PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY - HYDRO ELECTRIC (NEPRA - Regulated Business) FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 INDEPENDENT AUDITOR'S REPORT TO CHAIRMAN OF PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY ie nove audted the accompanying financial statements of Pakistan Water and Power Development Authority- Hydroelectric (NEPRA - Regulated Business) (hereinafter referred as "the -ydroelectric"), compr!sing statement of financial position as at 30 June 2015, and the related ncome statement, statement of comprehensive income, statement of cash flows and statement of rnances in equity together with the notes forming part thereof, for the year then ended, and a summainery of sgnficant accounting policies and other explanatory notes. Managements Responsibility for the Financial Statements Manaogement s respons[b!o fur the preparation and fair presentation of these financial statements in cr dance with internatont Financial Reporting Standards as applicable in Pakistan, and for such ie on:ro management determines is necessary to enable the preparation of financial I,te ens that arre-i free from material misstatenent, whether due to fraud or error. Auditors Responsibility eSpo'ns~ biliy s to express an opinion on these financial statements based on our audlt. e duced our audit in accordance with International Standards on Auditing as applicable in Pak stan sos stn>rds require that we cumply with ethical requirements and plan and perform the aut to iiiam easomnbie assurance about whether the financial statements are free from rn neial ui invulves pefor ming procedures to obtain audit evidence about the amounts and disclosures np thfinanca statenents. The procedures seiected depend on the auditor's judgment, including tne assessment of the risks of material misstatement of the financial statements, whether due to frond or rrr in makng Those risk assessments, the auditor considers in,tornal control relevant to the cntity's epaariaion and fair presentation of the financial statements in ordor to design audit orocedures that te aucropriate 1n ch ,rcumstances, out not for the purpose of expressing an opinion on the f t wvness of th ntitys internal control. An audit also includes eva!uating the appropriateness of A roinusopolicr , s and the reasonableness of accounting estimates mad2 by manaqernnt, as i a va a ing thrie oeral! presentation of the financia statements. he iv ha h audil ervidence we nave obtained is sufficient ;id appropriate to provide a bas:s,f Op n on n p nion, the financ,al statements present fairly, in all material aspects, the financial position of te iiyroo'actric as of 30 June 2015, and of its financial performance and of its cash flows for the enr:Fn enned in accordance with approved accounting standards as applicable in Pakistani vnitezco urant s Engaenot Partner: Nascore Akbar _amore: 21 Deceminbr 2015 PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015 Note 2015 2014 --------------- PKR '000 --------------- ASSETS Non current assets Property, plant and equipment 7 1,067,672,567 291,948,326 Long term advances and receivables 8 451,193 409,636 Long term security deposit 1,514 1,514 1,068,125,274 292,359,476 Current assets Stores, spares and loose tools 9 3,992,816 3,643,721 Trade debts 10 34,879,092 17,806,100 Advances and other receivables 11 3,358,457 4,759,673 Snort term investments 12 19,200 - Cash and bank balances 13 55,776,709 27, 149,369 98,026,274 53,358,863 TOTAL ASSETS 1,166,151,548 345,718,339 RESERVES AND LIABILITIES Equity interest ,eserV es 14 111,699,916 86,839,646 Government of Pakistan's investment 15 72,522,716 72,522,716 184,222,632 159,362,362 Revaluation surplus 16 794,865,198 39,056,259 979,087,830 198,418621 Non current liabilities Loans and borrowings - Interest bearing 17 119,744,674 94,407,545 Deterred grants 18 3,915,409 3,321,852 Deferred liabilities 19 28,207,909 26,286,574 151,867,992 124,015,971 Current liabilities Trade creditor and other payables 20 14,069,441 14,952,087 Debt Service Liability 21 11,388,181 - Current portion of loans and borrowings 17 6,205,807 6,088,134 Accrued Interest 22 2,672,935 1,520,566 Other current liabilities 23 859,362 722,960 35,195,726 23,283,747 CONTINGENCIES AND COMMITMENTS 24 - - TOTAL EQUITY AND LIABILITIES 1,166,151,548 345,718,339 The annexed notes from 1 to 37 form an integral part of these financial statements. MEMBER (FINANC MEMBER (POWER PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2015 2015 2014 -------------- PPKKR 000 ------------- Note Revenue 25 68,111,420 52,091,081 Cost of electricity 26 20,922,655 19,177,596 Gross margin 47,188,765 32,913,485 Operating expenses 27 1,429,279 1,450,390 Operating profit 45,759,486 31,463,095 Other income 28 3,440,679 933,720 49,200,165 32,396,815 Hydei levies 29 7109,892 7,015,237 Finance cost 30 8354,399 3,930,398 15,464,291 10,945,635 Net profit for the year 33,735,874 21,451,180 The annexed notes from 1 to 37 form an integral part of the financial statements. MEMBER IAN MEMBER (POWER) PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2015 2015 2014 ------- .---- PKR'000 ---------------- Profit for the year 33,735,874 21,451,180 Other comprehensive income not to be reclassified to profit and loss account in subsequent periods: Actuanal gain on defined benefit plans - 422,914 Reva[uation surplus 758,429,538 - Total Comprehensive Income for the year 792,165,412 21,874 094 Te annexed notes from 1 to 37 form an integral part of these financial statements- MEMEB FJ E) MEMBER (POWER) � аЭплсэдl as��w-aw � t �rr�'�Эеwэw i �` � � .� � . � � sдиа�и�зд��s ��»�r�ui} аsэц� }о �ёд �еа5а}ui ие r�s�cэ} L� аз� G woJ} sа�ви рахаиие аЧ1 fl�� L�� bLo - 94G'Z�5`�L 9G6`669' �� 6 8�� `�9��tr6L � L(lZ а�пГ 0� 1� se аэиеlеЭ _ {i�LB`SEL'i£� ° ЬL8'��L'£Е - s��ом ��аtида�гпар Jti� зл�аsа> га�,а}su.�a� _ _ � �6�`0�9`Z {66�'OZ9"�} £� G G иаС;ел�апаа о� аг�р ивс;���эадар �е�иаи�а��,и� {£бZ'Эбb° L L� - � (€OZ°96�' � �i - рашагра� anJasaa ����U�� �Lti�'S9�'�6L fiгг�`��L`�� �еалS ар� зо� гkив�иi аrtisиацэ.гдшв� о��о1 8Е�`б�tr'�S1 - - - 8£�`6Zt�'�SL sл�dJ�rs иоа�еп�епа� �L�'S£С'Е� �L8`S�L`££ - - - tr€C7Z aunC 0� рариа �еа.� ау� �ст; ��cr�d, l�9`�l�'8Ei! - 9�L'ZZS`�L 9t*9`6�8`Э8 �з�Z`��а'б£ �l[)� �1иГ Ей }е se �з�иг��� - ftr5tl`VLE` �Z) - �6(7'trL8` �Z - s�эсэт ди�зtидсэеапар -ьо} агиаsг� а� �а}su��y - _ - Ebl'�L{�'Zl 4��Ь`�з6Сl'Z4) uaiд�r���na� в� а�р исэiд�i��.�дгр ���иа�tэ�зи� 4��3`ZJ�'G�� - _ {li8'1�5'L�� - раи�аэра�авиаsа�����д�� #�60`t�LB' lZ b�э0`t�LB` bZ ��af, ац� �а; ашази{ ап€sиаца�д'�иоз 1Е'�'='1 �С6`Z�ц t�16'�Zp - - иерд si!�auaq раи��ар в� 6u��ela� SSOI I2uer�,�'� (]€3 G` 45tr` L Z Ug G' Ь��` lZ - ° - tл l аг аипf` t3£ Рари2 ��агi �Ч1 аа� lцо�� 8�£"�� l`�6t - 9LL'Z��'�� a�Z`tтl�'QL ZCэtr'�L()`lS ра��дsэа -�10� �1�Г 6b 3ё s� а�иг�аg ---------------°__---___�__��. �..т._��. .,g_.4._.®{}(}, �7�1д--__-__---------------------------------------------- Lt�6 �3QN1 a2�td {�6 а���} s�асзм ��ba�oN� ����1 ;цо,д диаш;sапи� �иашс�о�а�лзр s���Jn , рад�iас#сэ�д�i�и� д�� ��� ua�;�n��na� аеииаsэ� sзп.ааsэ� �1�1� Э1Ч�1�' р£ ®ЭQNЭ �Э`дЭ14 ЭН1 ��3 1SЭ2iЭ1CJ1 1�,�1f�bЭ Nд SЭ�1�'�hi� ЭС} 1tJЭWЭ1'д15 (SSЭ�tSr�B (]Э1'д�г��Э� ы�дЭN - з1�lзЭiЭСэг�С]J4Н1 � .11.12�" '�1�i'д 1NЭИ1дС��Эl1ЭС] �ЭМС3д t�1�b° �#Э1k1М Nb`1�!?itJd PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2015 2015 2014 Note --------------- PKR'000 --------------- CASH FLOWS FROM OPERATING ACTIVITIES t profit for the year 33,735,874 21,451,180 - ments for -Ir-' eciotion (7) 7,710,495 7,808,039 :C C'oSt (30) 8,354,399 3.930,398 ljaf jn rental (26.4) 3,401,410 2,327,208 impaired inves,ments (12) - 261,000 Re, i -ration s -ij : us (71,3) 758,429,538 - oyc- (26.2) 3,811,368 3,832,149 ,-\na: ;Lallon of grants (18) (856,139) (228,459) 780,851,071 17,930,335 814,586,945 39,381,515 Working capital changes: (Increase) / decrease in current assets Stores, spare parts and loose tools (349,095) (747,534) Trade debts (17,072,992) (11,468,330) Advances and other receivables 1,401,216 24,789,751 increase I (decrease) in current liabilities: Short term liabilities 136,402 (470,061) Trade and other payables (882,646) (3,131015) (16,767,115) 8.970,811 ,enerated from operations 797,819,830 48352,326 Finance cost paid (7,202,03 0) (3,0471,138)] 1jarah rental paid (3,880,504) (2,668,01 j) (11,082,534) (5,709,151) Nei cash generated from operating activities 786,737,296 42,643,175 CASH FLOWS FROM INVESTING ACTIVITIES Capil,71 expenditure incurred on property, plant and equipment (783,434,736) (31,218,426) Shor -Lerm investments (19,200) Ll',i'- advances. and receivabies (41,557) (113,179) Lonc, T--,m security deposit 413 Net cash used in investing activities (783,495,493) (31,331,192) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long term loans 42,958,515 35,826,969 Repayment of long teim loans (6,115,532) (4,099,023) Capital reserve 'cd, erned (11,496,203) (17,567,812) Empk--,,- e benefits pald (19.2) (1,410,939) (2,077,835) C-ar, -,-nsferred i received (18) 1,449,696 - N -t generatea from financing activities 25,385,537 12,082,299 Net ricrease in cash and cash equivalents during the year 28.627,340 23,394,282 Cash and cash equivalents at the beginning of the year 27,149,369 3,755,087 Cash and cash equivalents at the end of the year (13) 55J76,709 2T 149,369 The annexed notes from 1 to 37 form an integral part of the cial statements- MEMBE (F MEMBER (POWEe PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 1. LEGAL STATUS AND OPERATIONS Pakistan Water And Power Development Authority (WAPDA) is a body, fully owned by the Government of Pakistan, created by virtue of the Pakistan Water And Power Development Authority Act, 1958 (West Pakistan Act No. XXXI of 1958), commonly known as WAPDA ACT, as amended from time to time. The statutory mandate of WAPDA is to develop and utilize the water and power resources of Pakistan on a unified and multipurpose basis, WAPDA remained empowered among others, to frame schemes for the generation, transmission and distribution of power and the construction, maintenance and operation of power houses and grids In line with the Strategic Plan 1992 approved by the Cabinet Committee, the WAPDA Power Wing has been restructured comprising of the Generations, Distribution and Transmission activities , Assets and liabilities relating to the distribution activities were transferred to the 8 Distribution Companies (DISCOs) on 01 July 1998 while assets and liabilities relating to generation (other than hydel generation activities) and transmission facilities were transferred to the 4 Generation Companies (GENCOs) and National Transmission and Despatch Company (NTDC) on 01 March 1999 respectively. NEPRA has issued Generation License # GL(Hydel) /05 12004 to WAPDA on 03 November 2004 valid for Thirty (30) years for its Hydel power stations. As modified-Hl vide letter date 20 June 2011 issued by NEPRA, currently WAPDA is generating power from following hydel power stations' + Tarbela + Nandipur + Ghazi Brotha + Shadiwal + Mangla + Chichoki + Warsak + Kuram Garhi + Chashma + Renala Khurd + Rasul + Chitral + Khan Khawar + Allai Khawar + Gomal Zam + Jinnah + Dubair Khawar + Jabban + Dargai The management of Hydroelectric has prepared accounts under NEPRA (Uniform System of Accounts) Rules, 2009 and decided to segregate the operation & development of Hydel activities (regulated) from non core activities (non-regulated). The Regulated business comprises activities purely from the Hydel activities (Generation & Development of hydel electricity). 1.1 EXTRACTS FROM "WAPDA ACT 1958" As laid down in Section 22 of WAPDA Act 1958, the Hydroelectric - NEPRA regulated business Funds shall consist of: a) Grants made by the Governments, b) Loans obtained from the Governments, c) Grants made by the local bodies as required by the Governments, d) Sale proceeds of bonds, debenture, commercial paper or other securities issued by the Hydroelectric - NEPRA regulated business and dividends, e) Loans obtained by the Hydroelectric - NEPRA regulated business with special or general sanction of the Governnment, f) Foreign aid and loans obtained from the International Bank for Reconstruction and Development or otherwise, with the sanction and, under guarantee of [the and such terms and conditions as may be approved by the Government] and, g) All other sums received by the Hydroelectric - NEPRA regulated business. Regarding fixing rate for sale of power, Section 25 of the WAPDA Act, 1958 provides that The rate at which the Hydroelectric - NEPRA regulated business shall sell power be so fixed as to provide for meeting the operating cost, interest charges and depreciation of assets, the redemption at due time of loans other than those covered by depreciation, the payment of any taxes and a reasonable return on investment As provided in Section 26 of WAPDA Act, 1958 the Hydroelectric - NEPRA regulated business shall maintain complete and accurate books of accounts in such form as may be prescribed by it, provided that separate accounts shall be maintained for all schemes and transactions relating to ower. PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 1,2 REFERENCE FROM "CONSTITUTION OF PAKISTAN 1973" The Article 161(2) of the Constitution of Pakistan provides that the net profits earned by the Federal Government, or any undertaking established or administered by the Federal Government i.e.WAPDA as determined by the Presidential Order # 3 of June 1991, from the bulk generation of power at a hydro-electric station shall be paid to the Province on which the hydro-electric station is situated. For the purpose of this clause " net profits" shall be computed by deducting from the revenues accruing from the bulk supply of power from the bus-bar of a hydro-electric station at a rate to be determined by the Council of Common Interest. Operating expenses of the station which shall include any sums payable as taxes duties, interest or return on investment, and depreciations and element of obsolescence, and over-heads, and provision for reserves. 2. STATEMENT OF COMPLIANCE These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan- Approved accounting standards comprise of such International Financial Reporting Standards (lFRSs) issued by the International Accounting Standards Board and adopted by the Institute of Chartered Accountants of Pakistan (ICAP), Islamic Financial Accounting Standards issued by ]CAP and directives issued by National Electric Power Regulatory Authority (NEPRA) and WAPDA. 3. NEW AND AMENDED STANDARDS AND INTERPRETATIONS BECOME EFFECTIVE 3.1 The hydroelectnc - NEPRA regulatory business has adopted following new and amended IFRS and IFRIC interpretations which became effective during the year AS 16 & 41 - Agriculture: Beaer Plants AS 19 - Employee Contributions ]AS 32 - Offsetting Financia7 Assets and Financial liabilities - (Amendment) lAS 36 - Recoverable Amount for Non-Financial Assets - (Amendment) IFRIC 21 - Levies The adoption of the above standards, amendments, interpretations and improvements did not have any materal effect on the financial statements. 3.2 Standards, Interpretations and Amendments to Published Approved Accounting Standards that are not yet effective The following revised standards, amendments and interpretations with respect to the approved accounting standards as applicable in Pakistan would be effective from the dates mentioned below against the respective standard or interpretation: Effective date (annual Standard or Interpretation periods beginning on or after) IFRS 10 - Consolidated financial statements 1-Jan-15 IFRS 11 - Joint Anangements 1-Jan-15 IFRS 12 - Disclosure of Interests in other entities 1-Jan-15 IFRS 13 - Fair Value Measurement 1-Jan-15 IAS 1 - Presentation of Financial Statements - Disclosure Initiative 1-Jan-15 (Amendment) IAS 16 & 38 - Clarification of Acceptable Method of Depreciation 1-Jan-16 The WAPDA expects that the adoption of the above revisions and amendments of the standards will not affect the WAPDA's financial statements in the period of initial application. In addition to the above, the following new standards have been issued by IASB which are yet to be notified by the SECP for the purpose of applicability in Pakistan: Effective date (annual Standard or Interpretation periods beginning on or after) IFRS 9 - Financial instruments: classification and measurement 1-Jan-18 IFRS 14 - Regulatory Deferral Accounts 1-Jan-16 IFRS 15 - Revenue from Contracts with Customers 1-Jan-17 4. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES The preparation of financial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making j,udgment about carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis Revisions to accounting estimates are recognized in the period in which estimates are revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects ooth current and future periods. Judgments made by the management in the application of IFRSs that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in the ensuing paragraphs 4.1 Useful lives of property, plant and equipment and their impairment The Hydroelectric - NEPRA regulated business reviews the useful lives of property, plant and equipment on regular basis. Any change in the estimates in future years might affect the carrying amounts of the respective items of property, plant and equipment with a corresponding effect on the depreciation charge and impairment. 4.2 Cost of defined benefits plan The cost of defined benefit plan is determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These includes the determination of the discount rate, future salary increases, mortality rates, future pension increases, future increase in medical costs and future increase in electricity costs. Due to the complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions All assumptions are reviewed at each reporting date. 5, ACCOUNTING CONVENTION These financial statements have been prepared under historical cost convention except for certain assets/liabilities carried at their fair values 6. SIGNIFICANT ACCOUNTING POLICIES 6.1 Changes in accounting policies The entity re-assessed its accounting for property, plant and equipment with respect to measurement classes of property, plant and equipment after initial recognition. The entity has previously measured land, building & civil works and dam & reservoir using the cost model whereby, after initial recognition of the asset classified property, plant and equipment, the asset was carried at cost less accumulated depreciation and accumulated impairment losses- On 30 June 2015, the entity elected to change the method of accounting for land, building & civil works and dam & reservoirs . since entity believes that revaluation model more effectively demonstrates the financial position of these classes and is more aligned to best practices, After initial recognition, the entity uses the revaluation model, whereby land, buildings & civil works and dam & reservoir will be measured at fair value on the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The entity applied the revaluation model prospectively as allowed by IAS 8 'Accounting policies, changes in accounting estimates and errors', The entity was already using revaluation model for the subsequent measurement of Power generation plant asset. The entity revalued thirteen out of ninteen power stations. Some power stations were not revalued as they were constructed in recent years and the market value of the revalued class of assets would not be materially different as compared to their cost. 62 Property, plant and equipment Initial recognition Property, plant and equipment except freehold land and certain assets disposed off and leased back during previous years are stated at cost or revalued amount less accumulated depreciation and any identified impairment loss. Freehold land is stated at cost. Subsequent measurement All the asset of WAPDA Hydroelectric are measured at cost except for land, building and civil works, dam and reservior and power generation plant assets. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Hydroelectric - NEPRA regulated business and the cost of the item can be measured reliably. All other repair and maintenance costs are charged to income statement during the period in which they are incurred. PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) Derecognition An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and carrying amount of the asset) is included in the income statement in the year the asset is derecognized, Impairment The carrying amounts of the Hydroelectric - NEPRA regulated business's assets are reviewed at each statement of financial position date to determine whether there is any indication of impairment- If such indication exists, the recoverable amount of such asset is estimated An impairment loss is recognized wherever the carrying amount of the asset exceeds its recoverable amount. Impairment losses are recognized in income statement A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognized If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in income statement Revaluation surplus Surplus arising on revaluation of land, building & civil works,dam & reservoir nd power generation plant assets is credited to surplus on revaluation of fixed assets account. Deficit arising on subsequent revaluation of fixed assets is adjusted against the balance in the above mentioned surplus account. The surplus on revaluation of fixed assets to the extent of incremental depreciation charged on the related assets, is transferred directly to reserves. Depreciation Depreciation is charged to income statement on straight-line method so as to write off the cost of property, plant and equipment over their estimated remaining useful lives at the rates specified in note 7. However, depreciation charged on assets,that directly relates to construction and acquisition of other assets is included in the cost of such assets. Depreciation on addition to property, plant and equipment is charged from the month in which the asset is available for use and continued till the month of disposal. The revalued assets are depreciated over the remaining useful lives of the assets from the date of revaluation Depreciation for the year is based on economic useful life of individual assets, Depreciation at full rate is charged in the month of purchase/completion and no depreciation is charged in the month of disposal. No depreciation is to be charged when an asset is fully depreciated. Following d preciation rates are appled: S. No. Description of Assets Depreciation Civil Works/bulidings 2% Dams & Reservoirs 2% Generation Plant & Equipment's a. Turbines 2.285% b Generators (Class - F Insulation) 2.820% c Generators (Class - B Insulation) 3.30% d. GIS Switch Gear 1.99% e. Switchyard equipment 396% 2 f MV/LV Switch gear Control & Protection 3.96% g, Telecommunication and SCADA Equipment 4-987% h. Cranes 3.30% i, Trash Rack and Cleaning Machines 3.30% Truck Trailer 4.95% k. HV Circuit Breaker Air Blast Type 3.96% I, HV Circuit Breaker SF-G Type 3.30% m Transmission line equipment 396% 3 Mobile Plant & Equipment's 20% 4 Other Equipment's (All others except computer accessories) 10% 5 Computer Accessories 25% 6 Vehicles 20% Changes in estimates During the year, the management separate transmission equipment from power generating plants and assets keeping in view the wear and tear and expected revised useful life. This change in accounting estimate has no material impact on the depreciation, PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 62.1 Capital work in progress Capital work in progress is stated at cost less accumulated impairment losses, if any. Projects of capital work in progress are transferred to operational formations of the Hydroelectric - NEPRA regulated business, when 100% progress is certified by the consultants and verified by the Hydroelectric - NEPRA regulated business's own engineers. 6.3 Stores, spare parts and loose tools Stores are valued at moving average cost method, except items in transit which are stated at cost comprising invoice value plus incidental charges thereon. Stores in transit are valued at invoice value plus other charges incurred thereon. 6.4 Trade debts Trade debts and other receivables are carried at original invoice amount less an estimate for doubtful trade debts and other receivable based on review of outstanding amounts at the year end. Balances considered bad and irrecoverable are written off when identified. 6.5 Cash and cash equivalents For the purpose of statement of cash flows cash and cash equivalents comprise of cash in hand, cash at bank and short term highly liquid investment, that are readily convertible to known amount of cash and which are subject to an insignificant risk of change in value, 6.6 Reserve for development works Reserve for development works is recognized in accordance with the provisions available in The Constitution of the Islamic Republic of Pakistan and NEPRA tariff petition. This reserve would be used for the construction of new/ongoing hydel power development projects through Annual Development Plans of the Government of Pakistan, Such reserves are created from retained earnings 6.7 Grants Grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognized as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset Where the Hydroelectric - NEPRA regulated business receives non-monetary grants, the asset and the grant are recorded at nominal amounts and released to the income statement over the expected useful life of the relevant asset by equal annual installments. 6.8 Staff retirement benefits Defined benefit plans The Hydroelectric - NEPRA regulated business operates its own unfunded defined benefit plan for medical, free electricity and pension benefits schemes for its active and former employees. Due to materially different risks associated with each benefit plan the entity has disaggregated the plan for disclosure purposes The entity underwrites the actuarial nsk associated with the plan. The entity recognizes the net defined benefit liability in the statement of financial position The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method. Re- measurements, comprise of actuarial gains and losses from changes in actuarial and experience assumptions are recognized immediately in the statements of financial position with a corresponding debit or credit to retained earnings through Other Comprehensive Income in the period in which they occur. Remeasurement of net defined benefit liability recognized in Other Comprehensive Income shall not be reclassified to Profit or Loss in subsequent period. Past service costs are recognized in the profit and loss on earlier of : the date of the plan amendment or curtailment, and the date when entity recognizes related restructuring cost. Net interest is calculated by applying the discount rate to the net defined benefit liability The entity recognizes the current service cost. past service cost, gains and losses on curtailments, non-routine settlements and net interest expense or income changes in the net defined benefit obligation under 'Cost of Sales' in the statement of financial position, The entity has determined the net defined benefit liability by consulting a qualified actuary in prior year. The principal actuarial assumptions used in prior year are given in the below table. However no qualified actuary has been involved in the determination net defined benefit liability in current year. The current year charge and the interest cost represent the best estimates. PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) Free Free electricity medical benefits benefits Pension - Expected rate for discounting liabilities 12% 12% 12% - Expected rate for increase in pensionable salary - - 11% - Expected rate for increase in cost of pensioners - 7% - Expected rate for increase in medical cost - 11% - Expected rate for increase in electricity cost 11% - Average expected remaining working life 9 years 9 years 9 years 6.9 General provident fund and WAPDA welfare fund WAPDA operates self contributed General Provident Fund and WAPDA Welfare Fund for its employees Deductions are made from the salanes of the employees and remitted to the funds and afterward utilized as per SOPs approved by WAPDA 6.10 Foreign currencies Foreign currency transactions are recorded using the rate of conversion applicable on the date of transaction All monetary assets and liabilities in foreign currencies are translated at exchange rates prevailing at the statement of financial position date except in the case of foreign currency loans covered by the State Bank of Pakistan's Exchange Risk Coverage Scheme which are translated at the rates provided under the scheme. Exchange differences for the period up to the date of commissioning of assets financed out of foreign currency loans are capitalized to the extent they are eligible for capitalization All other exchange differences are charged to income statement. 6.11 Revenue recognition Revenue from the sale of electricity is recognized on transmission of electricity to the power infrastructure (transmission system) of the National Transmission and Dispatch Company Limited (NTDCL). Profit on bank deposit is recognized using effective interest method- 6.12 Hydel levies Hydel levies including net hydel profit paid to the Government of Khyber Pakhtunkhwa as recommended by National Finance Commission (NFC) and is charged to income statement. 6.13 Taxation Any income of the Pakistan Water & Power Development Authority (WAPDA) established under the Pakistan Water & Power Development Authority Act 1958 is exempt from income tax under clause-66(xvi) of the Second Scnedule of (Part-I) to the Income Tax Ordinance, 2001. 6.14 Financial assets Initial recognition Financiaf assets within the scope of [AS 39 are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets as appropriate The Hydroelectric - NEPRA regulated business determines the classification of its financial assets at initia recognition. Financia assets are recognized initially at fair value plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Hydroelectric - NEPRA regulated business's financial assets include cash and cash equivalents, held-to- maturity investments, and loans and other receivables, quoted and unquoted financial instruments Subsequent measurement The subsequent measurement of financial assets depends on their classification as follows: Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss includes financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Financial assets at fair value through income statement are carried in the statement of financial position at fair value with gains or losses recognized in the income statement The Hydroelectric - NEPRA regulated business has neither designated any financial assets nor currently has any financia asset at fair value through profit or loss. PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such financial assets are carried at amortized cost using the effective interest rate method. Gains and losses are recognized in the income statement when the loans and receivables are derecognized or impaired, as well as through the amortization process. Held-to-maturity investments Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held. to-maturity when the Hydroelectric - NEPRA regulated business has the positive intention and ability to hold it to maturity. After initial measurement held-to-maturity investments are measured at amortized cost using the effective interest method. This method uses an effective interest rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset- Gains and losses are recognized in the income statement when the investments are derecognized or impaired, as well as through the amortization process 6.15 Financial liabilities Initial recognition and measurement Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Hydroelectric - NEPRA regulated business determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognized initially at fair value and in the case of loans and borrowings, plus directly attributable transaction costs. Subsequent measurement The measurement of financial liabilities depends on their classification as follows: Financial liabilities at fair value through profit or loss Financlal liabilities at fair value through profit or loss includes financial liabilities held for trading and financial labilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term This category includes derivative financial instruments entered into by the Hydroelectric - NEPRA regulated business that are not designated as hedging instruments in hedge relationships as defined by IAS 39. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognized in the income statement. Financial liabilities at amortized cost After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using the effective interest rate method. Gains and losses are recognized in the income statement when the liaDilities are derecognized- Derecognition A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires. Offsetting of financial assets and financial liabilities: A financial asset and a financial liability is offset and the net amount is reported in the statement of financial position if the Hydroelectric - NEPRA regulated business - regulated business has legal enforceable right to set off the recognized amount and intends either to settle on a net basis or to realize the assets and settle the liability simultaneously. Corresponding income on assets and charge on liability are reported at net amount I a PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) Note 2015 2014 7. PROPERTY, PLANT AND EQUIPMENT ----------- PKR '000 ------- Operating fixed assets (7 1) 983,910.910 231,943,892 Capital work in progress (72) 83,761,657 60,004 434 1,067,672,567 291,948,326 7.1 Operating fixed assets - Owned 2015 Cost Depreciation . [Book values As at Additions/ As at As at For As at Particulars June Revaluation Addutient] As at AsJate Revaluation For Deletions i As at as at 30 June Rate PartiularsAdjustmentl 0Jn 0Jn h 0Jn surplus 3Jue 3Jne surplus te Adjustments 3Jue2015% 2014 (Deletions) 2015 2014 year 2015 F ----------------------------- ------------------- ----------------------------------- PK R '000 -------------------- ------------------------------------------------------------------------ Land 5,239 725 436467,409 42.831 441,742,704 - - - - - 441,742,704 - (7,261) Buildings and cmil works 51 141 754 149.115,232 604.163 200,857,341 11.364,813 64650384 949.424 7 241 76,971,862 123,885.479 2% (3,808) Power generation plant assets 181 290,307 - 678,186 181,941,461 104,269 973 - 4,439.568 7,591 108,717,132 73,224.329 1.99%-7% (27,032) Transmission line Equipment 8.319,990 - 20,408 8,337,951 393465 - 231,306 - 624,771 7,713.180 3,96% (2,447) Dams and reservoir 117,948,472 315,189,757 32,980 433,073,824 17,644.367 77,743,401 1,937,503 (4,165) 97,321,106 335,752,718 2% (97,385) General / plant assets 2,133,282 - 170,064 2,155,008 846 153 - 100,475 18,984 965,612 1,189,396 10% (148,338) Office equipment 72,779 - 25,774 94,053 43,292 - 5,247 1,295 49,834 44.219 10%/25% (4,500) Furniture and fixture 609,294 - 25,556 632,520 566,807 - 1,206 262 568.275 64,245 10% (2,330) Transportation equipment 1,837,735 - 611.518 1 890,700 1,520,585 - 45,766 29,709 1.596,060 294640 20% (558,553) 2015 368,593,338 900,772,398 2,211,480 1,270,725,562 136,649,446 142,393,785 7,710,495 60,917 286,814,652 983,910,910 (851,654) 2014 370,618,942 34,111 690 308 593,338 154,492,661 7,808,039 (25,651,258) 136,649.446 231 943.892 (36,137.294) …一……予,既 0し6じ0L66じ86 乙59心ヤし8&982 ZL6&09 56ヤ“0レ乙‘2 98乙LC68‘乙ヤL 9ヤヤ‘6ヤgLgCL 乙95ち乙ご0乙乙‘L 929各69ごL 86C‘乙乙乙石006 8にC‘に6ら去99C 5し0乙 6LCLヤ9乙乙09&CZL 000&e 99ご6 ーレEぞLgL Lこ6&20ヤら6E9乙L -9乙9『基92 5才9q40 』960‘乙多6&Cこ909『ヤLL E6L&gL ヤ乙乙‘9ヤー69し’9ヤ乙0乙‘9乙0“ヤ乙し乙9乙乙-LCOシ00ヤこJeM巳し」ヌJleqna ?29ヤ‘ら99乞ヤ09ヤらt 90差‘EL LL乞『0EI -992「0もし森ごOLO‘ヤヤ969こ-乙0乞“e96e ueqqe「 」9OLC909(6乙Lgし0レー69L60シー0乙6909 Se乙‘99OL乙L ヤ59 -LSCZgO“乙(叫eUU『 )969Lし99『L ヤ99’乙0ヤー20996 L -乙90LしL乙6ヤヤ’69OL9 ヤgE -ら60690『9 山eZ-eLu09 」ヤ6969C9「乙L69e6 09乙9 922ヤ69 -LLgZgg Lし9『9乙CLgし90乙0乙-90999乙9「JeMe目ヌ―e;IV EZge「ヤ’6 ら2990「’L eg乙『9 ヤ乙ヤ9乙こ-998C乙9 90ヤ6Lgo((0009 -20レ‘69ヤ0「」eM巳Hンu巳目X 95グ90ヤ99L‘乙5こ(699)2多LL 9こeg乙2 6Zegこ 9む9&099 99 989‘乙09 966‘乙ら―e」範リつ (9し) らシLCOZ 乙9乙OgL -9レ9 乙乙ごLCしZtぎ乙L こ99&Cgヤし99 9L9&gLヤ996『99 p」n目ヌ馴eu98 <ヤ2しでez 66e99ヤー99し乙06り乙e ヤ乙ビLg 9乙ダL乙9 -62ビe09 ヤ6ら“29 ―甲egtu印ny (L6ヤ98らヤこヤ乙eOLL -C乙乞黍LSヤヤ9 09ヤ“乙6L 5し6&9乙9&L -seヤ60レ‘し乙乙ヤ9レ乙IXo城創Hつ 乙99乙0乙99ご98ヤ『む-乙66 999ヤ92“しeしどOOL 969&e6し‘乙ZeL『L 9ヤ乙レ50‘乙gLgS乞L -eM-pe目5 乙gL‘ヤ乙らL 669乙乙CL乙-6eこ‘L ご9200ぎ2 929&02 999&969『e 966『し乙Ceg&99乙‘C 89ごgOL Jnd-pueN (乙6レ92) gLし‘0乙ごレegどこ9乙『L (gLgヤの乙98『仁0ヤ0“乙96 乙か乙‘goe 9乙9‘乙091乙Lgが6 乙し乙‘9ヤL‘乙2乙9“乞Le -eb」e口 Lgび99グ2 20『92ど2 -LLL&2 099&C6し‘乙9ヤごLZ 95びヤ9乙ヤe乞どに96ビe6e“ヤ2こビ9ヤ9 Inses 1 ヤヤ6て熱ごge 6しゼe6ぎャL ヤ99ビ乙乙9 06が尾どヤ096沿6616 Egビ90905 09ご乙c にビzoCヤ2 乙6プ9999乙e田q兜叫つ ヤZC&96ge ヤCし“CらCg egL ge乙『ヤヤ050&0乙9‘乙C69&89乙90SL8ヤ乙‘こしLZggししL6‘乙29&OL 9乙乙‘し9ビL Xes」巳M (999’ヤ) 262&26ビ96L eCZにダ昭ga‘ヤ2 妬がら66 929乙96’乙ヤ990&6銘“乙09ぴヤ田‘9妃弱9&992 999&69多’9にZ6Lに9ぴ02 引血ew !(6乙ヤ0こ引 &99ご09ごにら96ぽ22ヤ『乙9 -999&926’こ669Z60’しレ9C9&99e&ge Cg乙‘90どe乙9 多乞U乙ヤか29に‘シ6どにャヤヤ乙ヤ‘し66&6ZL e目事0J9!Ze目9 (OC) ヤ66’乙e9&Cヤしe乙ヤieLヤ‘9シL 00どヤ0に『ヤヤ9多69L&960&99 ヤgE&89ご9乙乙Lヤ‘し90&06乙乙乞ヤ’乙6乙9こ2&929&69し692&099&66 馴ヨq」e上 漏戸燕言謡論蔵f=晋憲鮪―燕癒燕濡か蔭耐UOI蛇J F還ピ準―=争墨と=鴛響生ダ=響」跳0・― uo!平で毒5」aMod人q 5ユasse pax!多6u!4?,ado 乙・L・2 (55ヨNISn日ロヨよVlngヨ8 VとdヨN・つ181つヨ4ヨOUQ人H) 人-LIUOHinV上NヨWど01ヨ八ヨ0 8ヨMod ONV Uヨ上VM NV土SlyVd PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA R-GULATED BUSINESS) 7,13 land, building & civil works and darn & reservoir were revalued at 30 June 2015 by an indepe r dent well reputed valuer M/s, National Engineering Services Pakistan (Pvt) Ltd (NESPAK) resulting in a surPILJ' of I-I's.758,379 million over the written down value of Rs. 127,535 million, HydroL:i _-_- ril_'s power generation plant assets were revalued at 30 June 2012 by an independent valuer M/s lqbal A. & Company (Pvt.) Limited and resulted in a surplus of Rs. 58,259 million over the written down value of I _'s, 20,950 million, 7A 3.1 Had the assets been carried under the cost model the carring amounts would be as follows, 2015 2014 Note --------------- PKR'000 ---------------- L,n n d (7-1-3-4) 5,239,895 5,239,725 ard civil works (7.1,15.1 39,244,110 39,776,941 Power generation plant assets (7 1 16,1) 16,258,075 77,020,334 Dams and reservoir (7,1,3 71) 66,793,088 100,304,105 127,535,168 222,341,105 7,1,3,2 Revaluation surplus on the revalued class of assets are as follows- Building & Power Dams and Land Civil Works generation reservoir Total (Note 7.1.3.4) (Note 7.1.3.5) plant assets (Note 7.1.3.7) (Note 7.1.3.6) --------------------------------------------------- PKIR TOG -------------------------------------------------- 2015 Revalued WDV 441,707,304 123,708,958 52,693,735 304,239,444 922.349,441 Historical cost WDV 5,239,895 39,244,110 16,258,07-5 rr3 793,088 127,535,168 Revaluation surplus 436,467,409 84,464,848 36,435,660 23 -0,446,356 794,814,273 2014 Revalued VVDV - - 55,783,889 55,783,889 Hi ltorjcal cost VVDV - 163 727,470 16,727 470 F, _fluition surplus " (i 39,6b6,419 7,1 13 Uiif -rence in yearly depreciation 0)aiga of revalued assets Building & Power Dams and Civil Works generatior reservoir Total plant asspts --------------------------------------- PKR TOO --------------------------------------- 2015 Revalued depreciation 949,563 3,486 ,- 15 1,614,596 6 052,924 Historical depreciation 949,563 868,236 1,614,596 3,432,395 Incremental depreciation - 2 G 2 0, 1, 9 2.6 2 0, 5 j 2014 Ft- iiued depreciation 3,708,030 3 708,030 Hi,txi al depreciation 856,010 856,010 Tr insfer to Third Sukuk Co- 9,175,146 9,175,146 Incremental depreciation 12,019.143 12,019,143 7.13.4 Land at cost and revalued amount Historical Revaluation R valued WOV Power Stations WDV as at surplus as at 30 June ,30 ji i no 9ri r, In A - - - - 2015 ------------------------------ PKR Too --------------------------- Tarbela 406,654 23 041,216 23,447,870 Mangla 162,703 115,611,297 115,774,000 Ghazi Barotha 4,409,428 292,111,478 296,520,906 Warsak 1,306 683,694 685,000 Chashma 2,256 977,744 980,000 Rasul 127 653,873 654,000 Dargai 250 832,150 832,400 Nandipur 873 1,159,067 1,159,940 c-li.-diwal 228 451,772 452,000 Ch; 'hf- 120 413,880 414,000 Kuj d ii Garhi 23 162,977 163,000 F-inala Khurd 110 270,790 270,900 Chitral 5,895 97,471 103,366 Allai Khawar 47,286 - 47,286 Khan Khawar 98,726 98,726 Gornal Zarn 18,990 18.990 Jabban 161 161 Jinnah Hydel 84,759 - 84,759 Total 5,239,895 436,467 09 441,707,304 ... . .............. .... . ......... .... ... .... .. .. . ....... .. ....... ............ . ....... PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 7.1.3.5 Building & civil works asset at historical and revalued written down values: Historical Revalued Historical Revalued cost Accumu Accumu Historical Revalued WDV Revaluation lated Revaluation lated WDV Power Stations Cost as at as at .as at 30 Juno 2015 surplus 30 Juno 2015 depreciation surplus depreciation as at as at as at 30 June 2015 30 June 2015 30 June 2015 --------------------- -R------------------------P-P---P---- PKR'000 -------------------------------------------------------------------------- -- Tarbea 4688,332 48,022,429 52,710 761 3,005,073 29,393,714 32,398,787 1,683 259 20.311,974 Mangle 1 061,659 17,001,251 18,062 910 479,860 12,714,016 13,193,876 581,799 4,869,034 Gazi Broths 25,165,032 49,889,208 75,054,240 5,887.148 3.899,897 9.787,045 19,277,884 65,267,195 Warsak 505,064 10,194,217 10,699,281 266,465 7,570,050 7,836,515 238,599 2.862.766 Chashma 6,893,563 14,376,373 21,269,936 1,932,282 3,485,709 5,417,991 4,961,281 15,851.945 Ras; 158,599 2 019,242 2,177 841 33,544 1,335,039 1.368,583 125.055 809,258 Darga 67,595 1,314.067 1,381 662 23,037 987,040 1,010,077 44.558 371,585 Nand pur 88,387 2.609,566 2,697,953 40,984 2,300,782 2,341,766 47,403 356,187 Shad:wa 56,057 1,599,476 1,655.533 23,318 1 384,556 1,407,874 32,739 247,659 35,142 995.558 1,030 700 18,986 844,571 863,557 16,156 167,143 KMr Garhi 11.906 441,002 452.908 6,442 376,907 383,349 5,464 69,559 Renala Khurd 23,064 142,728 165,792 5,174 131,777 136,951 17,890 28,841 Ch1tral 40,204 510.115 550.319 22,039 226,326 248,365 18,165 301.954 A a Khawar 2.021,093 - 2,021,093 77,253 - 77253 1,943,840 1,943,840 Dubair rhawar 1.066,095 - 1,066,095 3,376 3,376 1,062,719 1,062,719 Khan Khawar 1,969,977 - 1, 969,977 144.796 144,796 1,825,181 1,825,181 Jabban 961,589 - 961,589 28752 28,752 932,837 932,837 Jinnah Hyde] 6,745,128 - 6,745,128 315 847 - 315,847 6,429,281 6,429,281 Total 51,558,486 149,115,232 200,673,718 12,314,376 64,650,384 76,964,760 39,244,110 123,708,958 7.1.3.5.1 Building & civil works asset cost model schedule: Accumu- Accumulated Historical Cost of Asset Depreciation latedWD Additions I Cost as at 30 depreciation .caeo d atio WDV Power Stations as at charge for depreciation (Disposals) June 2015 as at 1 July as at 01 July 2014 the year as at 30 June 2014 30 June 2015 2015 ---------------------------------------------- -------------------- PKR '000 ----------------------- ------------------- ------------ Tarbela 4,557,293 131,039 4,688.332 2,919.466 85.607 3,005,073 1 683.259 Marnl 876,683 184,976 1.061,659 461.454 18,406 479,860 581,799 G-az Brotha 25,133,534 31,498 25.165,032 5,409,598 477,550 5,887,148 19,277,884 Warsak 489.979 15,085 505064 258.112 8,353 266.465 238.599 Chashma 6,877.169 16,394 6.893.563 1,801.572 130,710 1,932,282 4,961,281 158,599 - 158,599 30,670 2,874 33,544 125,055 Dag ai 80.944 (13,349) 67595 31,216 (8,179) 23.037 44,558 Nandipur 66 392 21.995 88387 40,078 906 40,984 47,403 Shadiwal 48,920 7,137 56,057 22,695 623 23,318 32,739 Chichoki 35,142 - 35,142 18,635 351 18,986 16,156 Kuram Garhi 11,906 - 11.906 6,288 154 6,442 5,464 Renala Khurd 23,064 - 23,064 4,738 436 5 174 17,890 Chitral 40,204 - 40.204 21,279 760 22,039 18,165 A i Khawar 2,021,093 - 2,021.093 38,852 38,401 77,253 1,943,840 Dubair Khawar 1,066 095 - 1.066.095 1,688 1,688 3,376 1,062,719 Khan , Khawar 1,969,977 - 1,969,977 107,774 37,022 144,796 1 825,181 Jabban 940,514 21,075 961 589 1,489 27,263 28,752 932,837 J inah Hydel 6,744,246 882 6,745.128 189 209 126,638 315.847 6,429,281 Total 51,141,754 416,732 51,558,486 11,364,813 949,563 12,314,376 39,244,110 PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 7.1.3.6 Power generation plant assets at historical and revalued written down values: Revaluted Revalued Revalued Additions / Revalued Depreciation Book value Power Stations cost as at (Disposals cost as at 30 accumulated (Disposals charge for the accumulated as at 1 July 2014 tAdjustment) June 2015 depreciation as /Adjustments) year 2014-15 depreciation as 30 June 2015 at 1 July 2014 at 30 June 2015 ----------------------------------------------------------------------------- PK R '000- --------------------------------------------------------------- . Tarbela 88,755.088 338,616 89,093,704 69,916,212 - 1,468,465 71,384,677 17,709,027 Ghazi Brotha 50,487,374 43,541 50,530,915 21,627,609 - 1,553,672 23,181,281 27,349,634 Warsak 479,146 - 479,146 243,777 - - 243,777 235,369 Chashma 14,333,843 15,241 14,349,084 6,529,686 - 465,737 6,995,423 7,353,661 Rasul 34,464 1,297 35,761 20,738 - 464 21,202 14,559 Dargai 275,360 (1,427) 273,933 268,750 (1,413) - 267,337 6,596 Nandipur 37,894 - 37,894 29,768 - 293 30,061 7,833 Shadiwal 83,281 - 83,281 76,139 - 204 76,343 6,938 Chichoki 177,210 177.210 170,169 - 170,169 7,041 Kuram Garhi 55,072 - 55,072 54,521 - - 54,521 551 Renala Khurd 15,145 - 15,145 12,619 - - 12,619 2,526 Chitral 2,3503- 2,350 2,510 (160) - 350 - Total 154726,227 397268 155,133,495 98,952498 1,573) 3,4881835 102,439760 52,693,735 7.1.3.6.1 Power generation plant assets cost model schedule: Additions / Accumulated Depreciation Accumulated Historical .Cost as at Cost as at 30 (Disposals WDV Power Stations 1 Jy 24 (Disposals June 20 depreciation as ADstments charge for the depreciation as asa /Adjustment) at 1 July 2014 year at 30 June 2015 30 J 2 30 June 2015 -------------------------------------------------------------------------- PKIR '000-------------------------- ------------------------------- --------. Tarbela 8,663,119 338,616 9,001,735 6,693,847 - 132,336 6,826,183 2,175,552 Ghazi Brotha 15,965,893 43,541 16,009,434 6,985,855 - 458,585 7,444,440 8,564,994 Warsak 1,563,409 - 1,563,409 742,741 - - 742,741 820,668 Chashma 9,187,118 15,241 9,202,359 4,255,204 - 276,895 4,532,099 4,670,260 Rasul 27,452 1,297 28,749 15,560 - 276 15,836 12,913 Darga 11.169 (1,427) 9,742 10.610 (1,413) - 9,197 545 Nandipur 15,182 - 15,182 11,937 - 108 12,045 3,137 Shadiwal 14,538 - 14,538 12,986 - 36 13,022 1,516 Chichoki 8,088 - 8,088 7,675 - 7.675 413 Kuram Garhi 3,728 - 3,728 3,542 - 3,542 186 Renala Khurd 1,454 - 1,454 1,381 - - 1,381 73 Chitral 29,777 - 29,777 22,119 (160) - 21,959 7,818 Total 35,490,927 397,268 35,888,195 18,763,457 (1,573) 868,236 19,630,120 16,258 075 PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITHY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 7.1.3.7 Dams & reservouir assets at revalued price Historical Revalued Historical Revalued Historical Revaluation Revalued Accumulated Revaluation Accumulated ReautoI . RvlainWDV WDV Power Stations Cost as at cost as at depreciation depreciation surplus Csurplus as at as at 30 June 2015 30 June 2015 as at as at 30 June 2015 30 June 2015 1 1 -- ------------------------------------------- PKR'000 ---------------------------------------------------------------------------- Tarbela 5,407,471 118,565,081 123,972,552 3,696,253 38 702,445 42,398,698 1,711,218 81,573,854 Mangla 20,320,502 83,557,118 103,877,620 2,210,097 30,248,562 32,458,659 18,110,405 71,418,961 Ghazi Brotha 48,984,886 101,793,671 150,778,557 11,460,844 7,198,002 18,658,846 37,524,042 132,119,711 Chashma 3,691,996 9,553,004 13,245,000 1,052,219 735,781 1,788,000 2,639,777 11 457,000 Rasul 26,700 1,720,883 1,747,583 2,494 858,611 861,105 24,206 886,478 Allai Khawar 414,465 - 414.465 17,719 - 17,719 396,746 396,746 Dubair Khawar 573,580 - 573,580 1,816 - 1,816 571 764 571,764 Gomal Zam 6,055,377 - 6,055,377 240,447 - 240,447 5, 814, 930 5,814,930 Total 85,474,977 315,189,757 400,664,734 18,681,889 77,743,401 96,425,290 66,793,088 304,239,444 7.1.3.7.1 Dams & reservouir assets at purchase price Accumulated . Accumulated Historical Cost of Asset Depreciation dpeito D Additions I Cost as at 30 depreciation chargedepreciation WDV Power Stations as at cag o h 01 July 2014 (Disposals) June 2015 as at 1 July as at 30 June as at 2014 2015 30 June 2015 ---------------------------------------------------------PKR'00 ---------------------------------------------------------------------- Tarbela 5,407,471 - 5,407,471 3,593,511 102,742 3,696,253 1,711,218 Mangla 20,308,257 12,245 20,320,502 1,824,201 385,896 2.210,097 18,110,405 Ghazi Brotha 48,984,886 - 48,984,886 10,530,131 930,713 11,460,844 37,524,042 Chashma 3,691,996 - 3,691,996 982,071 70,148 1,052,219 2,639,777 Rasul 26,700 - 26,700 1,987 507 2,494 24,206 Allai Khawar 414,465 - 414,465 9,844 7,875 17,719 396,746 Dubair Khawar 573,580 - 573,580 908 908 1,816 571,764 Gonal Zam 6055,377 - 6,055,377 124,640 115,807 240,447 5,814,930 Total 85,462,732 1 2 ,2 4 5 85,474,977 17,067,293 1,614,596 18,6811,889 66,793,088 PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 7.2 Capital work in progress 2015 2014 TotalcostTotal cost Hydel power projects Cumulative Direct Cumulative Total Cumulative Direct Cumulative incurred as at 30 Cmlt Drc incurred as at 30 June 2015 June 2014 -- ----- - --------------------- PKR'000 ------------------------------------------------------- Bhasha Dam Project 30,804,116 5,146,242 35,950,358 28,590,622 2,900,828 31,491,450 Terbela 4th Extension Hydro Project 18,141,328 3,303,906 21,445,234 10,081,397 1,196,372 11,277,769 Golan Gol Hydro Power Project 9,903,841 1 579,428 11,483,269 6,689,444 980,217 7,669,661 Dasu Hydro Power Project 5,996.503 373,512 6,370,015 1,655,641 - 1.655,641 Bunji Hydro Power Project 2,135 163 - 2,135,163 2,094,838 - 2.094,838 Kheyal Khawar Hydro Power Project 1,591,991 200,374 1,792,365 1,236,048 124,218 1,360,266 Dubair Khawar Project 230,206 - 230,206 230,206 - 230,206 Jinnah Hydro Power Project 308,741 - 308,741 237,755 237,755 Mangla Upgradation Project 330,736 - 330,736 - Other projects under construction 3347,756 367,814 3715,570 3675.55 311,289 3986,848 72,790,38 1 10,971,276 83,761 5 657 54 491 510 5,512,924 60,004,434 IDC stands for interest during construction 7.2.1 Capital work in progress - Movement during the year 2015 2014 Note ---------- PKR '000 ---------- Opening balance 60,004,434 52,411,658 Additions during the year Direct cost 19,067,615 33,376,706 [DC for the year 5458352 5,211,000 24,525,967 38,587,706 R&D - Survey and Investigation (27) (510,296) - Transferred to operating fixed assets (258,448) (30,994,930) Closing balance 83,761,657 60004,434 PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 2015 2014 8. LONG TERM ADVANCES AND RECEIVABLES Note --------------- PKR 000 -------------- Long term advances to employees - considered good (8.1) 451,193 409,636 8.1 Long term loans for purchase of plot, house, car, motorcycle etc. are given to regular employees of the Hydroelectric The said loans are provided at mark up rate of EP Fund applicable to the employees It is recovered in 120 instalments in respect of purchase of plot and house and in 60 installments for purchase of car, motorcycle etc These advances are unsecured and considered good by the management of the HydroeIectric. 9. STORES, SPARES AND LOOSE TOOLS Stores and spares 3,564.978 2,966,728 Loose tools 155,696 573,839 Stores in transit 272,142 103,154 3,992,816 3,643,721 9,1 Stores and spares includes few items which can be capitalized but are not distinguishable from other stores and spares. 10. TRADE DEBTS Receivable from NTDC (CPPA) - related party (10.1) 34,879,092 17,806,100 10.1 This represents unsecured receivable balance and are considered good by the management. 10.2 Aging of trade debts Not yet due 4,759,866 10,567,551 Past due. 0 - 30 days 4,697,674 3. 738 ,549 More than 60 days 25,421,552 3,500,000 34,879 092 17,806, 100 11, ADVANCES AND OTHER RECEIVABLES Advance to: (considered good) - employees 1,425,155 1.168,802 - suppliers, contractors & consultants 581,215 1,911,936 Prepayments (11.1) 782,839 984,969 General sales tax receivable 20,935 257,746 Advance to employees 84,138 70,320 Accrued interest 37,420 61,633 Miscellaneous receivables 426,755 304,267 3,358,457 4,759,673 11.1 This includes prepayments of Rs.775 million (2014: 787 million) to CRRK for import of material. 12. SHORT TERM INVESTMENTS - Held to maturity Held to maturity - Unquoted Allied Bank Limited (12.1) 19,200 - Innovative Investment Bank Limited (12.2) 261,000 261,000 280,200 261,000 Less: Impairment charged (261,000) (261,000) 19,200 12,1 This represents term deposit receipts in Allied Bank Limited for Kheyal Khawar project. The amount was received as a uarantee fee from contractor. These carry markup of 5.7 : with maturity period of three months. PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 12,2 This represented investment made in innovative Investment Bank (Formerly Crescent Standard Investment Bank). On maturity the balance remained unpaid, hence the case was lodged with the Judicial Department of Lahore High Court for the recovery of the said amount- The Honorable High Court decided the case in favour of the Hydroelectric and attached the property with forced sale value of Rs. 220 million and appointed Court Auctioneers for recovery of this amount. However, impairment has been recognized in prior year financial statements (note 27), 2015 2014 13. CASH AND BANK BALANCES Note --------------- PKR' 0 --------------- Cash in hand 64,725 3,566 Balance with the banks - current accounts un-utilized balance of loans and grants (13.1 - 13-3) 6,598,460 2,194 123 authority own balance - 6,237 6,598,460 2,200.360 - deposit accounts un-utilized balance of loans 34,667,429 16,315 903 redemption sinking fund (13.4) 8,003,462 1,930.456 authority own balance 6,442,633 6,699,084 (13.5) 49,113,524 24,945,443 Total bank balance 55,711,984 27,145,803 55,776,709 27,149,369 13.1 This inciudes Rs. 616 million (2014: 1,002 million) which represents unutilized balance of IDA loan (Note 17.1.4.4) relating to 4th Extension of Tarbela Project's Assignment Account. 13.2 This includes Rs. 4,656 million which represents unutilized balance of IDA loan (Note 171.4 7) relating to Dasu Hydro Power Project's Assignment Account, 13.3 The amount include Rs.1,145.136 million US Aid grant for Mangla refurbeshment. 13.4 This includes Redemption Sinking Fund which was created in March 2013 with HBL wapda house branch for the payment of SUKUK-l1 |jarah rentals due in January and July each year till July 2017,and JPH supplier credit due in February and august each year till august 2020. The profit is accrued on daily product basis for monthly credit of the same at one month KIBOR+15bps. The KIBOR is revised on 1st working day of each calendar month. Sinking fund created for SUKUK-1 has been settled during the year. 13.5 Deposit accounts carry interest at the rate ranging from 4.5% to 9.50% (2014: 7% to 9.50%) per annum 14. RESERVES Reserves for developments (14.1) & (14.2) 111,699,916 86,839.646 14,1 Provision for reserve for development works has been created in accordance with policy stated in note (6.6). The GoP has allowed to plough back/ invest these reserves in the construction of new/ongoing Hydel power development projects through Annual Development Plans of the Government of Pakistan. 14.2 Power sale tariff of the Hydroelectric is fixed to estimate reasonable return on investment made in the shape of loans and GoP equity for financing of the Hydroelectric projects. The Article 161 (2) of the Constitution of Pakistan allows to deduct return on investment and provision for reserve from the revenue of the Hydel Power Stations. The above transfer have accordingly been made to prepare financial statements of the Hydroelectric in line with provisions of the constitution. 15. GOVERNMENT OF PAKISTAN'S INVESTMENT 72,522,716 72,522,716 This represent investment funds provided by the GoP for Diamir Basha, Mangla Dam raising, Gomal Zam Hydel Power and other Power Projects from time to time. This also includes Capital investment by WAPDA from its other source of income. PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 2015 2014 16, REVALUATION SURPLUS Note -------------- PKR '000 --------------- Revaluation surplus - opening 39,056,259 51,075,402 Incremental depreciation due to revaluation (7.1,3.3) (2,620,599) (12,019,143) 36.435,660 39,056,259 17. LOANS AND BORROWINGS - INTEREST BEARING Foreign loans, - Relent 52,546,710 40,863,592 - Direct 6,270,730 7,267,336 Local loans - Cash development loans (local currency) 67,133,041 52.364,749 (17,1) 125 950,481 100,495,677 Less: Current portion shown under current liabilities Foreign relent loans 4,697,486 4,638,967 Foreign direct loans - Exim Bank China 1,232,000 1,217,457 Cash development loans 276,321 231,710 6,205,807 6,088,134 119,744,674 94,407,545 17.1 Loan and borrowings - Utilization wise breakup Operational projects: 1) Foreign relent loans Ghazi brotha 9,304,981 11,896,881 Chashma 1,691,973 2,059,363 Ali, Dubair & Khan Khawar 9,873,631 11,107,835 Jabban 2,565,094 3,029,635 (17,1-1) 23,435,679 28,093,714 2) Foreign direct loans Jinnah Hydro (17 1.2) 6,270,730 7,267.336 3) Local currency Cash development loans Ghazi brotha 6,033,571 6,189,219 Tarbela 1,245,632 1,311,235 Jabban 127,612 128,203 (17,1.3) 7,406,815 7,628,657 Total loans for operational power stations 37,113,224 42,989,707 Development projects: 1) Foreign relent loans Golen gol 3,747,560 2.837.963 Tarbela 4th Extension 15,786,250 9,504,214 Keyal Khwar 523,081 427,701 Dasu 9,054,140 (17,1,4) 29,111031 12,769,878 2) Local currency Cash development loans Harpo 39,000 39,000 Kohala 368,608 372,433 Bashoo 41,945 42,259 Diamir Basha 59,276,673 44,282,400 (17 1.5) 59,726,226 44.736.092 Total loans for development projects 88,837,257 57,505,970 125,950,481 100,495,677 PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 17.1.1 Operational project loans - Foreign relent loans Rate of Installments Repayment Loan No. Note interest outstanding commence- 2015 2014 per as on ment I annum 30 June 2015 Maturity ----------- PKR'000 ---------- Ghazi Brotha ADB-1424-PAK 14,00% 6 2001/2021 2,824,885 3,295,699 KFW-9566316 14,00% 8 2003/2023 2,378,778 2,676,123 Pk-P-47 17.1.1 1700% 5 2005/2020 2,847,124 3,416,547 EIB i 11 00% 1 2001/2016 121,499 243,124 IBRD-3965-PAK 3_64% 1 2001/2016 1,132,695 2265388 9,304,981 11,896,881 Chashma Hydol FRENCH BANK CREDIT 11.00% 4 1999/2019 120,890 151,111 FRENCH STATE CREDIT 11-00% 4 1999/2019 110,614 138,277 ADB-1143-PAK 14,00% 2 1997/2017 180,323 270,486 ADB-1144-PAK 17.1 1.2 14.00% 2 1997/2017 217,353 326,037 CITI Bank of Japan 11.00% 10 2005/2025 1,058,882 1,164,770 JAXIUM BANK LOAN 11.00% 0 1995/2015 3 860 IBRD-3107-PAK 11.00% 1 1996/2016 3,908 7,822 1.691,973 2,059,363 Altai, Dubair & Khan Khwar projects IDB-PAK-0117 17.1.1.3 17.00% 8 2008/2026 9,873,631 11,107,835 Jabban AFD Credit Facility 17.1.1.4 15.00% 14 2011/2028 2,565,094 3,029,635 23,435,679 28,093 714 17.1.1.1 These loans are for Ghazi Brotha hydel power station obtained from foreign financial institutions by the Government of Pakistan and are re-lent to the Hydroelectric - NEPRA Regulated Business and are secured by way of Government Guarantee in favour of those institutions. Further, the Hydroelectric - NEPRA Regulated Business is responsible for repayment to Government of Pakistan, 17.11.2 These loans are for Chashma hydel power station obtained from foreign financial institutions by the Government of Pakistan and are re-lent to the Hydroelectric - NEPRA Regulated Business and are secured by way of Government Guarantee in favour of those institutions. Further, the Hydroelectric - NEPRA Regulated Business is responsible for repayment to Government of Pakistan. 17.1.1.3 This represent Islamic Development Bank loan of US S 150.200 million under Istisna's Financing Agreement dated 1st Dec 2008 for Khan, Allai and Dubair Khwar Hydro Projects taken by the Government of Pakistan (Borrower). The borrower has relent the loan to WAPDA Hydroelectric being executing agency of Khwar Projects. The loan will be repaid in 15 years after the end 3 years gestation period. 17.1.1.4 This represent French Development Agency (AFD) loan of Euro 26.500 million under Subsidiary Loan Agreement dated 13 Dec 2010 for Jabban Power Station taken by the Government of Pakistan (Borrower). The borrower has relent the loan to WAPDA Hydroelectric being executing agency for the project. The loan will be repaid in 18 years after the grace period of 3 years. 17.1.2 Operational project loans - Foreign direct loans - Exim Bank China This represents supplier s credit facility of US$ 67.703 (2014:US$ 80.013 million) for the construction of Jinnah Hydro Power Project, a turn key project against the sanctioned limit of US $ 108.8 million, The loan is repayable in fourteen years inclusive of four years grace period, in 20 semi annually installments starting from 18 August 2010 Rate of mark-up is 5% annually with no floor and no cap (2012: 5% annually). The loan is secured through stand by letter of credit to back issuance of 20 promissory notes issued at the time of commencement of the project in 2006- PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 17,1.3 Operational project loans - Cash development loans Power Station Rate of Installments Repayment & I Note interest outstanding commence- 2015 2014 Year of Disbursement per ason ment/ annum 30 June 2015 Maturity --P..-.-.-.. PKR'000 ---------- Ghazi Brotha 2005-06 17.13.1 9.79% 17 2005/2031 6,033,571 6,189,219 Tarbela (HPS) 1997-98 17.1.3.3 17.50% 9 1997/2023 805,037 850,568 1998-99 17.13.3 17-50% 10 1998/2024 440,595 460,667 1,245,632 1,311,235 Jabban 2007-08 17.1.3.1 10.14% 18 2007/2033 30,112 30,703 2009-10 17 1.3.1 12.59% 18 2010/2035 97,500 97,500 127,612 128,203 7,406,815 7,628,657 171.3.1 These Loans have been obtained from Federal Government for construction of the project. The loan term is of 25 years with 5 years as grace period for principal repayment, 17.1.3.2 These Loans have been obtained from Federal Government for feasibility studies of Hydel development projects. The loan term is of 25 years with 5 years as grace period for principal repayment. 17.1.3.3 These Loans have been obtained for Tarbela hydel power station from Federal Government for payment of net Hydel profit to provincial Government of Khyber Pakhtunkhwa. The loan term Is of 25 years with 5 years as grace period for principal repayment. 17.1.4 Development projects loans - Foreign relent loans Rate of Installments Repayment Loan No. N ote interest outstanding commence- 2015 2014 per as on ment / annum 30 June 2015 Maturity - P-.. PKR'000 ----------- Golen Gol Kuwait Fund Loan No. 742 17.1.4.1 15.00% 26 2011/2025 1,280,709 545,676 Saudi Fund Loan No. 10/479 171.4.2 15.00% 10 2011/2025 1,796,033 1,975,604 Saudi Fund Loan No, 14/609 17.1.4.3 15.00% 30 2014/2034 670,818 316,683 3,747,560 2,837,963 Tarbela 4th Extension IDA CREDIT No. 5079-PK 17 1 4.4 15,00% 11 2013/2035 12,310,701 7,108,483 IBRD 8144-PK 17,1 4.5 15,00% 11 2013/2035 3,475,549 2,395,731 15,786,250 9,504,214 Keyal Khwar KFW-320517 17.1.4.6 17.00% 40 2012/2031 523.081 427,701 Dasu Hydro IDA CREDIT No. 5498-PK 17.1 4.7 15.00% 40 2015/2039 9,054,140 - 29 111 031 12,769,878 17.1.4.1 This represent Kuwait Fund loan of Kuwaiti Dinar 11,00 million under Subsidiary Loan Agreement dated 5th Sep 2008 for Golen Gol Hydro Power Project taken by the Government of Pakistan (Borrower). The borrower has relent the loan to WAPDA Hydroelectric being executing agency for the project The tenor of the loan is 15 years including 2 years of grace period. 17.1.4.2 This represent Saudi Fund loan of Saudi Riyals 150,00 million under Subsidiary Loan Agreement dated 5th Sep 2008 for Golen Gol Hydro Power Project taken by the Government of Pakistan (Borrower). The borrower has relent the loan to WAPDA Hydroelectric being executing agency for the project. The tenor of the loan is 15 years including 2 years of grace period PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 1714.3 This represent Saudi Fund loan of Saudi Riyals 216.750 million under Hydropower project between Pakistan and Saudi Fund for development (SFD) dated 17 Feb 2014 for Golen Gol Hydro Power Project taken by the Government of Pakistan (Borrower). The borrower has relent the loan to WAPDA Hydroelectric being executing agency for the project, The tenor of the loan is 20 years including 5 years of grace period. The effective date of loan is from 16 March 2014. The loan is to be repaid in 30 semi annual installment commencing on 30 April 2019 and ending on 31 Oct 2033 171.44 This represent International Development Association (IDA) loan of $ 440.00 million under Subsidiary Loan Agreement dated 12 April 2012 for Tarbela 4th Extension Hydro Power Project taken by the Government of Pakistan (Borrower). The borrower has relent the loan to WAPDA Hydroelectric being executing agency for the project The loan will be repaid in 25 years including 5 years of grace period. For the year Cumulative 2015 2014 2015 2014 Loan Utilization -------------------------------- PKR '000 ------------------------------- Opening Balance 1,001,860 923,168 1,925,028 923,168 Withdrawal of loan during the year 5,202,218 5,148,879 12,310 701 7,108,483 6,204,078 6,072,047 14,235,729 8 031,651 Less: Utilization of funds (5,588,255) (5,070,187) (11,694,878) (6,106,623) Closing balance 615,823 1,001,860 2,540,851 1,925,028 17,14.5 This represent International Bank for Reconstruction and Development (IBRD) loan of $ 400.00 million under Subsidiary Loan Agreement dated 12 April 2012 for Tarbela 4th Extension Hydro Power Project taken by the Government of Pakistan (Borrower). The borrower has relent the loan to WAPDA Hydroelectric being executing agency for the project. The tenor of the loan is 18.5 years including 7.5 years of grace period. For the year I Cumulative 2015 2014 2015 2014 Loan Utilization ------------------------------ PKR '000 ------------------------------- Opening balance - - - Withdrawal of loan during the year 1079.818 2,304,569 3,475,549 2,395,730 1079,818 2,304,569 3,475,549 2,395,730 Less: Utilization of funds (933,745) (2,304,569) (3,329,476) (2 395 730) Closing balance 146073 146073 17.1.4.6 This represent Frankfurt am Main (KfW) loan of Euro 97.080 million in total, to be disbursed in two trenches. Under Trench - 1 Euro 4,415 million will be disbursed which will be repaid in 38 years after 10 years grace period Under trench - 2. Euro 92.66 million will be disbursed that will be repaid in 30 years after grace period of 10 years. The loan taken by the Government of Pakistan (Borrower) has been relent under Subsidiary Loan Agreement dated 27 Dec 2011 for Keyal Khwar Hydro Power Project 17.1.4.7 This represents relent loan from International Development Association of Special Drawing Rights 3799 million equivalent to US $ 588 4 million between Government of Pakistan (Borrower) and International Development Association dated 25 August 2014 for Dasu hydropower project.VVapda will disburse USS 15 million on the request of NTDC for feasibility study and detail design of transmission lines.NTDC will repay this amount directly to GoP with out channeling WAPDA. The borrower has relent the loan to WAPDA Hydroelectric being executing agency for the project. The loan is to be repaid in 40 installments commencing on December 2019 and ending on June 2039 The tenor of the loan is 20 years including 5 of years of grace period. The effective date of the loan is from 13 October 2014 For the year Cumulative 2015 2014 2015 2014 -------------------------------- PKR '000------------------------------- Opening balance - . Withdrawal of loan during the year 9054,1401- 9,054,140 9,054,140 - 9,054,140 Less: Utilization of funds (443983503) (4,398.503) Closing balance 4655,6376- 4,655,637 PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 171.5 Development projects loans - Cash development loans Project Rate of Installments Repayment & Note interest outstanding commence- Year of Disbursement per as on ment 2 annum 30 June 2015 Maturity ------------- PKR '000 ------------- Harpo 2009-10 17.13,2 12,59% 18 2010/2035 39,000 39,000 Kohala 2006-07 17.1.3.2 11.78% 18 2006/2032 152,092 154,933 2009-10 17 1,3.2 12.59% 18 2010/2035 130.000 130,000 2008-09 17.1.3.2 13.80% 18 2008/2034 86.516 87,500 368.608 372.433 Bashoo 2007-08 17.1.3,2 10.14% 18 2007/2033 15,945 16.259 2009-10 17 1-3.2 12.59% 18 2010/2035 26,000 26,000 41,945 42,259 Diamir Basha 2007-08 171.5.1 10.14% 18 2007/2033 291,673 297,400 2009-10 17.1.5.1 12.59% 18 2010/2035 1,000,000 1,000,000 2011-12 17,1,5.1 12.64% 18 2011/2037 11,700,000 11,700,000 2012-13 17,1.5.1 10.65% 23 2013/2038 3,785,000 3,785,000 2013-14 171.5.1 11.79% 25 2014/2039 27,500,000 27,500,000 2014-15 17.1.5.1 10.53% 25 2015/2040 15,000.000 - 59,276,673 44.282,400 59,726.226 447 36,092 17.1.5.1 These Loans have been obtained for Bhasha hydel power station from Federal Government for land acquisitions. The loan term is of 25 years with 5 years as grace period for principal repayment 2015 2014 18. DEFERRED GRANTS Note -------------- PKR '000 ------------- Balance as on 01 July 3,321,852 3,550,311 Grants received during the year 1,449,696 - Grants amortized during the year (856,139) (228,459) Closing balance 3,915,409 3,321,852 18.1 This includes grants from USAID for Mangla Dam rehabilitation project, Tarbela Power Station and Gomal Zam Dam, The Tarbela Power Station grant was received under FARA agreement for the replacement of stator windings of unit 4. It has been amortized against the repair and maintenance cost incurred on the said replacements. The Gomal Zam grant was received for the construction of Gomal Zam Project and its been amortized over 30 years economic useful life of the plant and equipment of the project. The Mangla rehabilitation grant is received during the year to enhance the capacity of Mangla power station and include refurbishment and up gradation of unit five and six. 19. DEFERRED LIABILITIES WAPDA Second Sukuk Company Limited (19.1) 376,179 855,273 Employee benefits (19,2) 27,831,730 25,431.301 28,207,909 26,286.574 19.1 This represents ijarah rental payable to WAPDA Second Sukuk Company Limited and VVAPDA Third Sukuk Company Limited against ijarah agreement dated 2 July 2007 and dated 14 October 2013 in respect of certain Tarbela Dam power generation machines. The rental is payable in bi-annual installments and will be fully retired at 13 July 2017 and at 14 October 2021 respectively PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 19.2 2015 Post employment benefits Particulars Free Free medical electricity Pension Total facility facility -------------------------------PKR'000----------------------------- Liability recognized in the statement of financial position 5.554,063 2,566,197 19,711,470 27,831,730 Changes in the present value of defined benefit obligation: Opening defined benefit obligation 4,835,721 2,300,154 18,295,427 25.431,301 Service cost 310,228 73,945 375,440 759,613 Interest cost 580,286 276,018 2,195,451 3,051,755 Benefits paid (172,172) (83,920) (1,154,848) (1,410,939) Closing defined benefit obligation 5,554,063 2,566,197 19,711,470 27,831,730 2015 Post employment benefits Particulars Free Free medical electricity Pension Total facility facility ---------------------------PKR '000 ----------------------------- Charge for the year: Current service cost 310,228 73,945 375,440 759,613 Interest cost 580,286 276,018 2,195,451 3,051,755 890,514 349,963 2,570,891 3,811,368 2014 Post employment benefits Particulars Free Free medical electricity Pension Total I facility facility -- - --- ---------------- PKR '000 ----------------------------- Liability recognized in the statement of financial position 4,835,721 2,300,154 18,295,427 25.431,301 Changes in the present value of defined benefit obligation: Opening defined benefit obligation 4,322.373 2.191,670 17,585,858 24,099,902 Service cost 237,702 65,806 395,654 699,162 Interest cost 561,908 284,917 2,286,162 3,132,987 Benefits paid (184.133) (93,244) (1,800,458) (2,077,835) Actuarial (gains)/ losses (102,129) (148,996) (171,789) (422, 914) Closing defined benefit obligation 4,835,721 2,300,154 18,295,427 25,431 301 2014 Post employment benefits Particulars Free Free medical electricity Pension Total facility facility -------------------------------PKR 000 --------------------------- Charge for the year: Current service cost 237,702 65,806 395,654 699,162 Interest cost 561,908 284,917 2,286,162 3,132.987 799,610 350,723 2,681,816 3.832,149 PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 2014 Post employment benefits Particulars Free Free medical electricity Pension Total I facility facility ----------------------------- PKR '000-------------------------- Re-measurements of net defined benefit liability: Actuarial(gains)/Iosses due to change in demographic assumptions (43,533) 5,248 (121,071) (159,356) Actuarial(gains)/losses due to experience adjustments (58,596) (154,244) (50,718) (263,558) Amount chargeable to OCI (102,129) (148,996) (171,789) (422,914) 2015 2014 20. TRADE CREDITOR AND OTHER PAYABLES Note ------------- PKR '000 ------------- Trade creditors 5,403,733 4,198,434 Net hydel profit payable to Khyber Pakhtunkhwa (6.12) 3,500,000 5,400,000 Security deposits 1,486,349 1,313,271 Due to other formations/ wings of Authority (20.1) 1,210,057 1,205,501 Retention on contract payments 780,598 247,635 Accrued liabilities 712,700 419,710 Taxes payable 204,791 204,241 Bridge financing water wing 230,569 230,570 Water usage charges payable to AJ.K Government 209,152 100,087 Water Management Charges payable to IRSA 16 37,455 Projects clearing accounts 51,106 5,851 Other liabilities 266,125 1,589,332 14,055,196 14,952,087 20.1 Due to other formations/ wings of Authority Coordination Wing (HOC) 1,083,206 1,072,599 Water wing 126.851 132,902 1,210,057 1,205,501 21, DEBT SERVICE LIABILITY This represents the balance amount of principal and interest payable to Government of Pakistan against the schedules repayments of Foreign relent loans (Note 17.1.1) and Cash development loans (Note 17.1.3). 22. ACCRUED INTEREST 2,672,935 1,520,566 This represents interest of long term loans and borrowings note 17 23. OTHER CURRENT LIABILITIES Payable to Provinces (23.1) 17,573 17,315 Other liabilities 841,789 705,645 859,362 722,960 23.1 This represents amount payable to Governments of Punjab, Khyber Pakhtunkhwa and Sindh for 4% return on assets transferred to WAPDA from these provinces at the time of unbundlin of WAPDA. PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 24. CONTINGENCIES AND COMMITMENTS 24.1 Contingencies 24.1.1 During the year ended June 30, 2009 VVFSC was defrauded by a forged transfer of Sukuk Certificates valuing Rs, 180 million belonging to NFC to a ghost company, Swift Engineering Solutions (SES); the certificates were transacted a number of times and now these are partly held by Meezan Bank Limited (MBL), Soneri Bank Limited (SBL) and Bank Islami Pakistan Limited (BIPL). 24.1.2 WFSC odged a case of fraud with the Federal Investigation Agency (FIA). On the basis of an inquiry rePort dated 5 Aug 2009, FIA registered an FIR bearing No. 28/2009 and recovered from the accomplices of the principal accused a publicly declared absconder who has fled the country: a) Rs 13,477,000 in the form of hard cash, and prize bonds of Rs. 1,775,000- b) a house in Khyber block, Allama lqbal Town Lahore valuing Rs.6,500,000 c) an under construction Floor Mills in the name and style of Hussain Floor Mills' at Ferozewala District, Sheikhupura having land measuring 8 Kanals 13 marlas with a value of Rs. 6,300,000 with building constructed thereon of Rs 6,500,000, and d) Land measuring 1 kanal 1 marIa at Ferozewala District, Sheikhupura, 24.1.3 On 8 Mar 2010, FIA submitted a challan u/s 173 Cr PC in the court of Special Judge (Central) Lahore against twelve (12) accused out of which two including the principal accused are public absconders who are presently outside Pakistan. The case of extradition of the absconders is being pursued with different agencies! courts in and outside Pakistan. The Civil Court appointed WFSC as custodian of cash, prize bonds and Hussain Floor Mills whereas the house in Khyber block, Allama lqbal Town Lahore was returned to the occupant on the condition that pending the final decision of the case, the house shall not be disposed off in any manner. 24.1.4 On 30 Sep 2013, the Court gave its verdict and out of the twelve accused, acquitted six and declared the two main accused who have fled the country as public absconders, while the remaining have been sentenced to various periods of imprisonment and fine: the Court has further adjudicated that all the recoveries as stated at Note 24.1.2 are confiscated in favor of WFSC (the complainant). 24.1.5 VFSC has invested the recovered cash of Rs. 13,477,000 in saving account on the directions of the Civil Court. 24.1.6 On 12 Dec 2009 WFSC Filed Interpleader suit u/s 88 CPC in the Civil Court of Lahore for deciding the lawful ownership of defrauded Sukuk Certificates and deposited the 8th and 9th Ijarah rental amount with the Civil Court Meanwhile, WFSC filed an appeal in the Lahore High Court against the order dated 21 May 2010 of the Civil Judge, Lahore and the honorable High Court (LHC) ordered to continue to deposit the ljarah rental against the defrauded Sukuk Certificates with the Civil Court and further directed the Civil Court to deposit the same in a profit bearing scheme in a scheduled bank. Accordingly, 10th, 11th, 12th, 13th & 14th (final) Ijarah rentals and the principal amount of Rs. 180 million payable against the demised Sukuk Certificates were deposited in the scheduled bank by the Civil Court. The Honorable Lahore High Court, Lahore on 17-02-2015 had decided the case in favour of WAPDA and set aside the impugned judgment and decree and hold that the suit is maintainable and that the trial court erred is rejecting the plaint. Accordingly, WAPDA has filed an application in the Civil Court, Lahore with the pray to revise the original inter-pledder suit for deciding the true ownership of the defrauded Sukuk Certificates amounting to Rs. 180 Million.M/s Al-Mezan investment Management Company, Soneri Bank Ltd and National Fertilizer Corporation have filed appeals in Honorable Supreme Court of Pakistan against the judgment of Lahore High Court, Lahore. 24.1,7 Meanwhile, MBL, SBL, and BIPL being the affectees' / plaintiffs' filed separate suits against the Company (WFSC) asserting the validity of their purchase transactions, However, in the case of MBL the Honorable Sindh High Court, Karachi vide order dated 31 May 2012 decided that MBL's suit is not maintainable under the Financial Institutions (Recovery of Finance) Ordinance 2001. Accordingly, the suit was to be registered / fixed as a fresh ordinary case and written statement was filed by defendant / WAPDA. The case is now filed for framing of issues. The Honorable Court on our request has directed the plaintiffs to first satisfy the Honorable Court on the issue of jurisdiction. PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 242 Commitments 24.2.1 Capital commitments contracted for but not incurred as at 30 June 2015 (through forward cost) amounted to Rs. 2,895,229 million (2014: Rs. 3,355,598 million). 24,2.2 Comi itments under letter of credit amounts to Rs.2,748 million. (2014: Rs.1.990 million). 24.2.3 Commitments under Stand by letter of credit (SBLC) in favour of supplier for construction of Jinnah Hydro Project amounting to Rs USS 77 million (2014: US$ 80 million) 24,2.4 The commitments in respect of ljarah rentals payable to WAPDA Second Sukuk Company Limited and WPAPDA Third Sukuk Company Limited are explained below- 2015 2014 Note ------------- PKR '000 ------------ Break up of future Ijarah rentals payable (Sukuk Il & lIl): With in one year 3,951,441 4,236 685 With in one to five years 12,040,166 13.466,071 Over five years 754,574 1,548,997 16,746,181 19,251 753 25. REVENUE Variable charges (25.1) 3,413,857 2,573,519 Fixed charges 64,697,563 49,517,562 68,111,420 52q091 081 25.1 The amount is net of sales tax amounting to Rs 580 million (2014: 437 million) 26. COST OF ELECTRICITY Salaries wages and benefits (26.1) 3,518,944 2 979,413 Retirement and other benefits (26.2) 3,811,368 3,832,149 Sukuk ljarah rentals (26.4) 3,401,410 2,327,208 Repairs and maintenance 1.361,349 969,086 Depreciation (71) 7,710,495 7,808,039 Dams inspection and monitoring cost 455,088 502,007 Power, gas and water 330,475 267.685 NEPRA fees 111,361 75,919 Insurance (26.3) 49,721 49,809 ConsuItancy charges 129,709 331,967 Fuel charges 29,605 21,142 Return on assets to provinces 12,972 12,972 Sundry expenses 158 200 20,922,655 19.177,596 26.1 Salaries, wages and benefits Pay and allowances 2,934,548 2,569 192 Other benefits 684,396 410,221 3,518 944 2,979,413 26.2 Retirement and other benefits Pension 2,570,891 2,681,816 Free Electricity 349,963 350,723 Free Medical 890,514 799,610 3.811,368 3.832,149 I - ------- PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 26.3 As per WAPDA Equipment Protection Scheme (WEPS), WAPDA equipment of power houses have been given insurance coverage based on written down value of equipment- 2015 2014 Note ------------- PKR'000 ------------- 26.4 Sukuk Ijarah rentals Sukuk-ll 1,501,848 1,501,848 Sukuk-lll 1,899,562 825,360 3,401,410 2,327.208 27. OPERATING EXPENSES Authority overheads 541,309 495,535 R&D - Survey and Investigation (721) 510,296 - Vehicle running expenses 200,837 237,003 Outside services employed 73.007 70,246 Travelling expenses 46,184 47,107 Office expenses 17,465 16,341 Advertisement and periodicals 14,793 23,105 Legal and professional charges 12,273 8,201 Communication 7,958 7,362 Rent, rates and taxes 2,935 27,758 Impairment on short term investment (12.2) - 261,000 Loss on sale of asset for Sukuk III - 240,103 Other expenses 2,222 16,629 1,429,279 1.450,390 28. OTHER INCOME 28.1 Income from financial assets Interest on bank balances (28.1.1) 2,100,188 422,009 Interest income on investments 346,021 98,892 2,446,209 520,901 28.2 Income from assets other than financial assets Amortization of grant (18) 856,139 228,459 Income from lease of other property 86,098 64,005 Miscellaneous income 48,440 105,768 Income from non-utility operation 2,076 4,885 Interest income-advance to staff 870 1,676 Sale of scrap 723 6,538 Sale of stores 124 1,488 994,470 412,819 3,440,679 933,720 28.1.1 This includes interest on un-utilized loan balances lying with the banks, to be utilized on future development of projects. 29. HYDEL LEVIES Net hydel profit (29.1) 6,000,000 6,000,000 Water usage charges (29.2) 950,788 858,818 IRSA Charges (29.3) 159,104 156,419 7,109,892 7,015,237 PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 29.1 At present the Hydroelectric is making payment of Rs 6,000 million per annum on account of Net Hydel Profit INHP) to the Government of Khyber Pakhtunkhwa, as an interim arrangement on the directions of Government of Pakistan (GoP) This arrangement is expected to continue till such time, the GoP gives revised directions after the determination of revenue rate (NHP margin) by the Council of Common Interest, in respect of each Hydroelectric power station in operation In past the GoP has agreed to settle NHP arrears assessed by the Arbitral Tribunal for the period from FY 1991-92 to 2004-5. It is expected that arbitrary arrears, if any, agreed/assessed by the GoP for the subsequent period would be settled by the GoP itself with the provinces at its own in line with the previous practice 29.2 Water usage charges @ RS.0.15 per unit generated at Mangla Power House is being paid to Azad Jammu & Kashmir Government as per Memorandum of Understanding signed in 2003 29.3 IRSA charges are levied by IRSA vide letter no- A-ll-6/10/2010-IRSA dated 25 August 2011 w-e-f. 01 July 2011 @ Rs 0.005/kWh for hydro power generation. 2015 2014 30. FINANCE COST Note ------------- PKR'000 ------------- Interest on relent foreign loans - Utilized on hydel power stations 3,964.754 2,537.934 - Un-utilized (30.1) 620,796 532,036 4,585,550 3,069,970 Interest on cash development loans (CDL) - Utilized on hydel power stations 850,779 859,041 - Un-utilized balance (30.1) 2,905,997 - 3,756,776 859.041 Bank charges 12.073 1 387 8,354,399 3930, 398 30.1 Interest on un-utilized loans represents the interest cost incurred on balance lying with banks, to be utilized in future for the development of projects, 31 FINANCIAL RISK MANAGEMENT 31.1 Financial risk factors The Hydroelectric's financial liabilities comprise of interest bearing loans and borrowings, liability against assets subject to ijarah, other payables, accrued interest, short term borrowings and short term liabilities. The main purpose of these financial liabilities is to raise finances for the Hydroelectric's operations- The Hydroelectric has trade debts, advances, deposits, other receivables and cash and short term deposits that arrive directly from its operations. The Hydroelectric also holds long term investments, accounts / notes receivables and long term advances and deposits. The Hydroelectric's activities expose it to a variety of financial risks: market risk (including currency risk and interest rate risk), credit risk and liquidity risk, The Hydroelectric's overall risk management programmed focuses on the liquidity crisis and seeks to minimize potential adverse effects on the financial performance Risk management is carried out by management of the Hydroelectric. The management provides principles for overall risk management, as well as policies covering specific areas such as currency risk, nterest rate risk, credit risk and liquidity risk. 31.1.1 Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates. interest rates and equity prices will affect the Hydroelectric's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return on risk. PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) (a) Foreign currency risk management Pak Rupee (PKR) is the functional currency and presentational currency of the Hydroelectric and as a result currency exposure arises from transactions and balances in currencies other than PKR. The Hydroelectric's potential currency exposure comprises of: - Transactional exposure in respect of non functional currency monetary items. Transactional exposure in respect of non functional currency expenditure and revenues. The potential currency exposures are discussed below Transactional exposure in respect of non functional currency monetary items Monetary items, including financial assets and liabilities, denominated in currencies other than the functional currency of the Hydroelectric are periodically restated to PKR equivalent, and the associated gain or loss is taken to the income statement account. The foreign currency risk related to monetary items is managed as part of the risk management strategy. Transactional exposure in respect of non functional currency expenditure Certain operating and capital expenditure is incurred by the Hydroelectric in currencies other than the functional currency. These currency risks are managed as a part of overall risk management strategy Exposure to foreign currency risk The Hydroelectric's exposure to foreign currency risk was as follows based on notional amounts 2015 2014 ------------- US $ '000-------- Long term loans 61,549 73.858 The following significant exchange rates applied during the year: Average rate Reporting date mid spot rate 2015 2014 2015 2014 US $ 10145 102.88 101.77 98.8 Sensitivity analysis A ten percent strengthening of the Pak Rupee against the US S at 30 June 2015 would have increased profit or loss by the amounts shown below- This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis was performed on the same basis for 30 June 2014. 2015 2014 ------------- PKR'000 -------------- (Increase) I Decrease in profit or loss before reserves 626,569 729,717 A 10 percent weakening of the Pak Rupee against the US $ at 30 June 2015 would have equal but opposite effect on US $ to the amounts shown above, on the basis that all other variables remain constant, (b) Interest rate risk The interest rate risk is the risk that the value of the financial instrument will fluctuate due to changes in the market nterest rates. Sensitivity to interest rate risk arises from mismatches of financial assets and liabilities that mature in a given period. The Hydroelectric has no significant long-term interest-bearing assets. The Hydroelectric's interest rate risk arises from interest bearing loans and borrowings and short term borrowings Borrowings obtained at variable rates expose the Hydroelectric to cash flow interest rate risk. At the statement of financial position date the interest rate profile of the Hydroelectric's interest bearing financial instruments is: 2015 2014 2015 2014 ---------------------- % ------------------ --------------- PKR '000 --------------- Fixed rate instruments Financial liabilities: Loans and borrowings 3,62 % to 17 % 3.84 % to 17.5 % 125,950,481 100,495,679 PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) Fair value sensitivity analysis for fixed rate instruments The Hydroelectric does not account for any fixed rate financial assets and liabilities at fair value through profit or loss Therefore, a change in interest rate at the statement of financial position date would not affect profc or loss of the Hydroelectric 2015 2014 2015 2014 ---------------------- % ---------------------- --.-....-..--.- PKR '000 -------------- Floating rate instruments Financial assets: Bank balances 4.5 % to 9.5 % 7 % to 95 % 6,442.633 16,315,903 Fair value sensitivity analysis for floating rate instruments The following table demonstrates the sensitivity to a reasonably possible change in floating interest rates, with all other variables held constant, of the Hydroelectric's profit before tax (through the impact on floating rate borrowings). Increase/ Effect on (Decrease) in profit basis points before tax 2015 % PKR '000 Financial assets: Bank balances 1 (26,801) (26,801) 2014 Financial assets: Bank balances 138538 138,538 311.11.1 The Hydroelectric has transferred interest on these loans to Ministry of Finance (MoF), This interest is appearing in these financial statements as receivable from MoF Accordingly, there would be no impact on income statement of change in interest rate applicable on such borrowing. Previously this amount was receivable from National Transmission and Dispatch Company (NTDC). 31.1.2 Sensitivity analysis of credit risk Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was as follows: 2015 2014 -..-........... PKR '000 ----------- Long term advances 451,193 409,636 Long term security deposit 1.514 1,514 Trade debts 34,879,092 17.806.100 Advances and other receivables 3,358.457 4.759,673 Short term investments 19.200 - Bank balances 49,113,524 24.945,443 87,822,980 47,922,366 Credit risk related to trade debts is managed by established procedures and controls relating to customer's credit risk management. Outstanding receivables are regularly monitored. The maximum credit risk exposure at reporting date is carrying value of financial assets stated above The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rate. The table below shows the bank balances held with some major counterparties at the statement of financial position date. f PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) Rating 2015 2014 Short term Long term Agency ----------- PKR '000 ------------ A1+ AAA JCR/PACRA 6,742,986 6,633,314 A1+ AA+ PACRA 10,913,153 6,269,705 A-1+ AA+ JCR 61,114 255,821 A-1+ AAA JCR 8,299,287 2.554133 A1+ AAA PACRA 73,915 758,123 Al+ AAA PACRA 3 2,781 A1+ AA- PACRA 59,426 1,412,533 A-1+ AA JCR 29,207,740 6,370,769 Al+ AA PACRA 116,962 1,079,252 A1+ AA- PACRA - 750,339 A1+ AA+ PACRA 237,398 1,021,650 A1+ AA+ PACRA - 37.383 55.711,984 27,145,803 At 30 June 2015 the Hydroelectric has only customer National Transmission and Despatch Company Limited (NTDC) that owed Hydroelectric balance of Rs. 34,879 million (2014: Rs.17,806 million.) Due to Hydroelectric's long standing business relationships with NTDC and also it is related party of the Hydroelectric and after giving due consideration to their strong financial standing, management does not expect to the provision against receivables Accordingly the credit risk is minimal, 31.1.3 Liquidity risk Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Hydroelectric's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the entity's reputation The table below analyses the Hydroelectric's financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows 2015 Carrying Contractual Less than Between Over 5 1land 5 Amount cash flows 1 year years years 30 June 2015 -------------------------------------- ---- PKR' -------------------------------------------- Loans 125,950,481 125,950,481 6,205,807 21,077,440 98,667,234 Other payables 14,055,196 14,055,196 14,055,196 - - Accrued interest 2,672,935 2,672,935 2,672.935 - Short term liabilities 859,362 859,362 859.362 - 143,537,974 143,537.974 23,793,300 21,077,440 98,667,234 PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 2014 Carrying Contractual Less than Between Over 5 1 and 5 Amount cash flows 1 year years years - ------------------------------- PKR '000 ---------------------------- 30 June 2014 Loans 100,495,679 100,495,679 6,088,134 27,229,503 67,178.042 Other payables 14,952,087 14,952,087 14,952,087 - - Accrued interest 1,520,566 1,520,566 1,520,566 - Short term liabilities 722,960 722,960 722960 - 117,691,292 117,691,292 23,283,747 27,229,503 67,178,042 The contractual cash flows relating to the above financial liabilities have been determined on the basis of mark- up rates effective as at 30 June. The rates of mark up have been disclosed in respective notes to the financial statements, Fair values of financial assets and liabilities The carrying values of all financial assets and liabilities reflected in financial statements approximate their fair values Fair value is determined on the basis of objective evidence at each reporting date. Financial instruments by categories 2015 Cash and Loans and Held to cash advances maturity equivalent - -------P-R--.- PKR '000 ------------------------ Assets as per statement of financial position Long term advances and receivables - 451,193 - 451,193 Long term security deposit 1,514 - 1,514 Trade debts - 34,879,092 - 34,879.092 Advances and other receivables - 3,358,457 - 3,358,457 Short term investments - 19,200 - 19,200 Cash and bank balances 49,113,524 - - 49,113,524 49,113,524 38,709,456 87,822,980 2014 Cash and Loans and Held to cash advances maturity equivalent --------------------------- PKR '000 ..--- ------------ Assets as per statement of financial position Long term advances and receivables - 409,636 409,636 Long term security deposit - 1,514 1,514 Trade debts - 17 806,100 17.806,100 Advances and other receivables - 4,759,673 4,759,673 Cash and bank balances 24,945,443 - 24,945,443 24,945,443 22976,923 -47,922,366 PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 2015 At Amortized Cost Financial Liabilities as per statement of financial position PKR '000 Long term loans 125,950,481 Debt Service Liability 11,388,181 Other payables 14,069,441 Accrued interest 2,672,935 VVAPDA Second Sukuk Company Limited 376,179 Short term liabilities 859,362 155,316,579 2014 At Amortized Financial Liabilities as per statement of financial position Cost Cost PKR '000 Long term loans 100,495,679 Other payables 14,952,087 Accrued interest 1,520,566 WAPDA Second Sukuk Company Limited 855,273 Short term liabilities 722.960 118,546,565 31.2 Fair values of financial assets and liabilities The carrying values of all financial assets and liabilities reflected in financial statements approximate their fair values Fair value is determined on the basis of objective evidence at each reporting date. Fair value hierarchy The Hydroelectric uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities. Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable either. directly or indirectly. Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data. As at 30 June 2015, the Hydroelectric did not hold any financial instruments carried at fair value, 32. NUMBER OF EMPLOYEES The Hydroelectric as at 30 June 2015 has 7,697 (2014: 7,950) active employees all of whom are entitled to post employment benefits and 8,264 (2014: 8.031) pensioners to whom post employment benefits payments are disbursed. PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY (HYDROELECTRIC - NEPRA REGULATED BUSINESS) 2015 2014 33. INSTALLED CAPACITY AND NET ELECTRIC OUTPUT ---------- PKR 000 ---- Installed Capacity (MW) 6,902 6,902 Net Electric Output (GWh) 31,780 31,306 34. TRANSACTIONS WITH RELATED PARTIES The related parties comprise associated undertakings, subsidiaries, undertakings with common control, Government of Pakistan (GoP) and key management personnel. Transactions between the Hydroelectric and related parties. Statement of financial position items: Long term loans - Additions 42,958,515 35,826,969 - Repayments 6,115,532 4 099,023 Rece vable from NJHPC against GoP CDL Other payables 1,210,057 1,205,501 Capita inducted by GoP - - Income statement items: Sales 68,111,420 52.091 081 1% Authority overhead 263,273 289,977 insurance premium 49,721 49,809 ijarah rentals 3,401,410 2,327,208 Hydei lev es 6,000,000 6,000,000 Water usage charges 950,788 858,818 IRSA Charges 159,104 156,419 35. PROVISION FOR TAXATION income of the Hydroelectric is exempt from income tax as per provisions of Clause 66 (xvi) Part-I of Secono Sciedule to the Income Tax Ordinance, 2001. Interest income under section (u/s) 151, property income uls 155, and cash withdrawals from bank u/s 231A of the Income Tax Ordinance, 2001 is also exempt and in this connection exemption certificates are issued by Commissioner Income Tax on yearly basis. 36. DATE OF AUTHORIZATION OF ISSUE These financial statements were authorized for issue on 2/k 9 C- .JY§ 37. GENERAL 37.1 Figures have been rounded off to the nearest thousand, unless otherwise stated. 37.2 Corresponding figures have been rearranged/reclassified, wherever necessary, for better and fair presentation, However, no significant rearrangement/relassification has been made in the financial statements. V MEMBER (FINWANC MEMBER (POWER)