SAI POWER PTE. LTD. () (Incorporated in the Republic of Singapore) AUDITED FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION FOR THE YEAR ENDED 31 MARCH 2015
DIRECTORS REPORT The directors submit the report to the members of the Company together with the unaudited financial statements of the Company for the year ended 31 March 2015. 1. DIRECTORS The directors in office at the date of this report are:- RAMASUBRAMANIYAM SETHURAMAN TAN YEE TJEN (Appointed on 15.10.2012) 2. ARRANGEMENTS TO ACQUIRE SHARES OR DEBENTURES During and at the end of the financial year, the Company was not a party to any arrangement the object of which was to enable the director to acquire benefits through the acquisition of shares in or debentures of the Company or any other body corporate. 3. DIRECTOR S INTEREST IN SHARES OR DEBENTURES According to the register required to be kept under Section 164 of the Singapore Companies Act, Cap. 50, the following director who held office at the end of the financial year was interest in the shares of the Company as follows:-. Number of ordinary shares Name of director At 31 March 2015 At 31 March 2014 RAMASUBRAMANIYAM SETHURAMAN 1 1 4. DIRECTORS CONTRACTUAL BENEFITS Since the end of the previous financial period, no director of the Company has received or has become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director, or with a firm of which he is a member, or with a Company in which he has a substantial financial interest. 5. SHARE OPTIONS GRANTED During the financial year, no options were granted to take up unissued shares of the Company. 6. SHARE OPTIONS EXERCISED During the financial year, no shares of the Company were issued by virtue of the exercise of options granted. 7. UNISSUED SHARES UNDER OPTION There were no unissued shares of the Company under option at the end of the financial year. 8. AUDITORS The auditors, Kreston David Yeung PAC, have expressed their willingness to accept re- appointment. On behalf of the Board, RAMASUBRAHAMANIYAM SETHURAMAN Director Singapore. TAN YEE TJEN Director 2
STATEMENT BY DIRECTORS In our opinion:- i) the accompanying financial statements together with the notes thereto are drawn up so as to give a true and fair view of the state of affairs of the Company as at 31 March 2015 and of the results, changes in equity and cash flows for the Company for the year on that date; and ii) at the date of this statement there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due. On behalf of the Board, RAMASUBRAHAMANIYAM SETHURAMAN Director Singapore. TAN YEE TJEN Director 3
STATEMENT OF FINANCIAL POSITION As at 31 March 2015 Assets Non-current assets Notes 2015 2014 Security Deposit 3 20,800,801 12,235,766 Total non-current assets 20,800,801 12,235,766 Current assets Security Deposit 3 3,670,730 12,235,765 Prepaid Expenses 2,812 2,812 Bank balance 30,785 42,890 3,704,327 12,281,467 Total Assets 24,505,128 24,517,233 EQUITY AND LIABILITIES Equity attributable to owners Share Capital 4 100,001 100,001 Accumulated losses (1,193,082) (502,962) Total equity (1,093,081) (402,961) Current liabilities Other Payables and accruals 2,200 2,200 Amount due to a related company 5 5,869 6,581 Amount due to Director 6 15,347 15,347 Bank and other Loan 7 25,574,494 24,896,066 Total current liabilities 25,598,209 24,920,194 Total liabilities 25,598,209 24,920,194 Total Equity and Liabilities 24,505,128 24,517,233 The notes set out on pages 8 to 18 form an integral part of and should be read in conjunction with this set of financial statements. 4
STATEMENT OF COMPREHENSIVE INCOME Note Year ended 31.03.2015 Year ended 31.03.2014 Revenue - - Cost and expenses Finance Cost 670,928 415,741 Exchange difference (713) 51 Other operating expenses 19,905 60,212 Loss before taxation (690,120) (476,004) Taxation 8 - - Net Loss and total comprehensive loss for the year (690,120) (476,004) The notes set out on pages 8 to 18 form an integral part of and should be read in conjunction with this set of financial statements. 5
STATEMENT OF CHANGES IN EQUITY For the year ended 31 March 2015 Share Capital Accumulated Losses Total Balance as at 01 April 2013 100,001 (26,958) 73,043 Total comprehensive loss for the year - (476,004) (476,004) Balance as at 31 March 2014/01 April 2014 100,001 (502,962) (402,961) Total comprehensive loss for the year - (690,120) (690,120) Balance as at 31 March 2015 100,001 (1,193,082) (1,093,081) The notes set out on pages 8 to 18 form an integral part of and should be read in conjunction with this set of financial statements. 6
STATEMENT OF CASH FLOWS For the year ended 31 March 2015 Year ended 31.03.2015 Year ended 31.03.2014 Cash flows from operating activities Loss before taxation (690,120) (476,004) Change in assets and liabilities Prepaid expenses - (188) Trade receivables (24,471,531) Trade and other payables 678,015 24,902,647 Net Cash (used in)/generated from operating activities (12,105) (45,075) Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of year 42,890 87,965 Cash and cash equivalents at the end of year 42,890 87,965 Cash and cash equivalents comprise Balance with Banks 30,785 42,890 The notes set out on pages 8 to 18 form an integral part of and should be read in conjunction with this set of financial statements. 7
These notes form an integral part of and should be read in conjunction with the accompanying financial statements. 1. GENERAL The principal activities of the Company which is domiciled and incorporated in the Republic of Singapore are to those of business associated with power generation, coal sourcing and supplies and other ancillary business. However, the company has not commenced operation during the year. The company s immediate and ultimate holding company is KSK Mahanadi Power Company Limited, a company incorporated in Republic of India. The register office of the company is located 79, Robinson Road, 16-01, CPF Building, Singapore 068897. The financial statements of the Company for the financial year ended 31 March 2015 are authorised for issue in accordance with a resolution of the directors on the date of the statement by directors. The financial statements of the company are expressed in United States dollar. 2. SIGNIFICANT ACCOUNTING POLICIES a) Basis of Preparation The financial statements of the Company have been prepared in accordance with the historical cost convention, except as disclosed in the accounting policies below, and are drawn up in accordance with the Singapore Financial Reporting Standards ( FRS ) include its related Interpretations. In the current financial year, the Company has adopted all the new and revised FRS and Interpretations of FRS ( INT FRS ) that are relevant to its operations and effective for annual period beginning on or after 1 April, 2014. The adoption of these new/revised FRSs and INT FRSs has no material effect on the financial statements. b) Significant Accounting Estimates and Judgements Estimates, assumption concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Company s accounting policies, reported amounts of assets, liabilities, income and expense and disclosures made. They are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. 8
2. SIGNIFICANT ACCOUNTING POLICIES (continued) b) Significant Accounting Estimates and Judgements (continued) The critical accounting estimates and assumptions used and area involving a high degree of judgements are described below: Critical assumptions used and accounting estimates in applying accounting policies. Income Tax Significant judgement is required in determining the capital allowances and deductibility of certain expenses during the estimation of the company provision for income tax. The company recognises liabilities for expected tax issues based on estimates of whether additional tax will be due. When the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. c) Financial Assets Initial recognition and measurement Financial assets are recognised on the statement of financial position when, and only when, the company becomes a party to the contractual provisions of the financial instrument. The company determines the classification of its financial assets at initial recognition. When financial assets are recognised initially, they are measured at fair value, plus directly attributable transaction costs. Subsequent measurement Loans and receivables Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less impairment. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process. Derecognition All financial assets are recognised on their trade-date-the date on which the company commits to purchase or see the asset. Financial assets are derecognised when the rights to receive cash flows from the assets have expired or have been transferred and the company has transferred substantially all risks and rewards of ownership. 9
2. SIGNIFICANT ACCOUNTING POLICIES (continued) d) Impairment of Financial Assets The company assesses at the end of each reporting period whether there is any objective evidence that a financial asset is impaired. Financial assets carried at amortised cost For financial assets carried at amortised cost, the company first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the company determines that no objective evidence of impairment exists for an individually assessed financial assets, whether significant or not, it includes the asset in a company of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be recognised are not included in a collective assessment of impairment. If there is objective evidence that an impairment loss on financial assets carried at amortised cost has incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the financial asset's original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account. The impairment loss is recognised in profit or loss. When the asset becomes uncollectible, the carrying amount of impaired financial assets is reduced directly or if an amount was charged to the allowance account, the amounts charged to the allowance account are written off against the carrying value of the financial asset. To determine whether there is objective evidence that an impairment loss on financial assets has incurred, the company considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss. e) Cash and Cash Equivalents Cash and cash equivalents comprised cash at bank which are readily convertible to known amounts of cash and subject to insignificant risk of changes in value. 10
2. SIGNIFICANT ACCOUNTING POLICIES (continued) f) Financial Liabilities Initial recognition and measurement Financial liabilities are recognised on the statement of financial position when, and only when, the company becomes a party to the contractual provisions of the financial instrument. The company determines the classification of its financial liabilities at initial recognition. Financial liabilities are recognised initially at fair value, plus, directly attributable transaction costs. Subsequent measurement After initial recognition, financial liabilities are subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process. Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss. g) Share Capital Proceeds from issuance of ordinary shares are recognised as share capital in equity. h) Provisions Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. 11
2. SIGNIFICANT ACCOUNTING POLICIES (continued) i) Contingencies A contingent liability is:- A possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company; or A present obligation that arises from past events but is not recognised because: i) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or ii) The amount of the obligation cannot be measured with sufficient reliability. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company. Contingent liabilities and assets are not recognised on the statement of financial position of the company. j) Taxation Current income tax Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the end of the reporting period. Current income taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Deferred tax Deferred tax is provided using the liability method on temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised for all temporary differences. 12
2. SIGNIFICANT ACCOUNTING POLICIES (continued) j) Taxation (Continued) Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax Jaws) that have been enacted or substantively enacted at the end of each reporting period. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority. k) Related Parties A related party is defined as follows:- a) A person or a close member of that person's family is related to the company if that person: i) Has control or joint control over the company; ii) iii) Has significant influence over the company; or Is a member of the key management personnel ofthe company or of a parent of the company. b) An entity is related to the company if any ofthe following conditions applies: i) The entity and the company are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others). 13
2. SIGNIFICANT ACCOUNTING POLICIES (continued) k) Related Parties (Continued) ii) iii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member). Both entities are joint ventures of the same third party. iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity. v) The entity is a post-employment benefit plan for the benefit of employees of either the company or an entity related to the company. If the company is itself such a plan, the sponsoring employers are also related to the company; vi) The entity is controlled or jointly controlled by a person identified in (a); vii) A person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity). I) Functional and Presentation Currency Items included in the financial statements of the company are measured using the currency of the primary economic environment in which the company operates ('the functional currency"). The financial statements of the company are presented in United States dollar, which is the functional currency of the company. m) Foreign Currency Transactions Transactions in a currency other than United States dollar ("foreign currency") are translated into United States dollar using the exchange rates prevailing at the dates of the transactions. At the end of each reporting period, recorded foreign currency monetary items are adjusted to reflect the rate at the end of the reporting period. All realised and unrealised differences are taken to the profit or loss. 3. SECURITY DEPOSIT 2015 2014 Non-current (Note 7) 20,800,801 12,235,766 Current 3,670,730 12,235,765 24,471,531 24,471,531 14
4. SHARE CAPITAL Issued and fully paid:- No. of Shares Year ended 31.03.2015 Year ended 31.03.2014 At the beginning of the year 122,252 100,001 100,001 Issued during the year - - - At the end of the year 122,252 100,001 100,001 The owners of ordinary shares are entitled to receive dividends as and when declared by the company. The ordinary shares have no par value and carry one vote per share without restrictions. 5. AMOUNT DUE TO A RELATED COMPANY The amount is denominated in British Pound, non-trade, unsecured, interest free, repayable on demand and to be settled in cash. 6. AMOUNT DUE TO DIRECTOR The amount is non-trade, unsecured, interest-free, repayable on demand and to be settled in cash. 7. BANK LOAN The loan proceeds are to serve as a security deposit under a coal supply agreement. The loan matures in 360 days after drawdown date and may be extended for another period of 360 days. The interest rate is at 1.4% plus 12 month LIBOR. 8. TAXATION No provision for taxation had been made in view of the loss incurred by the Company during the financial year. The tax expense on the result for the financial year varies from the amount of income tax determined by applying the Singapore standard rate of income tax to loss before taxation due to following factors: - 2015 2014 Loss before taxation (690,120) (476,004) Tax expense calculated at tax rate of 17% (117,320) (80,921) Expenses not claimable for tax purposes 117,320 80,921 Tax expense - - 15
9. BANKING FACILITY The company has unused credit line amounting to 25 million. 10. FINANCIAL RISK MANAGEMENT The Company is exposed to credit risk, interest rate risk, foreign currency risk and liquidity risk which arise in the normal course of its operations. The Company does not use derivative financial instruments to minimise its financial risk exposures. As at 31 March 2015, the Company does not hold or issue derivatives financial instruments for trading purposes. The management closely monitors the Company s business risk exposures in connection with its financial assets and liabilities and adopts appropriate measures when considered necessary to reduce any potential financial risk exposures or losses. Foreign Currency Risk The company has no significantly exposed to foreign exchange risk as the majority of its transactions are denominated in United States dollar. Interest Rate Risk The company is not significantly exposed to changes in interest rates. The interest of bank loan is deducted upfront when disbursed to the company. As such, fluctuations in market interest rates do not have significant effect on the company s cash flow. Credit Risk The Company has no financial assets which carry significant exposure to credit risk. The carrying amounts of financial assets recorded in the financial statements represent the company s maximum exposure to credit risk Liquidity Risk The Company relies on its immediate holding company as a source of liquidity to finance its ongoing workings capital requirements. The maturity profile of the company s financial liabilities is within the period of next 12 months after the end of the reporting period. 16
11. CATEGORIES OF FINANCIAL INSTRUMENTS The following table sets out the financial instruments as at the end of the reporting year:- Assets Financial assets Loans and receivables:- 2015 2014 Security deposit 24,471,531 24,471,531 Cash and cash equivalents 30,785 42,890 Total financials assets 24,502,316 24,514,421 Liabilities At amortised cost:- Other Payables and accruals 2,500 2,200 Amount due to related company 5,869 6,581 Amount due to director 15,347 15,347 Bank and other Loan 25,574,494 24,896,066 Total financial liabilities 25,598,209 24,920,194 12. FAIR VALUES The carrying amounts of the financial liabilities are recorded in the financial statements at their approximate fair values, determined in accordance with the accounting policies disclosed in Note 2 to the financial statements. 13. CAPITAL MANAGEMENT The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debts and equity balances. The management reviews the capital structure regularly to achieve an appropriate capital structure. As part of this review, the management considers the cost of capital and the risks associated with each class of capital and makes adjustments to the capital structure, where appropriate, in light of changes in economic conditions and the risk characteristics of the underlying assets. There were no changes in the Company approach to capital management during the year. 17
14. NEW OR REVISED ACCOUNTING STANDARDS AND INTERPRETATIONS Certain new accounting standards, amendments and interpretations to existing standards have been published that are mandatory for accounting periods beginning on or after 1 April 2015. The Company does not expect that adoption of these accounting standards or interpretations will have a material impact on the Company s financial statements. DETAILED PROFIT AND LOSS ACCOUNT For the year ended 31 March 2015 Revenue - - 2015 2014 Less: OPERATING EXPENSES Accounting fee 3,720 1,800 Bank charges 7,615 33,989 Exchange difference (713) 51 Interest expenses 670,928 415,741 Professional fee 2,730 19,880 Secretarial fee 5,840 4,543 (690,120) (476,004) (690,120) (476,004) 18