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KSK ENERGY VENTURES LIMITED
8-2-293/82/A/431/A, Road No. 22, Jubilee Hills,
Hyderabad - 500 033,Telangana, India.
Ph: +91 40 2355 9922 - 25, Fax: +91 40 2355 9930
www.ksk.co.in
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ANNUAL REPORT
2013-14
BOARD OF DIRECTORS
Mr. T.L. Sankar
Chairman
Mr. S.R. Iyer
Non-Executive Director
Mr. Girish Kulkarni
Non-Executive Director
Mr. Anil Kumar Kutty
Non-Executive Director
Mr. K. Bapi Raju
Non-Executive Director
Mr. Tanmay Das
Non-Executive Director
CORPORATE SUSTAINABILITY INITIATIVES
Mr. K.A. Sastry
Whole-time Director
Mr. S. Kishore
Whole-time Director
CONTENTS
Highlights
02
Corporate Information
03 Highlights of the Year
04
Chairman’s Statement
Governance
09 Management Discussion and Analysis
23
Report on Corporate Governance
36 Directors’ Report
Financial Statements
STANDALONE FINANCIALS
43
48
50
51
Independent Auditors’ Report
Balance Sheet
Statement of Profit and Loss
Cash Flow Statement
53 Notes to Financial Statements
CONSOLIDATED FINANCIALS
77
79
81
82
Auditors’ Report on Consolidated Financial
Statements
Consolidated Balance Sheet
Consolidated Statement of Profit and Loss
Consolidated Cash Flow Statement
84 Notes to Consolidated Financial Statements
Corporate Information
Board of Directors
Mr.T.L.Sankar
Mr.S.R.Iyer
Mr.Girish N Kulkarni
Mr.K.Bapi Raju
Mr.Anil Kumar Kutty
Mr.Tanmay Das
Mr.K.A.Sastry
Mr.S.Kishore
Company Secretary
Mr. M.S. Phani Sekhar
Registered Office
8-2-293/82/A/431/A, Road No.22, Jubilee Hills
Hyderabad - 500 033, Telangana, India
Ph: 040-23559922-25
Fax: 040-23559930
E-mail: investors@ksk.co.in
CIN:L45204AP2001PLC057199
Statutory Auditors
M/s Umamaheshwara Rao & Co.,
Chartered Accountants
Flat No.5-H, Krishna Apartments, Ameerpet X Roads
Hyderabad - 500 073, Telangana, India
Registrar & Share Transfer Agent
Karvy Computershare Private Limited
Plot No.17 - 24, Vittal Rao Nagar, Madhapur,
Hyderabad - 500 081, Telangana, India
S ares Listed at
h
National Stock Exchange of India Limited
Website
BSE Limited
www.ksk.co.in
02
KSK ENERGY VENTURES LIMITED
Highlights of the year
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
Operating capacity stood at
1472 MW
First Unit of
600 MW
of KSK Mahanadi operational and the
second unit of
600MW
anticipated to operate shortly. Taking
aggregate operational capacity to
2072
MW
Commissioning of common infrastructure, additional
infrastructure works for KSK Mahanadi is under progress
10 MW Solar power
generation project commissioned
New
and
Solar Wind
power generation projects under pursuit
Hydro-Thermal opportunities potential collaboration for taking
up next stage of development
KSK Mahanadi, Chhattisgarh
ANNUAL REPORT 2013 - 2014 03
Chairman's Statement
KSK's motto has always been to deliver sustainable power and in delivering this KSK
needs the support of all the various stakeholders and in particular the Government,
Lenders and the Shareholders. With the various challenges across power sector in
India and long standing issues unresolved, there is a renewed hope in the industry that
the new government would take definitive steps to address these and make much
required amends to ensure assets utilization are good and generation returns to being
the backbone of Indian economic growth ahead.
Our commitment to become a leading power generator is stronger than ever and I am
making an effort to summarize the performance of KSK for the year 2013-14 and plans
ahead.
T.L. Sankar, Chairman
I am pleased to report that the year
would be position to operate a
block are anticipated to start during
2013-14 witnessed the commissioning
secured portfolio of power generating
the year,
initial progress by Gujarat
of first unit of 600 MW of the 3,600 MW
assets which in turn will generate
Mineral Development Corporation
project of the KSK Mahanadi SPV in the
attractive returns for our business and
("GMDC") of the Morga-II Coal Block
State of Chhattisgarh catapulting the
our shareholders.
Group's aggregate gross power
generation to 6,514 MWhs. With
another 600 MW unit soon entering
into operations at KSK Mahanadi, the
aggregate operating capacity during
the current year would be above 2000
MW and resultantly gross generation in
the current year could be significantly
higher. These results are in the context
of the circumstances across the Indian
power
sector and the overall
challenging times and economic
environment in India as well.
The phased construction of the KSK
Mahanadi project is making steady
progress, with the first 600 MW unit
commissioned during the year and
another very shortly. The commencement
has already commenced post
the
forest clearance accorded during May
2013,
the Prospecting License
accorded in December 2013 and in
d e p t h p r o s p e c t i n g a c t i v i t i e s
commenced in May 2014.
of fuel supplies under the tapering
The currency impact due to the
linkage Fuel Supply Agreement
significant depreciation of the Rupee
("FSA") from South Eastern Coalfields
against the US Dollar has resulted in
Limited ("SECL") is expected to have a
considerably greater costs on
high and positive impact, leading to
i m p o r t e d c a p i t a l g o o d s . T h e
enhanced operational profitability.
additional debt funding for the KSK
With the second 600 MW unit due to
Mahanadi,
to cover the significant
enter operations for a substantial part
USD/INR currency fluctuation on
Our constant efforts to iron out all the
of the current financial year, internal
project
imports and the extended
impediments that have been created
accruals are anticipated that will
timelines, has been agreed in principle
by various stakeholders that hamper
provide a robust support for the entire
by the Consortium of Lenders. In this
the actual generation of our power
power generation portfolio of
the
regard, the commitments of the entire
plants only demonstrate that power
Company. Further, interim coal imports
consortium are expected to be firmed
generation business in India not only
from overseas through appropriate
up on the same lines as the Current
necessitates actual unit construction
collaborative arrangements will provide
F a c i l i t y A g r e e m e n t s , a n d a r e
completion at project sites but also
sufficient fuel for the planned power
anticipated to be entered into later in
a d d r e s s i n g t h e v a r i o u s d a i l y
generation from KSK Mahanadi.
the year.
In line with the guidance
infirmities, in the current environment,
on a dynamic basis with innovative
and flexible solutions. It is our belief
that once successfully addressed we
While coal supplies from the Goa
Industrial Development Corporation
("GIDC")
from the GarePelma coal
given by the Reserve Bank of India,
where the progress of infrastructure
projects has been affected by factors
beyond the control of
the project
04
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
developers, an additional two years
However, 86 MW Arasmeta Captive
portfolio and operational experience
would be provided for project
continues to record low results both in
enables it to be better placed to secure
completion as well as commencement.
terms of Plant Load Factor and
the necessary further funding for its
The lenders consortium has agreed in
revenues because of the low offtake
major capital projects, resulting in an
principle to recognize the same and
by the Captive Consumer. With the
improved financial performance over
debt repayment at KSK Mahanadi is
new PPA arrangements in place, asset
time.
now expected to commence in June
utilisation at Arasmeta is expected to
2016 on quarterly basis. This
significantly improve and reach the
deferment provides additional
earlier PLF levels over the next few
internal accruals over the next two
quarters.
The total Power generating capacities
of utilities and non-utilities as on
March 31 2014 was 243,028 MW and
according to industry experts,
the
years and the necessary latitude for
additional units
to commence
operations.
Sai Maithili has set up a 10 MW Solar
total demand for electricity will be
Power Plant in the State of Rajasthan
above 950,000 MW by 2030 providing
under Jawaharlal Nehru National Solar
the requisite growth canvas. With the
Sai Wardha continues to pursue
Mission as part of Groups green
high quality of its asset base, a proven
compensation for the calorific value
energy initiatives. The total gross
execution capability, an increasingly
shortfall in the coal supplied during
power generated in the plant during
efficient business structure and with
the year, and a prima facie opinion has
the year was 19 MWh, with an average
secured fuel supplies to the power
been expressed by the Competition
PLF of 21%.
Commission of India ("CCI") on 22
January 2014 in favour of
the
Company's submission. A detailed
investigation is currently underway by
the office of the Director General of
Competition Commission of
India,
and the group is hopeful of being
granted the necessary relief in the next
few months.
In addition efforts on
seeking local regulatory intervention
on power supplies, enhanced utilisation
through appropriate open access
arrangements are simultaneously
being pursued. Once these are
successfully addressed, profitability of
Sai Wardha is expected to revert to the
previously achieved levels.
The other power projects of the Group
viz., 135 MW VS Lignite, 58 MW Sai
Regency and 43 MW Sitapuram Power
have all shown good performance by
achieving high Plant Load Factors.
Business Strategy and Outlook:
The high capital
intensity and
associated debt required in developing
and growing the Company's power
generation business, coupled with high
currency volatility and the current
difficult Indian policy environment, will
impact the Company's overall funding
requirements and financial performance
in the near term. Work continues on a
number of major initiatives in this regard.
The challenge continues within the
Indian power sector as a whole to obtain
fuel at the right price and open access
for the supply of power to customers at
sensible PPAs. However, with tapering
linkage of coal supplies now secured to
cover any potential delays for
the
Mahanadi plant and with significant
long term PPAs signed at higher tariff
rates, the Company's growing plant
plants, the Company is well positioned
to address
the Indian power
generation opportunities.
I also take this opportunity to place on
record my sincere thanks to our
Shareholders,
the Governments,
authorities and agencies, Project
Lenders and our valued customers,
who have supported our Company. I
c o n v e y m y a p p r e c i a t i o n a n d
thankfulness to my colleagues on the
Board for their invaluable contribution
in strengthening the Company.
I
would also like to thank all
the
employees for their dedicated and
committed efforts.
T.L. Sankar
Chairman
ANNUAL REPORT 2013 - 2014 05
06
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
ANNUAL REPORT 2013 - 2014 07
08
KSK ENERGY VENTURES LIMITED
Management Discussion and Analysis
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
INDUSTRY STRUCTURE AND DEVELOPMENTS
The Energy Sector - Introduction
Power sector in India has made rapid progress both in the Installed Capacity and Transmission and Distribution System. The
total Power generating capacities of utilities and non-utilities as on March 31 2014 was 243,028 MW. (Source: Executive
Summary: Power Sector - March 2014, CEA, Ministry of Power, Govt. of India). The country has been facing power shortages in
spite of the manifold growth over the years. The GoI lays special emphasis on reduction of transmission and distribution losses
and demand side management to optimally utilize the limited resources. Concerted efforts are going on to bridge this gap of
demand and supply through policy initiatives, private sector participation and development of Ultra Mega Power Projects
(UMPPs). The objectives of power sector development include providing sufficient, reliable and inexpensive power. The per
capita consumption of energy in India is one of the lowest in the world. For 2010, per capita consumption of electricity was 884
units per year as at 2012. This has been estimated to have moved marginally to 917.2 units by 2013 (Source: Growth of
Electricity Sector in India from 1947-2013, CEA, Ministry of Power, Govt. of India, July, 2013)
The state of preparedness of the country for generation of the energy it requires and the quality or efficiency of the technology
used in the generation can be well analyzed by the indicators of installed capacity and capacity utilization, respectively. The
power sector in India had an installed capacity of 243 Gigawatt (GW) as of March 2014 recording an increase of 7.9% over that
of April 2013. Captive power plants generate an additional 39.37 GW. Thermal power plants constitute 69.2% of the installed
capacity, hydroelectric about 16.7% and rest being a combination of wind, small hydro-plants, biomass, waste-to-electricity
plants and nuclear energy. India generated about 966 BU electricity during 2013-14 fiscal. (Source: Executive Summary: Power
Sector - March 2014, CEA, Ministry of Power, Govt. of India) Continued economic development, lifestyle changes and a
growing population are increasing the demand for energy in India.
Power shortages have adversely affected the country's economy. Power shortages in India have adversely impacted multiple
industries like agriculture, manufacturing, services etc. Improvement of this sector is essential for the economic well-being of
the country and enhancement of the quality of life of citizens.
The overall slow-down in economy and particularly in
infrastructure have led to stagnant electricity demand and decrease in the purchasing power of people, which signifies in a
nutshell the critical situation faced by the Indian power sector. Moreover, per capita annual electricity consumption remains
significantly low at ~917 kWh for FY 2012-13 and one third of the Indian population remains without access to electricity.
Indian Economy Outlook
The Indian economy continued to deal with persistent challenges of high inflation and low growth during FY 2013-14. The
surge in inflation particularly in food prices owing primarily to supply side constraints was one of the biggest challenges faced
by the Indian economy during the year which affected common man the most. The GDP growth rate recovered marginally from
4.47% in FY 2012-13 to 4.74% in FY 2013-14 owing to robust growth in financial and business services.
Generation
From 42.59 GW at the end of 6th Five Year plan (1980-85), the country has raised its installed capacity to 243.02 GW as of March
2014, world's fourth largest. The fuel wise break-up of the installed capacity as shown below depicts that coal has continued to
maintain its lion's share whereas hydro has lost almost half of its share to renewables and gas sources.
ANNUAL REPORT 2013 - 2014 09
Management Discussion and Analysis
160
140
120
100
80
60
40
20
0
145.27
Mar’ 1985
Mar’ 2014
26.31
40.53
14.46
29.40
21.78
4.78
1.09
0
0.54
Coal
Hydro
Nuclear
Renewables
Gas
Installed Capacity (GW)
0.17 1.19
Diesel
In the first two years of the12 Five Year Plan (2012-17) 43% of the target has been achieved by adding 38 GW (excluding
th
renewables). While, Central and State sectors could achieve 43% and 74% of their respective targets, Private sector's
achievement stands at 151% of its target for FY 2013-14.
Though the total generation in FY 2013-14 at 967 BU has increased by 55 BU over FY 2012-13, the overall Plant Load Factor
(PLF) of thermal power plants has plummeted from 67% in FY 2012-13 to 63% in FY 2013-14. The PLF of coal based plants
dropped from 70% in FY 2012-13 to 65% in FY 2013-14 and that of gas based plants from 40% in FY 2012-13 to 25% in FY 2013-
14 mainly due to domestic fuel shortages.
Transmission
Creation of capacities and deployment of better technology have led to noteworthy development of the transmission
segment. The transmission lines and transformation capacity added for the FY 2013-14 was 16748 (ckms) and 57330 MVA
respectively. The 12 Plan envisages an addition of about 1,07,440 ckm of transmission lines and 2,70,000 MVA of AC
th
transformer capacity. Out of this 33,855 ckm transmission lines and 1,20,995 MVA of AC transformer capacity were added upto
FY 2013-14.
During the year, the Southern Grid was connected to NEWNE Grid through the newly commissioned 765 kV Raichur-Sholapur
single circuit transmission line thereby forming 'One Nation-One Grid-One frequency' system and making the Indian power
system one of the largest operating synchronous grids in the world. This grid integration will provide relief to the power-
starved southern region and will ensure stability, better management and smooth delivery of power to the consumers.
Bottlenecks like delay in environmental & land clearances, RoW issues, disproportionate increase in transmission capacity as
compared to generation capacity etc. continue to hamper the segment.
10
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Distribution
Considering the various challenges such as high distribution losses, poor financial health of distribution companies and low
billing recovery, the government has introduced a financial re-structuring plan for the SEBs/discoms. Eight States which
account for 70-80% of the short-term liabilities are currently in the process of availing the benefit of this programme.
Continued focus on financial viability of the distribution sector is crucial for success of the power sector. Additionally, many of
the States, where costs far exceed revenue that can be recovered based on fixed tariffs have adopted the concept of Regulatory
Assets. These are recoverable from future tariff increases, which, if delayed, could cause tremendous cash management
challenges for the discoms. Hence, there is a need to address the issue of Regulatory Assets through practical solutions. Your
Company has taken the initiative of suggesting possible solutions and advocacy on the same is being pursued.
Fuel Availability
Domestic coal production has been stagnant in the last seven years, while demand from coal based generation capacities has
continuously risen over these years. Apart from the scaling up of production from Coal India Limited (CIL), there is a distinct
need to catalyse the expansion of indigenous coal production capacity.
CIL has been falling short of its production target due to environmental & legal delays in adding new mines, lack of diligent
efforts to ramp up existing ones, lack of railway access etc. FY 2013-14 ended with a coal production of 463 million tonnes (MT)
against the target of 482 MT.
As a prospering economy, India faces energy security as a growing challenge. The power sector is the largest consumer of coal
followed by the iron and steel and cement segments. The overall long-term demand of coal is closely linked to the
performance of the end-use sectors. If the country's coal demand has to be met, there is no option but to expedite the
development of these blocks which were allotted hoping that the private developers would be in a better position to deal with
various issues and bottlenecks and getting faster output of coal. In addition to the captive developers, the public sector coal
companies that are contributing more than 90 % of total production also need immediate support in taking measures for
increasing coal production from existing and new mines.
OPPORTUNITIES
Your Company is a power project development company in India, with experience in developing and operating multiple power
plants across India. Your Company operates in the power generation business and has long-term fuel access to its power
plants. Your Company's power projects are in various phases of operation and development, including operational power
projects, a power project under construction and power projects in the planning phases.
Your Company currently have (i) six power plants (aggregating 872 MW) and one unit of 600 MW (that is part of our 3,600 MW
Mahanadi power plant with an aggregate of six units), that are fully operational and (ii) five remaining units of the 3,600 MW
Mahanadi power plant (aggregating 3,000 MW) that are currently under various stages of construction. In addition, certain
other thermal, solar and hydro power projects, including outside India, are in various stages of planning.
The opportunities and outlook that exist for your Company are as follows:
(cid:2)
(cid:2)
With Power sale arrangements entered during the year under Case-I PPA, the ability to align the new uncertainties and
costs thereto are significantly addressed.
Though untested, the newly announced Case-1 and Case-2 bidding in the context of reasonable compensation for
recovery of fuel cost could be a welcome step for the power generation segment, however actual implementation is
awaited.
ANNUAL REPORT 2013 - 2014 11
Management Discussion and Analysis
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
The Sector provides immense opportunities for several projects through Public Private Partnerships /JVs for capacity
creation in generation, transmission and distribution segments.
With the Southern Grid integrated to the NEW Grid, the power trading market is set to expand and the large price
disparity between the southern and the other regions would reduce over the period.
Capitalize on the Growth of the Indian Power Generation Sector
The power sector in India has historically been characterized by power shortages that have worsened over time.
According to the CEA, the gap between power demand and supply for the period from April 2013 to March 2014 across
India was 6,103 MW. We believe that our power projects will play a role in the growth of the Indian power sector and
contribute in achieving the GoI's vision for the power sector. In addition to the power projects that we are currently
operating, constructing or planning, we intend to develop or acquire additional power projects in the future.
Continue to focus on our Sustainable Business Model
Opening the power generation sector in India to the private sector has increased the involvement of market dynamics in
the operation and maintenance of power projects across the country.
Developer Driven Business Model
We intend to continue to focus on a developer driven business model. We intend to establish power projects with cost-
efficient, sustainable, long-term sources of fuel. In addition, we intend to continue to invest in the captive power projects
of our consumers by setting up dedicated power projects matching, as much as possible, their power requirements.
(cid:2)
Secure Fuel Access
Having a dedicated, cost-efficient and established fuel supply arrangement for a power plant is fundamental to its
success. Our strategy has been to establish dedicated fuel supply arrangements prior to setting up a power plant and
continue to develop such arrangements during the operation of the plant. We try to ensure that we have adequate
supplies of cost-efficient fuel through captive fuel sources, long-term contracts with private parties or with state mineral
development corporations to meet our power projects' needs.
OUTLOOK
Your Company's management is focused on moving the various supply chain solutions forward with respect to operational
assets and addressing the on-ground situations to co-ordinate planned generation with fuel supplies for the assets under
construction. With the underlying assets, associated performance and opportunities, your Company is well positioned to be
one of the more stable, valuable and sustainable players in the Indian power generation landscape and view the future with
confidence. Your Company's bold growth initiative in these challenging times demonstrates its growth and profitability
potential in this key area of the Indian economy upon completion.
Further, with a new federal government in place, there is renewed hope in the power industry in India and the expectation that
the government would take the definitive steps to resolve longstanding issues confronting the power generation business
and competitive thermal energy is expected to maintain its position as the backbone of the Indian power sector.
PRINCIPAL RISKS AND UNCERTAINTIES
The last two years were challenging and exciting for the power sector and the Company, as well. Nevertheless this year has
also witnessed the result of undeterred and sincere efforts of the Company which led to resolution of few of the long pending
12
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
issues like obtaining environment related clearances for coal mines, execution of Fuel Supply Agreement for linkage coal and
PPAs with respect to the 3600 MW Power project in Chhattisgarh.
Below listed are the principal risks and uncertainties faced by the Company:
A. UNCERTAINTIES IN REGULATORY POLICY
Central and State governments have set out broad defined policy objectives and regulatory framework for the sector. But due
to non- coherent approach of the various regulatory and government agencies in according required approvals/ clearances
and adhoc policy revision has impacted the execution and operation of the project.
Mitigation
(cid:2)
(cid:2)
(cid:2)
Policy paralysis and government indecision to be counted with patient capital and innovative solutions while adhering to
highest standards of transparency and integrity.
Address contradictions through consultative process failing which enforcement of legal remedies for decisive positions.
Healthy engagement with government and local regulators to identify potential hazards upfront and develop an action
plan.
B. UNCERTAINTIES IN AVAILABILITY OF FUEL
The Group has secured fuel arrangements for all its operational as well under construction power projects. The fuel
arrangements with Government agencies are valid for certain period and extended further for next term subject to renewal of
the agreement. Though it is normal practice followed by CIL/ GAIL and the agreements for usually extended for next term, but
there is no such guarantee for the extension of the fuel supply agreements. There is a risk that CIL may decline the extension,
change the annual supply quantity and quality and/ or increase the fuel price.
Mitigation
(cid:2)
(cid:2)
(cid:2)
PPAs with fuel cost pass through arrangement
Arrangement with multiple suppliers and reducing dependability on single fuel supplier
Close hands on co-ordination between various Ministries and agencies of Government and addressing the same.
C.
PPA related - Customer Concentration
The Company is dependent on a small number of customers to supply its output and derive its revenue and profitability.
Mitigation
(cid:2)
(cid:2)
Attempt to capture appropriate language remedies for PPA administration and continuous customer interactions for
mutual problem addressal
Seek performance securities and regulatory directions for enforcement of contractual obligations
ANNUAL REPORT 2013 - 2014 13
Management Discussion and Analysis
D. Non - Availability of Support Infrastructure
The continuous and efficient operation of Power Projects also depends on the support infrastructure facilities, in addition to
power plant block. The support infrastructure facilities like water supply system, rail logistic system for coal transport etc, not
limited to the power plant boundary, but are imperative for the operation of power plant.
Mitigation
(cid:2)
(cid:2)
(cid:2)
Close monitoring of these facilities
Highly skilled and specialised manpower dedicated for these facilities
Additional water reservoir and coal stockyard inside the power plant area, so that any sudden breakdown of support
facilities shall not affect the operation of the power plant
E. Currency Fluctuations
During the financial year 2013-14, Indian Rupee depreciated by 10.6% against US dollar and in financial year 2012-13, by 7.5%.
Though the recent economic and political developments in the country indicate the improvement in exchange rate, there is no
such guarantee and Indian currency may further depreciate.
Mitigation
(cid:2)
Appropriate currency hedging instruments.
F. Cost & Time overrun of Projects under construction
The Group is in active implementation of 3600 MW coal based Power plant in Chhattisgarh. The commissioning of the project
has been delayed due to several exogenous factors such as extended monsoons, local issues, delay in permits and clearances
from government agencies. The timely execution of the project is also dependent on the fulfilment of contractual obligations
of EPC contractors.
The project cost may increase due to delay in commissioning of the Project. In addition to above factors, the depreciation of
Indian Rupee against foreign currencies may also add to the cost overrun.
Mitigation
(cid:2)
(cid:2)
(cid:2)
Close monitoring of the project teams through Project Management Group and active contractor engagement to address
issues
Risk of over runs mitigated through turnkey EPC contracts of lumpsum Turnkey basis for the major part of the project
scope
Key concerns addressed through periodic review meetings of top management teams at site and head offices
G. Socio- Economic- Political uncertainties
The Group operates multiple power projects in various locations, each with its own set of circumstances, challenges, cultures
and local activism levels. Any adverse monetary and fiscal changes may result in higher operating and financial cost and put
strain on the cash flows of the projects. Any change of Government in Centre and respective States may raise the risk of ad-hoc
changes in policies, the basic premises on which Projects were envisaged.
14
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Mitigation
(cid:2)
(cid:2)
(cid:2)
(cid:2)
The Company management emphasis on active stake holder engagement, corporate social responsibility initiatives and
continual consultation and engagement programs
Working with local communities, leaders for review of challenges and solutions to address the same
Close hands on co-ordination between various Ministries and agencies of Government and addressing the same.
Close monitoring of the various incentive regimes and ensuring timely adherence to specifications / norms where
timelines are of essence
Below listed are the principal risks and uncertainties faced by the Sector as a whole:
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
Domestic fuel shortages including lack of clarity on availability of domestic fuel especially gas is impacting the power
sector adversely.
Even as the government pushes ahead with raising the fuel price, Discoms, which are already suffering from abysmal
health, would be recovering lesser than the costs, unless adequate tariff hikes are provided. This will impact adversely the
strengthening and augmenting of distribution networks resulting into high technical losses, unplanned extensions of
distribution lines, overloading of the system elements and lack of adequate reactive power support.
With the introduction of new land acquisition law, land acquisition for new projects is estimated to take much more time
and the higher compensation for land would increase the project cost. This is only likely to add to the woes of power
project developers already struggling with delays in multiple clearances with respect to environment, forest, water linkage,
rights of ways (RoW) etc., eventually leading to increased pre-development cycle and cost escalation.
Unsustainable cross subsidy levels is one of the major issues faced by Distribution companies and its elimination is the key
to entail cost-reflective tariffs. The open access regime has further constrained the ability to reduce the cross-subsidies.
Banks, apart from limiting their exposure, are extremely cautious in lending to the ailing power sector which may further
constrain the sector's growth.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an internal control system, which provides protection to all its assets against loss from unauthorized use and
for correct recording and reporting of transactions. The internal control systems are further supplemented by internal audit
carried out by an independent firm of Chartered Accountants and periodical review by the management. The Audit
Committee of the Board addresses issues raised by both the Internal Auditors and Statutory Auditors.
The internal control systems are implemented
(cid:2)
(cid:2)
(cid:2)
To safeguard the Company's assets from loss or damage
To keep constant check on cost structure
To provide adequate financial and accounting controls and implement accounting standards.
ANNUAL REPORT 2013 - 2014 15
Management Discussion and Analysis
OPERATIONAL PERFORMANCE
During the year under review and until date the aggregate installed capacity stands at 1472 MW. The operational performance
for the financial year 2013-14 of each of the operational power plants is provided as under:
31 March 2014
KSK Mahanadi (First 600 MW)
Sai Wardha (540 MW)
VS Lignite (135 MW)
Sai Regency (58 MW)
Arasmeta Captive Power (86 MW)
Sitapuram Power (43 MW)
Sai Regency Wind Project (19 MW)
Sai Maithili Solar Project (10 MW)
KSK Mahanadi Power Company Limited
MWh
1,088 MWh
2,586 MWh
902 MWh
445 MWh
341 MWh
342 MWh
33 MWh
19 MWh
PLF
62%
55%
76%
88%
45%
91%
20%
21%
The construction activity at KSK Mahanadi, a large, single location, greenfield private power plant continues, with significant
achievements during the year under review, and the period up to this date. The first 600 MW unit has commenced supplies
under the PPA's and the second 600 MW unit is expected to achieve synchronization shortly. Phased construction of the
remaining four 600 MW units is expected. Major part of the civil works, construction and common operation infrastructure at
site are complete. Water pipeline infrastructure to meet the water requirements of the entire power plant is commissioned.
Switch yard and transformer yard commissioned, with back charging of 400kV switchyard and transmission system enabling
connectivity for evacuation of power generated into the national grid. Required rail infrastructure to enable transportation of
coal to the power plant is complete.
With stabilised generation from the first 600 MW unit, and the progress being made with the second 600 MW unit, the
Company's management continues to focus its efforts on expediting the construction of the remaining four units.
Sai Wardha Power Limited (formerly
Wardha Power Company Limited)
Sai Wardha is a 4X135MW (540MW) coal based power plant located at Warora Growth Centre, Chandrapur District in
Maharashtra. The total gross power generated in the plant during the review period was 2,586 MWh with an average Plant
Load Factor (PLF) of 55%. This reflected the challenging local operating environment, the fuel and the open access grid
constraints experienced by Sai Wardha.
While, Sai Wardha is pursuing power sale arrangements to commence supplies for part of the capacity that was earlier being
supplied to R-infra, the additional capacity that was earmarked to be supplied to captive industrial consumers also
experienced limitations on open access from the local grid, in spite of long term PPA commitments from various industries. Sai
Wardha continues to make all efforts to pursue the coal price reduction and the granting of the necessary open access
permissions, which will ultimately lead to the enhanced utilisation and profitability of the Sai Wardha plant.
16
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
VS Lignite Power Private Limited
VS Lignite is a 135 MW lignite based power plant located at Gurha village in Bikaner District of Rajasthan. The total gross power
generated in the plant during the year was 902 MWh, with an average PLF of 76%. The Company is continuing its efforts to
secure necessary long term Power Purchase Arrangements from the local grid as well as appropriate legal reliefs with respect
to tariffs from industrial customers.
Sai Regency Power Corporation Private Limited
This Company operates a captive natural gas based combined cycle power plant with a capacity of 58 MW located in
Kalugoorani village in Ramanathapuram District of Tamil Nadu and wind power generation with a capacity of 18.90 MW
located in Tirunelveli District of Tamil Nadu. The total gross power generated in the combined cycle gas fired power plant
during the year was 445 MWh, with an average PLF of 88%. The wind capacity of 19 MW has been disposed subsequent to the
year end at an attractive realization post the tax gains.
Arasmeta Captive Power Company Limited
Arasmeta is a coal based power plant located at Gopal Nagar Village of Janjgir-Champa District in Chhattisgarh. The total gross
power generated in the plant during the year was 341 MWh, with an average PLF of 45%, primarily due to the limited off-take
by Lafarge India. With the new PPA arrangements in place, asset utilisation is expected to significantly improve and reach the
earlier 80%+ PLF levels over the next few quarters.
Sitapuram Power Limited
Sitapuram is a 43 MW coal based power plant situated at Dondapadu village of Nalgonda District in Telangana. The power
generated is supplied to M/s. Zuari Cement Limited, a captive consumer having cement plants in Dondapadu
in Telangana
and
Yerraguntla in Andhra Pradesh and the balance of power sold to other customers under open access. The total gross power
generated in the plant during the year was 342 MWh, with an average PLF of 91%.
Sai Maithili Power Company Private Limited
Sai Maithili has set up a 10 MW Solar Power Plant in the State of Rajasthan under Jawaharlal Nehru National Solar Mission as
part of Groups green energy initiatives. The total gross power generated in the plant during the year was 19 MWh, with an
average PLF of 21%.
FINANCIAL PERFORMANCE
The consolidated financial statements of the Company and its subsidiaries are prepared and presented in accordance with the
Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises
accounting standards notified by the Central Government of India under Section 211 (3C) of the Companies Act, 1956, other
pronouncements of the Institute of Chartered Accountants of India, the provisions of Companies Act, 1956, the provisions of
the Companies Act, 2013 (to the extent notified) and guidelines issued by Securities and Exchange Board of India.
Revenues
Sales and operating income
(Rs.in million)
Particulars
Fiscal 2014
% of total revenue
Fiscal 2013
% of total revenue
Sales and operating income
Other income
Total
21,118.01
1,365.52
22,483.53
94
6
100
22,070.20
1,006.96
23,077.16
96
4
100
ANNUAL REPORT 2013 - 2014 17
Management Discussion and Analysis
The total sales and operating income have decreased by 4% from Rs. 22,070.20 million for the fiscal year 2013 to Rs. 21,118.01
million for the fiscal year 2014. The breakdown of the sales and operating income was as follows:
(Rs.in million)
Particulars
Fiscal 2014
% of total revenue
Fiscal 2013
% of total revenue
Income from sale of energy
20,993.40
Project development fee
Corporate support services
Other operating income
67.46
46.69
10.46
Total
21,118.01
Income from sale of energy
99.41
0.32
0.22
0.05
100
21,910.62
123.75
2.19
33.64
22,070.20
99.28
0.56
0.01
0.15
100
Income from sale of energy is primarily from our Subsidiaries. The income from sale of energy in fiscal 2014 reported 4%
negative growth over the fiscal 2013. The decrease in income from sale of energy was primarily on account of a decrease in
sales in the Sai Wardha power plant. However, decrease in sales in Sai Wardha power plant has been offset to a certain extent
on account of commencement of commercial operations of the first 600 MW unit of the KSK Mahanadi power project.
The overall units of power generated, number of units sold and average realisation has been demonstrated in the table below:
Particulars
Fiscal 2014
Fiscal 2013
Units generated (units in million)
Sale of energy (Rs. in million)
Average realization (per unit)
5,755
20,993.40
4.33
5,546
21,910.62
4.63
Overall Units generated, average realisation and sale of energy trend has been demonstrated in the graph below:
AVERAGE
UNITS GENERATED
5.00
4.00
3.00
2.00
1.00
0.00
4.57
4.63
4.33
3.89
4.09
3.54
5,546 5,755
4,862
6,000
5,000
4,000
3,000
2,000
1,000
0
2,793
958
1,010
FY 09 FY 10 FY 11 FY 12 FY 13 FY 14
Rs. per unit
FY 09 FY 10 FY 11 FY 12 FY 13 FY 14
Units in Million
SALE OF ENERGY
21,911
20,993
19,066
10,164
25,000
20,000
15,000
10,000
5,000
2,452 2,827
0
FY 09 FY 10 FY 11 FY 12 FY 13 FY 14
Rs. Million
18
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Income from project development services
Decrease in our income from project development services from Rs. 123.75 million during fiscal 2013 to Rs. 67.46 million
during fiscal 2014 reflects the maturity of our assets portfolio from under construction assets to operational assets.
Other income
Our income from other sources increased to Rs. 1,365.52 million for the fiscal year 2014 as compared to Rs. 1,006.96 million for
the fiscal year 2013 as outlined below:
Particulars
Interest Income
Dividend Income
Insurance claim received
Miscellaneous income
Total
Fiscal 2014
Fiscal 2013
(Rs. in million)
966.79
0.90
353.49
44.34
980.73
1.28
-
24.95
1,365.52
1,006.96
Increase in income from other sources was primarily on account of payments received in fiscal year 2014 against insurance
claims made in two of our Subsidiaries. However, increase in income from other sources has been offset to a certain extent due
to decrease in interest income on surplus funds parked in deposit and advances.
Expenditure
Generation and operating expenses
Particulars
Consumption of fuel
Other manufacturing expenses
Total
Fiscal 2014
Fiscal 2013
(Rs. in million)
11,978.78
1,522.50
13,501.28
10,695.64
1,314.50
12,010.14
The total generation and operating expenses indicated an increase of 12% from Rs. 12,010.14 million in fiscal 2013 to Rs.
13,501.28 million in fiscal 2014.
Employee benefit expenses and other expenses
Particulars
Employee benefit expenses
Other expenses
Total
Fiscal 2014
Fiscal 2013
(Rs. in million)
463.42
1,781.52
2,244.94
431.65
1,444.46
1,876.11
The employee benefit expenses and other expenses have registered an increase of 20% from Rs. 1,876.11 million in fiscal 2013 to
Rs. 2,244.94 million in fiscal 2014. The increase is mainly on account of increase in open access charges incurred in connection with
the sale of power to captive customers in the Sai Wardha power plant, increase administrative costs associated with the
commencement of commercial operation of the KSK Mahanadi power plant's first unit and
foreign exchange losses
.
ANNUAL REPORT 2013 - 2014 19
Management Discussion and Analysis
Finance costs
Particulars
Gross finance costs
Less : Capitalized to fixed assets
Net Finance costs
Fiscal 2014
Fiscal 2013
(Rs. in million)
18,186.13
10,970.01
7,216.12
14,679.81
8,662.14
6,017.67
The gross finance costs increased to Rs. 18,186.13 million in fiscal 2014 from Rs. 14,679.81 million in fiscal 2013 reflecting a 24%
increase year on year. During the fiscal 2014, the Group had mobilized additional average borrowing of Rs. 17,863.42 million to
finance its capital expenditure and working capital requirements resulting in increased finance costs of Rs. 3,506.32 million.
However, after capitalizing for the constructions units as applicable, the net increase in finance costs as reflected above is Rs.
1,198.45 million.
Depreciation and amortization expenses
Depreciation and amortization expenses had increased from Rs. 2,264.68 million in fiscal 2013 to Rs. 2,929.73 million in fiscal
2014 mainly on account of commencement of commercial operation of the KSK Mahanadi power plant's first unit.
Taxes
The Group made effective use of various tax benefits available in India, including certain special benefits for companies in the
power sector and such benefits have resulted in lower effective tax rate in some of our operating Subsidiaries. The tax provided
on a consolidated basis amounted to Rs. (1,527.61) million (including MAT credit of Rs. (101.02) million for fiscal 2014 as
against Rs. (764.96) million (including MAT credit of Rs. (140.46) million for fiscal 2013. The increase in tax income is mainly on
account of carry forward of losses in the Sai Wardha power plant, VS Lignite power plant and the KSK Mahanadi power plant.
Earnings / (loss) per Share
The Earnings / (Loss) per share for fiscal 2014 stood at Rs. (4.62), which showed a decrease over the previous year. This
significant decrease is due to lower performance of our operational plants and the Sai Wardha power plant in particular.
Segmental analysis
The Group is currently engaged in two business segments, namely, power generation and power development. Net revenues
from its power generation segment have decreased from Rs. 21,944.26 million in fiscal 2013 to Rs. 21,003.86 million in fiscal
2014. Net revenues from its project development segment have decreased from Rs. 125.94 million in fiscal 2013 to Rs. 114.15
million in fiscal 2014. The power generation segment contributed 99% revenue of the Group's total revenue in both Fiscal Years
2014 and 2013.
Financial position and cash flows
The capital employed of the Group was Rs. 190,126 million as at March 31, 2014 and increased by Rs. 15,431 million as
compared to March 31, 2013. The Group incurred Rs. 21,758 million towards capital expenditure during fiscal 2014. The major
expenditure was incurred on continuous construction and development activities at our 6 x 600 MW Mahanadi power plant.
The loan portfolio of the Group comprises a combination of domestic and foreign currency loans. The aggregate outstanding
indebtedness as at March 31, 2014 stood at Rs. 151,345 million and increased by Rs. 15,585 million compared to fiscal 2013.
The increase is mainly on account of disbursement of term loans and foreign currency loans in the KSK Mahanadi power plant
for ongoing construction activities and working capital requirements across other projects. Apart from these, during fiscal year
2014, the Sai Wardha power plant also refinanced its existing borrowing with External Commercial Borrowing.
20
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Net customer receivables increase is mainly attributable to regular trade debtors coupled with withholdings of monies by
certain off takers citing billing disputes or entitlement to withhold and necessary legal remedies are being pursued for
realization of such receivables.
Cash accruals from operations were lower in fiscal 2014 by Rs. 3,638 million as compared to fiscal 2013 mainly due to lower
asset utilization at Sai Wardha power plant. Proceeds from sale of short term investments, sale of surplus lands, dividend and
interest income aided cash generation during the year fiscal 2014. Apart from deployment of cash for capital expenditure, the
Group repaid some of its long term loans amounting to Rs. 31,880 million and availed fresh disbursement of borrowings
amounting to Rs. 42,317 million. Consequently, there was net cash inflow of Rs. 289 million for the fiscal 2014.
HUMAN RESOURCES
The Human Resource Department in the organization acts as a strategic partner for realizing the mission and vision of the
organization. It functions with the objective of developing the Human Resource, who ultimately unleashes the Company
Philosophy “Power from Knowledge”.
HR Processes and Practices are strengthened with a view to create a system & culture which will enable people to unleash their
potential and grow within the organization and at the same time along with the organization and ensure Talent Retention and
Development.
The capability development is given priority to make the organization more agile and make it competitive globally. The frame
work is being done for developing employees at all levels and to make them future ready for higher roles and responsibility.
Total manpower of the group at the end of the financial year is 1274.
SUSTAINABILITY INITIATIVES
Sustainability initiatives continue to be essential ingredient of KSK's Business policy and the Group embraces this responsibility
that comes along with the opportunity of operating across various locations in multiple Indian States. Towards this direction,
our commitment to community moves beyond the requirement of social license to operate and to a far noble theme of
"Bringing Dignity to Life…" as part of `giving back to society' to support and initiate projects that provide sustainable solutions
to the most pressing social challenges for the affected communities.
Further, the Group support to various social infrastructure facilities in the immediate vicinity of the Hospital is expected to
enable sustained community involvement and utilization of the asset by local stakeholders and provide the much required
monetary and non- monetary impetus to the hospital Facilities.
The Group's effort in tertiary healthcare with cardiac facility at Raipur, where services are offered free of charge to all
stakeholders, has experienced certain milestones during the year and subsequent period thereof as summarised below:
(cid:2)
(cid:2)
Over 3,400+ Outpatient Cardiac consultations with 400+ state of art cardiac surgeries performed free of cost
Divine Child Health Programme initiated in September 2013 for screening of children for over 29 conditions that could
eventually lead to Cardiac interventions
Department of Paediatric Heart Care initiated with Foetal cardiology services initiated in June 2014.
The group's sustainability initiatives towards community are essentially focused on five thrust areas; Education, Health, Socio-
economic empowerment, infrastructure development and cultural and social contribution.
ANNUAL REPORT 2013 - 2014 21
Management Discussion and Analysis
1. Promoting Quality Education:
(cid:2)
(cid:2)
Providing merit scholarships to school students, Fee reimbursement to students to pursue higher education courses like
Engineering and Polytechnic, Medical & Management course and ITI scholarships.
Equipment support such as school uniforms, schools bags, stationary & sports material, provision of sports kits and
financial assistance for construction of School Building.
2. Building Healthier Communities:
(cid:2)
(cid:2)
(cid:2)
Through mobile clinic, 186 camps have been organized thereby reaching out to more than 8000 patients in KSK Mahanadi
project area.
Over 3000 persons have been benefitted through our clinic facility at Sai Wardha Project Site.
Provided Emergency Ambulance Services to over 400 users.
3.
Facilitating Socio-Economic Empowerment:
(cid:2)
(cid:2)
(cid:2)
Support for Pond Deepening work at Mankadal Pond, Nawagarh, Upkanala of Nawapara
Distribution of Vegetable Seeds and financial support to families under Income Generation Activity.
Provided drinking water facilities to nearly 2000 families through water tanker or by deepening the ponds and through
digging bore wells.
4. Developing Infrastructure:
(cid:2)
(cid:2)
(cid:2)
(cid:2)
Improved rural connectivity by laying Outer Peripheral approach roads.
Stone Dust filling over damaged streets & roads and drainage line for water recharging of local ponds
Construction of multiple RCC over-head Tanks (100 KL Capacity) adjoin KSK Mahanadi site
Installation of High mast Lights
5.
Fostering Culture and Social contribution:
(cid:2)
(cid:2)
Supported District Administration for organizing Tricycle distribution camp and celebrating Armed Forces Flag Day.
Sponsorship of Republic day celebrations & International Camel festival and local cricketing events.
Moving forward, the Group intends to follow the new statutory stipulations as applicable in addition to marshalling additional
resources for dedicated pursuit of these various initiatives, the Group intends to learn from the experiences of various other
specialist agencies in the areas of community development and support to undertake initiatives that contribute to build a
better and environmentally sustainable way of life for all stake-holders including consumers, shareholders, employees, local
community and society at large to contribute to the sustainability of those communities.
CAUTIONARY STATEMENT:
Certain Statements in this Management Discussion and Analysis describing the Company's business plans estimates and
expectations, numerical or otherwise, may be 'Forward looking statements' within the meaning of applicable laws and
Important developments
regulations. Actual results might differ substantially or materially from those expressed or implied.
that could affect the Company's operations include economic conditions, government permissions, significant changes in
political and regulatory environment in India, tax laws litigation, labour relations and interest costs amongst others.
22
KSK ENERGY VENTURES LIMITED
Report on Corporate Governance
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
KSK is committed to maintaining high standards of corporate governance. Corporate governance is a synonym for sound
management, transparency and disclosure practices that are synchronous with nature and size of business. Corporate
governance encompasses not only the way in which the Company is managed and deals with its shareholders but also
addresses all aspects of its relationship with society. Hence, it has always been an integral part of your Company's philosophy.
The Company firmly believes that good corporate governance stems from the management's mindset and cannot be
regulated by legislation alone. The Company is firmly committed to fulfill the objective of good Corporate Governance.
Company's philosophy on Corporate Governance envisages the attainment of the highest levels of transparency,
professionalism and accountability in all facets of its operations and in its interactions with its stake holders, including
shareholders, employees, the government and the lenders. The Company's objective remains to create long term value for
shareholders.
The governance structure exhibits the Group's ability to deliver a diversified business, deliver operational performance and
simplify the operating model.
Your Company has complied with the requirements of Corporate Governance as required under Clause 49 of the Listing
Agreement with the Stock Exchanges, the disclosure requirements of which are given below:
BOARD OF DIRECTORS
Composition and Category of Directors
As on March 31, 2014, the Board of Directors of the Company consists of 8 (eight) Directors out of whom six are Non - Executive
/ Independent Directors and two are Executive / Whole - Time Directors. The Company has an Independent Director as a
Chairman and the number of Independent Directors is one-third of the total number of Directors and hence the composition of
the Board is in conformity with Clause 49 of the Listing Agreement. Detailed profiles of the Directors retiring by rotation have
been provided in the notice convening the Annual General Meeting.
None of the Directors on the Board is a Member on more than 10 Committees and Chairman of more than 5 Committees (as
specified in Clause 49), across all the companies in which he is a Director.
Details of other Directorships and Chairmanship / Membership of Committee of each Director in various other Companies is as
follows:
Name of the Director
& Category
No. of other Directorships
No. of other Committee
as on 31.03.2014*
positions held as on
31.03.2014#
Chairman
Member
Mr. T. L. Sankar, Chairman / Independent Director
Mr. S. R. Iyer, Independent Director
Mr. Girish N Kulkarni, Independent Director
Mr. Anil Kumar Kutty, Non-Executive Director
Mr. Tanmay Das, Non-Executive Director
Mr. K. Bapi Raju, Non-Executive Director
Mr. K.A. Sastry, Whole-time Director / Promoter Director
Mr. S. Kishore, Whole-time Director / Promoter Director
2
10
11
3
20
9
17
17
* Excludes Directorships in foreign companies and Section 25 Companies.
1
5
1
-
-
-
3
2
-
1
2
2
-
1
4
4
ANNUAL REPORT 2013 - 2014 23
Report on Corporate Governance
# in accordance with Clause 49 of the listing Agreement, Chairmanship / Membership of only Audit & Stakeholders Grievance
Committee in all public limited companies (excluding KSK Energy Ventures Limited) has been considered.
Board Meetings and Procedures
The Board of KSK Energy Ventures Limited met four times during the financial year under review on the following dates: 28 May
2013, 10 August 2013, 9 November 2013 and 10 February 2014. In case of Business exigencies, resolutions are passed by
circulation.
All required information including but not limited to those mentioned in Annexure I A to Clause 49 of the Listing Agreement
are placed before the Board of Directors. Presentations on the financial and operational performance are made to the Board by
the members of the Senior Management team. Information and data that are more important to the Board's understanding of
the business in general and related matters are tabled for discussion.
The Board functions in a democratic manner and the members are at liberty to discuss any issue related to the business in
general.
The maximum time gap between any two meetings did not exceed four months. Leave of absence was granted to those
Directors who expressed their inability to attend the Board Meeting(s).
Details of Directors attendance at Board Meetings and at the last Annual General Meeting held on 21.09.2013 are given in the
following table:
Name of the Director
No. of Board Meetings attended
Attendance at the Annual
during the year
General Meeting
Mr. T. L. Sankar
Mr. S. R. Iyer
Mr. Girish N Kulkarni
Mr. Anil Kumar Kutty
Mr. Tanmay Das
Mr. K. Bapi Raju
Mr. K.A. Sastry
Mr. S. Kishore
Committees of the Board:
4
3
2
4
4
2
4
4
Yes
Yes
No
Yes
Yes
Yes
No
Yes
The Committees appointed by the Board focus on specific areas and make informed decisions within the authority delegated.
Each Committee of the Board is guided by its Charter, which defines the composition, scope and powers of the Committee.
The Committees also make specific recommendations to the Board on various matters from time to time. All observations,
recommendations and decisions of the Committees are placed before the Board for information or for approval.
In addition to the functional Committees, your Board has constituted the following mandatory committees.
24
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
AUDIT COMMITTEE
The management is responsible for the Company's internal controls and the financial reporting process while the statutory
auditors are responsible for performing independent audits of the Company's financial statements in accordance with
generally accepted auditing practices and for issuing reports based on such audits. The Board of Directors has entrusted the
Audit Committee to supervise these processes and thus ensure accurate and timely disclosures that maintain the transparency,
integrity and quality of financial reporting.
Apart from the matters provided in Clause 49 of the Listing Agreement with the Stock Exchanges read with Section 177(4) of
the Companies Act, 2013, the Committee reviews Internal Audit Report and the report of statutory auditors. The Committee
also discusses with the Internal and Statutory Auditors their scope of audit, adequacy of internal control systems, findings and
observations / suggestions.
Composition, meetings and attendance particulars of the Audit Committee during the year is as follows:
The Audit Committee met four times during the year on: 28 May 2013, 10 August 2013, 9 November, 2013 & 10 February 2014.
Sl. No
Name of the Director
Category
No. of Meetings attended
1
2
3
Mr. S.R. Iyer
Mr. T.L. Sankar
Mr. Girish Kulkarni
Chairman
Member
Member
All the above members and Chairman are Independent Directors.
3
4
2
The Audit Committee invites such of the executives, as it considers appropriate (and particularly the head of the Accounts
function) to be present at its meetings. The Internal Auditor and Statutory Auditors are also invited to the meetings. The
Company Secretary acts as the Secretary of the Committee.
NOMINATION AND REMUNERATION COMMITTEE
Composition:
Nomination and Remuneration Committee consists of Non-Executive Independent Directors viz. Mr. Girish N. Kulkarni, Mr. T.
L. Sankar and Mr. S. R. Iyer. Mr. Girish N. Kulkarni is the Chairman of the Committee.
Terms of reference:
The Remuneration Committee was re-designated as 'Nomination and Remuneration Committee' by the Board on May 24,
2014 in line with the requirements of provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
The Nomination and Remuneration Committee is responsible to determine on behalf of the Board and on behalf of the
shareholders with agreed terms of reference, the Company's policy on specific remuneration packages for executive directors,
criteria for evaluation of Independent Directors and the Board, devise a policy on Board diversity, identify persons who are
qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down and
to carry out any other function as is mandated by the Board from time to time and / or enforced by any statutory notification,
amendment or modification, as may be applicable.
ANNUAL REPORT 2013 - 2014 25
Report on Corporate Governance
Attendance during the year:
The remuneration committee has met once during the year on 10 February 2014.
Remuneration Policy:
Whole-time Directors are appointed by shareholder's resolution. No severance fees is payable to the Whole-time Directors. All
components of remuneration to the Whole-time Directors are fixed in line with the Company's policies.
The Non-Executive Directors and Independent Directors receive sitting fee for attending meetings of the Board and Audit
Committee. The remuneration paid to the Directors during the year under review was in conformity with the applicable
provisions of the Companies Act, 1956, duly considered and approved by the Board and the shareholders.
The appointment of Whole-time Directors is governed by resolutions passed by the Board of Directors, Members of the
Company and the Service Agreements entered into by the Company with the Whole-time Directors, which cover the terms and
conditions of such appointment read with the service rules of the Company. The notice period for Whole-time Directors is six
months as per the Service Agreements.
The Company has no stock option scheme and hence no stock options have been granted to the Directors.
Details of Remuneration paid to Directors for the year ended March 31, 2014:
(Amount in Rs.)
Name of the Director
Sitting Fees
Salary
Perquisites
Commission
Total
Mr. T. L. Sankar
Mr. S. R. Iyer
Mr. Girish N Kulkarni
Mr. Anil Kumar Kutty
Mr. Tanmay Das
Mr. K. Bapi Raju
Mr. K.A. Sastry
Mr. S. Kishore
1,60,000
1,20,000
80,000
-
-
-
-
-
-
-
-
-
-
-
7,500,000
7,500,000
STAKEHOLDERS RELATIONSHIP COMMITTEE
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,60,000
1,20,000
80,000
-
-
-
7,500,000
7,500,000
The Investors Grievance Committee was re-designated as 'Stakeholders Relationship Committee’ by the Board on May 24,
2014 in line with the requirements of provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement and is
empowered to perform all the functions of the Board in relation to handling of Shareholder's Grievances. It primarily focuses
on:
(cid:2)
(cid:2)
(cid:2)
(cid:2)
To redress the grievances of shareholders, debenture holders and other security holders
To resolve the grievances of the security holders of the company including complaints related to transfer of shares, non-
receipt of annual reports, non-receipt of declared dividends.
To approve issue of the Company's duplicate share / debenture certificates
To review the performance of the Company's Registrars and Transfer Agents
26
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
(cid:2) To carry out such other functions as may be referred by the Board from time to time or enforced by any statutory
notification / amendment or modification as may be applicable
The Stakeholders Relationship Committee consists of three Directors. The Chairman of the Committee is a Non-executive
Independent Director. The Committee met four times during the year on 28 May 2013, 10 August 2013, 9 November 2013 & 10
February 2014.
The Company Secretary, Mr. M.S. Phani Sekhar has been designated as Compliance Officer of the Company in compliance with
the Listing Agreement with the Stock Exchanges.
Composition of the Stakeholders Relationship Committee (earlier
Investors Grievance Committee
)as on 31 March,
2014 and attendance record during the year 2013-14 is as follows:
Name of the Director
Mr. T.L. Sankar
Mr. K.A. Sastry
Mr. S. Kishore
Category
Chairman
Member
Member
No. of Meetings attended
4
4
4
The status of investor complaints received during the year is as follows:
Description
Received
Resolved
Pending
Non receipt of Annual Report
TOTAL
1
1
1
1
Nil
Nil
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
As per the Section 135 of the Companies Act, 2013, every company having net worth of Rs. 500 crore or more or turnover of Rs.
1000 crore or more or a net profit of Rs.5 crore or more during any financial year shall constitute a Corporate Social
Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an
independent director.
Accordingly, the Corporate Social Responsibility (CSR) Committee was constituted by the Board on May 24, 2014. The
Committee's responsibility is to assist the Board in undertaking CSR activities by way of formulating and monitoring CSR Policy
of the company.
Composition of the Committee
Name
Mr. T.L. Sankar
Mr. Anil Kumar Kutty
Mr. Tanmay Das
Category
Designation
Independent Director
Non-Executive Director
Non-Executive Director
Chairman
Member
Member
ANNUAL REPORT 2013 - 2014 27
Report on Corporate Governance
The brief terms of reference of the Committee are as follows:
(a) Formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be
undertaken by the company;
(b) Recommend the amount of expenditure to be incurred on CSR activities and
(c) Monitor the implementation of Corporate Social Responsibility Policy of the Company from time to time.
CEO and CFO Certification
The CEO and CFO of the Company have certified to the Board in relation to reviewing financial statements and other
information as mentioned in Para V of clause 49 of the listing agreement and the required certificate is appended.
GENERAL BODY MEETINGS
Details of the Annual General Meetings (AGMs) held during the preceding 3 years and Special Resolutions passed thereat are
given below:
Financial
Date and time
Location
Details of Special Resolutions passed
Year
of AGM
2010-11
17 September 2011
NIFT Auditorium, National Institute
One Special Resolution was passed under
11.00 AM
of Fashion Technology,
Section 314(1) for appointment of
Opp. Hi-tech City, Madhapur,
Mr. K. Bapi Raju, Director as "President - Corporate
Cyberabad, Hyderabad - 500 081
Affairs" in KSK Mahanadi Power Company
Limited, a Subsidiary Company.
2011-12
01 September 2012
NIFT Auditorium, National Institute
No Special Resolution was passed
11.00 AM
of Fashion Technology,
Opp. Hi-tech City, Madhapur,
Cyberabad, Hyderabad - 500 081
2012-13
21 September 2013
Bhaskara Auditorium, B M Birla Marg, No Special Resolution was passed
11.00 AM
Adarsh Nagar, Hyderabad - 500 063
Postal Ballot
No resolution was passed through Postal Ballot during the financial year 2013-14.
DISCLOSURES:
(cid:2)
(cid:2)
(cid:2)
There were no materially significant related party transactions that may have potential conflict with the interests of the
Company at large. The details of related party transactions are disclosed in Note 24 to the Accounts in the Annual Report.
There was no incidence of non-compliance during the last three years by the Company on any matter related to Capital
Market. There were no penalties imposed nor strictures passed on the Company by Stock Exchange, SEBI or any statutory
authority.
The Company has complied with all the mandatory requirements of the code of corporate governance as stipulated in
clause 49 of the listing agreement with the stock exchanges. Certificate from Mr. S. Kishore, Whole-time Director and Mr. V.
28
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Sambasiva Rao, Head - Accounts and Statutory Auditor confirming compliance with the conditions of Corporate
Governance as stipulated under clause 49 of the Listing Agreement are annexed.
The Company has adopted the non-mandatory requirements regarding constitution of remuneration committee.
MEANS OF COMMUNICATION
Financial Results:
The quarterly and half yearly results are normally published in all India editions of Business Line (national
daily) and Andhra Prabha (regional newspaper). Further the quarterly financial results/shareholding patterns, official news
releases are posted on Company's website: www.ksk.co.in.
Website:
The Company's website www.ksk.co.in contains a separate dedicated section 'Investor relations' where shareholders'
information is available. Comprehensive information about the Company, its business and operations, press releases and
presentation to Investors can also be viewed. Annual Report is also available in a user-friendly and downloadable form.
NSE Electronic Application Processing System (NEAPS) and BSE online Portal
: The Company also submits to NSE, all
disclosures and communications through NSE's NEAPS portal. Similar filings are made to BSE on their Online Portal - BSE
Corporate Compliance & Listing Centre.
SEBI Complaints Redress System (SCORES)
: The investor complaints are processed in a centralized web-based complaints
redress system. The salient features of this system are: Centralized database of all complaints, online upload of Action Taken
Reports (ATRs) by concerned Companies and online viewing by investors of actions taken on the complaint and its current
status.
Designated exclusive email-id: The Company has designated the following email id exclusively for investors servicing:
investors@ksk.co.in
GENERAL SHAREHOLDER INFORMATION
(a) Annual General Meeting
Day, Date and time: Saturday, 27 September 2014 at 11A.M
Venue: Plot No.694, Road No.33, Jubilee Hills, Hyderabad - 500 033.
(b) Financial Year :
April 1 to March 31
(c) Book Closure date:
Saturday, 20 September 2014 to Saturday 27 September 2014 (Both days inclusive)
(d) Listing on Stock Exchanges with Stock Code
Name and Address of the Stock Exchange
Scrip Code / Trading Symbol
BSE Limited
Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai-400 001
National Stock Exchange of India Limited
Exchange Plaza, Bandra-Kurla Complex, Bandra (East), Mumbai-400051.
532997
KSK
Listing fee for the year 2014-15 has been paid to all the Stock Exchanges where the Company's shares are listed.
ISIN Code for Demat:
The ISIN allotted to the Company is INE143H01015
ANNUAL REPORT 2013 - 2014 29
Report on Corporate Governance
(e) Market Information:
(I) Market Price Data: High, low during each month and trading volumes of the Company's Equity shares during the last
financial year at NSE and BSE are given below.
MONTH
April, 2013
May, 2013
June, 2013
July, 2013
August, 2013
September, 2013
October, 2013
November, 2013
December, 2013
January, 2014
February, 2014
March, 2014
High
50.85
57.95
61.00
60.00
57.70
55.95
68.40
66.00
69.95
80.00
61.90
69.75
NSE
Low
43.00
47.10
50.10
51.10
49.80
50.20
50.45
57.75
60.10
58.10
53.25
53.60
Volume
High
169485
365334
591891
1792922
166905
225062
913163
390464
447965
10901678
512214
3421637
50.70
58.00
63.50
59.40
57.50
54.95
68.00
65.45
69.80
80.05
62.00
69.75
BSE
Low
43.00
47.25
50.10
51.15
50.00
50.45
50.15
58.55
61.00
58.30
53.65
53.80
Volume
68482
181330
2648834
1555746
91153
36057
10028682
114447
1195077
6225820
253928
955002
(ii) Performance of share price of the Company in comparison to the BSE
KSK VS Sensex (2013-14)
80
70
60
50
40
30
20
10
0
Apr -
13
May -
13
Jun -13 Jul -13
Aug -
13
Sep -
13
Oct -13
Nov -
13
Dec -
13
Jan -14
Feb -
14
Mar -
14
25000
20000
15000
10000
5000
0
KSK
Sensex
48.45
51.55
57.75
56.05
53.5
50.55
60.2
60.5
67.5
58.9
54.35
68.55
19504
19760
19396
19346
18620
19380
21165
20792
21171
20514
21120
22386
KSK
Sensex
30
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
(f) Share Transfer System :
The Company has appointed M/s. Karvy Computershare Private Limited, as its Registrar and Share Transfer Agent, who are
fully equipped to carry out share transfer activities and redress investor complaints. Company Secretary is the Compliance
Officer for redressal of all shareholders' grievances.
(g) Distribution of Shareholding
(i) Distribution of Shares as on 31 March, 2014
Category (Amount)
No. of Cases
% of Cases
Total Shares
Amount
% of Amount
Distribution Schedule - Consolidated as on 31/03/2014
1-5000
5001- 10000
10001- 20000
20001- 30000
30001- 40000
40001- 50000
50001- 100000
100001& Above
TOTAL
12974
91.30
1361088
13610880
570
317
112
48
27
64
101
14213
4.01
2.23
0.78
0.34
0.18
0.45
0.71
458233
484568
286501
174670
126688
473284
4582330
4845680
2865010
1746700
1266880
4732840
369265422
3692654220
100.00
372630454
3726304540
0.40
0.12
0.13
0.07
0.04
0.03
0.12
99.09
100.00
(ii) Shareholding Pattern as on 31 March, 2014
Category
A. Promoters Holding
Promoters
Sub -Total: A
B. Public Shareholding
Mutual Funds /UTI
Financial Institutions /Banks
Foreign Institutional Investors
Bodies Corporate
Non Resident Indians
Foreign Bodies
Indian Public
Sub -Total: B
GRAND TOTAL (A+B)
No of Shares
%
279232677
279232677
12135112
11956481
18663657
20114307
127301
26374531
4026388
93397777
372630454
74.94
74.94
3.25
3.20
5.00
5.40
0.03
7.07
1.08
25.06
100.00
ANNUAL REPORT 2013 - 2014 31
Report on Corporate Governance
(h) Dematerialisation of Shares and Liquidity:
The Company's shares are compulsorily traded in dematerialized form and are available for trading on both Depositories
viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The shares of
the Company are actively traded in the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE).
(i) Outstanding GDRs/ADRs/Warrants on any convertible instruments, conversion date and likely impact on equity:
As on 31 March, 2014, the Company does not have any outstanding GDRs/ADRs/Warrants or any convertible instruments.
(j) Address for investor's correspondence
(i) Registrar and Transfer Agents:
Karvy Computershare Private Limited
Plot No 17 to 24, Vithal Rao Nagar
Madhapur, Hyderabad - 500 081
Ph: 040-23420818
Fax: 040-23420814
E-mail: einward.ris@karvy.com
(ii) Any Query on Annual Report:
Corporate Affairs Department
KSK Energy Ventures Limited
8-2-293/82/A/431/A
Road No. 22, Jubilee Hills
Hyderabad - 500 033
Ph: 040-23559922-25
Fax: 040-23559930
E-mail: investors@ksk.co.in
(k) Other Shareholder information:
(i) Corporate Identity Number (CIN)
The CIN allotted to the Company by the Ministry of Corporate Affairs, Government of India is
L45204AP2001PLC057199
(ii) Shareholder's Relation Team
The Shareholder's Relations Team is located at the Registered Office of the Company.
Contact Person: Compliance Officer Ph: 040-23559922-25
Fax: 040-23559930
In Compliance with Clause 47(f) of the Listing Agreement, a separate email ID investors@ksk.co.in has been set up as a
dedicated ID solely for the purpose of dealing with shareholder's complaints.
32
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
(iii) Shares held in electronic form
Shareholders holding shares in electronic form may please note that instructions regarding change of address,
nomination and power of attorney should be given directly to the Depository Participant.
(iv) Reconciliation of Share Capital Audit
As stipulated by SEBI, a qualified Practicing Company Secretary carries out Reconciliation of Share Capital Audit to
reconcile the total admitted capital with NSDL and CDSL and the total issued and listed capital. The audit is carried out
every quarter and the report thereon is submitted to the Stock Exchanges as well as placed before the Board of Directors.
The audit confirms that the total listed and paid up capital is in agreement with the aggregate of the total number of shares
in physical form and the total number of shares in electronic form (held with NSDL and CDSL).
Other disclosures as per Clause 49 of the Listing Agreement:
(i) Clause 49(I) (D): Code of Conduct:
The Company has adopted a Code of Conduct as required under Clause 49(I)(D) of the Listing Agreement with Stock
Exchanges, which applies to all the Board Members and Senior Management of the Company. The Board Members and
senior management personnel have affirmed their compliance on an annual basis and their confirmations have been
received in this regard. The Code of Conduct is available on the Company's website: www.ksk.co.in
A declaration to this effect signed by the Whole-time Director is given below.
“I hereby confirm that the Company has obtained from all the members of the Board and Senior Management Personnel,
affirmation that they have complied with the Code of Conduct and Ethics for Directors and Senior Management of the
Company in respect of Financial Year 2013-14.”
Place: Hyderabad
Date: 14 August 2014
(ii) Clause 49(IV) (B): Disclosure of Accounting Treatment:
Sd/-
S. Kishore
Whole-time Director
The Company has complied with the appropriate accounting policies and has ensured that they have been applied
consistently. There have been no deviations from the treatment prescribed in the Accounting Standards notified under
Section 211 (3C) of the Companies Act, 1956. Significant Accounting Policies is provided elsewhere in the Annual Report.
(iii) Clause 49(IV) (E):
(a) None of the Independent / Non-executive Directors has any pecuniary relationship or transactions with the Company
which in the judgement of the Board may affect the independence of the director except receiving sitting fee for
attending Board / Committee meetings.
(b) Except Mr. Girish N. Kulkarni and Mr. Anil Kumar Kutty who are holding 100 and 375 shares of the Company
respectively, no other non-executive director is holding any shares in the Company.
(iv) Management Discussion and Analysis Report:
The Management Discussion and Analysis Report is provided elsewhere and form part of this Annual Report.
ANNUAL REPORT 2013 - 2014 33
Report on Corporate Governance
(v) Clause 49(IV) (G): Shareholders Information:
a.
Appointment / Re-appointment of Directors: The brief resume of Director retiring by rotation, Independent Directors
being appointed and Whole-time Directors seeking re-appointment, including nature of their experience in specific
functional areas, names of companies in which they hold directorship and membership of committees of the Board is
appended to the Notice for calling Annual General Meeting.
b. None of the Directors are related to each other.
(vi) Clause 49(V): CEO/CFO certification:
The CEO and CFO certification on the financial statements for the year 2013-14 is provided elsewhere in this Annual
Report.
(vii) Details of Shares in the Escrow Account as on 31 March, 2014: (Clause 5A of the Listing Agreement):
st
Particulars
No. of Shareholders
No. of Shares
Aggregate number of shareholders and the outstanding shares in the
Escrow account lying at the beginning of the year
Number of shareholders who approached issuer for transfer of shares
from suspense account during the year
Number of shareholders to whom shares were transferred from suspense
account during the year
Aggregate number of shareholders and the outstanding shares in the
suspense account lying at the end of the year
5
0
0
5
150
0
0
150
The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.
(viii) Prevention of Insider Trading: [Regulation 12 of the SEBI (Prohibition of Insider Trading) Regulations, 1992]
In pursuance of the SEBI (Prohibition of Insider Trading) Regulations, 1992, the Board had approved the "Code of Conduct
for prevention of insider trading". The Board has designated Company Secretary as the Compliance Officer.
34
KSK ENERGY VENTURES LIMITED
Auditors' Certificate on Corporate Governance
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
To
The Members of
KSK Energy Ventures Limited
We have examined the compliance of conditions of Corporate Governance by KSK Energy Ventures Limited for the year ended
on March 31, 2014, as stipulated in Clause 49 of the Listing Agreement of the said Company with stock exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination has been
limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring compliance with the
conditions of Corporate Governance as stipulated in the said Clause. It is neither an audit nor an expression of opinion on the
financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us and the representations made
by the Directors and management, we certify that the Company has complied with the conditions of Corporate Governance as
stipulated in the above mentioned Listing Agreement.
We further state that such compliance is neither an assurance as to the further viability of the Company nor the efficiency or
effectiveness with the management has conducted the affairs of the Company.
Place: Hyderabad
Date: 14 August 2014
For
Umamaheswara Rao& Co.,
Chartered Accountants
Sd/-
S. Venugopal
Partner
ICAI MRN. 205565
FRN 004453S
ANNUAL REPORT 2013 - 2014 35
Directors' Report
Dear Shareholders,
Your Directors have the pleasure in presenting the Fourteenth Annual Report together with the audited statements of
accounts for the year ended 31 March 2014.
PERFORMANCE HIGHLIGHTS
(INR Million)
Particulars
Standalone
Consolidated
2013-14
2012-13
2013-14
2012-13
Income
Operating Expenditure
Operating Profit
Add: Other Income
Less: Finance Cost
Less: Depreciation
Profit before tax (PBT)
Tax expense
Net Profit/(Loss) after Tax
Earnings per Share (EPS) (Rs.)
a)
Basic
b) Diluted
Standalone:
479.76
(114.56)
365.20
7.26
(226.79)
(10.48)
135.19
(37.69)
97.50
0.01
0.01
491.55
(165.69)
325.86
0.54
(157.04)
(16.64)
152.72
(19.91)
132.81
0.11
0.11
21,118.01
22,070.20
(15,746.22)
(13,886.25)
5,371.79
1,365.52
(7,216.12)
(2,929.73)
(3,408.54)
(1,527.61)
(1,880.93)
(4.62)
(4.62)
8,183.95
1,006.96
(6,017.67)
(2,264.68)
908.56
(764.96)
1,673.52
3.79
3.79
During the year under review, the Company's income stood at Rs 479.66 mn. Further, there is a decrease in the operating
expenditure. As a result, operating profit for the year increased from Rs 325.86 mn to Rs 365.20 mn. With increase in finance
cost, the profit before tax reduced from Rs 152.72 mn to Rs 135.19 mn.
Consolidated:
During the year under review, the consolidated income of the Group stood at Rs. 21,118.01 mn. Further, during the year,
operating expenses and finance cost experienced increase due to commissioning of first unit of 3600 MW KSK Mahanadi
project resulting in a loss of Rs 3,408.54 mn. After providing for negative tax expense due to recognition of deferred tax asset
on carry forward of losses. The Loss after tax stood at Rs 1,880.93mn as against Profit after tax of Rs 1,673.52 mn for the
previous year.
DIVIDEND
Your Directors have not recommended any dividend on equity shares for the year under review.
As per the terms of issue, the Company had paid dividend on 8% Cumulative Redeemable Preference Shares of Rs. 10/- each
issued to L&T Infrastructure Finance Company Limited. Further, the Company has also redeemed 33,000,000 8% Cumulative
Redeemable Preference Shares of Rs. 10/- each issued to L&T Infrastructure Finance Company Limited.
36
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
REVIEW OF OPERATIONS
Your Company is a power project development company with track record of developing and operating power plants. The
Company is established in 2001 to capitalize on the emerging opportunities in the Indian power sector and focus on
developing, operating and maintaining power projects across various fuels, various territories and sizes.
The Company along with its subsidiaries and jointly controlled entities has an installed gross power generation capacity of
1472 MW of power and is currently involved in constructing 3600 MW KSK Mahanadi Power plant that has a 600 MW unit
operational and another expected to be operational shortly taking aggregate operational capacity to 2000+ MW. Additionally,
the group has an exciting portfolio of planned projects across the fuel spectrum.
PRINCIPAL POWER ASSETS
KSK's principal power projects are as follows:-
Operational power plants
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
Arasmeta, a 86 MW coal based power plant in Chhattisgarh;
Sai Regency, a 58 MW natural gas based power plant inTamilnadu;
Sitapuram, a 43 MW coal based power plant in Telangana;
VS Lignite, a 135 MW lignite based power project in Rajasthan;
Sai Wardha Power, a 540 MW coal based power project in Maharashtra;
Sai Maithili Power, a 10 MW Solar Power project in Rajasthan; and
KSK Mahanadi Power, a 3,600 MW coal based power project in Chhattisgarh - first 600 MW has been commissioned.
Power projects under active construction stage
(cid:2)
KSK Mahanadi, a 3,600 MW coal based power project in Chhattisgarh - remaining 5 units of 600 MW each
REVIEW OF BUSINESS
Further, the operational and financial performance of each of the power plants for the financial year 2013-14 has been outlined
in the "Management Discussion and Analysis Report"section.
QUALIFIED INSTITUTIONAL PLACEMENT
The Company has successfully completed a Qualified Institutional Placement (QIP) of its Equity shares during June 2014. In
terms of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, the issue
price was fixed at Rs. 99.00 (including a premium of Rs. 89.00) per Equity share. 4,04,04,040 equity shares were allotted to the
investors and an approximate amount of Rs. 400 Crores was raised through the QIP.
SUBSIDIARIES
Details of major subsidiaries of the Company and their business operations during the year under review are covered in the
Management's Discussion and Analysis Report.
ANNUAL REPORT 2013 - 2014 37
Directors' Report
The Ministry of Corporate Affairs, Government of India, vide General Circular No.: 2/20 dated February 8, 2011, has granted a
general exemption to companies from attaching the Balance sheet, Statement of Profit & Loss and other documents referred
to in Section 212(1) of the Companies Act, 1956 in respect of its subsidiary companies, subject to fulfillment of the conditions
mentioned therein. Accordingly, the said documents are not being attached with the Balance Sheet of the Company. A gist of
the financial performance of the subsidiary companies is contained in the report. The Annual Accounts of the subsidiary
companies are open for inspection by any Member during the business hours at the Registered Office of the Company. The
members, if desires may write to Company Secretary at the registered office of the Company for obtaining a copy of the
financials of the subsidiaries.
The consolidated financial statements of the company, which includes the results of its subsidiaries, are included in this Annual
Report.
DIRECTORS
In accordance with the provisions of the Companies Act, 2013, Independent Directors are required to be excluded while
computing the number of directors to retire by rotation. As of the date of this Report, Mr. T.L. Sankar, Mr. S.R. Iyer and Mr.
Girish N. Kulkarni are the Independent Directors liable to retire by rotation. In order to give effect to the applicable provisions of
Sections 149 and 152 of the Act, it is proposed that these Directors be appointed as Independent Directors not liable to retire
by rotation, to hold office as per the tenure of appointment mentioned in the Notice of the forthcoming Annual General
Meeting of the Company.
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the
criteria of independence as prescribed under the applicable provisions of Section 149 of the Act and under Clause 49 of the
Listing Agreement with the Stock Exchanges.
In accordance with the provisions of the Companies Act, 2013, Mr. K. Bapi Raju, Director retire by rotation at the forthcoming
Annual General Meeting and being eligible, offered himself for re-appointment.
Further, Mr. S. Kishore and Mr. K.A. Sastry whose term as Whole-time Directors will expire on March 31, 2015, are proposed to
be reappointed as Whole-time Directors of the Company with effect from April 1, 2015 for a period of 5 years subject to the
approval of the Members. Separate resolutions have been put up for consideration by the Members.
AUDITORS
M/s. Umamaheswara Rao & Co, Chartered Accountants, Hyderabad, Auditors of the Company will retire at the forthcoming
Annual General Meeting of the Company and are eligible for re-appointment.
It is proposed to re-appoint M/s.
Umamaheswara Rao & Co., as Statutory Auditors of the Company from the conclusion of 14th Annual General Meeting till the
conclusion of the 17th Annual General Meeting to be held in the year 2017, subject to the ratification of their appointment at
every AGM. M/s. Umamaheswara Rao & Co., has under Section 141 of the Act, has furnished a certificate of its eligibility for re-
appointment. The Members year on year will be requested to ratify their appointment as Auditors and to authorise the Board
of Directors to fix their remuneration.
The Notes on Financial Statements referred to in the Auditors’ Report are self-explanatory and do not call for any further
comments.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreements with Stock Exchanges, a Management Discussion and Analysis Report, Report
on Corporate Governance and Auditors' Certificate, are included in the Annual Report.
38
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
COMPOSITION OF AUDIT COMMITTEE
The Audit Committee of the Company constituted in terms of Section 292A of the Companies Act, 1956 and Clause 49 of the
Listing Agreement consists of Mr. S.R. Iyer (Chairman), Mr. T.L. Sankar (Member) and Mr. Girish N. Kulkarni (Member).
COMPOSITION OF CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Corporate Social Responsibility Committee of the Company constituted in terms of Section 135 of the Companies Act,
2013 consists of Mr. T.L. Sankar (Chairman), Mr. Anil Kumar Kutty (Member) and Mr. Tanmay Das (Member).
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 217 (2AA) of the Companies Act, 1956, your Directors hereby confirm that:
(cid:2)
(cid:2)
(cid:2)
(cid:2)
in the preparation of the Annual Accounts, the applicable accounting standards have been followed;
appropriate accounting policies have been applied consistently. Judgment and estimates which are reasonable and
prudent have been made so as to give true and fair view of the state of affairs of the Company as at the end of the financial
year and of the profit of the Company for the period;
proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud
and other irregularities;
the annual accounts have been prepared on a going concern basis.
PERSONNEL & INDUSTRIAL RELATIONS
Relations between employees and the management continued to be cordial during the year. KSK is committed in its quest to
improve and maintain employee morale and satisfaction at all levels.
Particulars of Employees: The particulars of employees as required to be disclosed pursuant to the provisions of Section 217
(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this
Report. However, as per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the report and the accounts are
being sent to all the shareholders excluding the aforesaid information. Any shareholder desirous of obtaining such particulars
may write to the Company Secretary at the Registered Office of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
OUTGO
a) Conservation of Energy : Not applicable
b)
c)
Technology Absorption : Not Applicable
Foreign Exchange Earnings and Outgo :
Foreign Exchange Earnings
Foreign Exchange Outgo
2013-14
-
-
(Rs. in Millions)
2012-13
-
-
ANNUAL REPORT 2013 - 2014 39
Directors' Report
ACKNOWLEDGEMENTS
Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Financial
Institutions, Banks, Government Authorities, Customers, Vendors and Members during the year under review. Your Directors
also wish to place on record their deep sense of appreciation for the excellent services of the executives, staff and the workers
of the Company. We look forward to their continued support in the future.
Place: Hyderabad
Date:14 August 2014
th
On behalf of the Board
Sd/-
T.L. Sankar
Chairman
40
KSK ENERGY VENTURES LIMITED
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41
Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certificate
The Board of Directors,
KSK Energy Ventures Limited.
C E R T I F I C A T E
We, S. Kishore, Whole-time Director and V. Sambasiva Rao, Group Head - Accounts of KSK Energy Ventures Limited, to the best
of our knowledge and belief hereby certify that:
a) We have reviewed financial statements and the cash flow statement for the year ended 31 March 2014 and:
st
(i)
these statements do not contain any materially untrue statement or omit any material fact or contain statements that
might be misleading.
(ii)
these statements together present a true and fair view of the Company's affairs and are in compliance with existing
accounting standards, applicable laws and regulations.
b)
There are no transactions entered into by the company during the year that are fraudulent, illegal or violative of the
Company's code of conduct.
c) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have
evaluated the effectiveness of the internal control systems of the company pertaining to financial reporting and we have
disclosed to the auditors and the Audit Committee, deficiencies in the design and operations of internal controls, if any, of
which we are aware and the steps we have taken or propose to take to rectify these deficiencies.
d) We have indicated to the auditors and the audit committee:
(i)
Significant changes in internal control over financial reporting during the year;
(ii) Significant changes in accounting policies during the year and that the same has been disclosed in the notes to the
financial statements; and
(iii)
Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management
or an employee having a significant role in the Company's internal control system over financial reporting.
Sd/-
V. Sambasiva Rao
Sd/-
S. Kishore
Group Head - Accounts
Whole-Time Director
Place: Hyderabad
Date: 24 May 2014
42 KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Independent Auditor's Report
To
The Members of KSK Energy Ventures Limited
Report on the Financial Statements
We have audited the accompanying financial statements of KSK Energy Ventures Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and
a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956("the Act") read with General Circular 15/2013 dated 13 September,
2013 of Ministry of Corporate Affairs in respect of Section 133 of Companies Act. This responsibility includes the design,
implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements
that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of
the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give
the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting
principles generally accepted in India:
(a)
in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;
(b)
in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
(c)
in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
ANNUAL REPORT 2013 - 2014 43
Independent Auditor's Report
(All amounts in Indian Rupees million, except share data and where otherwise stated)
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2003 ("the Order") issued by the Central Government of India in
terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary
for the purpose of our audit;
b.
in our opinion proper books of account as required by law have been kept by the Company so far as appears from our
examination of those books.
c.
the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement
with the books of account.
d.
in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting
Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956, read with General Circular
15/2013 dated 13 September, 2013 of Ministry of corporate affairs in respect of section 133 of companies act 2013;
e.
on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the
Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in
terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.
f.
since the Central Government has not issued any notification as to the rate at which the cess is to be paid under
section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in
which such cess is to be paid, no cess is due and payable by the Company.
For
Umamaheswara Rao& Co.,
Chartered Accountants
Sd/-
S. Venugopal
Partner
ICAI MRN: 205565
FRN 004453S
Place: Hyderabad
Date: 24 May 2014
44
KSK ENERGY VENTURES LIMITED
Annexure to Auditors' Report
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Referred to in paragraph 1 of "Report on Other Legal and Regulatory Requirements"inour report of
even date:
According to the information and explanations given to us:
1.
The company has maintained proper records showing full particulars, including quantitative details and situation of fixed
assets.
The Company has a fixed programme of Physical verification of its fixed assets which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets. Management has physically verified the fixed assets during
the year. No material discrepancies were noticed on such verification.
During the period the Company has not disposed off substantial part of fixed assets and therefore do not affect the going
concern assumption.
2.
The Clause relating to Inventories is not applicable to the company, as the Company has not carried out any
manufacturing activity.
3.
(a) During the year the Company has granted unsecured loans and advances from time to time to Twelve Companies
covered in the register maintained under section 301 of the Companies Act, 1956.The Maximum amount involved
during the year amounts to Rs.1,363.41 crores and the year-end balance of such loans was Rs. 3.07 crores.
In our opinion, the rate of interest and other terms and conditions of such loans and advances made are not prima
facie prejudicial to the interests of the company.
(b) The company has taken unsecured loans from Seven Companies covered in the register maintained under section
301 of the companies Act, 1956.The Maximum amount involved during the year amounts to Rs.497.46 crores and
year-end balance of such loan was Rs.182.52 crores.
In our opinion, the rate of interest and other terms and conditions of such loans and advances made are not prima
facie prejudicial to the interests of the company.
(c) The payment and receipt of interest is regular both in cases of the loans given and loans accepted. The loans are
recoverable or payable on demand.
4.
In our opinion and according to the information and explanations given to us, there is an adequate internal control system
commensurate with the size of the company and the nature of its business. We have not observed any major weakness in
the internal control system during the course of the audit.
5.
(a) According to the information and explanations given to us, we are of the opinion that particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956, have been entered in the register required to be
maintained under that section.
(b) Transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable
having regard to the prevailing market prices at that time.
ANNUAL REPORT 2013 - 2014 45
Annexure to Auditors' Report
(All amounts in Indian Rupees million, except share data and where otherwise stated)
6.
The Company has not accepted any deposits from the public and consequently the directives issued by Reserve Bank of
India; the provisions of Section 58 A and 58AA of the Companies Act, 1956 and the rules framed there under are not
applicable.
7.
In our opinion, the Company has an Internal Audit System commensurate with its size and the nature of its business.
8. During the year the maintenance of cost records is not applicable for the Company.
9.
(a) According to the Information and explanations given to us and on the basis of examination of books of accounts, the
Company is regular in depositing undisputed statutory dues including provident fund, Investor Education and
Protection Fund, Employee's State Insurance, Income tax, Sales tax, Wealth tax, service tax, Custom duty, Excise duty,
cess and other statutory dues with the appropriate authority and as at 31 March, 2014, no undisputed statutory dues
st
were outstanding for more than six months from the date they became payable.
(b)
There were no dues in respect of income tax, sales tax, wealth tax, customs duty, excise duty and cess that have not
been deposited with the appropriate authorities on the account of any dispute as on 31 March 2014, other than
st
those furnished below:
Name of the
statue
Nature of
dues
Forum where
Period to which
pending
amount relates
Finance Act, 1994
Service Tax
CESTAT
April, 2008 to March, 2010
Income Tax Act
Income Tax Demand
CIT (Appeals)
Financial Year 2009-10
Amount
(In Crores)
50.20
28.03
10. The company neither has accumulated losses as at the end of the financial year nor has incurred cash losses during the
financial year and in the immediately preceding year.
11. The company has not defaulted in payment of dues to any Financial Institution/Banks.
12. The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and
other securities.
13. The company is not a chit fund, nidhi, mutual benefit fund or a society. Accordingly the provisions of clause 4 (xiii) of the
Companies (Auditor's Report) Order, 2003 are not applicable to the company.
14. As per the information and explanations given to us, the Company is not dealing or trading in shares, securities,
debentures and other investments.
15.
In our opinion and according to the information and explanations given to us, the terms and conditions of guarantees
given by the Company for loans taken by others from banks or financial institutions are not prima facie prejudicial to the
interests of the Company.
16.
In our opinion, the term loans raised have been applied for the purpose for which they were raised.
46
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
17. According to the information and explanations given to us and on an overall examination of the Balance sheet of the
company, we report that no funds raised on short term basis have been utilized for long term investment.
18. During the period the company has not made any preferential allotment of shares to Companies/firms/parties covered in
the register maintained under Section 301 of the Act, 1956.
19. The company has not issued any debentures and accordingly the provisions of clause 4 (xix) of the Companies (Auditor's
Report) Order, 2003 are not applicable to the Company.
20. During the period the Company has not raised money by public issue and accordingly the provisions of clause 4 (xx) of the
Companies (Auditor's Report) Order, 2003 are not applicable to the Company.
21. Based on the audit procedures adopted we are of the opinion that, no fraud on or by the company has been noticed or
reported during the course of our audit.
For
Umamaheswara Rao& Co.,
Chartered Accountants
Sd/-
S. Venugopal
Partner
ICAI MRN: 205565
FRN 004453S
Place: Hyderabad
Date: 24 May 2014
ANNUAL REPORT 2013 - 2014 47
Balance Sheet as at 31 March 2014
(All amounts in Indian Rupees million, except share data and where otherwise stated)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
Note
As at
31 March 2014
31 March 2013
I EQUITY AND LIABILITIES
1 Shareholders’ funds
(a) Share capital
(b) Reserves and surplus
2 Non-current liabilities
(a) Long-term borrowings
(b) Other non-current liabilities
(c) Deferred tax liabilities (net)
3 Current liabilities
(a) Short-term borrowings
(b) Trade payables
(c) Other current liabilities
(d) Short-term provisions
TOTAL
II ASSETS
1
Non-current assets
(a) Fixed assets
(i) Tangible assets
(ii) Intangible assets
(iii) Capital work in progress
(iv) Intangible assets under development
(b) Non-current investments
(c) Long-term loans and advances
(d) Other non-current assets
3
4
5
6
5
7
9
8
10
11
12
13
4,396.30
22,255.03
26,651.32
230.00
1,284.92
0.69
1,515.61
1,432.34
1,980.80
1,610.19
19.23
5,042.56
33,209.49
4,726.30
22,308.85
27,035.15
1,287.19
-
1.21
1,288.40
5,800.79
3,630.19
2,203.25
19.36
11,653.59
39,977.14
198.10
192.14
2.71
7.71
-
29,856.94
1,346.26
231.14
31,642.86
3.64
-
1.01
29,775.30
3,826.77
238.45
34,037.31
48
KSK ENERGY VENTURES LIMITED
2 Current assets
(a) Trade receivables
(b) Cash and bank balance
(c) Short-term loans and advances
(d) Other current assets
TOTAL
See accompanying notes to the financial statements
As per our report of even date
For
Umamaheswara Rao & Co.
Chartered Accountants
Firm registration No: 004453S
Sd/-
S.Venugopal
Partner
Membership No: 205565
Place : Hyderabad
Date : 24 May 2014
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Note
As at
31 March 2014
31 March 2013
14
15
12
13
217.60
219.97
824.67
304.39
1,566.63
33,209.48
-
267.62
5,392.25
279.96
5,939.83
39,977.14
for and on behalf of the Board
Sd/-
S. Kishore
Sd/-
Sd/-
K. A. Sastry
M. S. Phani Sekhar
Whole-time Director
Whole-time Director
Company Secretary
ANNUAL REPORT 2013 - 2014 49
Statement of Profit and Loss for the year ended 31 March 2014
(All amounts in Indian Rupees million, except share data and where otherwise stated)
Note
Year ended
31 March 2014
31 March 2013
I
Revenue from operations
II Other income
III Total revenue (I+II)
IV Expenses
Employee benefits expense
Other expenses
Finance costs
Depreciation
Total expenses
16
17
18
19
20
10
V Profit /(loss) before exceptional items and tax (III-IV)
VI Tax expense / (Income)
Current tax
For the year
Less: Mat credit entitlement
Deferred tax
Total tax expense / (Income)
VII Profit / (loss) for the year (V-VI)
Earnings / (loss) per share :
Basic and Diluted- face value Rs.10 per share
See accompanying notes to the financial statements
479.76
7.26
487.02
54.97
59.59
226.79
10.48
351.83
135.19
38.21
-
(0.52)
37.69
97.50
0.01
491.55
0.54
492.09
64.13
101.56
157.04
16.64
339.37
152.72
30.56
(7.38)
(3.27)
19.91
132.81
0.11
for and on behalf of the Board
Sd/-
S. Kishore
Sd/-
Sd/-
K. A. Sastry
M. S. Phani Sekhar
Whole-time Director
Whole-time Director
Company Secretary
As per our report of even date
For
Umamaheswara Rao & Co.
Chartered Accountants
Firm registration No: 004453S
Sd/-
S.Venugopal
Partner
Membership No: 205565
Place : Hyderabad
Date : 24 May 2014
50
KSK ENERGY VENTURES LIMITED
Cash Flow Statement for the year ended 31 March 2014
(All amounts in Indian Rupees million, except share data and where otherwise stated)
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
CASH FLOW FROM OPERATING ACTIVITIES
Profit before tax
Adjustment for
Depreciation and amortisation expense
Finance costs
Interest income
Loss on sale of assets
Operating profit before working capital changes
Adjustment for working capital
Trade receivables
Loans and advances
Other assets
Trade payables
Other liabilities and provisions
Cash generated from operations
Income taxes paid
Net cash flow from operating activities
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed assets including capital work-in-progress
Sale of fixed assets
Advance for investments, net
Inter corporate deposit given / refund, net
Purchase of investments
(Investment)/redemption of bank deposit (held as margin
money or security against guarantees or borrowings)
(Investment)/redemption of bank deposit (having original
maturity more than three months)
Interest received
Net Cash from (used in) investing activities
31 March 2014
31 March 2013
135.19
152.72
10.48
928.62
(701.83)
0.03
372.49
(217.60)
(337.02)
0.49
133.82
30.39
(17.43)
(136.74)
(154.17)
(95.16)
0.02
(781.88)
2,167.75
(8.13)
66.49
(0.01)
676.85
2,025.93
16.64
1,142.69
(985.65)
39.00
365.40
300.42
21.63
108.15
59.64
(8.17)
847.07
(182.75)
664.32
(5.16)
760.34
1,302.13
(2,557.08)
(184.25)
86.86
21.35
992.37
416.56
ANNUAL REPORT 2013 - 2014 51
Cash Flow Statement for the year ended 31 March 2014
(All amounts in Indian Rupees million, except share data and where otherwise stated)
CASH FLOW FROM FINANCING ACTIVITIES
Redemption of preference share capital
Payment of dividend and dividend tax
Repayment of long term borrowings
Proceed/(repayment) of short term borrowings, net
Payment of finance costs
Net Cash flow from financing activities
Net income / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
1 Notes:
Cash and cash equivalents includes:
Cash in hand
Balances with banks
On current account
31 March 2014
31 March 2013
(387.86)
(93.59)
(875.00)
422.99
(919.46)
(1,852.92)
18.84
31.69
50.53
0.26
50.27
50.53
-
(93.23)
(875.00)
1,008.41
(1,113.44)
(1,073.26)
7.62
24.07
31.69
0.15
31.54
31.69
2 Previous year figures have been regrouped / reclassified to conform to the classification of the current year.
for and on behalf of the Board
Sd/-
S. Kishore
Sd/-
Sd/-
K. A. Sastry
M. S. Phani Sekhar
Whole-time Director
Whole-time Director
Company Secretary
As per our report of even date
For
Umamaheswara Rao & Co.
Chartered Accountants
Firm registration No: 004453S
Sd/-
S.Venugopal
Partner
Membership No: 205565
Place : Hyderabad
Date : 24 May 2014
52
KSK ENERGY VENTURES LIMITED
Notes to Financial Statements
(All amounts in Indian Rupees million, except share data and where otherwise stated)
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
ANNUAL REPORT 2013 - 2014 53
Notes to Financial Statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
54
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
ANNUAL REPORT 2013 - 2014 55
Notes to Financial Statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
56
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
3
Share Capital
Authorised
4,000,000,000 (31 March 2013: 4,000,000,000)
equity shares of Rs.10/- each.
1,031,500,000 (31 March 2013: 1,031,500,000)
preference shares of Rs.10/- each.
Issued, subscribed and paid up
372,630,454 (31 March 2013: 372,630,454)
equity shares of Rs.10/- each fully paid up.
(Of the above shares 70,195,429 equity shares
are allotted as fully paid up by way of bonus shares)
67,000,000 (31 March 2013: 100,000,000 ) 8%
Compulsorily redeemable preference shares of Rs.10/-
each fully paid up. (refer note a )
As at
31 March 2014
31 March 2013
40,000.00
40,000.00
10,315.00
10,315.00
50,315.00
50,315.00
3,726.30
3,726.30
670.00
1,000.00
4,396.30
4,726.30
Notes:
a
Above preference shares are redeemable at premium over a period of 5 years, starting from end of the 3rd year from the
date of allotment.
b Reconciliation of number of shares outstanding
As at
31 March 2014
31 March 2013
Equity shares
Outstanding at the beginning of the year
372,630,454
372,630,454
Issued during year
Bought back during year
-
-
-
-
Outstanding at the end of the year
372,630,454
372,630,454
8% Compulsorily redeemable preference shares
Outstanding at the beginning of the year
100,000,000
100,000,000
Issued during the year
Redeemed during the year
Outstanding at the end of the year
-
33,000,000
67,000,000
-
-
100,000,000
ANNUAL REPORT 2013 - 2014 57
Notes to Financial Statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
c
Equity shares held by holding company and its subsidiaries
Name of the share holder
As at
Holding Company
No of shares held
% of shares held
Subsidiaries of Holding Company
No of shares held
% of shares held
31 March 2014
31 March 2013
191,222,031
191,222,031
51.32%
51.32%
88,010,646
23.62%
88,010,646
23.62%
d
Particulars of shareholders holding more than 5% of the shares
Name of the share holder
As at
31 March 2014
31 March 2013
Equity shares fully paid - up
KSK Energy Limited
No of shares held
% of shares held
KSK Energy Company Private Limited
No of shares held
% of shares held
LB Group
No of shares held
% of shares held
191,222,031
191,222,031
51.32%
51.32%
79,345,007
21.29%
79,345,007
21.29%
18,500,000
20,828,534
4.96%
5.59%
8% Compulsorily redeemable preference shares fully paid - up
L & T Infrastructure Finance Company Limited
No of shares held
% of shares held
67,000,000
100.00%
100,000,000
100.00%
58
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
As at
31 March 2014
31 March 2013
-
330.00
330.00
18,739.90
57.86
18,682.04
3,568.95
97.50
3,666.45
330.00
79.78
13.69
423.47
3,242.98
22,255.03
-
-
-
18,739.90
-
18,739.90
3,529.12
132.81
3,661.93
-
80.00
12.98
92.98
3,568.95
22,308.85
As at
31 March 2014
31 March 2013
4 Reserves and surplus
Capital Redemption Reserve
Opening balance
Transfer from surplus
Securities premium
Opening balance
Less: Premium on redemption of preference shares
Surplus
Opening balance
Add: profit for the year from statement of profit and loss
Amount available for Approprations
Approprations
Transfer to capital redemption reserve
Preference dividend
Dividend distribution tax
Balance
5
Borrowings
Long-term borrowings
Secured
Term loans
Rupee loans from banks (Ref note 1 & 2a)
-
1,057.19
Unsecured
Deferred payment liabilities (refer note 2b)
Short-term borrowings
Secured
Loan against letter of credits (refer note 1)
Unsecured
Loan against deposits
Loans and advances from related parties
230.00
230.00
776.84
655.50
-
1,432.34
1,662.34
230.00
1,287.19
-
5,177.70
623.09
5,800.79
7,087.98
ANNUAL REPORT 2013 - 2014 59
Notes to Financial Statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
1) Details of security provided for various credit facilities
Security : Secured by first pari-passu charge on fixed assets, current assets of the Company and corporate guarantee of
KSK Power Ventur plc.
2) Repayment terms of the long-term borrowings
a
The long term Rupee loans are repayable in quarterly, half yearly instalments with the last instalment of respective loans
are payable from October 2014 to December 2014 The long term borrowings carries an weightage average rate of interest
of 14.42 % p.a.
b Deferred payment liability is repayable in March 2018.
6 Deferred tax (net )
Deferred tax liability on account of depreciation
Deferred tax- net
7
Trade payables
Dues to other than micro and small enterprises
As at
31 March 2014
31 March 2013
0.69
0.69
1.21
1.21
As at
31 March 2014
31 March 2013
1,980.80
1,980.80
3,630.19
3,630.19
As at 31 March 2014 (31 March 2013: Nil ) there are no amounts including interest payable to Micro and Small enterprises as
defined under Micro, Small and Medium Enterprises Development Act, 2006, based on the information available with the
Company.
8 Provisions
Short-term provisions
For dividend and tax there on
60
KSK ENERGY VENTURES LIMITED
As at
31 March 2014
31 March 2013
19.23
19.23
19.36
19.36
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
9 Other current liabilities
Current maturities of long-term debt
1,400.44
2,125.00
As at
31 March 2014
31 March 2013
Interest accrued but not due on borrowings
Interest accrued and due on borrowings
Salaries and bonus payable
Other liabilities
Statutory liabilities
Creditors for capital goods (including retention money)
-
79.33
6.32
91.47
31.53
1.10
9.24
60.94
3.95
-
3.51
0.61
1,610.19
2,203.25
ANNUAL REPORT 2013 - 2014 61
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62
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
As at
31 March 2014
31 March 2013
11 Non current investments
Trade investments
Investments in equity instruments
(unquoted, fully paid up )
3,636,363 (31 March 2013: 3,636,363)
160.00
160.00
Equity shares of Rs.10 each in Terra Energy Limited.
Other investments
Investments in equity instruments
(unquoted, fully paid up )
Investment in subsidiary
10,500 (31 March 2013: 10,500) Equity shares of
Rs 10 each in KSK Narmada Power Company Private Limited.
499,990 (31 March 2013: 499,990) Equity shares
of Rs 10 each in KSK Wind Energy Private Limited
0.11
5.00
0.11
5.00
570,115,305 (31 March 2013: 570,115,305) Equity shares
7,527.58
7,527.58
of Rs.10 each in KSK Electricity Financing India Private Limited.
150,000 (31 March 2013: 150,000) Equity shares of Rs.10 each
in KSK Wardha Infrastructure Private Limited .
10,500 (31 March 2013: 10,500) Equity shares of Rs 10 each
in KSK Vidarbha Power Company Private Limited .
10,000 (31 March 2013: 10,000) Equity shares of Rs 10 each
in KSK Dibbin Hydro Power Private Limited.
50,000 (31 March 2013: 50,000) Equity shares of Rs 10 each
in Kameng Dam Hydro Power Limited.
1.50
0.11
0.10
0.50
1.50
0.11
0.10
0.50
7,660,330 (31 March 2013: 7,660,330) Equity shares of Rs 10 each
76.60
76.60
in JR Power Gen Private Limited.
2,062,549,994 (31 March 2013: 2,062,549,994) Equity shares of
20,625.50
20,625.50
Rs 10 each in KSK Mahanadi Power Company Limited.
36,500,028 (31 March 2013: 47,762,190) Class A Equity shares of
554.55
725.62
Rs 10 each in Sai Wardha Power Limited (formerly known as
Wardha Power Company Limited).
50,000 (31 March 2013: 50,000) Equity shares of Rs 10 each
0.50
0.50
in KSK Upper Subansiri Hydro Energy Limited.
ANNUAL REPORT 2013 - 2014 63
Notes to Financial Statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
1,000,000 (31 March 2013: 1,000,000) Equity shares of
Rs 10 each in KSK Dinchang Power Company Private Limited.
1,000,000 (31 March 2013: 1,000,000) Equity shares of
Rs 10 each in KSK Jameri Hydro Power Private Limited.
1,059,280 (31 March 2013: 1,059,280) Equity shares of
NRs 100 ( in Rs.62.50 ) each in Tila Karnali Hydro
Electric Company Private Limited.
As at
31 March 2014
31 March 2013
10.00
10.00
66.20
10.00
10.00
66.20
13,077 (31 March 2013: 13,077) Equity shares of NRs 100
0.82
0.82
( in Rs.62.50 ) each in Bheri Hydro Power Company Private Limited.
Investments in preference shares
(unquoted,fully paid up )
Investment in subsidiary
4,410,000 (31 March 2013: 4,410,000) 16% optionally convertible
145.53
145.53
cumulative redeemable preference shares of Rs.10 each in
KSK Wind Energy Private Limited
4,760,000 (31 March 2013: 4,760,000) 6% convertible preference
238.00
shares of Rs 10 each in Sai Regency Power Corporation Private Limited.
660,000 (31 March 2013: 530,000) 12% cumulative redeemable
41.26
238.00
33.12
preference shares of NRs 100 (in Rs 62.50) each in
Tila Karnali Hydro Electric Company Private Limited
14,850,769 (31 March 2013: 14,850,769) 0.01% Class B
148.51
148.51
cumulative redeemable preference shares of Rs 10 each
in Sai Wardha Power Limited (formerly known as
Wardha Power Company Limited)
17,107,223 (31 March 2013: Nil) 0.01% Class A redeemable
171.07
preference shares of Rs 10 each in Sai Wardha Power Limited
(formerly known as Wardha Power Company Limited)
Investments in Debentures
(unquoted,fully paid up )
Investment in subsidiary
7,350,000 (31 March 2013: Nil) 0.01% Optionally convertible
73.50
redeemable debentures of Rs 10 each in JR Power Gen Private Limited.
-
-
Total
29,856.94
29,775.30
64
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
The Company pledged the investments in the following entities in favour of the lenders for extending the loans to the
respective companies
Details of shares pledged (no of shares)
As at
31 March 2014
31 March 2013
Equity shares of Rs.10/-each in KSK Mahanadi Power Company Limited
2,048,942,459
1,179,400,501
Class ‘A’ Equity shares of Rs. 10/- each in Sai Wardha Power Limited
(formerly known as Wardha Power Company Limited)
36,500,028
47,762,190
12 Loans and advances
Long-term loans and advances
Unsecured, considered good
Capital advances
Security deposits
Prepaid expenses
Advance for investments
Related parties
Others
Loans and advances
Related parties
Advance tax and TDS receivable (net of provision for tax)
Short-term loans and advances
Unsecured, considered good
Loans and advances
Related parties
Advances for supplies / expenses
Prepaid expenses (Refer note 1)
Other receivables
Security deposits
Total
As at
31 March 2014
31 March 2013
73.38
-
0.22
965.83
79.61
-
227.22
1,346.26
42.16
1.19
9.20
453.34
318.78
824.67
2,170.93
-
250.00
0.54
257.45
79.62
3,003.00
236.16
3,826.77
5,153.41
0.62
6.55
225.64
6.03
5,392.25
9,219.02
ANNUAL REPORT 2013 - 2014 65
Notes to Financial Statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
Note :
1
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a
gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with
an insurance company in the form of a qualifying insurance policy.
Reconciliation of opening and closing balances of the present value of the defined benefit obligation
Present value of obligation at the beginning of the year
Interest cost
Current service cost
Benefits paid
Actuarial loss/(gain) on obligation
Present value of obligation at the end of the year
Change in fair value of assets
Fair value of plan assets at the beginning of the year
Expected return on plan assets
Benefits Paid
Actuarial gain/(loss) on plan assets
Fair value of plan assets at the end of the year
Amounts recognised in the balance sheet
Present value of obligation as at the end of the year
Fair value of plan assets at the end of the year
Funded status
Net asset/(liability) recognised in the balance sheet
As at
31 March 2014
31 March 2013
5.87
0.43
0.31
(0.96)
(0.40)
5.25
5.28
0.42
0.41
(0.07)
(0.17)
5.87
As at
31 March 2014
31 March 2013
7.65
0.63
(0.96)
(0.03)
7.29
7.08
0.64
(0.07)
-
7.65
As at
31 March 2014
31 March 2013
5.25
7.29
2.04
2.04
5.87
7.65
1.78
1.78
66
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Amounts recognised in the balance sheet
Acturial (gain) / losses
Experience adjustment
As at
31 March 2014
31 March 2013
31 March 2012
31 March 2011
(0.37)
(0.17)
(5.03)
(1.19)
On account of change in assumption
On account of change in experience
On plan assets
(0.47)
0.07
(0.03)
(0.02)
(0.15)
-
0.07
(5.10)
-
(0.15)
(1.18)
(0.13)
Amounts recognised in profit and loss account
Current service cost
Interest cost
Past service cost (non vested benefits)
Expected return on plan assets
Net actuarial (gain) / loss recognised for the period
Expenses/(benefits) recognised in the statement of profit and loss
Asset information
Category of Assets
Year ended
31 March 2014
31 March 2013
0.31
0.43
-
(0.63)
(0.37)
(0.26)
0.41
0.42
0.16
(0.64)
(0.17)
0.17
As at
31 March 2014
31 March 2013
Insurer managed funds
100%
100%
Summary of actuarial assumptions
Discount rate
Salary escalation
Expected return on plan assets
Attrition rate
Year ended
31 March 2014
31 March 2013
8.75%
10.00%
8.75%
15.00%
8.06%
15.00%
9.15%
15.00%
Discount rate: The discount rate is based on the prevailing market yields of indian government securities as at balance sheet
date for the estimated term of the obligations
Expected rate of return on planned assets: This is based on the expectation of the average long term rate of return expected on
investments of the fund during the estimated term of the obligations.
ANNUAL REPORT 2013 - 2014 67
Notes to Financial Statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
13 Other assets
Other non-current assets
Unsecured, considered good
Long term trade receivables
Mat credit entitlement
Interest accrued on deposits
Balances with banks:
Deposits with bank held as margin money or security
against guarantee or borrowings
Other current assets
Unsecured, considered good
Interest accrued on deposits
Balances with statutory authorities
Total
14 Trade receivables
Unsecured, considered good
Other debts
related parties
15 Cash and bank balances
Cash and cash equivalents
Cash on hand
Balances with banks
On current accounts
Other bank balances
Deposits having maturity more than three months
Deposits with bank held as margin money or security
against guarantee or borrowings
Total cash and bank balances
68
KSK ENERGY VENTURES LIMITED
As at
31 March 2014
31 March 2013
230.00
230.00
-
0.19
0.95
7.38
0.12
0.95
231.14
238.45
297.17
7.22
304.39
535.53
272.25
7.71
279.96
518.41
As at
31 March 2014
31 March 2013
217.60
217.60
-
-
As at
31 March 2014
31 March 2013
0.26
50.27
50.53
0.14
169.30
169.44
219.97
0.15
31.54
31.69
0.13
235.80
235.93
267.62
16 Revenue from operations
Project development fees
Corporate support services fees
17 Other income
Miscellaneous income
18 Employee benefits expense
Salaries,
wages
and bonus
Contribution to provident and other funds
Staff welfare expenses
19 Other expenses
Rent
Rates and taxes
Printing and stationery
Communication expenses
Office expenses
Travel and conveyance
Insurance charges
Legal and professional charges
Auditors' remuneration
audit fees
for certification (including tax audit)
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Year ended
31 March 2014
31 March 2013
67.46
412.30
479.76
123.75
367.80
491.55
Year ended
31 March 2014
31 March 2013
7.26
7.26
0.54
0.54
Year ended
31 March 2014
31 March 2013
52.70
0.19
2.08
54.97
61.49
0.35
2.29
64.13
Year ended
31 March 2014
31 March 2013
7.43
0.25
2.80
4.50
6.62
3.01
1.81
20.04
2.00
0.02
9.97
0.13
1.87
3.97
7.11
1.77
2.19
22.57
2.00
0.04
ANNUAL REPORT 2013 - 2014 69
Notes to Financial Statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
Repair and maintenance
building
others
Donations
Electricity expenses
Training, seminar and recruitment expenses
Directors sitting fees
Loss on sale of assets
Miscellaneous expenses
20 Finance cost (net):
Interest on others
Other borrowing cost
Less: Interest Income
21 Contingent liabilities and commitments :
a) Contingent liabilities :
I)
Bank guarantees and letter of credits outstanding
ii) Corporate guarantees outstanding
Year ended
31 March 2014
31 March 2013
0.28
5.28
0.12
2.03
0.20
0.36
0.03
2.81
59.59
0.13
6.05
0.12
2.20
0.47
0.48
39.00
1.49
101.56
Year ended
31 March 2014
31 March 2013
909.27
19.35
928.62
701.83
226.79
1,139.05
3.64
1,142.69
985.65
157.04
Year ended
31 March 2014
31 March 2013
5,814.84
24,759.97
2,853.44
25,219.88
iii) Service tax department has issued demand order to the Company for payment of service tax amounting to Rs 505.64
million (including penalty) relating to the disagreement on availment of Cenvat Credit for the period April 2008 to
September 2010 and non -payment of service tax. Further, an amount of Rs. 25.88 million has been paid against the
demand under protest and the balance demand is stayed. However, the Company believes that the claims raised by the
department are not tenable and the Company has filed an appeal against the said order before the CESTAT.
70
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Year ended
31 March 2014
31 March 2013
iv) The Company has received a net demand of Rs. 280.30 million (31 March 2013 :Rs 280.30 million) (including interest) from
income tax department for Assessment Year 2010-11 pursuant to disallowance of certain claims / expenses. Challenging
the order, Company preferred an appeal before CIT (appeals). Further, an amount of Rs. 114.85 million has been paid
against the demand under protest and the CIT granted stay of collection of tax till September 2014. The Company believes
that all the claims / expenses claimed are allowable as per the provision of income tax act and the demand raised is not
tenable and there should not be any material impact on the financial statement.
b) Estimated value of the contracts to be executed on capital account and not provided for:
Capital Commitments
-
0.74
22 Expenditure in foreign currency on accrual basis
Year ended
31 March 2014
31 March 2013
Foreign travel
Total
23 Earnings/(loss) per share (EPS)
The Computation of EPS as per AS 20 is set out below:
Net Profit after tax
Less : Preference dividend and tax thereon
Net Profit/(loss) attributable to shareholders for Basic / Diluted EPS
Weighted average number of shares outstanding for the purpose
of calculation of Basic and Diluted EPS
Earnings/(loss) per share – Basic/Diluted (in Rs.)
Year ended
31 March 2014
31 March 2013
0.14
0.14
-
-
Year ended
31 March 2014
31 March 2013
97.50
(93.47)
4.03
372.63
0.01
132.81
(92.98)
39.83
372.63
0.11
ANNUAL REPORT 2013 - 2014 71
Notes to Financial Statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
24 Related party Disclosures:
a) Parties where control exists
Name of the party
KSK Power Venture plc
KSK Energy Limited
KSK Electricity Financing India Private Limited
J R Power Gen Private Limited
KSK Dibbin Hydro Power Private Limited
Kameng Dam Hydro Power Limited
KSK Narmada Power Company Private Limited
KSK Wind Energy Private Limited
KSK Vidarbha Power Company Private Limited
Sai Maithili Power Company Private Limited
KSK Wardha Infrastructure Private Limited
KSK Mahanadi Power Company Limited
KSK Upper Subansiri Hydro Energy Limited
KSK Dinchang Power Company Private Limited
KSK Jameri Hydro Power Private Limited
Tila karnali Hydro Electric Company
Private
Limited
Bheri Hydro Power Company Private Limited
Sai Regency Power Corporation Private Limited
VS Lignite Power Private Limited
Relationship
Step-up holding company
Holding company
Subsidiary company
Subsidiary company
Subsidiary company
Subsidiary company
Subsidiary company
Subsidiary company
Subsidiary company
Subsidiary company
Subsidiary company
Subsidiary company
Subsidiary company
Subsidiary company
Subsidiary company
Subsidiary company
Subsidiary company
Subsidiary company
Subsidiary company
Sai Wardha Power Limited (formerly known as Wardha Power Company Limited)
Subsidiary company
Sai Power pte Limited
Field Mining Ispats Limited
Arasmeta Captive Power Company Private Limited
Subsidiary company
Subsidiary company
Subsidiary company
b) Parties where significant influence exists and where the transactions have taken place during the year
Name of the party
Sitapuram Power Limited
KSK Water Infrastructures Private Limited
KSK Mineral Resources Private Limited
KSK Energy Company Private Limited
Raigarh Champa Rail Infrastructure Private Limited
KSK Wind Energy Nandgaon Athni Private Limited
KSK Wind Energy Madurai MS Puram Private Limited
72
KSK ENERGY VENTURES LIMITED
Relationship
Joint venture
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Name of the party
KSK Wind Energy Tirupur Elayamuthur Private Limited
KSK Wind Energy Tuticorin Rajapudukudi Private Limited
KSK Wind Energy Halagali Benchi Private Limited
KSK Wind Power Sankonahatti Athni Private Limited
KSK Wind Power Aminabhavi Chikodi Private Limited
KSK Wind Energy Mothalli Haveri Private Limited
c) Key Management personnel
Name of the party
Mr. S. Kishore
Mr. K .A .Sastry
d) Particulars of related party transactions
Relationship
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Relationship
Whole-time Director
Whole-time Director
S.No
Particulars
Subsidiaries
Joint
Fellow
KMP/ Relative
venture
subsidiaries
of KMP
31 March 2014
I. Transactions
1
2
3
4
5
6
7
8
9
Project development and corporate support fees
Interest Income
Interest expense
Sale of coal
Purchase of fixed assets
Loans and advance given
(including advance for investments)
Refund of loans and advance
Loans/security deposits taken
Repayment of loan/security deposit
10 Managerial remuneration
II. Balances
1
2
3
Amount receivable
Amount Payable
Managerial remuneration payable
430.96
665.11
74.68
107.53
0.06
9,988.72
17,144.74
823.97
3,132.57
-
1,410.99
1,851.64
4.30
-
-
-
-
-
-
-
-
-
-
11.40
24.88
-
-
81.76
249.99
1,014.27
532.55
-
-
-
-
-
-
-
-
-
-
15.00
1.10
-
-
27.80
603.15
-
-
-
1.11
ANNUAL REPORT 2013 - 2014 73
Notes to Financial Statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
S.No
Particulars
Subsidiaries
Joint
Fellow
KMP/ Relative
venture
subsidiaries
of KMP
31 March 2013
I. Transactions
1
2
3
4
5
6
7
8
9
Project development and corporate support fees
Interest Income
Interest expense
Sale of assets
487.25
903.10
55.07
2.10
4.30
58.46
-
-
Loans and advance given
6,053.02
17.50
(including advance for investments)
Refund of loans and advance
Loans/security deposits taken
Repayment of loan/security deposit
Managerial remuneration
II. Balances
1
2
3
Amount receivable
Amount Payable
Managerial remuneration payable
4,074.58
451.40
195.90
22.87
-
8,438.66
4,146.25
-
-
-
-
9.88
-
-
-
-
13.95
1.17
155.46
0.53
1,553.83
1,558.02
-
-
-
-
-
-
-
-
-
18.00
196.87
111.67
-
-
-
-
1.33
e) Disclosure of loans and advances to subsidiaries pursuant to Clause 32 of the listing agreement:
Particulars
Amount outstanding as at
Maximum
outstanding
during the year
31 March 2014
31 March 2013
31 March 2014
I Loans and advances in the nature of loans
given to subsidiaries: * ^
Subsidiaries
KSK Dibbin Hydro Power Private Limited
Kameng Dam Hydro Power Limited
J R Power Gen Private Limited
KSK Narmada Power Company Private Limited
KSK Vidarbha Power Company Private Limited
KSK Upper Subansiri Hydro Energy Limited
KSK Dinchang Power Company Private Limited
KSK Jameri Hydro Power Private Limited
74
KSK ENERGY VENTURES LIMITED
-
-
-
16.65
2.01
-
-
-
949.36
857.72
1,253.19
16.65
2.00
1,772.40
72.46
49.90
958.84
935.39
1,464.60
16.65
2.01
1,932.29
83.29
57.80
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Particulars
Amount outstanding as at
Maximum
outstanding
during the year
31 March 2014
31 March 2013
31 March 2014
Arasmeta Captive Power Company Private Limited
12.00
1,138.00
1,170.10
Sai Wardha Power Limited (formerly known as
Wardha Power Company Limited )
KSK Electricity Financing India Private Limited
KSK Mahanadi Power Company Limited
-
-
-
1,865.00
-
-
1,865.01
14.80
2.25
Total
30.66
7,976.68
II Loans and advances in the natue of loans
where interest is not charged or charged
below bank rate
KSK Narmada Power Company Private Limited
KSK Vidarbha Power Company Private Limited
KSK Dinchang Power Company Private Limited
KSK Jameri Hydro Power Private Limited
KSK Mahanadi Power Company Limited
Sai Wardha Power Limited (formerly known as
Wardha Power Company Limited )
Total
16.65
2.01
-
-
-
-
18.66
16.65
2.00
72.46
49.90
-
1,865.00
2,006.01
16.65
2.01
-
-
2.25
-
III Loans to employees as per Company’s policy are not considered.
* The above loans & advances to subsidiary fall under the category of loans & advances in the nature of loans where
there is no repayment schedule and are repayable on demand.
^ Excludes interest accrued.
IV) Equity held in subsidiaries and step down subsidiary have been disclosed under “Non current Investment", (see note no
11).
V)
The Company has provided securities by way of pledge of investments for loans taken by subsidiaries ( see note no 11).
VI) The holding company has pledged certain shares held in the Company as security towards the borrowings of the
Company.
VII) Corporate Guarantees of Rs. 36,957.67 (31 March 2013 Rs.32,917.20), Bank guarantees of Rs. 5,965.17 (31 March 2013
Rs.4,362.48) and Letter of credit limits of Rs. 1,684.01 (31 March 2013 Rs.2,043.79) has been given by the Company on
behalf of subsidiaries and fellow subsidiaries.
VIII) Corporate Guarantees of Rs. 10,880.00 ( 31 March 2013 Rs.9,605.00) has been given by step-up holding Company on
behalf of the Company.
ANNUAL REPORT 2013 - 2014 75
Notes to Financial Statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
25 The company is primarily engaged in the business of providing project development and corporate support services.
Accordingly there are no reporateble segment as per accounting standard 17 notified under the Companies Act, 1956.
26 In the opinion of board, any of the assets other than fixed assets and non-current investment have a value on realization in
the ordinary course of business at least equal to the amount at which they are stated on the Balance Sheet.
27 During the year the Company has assigned certain of its development portfolio assets along with associated liabilities to
its wholly owned subsidiary KSK Electricity Financing India Private Limited for independent development pursuit.
28 Previous year figures have been regrouped and reclassified wherever necessary to conform to the current year
classification.
As per our report of even date
For
Umamaheswara Rao & Co.
Chartered Accountants
Firm registration No: 004453S
Sd/-
S.Venugopal
Partner
Membership No: 205565
Place : Hyderabad
Date : 24 May 2014
for and on behalf of the Board
Sd/-
S. Kishore
Sd/-
Sd/-
K. A. Sastry
M. S. Phani Sekhar
Whole-time Director
Whole-time Director
Company Secretary
76
KSK ENERGY VENTURES LIMITED
Auditors' Report on Consolidated Financial Statements
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
To,
The Board of Directors of KSK Energy Ventures Limited,
We have audited the attached consolidated balance sheet of KSK Energy Ventures Limited ('the Company') and its subsidiaries
and Joint Venture (collectively referred as 'the KSK group') as at 31 March 2014 and the consolidated profit and loss account
and the consolidated cash flow statement for the year ended on that date annexed thereto. These financial statements are the
responsibility of the company's management and have been prepared by the management on the basis of separate financial
statements and other financial information regarding components. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principals used and significant estimates made by the
management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
We did not audit the financial statements of subsidiaries and joint venture namely:
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
(cid:2)
KSK Mahanadi Power Company Limited
KSK Wind Energy Private Limited
Kameng Dam Hydro Power Limited
KSK Dibbin Hydro Power Private Limited
KSK Narmada Power Company Private Limited
KSK Wardha Infrastructure Private Limited
KSK Vidarbha Power Company Private Limited
J R Power Gen Private Limited
KSK Upper Subansiri Hydro Energy Limited
KSK Jameri Hydro Power Private Limited
KSK Dinchang Power Company Private Limited
Tila Karnali Hydro Electric Company Private Limited
Arasmeta Captive Power Company Private Limited.
Sai Regency Power Corporation Private Limited
Sai Wardha Power Limited (Formerly Wardha Power Company Limited)
Field Mining and Ispats Limited
Sai Maithili Power Company Private Limited
Sitapuram Power Limited (Joint venture)
Sai Power Pte Limited
Bheri Hydro Power Company Private Limited
Whose financial statements reflect total assets of Rs. 213,130 million as at 31 March 2014 and total revenue of Rs. 20,345 million
for the year ended 31 March 2014. The financial statements and other information of the subsidiaries and joint Venture, except
ANNUAL REPORT 2013 - 2014 77
Auditors' Report on Consolidated Financial Statements
(All amounts in Indian Rupees million, except share data and where otherwise stated)
Sitapuram Power Limited have been audited by other auditors whose reports have been furnished to us and our opinion, in so
far it relates to amounts included in respect of these subsidiaries, is based solely on the report of other auditors.
We report that the consolidated financial statements have been prepared by the company's management in accordance with
the requirements of the Accounting Standards (AS) 21, Consolidated financial statements and Accounting Standard(AS) 27,
financial reporting of interest in joint ventures issued by the Institute of Chartered Accountants of India.
Based on our audit as aforesaid, and on consideration of reports of other auditors on financial statements and on other
financial information of the components, and to the best of our information and according to the explanations given to us, we
are of the opinion that the attached consolidated financial statements give a true and fair view in conformity with the
accounting principles generally accepted in India:
i)
ii)
in the case of consolidated Balance sheet, of the state of the KSK Group as at 31 March 2014;
in the case of consolidated Profit and Loss Account, of the loss for the year ended on that date; and
iii)
in the case of consolidated Cash Flow Statement, of the cash flows for the year ended on that date.
For
Umamaheswara Rao& Co.,
Chartered Accountants
Sd/-
S. Venugopal
Partner
Membership No. 205565
FRN 004453S
Place: Hyderabad
Date: 24 May 2014
78
KSK ENERGY VENTURES LIMITED
Consolidated Balance Sheet as at 31 March 2014
(All amounts in Indian Rupees million, except share data and where otherwise stated)
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Note
As at
31 March 2014
31 March 2013
I
EQUITY AND LIABILITIES
1
Shareholders' funds
(a) Share capital
(b) Reserves and surplus
2 Minority interest
3 Non-current liabilities
(a) Long-term borrowings
(b) Deferred tax liabilities (net)
(c) Other long term liabilities
(d) Long-term provisions
4
Current liabilities
(a) Short-term borrowings
(b) Trade payables
(c) Other current liabilities
(d) Short-term provisions
II. ASSETS
1 Non-current assets
(a) Fixed assets
(i)
Tangible assets
(ii)
Intangible assets
(iii) Capital work in progress
(iv) Intangible assets under development
(b) Non-current investments
(c) Deferred tax assets (net)
(d) Long-term loans and advances
(e) Other non-current assets
4
5
6
7
8
9
11
7
10
12
11
13
14
8
15
16
4,396.30
25,511.59
29,907.89
6,810.13
4,726.30
27,290.86
32,017.16
6,735.18
117,080.40
112,689.28
65.88
4,355.21
23.61
227.31
3,271.65
51.14
121,525.10
116,239.38
18,531.98
5,243.76
36,057.81
175.03
60,008.58
15,674.88
2,163.39
28,808.79
92.85
46,739.91
218,251.70
201,731.63
76,960.81
2,060.57
92,619.45
3.79
215.81
3,320.73
8,064.46
3,149.77
44,963.75
2,041.22
105,871.75
1.01
215.81
1,910.89
12,120.98
2,552.81
186,395.39
169,678.22
ANNUAL REPORT 2013 - 2014 79
Consolidated Balance Sheet as at 31 March 2014 (continued..)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
2
Current assets
(a) Current investments
(b)
Inventories
(c) Trade receivables
(d) Cash and bank balances
(e) Short-term loans and advances
(f) Other current assets
Note
As at
31 March 2014
31 March 2013
14
17
18
19
15
16
-
1,493.52
9,201.52
8,693.22
10,497.27
1,970.78
31,856.31
172.06
1,510.71
5,597.08
14,656.47
8,535.30
1,581.79
32,053.41
218,251.70
201,731.63
See accompanying notes to Consolidated financial statements
for and on behalf of the Board
Sd/-
S. Kishore
Sd/-
Sd/-
K. A. Sastry
M. S. Phani Sekhar
Whole-time Director
Whole-time Director
Company Secretary
As per our report of even date
For
Umamaheswara Rao & Co.,
Chartered Accountants
Firm registration No: 004453S
Sd/-
S.Venugopal
Partner
Membership No: 205565
Place : Hyderabad
Date : 24 May 2014
80
KSK ENERGY VENTURES LIMITED
Consolidated
Statement of
Profit and Loss for the year ended 31 March 2014
(All amounts in Indian Rupees million, except share data and where otherwise stated)
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Note
Year ended
20
21
22
23
24
25
26
13
I
Revenue from operations
II Other income
III Total revenue (I+II)
IV Expenses
Cost of fuel consumed
Manufacturing expenses
Employee benefits expenses
Other expenses
Finance costs
Depreciation and amortisation expenses
Total expenses
V Profit / (loss) before tax (III - IV)
VI Tax expense / (income)
Current tax
For the year
In respect of earlier years
Less : MAT credit entitlement
Deferred tax
Total tax expense / (income)
VII Profit / (loss) for the year before minority interest (V - VI)
Minority interest
Profit / (loss) for the year after minority interest
VIII Earnings / (loss) per share:
31 March 2014
31 March 2013
21,118.01
1,365.52
22,483.53
22,070.20
1,006.96
23,077.16
11,978.78
10,695.64
1,522.50
463.42
1,781.52
7,216.12
2,929.73
25,892.07
(3,408.54)
145.53
(0.85)
(101.02)
(1,571.27)
(1,527.61)
(1,880.93)
(252.04)
(1,628.89)
1,314.50
431.65
1,444.46
6,017.67
2,264.68
22,168.60
908.56
.
164.48
0.38
(140.46)
(789.36)
(764.96)
1,673.52
167.72
1,505.80
Basic and diluted -face value of Rs.10 per share (Rs.)
(4.62)
3.79
See accompanying notes to Consolidated the financial statements
for and on behalf of the Board
Sd/-
S. Kishore
Sd/-
Sd/-
K. A. Sastry
M. S. Phani Sekhar
Whole-time Director
Whole-time Director
Company Secretary
As per our report of even date
For
Umamaheswara Rao & Co.
Chartered Accountants
Firm registration No: 004453S
Sd/-
S.Venugopal
Partner
Membership No: 205565
Place : Hyderabad
Date : 24 May 2014
ANNUAL REPORT 2013 - 2014 81
Consolidated Cash Flow Statement for the year ended 31 March 2014
(All amounts in Indian Rupees million, except share data and where otherwise stated)
CASH FLOW FROM OPERATING ACTIVITIES
(Loss) / profit before tax
Adjustments for
Depreciation and amortisation expenses
Finance cost
Interest income
Dividend income
(Profit) / loss on sale of assets, net
Profit on sale of investment
Bad debts / advances written off / provision for doubtful debts
Unrealised foreign exchange differences
Liability no longer required written back
Operating profit before working capital changes
Adjustments for working capital
Inventories
Trade receivables
Loan and advances
Other assets
Trade payables
Other liabilities and provisions
Cash generated from operations
Income tax paid
Net cash from operating activities
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed assets including capital work-in-progress
and capital advances
Sale of fixed assets
Cash flow on sale of wind mills undertaking
Advance received against sale of assets
Acquisition of minority interest
(Purchase) / sale of current investments, net
(Investment) / redemption of bank deposit (having original
maturity more than three months)
(Investment) / redemption of bank deposit (held as margin
money or security against guarantees or borrowings)
Advance for investment - given
Inter corporate deposit - given
Inter corporate deposit - refund
31 March 2014
31 March 2013
(3,408.54)
908.56
2,929.73
7,216.12
(966.79)
(0.90)
(26.14)
(0.12)
21.17
29.73
(13.66)
5,780.60
17.19
(3,604.44)
(2,558.69)
(356.57)
2,874.74
111.42
2,264.25
(335.36)
1,928.89
2,264.68
6,017.67
(980.73)
(1.28)
24.71
(3.41)
234.37
31.21
(18.76)
8,477.02
(278.60)
(1,889.53)
(112.57)
(442.45)
109.01
37.66
5,900.54
(334.05)
5,566.49
(12,028.95)
(17,719.34)
41.49
51.49
708.00
-
172.18
394.31
262.46
604.96
-
(1.30)
53.04
(346.05)
6,884.76
2,275.86
(611.60)
(1,182.40)
1,503.44
(1,106.30)
(980.10)
1,080.17
82
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Interest received
Dividend received
31 March 2014
31 March 2013
2,014.07
97.75
2,386.51
22.15
Net cash used in investing activity
(1,955.46)
(13,467.94)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from share issue and application money in
subsidiary to minority interest
Redemption of preference share capital
Repayment of share application money in subsidiary
Payment of dividend and dividend tax
Proceeds from long term borrowings
Repayment of long term borrowings
Proceeds from short term borrowings, net
Payment of finance costs
Net cash from financing activities
Net increase / (decrease) in cash and cash equivalents
Effect of exchange rate changes
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Notes
1
Cash and cash equivalents includes:
Cash in hand
Balances with banks:
On current account
On deposit account
2,212.08
280.17
(387.86)
(30.00)
(93.60)
42,316.60
(31,879.67)
4,061.93
(15,884.90)
314.58
288.01
0.95
1,440.83
1,729.79
-
(1,750.00)
(93.24)
37,300.32
(17,350.64)
364.32
(14,397.45)
4,353.48
(3,547.97)
(1.54)
4,990.34
1,440.83
As at
31 March 2014
31 March 2013
3.57
24.38
1,719.02
7.20
1,729.79
1,200.22
216.23
1,440.83
2
Previous year figures have been regrouped / reclassified to conform to the classification of the current year.
Umamaheswara Rao & Co.
As per our report of even date
For
Chartered Accountants
Firm registration No: 004453S
Sd/-
S.Venugopal
Partner
Membership No: 205565
Place : Hyderabad
Date : 24 May 2014
for and on behalf of the Board
Sd/-
Sd/-
Sd/-
S. Kishore
Whole-time Director
K. A. Sastry
Whole-time Director
M. S. Phani Sekhar
Company Secretary
ANNUAL REPORT 2013 - 2014 83
Notes to Consolidated financial statements
(All amounts in Indian Rupees million, except share data and where otherwise stated)
1 Description of business
KSK Energy Ventures Limited (“KSKEVL” or the “Company”), 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,
currently predominantly through subsidiaries and jointly controlled entities with multiple industrial consumers in India
with next level of growth coming through large base load power plant subsidiaries.
KSKEVL focused its strategy on the private sector power development market, undertaking entire gamut of development,
investment, construction, operation and maintenance of power plant with supplies initially to heavy industrials operating
in India and now branching out to cater to the needs of utilities and others in the wider Indian power sector.
2
Significant Accounting Policies
2.1 Accounting convention
The Consolidated Financial Statements of KSK Energy Ventures Limited and its Subsidiaries and Joint Ventures (“the
Group” or “the Company”) have been prepared and presented under the historical cost convention on the accrual basis in
accordance with Indian Generally Accepted Accounting Principles (GAAP). GAAP comprises Accounting Standards
notified by the Central Government of India under Section 211 (3C) of the Companies Act, 1956, other pronouncements of
Institute of Chartered Accountants of India, the provisions of the Companies Act 2013 (to the extent notified), the
provisions of Companies Act, 1956 and guidelines issued by Securities and Exchange Board of India.
2.2 Use of estimates
The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure relating to contingent
liabilities on the date of Consolidated Financial Statements and reported amounts of income and expenditure for the
period. Actual results could differ from these estimates. Examples of such estimates include provision for doubtful debt,
future obligation under employee retirement benefit plan, income taxes, useful life of fixed assets, etc. Any revision to
accounting estimates is recognised prospectively in the current and future periods.
2.3 Inventories
Inventories are valued at the lower of cost and net realisable value. Cost of inventories comprises all costs of purchase, cost
of conversion and other costs incurred in bringing the inventories to their present location and condition. The method of
determining the costs of various categories of inventories are as follows:
Fuel
Stores, spares and consumables
Weighted average
First-in-first-out
2.4 Cash flow statement
Cash flow statement is reported using the indirect method, where by the net profit before tax is adjusted for the effects of
transactions of a non cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item
of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and
financing activities of the Company are segregated and presented separately.
84
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
2.5 Revenue recognition
Sale of energy is recognized on accrual basis in accordance with the relevant agreements.
Revenue in the form of project development fees for services rendered in relation to development work of potential power
projects is recognized when such fees is assured and determinable under the terms of the respective contract.
Corporate Support Service income is recognized when such income is assured and determinable under the terms of the
respective contract.
Consultancy income is recognized in proportion with the degree of completion of contract.
Dividend income is recognized when the unconditional right to receive the income is established.
Interest is recognized using the time proportionate method, based on the underlying interest rates.
Insurance claims are accounted based on certainty of realization.
Revenue from sale of scrap and fly ash is accounted for as and when sold.
2.6 Fixed assets and depreciation
Fixed assets are stated at cost of acquisition. Cost of acquisition is inclusive of freight, duties, levies and all incidentals
directly or indirectly attributable to bringing the asset to its working condition for its intended use. Cost of fixed assets
includes cost of initial warranty / insurance spares purchased along with the capital asset, which are grouped as single item
under respective assets.
Machinery spares of the nature of capital spares are capitalized at the time of their purchase whether procured at the time
of purchase of the fixed asset concerned or subsequently. Where such spares are replaced, the carrying cost of the worn
out spares are written off. The total cost of such capital spares is allocated on a systematic basis over a period not
exceeding the useful life of the principal item.
Depreciation has been provided on Straight Line Method at the rates and in the manner specified in Schedule XIV of the
Companies Act, 1956 except for assets costing up to Rs. 5,000/- which are fully depreciated in the year of capitalization.
Depreciation is calculated on a pro-rata basis from the date of installation / capitalization till the date the assets are sold or
disposed.
Depreciation on initial / warranty spares are provided on the same rates applicable for that asset group, irrespective of its
actual usage.
Intangible assets, viz., computer software is recognized as per the criteria specified in the Accounting Standard (AS) 26
“Intangible Assets” notified by the Central Government of India under section 211 (3C) of the Companies Act, 1956 and is
amortised over a period of three years.
Leasehold improvements are amortised over the lease period.
ANNUAL REPORT 2013 - 2014 85
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
2.7 Capital work in progress
The cost of fixed assets not ready for their intended use before such date is disclosed under capital work in progress.
Capital work in progress is carried at cost and incidental and attributable expenses including interest and depreciation on
fixed assets in use during construction are carried as part of “expenditure during construction period, pending allocation”
to be allocated on major assets on commissioning of the project.
In respect of supply-cum-erection contracts, the value of supplies received at site and accepted is treated as capital work
in progress.
Claims for price variation / exchange variation in case of contracts are accounted for on acceptance.
2.8 Foreign currency transaction
Foreign currency transactions are initially recorded at the rates of exchange ruling at the date of transaction.
At the Balance Sheet date, foreign currency monetary items are reported using the closing / contracted rate. Non-
monetary items denominated in foreign currency are reported at the exchange rate ruling at the date of transaction.
Exchange differences arising on account
long-term foreign currency monetary items
related to the
acquisition/construction of fixed assets are capitalised and depreciated over the remaining useful life of the asset.
Exchange differences arising on other long-term foreign currency monetary items are accumulated in the “Foreign
Currency Monetary Item Translation Difference Account” and amortised over the remaining life of the concerned
monetary item.
The premium or discount on forward exchange contract are amortised and recognised as an expense / income over the
life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency
monetary items, are recognised in the statement of profit and loss in the period in which the exchange rates change. Any
profit or loss arising on cancellation or renewal of such forward exchange contract is also recognised as income or as
expense for the period. Any gain / loss arising on forward contracts which are long-term foreign currency monetary items
is recognised in accordance with above paragraphs.
All other exchange differences are recognised as income or as expenses in the period in which they arise.
2.9 Derivative Contracts
The Company enters into derivative contracts in the nature of foreign currency options, interest rate swaps and forward
contracts with an intention to hedge its existing assets and liabilities, firm commitments and highly probable transactions.
Derivative contracts which are closely linked to the existing assets and liabilities are accounted as per the policy stated for
foreign currency transactions. All other derivative contracts are marked-to market and losses are recognised in the
Statement of Profit and Loss. Gains arising on the same are not recognised, until realised, on grounds of prudence.
2.10 Investments
Long-term investments, are stated at cost. A provision for diminution is made to recognise a decline, other than
temporary, in the value of long-term investments. Current investments are carried at the lower of cost and fair value. The
comparison of cost and fair value is done separately in respect of each category of investment.
86
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
2.11 Employee retirement benefits
Provident fund
Eligible employees receive benefits from a provident fund, which is a defined contribution scheme. Both the employee
and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered
employee salary. The contribution made by the Company is charged to the Statement of Profit and Loss.
Gratuity
In accordance to the Payment of Gratuity Act, 1972, the Group provides for the gratuity, a defined benefit retirement plan
(“the gratuity plan”) covering the eligible employees. The gratuity plan provides for a lump sum payment to the vested
employees at retirement, death, incapacitation or termination of the employment, of an amount based on the respective
employee salary and the tenure of the employment within the Group.
Liabilities with regard to the gratuity plan are determined by independent actuary. The Group makes annual contribution
to employee’s group gratuity scheme administered by trustees and managed by Life Insurance Corporation of India.
The Group recognizes the net obligation of the gratuity plan in the Balance Sheet as an asset or liability, respectively in
accordance with Accounting Standard (AS) 15, “Employee Benefits”.
Actuarial gains or losses arising from experience adjustments and changes in actuarial assumptions are recognized in the
Statement of Profit and Loss.
2.12 Borrowing cost
Borrowing costs include interest on borrowings and amortisation of ancillary cost incurrred in connection with the
arrangement of borrowings.
Borrowing costs directly attributable to the acquisition or construction of those fixed assets which necessarily take a
substantial period of time to get ready for their intended use are capitalized.
All other borrowing costs are recognised as an expense in the year in which they are incurred.
2.13 Leases
Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of
the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the
inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges
and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against
income. Lease management fees, legal charges and other initial direct costs are capitalised. If there is no reasonable
certainty that the Company will obtain the ownership by the end of the lease term, capitalised lease assets are depreciated
over the shorter of the estimated useful life of the asset or the lease term.
Lease that do not transfer substantially all the risks and rewards of ownership are classified as operating leases and
recorded as expense as and when the payments are made over the lease term.
ANNUAL REPORT 2013 - 2014 87
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
2.14 Earnings per share
Basic earnings per share are computed by dividing the net profit or loss after tax attributable to equity shareholders for the
period by the weighted average number of equity shares outstanding during the period. For the purpose of calculating
diluted earnings per share, net profit or loss after tax attributable to equity shareholders and the weighted average
number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. Dilutive
potential equity shares are deemed converted as at the beginning of the period, unless they have been issued at a later
date.
In computing the dilutive earnings per share, only potential equity shares that are dilutive and that either reduces
the earnings per share or increases loss per share are included.
2.15 Taxes on income
Income tax expense/ (income) comprises of current tax, deferred tax and Minimum Alternative Tax (MAT) credit.
Current tax
The current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the
Company.
Deferred tax
Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income
for the period. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised
using the tax rates that have been enacted or substantially enacted by the Balance Sheet date. Deferred tax assets are
recognized only to the extent there is reasonable certainty that the assets can be realised in future; however, where there is
unabsorbed depreciation or carry forward of loss under taxation laws, deferred tax assets are recognised only if there is a
virtual certainty of realization of such assets.
Deferred tax assets are reviewed at each Balance Sheet date and written down or written-up to reflect the amount that is
reasonably/virtually certain (as the case may be) to be realised.
The break-up of the deferred tax assets and liabilities as at the Balance Sheet date has been arrived at after setting-off
deferred tax assets and liabilities where the Company has legally enforceable right and an intention to set-off assets
against liabilities and where such assets and liabilities relate to taxes on income levied by the same governing taxation
laws.
MAT credit
MAT credit is recognized as an asset only when, and to the extent, there is convincing evidence that the Company will pay
normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an
asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered
Accountants of India, the said asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT
Credit entitlement. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of
MAT credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal
income tax during the specified period.
2.16 Impairment of assets
The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any
such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the
88
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the
carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in
the Statement of Profit and Loss. For an asset that does not generate largely independent cash inflows, the recoverable
amount is determined for the cash-generating unit to which the asset belongs. If at the Balance Sheet date there is an
indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset
is reflected at the recoverable amount subject to a maximum of depreciated historical cost.
2.17 Provisions and contingencies
Provisions and contingencies
The Company recognises a provision when there is a present obligation as a result of past obligating event that probably
requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a
contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow
of resources is remote, no provision or disclosure is made.
Onerous contract
Provisions for onerous contracts i.e. contracts where the expected unavoidable costs of meeting the obligations under the
contract exceed the economic benefits expected to be received under it, are recognized when it is probable that an
outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an
obligating event, based on a reliable estimate of such obligation.
3 Basis of consolidation
The Consolidated Financial Statements relate to KSK Energy Ventures Limited, its Subsidiaries and interest in Joint
Ventures.
3.1 Basis of accounting
The financial statements of the Subsidiary / Joint Venture Companies in the consolidation are drawn up to the same
reporting date as that of the Company.
The Consolidated Financial Statements have been prepared in accordance with Accounting Standards (AS) 21
“Consolidated Financial Statements” and (AS) 27 “Financial Reporting of Interest in Joint Ventures”, notified by the Central
Government of India under Section 211 (3C) of the Companies Act, 1956.
3.2 Principles of consolidation
The Consolidated Financial Statements have been prepared as per the following principles:
The financial statements of the Company and its Subsidiaries are combined on a line by line basis by adding together the
book value of like items of assets, liabilities, income and expenses after eliminating intra-group balances, intra-group
transactions and unrealised profits or losses.
The Consolidated Financial Statements include the interest of the Company in Joint Ventures, which has been accounted
for using the proportionate consolidation method of accounting whereby the Company’s share of each of assets,
liabilities, income and expenses of a jointly controlled entity is considered as separate line item.
ANNUAL REPORT 2013 - 2014 89
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
Preference share capital in Joint Venture entities and share application money in subsidiaries held by the outsiders, shown
separately together with minority interest under note 6 to Balance Sheet.
The Group accounts for investments by the equity method of accounting where it is able to exercise significant influence
over the operating and financial policies of the investee. Inter company profits and losses have been proportionately
eliminated until realized by the investor or investee.
The Consolidated Financial Statements are prepared using uniform accounting policies for like transactions and other
events in similar circumstances and are presented to the extent possible, in the same manner as the Company’s separate
financial statements except as otherwise stated in the notes to the accounts.
The difference between the cost of investment in the Subsidiary / Joint Venture and the share of net assets at the time of
acquisition of shares is identified in the financial statements as goodwill or capital reserve as the case may be.
Minority interests share of profit of consolidated subsidiaries is identified and adjusted against income of the group in
order to arrive at the surplus attributable to the shareholders of the Company.
3.3 Particulars of Subsidiaries and Joint Ventures:
S. No.
Name of the
Company
Subsidiary Companies
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
KSK Narmada Power Company Private Limited
KSK Wind Energy Private Limited
KSK Vidarbha Power Company Private Limited
KSK Wardha Infrastructure Private Limited
Sai Maithili Power Company Private Limited
KSK Dibbin Hydro Power Private Limited
Kameng Dam Hydro Power Limited
Arasmeta Captive Power Company Private Limited
KSK Electricity Financing India Private Limited
VS Lignite Power Private Limited
Sai Regency Power Corporation Private Limited
Sai Wardha Power Limited (formerly known as
Wardha Power Company Limited)
KSK Mahanadi Power Company Limited
J R Power Gen Private Limited
KSK Upper Subansiri Hydro Energy Limited
KSK Jameri Hydro Power Private Limited
KSK Dinchang Power Company Private Limited
(% of Shareholding)
Country of
31 March
31 March
incorporation
2014
2013
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
100
100
100
100
52
100
100
51
100
74
100
100
100
100
52
100
100
51
100
74
73.92
83.93
73.92
87
84.67
85.23
51
100
100
100
51
100
100
100
90
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Country of
31 March
31 March
(% of Shareholding)
Name of the
Company
Field Mining and Ispats Limited
S. No.
18
19
20
21
Tila Karnali Hydro Electric Company Private Limited Nepal
Bheri Hydro Power Company Private Limited
Sai Power Pte LTD
incorporation
India
Nepal
Singapore
India
Joint Venture Company
22
Sitapuram Power Limited
4
Share capital
Authorised
2013
84.98
80
90
100
49
2014
84.98
80
90
100
49
As at
31 March 2014
31 March 2013
4,000,000,000 (31 March 2013: 4,000,000,000)
40,000.00
40,000.00
equity shares of Rs. 10/- each
1,031,500,000 (31 March 2013: 1,031,500,000)
10,315.00
10,315.00
preference shares of Rs.10/- each
Issued, subscribed and paid up
372,630,454 (31 March 2013: 372,630,454)
equity shares of Rs. 10/- each fully paid up
67,000,000 (31 March 2013: 100,000,000) 8%
Compulsorily redeemable preference shares of
Rs. 10/- each fully paid up (refer note a)
50,315.00
50,315.00
3,726.30
3,726.30
670.00
1,000.00
4,396.30
4,726.30
a
Above preference shares are redeemable at premium over the period of 5 years, starting from end of the 3rd year from the
date of allotment.
b
The company has only one class of equity shares having a par value of Rs 10/- per share. The holders of equity shares are
entitled to receive dividend as declared from time to time and are entitled to voting rights proportionate to their
shareholding at the meeting of shareholders.
ANNUAL REPORT 2013 - 2014 91
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
c
Equity Shares held by holding company and its subsidiaries
Particulars
As at
31 March 2014
31 March 2013
Holding company
No of shares held
% of shares held
Subsidiaries of holding company
No of shares held
% of shares held
191,222,031
191,222,031
51.32%
51.32%
88,010,646
23.62%
88,010,646
23.62%
d
Particulars of the shareholders holding more than 5% of the shares
Name of the shareholder
As at
31 March 2014
31 March 2013
Equity shares fully paid up
KSK Energy Limited
No of shares held
% of shares held
KSK Energy Company Private Limited
No of shares held
% of shares held
LB Group
No of shares held
% of shares held
8% Compulsorily redeemable preference shares fully paid up
L & T Infrastructure Finance Company Limited
No of shares held
% of shares held
e
Reconciliation of number of shares outstanding
191,222,031
191,222,031
51.32%
51.32%
79,345,007
21.29%
79,345,007
21.29%
18,500,000
20,828,534
4.96%
5.59%
67,000,000
100.00%
100,000,000
100.00%
Particulars
As at
31 March 2014
31 March 2013
8% Compulsorily redeemable preference shares
Outstanding at the beginning of the year
Redeemed during the year
Outstanding at the end of the year
100.00
33.00
67.00
100.00
-
100.00
92
KSK ENERGY VENTURES LIMITED
5 Reserves and Surplus
Capital redemption reserve
Opening balance
Add: Transferred from surplus
Securities premium
Opening balance
Less: Premium on redemption of preference shares
Foreign currency translation reserve
Opening balance
Add: Movement during the year
Surplus
Opening balance
Add: (Loss) / profit for the year
Amount available for appropriations
Approprations
Transfer to capital redemption reserve
Preference dividend
Dividend distribution tax
Balance
6 Minority Interest
Minority interest
Preference share capital in JV entities held by others
Share application money in subsidiaries held by others
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
As at
31 March 2014
31 March 2013
-
330.00
330.00
18,739.90
57.86
18,682.04
(1.61)
0.95
(0.66)
8,552.57
(1,628.89)
6,923.68
330.00
79.78
13.69
423.47
6,500.21
25,511.59
-
-
-
18,739.90
-
18,739.90
(0.07)
(1.54)
(1.61)
7,139.75
1,505.80
8,645.55
-
80.00
12.98
92.98
8,552.57
27,290.86
As at
31 March 2014
31 March 2013
6,774.80
35.20
0.13
6,810.13
6,587.19
35.20
112.79
6,735.18
ANNUAL REPORT 2013 - 2014 93
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
7 Borrowings
Long-term borrowings
Secured
Debentures
Term loans *
Rupee loans from banks **
Rupee loans from others
Foreign currency loans
Hire purchase loans
Unsecured
Debentures
Deferred payment liabilities
Short-term borrowings
Secured
Loans repayable on demand
From banks
Foreign currency loans
Loans against letters of credit
Loan against deposit
Unsecured
Loans repayable on demand
From related parties
From others
As at
31 March 2014
31 March 2013
640.00
-
64,837.29
30,466.86
20,696.25
-
210.00
230.00
52,697.91
31,689.09
28,070.92
1.36
-
230.00
117,080.40
112,689.28
4,742.75
2,405.31
4,748.00
4,383.55
1,490.79
761.58
18,531.98
135,612.38
4,025.32
1,497.77
2,145.92
7,586.20
418.09
1.58
15,674.88
128,364.16
*
Term loans includes an amount of Rs 8,431.15 in KSK Mahanadi Power Company Limited which is schedule for repayment
during financial year 2014-15.The Company has made an application for overrun and also for deferment of repayment
schedule with the lenders and is pending.
In the opinion of the Company, it will get a favourable response and hence,
pending outcome of the same, the above referred amount is classified under long term borrowings.
** Out of the above Rupee term loans from banks, amount of Rs 1,400.43 is guaranteed by KSK Power Ventur plc., the stepup
holding company.
94
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
a Details of security provided for various credit facilities
KSK Energy Ventures Limited
Rupee term loans from banks are secured by first pari-passu charge on fixed assets, current assets and corporate
guarantee of KSK Power Venture plc and KSK Wind Energy Private Limited.
Sai Wardha Power Limited (formerly known as Wardha Power Company Limited)
Rupee term loans from banks and others and long term foreign currency loans are secured by first charge pari-passu by
way of mortgage on the Company's immovable properties and hypothecation of whole of the movable properties, both
present and future. Pledge of certain equity shares of the Company held by KSK Electricity Financing India Private Limited.
Loan repayable on demand are secured by first pari-passu charge on all fixed and current assets of the Company (existing
and future) along with the other member banks/ financial institutions.
Foreign currency loans and loans against letter of credit are secured by subservient charges on the entire movable fixed
and current assets of the company and secured by letter of credit facility sanctioned to KSK Energy Ventures Limited.
Sitapuram Power Limited
Rupee term loan from bank is secured by first charge on all immovable and movable assets including current assets, both
present and future. Pledge of certain equity and preference shares of the company held by KSK Electricity Financing India
Private Limited.
Loans repayable on demand are secured by first charge on entire block of assets.
VS Lignite Power Private Limited
Rupee term loans from banks and others are secured by first charge pari-passu by way of mortgage on all the company's
immovable properties and hypothecation of whole of the movable properties both present and future. Pledge of certain
equity shares of the company held by KSK Electricity Financing India Private Limited. Corporate guarantee given KSK
Energy Ventures Limited
Loans repayable on demand are secured by pari-passu first charge on fixed assets and current assets along with term
lenders.
Debentures are secured by way of mortgage of company’s land and pledge of certain equity shares of VS Lignite Power
Private Limited, KSK Mineral Resources Private Limited and Sai Wardha Power Limited (formerly known as Wardha Power
Company Limited).
KSK Dibbin Hydro Power Private Limited
Hire purchase loan is secured by pledge of equipment purchased.
ANNUAL REPORT 2013 - 2014 95
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
Arasmeta Captive Power Company Private Limited
Rupee term loans from banks and others are secured by first charge pari-passu by way of mortgage on all the Company's
immovable properties including leasehold land and freehold land and hypothecation of whole of the movable fixed assets
and current assets both present and future. Pledge of certain fully paid up equity shares of the Company held by KSK
Electricity Financing India Private Limited.
Loans repayable on demand are secured by pari-passu first charge on all the Company's immovable properties and
hypothecation of all the Company's movables fixed assets and current assets both present and future.
KSK Mahanadi Power Company Limited
Rupee term loans, foreign currency loans and loans against letter of credit and cash credit are secured by first charge over
all movable properties, intangible assets and other assets (including assignment of rights, titles, interests, benefits, claims
etc.) of the company both present and future. Further guaranteed by pledge of certain equity shares of the company held
by KSK Energy Ventures Limited.
Rupee sub debt loans are secured by second charge over all movable properties, intangible assets and other assets
(including assignment of rights, titles, interests, benefits, claims etc.) of the company both present and future. Further
guaranteed by pledge of certain equity shares of the company held by KSK Energy Ventures Limited.
Sai Regency Power Corporation Private Limited
Rupee term loans from banks are secured by first charge pari-passu by way of mortgage on all company's immovable
properties and hypothecation of movable properties. First charge on the wind project assets of the company. Pledge of
certain equity shares of the company held by KSK Electricity Financing India Private Limited.
Loans repayable on demand are secured by first pari-passu charge on the entire current assets of the company.
Sai Maithili Power Company Private Limited
Rupee term loan from banks are secured by way of mortgage on all the Company's immovable properties including land
and hypothecation of whole of the movable fixed assets and current assets both present and future. Pledge of shares of at
least 30% of the total equity shareholding. Corporate guarantee of KSK Energy Ventures Limited and VS Lignite Power
Private Limited
b
Loan against deposits are secured by pledge of deposits.
96
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
c
Repayment terms of long-term borrowings
S No
Name of
the Company
Amount outstanding
included in
Long term
Other
Repayment terms
borrowings
current
liability
Debentures
1
VS Lignite Power Private Limited
640.00
2
KSK Wind Energy Private Limited
210.00
-
-
The debentures are repayable in structured
annual repayments with the last instalment
payable by Mar 2025. The debenture carries an
internal rate of return of 15% p.a
The debentures are optionally convertible into
equity shares of Rs 10 /- each after five years
and redeemable at the end of
ten years from
the date of allotment. The coupon rate of
interest is 0.01% p.a.
Term loan
1
KSK Energy Ventures Limited
-
1,400.43
The long term Rupee loans are repayable in half
yearly instalments with the last instalment of
respective loans are payable by Dec 2014 The
long term borrowings carries an weighted
average rate of interest of 14.42 % p.a
2
Sai Wardha Power Limited (formerly
3,255.00
617.50
The long term Rupee loans are repayable in
known as Wardha Power Company
Limited)
quarterly instalments with the last instalment
of respective loans are payable from Jun 2020
to Sep 2022. These loans carry a weighted
average interest rate of 13.32% p.a.
3
Sitapuram Power Limited
431.20
53.90
The long term Rupee loan is repayable in
quarterly instalments with the last instalment of
the loan is payable by Mar 2023. This loan
carries a weighted average interest rate of
12.54% p.a
4
VS Lignite Power Private Limited
4,388.72
529.67
The long term Rupee loans are repayable in
quarterly instalments with the last instalment of
respective loans are payable from Nov 2020 to
May 2024. These loans carry a weighted
average interest rate of 13.05% p.a.
ANNUAL REPORT 2013 - 2014 97
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
S No
Name of
the Company
Amount outstanding
included in
Long term
Other
Repayment terms
borrowings
current
liability
5
Arasmeta Captive Power
1,078.00
176.00
The long term Rupee loans are repayable in
Company Private Limited
quarterly instalments
with the last instalment
of respective loans are payable from Dec 2020
to Apr 2021. These loans carry a weighted
average interest rate of 13.10% p.a
6
Sai Regency Power Corporation
1,815.22
563.66
The long term Rupee loans are repayable in
Private Limited
quarterly instalments with the last instalment of
respective loans are payable from Sep 2020 to
Jun 2023. These loans carry a weighted average
interest rate of 12.66% p.a.
7
KSK Mahanadi Power Company
84,212.98
-
The long term Rupee loans are repayable in
Limited
quarterly instalments with the last instalment of
respective loans are payable from Sep 2024 to
Apr 2026. These loans carry a weighted average
interest rate of 14.48% p a.
8
Sai Maithili Power Company
123.03
50.40
The long term Rupee loan is repayable by Nov
Private Limited
Foreign currency loans
2025, in quarterly instalments. The long term
borrowings carries an weighted average rate of
interest of 14.33 % p.a
1
Sai Wardha Power Limited
14,965.75
2,394.52
The long term foreign currency loans are
(formerly known as Wardha Power
Company Limited)
repayable in half yearly instalments beginning
from November 2018 with the last instalment
payable by Aug 2021. The long term foreign
currency loans carry a weighted average
interest rate of 5.79% p.a.
2
KSK Mahanadi Power
5,730.50
9,945.26
The foreign currency loans are repayable over
Company Limited
the period of one year with an option to roll
over upto three years from the initial date of
availment and the weighted average interest
rate is around 1.50%. p.a
98
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
S No
Name of
the Company
Amount outstanding
included in
Long term
Other
Repayment terms
borrowings
current
liability
Hire purchase loans
1
KSK Dibbin Hydro Power
-
0.92
The hire purchase loan is repayable by Jun 2014
Private Limited
Deferred payment liabilities:
in monthly instalments.
1
KSK Energy Ventures Limited
230.00
-
Deferred payment liability are repayable in Mar
2018.
8 Deferred tax liability / (assets)
Deferred tax liability on account of depreciation
Deferred tax (asset) on account of carry forward of losses
Deferred tax liabilities/(asset) on expenses allowed/disallowed
As at
31 March 2014
31 March 2013
2,129.85
(5,497.82)
113.12
1,583.24
(3,266.31)
(0.51)
Deferred tax (assets), net as at the end of the year
(3,254.85)
(1,683.58)
Certain group companies are entitled to avail exemption under section 80IA of the Income Tax Act, 1961 from income tax on
profits of business. Based on the assessment of the Company, deferred tax as on 31 March 2014 has been recognized only to
the extent the timing differences arising in the current period which does not get reversed within the tax holiday period.
9 Other long term liabilities
Creditor for capital goods (including retention money)
Security deposit from customers
Other liabilities
As at
31 March 2014
31 March 2013
2,938.77
131.53
1,284.91
4,355.21
3,109.83
161.82
-
3,271.65
ANNUAL REPORT 2013 - 2014 99
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
10 Trade payable
Dues to other than micro and small enterprises
As at
31 March 2014
31 March 2013
5,243.76
5,243.76
2,163.39
2,163.39
As at 31 March 2014 (31 March 2013: Nil) there are no amounts including interest payable to Micro and Small enterprises as
defined under Micro, Small and Medium Enterprises Development Act, 2006, based on the information available with the
Company.
11 Provisions
Long-term provisions
For employee benefits (refer note a)
Short-term provisions
For dividend and tax thereon
For taxation (net of advance tax) (refer note b)
For provision for mark to market loss on derivative instruments
As at
31 March 2014
31 March 2013
23.61
23.61
19.23
93.24
62.56
175.03
198.64
51.14
51.14
19.36
73.49
-
92.85
143.99
a.
Employee benefit plans : The Company has a defined benefit gratuity plan. Every employee who has completed five years
or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The
scheme is funded with an insurance company in the form of a qualifying insurance policy.
The following table sets out the status of the gratuity plan as required under AS 15 (Revised)
Reconciliation of opening and closing balances of the present value of the defined benefit obligation
Benefit obligation at the beginning of the year
Interest cost
Current Service cost
Benefits paid
Actuarial (gain) / loss
Benefit obligation at the end of the year
100
KSK ENERGY VENTURES LIMITED
As at
31 March 2014
31 March 2013
92.16
7.26
23.49
(4.18)
(49.08)
69.65
83.20
6.63
33.45
(0.64)
(30.48)
92.16
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Change in the fair value of assets
Fair value of plan assets at the beginning of the year
Expected return on plan assets
Contributions
Benefits paid
Actuarial gains/(loss)
Fair value of plan assets at the end of the year
Experience history
As at
31 March 2014
31 March 2013
44.15
3.92
5.55
(4.18)
0.07
49.51
33.66
3.36
7.56
(0.64)
0.21
44.15
31 March 2014
31 March 2013
31 March 2012
31 March 2011
Year ended
Actuarial (gain) / losses
(49.15)
(30.69)
(18.48)
(12.74)
Experience adjustment
On account of change in assumption
(44.23)
On account of change in experience
On plan assets
(4.85)
(0.07)
(0.92)
(29.56)
(0.21)
2.27
(20.57)
(0.18)
(1.36)
(11.62)
0.24
Amount recognised in the statement of Profit and Loss
Current service cost
Interest cost
Past service cost- (non vested benefits)
Expected return on plan assets
Net actuarial (Gain) / loss recognised in the year
Amount included in personnel expense / other income
Amount recognized in the Balance Sheet
Present value of funded obligations at the end of the year
Fair value on plan assets at the end of the year
Funded status
Net (liability) / asset recognised in the Balance Sheet
Year ended
31 March 2014
31 March 2013
23.49
7.26
-
(3.92)
(49.15)
(22.32)
33.45
6.63
3.94
(3.36)
(30.69)
9.97
As at
31 March 2014
31 March 2013
69.65
49.51
(20.14)
(20.14)
92.16
44.15
(48.01)
(48.01)
ANNUAL REPORT 2013 - 2014 101
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
Asset information
Category of Assets
As at
31 March 2014
31 March 2013
Insurer managed funds
100%
100%
Summary of actuarial assumptions
Discount rate
Salary escalation
Attrition rate
Expected return on plan assets
Period ended
31 March 2014
31 March 2013
8.75%
10.00%
15.00%
8.75%
8.06%
15.00%
15.00%
9.00%
Discount rate
: The discount rate is based on the prevailing market yields of Indian government securities as at the balance
sheet date for the estimated term of the obligations
Expected rate of return on plan assets
: This is based on the expectation of the average long term rate of return expected on
investments of the fund during the estimated term of the obligations.
b
Income taxes
: Certain Group company’s income from sale of electrical energy is exempt from tax under section 80 IA of
the Income Tax Act, 1961. Provision for current tax for the year in these companies represents tax payable on account of
MAT under section 115JB of the Income Tax Act, 1961 on the book profit.
12 Other current liabilities
Current maturities of long-term debt
Interest accrued but not due on borrowings
Interest accrued and due on borrowings
Security deposit from customers
Salary and bonus payable
Share application money in subsidiary held by others
Creditor for capital goods (including retention money)
Forward cover payable
Derivative liabilities
Statutory liabilities
Advance received against sale of assets
Other liabilities
102
KSK ENERGY VENTURES LIMITED
As at
31 March 2014
31 March 2013
15,732.26
719.64
2,748.55
37.58
146.89
2,063.20
13,236.71
57.71
26.14
398.61
708.00
182.52
7,396.24
503.69
444.77
37.58
68.21
182.40
19,867.88
-
-
308.02
-
-
36,057.81
28,808.79
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
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ANNUAL REPORT 2013 - 2014 103
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
14 Investments
Non-current investments
Trade investment
Investment in equity instruments
(quoted, fully paid up)
As at
31 March 2014
31 March 2013
364,418 (31 March 2013: 364,418) equity shares of
55.81
55.81
Rs. 10/- each in Thiru Arooran Sugars Limited
(unquoted, fully paid up )
3,636,363 (31 March 2013: 3,636,363) equity shares of
160.00
160.00
Rs. 10/- each in Terra Energy Limited
215.81
215.81
Current investments
Other investment
Investment in mutual fund
(quoted, fully paid up)
Nil (31 March 2013: 101,247.072 @ Rs.1,000.25/-)
units each in IDFC Cash Fund - Daily Dividend -Direct plan
Nil (31 March 2013: 6,024,979.585) units of Rs.10.0125/-
each
in IDFC Ultra Short Term Fund - Daily Dividend -(Direct Plan)
Nil (31 March 2013: 28,701.728 @ Rs.16.1653/-) units each in
IDFC Ultra Short Term Fund - Growth -(Direct Plan)
Nil (31 March 2013: 4,989.846 ) units of Rs. 2,004.07/-
each in
SBI Magnum Insta Cash Fund Liquid Floater-Regular Plan-Growth
-
-
-
-
-
215.81
101.27
60.33
0.46
10.00
172.06
387.87
Aggregate Market value of quoted investment as at 31 March 2014: Rs. 24.42 (31 March 2013: Rs. 193.98)
15 Loans and advances
Long-term loans and advances
Secured, considered good
Capital advances
104
KSK ENERGY VENTURES LIMITED
As at
31 March 2014
31 March 2013
1,431.53
9,610.46
Unsecured, considered good
Capital advances
Security deposits
Prepaid expenses
Advance for investment
related parties
Others
Advance tax and TDS receivable (net of provision for tax)
Short-term loans and advances
Unsecured, considered good
Inter corporate deposit
related parties
Others
Advance for supplies / expenses
Prepaid expenses
Other receivables
related parties
Others
Security deposit
related parties
Others
Unsecured, Doubtful
Other receivables
Less: Provision for doubtful advances
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
As at
31 March 2014
31 March 2013
4,008.67
1,143.89
118.78
611.60
79.61
670.38
1,470.05
380.93
12.92
-
79.61
567.01
8,064.46
12,120.98
866.71
514.01
523.20
384.56
15.97
2,443.18
4,202.03
1,547.61
134.54
(134.54)
10,497.27
18,561.73
922.75
779.01
470.48
493.30
667.76
1,674.90
3,111.94
415.16
134.54
(134.54)
8,535.30
20,656.28
Other receivables includes an amount of Rs. 21.69 i.e. group share of 49% of Rs. 44.27 in Sitapuram Power Limited (“Joint
venture entity”), which represents penal demand charges levied by Andhra Pradesh Southern Power Distribution Company Ltd
(“SPDCL”) towards temporary outage of the generating plant on Zuari Cement Limited (ZCL), the captive consumer, which has
been passed on to the Company. The Company has contended the basis for the charges levied by SPDCL and along with the
captive consumer has filed a writ petition before High Court of Andhra Pradesh dated 22 April 2013 to issue an order / direction
to SPDCL to refund the amount along with interest, against which Honourable Court has passed an interim directions to adjust
the amounts from monthly electricity bills payable to SPDCL.
ANNUAL REPORT 2013 - 2014 105
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
16 Other assets
Other non-current assets
Unsecured, considered good
Trade receivables
Mat credit entitlement
Balances with banks;
Deposits held as margin money or security
against guarantees or borrowings
Interest accrued on deposits and advances
Unammortised portion of ancillary cost of arranging the borrowings
Derivative asset
Other current assets
Unsecured, considered good
Interest accrued on deposits and advances
Unbilled revenue
Balances with statutory authorities
Unammortised portion of ancillary cost of arranging the borrowings
Forward cover receivable
Deferred premium on forward contract
17 Inventories
(At lower of cost or net realisable value)
Fuel
Coal
Coal - in - transit
Lignite
Lime Stone
Stores and spares
Stores and spares-in-transit
106
KSK ENERGY VENTURES LIMITED
As at
31 March 2014
31 March 2013
230.00
546.55
657.58
34.75
505.22
1,175.67
3,149.77
675.17
27.03
1,135.47
78.64
53.77
0.70
1,970.78
5,120.55
230.00
453.23
1,684.44
185.14
-
-
2,552.81
775.86
23.33
782.60
-
-
-
1,581.79
4,134.60
As at
31 March 2014
31 March 2013
188.68
211.91
12.46
2.02
1,072.67
5.78
1,493.52
350.99
113.90
14.29
2.05
1,016.75
12.73
1,510.71
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
18 Trade receivables
Secured, considered good
Debts outstanding for a period exceeding six months
Other debts
Unsecured, considered good
Debts outstanding for a period exceeding six months
Other debts
Unsecured, considered doubtful
Debts outstanding for a period exceeding six months
Provision for doubtful debts
As at
31 March 2014
31 March 2013
812.04
3,925.56
2,689.61
1,774.31
88.80
(88.80)
9,201.52
489.96
1,114.95
1,281.08
2,711.09
88.80
(88.80)
5,597.08
As per the terms of the Power Purchase Agreement (‘PPA’) entered in between by various subsidiaries (hereinafter referred to
as ‘SPVs’) and captive consumers (hereinafter referred to as ‘Customers’), they are required to carry out an annual
reconciliation of the energy supplied / taken against the minimum guaranteed units as per PPA, any excess or shortfall of the
customer’s take or pay obligations or SPV’s supply or pay obligations and various debit and credit notes raised by either of the
parties. The reconciliation is currently under progress and the management is confident that the entire amount outstanding is
recoverable and also it will not result in any claims against the Group.
19 Cash and bank balances
Cash and cash equivalents
Cash on hand
Balances with banks;
On current account
On deposit account
Other bank balances
Deposits with bank held as margin money or
security against guarantees or borrowings
Deposit having maturity of more than three months
As at
31 March 2014
31 March 2013
3.57
24.38
1,719.02
7.20
1,729.79
1,200.22
216.23
1,440.83
6,850.44
12,708.34
112.99
6,963.43
8,693.22
507.30
13,215.64
14,656.47
ANNUAL REPORT 2013 - 2014 107
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
20 Revenue from operations
Sale of electricity
Project development fees
Corporate support service fees
Other operating income
21 Other Income
Interest income
Dividend income
Net gain on sale of current investments
Profit on sale of fixed assets, net
Insurance claim received
Miscellaneous income
22 Cost of fuel consumed
Coal
Lignite
Natural gas
Others
23 Manufacturing expenses
Consumption of stores and spares
Operation and maintenance expenses
Cost of import power
Raw water charges
Repairs and maintenance - plant and equipment
108
KSK ENERGY VENTURES LIMITED
Year ended
31 March 2014
31 March 2013
20,993.40
21,910.62
67.46
46.69
10.46
123.75
2.19
33.64
21,118.01
22,070.20
Year ended
31 March 2014
31 March 2013
966.79
0.90
0.12
26.14
353.49
18.08
1,365.52
980.73
1.28
3.41
-
-
21.54
1,006.96
Year ended
31 March 2014
31 March 2013
9,885.47
802.14
1,098.97
192.20
8,804.05
738.73
953.29
199.57
11,978.78
10,695.64
Year ended
31 March 2014
31 March 2013
292.22
827.52
96.90
280.48
25.38
305.47
645.78
80.52
239.66
43.07
1,522.50
1,314.50
24 Employee benefit expenses
Salaries, wages and bonus
Contribution to provident and other funds
Staff welfare expenses
25 Other expenses
Rent
Rates and taxes
Communication expenses
Travel and conveyance
Insurance charges
Legal and professional charges
Generation, transmission and selling expenses
Remuneration to auditors
Repairs and maintenance
building
others
Bad debts / receivables written off
Provision for doubtful debts / receivables
Donation
Freight outward
Foreign exchange loss, net
Loss on sale of fixed assets
Miscellaneous expenses
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Year ended
31 March 2014
31 March 2013
436.91
5.85
20.66
463.42
399.80
13.79
18.06
431.65
Year ended
31 March 2014
31 March 2013
32.81
21.97
14.62
42.77
99.23
164.64
895.42
6.78
3.65
73.37
21.17
-
9.06
127.89
160.22
-
107.92
1,781.52
26.39
23.76
14.02
37.35
76.01
137.81
528.32
5.34
8.54
66.28
6.00
228.37
17.54
91.70
70.26
24.71
82.06
1,444.46
ANNUAL REPORT 2013 - 2014 109
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
26 Finance costs
Interest expense
Other borrowing cost
Derivative premium
Loss on derivatives / swap contracts
Year ended
31 March 2014
31 March 2013
6,107.77
783.71
262.08
62.56
5,693.10
324.57
-
-
7,216.12
6,017.67
The borrowing cost attributable to the acquisition or construction of fixed assets amounting to Rs.10,970.01 (31 March 2013:
Rs. 8,662.14) has been capitalised.
27. Contingent liabilities and Commitments
a
Contingent liabilities (Group's share)
(i) Bank guarantees outstanding
(ii) Corporate guarantees outstanding
As at
31 March 2014
31 March 2013
11.41
9,195.51
9.41
8,278.25
(iii) Claims against the Group not acknowledged as debt Rs. 593.30 (31 March 2013: Rs.503.61).
(iv) The Group has received claims for Rs. 652.87 (31 March 2013: Rs. 652.87) from Joint Director General of Foreign Trade
(JDGFT) towards the recovery of the duty drawbacks, earlier refunded. The company had earlier made claims for the refund
of the duties paid on the machinery and other items purchased for the construction of the power projects under the
scheme of deemed export benefit, which were accepted and refunds were granted. The communication from the JDGFT
regarding the recovery of the duties paid are based on the interpretations by the Policy Interpretation Committee held on
15 March 2011.The company contends that the above change in interpretation requires an amendment to the foreign
trade policy to be legally enforceable in law. The relevant amendments has now been incorporated in the policy. Since the
amendments made shall have prospective effect only, the company believes that outcome of the above dispute should be
in favour of the company and there should be no material impact on the financial statements.
(v) The Company has received a net demand of Rs. 280.30 (31 March 2013 :Rs 280.30) (including interest) from income tax
department for Assessment Year 2010-11 pursuant to disallowance of certain claims / expenses. Challenging the order,
Company preferred an appeal before CIT (appeals). Further, an amount of Rs. 114.85 has been paid against the demand,
under protest, and the CIT granted stay of collection of tax till September 2014. The Company believes that all the claims /
expenses claimed are allowable as per the provision of income tax act and the demand raised is not tenable and there
should not be any material impact on the financial statement.
(vi) Sai Wardha Power Limited (SWPL) filed a claim against Maharashtra State Electricity Distribution Company Limited
(‘MSEDCL’) towards recovery of the amount withheld against supply of energy under Power Purchase Agreement
110
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
(including penalty on such amount) amounting to Rs. 684. The facility required for generation of an agreed quantum of
power, this was not ready as per an agreed schedule on account of unexpected factors beyond the control of the Group,
the Group proposed to MSEDCL an arrangement to secure the energy from alternate supplies for the short quantity
required to meet the obligation under the power purchase agreement. MSEDCL accepted the proposal and also
confirmed that the energy supplied from alternate sources will also be subject to the tariff agreed under the power
purchase agreement. However, after initial payments for the period April to June 2010, starting July 2010 to October 2010,
MSEDCL did not settle the entire dues billed and the certain amounts were withheld without any explanation. The Group
contended before Maharashtra Electricity Regulatory Commission (“MERC”) that since the energy supplied and billed was
as per the terms agreed and the similar bills of earlier months were paid by MSEDCL, there is no cause to withhold the
payments. However, MERC has dismissed the petition. The group has filed an appeal before Appellate Tribunal for
Electricity (APTEL) against the order of MERC and APTEL also rejected the appeal. The Group has further filed an appeal
before Honourable Supreme Court of India. Pending adjudication, the Group believes that the final outcome of the above
dispute should be in favour of the Group and there should be no material impact on the financial statements.
(vii) SWPL has recognised an amount of Rs. 1,504 out of the total claim amount of Rs. 3,768 relating to quality and price claims
made by the Group on Western Coalfields Limited (‘WCL’) the coal supplier which was rejected by latter. Aggrieved by the
same, the Group has filed petition with Competition Commission of India (‘CCI’), relating to abuse of dominant position by
WCL and Coal India Limited (CIL). The abuse relates to Pricing of Coal under the Coal Supply Agreement and supply of
lower quality coal during the financial years 2012-13 and 2013-14. Having found prima facie case of abuse by WCL and CIL,
the Commission, on 22nd January, 2014, ordered an investigation by the Director General. The investigation by the office
of the Director General is presently underway. Pending the final investigation report and order in this regard by CCI, the
Group has continued to recognise the above said amount in respect of quality claim as receivable from WCL.
(viii) Reliance Infrastructure Limited (‘RIL’) has deducted an amount of Rs. 893 from the various invoices raised by SWPL on
account of capacity charges. As per Group,
if availability on a cumulative basis is greater than 75%, then RIL has no cause
for recovery of any capacity charge from the invoices whereas the RIL’s contention is that on supply of 85 % of Contracted
Capacity SWPL shall not be permitted to recover full capacity charges. Hence, the Group has preferred an appeal before
Maharashtra Electricity Regulatory Commission (“MERC”) and MERC in its order directed RIL to remit the entire amount
deducted, as the same were not in accordance with the PPA. MERC also gave the methodology for proportionate
reduction in case of a future shortfall in Plant Availability. However RIL has preferred an appeal before APTEL against the
order of MERC and also prayed for stay of the order. Pending outcome of the same, the Group has continued to show the
entire amount as receivable from RIL.
(ix) Other current assets include an amount of Rs. 1,114 relating to Central Excise, VAT and Service Tax receivable from the
respective departments by SWPL. The SWPL is registered as SEZ unit. A unit in SEZ is allowed to import goods (purchase
from local market is also treated as import) without payment of Duty for the purpose of its authorised operations. The
exemption from the payment of duties and taxes are provided under Section 26 of the SEZ Act, 2005. In respect of Service
Tax, the entire refund claim filed till date are pending before CESTAT. In one of our earlier refund claim for the period
March 2009 to June 2009, the CESTAT has already given a favourable order and thus we are confident of getting a
favourable order from CESTAT. In respect of VAT claims Group has already received a refund for the financial year ending
2008 and 2009 and the Group is confident to receive the refund for the remaining years as well. However, the excise duty
ANNUAL REPORT 2013 - 2014 111
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
refund claims were rejected by the department stating that there are no provision of refund under the SEZ Act to the
Group and the refund if any can be permissible to WCL, the supplier of coal. However the Group has obtained a legal
opinion from a reputed lawyer stating that the refund can be processed to the Group since the Group has born the duty
burden and accordingly the Group is very confident that the entire amount is receivable.
(x) MSEDCL imposed Cross Subsidy Surcharge of Rs. 1,237 on the captive users of SWPL which was against the express
provisions of the Electricity Act 2003 read with the Electricity Rules, 2005. This arbitrary act of MSEDCL was challenged
before the MERC, however, MERC asked Group to pay Cross Subsidy Surcharge on account of not fulfilling the conditions
of 51% supply to captive users as per Rule 3 of the Electricity Rules 2005 for the FY 2012-13. Aggrieved by the said order of
the MERC, SWPL has filed an appeal before the APTEL. In the view of the Group, MSEDCL ought to have been considered as
a factor for non-fulfilment of eligibility criteria as per Electricity Rules, 2005. There could not have been any directions upon
Group to be liable for payment of cross subsidy surcharge for the FY 2012-13, since in the event the delay caused by
MSEDCL in granting open access to captive customers had not occurred, SWPL would have complied with the above said
criteria. In view of the above, the Group believes that there is a good chance of succeeding before the APTEL and hence no
adjustment has been made in the financial statements.
(xi) KMCPL has levied capacity charges and transmission charges to AP Discoms for the period from 16th June, 2013 to 13th
August, 2013 amounting to Rs. 873, on account of delayed fulfilment of obligation under the PPA. AP Discoms have
rejected those claims and made the counter claim of Rs. 236 for failure to furnish advance final written notice of
commencement of supply of power as per article 4.1.2 of PPA. The Group has preferred an appeal before APERC for refund
of amount collected by AP Discoms by encashment of bank guarantee. The Group’s contention is that since the AP
Discoms have failed to fulfil the obligation as per PPA, there is default on part of AP Discoms and the counter claim by AP
Discoms is merely to negate the effect of KMPCL claim of capacity charges. Hence, the Group is confident that the final
outcome of the case would be in favour of the Group only. Hence the amount is continued to be recognised as receivables
in the books of account.
(xii) KMPCL has levied claim for change in law on AP Discoms amounting to Rs. 2,495 as per Article 10 of the PPA which was
rejected by the later. Aggrieved by the same the Group has preferred an appeal before Andhra Pradesh Electricity
Regulatory Commission (“APERC”) contending that subsequent to execution of the PPA, the Government of India by
Presidential Directive amended the coal policy. As per the coal policy existing prior to 17 July 2013, there was no restriction
or provision in regard to the nature of the PPA’s to be entered into by persons to whom tapering linkages were granted.
However, the Presidential Directive restricted the supply of coal to tapering linkages to only when there is a long term PPA.
Further, the presidential directive, directs Coal India Limited to enter Fuel Supply Agreement (FSA) for domestic coal of
65% of Annual Contracted Quantity only for the power plants having normal coal linkages and meet the balance FSA
obligation by imported coal on a cost plus basis. Accordingly the Group has recognised only Rs. 873 out of the total claim
of Rs. 2,495 in books of accounts on a conservative basis. However, pending outcome of the case, the Group is confident
the entire amount claimed is fully recoverable.
(xiii) Service tax department has issued demand order to the Company for payment of service tax amounting to Rs 505.64
(including penalty) relating to the disagreement on availment of Cenvat Credit for the period April 2008 to September
2010 and non -payment of service tax. Further, an amount of Rs. 25.88 has been paid against the demand and the balance
demand is stayed. However, the Company believes that the claims raised by the department are not tenable and the
Company has filed an appeal against the said order before the CESTAT.
112
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
b
Estimated amount of contracts remaining to be executed on capital account and not provided for in the
Company, its Subsidiaries and Joint Ventures: (Group's share)
Estimated value of contracts remaining to be executed on capital
59,098.00
57,809.76
As at
31 March 2014
31 March 2013
account not provided for
28 Jointly Controlled Entities
Proportionate consolidation of interests
The Company has a 49% interest in Sitapuram Power Limited, a Joint Venture (JV) in India. Sitapuram Power Limited (“the
Company”) was incorporated on 18 July 2005 and is engaged in the business of generation of electricity. The Company was set
up as a special purpose entity by Zuari Cement Limited and KSK Energy Ventures Limited to build and operate a 43 MW captive
power plant in Sitapuram to cater to the power requirements of Zuari Cement Limited.
The Group has, in accordance with AS 27 “Financial Reporting of Interest in Joint Ventures” issued by the ICAI, accounted for its
49% interest in the JV by the proportionate consolidation method. Thus the Group’s Income Statement, Balance Sheet and
Cash Flow Statement incorporate the Group’s share of income, expenses, assets, liabilities and cash flows of the JV on a line-by-
line basis.
The aggregate amount of the assets, liabilities, income and expenses related to the Group’s share in the JV included in these
financial statements, as at and for the period ended 31 March 2014 are given below
LIABILITIES
Non-current liabilities
Long-term borrowings
Deferred tax liabilities (net)
Long-term provisions
Current liabilities
Short-term borrowings
Trade payables
Other current liabilities
Short-term provisions
As at
31 March 2014
31 March 2013
431.20
60.83
0.42
492.45
67.01
81.45
58.36
11.35
218.17
710.62
485.10
49.80
0.84
535.74
75.28
39.53
167.49
12.14
294.44
830.18
ANNUAL REPORT 2013 - 2014 113
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
ASSETS
Non-current assets
Fixed assets
Tangible assets
Intangible assets
Capital work in progress
Intangible assets under development
Long-term loans and advances
Other non-current assets
Current assets
Inventories
Trade receivables
Cash and bank balances
Short-term loans and advances
Other current assets
As at
31 March 2014
31 March 2013
650.28
0.66
0.84
1.20
2.25
94.87
750.10
45.65
266.03
12.34
149.01
17.75
693.92
1.26
-
-
1.93
79.42
776.53
49.53
199.50
145.62
121.00
16.99
490.78
1,240.88
532.64
1,309.17
As at
31 March 2014
31 March 2013
Claims against the Company not acknowledged as debt
4.45
4.45
114
KSK ENERGY VENTURES LIMITED
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Year ended
31 March 2014
31 March 2013
812.45
4.27
552.61
42.50
11.30
27.48
75.13
45.49
62.21
13.38
(0.05)
(13.40)
11.02
51.26
835.54
0.23
530.99
38.90
11.09
36.80
82.39
45.38
90.22
18.04
0.30
(18.27)
8.26
81.89
Income
Revenue from operations
Other Income
Expenses
Cost of fuel consumed
Manufacturing expenses
Employee benefits expenses
Other expenses
Finance costs
Depreciation and amortisation expenses
Profit before tax
Provision for tax
Current tax
For the year
In respect of earlier years
Less : MAT credit entitlement
Deferred tax
Profit after tax
29 Operating Leases
The Consolidated entities have entered into certain operating lease agreements. An amount of Rs. 59.79 (31 March 2013: Rs.
72.04) paid under such agreements has been disclosed as “Rent” under other expenses in the Consolidated Profit and Loss
statement and expenditure during construction period, pending allocation.
The schedule of future minimum rental payments in respect of non-cancelable operating leases is set out below:
Lease Obligations
Within one year of the Balance Sheet date
Due between one to five years
As at
31 March 2014
31 March 2013
10.00
39.17
0.47
-
ANNUAL REPORT 2013 - 2014 115
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
30 Earnings/(loss) per Share (EPS)
The computation of EPS as per AS 20 is set out below
Net profit / (loss) after tax and minority interest
Less: Preference dividend and tax thereon
Net profit / (loss) attributable to shareholders - for basic / diluted EPS
Weighted average number of shares outstanding for the purpose
of calculation of basic and diluted EPS (in million)
Year ended
31 March 2014
31 March 2013
(1,628.89)
93.47
(1,722.36)
372.63
1,505.80
92.98
1,412.82
372.63
Earnings per share – basic / diluted (in Rs.)
(4.62)
3.79
31 Derivative Instruments and Unhedged foreign currency exposure
Derivative contracts entered and outstanding
Particulars
Purpose
As at
31 March 2014
31 March 2013
Currency option
Hedge of foreign currency loans
Interest rate swaps
Hedge against exposure to variable
Forward contract
Hedge of foreign currency loans
interest outflow on loans
Particulars of Unhedged foreign Currency Exposure
Loans
Loans
Interest on loans
Interest on loans
Import creditors (including retention money)
Receivable
116
KSK ENERGY VENTURES LIMITED
Rs. 9,509.24
US $ 158.85
Rs. 9,757.67
US $ 163.00
Rs. 53.77
US $ 0.90
-
-
-
-
-
-
As at
31 March 2014
31 March 2013
Rs. 24,297.54
Rs. 30,089.14
US $ 405.89
US $ 550.53
Rs. 90.45
Euro 1.10
Rs. 398.30
US $ 6.65
Rs. 0.74
Euro 0.01
Rs. 153.95
Euro 2.20
Rs. 224.29
US $ 4.10
Rs. 2.14
Euro 0.03
Rs. 20,908.10
Rs. 19,713.57
US $ 349.26
US $ 360.69
Rs. 677.47
US $ 11.32
Rs. 298.90
US $ 5.47
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
As at
31 March 2014
31 March 2013
Rs. 26.14
US $ 0.44
Rs. 1.32
CNY 0.14
Rs. 1.43
US $ 0.02
-
-
Rs. 1.58
CNY 0.18
Rs. 0.39
US $ 0.01
Premium payable
Cash with Bank
Cash with Bank
32 Segment Reporting
The Segment report of the Group has been prepared in accordance with the Accounting Standard 17 “Segment Reporting”.
There is only one reportable geographical segment as per Accounting Standard 17. For the purpose of reporting business
segments, the Group is engaged in two segments, viz., Project development and power generation.
31 March 2014
Project
Power
Reconciling/
Total
development
generating
Elimination
activites
activities
activities
Revenue
Segment Result
Unallocated income (net)
Finance costs
Loss before tax
Tax income
Loss for the year
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilites
Total liabilites
Other segment information
Depreciation / amortisation
Capital expenditure
479.76
325.39
21,003.86
2,116.67
(365.61)
21,118.01
-
2,442.06
1,365.52
(7,216.12)
(3,408.54)
1,527.61
(1,880.93)
798.87
205,388.27
(171.49)
206,015.65
12,236.05
218,251.70
46.92
26,979.00
(171.49)
26,854.43
152,616.05
179,470.48
14.43
2.82
2,915.30
16,665.94
-
-
2,929.73
16,668.76
ANNUAL REPORT 2013 - 2014 117
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
31 March 2013
Project
Power
Reconciling/
Total
development
generating
Elimination
activites
activities
activities
491.55
319.70
21,944.26
5,624.28
889.31
191,670.80
23.21
29,770.72
20.20
25.39
2,244.48
35,862.19
Revenue
Segment Result
Unallocated income (net)
Finance costs
Profit before tax
Tax income
Profit for the year
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilites
Total liabilites
Other segment information
Depreciation / amortisation
Capital expenditure
33 Related party disclosure
a
Parties where control exists
S No.
Name of the party
1
2
3
K&S Consulting Group Private Limited
KSK Power Ventur plc
KSK Energy Limited
(For detail list of subsidiaries see note 3.3)
(365.61)
22,070.20
-
-
-
-
-
5,943.98
982.25
(6,017.67)
908.56
764.96
1,673.52
192,560.11
9,171.52
201,731.63
29,793.93
133,002.96
162,796.89
2,264.68
35,887.58
Relationship
Ultimate holding company
Step up holding company
Holding company
b
Parties where significant influence exists and where the transactions have taken place during the period
S No.
Name of the party
1
2
3
4
5
KSK Energy Company Private Limited
Raigarh Champa Rail Infrastructure Private Limited
KSK Mineral Resources Private Limited
KSK Surya Photovoltaic Venture Limited
KSK Water Infrastructures Private Limited.
Relationship
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
118
KSK ENERGY VENTURES LIMITED
S No.
Name of the party
6
7
8
9
10
11
12
13
14
15
16
KSK Wind Energy Halagali Benchi Private Limited
KSK Wind Energy Mothalli Haveri Private Limited
KSK Wind Power Aminabhavi Chikodi Private Limited
KSK Wind Power Sankonahatti Athni Private Limited
KSK Wind Energy Nandgaon Athni Private Limited
KSK Wind Energy Madurai Ms Puram Private Limited
KSK Wind Energy Tirupur Elayamuthur Private Limited
KSK Wind Energy Tuticorin Rajapudukudi Private Limited
Marudhar Mining Private Limited
SN Nirman Infra Projects Private Limited
Sitapuram Power Limited
c
Key Management Personnel
S No.
Name of the party
1
2
S. Kishore
K. A. Sastry
d
Related party transactions
Particulars
HIGHLIGHTS
GOVERNANCE
FINANCIAL STATEMENTS
Relationship
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Joint Venture
Relationship
Whole-time Director
Whole-time Director
Joint
venture
31 March 2014
Subsidiaries
/ fellow subsidiaries
KMP
Transactions
Project development and corporate support fees
Interest income
Interest expense
Fuel and water charges
Sale of assets
Share application money / loans accepted
Share application money / loans repaid
Loans and advances given (including advance for investments)
Refund of the loans and advances
Managerial remuneration
Balances at the year end
Amount receivable
Amount payable
Share application money in subsidiary
Managerial remuneration payable
2.19
-
0.59
-
-
120.18
29.13
-
-
-
0.56
91.58
-
-
67.46
736.81
119.23
1,142.03
137.52
5,842.89
2,408.98
9,806.47
8,811.46
-
-
-
-
-
-
-
-
-
-
15.00
5,810.92
2,488.05
1,870.80
-
-
-
-
1.10
ANNUAL REPORT 2013 - 2014 119
Notes to Consolidated financial statements (Continued...)
(All amounts in Indian Rupees million, except share data and where otherwise stated)
Particulars
31 March 2013
Joint
Subsidiaries
Holding
KMP
venture
/ fellow subsidiaries
company
Transactions
Project development and corporate support fees
Interest income
Interest expense
Fuel and water charges
Sale of assets
Share application money / loans accepted
Share application money / loans repaid
Loans and advances given (including advance for investments)
Refund of the loans and advances
Managerial remuneration
Balances at the year end
Amount receivable
Amount payable
Share application money in subsidiary
Managerial remuneration payable
2.19
29.82
-
-
-
-
-
8.93
230.22
-
5.04
-
-
-
123.75
719.51
14.95
938.17
1.17
1,813.82
2,001.31
2,910.63
2,960.25
-
4,707.03
432.56
100.00
-
-
-
-
-
-
-
1,750.00
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18.00
-
-
-
1.33
e
f
The Group has given corporate guarantees of Rs.17,297.40 (31 March 2013: Rs.12,854.10) and bank guarantees of Rs.11.41
(31 March 2013: Rs. 9.41) on behalf of fellow subsidiaries.
The Group has obtained corporate guarantees of Rs.13,580.00 (31 March 2013: Rs. 12,305.00) from step-up holding
company.
34 During the year, Sai Wardha Power Limited (formerly known as Wardha Power Company Limited) has refinanced its part of
Rupee term loans with External Commercial Borrowing and incurred certain cost related to it. The Group has deferred the
expenditure over the tenure of loan in accordance with AS 16 – Borrowing cost.
35 In the opinion of board, any of the assets other than fixed assets and non-current investment have a value on realization in
the ordinary course of business at least equal to the amount at which they are stated on the Balance Sheet.
36 Previous year figures have been regrouped / reclassified to conform to the classification of the current year.
for and on behalf of the Board
Sd/-
S. Kishore
Sd/-
Sd/-
K. A. Sastry
M. S. Phani Sekhar
Whole-time Director
Whole-time Director
Company Secretary
As per our report of even date
For
Umamaheswara Rao & Co.
Chartered Accountants
Firm registration No: 004453S
Sd/-
S.Venugopal
Partner
Membership No: 205565
Place : Hyderabad
Date : 24 May 2014
120
KSK ENERGY VENTURES LIMITED
BOARD OF DIRECTORS
Mr. T.L. Sankar
Chairman
Mr. S.R. Iyer
Non-Executive Director
Mr. Girish Kulkarni
Non-Executive Director
Mr. Anil Kumar Kutty
Non-Executive Director
Mr. K. Bapi Raju
Non-Executive Director
Mr. Tanmay Das
Non-Executive Director
CORPORATE SUSTAINABILITY INITIATIVES
Mr. K.A. Sastry
Whole-time Director
Mr. S. Kishore
Whole-time Director
K
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KSK ENERGY VENTURES LIMITED
8-2-293/82/A/431/A, Road No. 22, Jubilee Hills,
Hyderabad - 500 033,Telangana, India.
Ph: +91 40 2355 9922 - 25, Fax: +91 40 2355 9930
www.ksk.co.in
A
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1
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1
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ANNUAL REPORT
2013-14