $ at March 2015.

 

While underlying revenue and gross profit have both grown compared to the same period last year, operating profit has remained constant and loss before tax has increased, due to higher finance costs. During the period, the pending PPA finalisation at Sai Wardha, coupled with continuing transmission corridor constraints of the national grid at KSK Mahanadi restricted actual generation, resulting in lower than expected PLF at Sai Wardha and KSK Mahanadi, causing mismatches in meeting overall financing costs.

 

However, we are pleased to report that, starting early October 2015, the two 600 MW units at KSK Mahanadi became fully operational. Compared to the gross generation of 2,134 GWh during the first half, generation rose to 1,156 GWh during the first 45 days of the second half, and improvements both in revenue and gross profit are expected in the second half of the current financial year, with full benefits on a full year basis during FY2017.

 

Comparison of results




30 Sep 2015

(USD m)

30 Sep 2014

(USD m)

% change

30 Sep 2015*

(USD m)

30 Sep 2014

(USD m)

% change

Revenue

245.47

175.86

40%

261.95

175.86

49%

Gross profit

52.64

37.66

40%

56.17

37.66

49%

Operating profit

28.68

28.62

-

30.60

28.62

7%

(Loss) / profit before tax

(146.49)

(69.03)

112%

(156.33)

(69.03)

126%

Average exchange rate Rs/USD

Rs 64.250

Rs 60.207





 

*September 2015 translated at September 2014 Rs/USD exchange

 



Operating Highlights 

·      Operating assets generated 4,026 GWh in the first half, compared to 2,950 GWh for the similar period in the previous year, an increase of 36%, with the following plant load factors ("PLF"):

 

 

                                                 

30 Sep 2015

30 Sep 2014

 

KSK Mahanadi (1200 MW)*

2,134 GWh

(40%)

1,444 GWh

(55%)

 

Sai Wardha (540 MW)

986 GWh

(42%)

547 GWh

(23%)

 

VS Lignite (135 MW)

418 GWh

(70%)

473 GWh

(80%)

 

Sai Regency (58 MW)

228 GWh

(91%)

217 GWh

(85%)

Sai Lilagar (86 MW)

93 GWh

(25%)

95 GWh

(25%)

 

Sitapuram Power (43 MW)

159 GWh

(84%)

166 GWh

(88%)

 

Solar Project (10 MW)

8 GWh

(19%)

8 GWh

(18%)

 

 

* Previous year calculated on 600 MW basis

·        With the recent commissioning of the first two 600 MW units at the 3.6 GW KSK Mahanadi power project, phased construction in line with available incremental capital expenditure is underway to commission the next two 600 MW units during the second half of FY 2017 with the remaining 1,200 MWs scheduled to be completed during the second half of FY 2018.

 

·        High coal costs continue to constrain operations at Sai Wardha in addition to PPA issues on the IPP phase of the output. Regarding coal cost reduction, following a decision made by the Competition Commission of India; Western Coal Fields approached the Competition Appellate Tribunal and ruling on the appeal is awaited shortly and therefore it is anticipated that the issue could be resolved in the second half of the year.

 

·        Favourable additional offtake agreements have been received on the captive phase with two PPAs from Lupin Limited and Hindustan Petroleum Corporation Limited totalling 33 MW. A Letter of Intent for 10 MW was also received from RCF Limited. In addition to the long term PPA with MSEDCL (a local state utility company), interim short term power sale arrangements are being explored to improve asset utilisation levels, enabling revenues and profitability to continue to experience marginal improvements in the short term, ahead of the  full improvements being realised.

 

·        Notwithstanding the challenges across the sector and exchange rate volatility that distorts the Company's performance, the combination of our underlying assets, our risk mitigation strategies and certain recent positive developments should, in the long term, assist in moving the Company back towards meeting market expectations. However, in the short term, owing to capacity utilisation rates remaining below the Board's initial plans, these changes will be gradual.

 

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

 "The first half of the current year witnessed the Company's power plants' aggregate gross generation increasing to 4.02 TWhs, helped by the commencement of supplies from the second 600 MW unit at KSK Mahanadi. With the challenges at Sai Wardha and KSK Mahanadi being addressed, it is anticipated that gross generation could achieve 9 TWhs during 2015-16.

With regards to fuel supplies, it is understood the Ministry of Power and Ministry of Coal are currently considering a comprehensive new plan and structure wherein the coal linkages could be formulated to address needs of those power plants that have long term PPA commitments to state owned DISCOMS in place, and have made physical progress on the ground. We believe that KSK Mahanadi, with multiple DISCOMS supply PPAs in place, is well positioned to address our coal requirements.

The Company continues to be in discussions with the project stakeholders regarding the terms of existing drawn and undrawn financial facilities and additional financing plans to enable KSK Mahanadi to continue with the project execution. Discussions with all stakeholders regarding such arrangements have been positive to date and the Company's lenders are supportive of the proposed arrangements, subject to them obtaining necessary consents.

KSK's performance during the period would not have been possible without the valuable and appreciated support of its shareholders 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

 

+91 (0)402 355 9922

 

Arden Partners plc

James Felix / Patrick Caulfield

 

+44 (0)207 614 5900

Key Business Updates

·      3,600 MW KSK MAHANADI POWER PROJECT:

The construction activity at KSK Mahanadi (a large, single location, greenfield private power plant) continues, with significant achievements during the period under review and post period. To date, progress has been as follows:

o    the first two units of 600 MW each are in operation;

o    completion of the construction of the major part of the civil works and common operation infrastructure at the site;

o    water pipeline infrastructure to meet the water requirements of the entire power plants is operational;

o    rail connectivity to the power plant for coal transportation has been put in place; and

o    switch yard and transformer yard commissioned, with the back charging of 400kV switchyard and transmission system, enabling connectivity for evacuation of power generated into the national grid.

Following stabilised generation from the current 1,200 MW, the Company's management is focusing its efforts on expediting the construction of the next 1,200 MW, while the last 1,200 MW unit is also planned to be taken up for completion. Further, it has been proposed by the project lenders that the ancillary infrastructure of KSK Water and Raigarh Champa Rail is to be merged into KSK Mahanadi with the assets and associated debt facilities taken over by KSK Mahanadi.

·      540 MW SAI WARDHA POWER LIMITED (SWPL):          

The total gross power generated during the review period was 986 GWh with an average PLF of 42%.  This reflects the initial positive movement achieved against the challenging local operating environment and the fuel and open access grid constraints experienced by Sai Wardha Power.

The Company continues to use every effort to pursue the coal price reduction and the PPA achievement of the IPP phase, which will ultimately lead to the enhanced utilisation and profitability of the Sai Wardha plant.

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

The total gross power generated during the period was 418 GWh, with an average PLF of 70 %. The Company has been mandated by the local state for power supplies under a long term PPA with a local grid company and is currently operating under a short term PPA until March 2016. Efforts are continuing to secure necessary long term PPAs from the local grid as mandated by the Government which should be achieved during the current year.

·      86 MW SAI LILAGAR POWER LIMITED (SLPL):

The total gross power generated during the period was 93 GWh, with an average PLF of 25%, which continues to reflect the transition from Captive Power Plant to the Independent Power Producer as well as power supplies which are aligned with the second unit operations of KSK Mahanadi.

With the new PPA arrangements in place, the Company still expects asset utilisation to reach low to mid 80 % PLF levels over the next few quarters. As a result, the Company anticipates increased generation, revenue and profitability from the SLPL 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 period was 228 GWh, with an average PLF of 90%. The plant continues to produce an exceptional operational and financial performance, which the Company expects to continue in the future.

·      43 MW SITAPURAM POWER LIMITED (SPL):

The total gross power generated during the period was 159 GWh, with an average PLF of 84%. Fuel costs for the period under review continue to increase due to an increase in coal prices from the Singareni Collieries Company Limited, as well as from open market purchases, but the energy generated in the period has been supplied to the captive consumers in accordance with the provisions of the PPA, and the balance of power sold to local utilities.  

·      10 MW SAI MAITHILI SOLAR POWER PROJECT:

The total gross power generated during the period was 8.4 GWh, 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.

·      CONSTRUCTION OF ADDITIONAL SOLAR POWER GENERATION PLANTS:

In response to the continuing initiative of the Indian Government, the Company continues to seek to develop an additional 250 MW of solar power generation projects in the medium term wherein the first 50 MW is expected to be commissioned over the next few months and an additional 50 MW subsequently.

As mentioned in the Audited Results announced on 21 July 2015, a number of early initiatives for the procurement of the necessary panels and associated plant equipment have been finalised with selected vendors, with active support of the banks who are ready to provide the requisite long term financing required.

WIND POWER GENERATIONAND HYDRO POWER GENERATION INITIATIVE  

The Company continues to pursue specific wind power generation initiatives as well as work on the hydro project portfolio and suitable collaboration opportunities.

FINANCING ARRANGEMENTS  

The Company's main power plant initiative of KSK Mahanadi requires incremental debt and equity for full completion of the 3.6 GW during FY 2018. Post a recent regulatory clarification, the Project lenders are currently deliberating an appropriate implementation structure and funding plan to address both the debt and equity requirements of the project.

The Company continues to evaluate proposals for further strategic funding through potential participation by the EPC Contractor, directly or indirectly, as well as strategic equity collaboration by other potential participants.

FINANCIAL PERFORMANCE

During the period total operational capacity was 2,072 MW, which still only reflected partial operation during the period. The consolidated operating revenue was $ 245.47 m, gross profit was $ 52.64 m, operating profit was $ 28.68 m, loss before tax was $ 146.49 m, and the loss after tax was $ 97.66 m.

The increase in revenue and gross profit was due to an increase in power generation from KSK Mahanadi and Sai Wardha. Despite an increase in operating performance, operating profit remains at the same level caused by an increase in provision for doubtful receivables of $ 3.48 m, and due to the previous year including income from an insurance claim and liquidated damages of $ 8.08 m.

The significant increase of finance costs from $ 106.70 m to $ 184.72 m was due to increase in period-on-period finance cost of $ 60.91 m relating to Mahanadi mainly due to second unit finance cost being charged to income statement during the current period. As a result, the Company the losses before taxes has increased.

BUSINESS STRATEGY

The Company's business strategy has been to focus on consolidating the operations of the installed capacity of 2,072 MW during FY 2015-16.  The combined portfolio PLF of 44% in the first half is expected to be enhanced to a portfolio PLF of 55%+ during the second half, enabling a gross generation of 9 TWh. High operation performance of KSK Mahanadi would be central to this level of generation.

The Indian power sector remains challenging due to fuel price pressures and and difficulty in achieving open access supply of power to customers at competitive PPA tariffs. However, with significant long term PPAs signed at attractive tariff rates, the Company continues to expect to secure the necessary debt funding required for its major capital projects, resulting in an improved financial performance over time.

OUTLOOK

It is well acknowledged that India's unfulfilled demand for power generation is expected to continue to grow through the coming decade. As such KSK is well positioned to address these power generation opportunities through its high quality and expanding asset base and proven execution capability as shown by the two 600 MW units at KSK Mahanadi becoming fully operational.

The Board continue to believe KSK will be one of India's leading suppliers of power and the successful phased completion of the 3.6 GW KSK Mahanadi power projects being added to the Company's existing portfolio reinforces such a view. That said, the Board expects revenues and underlying profit in the short term to remain below the Board's initial expectations, but in the long term maintain that these expectations should be met.

An extract of the Interim Consolidated and Company Financial Statements for the period ended 30 September 2015 is shown below.

A full set of accounts will be available from the Company websites: www.kskplc.co.uk

PRINCIPAL RISKS AND UNCERTAINITIES

The business of the Group is subject to a variety of risks and uncertainties which, if they occur may have a materially adverse effect on the Group'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 Group's business. The risks and uncertainties faced by the Group 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 Group 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;

·    Delays in providing necessary regulatory support and  / or dispensation as may be required for timely implementation of the financing plans

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

·    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 and open 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

·    Liquidity risk and project financing

 

INTERIM CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION

as at 30 September 2015

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



 Consolidated 

Company


Notes

30 September 2015

31 March
2015

30 September 2015

31 March
2015

ASSETS






Non-current 






Property, plant and equipment, net

5

3,313,468

3,456,914

-

-

Intangible assets and goodwill

6

11,459

12,188

-

-

Investments and other financial assets

7

110,589

130,491

401,008

403,902

Other non-current assets

8

94,905

102,646

-

-

Trade and other receivables

9

2,553

2,845

-

-

Deferred tax asset

23

169,620

128,104

-

-



3,702,594

3,833,188

401,008

403,902

Current






Investments and other financial assets

7

50,117

31,313

23

27

Other current assets

8

43,858

40,459

607

320

Trade and other receivables

9

197,261

154,212

-

-

Inventories

10

33,955

32,453

-

-

Cash and short-term deposits

11

201,070

197,996

2,099

1,065



526,261

456,433

2,729

1,412

Total assets


4,228,855

4,289,621

403,737

405,314







EQUITY AND LIABILITIES






Issued capital

12

289

289

289

289

Share premium

12

287,191

287,191

287,191

287,191

Share application money

12

13,739

16,498

13,739

16,498

Foreign currency translation reserve

12

(148,767)

(129,431)

6,191

4,524

Revaluation reserve

12

1,401

1,418

-

-

Capital redemption reserve

12

10,855

10,855

-

-

Other reserves

12

145,352

147,317

146

122

(Accumulated deficit) / retained earnings

12

(51,202)

15,590

(21,088)

(18,927)

Equity attributable to owners of the Company


258,858

349,727

286,468

289,697

Non-controlling interests


166,382

203,374

-

-

Total equity


425,240

553,101

286,468

289,697

Non-current liabilities






Loans and borrowings

13

2,637,229

2,722,596

-

-

Other non-current financial liabilities

14

25,214

26,862

-

-

Trade and other payables

15

43,422

47,581

-

-

Provisions

16

3,119

3,210

-

-

Deferred revenue

17

2,614

2,824

-

-

Employee benefit liability


855

711

-

-

Deferred tax liabilities

23

32,111

33,777

-

-



2,744,564

2,837,561

-

-







INTERIM CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION

as at 30 September 2015

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



 Consolidated 

Company


Notes

30 September 2015

31 March
2015

30 September 2015

31 March
2015

Current liabilities






Loans and borrowings

13

620,900

521,953

115,802

114,245

Other current financial liabilities

14

5,529

5,959

-

-

Trade and other payables

15

429,768

369,590

1,467

1,372

Deferred revenue

17

233

310

-

-

Taxes payable


2,621

1,147

-

-



1,059,051

898,959

117,269

115,617

Total liabilities


3,803,615

3,736,520

117,269

115,617

Total equity and liabilities


4,228,855

4,289,621

403,737

405,314

 

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

INTERIM CONSOLIDATED AND COMPANY INCOME STATEMENT

for the six months ended 30 September 2015

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



Consolidated

Company


Notes

30 September 2015

30 September 2014

30 September 2015

30 September 2014

Revenue

18

245,465

175,855

-

-

Cost of revenue

19

(192,828)

(138,191)

-

-

Gross profit


52,637

37,664

-

-







Other operating income

20

348

8,623

-

-

Distribution costs


(4,605)

(4,682)

-

-

General and administrative expenses


(19,703)

(12,981)

(464)

(474)

Operating profit / (loss)


28,677

28,624

(464)

(474)

Finance costs

21

(184,721)

(106,695)

(1,697)

(1,654)

Finance income

22

9,551

9,037

-

-

Loss before tax


(146,493)

(69,034)

(2,161)

(2,128)

Tax income / (expense)

23

48,832

12,386

-

-

Loss for the period


(97,661)

(56,648)

(2,161)

(2,128)

Attributable to:






Owners of the Company


(69,758)

(44,600)

(2,161)

(2,128)

Non-controlling interests


(27,903)

(12,048)

-

-



(97,661)

(56,648)

(2,161)

(2,128)

(Loss) / earnings per share


 

 




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


175,308,600

175,308,600



Basic and diluted (loss) / earnings per share (US $) 


(0.40)

(0.25)



 

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

INTERIM CONSOLIDATED AND COMPANY STATEMENT OF OTHER COMPREHENSIVE INCOME

for the six months ended 30 September 2015

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



Consolidated

Company



30 September 2015

30 September 2014

30 September 2015

30 September 2014

Loss for the period


(97,661)

(56,648)

(2,161)

(2,128)

Items that will never be reclassified to income statement






Re-measurement of defined benefit liability


(55)

111

-

-

Income tax relating to re-measurement of defined benefit liability


4

(40)

-

-









(51)

71

-

-

Items that are or may be reclassified subsequently to income statement






 Foreign currency translation differences


(29,546)

(16,926)

1,667

(1,811)

Available-for-sale financial assets






 - current period losses


2

652

-

-

 - reclassification to income statement


26

33

-

-

Income tax relating to available-for-sale financial asset


(465)

59

-

-



(29,983)

(16,182)

1,667

(1,811)

Other comprehensive (expense) / income, net of tax


(30,034)

(16,111)

1,667

(1,811)

Total comprehensive (expense) / income for the period


(127,695)

(72,759)

(494)

(3,939)







Attributable to:






Owners of the Company


(89,442)

(55,042)

(494)

(3,939)

Non-controlling interests


(38,253)

(17,717)

-

-



(127,695)

(72,759)

(494)

(3,939)







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


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)

Change in non-controlling interests without change in control

-

-

-

-

-

-

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 (loss) / gain

-

-

-

-

-

-

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 interim condensed Consolidated income statement. However, the non controlling interest disclosed in the interim condensed 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 2015

 

(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 2015

289

287,191

16,498

(129,431)

1,418

10,855

147,317

15,590

349,727

203,374

553,101

 

Refund of share application money

-

-

(2,759)

-

-

-

-

-

(2,759)

-

(2,759)

 

Change in non-controlling interests without change in control (refer note 4)

-

-

-

-

-

-

(1,661)

-

(1,661)

4,230

2,569

 

Transfer of economic interest to non-controlling interests1

-

-

-

-

-


-

2,949

2,949

(2,949)

-

 

Equity-settled share based payment

-

-

-

-

-

-

24

-

24

-

24

 

Net depreciation transfer for property, plant and equipment

-

-

-

-

(17)

-

-

17

-

-

-

 

Transaction with owners

-

-

(2,759)

-

(17)

-

(1,637)

2,966

(1,447)

1,281

(166)

 

Loss for the period

-

-

-

-

-

-

-

(69,758)

(69,758)

(27,903)

(97,661)

 

Other comprehensive income












 

Items that will never be reclassified to income statement












 

Re-measurement of defined benefit liability

-

-

-

-

-

-

(35)

-

(35)

(20)

(55)

 

Income tax relating to re-measurement of defined benefit liability

-

-

-

-

-

-

4

-

4

-

4

 

Items that are or may be reclassified subsequently to income statement












 

Foreign currency translation differences

-

-

-

(19,336)

-

-

-

-

(19,336)

(10,210)

(29,546)

 

Available-for-sale financial assets












 

 - current period (loss) / gain

-

-

-

-

-

-

(9)

-

(9)

11

2

 

 - reclassification to profit or loss

-

-

-

-

-

-

26

-

26

-

26

 

Income tax relating to available-for-sale financial asset

-

-

-

-

-

-

(314)

-

(314)

(151)

(465)

 

Total comprehensive expenses for the period

-

-

-

(19,336)

-

-

(328)

(69,758)

(89,422)

(38,273)

(127,695)

 

Balance as at 30 September 2015

289

287,191

13,739

(148,767)

1,401

10,855

145,352

(51,202)

258,858

166,382

425,240

 

(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 shareholders, through which the non-controlling shareholders are entitled to a dividend of 0.01% of the face value of the equity share capital held and the same is also reflected in the interim condensed Consolidated income statement. However, the non controlling interest disclosed in the interim condensed 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 2015

 (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 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 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

 









As at 1 April 2015

289

287,191

16,498

4,524

122

(18,927)

289,697

Refund of share application money

-

-

(2,759)

-

-

-

(2,759)

Equity-settled share based payment

-

-

-

-

24


24

Transaction with owners

-

-

(2,759)

-

24

-

(2,735)

Loss for the period

-

-

-

-

-

(2,161)

(2,161)

Other comprehensive income








Foreign currency translation differences

-

-

-

1,667

-

-

1,667

Total comprehensive income / (expense) for the period

-

-

-

1,667

-

(2,161)

(494)

Balance as at 30 September 2015

289

287,191

13,739

6,191

146

(21,088)

286,468

(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 2015





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






 Consolidated

 Company


30 September 2015

30 September 2014

30 September 2015

30 September 2014

 Cash inflow / (outflow) from operating activities





 Loss before tax

(146,493)

(69,034)

(2,161)

(2,128)

 Adjustment





 Depreciation and amortization

51,359

29,723

-

-

 Finance cost

185,863

102,281

4,978

1,575

 Finance income

(9,551)

(9,037)

-

-

 Provision and impairment of trade receivable, PPE and other receivable

3,480

-

-

-

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

(17)

212

-

-

 Others 

(90)

112

24

58

                                                                                                                           





 Change in 





 Trade receivables and unbilled revenue

(45,101)

(12,849)

-

-

 Inventories

(1,502)

(2,429)

-

-

 Other assets

240

(2,090)

4,091

(214)

 Trade payables and other liabilities

22,393

4,182

28

(65)

 Provisions and employee benefit liability

144

(35)

-

-

 Cash generated from / (used in) operating activities

60,725

41,036

6,960

(774)

 Taxes refund / (paid), net

2,196

(2,330)

-

-

 Net cash provided by / (used in) operating activities

62,921

38,706

6,960

(774)






 Cash inflow / (outflow) from investing activities





 Movement in restricted cash, net

(1,055)

(16,781)

-

-

 Purchase of property, plant and equipment and other non-current assets

(25,360)

(234,785)

-

-

 Proceeds from sale of property, plant and equipment

2,345

38,914

-

-

 Purchase of financial assets

(13,711)

(32,738)

(340)

(34,758)

 Proceeds from sale of  financial assets

8,587

32,266

160

-

 Dividend received

158

93

-

-

 Interest income received

8,335

7,881

-

-

 Net cash used in investing activities 

(20,701)

(205,150)

(180)

(34,758)

 Cash inflow / (outflow) from financing activities





 Proceeds from borrowings

303,816

721,780

52,977

39,882

 Repayment of borrowings

(145,091)

(421,630)

(51,740)

-

 Finance costs paid

(186,741)

(202,933)

(1,029)

(2,447)

 Payment of derivative liability

(2,508)

(2,451)

-

-

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

2,437

64,976

-

-

 Net refund of share application money 

(2,759)

(3,285)

(2,759)

(1,502)

 Net cash flow (used in) / provided by financing activities 

(30,846)

156,457

(2,551)

35,933

 Effect of exchange rate changes

(9,355)

(6,758)

(3,195)

784

 Net increase / (decrease) in cash and cash equivalent

2,019

(16,745)

1,034

1,185

 Cash and cash equivalents at the beginning of the period

40,733

55,934

1,065

173

 Cash and cash equivalents at the end of the period (refer note 11)

42,752

39,189

2,099

1,358

(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 2015

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 26 November 2015.

1.2.     Statement of compliance /responsibility statement

a.     the condensed set of financial statements contained in this document has been prepared in accordance with International  Accounting Standard 34 ("IAS 34"), "Interim Financial Reporting" as adopted by European Union ('EU') and gives a true and fair view of the assets, liabilities, financial position and the profit or loss of the group as required by Disclosure and Transparency Rules ("DTR") 4.2.4R;

b.     the Interim management report contained in this document includes a fair review of the information required by the Financial Conduct Authority's DTR 4.2.7R (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year);

c.     this document includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein);

d.    the interim condensed Consolidated and Company financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2015, which have been prepared in accordance with IFRSs.

e.     The financial information set out in these financial statements does not constitute statutory accounts. The financial statement is unaudited but has been reviewed by KPMG Audit LLC and their report is set out at the end of this document.

1.3.     Financial period

The interim condensed Consolidated and Company financial statements are for the six months period ended 30 September 2015. The comparative information required by IAS 1 were determined using IAS 34 and include comparative information as follows:

Statement of financial position                                                                                 :

31 March 2015 being the end of immediately preceding financial year.

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

Six months ended 30 September 2014 being the comparable interim period of the immediate preceding financial year.

1.4.     Basis of preparation

These interim condensed Consolidated and Company financial statements have been prepared under International Accounting Standards-34- "Interim Financial Reporting" as adopted by the European Union.

These interim condensed Consolidated and Company financial statements have been prepared on the historical cost convention and on an accrual basis, except for the following:

·    derivative financial instruments that are measured at fair value;

·    financial instruments that are designated as being at fair value through profit or loss account upon initial recognition are measured at fair value;

·    available-for-sale financial assets that are measured at fair value; and

·    Net employee defined benefit (asset) / liability that are measured based on actuarial valuation

 

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


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

Going Concern:  The financial statements have been prepared on the going concern basis which assumes the Group and the Company will have sufficient funds to continue its operational existence for the foreseeable future, covering at least twelve months from the date of signing these financial statements. The Group requires funds for both short term operational needs as well as for long term investment programmes, mainly in construction projects for its power plants.

 

As at 30 September 2015, the Group and Company have net current liabilities of US $ 532,790 and US $ 114,540 and is depending on a continuation of both short term and long term debt financing facilities. Such financing is subject to covenant and amortisation conditions. The Group also has significant capital commitments at the year-end of which a portion is due to be met during the year to 30 September 2016 (refer note 25), primarily in respect of on-going plant construction projects at KSK Mahanadi. The Group is also involved in a number of on-going legal and claim matters.

 

The Group continues to generate cash flows from current operations which are further expected to increase with higher plant load factor (PLF) both at KSK Mahanadi plant and Sai Wardha plant. These factors are key assumptions with regard to management's forecasts and expectations. While the transmission corridor constraint on KSK Mahanadi for the operation and sale of power from unit 2 has been resolved resulting in full load operation of two units of 600 MW each from the month of October 2015, long term PPA arrangement as well as interim arrangements for Sai Wardha are anticipated to be put in place shortly. 

 

In addition, a number of the facilities that are due to expire at 30 September 2016 are in the process of being extended and have a rollover clause in a number of cases, and the Group may refinance and/or restructure certain short term borrowings into long borrowings and will also consider alternative sources of financing, where applicable. The Directors are confident that facilities will remain available to the Group based on current trading, covenant compliance and ongoing discussions with the Group's primary lending consortium regarding future facilities and arrangements in respect of current borrowings. 

 

The Group currently had significant undrawn borrowing facilities, subject to certain conditions, amounting to approximately US $ 469,799 to meet its long term investment programmes. However, the Group is currently in discussions with stakeholders regarding the terms of such existing drawn and undrawn financial commitments in order to match facilities to the current development and financing plans for KSK Mahanadi. Discussions with all stakeholders regarding such arrangements have been positive to date and the Groups lenders are supportive of proposed arrangements and necessary clarification in this regard has also been received by the financiers from the relevant authority. Nonetheless the Group monitors the situation on an on-going basis and plans alternative arrangements where necessary. The outcome of these discussions may impact on the timing of the strategic development of this plant.

 

As a consequence, the Directors have a reasonable expectation that the Company and Group are well placed to manage their business risks and continue in operational existence for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis of accounting when preparing these financial statements.

2.     Changes in accounting policy and disclosure

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

3.     Significant accounting judgements, estimates and assumptions

There have been no significant changes in the significant accounting judgments, estimates and assumptions applied for the purposes of the preparation of these interim condensed Consolidated and Company financial statements.

 

 

4.     Acquisition and Dilution - change in non-controlling interest without change in control

a.   Warrant issue by KSK Energy Ventures Limited

During the previous year ended 31 March 2015, the group has issued 80,808,080 warrants of face value of Rs. 10 (US $ 0.16) each in KSK Energy Ventures Limited ('KEVL'), an Indian Listed subsidiary to KSK Power Holdings Limited ("KPHL") with an option to apply for and be allotted equivalent number of equity shares of the face value of Rs 10 (US $ 0.16) each at a premium of Rs. 89 (US $ 1.45) each on a preferential basis.

Pursuant to above, during the period ended 30 September 2015, KPHL acquired 1,736,580 shares of KSK Energy Ventures Limited ('KEVL') resulting in increase of the ownership interest of the Group in KEVL from 68.30 % to 68.37 % resulting in a 0.07 % additional interest in subsidiary. The aforesaid transaction is accounted as an equity transaction, and accordingly no gain or loss is recognised in the interim condensed consolidated income statement. An amount of US $ 347 by which the non-controlling interest is adjusted and debited to 'other reserve' within interim condensed consolidated statement of changes in equity and attributed to the owners of the Company

b.   Dilution in KSK Mahanadi Power Company Limited

During the year ended 30 September 2015, the Group has issued additional 112,000,000 equity shares in KSK Mahanadi Power Company Limited ("KMPCL") to KSK Energy Ventures Limited ("KEVL") at a face value of Rs 10 (US $ 0.16) at par and 30,000,000 equity shares in KMPCL held by KSK Energy Limited ("KEL") has been transferred to KEVL

Pursuant to above, the ownership interest of the Group in KMPCL decreased by 0.35 % in a subsidiary without loss of control. The aforesaid transaction is accounted as an equity transaction, and no gain or loss is recognised in the Consolidated income statement.  Pursuant to this an amount of US $ 1,454 is debited to 'other reserve' within consolidated statement of changes in equity and attributed to the owners of the company.

c.    Dilution in KSK Dibbin Hydro Power Private Limited

During the period ended 30 September 2015, the Group has issued additional 12,650,000 equity shares in KSK Dibbin Hydro Power Private Limited ("KDHPPL") to North Eastern Electric Power Corporation Limited (NEEPCO) at face value of Rs 10 (US $ 0.16) each.

Pursuant to above, the ownership interest of the Group in KDHPPL decreased from 81.01 % to 70.00 % resulting in a 11.01 % decrease in Group's controlling interest in a subsidiary without loss of control. The aforesaid transaction is accounted as an equity transaction, and no gain or loss is recognised in the interim condensed consolidated income statement.  The difference of US $ 140 between the fair value of the net consideration received (US $ 1,969) and the amount by which the non-controlling interest are adjusted (US $ 1,829), is credited to 'Other reserve' within interim condensed Consolidated statement of changes in equity and attributed to the owners of the company.

 

 

 

5.     Property, plant and equipment, net

The property, plant and equipment of the Group comprise:


Land and buildings

Power stations

Mining property

Other plant and equipment

Assets under construction

Total

Cost







As at 1 April 2014

264,826

1,234,588

7,763

9,425

1,823,459

3,340,061

Additions

1,247

31

5,424

663

410,054

417,419

Business Combination

11,081

60,017

-

31

16

71,145

Transfer

173,733

1,009,392

-

-

(1,183,125)

-

Disposals/adjustments

(7,316)

(40,752)

-

(585)

(2,367)

(51,020)

Exchange difference

(11,896)

(55,463)

(348)

(423)

(87,014)

(155,144)

As at 31 March 2015

431,675

2,207,813

12,839

9,111

961,023

3,622,461








As at 1 April 2015

431,675

2,207,813

12,839

9,111

961,023

3,622,461

Additions

27

52

-

474

89,370

89,923

Transfer

6,479

14,474

-

-

(20,953)

-

Disposals/adjustments

(133)

(31)

-

(42)

-

(206)

Exchange difference

(23,552)

(120,456)

(699)

(495)

(47,422)

(192,624)

As at 30 September 2015

414,496

2,101,852

12,140

9,048

982,018

3,519,554

Depreciation





As at 1 April 2014

17,213

99,280

1,873

6,413

-

124,779

Additions

7,433

49,495

477

1,192

-

58,597

Disposals / adjustments

(1,358)

(8,955)

-

(505)

-

(10,818)

Exchange difference

(951)

(5,647)

(96)

(317)

-

(7,011)

As at 31 March 2015

22,337

134,173

2,254

6,783

-

165,547








As at 1 April 2015

22,337

134,173

2,254

6,783

-

165,547

Additions

6,325

44,122

337

510

-

51,294

Disposals / adjustments

(9)

(95)

-

(36)

-

(140)

Exchange difference

(1,414)

(8,683)

(133)

(385)

-

(10,615)

As at 30 September 2015

27,239

169,517

2,458

6,872

-

206,086

Net book value







As at 30 September 2015

387,257

1,932,335

9,682

2,176

982,018

3,313,468

As at 31 March 2015

409,338

2,073,640

10,585

2,328

961,023

3,456,914

 

Property, plant and equipment with a carrying amount of US $ 3,152,102 (31 March 2015: US $ 3,292,520) is subject to security restrictions (refer note 13).

 

 

 

 

 

 

 

 

 

6.     Intangible assets and goodwill


Mining license

Goodwill

Total

Cost




As at 1 April 2014

2,634

18,026

20,660

Disposals

-

(7,015)

(7,015)

Exchange difference

(118)

(810)

(928)

As at 31 March 2015

2,516

10,201

12,717

As at 1 April 2015

2,516

10,201

12,717

Disposals

-

-

-

Exchange difference

(137)

(557)

(694)

As at 30 September 2015

2,379

9,644

12,023

Amortisation




As at 1 April 2014

415

-

415

Additions

136

-

136

Exchange difference

(22)

-

(22)

As at 31 March 2015

529

-

529

As at 1 April 2015

529

-

529

Additions

65

-

65

Exchange difference

(30)

-

(30)

As at 30 September 2015

564

-

564

Net book value




As at 30 September 2015

1,815

9,644

11,459

As at 31 March 2015

1,987

10,201

12,188

The goodwill acquired through business combinations have been allocated to the following cash generating units of the Group, for impairment testing as follows:


30 September 2015

31 March
2015

J R Power Gen Private Limited

22

22

Sai Wardha Power Limited

3,539

3,745

Sitapuram Power Limited

4,988

5,276

Sai Regency Power Corporation Private Limited

1,095

1,158

 

Total

9,644

10,201

Goodwill is tested for impairment annually and was performed last at 31 March 2015. There were no further circumstances which indicated that the carrying value may be impaired as at 30 September 2015. Hence no impairment testing was carried out in the interim period ended 30 September 2015.

 

7.     Investments and other financial assets


Consolidated

Company


30 September 2015

31 March
2015

30 September 2015

31 March
2015

Current





Financial assets at fair value through profit or loss





 -  held-for-trading

15,689

2,589

-

-

-    Derivative assets

11

-

-

-

Loans and receivables

34,394

28,724

23

27

Loans to and receivables from  Joint Venture partner

23

-

-

-


50,117

31,313

23

27






Non-current





Financial assets at fair value through profit or loss





  -  Derivative assets

48,183

49,702

-

-

Available-for-sale investments

18,113

19,155

-

-

Deposit with banks

5,013

8,102

-

-

Loans and receivables

24,301

37,688

780

5,100

Loans to and receivables from Joint Venture partner

14,979

15,844

-

-

Loans to and receivable from subsidiaries

-

-

173,387

 171,676

Investment in subsidiaries

-

-

226,841

 227,126


110,589

130,491

401,008

 403,902

Total

160,706

161,804

401,031

 403,929

Impairment of financial assets

During the period ended 30 September 2015, the Group's available-for-sale financial asset of US $ 26 (31 March 2015: US $ 693) and loans and receivable of US $ 1,210 (31 March 2015: US $ 25,095) were collectively impaired and written off.

During the period ended 30 September 2015, the Company's loans and receivable of US $ Nil (31 March 2015: US $ Nil) were collectively impaired.

8.     Other assets

        


Consolidated

Company


30 September 2015

31 March
2015

30 September 2015

31 March
2015

Current





Advance to suppliers

35,179

27,591

-

-

Prepayments

7,006

7,577

607

320

Income tax receivable

1

3,587

-

-

Other receivables

1,672

1,704

-

-


43,858

40,459

607

320

Non-current





Development of mineral assets

39,029

41,231

-

-

Prepayments

24,969

28,320

-

-

Income tax receivable

13,592

12,245

-

-

Other receivables

17,315

20,850

-

-


94,905

102,646

-

-

Total

138,763

143,105

 

607

320

 

9.     Trade and other receivables




30 September 2015

31 March
2015

Current





Trade receivables



186,108

142,806

Unbilled revenue



267

627

Interest accrued



10,886

10,779




197,261

154,212

Non-current





Trade receivables



1,950

1,983

Interest accrued



603

862




2,553

2,845

Total



199,814

157,057

The movement in the allowances for impairment in respect of trade and other receivable during the period/ year was as follows:


30 September 2015

31 March
2015

Opening balance

5,112

5,918

Impairment loss recognised

2,270

3,555

Reversal of impairment loss recognised

-

-

Amount written off

-

(4,108)

Exchange difference

(349)

 

(253)

Closing balance

7,033

5,112

10.  Inventories


30 September 2015

31 March
2015

Fuel (at cost)

10,273

13,983

Stores and spares (at cost)

23,484

18,260

Others

198

210

Total

33,955

32,453

11.  Cash and short-term deposits

Cash and short-term deposits comprise of the following:


Consolidated

Company


30 September 2015

31 March
2015

30 September 2015

31 March
2015

Cash at banks and on hand

42,750

40,730

2,099

1,065

Short-term deposits

158,320

157,266

-

-

Total

201,070

197,996

2,099

1,065

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

 

 

Consolidated

Company


30 September 2015

30 September 2014

30 September 2015

30 September 2014

Cash at banks and on hand

42,750

39,189

2,099

1,358

Short-term deposits

158,320

154,902

-

-

Total

201,070

194,091

2,099

1,358

Less: Restricted cash1

(158,318)

(154,902)

-

-

Cash and cash equivalent

42,752

39,189

2,099

1,358

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

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 Company on the date of the shareholders' meeting, has one vote in respect of each share held. All shares are equally eligible to receive dividends and the repayment of capital in the event of liquidation of the Company.

The Company has an authorised share capital of 500,000,000 equity shares (31 March 2015: 500,000,000) at par value of US $ 0.002 (£ 0.001) per share amounting to US $ 998.The issued and fully paid up number of shares of the company is 175,308,600 (31 March 2015: 175,308,600). During the period company has not issued/ bought back any ordinary share. 

         Share application money represents amount received from investors / parents pending allotment of ordinary shares.

         Reserves

Share premium represents the amount received by the Group over and above the par value of shares issued. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax consequences.

 

         Revaluation reserve comprises gains and losses due to the revaluation of previously held interest of the assets acquired in a business combination.

         Foreign currency translation reserve is used to record the exchange difference arising from the translation of the financial statements of the Group entities and the same is not distributable.

Capital redemption reserve represents statutory reserve required to be maintained under local law of India on account of redemption of capital.  The reserve is credited equivalent to amount of capital redeemed by debiting retained earnings and the same is not distributable.

         Other reserve represents the difference between the consideration paid and the adjustment to net assets on change of controlling interest, without change in control and the excess of the fair value of share issued in business combination over the par value of such shares. Any transaction costs associated with the issuing of shares by the subsidiaries are deducted from other reserves, net of any related income tax consequences. Further, it also includes the loss / gain on fair valuation of available-for-sale financial instruments and re-measurement of defined benefit liability net of taxes and the same is not distributable.

Retained earnings mainly represent all current and prior year results as disclosed in the interim condensed consolidated income statement and interim condensed consolidated other comprehensive income less dividend distribution.

13.  Loans and borrowings

The loans and borrowings comprise of the following:

 



Final Maturity

Consolidated

Company


30 September 2015

31 March
2015

30 September 2015

31 March
2015

Long-term "project finance" loans


June-2028

2,758,538

2,760,503

-

-

 

Short-term loans


September-16

183,906

168,273

80,802

64,564

 

Buyers' credit facility


September-16

131,911

148,687

35,000

49,681

 

Cash credit and other working capital facilities

September-16

129,518

111,305

-

-

Redeemable preference shares


January-2029

10,942

11,564

-

-

 

Debentures


March-2025

43,314

44,217

-

-

 

Total



3,258,129

3,244,549

115,802

114,245

 

 

The interest-bearing loans and borrowings mature as follows:


Consolidated

Company


30 September 2015

31 March
2015

30 September 2015

31 March
2015

Current liabilities





Amounts falling due within one year

620,900

521,953

115,802

114,245

 

Non-current liabilities





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

1,075,834

1,087,518

-

-

Amounts falling due in more than five years

1,561,395

1,635,078

-

-

Total

3,258,129

3,244,549

115,802

114,245

 

Current liabilities include an amount of US $ 46,798 in KSK Mahanadi, which is scheduled for repayment with in next twelve months as per the earlier schedule of repayment. However, the Group has already lodged the necessary application outlining the various factors beyond its control and requesting project stake holders regarding the necessary extension terms of existing drawn and undrawn financial facilities in line with the policy framework applicable to all Infrastructure projects in India. The Group is confident that the same would be favourably addressed by the project lenders shortly and pending outcome of the same, the above referred amount is classified under current liabilities..

§ Long-term "project finance" loans of the Group amounting US $ 2,758,538 (31 March 2015: US $ 2,760,503) is fully secured on the property, plant and equipment and other assets of subsidiaries and joint operations that operate power stations, allied services and by a pledge over the promoter's shareholding in equity and preference capital of some of the subsidiaries and joint operations and corporate guarantee provided by the Company.

§ The short term loans taken by the Group are secured by the corporate guarantee provided by the Company, fixed deposits of the Group and by pledge of shares held in the respective entities.

§ Buyer's credit facility is secured against property, plant and equipment and other assets on pari-passu basis, pledge of fixed deposits and corporate guarantee of KEVL. These loans bear interest at LIBOR plus 25 to 300 basis points.

§ A number of the facilities that are due to expire at 30 September 2016 are in the process of being extended and have a rollover clause in a number of cases.

§ Cash credit and other working capital facilities are fully secured against property, plant and equipment and other assets on pari-passu basis with other lenders of the respective entities availing the loan facilities.

§ Redeemable preference shares are due for repayment in 0-14 years.

§ Debentures are secured on the property, plant and equipment and other assets of subsidiaries that operate power stations, allied services and by a pledge over the promoter's shareholding in equity capital of some of the subsidiaries.

14.  Other financial liabilities




30 September 2015

31 March
2015

Current





Option premium payable



5,529

5,506

Forward exchange forward contracts



-

453




5,529

5,959

Non-Current





Option premium payable



19,566

22,099

Interest rate swaps



5,648

4,763




25,214

26,862

Total



30,743

32,821

 

 

15.  Trade and other payables


Consolidated

Company


30 September 2015

31 March
2015

30 September 2015

31 March
2015

Current





Trade payable

112,572

90,306

1,467

1,372

Other payable

208,778

196,650

-

-

Interest payable

108,418

82,634

-

-


429,768

369,590

1,467

1,372

Non-current





Trade payable

29,298

32,642

-

-

Other payable

14,124

14,939

-

-


43,422

47,581

-

-

Total

473,190

417,171

1,467

1,372

 

Trade payables are non-interest bearing and are normally settled on 45 days terms.

§ Non-current trade payables are non-interest bearing and will be settled in 1-8 years.

§ Interest payable is normally settled monthly throughout the financial year.

§ Other payable mainly includes payable against acquisition of capital asset.

16.  Provisions


Decommissioning and restoration costs

Contingent liability

Total

Non-current




As at 1 April 2014

2,494

-

2,494

Business combination

(170)

819

649

Unwinding of discount

183

-

183

Exchange difference

(116)

-

(116)

As at 31 March 2015

2,391

819

3,210





As at 1 April 2015

2,391

819

3,210

Unwinding of discount

87

-

87

Exchange difference

(133)

(45)

(178)

As at 30 September 2015

2,345

774

3,119

 

A provision has been recognised for decommissioning and restoration costs associated with construction of a power plant. The unwinding of the discount on the decommissioning provision is included as a finance costs and the discount rate assumed is 7.5% (31 March 2015: 7.5%).

17.  Deferred revenue


30 September 2015

31 March
2015

Opening balance

3,134

5,714

Transferred to the revenue

(62)

(2,269)

Transferred to the other operating income

(59)

(111)

Exchange difference

(166)

(200)

Closing balance

2,847

3,134




Current

233

310

Non-current

2,614

2,824


2,847

3,134

 

18.  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 interim condensed 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 2015

Project development activities

Power generating activities

Reconciling / Elimination activities

Consolidated

 

Revenue





 

External customers

17

245,448

-

245,465

 

Inter-segment

1,738

-

(1,738)

-

 

Total revenue

1,755

245,448

(1,738)

245,465

 






Segment operating results

1,016

27,916

371

29,303

 

Unallocated operating expenses, net




(626)

 

Finance costs




(184,721)

 

Finance income




9,551

 

Loss before tax




(146,493)

 

Tax income




48,832

 

Loss after tax




(97,661)

 






 

Segment assets

10,396

3,893,883

(4,474)

3,899,805

 

Unallocated assets




329,050

 

Total assets




4,228,855

 






 

Segment liabilities

8,438

345,490

(4,474)

349,454

 

Unallocated liabilities




3,454,161

 

Total liabilities




3,803,615

 






 

Other segment information





 

Depreciation and amortisation

43

51,276

40

51,359

 

Capital expenditure

3

89,891

29

89,923

 

 

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

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

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 $ 9,551 and              US $ 184,721 respectively (30 September 2014: US $ 9,037 and US $ 106,695 respectively).

(c)   Segment assets do not include deferred tax asset of US $ 169,620 (30 September 2014: US $ 50,534), financial assets and other investments US $ 108,289 (30 September 2014: US $ 137,097), short-term deposits with bank and cash US $ 24,244 (30 September 2014: US $ 11,987), and corporate assets US $ 26,897 (30 September 2014: US $ 31,116).

(d)   Segment liabilities do not include deferred tax US $ 32,111 (30 September 2014: US $ 35,869), current tax payable US $ 2,621 (30 September 2014: US $ 2,959), interest-bearing current and non-current borrowings US $ 3,258,129 (30 September 2014: US $ 3,113,101), derivative liabilities US $ 30,743 (30 September 2014: US $ 31,231) and corporate liabilities US $ 130,557 (30 September 2014: US $ 89,802).

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

(f)    Two customers in the power generating segment contributing revenues of US $ 144,468 accounted for 58.93% (30 September 2014: One customer in the power generating segment contributing revenues of US $ 88,392 accounted for 50.28%) of the total segment revenue.

 

19.  Depreciation, amortisation, costs of inventories included in the interim condensed Consolidated income statement 


30 September 2015

30 September 2014

Included in cost of revenue:



Fuel costs

122,702

95,227

Depreciation

44,450

25,201

Amortisation of intangible asset

65

69

Included in general and administrative expenses:



Depreciation

6,844

4,453

Impairment of trade and other receivable

3,480

-

20.  Other operating income

Other operating income comprises:

 


30 September 2015

30 September 2014

Income from management fees

121

129

Gain  on disposal of property, plant and equipment, net

17

-

Claims received 1

-

8,076

Deferred revenue amortisation

59

57

Other operating income

151

361

Total

348

8,623

1Claims received includes an amount of US $ Nil (30 September 2014: US $ 8,076) received from an Engineering, Procurement and Construction (EPC) contractor.

21.  Finance costs

Finance costs comprise:


Consolidated

Company


30 September 2015

30 September 2014

30 September 2015

30 September 2014

Interest expenses on loans and borrowings 1

147,261

             73,738

600

615

Other finance costs

8,579

              13,182

786

798

Impairment of financial assets 2

26

33                     

-

-

Net loss on financial instrument at fair value through profit or loss 3

1,048

              112

-

-

Foreign exchange loss, net

26,792

18,730

311

241

Unwinding of discounts

1,015

900                   

 

-

-

Total

184,721

106,695

1,697

1,654

1Borrowing cost capitalised during the year amounting to US $ 65,935 (30 September 2014: US $ 117,520).

2 Impairment of financial assets relates to available-for-sale financial asset of US $ 26 (30 September 2014: US $ 33).

3Net loss on financial instrument at fair value through profit or loss above relates to foreign exchange forward contracts, currency options and interest rate swap that did not qualify for hedge accounting.

22.  Finance income

The finance income comprises:




30 September 2015

30 September 2014

Interest income





    bank deposits



6,779

7,120

    loans and receivables



1,482

858

Dividend income



289

228

Net gain on held-for-trading financial assets





    on disposal



4

3

    on re-measurement



70

21

Unwinding of discount on security deposits



927

807

Total



9,551

9,037

23.  Tax income / (expense)

       The major components of income tax for the period ended 30 September 2015 and 30 September 2014 are:


30 September 2015

30 September 2014

Current tax

(2,178)

(905)

Deferred tax

51,010

13,291

Tax income reported in the income statement

48,832

12,386

Deferred income tax at 30 September 2015 and 31 March 2015 relates to the following:


30 September 2015

31 March 2015

Deferred income tax assets



Property, plant and equipment

4,511

4,554

Unused tax losses carried forward

272,323

230,186

MAT credit

9,482

9,961

Others

4,335

3,922


290,651

248,623

Deferred income tax liabilities



Property, plant and equipment

151,632

151,778

Others

1,510

2,518


153,142

154,296

Deferred income tax asset, net

137,509

94,327

Reconciliation of deferred tax asset /(liability), net


30 September 2015

30 September 2014

Opening balance

94,327

1,702

Deferred tax  income during the period recognised in the income statement

51,010

13,291

Deferred tax income during the period recognised in other comprehensive income

(461)

19

MAT credit adjustment

(685)

-

Exchange difference

(6,682)

(347)

Closing balance

137,509

14,665

 

The Group is subject to the provisions of Minimum Alternate Tax ('MAT') under the Indian Income taxes. Accordingly, the Group calculated the tax liability for current taxes in India after considering MAT.

The Group has carried forward credit in respect of MAT liability paid to the extent it is probable that future taxable profit will be available against which such tax credit can be utilized.

Income tax expense is recognised based on Management's best estimate of the weighted average annual income tax rate expected for the full financial year applied to the pre-tax income of the interim period. The Group's consolidated effective tax rate for the six months ended 30 September 2015 was 33.33 % (six months ended 30 September 2014 was 17.94%). The change in effective tax rate was caused mainly on account of recognition of deferred tax assets in certain Group companies.

 

24.  Related party transactions

The table below set out transactions with related parties that occurred in the normal course of trading.

Particulars

Consolidated

Company

30 September 2015

30 September 2014

30 September 2015

30 September 2014

Joint operations

Parent /  GUP

KMP

Joint  operations

Parent / GUP

KMP

Subsidiaries

Parent / GUP

KMP

Subsidiaries

Parent / GUP

KMP

Transactions1,2













Corporate support services fees

17

-

-

53

-

-

-

-

-

-

-

-

Interest income

263

-

-

372

-

-

-

-

-

-

-

-

Capacity charges paid

-

-

-

1,275

-

-

-

-

-

-

-

-

Inter-corporate deposits and loans given

48

30

-

15,619

-

-

5,339

-

-

36,290

-

-

Inter-corporate deposits and loans refunded

-

(132)

-

(13,766)

-

-

(3,977)

-

-

-

-

-

Loan taken

-

425

-

-

-

-

14

-

-

38,649

-

-

Refund of share application money

-

2,759

 

-

-

1,502

-

-

2,759

-

-

1,502

-

Equity-settled share based payment

-

-

24

-

-

58

-

-

24

-

-

58

Managerial remuneration 3

-

-

328

-

-

366

-

-

161

-

-

188







30 September 2015

30 September 2014

30 September 2015

30 September 2014

Balances 1,2













Interest receivable

3,896

-

-

3, 829

-

-

-

-

-

-

-

-

Interest payable

-

-

-

9

-

-

-

-

-

-

-

-

Loans and inter corporate deposits receivable

15,002

799

-

32,919

1,005

-

173,387

23

-

166,068

-

-

Loans payable

-

413

-

-

-

-

61,970

-

-

37,524

-

-

Other receivable 

10

-

-

581

-

-

-

-

-

-

-

-

Other payable

1,373

-

-

1,581

-

-

-

-

-

-

-

-

Guarantees given

135

-

-

146

-

-

465,087

-

-

468,139

-

-

Managerial remuneration payable3

-

-

117

-

-

109

-

-

79

-

-

87

 

 

 

25.  Commitments and contingencies

Capital commitments

As at 30 September 2015, the Group is committed to purchase property, plant and equipment for US $ 1,281,469 (31 March 2015: US $ 1,300,892). In respect of its interest in joint operations the Group is committed to incur capital expenditure of US $ 49 (31 March 2015: US $ 51). 

Guarantees

·      The Company has guaranteed to unrelated parties for the loans and non-fund based facilities availed by subsidiaries for       US $ 307,087 (31 March 2015: US $ 275,977)  and

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

Legal and other claim

As a part of the environment and activities of the Group, the Group is exposed to a number of litigation and claim matters which may significantly impact receivables or payables. No significant adverse developments have occurred in respect of these matters during the period. Litigation and other matters are disclosed in detail in note number 30 in 31 March 2015 financials.

26.  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

Carrying amount

Fair value

30 September 2015

30 September 2015

31 March 2015

31 March 2015

Non- current financial assets





Trade and other receivables

2,553

2,553

2,845

2,845

Equity securities - available-for-sale

18,113

18,113

19,155

19,155

Loans and receivables

39,280

39,280

53,532

53,532

Derivative assets

48,183

48,183

49,702

49,702

Non-current bank deposits

5,013

5,013

8,102

8,102

Total non-current

113,142

113,142

133,336

133,336






Current financial assets





Trade and other receivables

197,261

197,261

154,212

154,212

Equity securities - held for trading

107

107

152

152

Debt securities-held for trading

15,582

15,582

2,437

2,437

Derivative assets

11

11

-

-

Loans and receivables

34,417

34,417

28,724

28,724

Cash and short-term deposits

201,070

201,070

197,996

197,996

Total current

448,448

448,448

383,521

383,521

Total      

561,590

561,590

516,857

516,857













Non- current financial liabilities





Trade and other payables

43,422

43,422

47,581

47,581

Loans and borrowings

2,637,229

2,637,229

2,722,596

2,722,596

Interest rate swaps

5,648

5,648

4,763

4,763

Option premium payable

19,566

19,566

22,099

22,099

Total non-current

2,705,865

2,705,865

2,797,039

2,797,039
















Current financial liabilities





Trade and other payables

429,768

429,768

369,590

369,590

Loans and borrowings

620,900

620,900

521,953

521,953

Foreign exchange forward contract

-

-

453

453

Option premium payable

5,529

5,529

5,506

5,506

Total current

1,056,197

1,056,197

897,502

897,502

Total

3,762,062

3,762,062

3,694,541

3,694,541

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


Carrying amount

Fair value

Carrying amount

Fair value

30 September 2015

30 September 2015

31 March 2015

31 March 2015

Non-current financial assets





Loans and receivables to subsidiaries

173,387

173,387

171,676

171,676

Loans and receivables

780

780

5,100

5,100

Total non-current

174,167

174,167

176,776

176,776

Current financial assets





Loans and receivables

23

23

27

27

Cash and short-term deposits

2,099

2,099

1,065

1,065

Total current

2,122

2,122

1,092

1,092

Total

176,289

176,289

177,868

177,868






Current financial liabilities





Trade and other payables

1,467

1,467

1,372

1,372

Loans and borrowings

115,802

115,802

114,245

114,245

Total current

117,269

117,269

115,617

115,617

 

Fair value hierarchy

 

The table below analyses recurring fair value measurements for financial assets and financial liabilities. These fair value measurements are categorised in to different levels in the fair value hierarchy based on the inputs to valuation techniques used. The different levels are defined as follows.

 

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2:  inputs other than quoted prices that 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 2015

Level 1

Level 2

Level 3

Total

Financial assets measured at fair value





Equity securities - available-for-sale

464

-

17,649

18,113

Equity securities - held for trading

107

-

-

107

Debt securities-held for trading

15,582

-

-

15,582

Derivative assets

-

48,194

-

48,194

Total

16,153

48,194

17,649

81,996






Financial liabilities measured at fair value





Interest rate swaps

-

5,648

-

5,648

Option premium payable

-

25,095

-

25,095

Total

-

30,743

-

30,743

The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting year during which the transfer has occurred. During the period ended 30 September 2015, there were no transfers between Level 1 and Level 2 fair value measurements.

 

Reconciliation of Level 3 fair value measurements of financial assets:

30 September 2015

Available-for-sale

Total


Unquoted Equities


Opening balance

18,644

18,644

Total gains or losses:



 - in income statement

-

-

 - in other comprehensive income



     change in fair value of available for sale financial asset

23

23

     foreign currency translation difference

(1,018)

(1,018)

Settlements

-

-

Transfers into level 3

-

-

Closing balance

17,649

17,649

 

31 March 2015

Level 1

Level 2

Level 3

Total

Financial assets measured at fair value





Equity securities - available-for-sale

 511

 -  

 18,644

 19,155

Equity securities - held for trading

 152

 -  

 -  

 152

Debt securities-held for trading

 2,437

 -  

 -  

 2,437

Derivative assets

 -  

 49,702

 -  

 49,702

Total

 3,100

 49,702

 18,644

 71,446






Financial liabilities measured at fair value





Interest rate swaps

 -  

 4,763

 -  

 4,763

Option premium payable

 -  

 27,605

 -  

 27,605

Foreign exchange forward contract

 -  

 453

 -  

 453

Total

 -  

 32,821

 -  

 32,821

 

 

During the year ended 31 March 2015, there were no transfers between Level 1 and Level 2 fair value measurements.

 

Reconciliation of Level 3 fair value measurements of financial assets:

31 March 2015

Available-for-sale

Total


Unquoted Equities


Opening balance

21,439

21,439

Total gains or losses:



 - in income statement

-

-

 - in other comprehensive income



     change in fair value of available for sale financial asset

(1,877)

(1,877)

     foreign currency translation difference

(918)

(918)

Settlements

-

-

Transfers into level 3

-

-

Closing balance

18,644

18,644

Ends


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

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