TIDMOPG
RNS Number : 3122B
OPG Power Ventures plc
30 September 2022
30 September 2022
OPG Power Ventures plc
("OPG", the "Group" or the "Company")
Final results for the year ended 31 March 2022
OPG (AIM: OPG), the developer and operator of power generation
assets in India, announces its final results for the year ended 31
March 2022 ("FY22").
FY22 Summary:
-- FY22 revenue decreased by 14.66 per cent to GBP80.1 million
from GBP93.8 million in FY21 primarily due to Covid-19 related
disruptions and increased coal prices in second half of FY22 due to
ongoing global conflict.
-- Total generation (including deemed) in FY22 was nearly 1.9
billion kWh, 11.0 per cent lower than last year's generation of
nearly 2.1 billion kWh.
-- Adjusted EBITDA of GBP21.6 million (27.0 per cent margin) as
compared with GBP33.7 million (36.0 per cent margin) in FY21.
-- Profit before tax from continued operations was GBP13.0
million as compared to GBP21.6 million in FY21.
-- Basic earnings per share 1.5 pence in FY22 as compared to 3.5 pence in FY21.
-- Net debt reduced from GBP16.24 million in FY21 to GBP6.9 million in FY22.
Unless specified, all figures in GBP
million FY22 FY21
Revenue 80.1 93.8
------ -----
Other Operating Income - 9.4
------ -----
Adjusted EBITDA 21.6 33.7
------ -----
Profit before tax from continuing operations 13.0 21.6
------ -----
Profit/(Loss) from discontinued operations,
incl. NCI (2.9) 1
------ -----
Profit for the year 6.0 14.1
------ -----
Earnings per share (pence) 1.5 3.5
------ -----
Net debt 6.9 16.2
------ -----
Net debt to Adjusted EBITDA (ratio) 0.3 0.5
------ -----
Total generation (including deemed) (billion
kWh) 1.9 2.1
------ -----
Current developments and highlights
-- Plant Load Factor ("PLF") including 'deemed' for the
five-month period to 31 August 2022 was low at 28.6 per cent as OPG
continues to focus on profitability and an optimising Plant Load
Factor (PLF) with a mix of long term and short term Power Purchase
Agreements (PPA) with the State Utility, supply to captive
shareholders and supply through Exchange and coal sales.
-- Due to prevalent high coal prices, State Utility has approved
the pass through of the fuel prices until December 2022, under long
term PPA.
-- Average tariff for the five months period to 31 August 2022
was Rs. 9.15, up 69 per cent (FY21: Rs. 5.42) due to pass through
of high coal prices by the State Utility and short-term supply
contract awarded by State Utility.
-- International coal prices continue to be high due to the
ongoing global conflict coupled with demand from China and
Europe.
Indian Economy update
-- According to the World Economic Report, the Indian Economy is
expected to grow by 8.2 per cent in FY23.
-- The power demand in the country is expected to grow at 6.5
per cent between FY22 and FY24 according to the Central Electricity
Authority
-- The deadline for meeting emission norms for the majority of
coal-based power plants in India, has been extended from December
2024 to December 2026.
Mr. Kumar, Non-Executive Chairman said:
"We are proud to report that, despite the challenges of Covid 19
and the global supply disruption due to Russia Ukraine conflict,
OPG has demonstrated an excellent performance which was comfortably
in line with FY22 market expectations and has also delivered a
significant reduction in net debt during the year."
The Company's annual report and accounts for the year ended 31
March 2022 is available on the Company's website at
www.opgpower.com/and will be sent to shareholders shortly.
For further information, please visit www.opgpower.com or
contact:
Via Tavistock
OPG Power Ventures PLC below
Ajit Pratap Singh
Cenkos Securities plc (Nominated Adviser +44 (0) 20 7397
& Broker) 8900
Stephen Keys / Katy Birkin
Tavistock (Financial PR) +44 (0) 20 7920
Simon Hudson / Nick Elwes 3150
Chairman's Statement
Resilience, robust profitability and strong cash generation
FY22 has been a challenging year. As the world and the global
economy was recovering from Covid-19, the war in Ukraine dented
sentiment with a sharp increase in global energy prices. Despite a
challenging year, OPG has continued to deliver strong cash
generation, robust profitability and achieve a significant
reduction in net debt.
The unprecedented health crisis, caused by Covid-19, took an
immense human and economic toll globally. At OPG, we responded
immediately with a comprehensive Covid-19 response plan - putting
in place health and safety measures to protect our employees,
continuing to run our plant operations smoothly to ensure supply of
electricity to our consumers, and providing essential support and
assistance to our local communities in need. Yet, even in such
critical circumstances, our Group has emerged strong, reporting
solid set of financial results and paving pathways for accelerated
and sustainable future growth.
The plants' generation, including deemed generation, during FY22
was 1.9 billion units which is an 11.0 per cent reduction in
generation in comparison with FY21 primarily due to the increase in
coal prices. The average Plant Load Factor ("PLF") in FY22
(including deemed) was at 52 per cent (FY21: 58 per cent) and the
average realised tariff was Rs. 5.82 (FY21: Rs.5.72) per kilowatt
hour.
In FY22, the Group's revenue was GBP80.1 million (FY21: GBP93.8
million) and Adjusted EBITDA was GBP21.6 million (FY21: GBP33.7
million) and profit for the year was GBP6.0 million (FY21: GBP14.1
million).
We are glad to report that OPG was comfortably in line with FY22
market expectations despite the difficult market conditions.
Creating shareholder value through deleveraging
In 2018, the Board took the decision to focus on our profitable,
long-life assets in Chennai, and to prioritise deleveraging as a
method to grow shareholders' equity. This strategy, we believe,
will deliver value to shareholders with free cash flows providing
significant returns to our shareholders and further opportunities
to grow the business.
During the period FY20 - FY22 net debt reduced significantly
from GBP53.4 million to GBP16.2 million and then to GBP6.9 million.
Net debt to Adjusted EBITDA ratio reduced from 1.7x to 0.5x and
further to 0.3x demonstrating the robustness of OPG's financial
position. The Group remains amongst the least leveraged power
companies in India.
The Board remains convinced, especially in light of the Covid-19
challenges, that our strategy of maintaining operational excellence
and paying down expensive borrowings is the right one to pursue for
all our stakeholders.
Maximising stakeholders' long-term value
One of OPG's paramount objective is to maximise stakeholders'
long-term value. In light of disruptions and uncertainty caused by
Covid-19 and extraordinary volatility in coal prices and freight
over the past year and a half, the Board believes that it is in the
best interest of the Group and its stakeholders to conserve cash.
The cash thus conserved will be utilized for repaying debt, growing
ESG focused projects and maintaining a strong and resilient balance
sheet to withstand the turbulent times.
Building a sustainable future
Rapid growth in urbanisation, universal electrification, and a
renewable energy transition driven by climate change, mean that
India's incremental power needs is targeted to largely be met by
renewable energy. Our business strategy is aligned with this,
offering us an opportunity to unlock value for all our stakeholders
in the years to come. OPG has developed its ESG strategy, which,
among other matters, includes objectives to reduce its carbon
footprint. As part of this strategy, the Group is evaluating
various options to increase its renewable energy asset base and to
establish joint ventures to roll out various energy transition
technologies. These initiatives will ensure that OPG delivers
year-on-year improvements to reach the Group's emissions reduction
targets in the medium and longer-term.
We are pleased to present our second standalone ESG report which
pertains to FY22 and summarises the objectives, activities, and the
performance of the Group from an ESG perspective. This report
includes examples of how we have demonstrated our commitments and
applied our management approach on a range of ESG topics, including
environmental stewardship, health & safety, relationship with
local community, and governance.
Indian Economy and Power Sector Update
India is the third largest producer and third largest consumer
of electricity in the world with installed power capacity reaching
400 GW as at March 2022. In FY22, even amidst a relatively weaker
macroeconomic scenario, peak power demand hit an all-time high of
200.5 GW. On account of a record-breaking heat wave in North India,
the peak power demand has already touched 210.8 GW in the current
financial year.
In June 2022, the World Bank's Global Economic Outlook projected
India's FY23 (CY22) economic growth forecast at 7.5 per cent,
supported by plans for higher spending on infrastructure, rural
development and health services as well as stronger-than-expected
recovery in services. FY24 (CY23) is forecasted at 7.1 per cent,
amongst the highest growth rates.
During FY22, power consumption increased by 9.5 per cent to
1,392.1 BU from 1,271.5 BU. ICRA, which is a leading ratings agency
in India estimates that India's electricity demand is expected to
grow up to 6.5 per cent in FY23 on a year-on-year basis.
Over the last several months the prices of thermal coal and
freight have surged sharply primarily due to increased imports of
coal and other goods by China and other Asian countries on the back
of post Covid-19 economic recovery. Whilst OPG is partially covered
from increases in prices with fixed price agreements for coal and
freight, the Group remains exposed to market fluctuations for the
unhedged portion of coal consumption and freight. The Group
continues to explore various options including sourcing the coal
from other geographies (including domestic sources) to reduce the
per unit cost of electricity.
Outlook
Since April 2022, the prices of thermal coal and freight have
increased significantly due to geo-political tensions. Coal prices
may not reduce significantly in the short term.
While challenges to the economy will continue in FY23, the Group
has strong foundations, allowing us both to manage the ongoing
Covid-19 situation and to pursue growth sustainably. The Group's
medium and long-term fundamentals remain unchanged. We have strong
cash flows which will enable OPG to continue to reduce and deliver
our long-term profitable business model of responsible growth and
sustainable returns to shareholders. We will also continue to focus
on advancing our ESG agenda.
I would like to extend my gratitude to all our employees who
overcame challenges posed by the pandemic, as well as vendors,
banks and all stakeholders, especially our shareholders, for the
incredible support we have received during these unprecedented and
extraordinary times.
N. Kumar
Chairman
28 September 2022
Financial Review
The following is a commentary on the Group's nancial performance
for the year.
Income statement
Year ended 31 March 2022 % of revenue 2021 % of revenue
GBPm GBPm
====================================== ================ ===================== =============== ====================
Revenue GBP80.1 GBP93.8
Cost of revenue (excluding (GBP56.5) (GBP56.9)
depreciation)
====================================== ================ ===================== =============== ====================
Gross profit GBP23.6 29.4 GBP36.9 39.4
====================================== ================ ===================== =============== ====================
Other operating income GBP0.0 GBP9.4
Other income GBP8.1 GBP1.9
Distribution, General and
Administrative
expenses, ECL (excluding (GBP10.0) (GBP14.5)
depreciation,
employee stock option charge)
====================================== ================ ===================== =============== ====================
Adjusted EBITDA GBP21.6 27.0 GBP33.7 36.0
====================================== ================ ===================== =============== ====================
Share based compensation (GBP0.2) (GBP0.5)
Depreciation (GBP5.3) (GBP5.7)
Net finance costs (GBP3.1) (GBP5.9)
====================================== ================ ===================== =============== ====================
Profit before tax from continuing
operations GBP13.0 16.2 GBP21.6 23.0
====================================== ================ ===================== =============== ====================
Taxation (GBP4.1) (GBP8.4)
====================================== ================ ===================== =============== ====================
Profit after tax from continuing
operations GBP8.9 11.1 GBP13.1 14.0
====================================== ================ ===================== =============== ====================
(Loss)/Profit from discontinued
operations, including (GBP2.9) GBP1.0
Non-Controlling
Interest
====================================== ================ ===================== =============== ====================
Profit for the year GBP6.0 7.5 GBP14.1 15.0
====================================== ================ ===================== =============== ====================
Note: Due to rounding, numbers presented throughout this
document may not add up precisely to the totals provided and
percentages may not precisely reflect the absolute figures.
Revenue
FY22 has been a tough year for OPG. The Group's revenues
decreased by GBP13.8 million (a 14.7 per cent decline) in FY22
primarily driven by the impact of Covid-19 in the first half and
high coal prices in the second half of FY22. The Group decreased
generation and consequently sales to captive power users because of
the unprecedented increase in costs. Adjusted EBITDA in FY22 at
GBP21.6 million was 27.0 per cent of revenues as compared to 36 per
cent last year.
The average tariff realized in FY22 was Rs. 5.60/kWh, marginally
higher than previous year's Rs. 5.52/kWh. Total generation
including deemed was 1.87 Bn units, a decline of 11.3 per cent over
last year's 2.1 Bn units. This reduction was primarily because of
the second Covid-19 wave that affected India and the high coal
prices in the second half. The increase in coal prices was due to
higher demand for coal from China, Europe, excessive rains in the
Q3FY22 and later on, the export ban on coal in Q4FY22 in
Indonesia.
The production and output levels from the Group's operating
power plants compared to the prior years were as follows:
FY22 FY21
============================================ ====================== ==================
Total generation, incl. "deemed" generation
(million units) 1,868 2,107
Plant Load Factor (PLF) (%)* 52 58
Average tariff (INR/unit) 5.60 5.52
* Unit 3: "Deemed" PLF (%) has been included.
Gross Profit
The Gross Profit (GP) for the year was GBP23.6 million (29.4 per
cent of revenue). On y-o-y basis (FY21 - GBP36.9 million (39.4 per
cent of revenue)), the gross profit declined by 36 per cent
reflecting the impact of high Indonesian coal prices.
The cost of revenue represents fuel costs. The table below shows
average price of coal consumed in FY22 and FY21.
Average price of coal consumed FY22 FY21
================================================== ========================= ================
Average price of coal consumed ( /mt) 5,460 4,127
Average price of coal consumed ( / mKCal) 1,328 991
Per cent change in average price of coal consumed
( /mt) 32.3 (4.1)
Per cent change in the average price of coal
consumed ( / mKCal) 34.0 (3.6)
Adjusted EBITDA
Adjusted earnings before interest, taxation, depreciation and
amortisation ('Adjusted EBITDA') is a measure of a business' cash
generation from operations before depreciation, interest and
exceptional and non-standard or non- operational charges, e.g.
share based compensation, etc. Adjusted EBITDA is useful to analyse
and compare profitability among periods and companies, as it
eliminates the effects of financing and capital expenditures.
Adjusted EBITDA for FY22 was GBP21.6 million, a decrease of 36
per cent from GBP33.7 million in FY21 primarily because of increase
in international coal prices.
Profit from continuing operations before tax was GBP13.0 million
(16.2 per cent of revenue) as compared to GBP21.6 million (23.0 per
cent of revenue) in FY21 primarily because of increase in
international coal prices.
Profit before Tax (PBT) reconciliation for FY22 (GBPm)
PBT FY22 GBP13.0
PBT FY21 GBP21.6
----------
Increase (Decrease) in PBT (GBP8.6)
----------
Decrease in GP (GBP13.4)
----------
Decrease in Other Operating Income (GBP9.4)
----------
Increase in Other Income GBP6.1
----------
Decrease in Distribution, General & Administrative GBP4.9
Expenses, Expected Credit Loss
----------
Decrease in Net Finance Costs GBP2.9
----------
Decrease in Depreciation and Amortisation GBP0.4
----------
Increase (Decrease) in PBT (GBP8.6)
----------
Taxation
The Company's operating subsidiaries are under a tax holiday
period but are subject to Minimum Alternate Tax ('MAT') on their
accounting profits. Taxes paid under MAT can be offset against
future tax liabilities arising after the tax holiday period. The
tax expense during the year was GBP4.1 million.
Profits after tax from continuing operations
Profits after tax from continuing operations has decreased by
32.1 per cent or GBP4.2 million from GBP13.1 million to GBP8.9
million. The decrease was in line with H1FY22 forecasts.
Assets held for sale and loss from discontinued operations - 62
MW Karnataka solar projects
In FY18, four Karnataka solar projects (62 MW) were
commissioned. OPG has a 31 per cent equity interest in these
projects.
During FY19, the Group obtained a right to exercise an option to
buy an additional 30 per cent equity interest in solar companies.
Effective from FY20 this right was assigned to a third party and
from FY21 the remaining related obligations and the results of the
operations of the solar companies are not consolidated in the
Group's consolidated financial statements due to loss of control.
As previously reported, after evaluation of all options, the Group
decided that the most efficient way to maximise shareholders' value
from the solar operations was to divest its' stake in the solar
companies. The process of disposing the assets satisfy all
conditions of IFRS 5. Therefore, the solar assets have been
classified as "Assets held for sale" as on 31 March 2022. The
completion of the disposal process was impacted by Covid-19.
OPG in its endeavour to sell the solar assets continues to
identify potential buyers. Based on the term sheet received from
potential buyer, the Group's investment in the solar companies was
valued at GBP13.5 million as compared to OPG's initial investment
of GBP16.4 million. This loss of GBP2.9 million is recognized as
loss from discontinued operations on account of the diminution in
the value of investment. The management is evaluating and actively
considering the offer received from the potential buyer.
Earnings per Share (EPS)
The group's total reported EPS decreased from 3.5 pence in FY21
to 1.5 pence in FY22.
Dividend policy
One of OPG's paramount objectives is to maximise stakeholders'
long-term value. Keeping in mind, the disruptions and uncertainty
caused by Covid-19 and extraordinary volatility in coal prices and
freight, the Board believes that it is in the best interests of the
Group and its stakeholders to conserve cash. The cash thus
accumulated will be used to repay debt, to fund growth in relation
to ESG focused projects and to maintain a strong and resilient
balance sheet to withstand turbulent times. Therefore, the Board
decided not to declare a dividend for FY22. The Board will revisit
the Group's dividend policy in due course.
Foreign exchange gain/loss on translation
The British Pound to Indian Rupee exchange rate appreciated to a
closing rate of GBP1= Rs. 99.37 on 31 March 2022 from a rate of
GBP1= Rs. 100.81 on 31 March 2021 thereby resulting in a gain of
GBP2.3 million. The same has been recognized under "Exchange
differences on translating foreign operations".
Property, plant and equipment
The increase in net book value of our property, plant and
equipment to GBP173.4 million principally relates to additions
during the year offset by depreciation and foreign exchange impact
during the year.
Other non-current assets
Other non-current assets (excluding property, plant and
equipment & intangible assets) have increased by GBP4.3
million. The major components of this increase was in the
non-current portion of restricted cash (up GBP2.2 million)
represented by investments in mutual funds and fixed deposits
maturing after twelve months of GBP10.4 million (2021: GBP8.2
million) allocated to debenture redemption fund and OPG's strategic
investment in Atsuya Technologies Private Limited totalling to
GBP2.1 million (Rs. 210.0 million). The debenture redemption fund
was created to repay the non-convertible debentures of GBP20.1
million (Rs. 2.0 billion) which are repayable in FY24.
Current assets
Current assets have decreased by GBP4.4 million from GBP74.5
million to GBP70.1 million year on year primarily as a result of
the following:
-- decrease in Assets held for sale by GBP2.9 million due to
diminution in the value of investments in the solar companies.
-- decrease in trade receivables by GBP6.2 million as a result
of strong collections from the Group's captive power users and
customers, including old receivable balances.
-- decrease in inventories by GBP1.7 million on account of consumption and sale of coal.
-- increase in other short-term assets by GBP8.4 million
primarily due to increase in investments in mutual funds to GBP18.2
million (2021: GBP13.3 million) and advances to vendors of GBP6.2
million (2021: GBP2.4 million).
-- decrease in cash balances (including restricted cash) by GBP2.1 million.
Liabilities
Current liabilities have marginally increased by GBP0.2 million
from GBP38.2 million to GBP38.4 million year on year. Bank
borrowings increased by GBP8.9 million from GBP4.5 million to
GBP13.4 million. Trade payables decreased by GBP8.1 million from
GBP32.5 to GBP24.4 million.
Non-current liabilities have decreased by GBP8.1 million
primarily due to decrease in the non-current portion of borrowings
by GBP12.5 million from GBP22.3 million to GBP9.8 million. Deferred
Tax liabilities have increased from GBP13.0 million to GBP17.0
million.
Financial position, debt, gearing and finance costs
As at 31 March 2022, total borrowings were GBP43.3 million (31
March 2021: GBP46.6 million). The gearing ratio, net debt (i.e.
total borrowings minus cash and current and non-current investments
in mutual funds)/(equity plus net debt), was 3.9 per cent (31 March
2021: 9.1 per cent). The gearing ratio is a useful measure to
identify the financial risk of a company.
OPG's NCDs are repayable in June 2023 and have an interest
coupon of 9.85 per cent. The issue of the NCDs had a material
positive impact upon the Group's cash flow during the uncertain
Covid-19 impacted period, through a significant deferment of
principal payments and the NCDs' interest coupon being lower by c.1
per cent in comparison with the existing term loans interest
rate.
During FY22 net debt (total borrowings minus cash and current
and non-current investments in mutual funds) reduced from GBP16.3
million to GBP6.9 million and net debt to Adjusted EBITDA ratio
reduced from 0.5x to 0.3x as a result of the repayment of term
loans and working capital loans as well as strong cash collections
achieved during the year. This demonstrates the robustness of OPG's
financial position. The Group remains amongst the least leveraged
power companies in India.
Based on the present term loans repayment schedule, the Group is
expected to be term loan free during June 2024.
Finance costs have decreased by GBP1.4 million from GBP6.8
million in FY21 to GBP5.4 million in FY22. This was primarily due
to the impact of decrease in foreign exchange losses and reduction
in interest expenses following scheduled repayments of the term
loans and the issuance of the NCDs.
Finance income increased from GBP0.9 million in FY21 to GBP2.3
million in FY22. This has resulted in a decrease of GBP2.8 million
in Net Finance Costs from GBP5.9 million in FY21 to GBP3.1 million
in FY22.
Current restricted cash representing deposits maturing between
three to twelve months amounted to GBP2.4 million (FY21: GBP3.2
million) which have been pledged as security for Letters of
Credit.
Non-current restricted cash represents investments in mutual
funds of GBP8.8 million (31 March 2021: GBP8.2 million) and fixed
deposits of GBP1.6 million (31 March 2021: GBP0.01 million). These
non-current investments have a maturity period in excess of twelve
months and are allocated to the debenture redemption fund which is
earmarked towards the redemption of non-convertible debentures
scheduled during FY24 of GBP20.1 million (`2.0 billion).
Cash flow
Cash flow from continuing operations before and after changes in
working capital were GBP21.6 million (FY21: GBP36.8 million) and
GBP16.3 million (FY21: GBP40.2 million) respectively. Net cash flow
from operating activities decreased from
GBP40.2 million in FY21 to GBP16.3 million in FY22, a decrease
of GBP23.8 million, primarily due to decrease in trade payables and
other liabilities.
Movements (GBPm) FY22 FY21
========================================================== ================ ==================
Operating cash flows from continuing operations before
changes in
working capital GBP21.6 GBP36.8
Tax paid (GBP0.0) (GBP0.7)
Change in working capital assets and liabilities (GBP5.2) GBP4.1
========================================================== ================ ==================
Net cash generated by operating activities from continuing GBP16.3 GBP40.2
operations
========================================================== ================ ==================
Purchase of property, plant and equipment (net of (GBP3.5) (GBP0.5)
disposals)
Investments (purchased)/sold, incl. in solar projects,
shipping JV, market securities, movement in restricted (GBP5.7) (GBP29.0)
cash and interest received(#)
========================================================== ================ ==================
Net cash (used in)/from continuing investing activities (GBP9.2) (GBP29.5)
========================================================== ================ ==================
Finance costs paid, incl. foreign exchange losses (GBP4.5) (GBP5.8)
Dividend paid - -
========================================================== ================ ==================
Total cash change from continuing operations before GBP2.6 GBP4.9
net borrowings
========================================================== ================ ==================
(#) Includes purchase of investments in mutual funds and other
market securities of GBP10 million included in restricted cash and
other short term assets in the statement of financial position.
Ajit Pratap Singh
Chief Financial Officer,
28 September 2022
Consolidated statement of financial
position As at 31 March 2022
(All amount in GBP, unless otherwise
stated)
======================================== =========================================================
As at As at
Notes 31 March 2022 31 March 2021
======================================== ============ ================= ======================
Assets
Non-current assets
Intangible assets 14 11,810 2,394
Property, plant and equipment 15 173,369,128 172,716,040
Right-of-use assets 15 36,548 -
Investments 2,113,307 -
Other long-term assets 16 12,140 69,853
Restricted cash 19 10,427,847 8,194,412
================= ======================
185,970,780 180,982,699
================= ======================
Current assets
Inventories 18 10,465,820 12,186,644
Trade and other receivables 17 8,607,935 14,829,989
Other short-term assets 16 26,182,923 17,805,554
Current tax assets (net) 1,250,086 1,131,342
Restricted cash 19(b) 2,392,104 3,219,356
Cash and cash equivalents 19(a) 7,691,392 8,920,952
Assets held for sale 7(a), 7(b) 13,497,027 16,425,368
================= ======================
70,087,287 74,519,205
================= ======================
Total assets 256,058,067 255,501,904
================= ======================
Equity and liabilities
Equity
Share capital 20 58,909 58,909
Share premium 20 131,451,482 131,451,482
Other components of equity (10,221,248) (12,735,470)
Retained earnings 47,904,448 41,910,280
================= ======================
Equity attributable to owners of the
Company 169,193,591 160,685,201
Non-controlling interests 872,663 881,869
================= ======================
Total equity 170,066,254 161,567,070
================= ======================
Liabilities
Non-current liabilities
Borrowings 22 9,759,610 22,260,206
Non-Convertible Debentures 22 20,126,738 19,840,089
Trade and other payables 23 630,358 607,702
Other liabilities 36,228 -
Deferred tax liabilities (net) 13 17,029,927 12,994,371
================= ======================
47,582,861 55,702,368
Current liabilities
Borrowings 22 13,399,429 4,510,358
Trade and other payables 23 24,440,324 32,495,799
Other liabilities 569,199 1,226,309
Liabilities classified as held for sale 7(b) - -
38,408,952 38,232,466
================= ======================
Total liabilities 85,991,813 93,934,834
================= ======================
Total equity and liabilities 256,058,067 255,501,904
================= ======================
The notes are an integral part of these
consolidated financial statements.
The financial statements were authorised for issue by the board of directors
on 28 September 2022 and were signed on its behalf by:
N Kumar Arvind Gupta Dmitri Tsvetkov Ajit Pratap Singh
Non-Executive Chairman1 Chairman1 Chief Financial Chief Financial
Officer2 Officer2
--------------------------- --------------- ------------------- ------------------
1 Effective 4 April 2022. Mr Arvind Gupta step down from the
Board and Mr N. Kumar appointed as Non-executive Chairman
2 Effective 31 May 2022. Mr Dmitri Tsvetkov step down from the
Board and Mr Ajit Pratap Singh appointed as Chief Financial
Officer
Consolidated statement of Comprehensive
Income for the Year ended 31 March 2022
(All amount in GBP, unless otherwise stated)
=============================================== =========================================================
Year ended Year ended
Notes 31 March 2022 31 March 2021
=============================================== ======== =================== ========================
Revenue 8 80,067,032 93,823,933
Cost of revenue 9 (56,500,964) (56,893,065)
=================== ========================
Gross profit 23,566,068 36,930,868
=================== ========================
Other Operating income 10(a) - 9,420,712
Other income 10(b) 8,054,865 1,921,546
Distribution cost (3,894,563) (4,791,056)
General and administrative expenses (6,316,484) (7,256,153)
Expected credit loss on trade receivables 28 - (3,025,055)
Depreciation and amortization (5,333,531) (5,705,538)
=================== ========================
Operating profit 16,076,355 27,495,324
=================== ========================
Finance costs 11 (5,356,089) (6,803,137)
Finance income 12 2,285,364 868,439
=================== ========================
Profit before tax 13,005,630 21,560,626
Tax expense 13 (4,097,184) (8,447,699)
=================== ========================
Profit for the year from continued operations 8,908,446 13,112,927
=================== ========================
(Loss)/Gain from discontinued operations,
including Non-Controlling Interest 7 (2,928,341) 999,398
=================== ========================
Profit for the year 5,980,105 14,112,325
=================== ========================
Profit for the year attributable to:
Owners of the Company 5,994,168 14,091,807
Non - controlling interests (14,063) 20,518
=================== ========================
5,980,105 14,112,325
=================== ========================
Earnings per share from continued operations
Basic earnings per share (in pence) 25 2.23 3.27
Diluted earnings per share (in pence) 2.23 3.25
Earnings/(Loss) per share from discontinued
operations
Basic (Loss)/Earnings per share (in pence) 25 (0.73) 0.25
Diluted (Loss)/Earnings per share (in
pence) (0.73) 0.25
Earnings per share
-Basic (in pence) 25 1.50 3.52
-Diluted (in pence) 1.50 3.50
Other comprehensive income / (loss)
Items that will be reclassified subsequently
to profit or loss
Exchange differences on translating foreign
operations 2,319,444 (12,860,261)
Consolidated statement of changes in equity
For the Year ended 31 March 2022
(All amount in GBP, unless otherwise stated)
Issued Ordinary Share premium Other reserves Foreign Retained Total Non-controlling Total equity
capital shares currency earnings attributable interests
(No. of translation to owners
shares) reserve of parent
At 1 April 2020 400,733,511 58,909 131,451,482 7,486,127 (8,809,114) 27,818,474 158,005,878 497,955 158,503,833
============== ============== ============== ================ =============== ============ ==================== ================ ================
Employee Share
based
payment LTIP
(Note
21) - - - 535,247 - - 535,247 - 535,247
============== ============== ============== ================ =============== ============ ==================== ================ ================
Transaction with
owners - - - 535,247 - - 535,247 - 535,247
============== ============== ============== ================ =============== ============ ==================== ================ ================
Profit for the
year - - - - - 14,091,806 14,091,806 20,518 14,112,324
Deconsolidation
(note
7b) - - - - 912,531 - 912,531 376,718 1,289,249
Other
comprehensive
loss - - - - (12,860,261) - (12,860,261) (13,322) (12,873,583)
============== ============== ============== ================ =============== ============ ==================== ================ ================
Total
comprehensive
income - - - - (11,947,730) 14,091,806 2,144,076 383,914 2,527,990
============== ============== ============== ================ =============== ============ ==================== ================ ================
At 31 March 2021 400,733,511 58,909 131,451,482 8,021,374 (20,756,844) 41,910,280 160,685,201 881,869 161,567,070
============== ============== ============== ================ =============== ============ ==================== ================ ================
At 1 April 2021 400,733,511 58,909 131,451,482 8,021,374 (20,756,844) 41,910,280 160,685,201 881,869 161,567,070
============== ============== ============== ================ =============== ============ ==================== ================ ================
Employee Share
based
payment LTIP
(Note
21) - - - 194,778 - - 194,778 - 194,778
============== ============== ============== ================ =============== ============ ==================== ================ ================
Transaction with
owners - - - 194,778 - - 194,778 - 194,778
============== ============== ============== ================ =============== ============ ==================== ================ ================
Profit for the
year - - - - - 5,994,168 5,994,168 (14,063) 5,980,105
Other
comprehensive
income - - - - 2,319,444 - 2,319,444 4,857 2,324,301
============== ============== ============== ================ =============== ============ ==================== ================ ================
Total
comprehensive
income - - - - 2,319,444 5,994,168 8,313,612 (9,206) 8,304,406
============== ============== ============== ================ =============== ============ ==================== ================ ================
At 31 March 2022 400,733,511 58,909 131,451,482 8,216,152 (18,437,400) 47,904,448 169,193,591 872,663 170,066,254
============== ============== ============== ================ =============== ============ ==================== ================ ================
The notes are an integral part of these consolidated financial
statements
Consolidated statement of cash flows
For the Year ended 31 March 2022
(All amount in GBP, unless otherwise
stated)
=============================================== =========================================================
Year ended Year ended
Notes 31 March 2022 31 March 2021
=============================================== =========== ================== ========================
Cash flows from operating activities
Profit before income tax including
discontinued operations 10,077,289 22,560,024
Adjustments for:
(Profit) / Loss from discontinued operations,
net 7 2,928,341 (999,398)
Unrealised foreign exchange loss 9(d) 184,880 46,931
Financial costs 11 5,171,209 6,756,206
Financial income 12 (2,285,364) (864,156)
Share based compensation costs 21 194,778 535,247
Depreciation and amortisation 5,333,531 5,705,538
Expected credit loss on Trade receivables 28 - 3,025,055
Changes in working capital
Trade and other receivables 6,294,982 7,404,759
Inventories 1,854,857 (1,654,539)
Other assets (3,283,261) 4,976,235
Trade and other payables (9,121,460) (7,106,516)
Other liabilities (969,676) 490,713
================== ========================
Cash generated from continuing operations 16,380,106 40,876,099
Taxes paid (48,554) (709,277)
================== ========================
Cash provided by operating activities
of continuing operations Cash used for
operating activities of discontinued 16,331,552 40,166,822
operations - -
================== ========================
Net cash provided by operating activities 16,331,552 40,166,822
================== ========================
Cash flows from investing activities
Purchase of property, plant and equipment
(including capital advances) (3,534,707) (506,222)
Interest received 2,285,364 864,156
Movement in restricted cash (1,213,769) (4,655,096)
Purchase of investments (6,760,520) (25,250,994)
================== ========================
Cash used in investing activities of
continuing operations (9,223,632) (29,548,156)
================== ========================
Net cash used in investing activities (9,223,632) (29,548,156)
================== ========================
Cash flows from financing activities
Proceeds from borrowings (net of costs) - 21,981,043
Repayment of borrowings (3,909,695) (27,938,844)
Finance costs paid (4,528,565) (5,812,498)
================== ========================
Cash used in financing activities of
continuing operations (8,438,260) (11,770,299)
Cash used in financing activities of discontinued operations - -
Net cash used in financing activities (8,438,260) (11,770,299)
================== ========================
Net decrease in cash and cash equivalents
from continuing operations (1,330,340) (1,151,633)
Net decrease in cash and cash equivalents from discontinued operations
- -
Net decrease in cash and cash equivalents (1,330,340) (1,151,633)
Cash and cash equivalents at the beginning
of the year 8,920,954 3,438,830
Cash and cash equivalents on deconsolidation - (28,560)
Exchange differences on cash and cash
equivalents 100,781 6,662,317
Cash and cash equivalents at the end
of the year 7,691,395 8,920,954
Consolidated statement of cash flows
For the Year ended 31 March 2022 (continued)
(All amount in GBP, unless otherwise stated)
Disclosure of Changes in financing liabilities:
Analysing of changes in Net 1 April 2021 Cash flows Other Changes 31 March
debt 2022
Working Capital loan 3,788,314 (2,152,472) 5,949 1,641,791
Secured loan due within one
year 722,044 10,780,822 254,772 11,757,638
Borrowings grouped under
Current
liabilities 4,510,358 8,628,350 260,721 13,399,429
Secured loan due after one
year 42,100,295 (12,538,045) 324,098 29,886,348
Borrowings grouped under
Non-current
liabilities 42,100,295 (12,538,045) 324,098 29,886,348
================== ================== ========================= ====================
Analysing of changes in Net 1 April 2020 Cash flows Other Changes 31 March
debt 2021
Working Capital loan 6,914,122 (2,704,726) (421,082) 3,788,314
Secured loan due within one
year 16,832,107 (15,443,674) (666,390) 722,044
Borrowings grouped under
Current
liabilities 23,746,229 (18,148,399) (1,087,471) 4,510,358
Secured loan due after one
year 33,081,456 12,190,599 (3,171,760) 42,100,295
Borrowings grouped under
Non-current
liabilities 33,081,456 12,190,599 (3,171,760) 42,100,295
================== ================== ======================== ====================
Notes to the consolidated financial statements
(All amount in GBP, unless otherwise stated)
1 Nature of operations
OPG Power Ventures Plc ('the Company' or 'OPGPV'), and its
subsidiaries (collectively referred to as 'the Group') are
primarily engaged in the development, owning, operation and
maintenance of private sector power projects in India. The
electricity generated from the Group's plants is sold principally
to public sector undertakings and heavy industrial companies in
India or in the short term market. The business objective of the
Group is to focus on the power generation business within India and
thereby provide reliable, cost effective power to the industrial
consumers and other users under the 'open access' provisions
mandated by the Government of India.
2 Statement of compliance
The consolidated financial statements of the Group have been
prepared in accordance with International Financial Reporting
Standards (IFRS) - as issued by the International Accounting
Standards Board and the provisions of the Isle of Man, Companies
Act 2006 applicable to companies reporting under IFRS.
3 General information
OPG Power Ventures Plc, a limited liability corporation, is the
Group's ultimate parent Company and is incorporated and domiciled
in the Isle of Man. The address of the Company's registered Office,
which is also the principal place of business, is 55 Athol street,
Douglas, Isle of Man IM1 1LA. The Company's equity shares are
listed on the Alternative Investment Market (AIM) of the London
Stock Exchange.
The Consolidated Financial statements for the year ended 31
March 2022 were approved and authorised for issue by the Board of
Directors on 28 September 2022.
4 Recent accounting pronouncements
a) Standards, amendments and interpretations to existing
standards that are not yet effective and have not been adopted
early by the Group
At the date of authorisation of these financial statements,
certain new standards, and amendments to existing standards have
been published by the IASB that are not yet effective, and have not
been adopted early by the Group. Information on those expected to
be relevant to the Group's financial statements is provided
below.
Management anticipates that all relevant pronouncements will be
adopted in the Group's accounting policies for the first period
beginning after the effective date of the pronouncement. New
standards, interpretations and amendments not either adopted or
listed below are not expected to have a material impact on the
Group's financial statements.
b) Changes in accounting Standards
The following standards and amendments to IFRSs became effective
for the period beginning on 1 January 2021 and did not have a
material impact on the consolidated financial statements:
i Amendments to IFRS 16, Covid 19 "related rent concessions"
"The amendments permit lessees, as a practical expedient, not to
assess whether particular rent concessions occurring as a direct
consequence of the Covid-19 pandemic are lease modifications and
instead, to account for those rent concessions as they were not
lease modifications. Initially, these amendments were to apply
until June 30, 2021."
ii Amendments to IFRS 16, Covid 19 "related rent concessions beyond 30 June 2021"
"In light of the fact that the Covid-19 pandemic is continuing,
the IASB extended the application period of the practical
expenditure with respect to accounting for Covid-19-related rent
concessions through June 30, 2022"
iii Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4, and IFRS 16
"Interest rate benchmark reform (phase 2)"
"IFRS9. IAS 39, BRS 7, The amendments provide temporary relief
to adopters regarding the financial reporting impact that will
result from replacing Interbank Offered Rates (IBOR) with
alternative risk-free rates (RFRS). The amendments provide for the
following practical expedients: Treatment of contract modifications
or changes in contractual cash flows due directly to the
Reform-such as fluctuations in a market interest rate-as changes in
a floating rate, allow changes to the designation and documentation
of a hedging relationship required by IBOR reform without
discontinuing hedge accounting. Temporary relief from having to
meet the separately identifiable requirement when an RFR instrument
is designated as a hedge of a risk comes in connection with the
IBOR Reform."
iv Amendments to IFRS 9, IAS 39 and IFRS 7, "Interest Rate Benchmark Reform"
In September 2019, the IASB published amendments to IFRS 9, IAS
39 and IFRS 7, "Interest Rate Benchmark Reform." The Phase 1
amendments of the IASB's Interest Rate Benchmark Reform project
(IBOR reform) provide for temporary exemption from applying
specific hedge accounting requirements to hedging relationships
that are directly affected by IBOR reform. The exemptions have the
effect that IBOR reform should not generally cause hedge
relationships to be terminated due to uncertainty about when and
how reference interest rates will be replaced. However, any hedge
ineffectiveness should continue to be recorded in the income
statement under both IAS 39 and IFRS 9. Furthermore, the amendments
set out triggers for when the exemptions will end, which include
the uncertainty arising from IBOR reform. The amendments have no
impact on Group's Consolidated Financial Statements.
v Amendments to IFRS 4, "Extension of the temporary exemption
from IFRS 9" "Deferral of initial application of IFRS 9 for
insurers"
c) Standards and Interpretations Not Yet Applicable
The IASB and the IFRS IC have issued the following additional
standards and interpretations. Group does not apply these rules
because their application is not yet mandatory. Currently, however,
these adjustments are not expected to have a material impact on the
consolidated financial statements of the Group:
i Amendments to IAS 16-proceeds before intended use
The amendments prohibit a company from deducting from the cost
of property, plant and equipment amounts received from selling
items produced while the Company is preparing the asset for its
intended use. Instead, a company will recognize such sales proceeds
and related cost in profit or loss.
ii Amendments to IAS 37-Onerous contracts-cost of Fulfilling a contract
"Clarification that all costs directly attributable to a
contract must be considered when determining the cost
of fulfilling the contract." iii Amendments to IFRS 3-Reference to the Conceptual Framework
Reference to the revised 2018 IFRS Conceptual Framework.
Priority application of LAS 37 or IFRIC 21 by the acquirer to
identify acquired liabilities. No recognition of contingent assets
acquired allowed.
iv Annual Improvements Project-Annual Improvements to IFRSs
2018-2020 Cycle Minor amendments to IFRS 1, IFRS 9, IFRS 16 and IAS
41.
v IFRS 17 "Insurance contracts including Amendments to IFRS 17"
The new IFRS 17 standard governs the accounting for insurance
contracts and supersedes IFRS 4. vi Amendment to IFRS 17-Initial
Application of IFRS 17 and IFRS 9-Comparative Information
The amendment concerns the transitional provisions for the
initial joint application of IFRS 17 and IFRS 9.
vii Amendments to IAS 1-Classification of Liabilities as Current
or Non-current Amendments to IAS 1-Classification of Liabilities as
Current or Non-current-Deferral of Effective Date
Clarification that the classification of liabilities as current
or non-current is based on the rights the entity has at the end of
the reporting period.
viii Amendments to IAS 1 and IFRS Practice Statement 2-Disclosure of Accounting Policies
"Clarification that an entity must disclose all material
(formerly ""significant"") accounting policies. The main
characteristic of these items is that, together with other
information included in the financial statements, they can
influence the decisions of primary users of the financial
statements"
ix Amendments to IAS 8-Definition of Accounting Estimates
Clarification with regard to the distinction between changes in
accounting policies (retrospective application) and changes in
accounting estimates (prospective application).
x Amendments to IAS 12-Deferred Tax related to Assets and
Liabilities arising from a Single transaction.
Clarification that the initial recognition exemption of IAS 12
does not apply to leases and decommissioning obligations. Deferred
tax is recognized on the initial recognition of assets and
liabilities arising from such transactions.
5 Summary of significant accounting policies
a) Basis of preparation
The consolidated financial statements of the Group have been
prepared on a historical cost basis, except for financial assets
and liabilities at fair value through profit or loss and financial
assets measured at FVPL.
The consolidated financial statements are presented in
accordance with IAS 1 Presentation of Financial Statements and have
been presented in Great Britain Pounds ('GBP'), the functional and
presentation currency of the Company.
During the current year, the results of the operations of solar
entities Avanti Solar Energy Private Limited, Mayfair Renewable
Energy Private Limited, Avanti Renewable Energy Private Limited and
Brics Renewable Energy Private Limited continued to be classified
as Assets held for sale as the process of disposition of the solar
entities could not be implemented during FY22 due to pandemic
Covid-19 and expectation of comparatively better valuation for
sale. However the Management expects the interest in the solar
entities to be sold within the next 12 months and continues to
locate a buyer. The Group continues owning a 31% equity interest in
the solar entities.
Going Concern
"As at 31 March 2022 the Group had GBP7.7m in cash and net
current assets of GBP31.7m. The Group has considered the possible
effects that may result from the pandemic on the carrying amounts
of receivables and other financial assets and carried out a Reverse
Stress Test (RST). In developing the assumptions relating to the
possible future uncertainties in the global economic conditions
because of this pandemic, the Group, as at the date of approval of
these financial statements has used internal and external sources
of information. The Group has performed sensitivity analysis on the
assumptions used for business projections and based on current
estimates expects the carrying amount of these assets will be
recovered and no material impact on the financial results
inter-alia including the carrying value of various current and
non-current assets are expected to arise for the year ended 31
March 2022. The Group will continue to closely monitor any
variation due to the changes in situation and these changes will be
taken into consideration, if necessary, as and when they
crystalise. The directors and management have prepared a cash flow
forecast to September 2023, 12 months from the date this report has
been approved. Based on the RST analysis, we can conclude that the
Group is in strong position to go through the current situation
caused by Covid-19 pandemic and going concern is not an issue.The
Group experiences sensitivity in its cash flow forecasts due to the
exposure to potential increase in USD denominated coal prices and a
decrease in the value of the Indian Rupee. The Directors and
management are confident that the Group will be trading in line
with its forecast and that any exposure to a fluctuation in coal
prices or the exchange rate INR /USD has been taken into
consideration and therefore prepared the financial statements on a
going concern basis."
"The consequences of the Covid-19 pandemic continued to impact
the Group businesses. However, the economic consequences of the
Covid-19 pandemic, which had a marginally negative effect on the
Group activities in the FY21, have to a large extent dissipated in
FY22, although the economic impediments that still persist vary
from region to region and from segment to segment.The Group
received no materially significant public support measures such as
tax relief or compensatory mechanisms except for certain debt drawn
as part of COVID-19 related credit measures extended by the Reserve
Bank of India. In addition, there were no material effects on the
employment situation in the Group. Overall, the Covid-19 pandemic
did not have very significant impact for the Group during the
year."
Sharp rise in global coal price during second half of the year
deterred import of coal, putting further pressure on demand for
domestic (Indian) coal. The war between Russia and Ukraine from
February 2022 has further aggravated the situation, with a sharp
upward movement in global coal prices. As power demand in India
continues to be met mainly through thermal generation, a surge in
power demand during second half of the year put pressure on fuel
supply. The unanticipated rise in demand for electricity with
pickup in economic activities was not met by proportional growth in
coal supplies (also in part due to sharp jump in global coal
price), resulting in severe coal shortages. If global coal prices
do not correct to normal levels there can be a material adverse
effect on the group's results of operations and financial
condition. The Group has taken certain commercial and technical
measures to reduce the impact of this adverse development including
blending comparatively cheaper coal, modifications to boilers to
facilitate different quality coal firing and also renegotiation of
the tariff and commercial terms of the power sale arrangement with
the power consumers.
b) Basis of consolidation
The consolidated financial statements include the assets,
liabilities and results of the operation of the Company and all of
its subsidiaries as of 31 March 2022. All subsidiaries have a
reporting date of 31 March.
A subsidiary is defined as an entity controlled by the Company.
The parent controls a subsidiary if it is exposed, or has rights,
to variable returns from its involvement with the subsidiary and
has the ability to affect those returns through its power over the
subsidiary. Subsidiaries are fully consolidated from the date of
acquisition, being the date on which effective control is acquired
by the Group, and continue to be consolidated until the date that
such control ceases.
All transactions and balances between Group companies are
eliminated on consolidation, including unrealised gains and losses
on transactions between Group companies. Where unrealised losses on
intra-group asset sales are reversed on consolidation, the
underlying asset is also tested for impairment from a group
perspective. Amounts reported in the financial statements of
subsidiaries have been adjusted where necessary to ensure
consistency with the accounting policies adopted by the Group.
Non-controlling interest represents the portion of profit or
loss and net assets that is not held by the Group and is presented
separately in the consolidated statement of comprehensive income
and within equity in the consolidated statement of financial
position, separately from parent shareholders' equity. Acquisitions
of additional stake or dilution of stake from/ to non-controlling
interests/ other venturer in the Group where there is no loss of
control are accounted for as an equity transaction, whereby, the
difference between the consideration paid to or received from and
the book value of the share of the net assets is recognised in
'other reserve' within statement of changes in equity.
c) Investments in associates and joint ventures
Investments in associates and joint ventures are accounted for
using the equity method. The carrying amount of the investment in
associates and joint ventures is increased or decreased to
recognise the Group's share of the profit or loss and other
comprehensive income of the associate and joint venture, adjusted
where necessary to ensure consistency with the accounting policies
of the Group.
Unrealised gains and losses on transactions between the Group
and its associates and joint ventures are eliminated to the extent
of the Group's interest in those entities. Where unrealised losses
are eliminated, the underlying asset is also tested for
impairment.
d) List of subsidiaries, joint ventures, and associates
Details of the Group's subsidiaries and joint ventures, which
are consolidated into the Group's consolidated financial
statements, are as follows:
i) Subsidiaries
=============================== ====================================================================================
Subsidiaries % Voting Right % Economic interest
Immediate Country March 2022 March March 2022 March
of 2021 2021
parent incorporation
=============================== =========== =============== ======================== ============================
Caromia Holdings limited OPGPV Cyprus 100.00 100.00 100.00 100.00
('CHL')
Gita Power and Infrastructure
Private Limited, ('GPIPL') CHL India 100.00 100.00 100.00 100.00
OPG Power Generation
Private Limited ('OPGPG') GPIPL India 75.38 71.25 99.92 99.90
Samriddhi Surya Vidyut OPGPG India 75.38 71.25 100.00 100.00
Private Limited
Powergen Resources Pte OPGPV Singapore 100.00 100.00 100.00 100.00
Ltd
=============================== =========== =============== ======================== ============================
ii) Joint ventures -
Assets Held for sale
=============================== =========== =============== ======================== ============================
Joint ventures % Voting Right % Economic interest
Venture Country March 2022 March March 2022 March
of 2021 2021
incorporation
=============================== =========== =============== ======================== ============================
Padma Shipping Limited OPGPV
("PSL") / OPGPG Hong Kong 50 50 50 50
=============================== =========== =============== ======================== ============================
iii) Associates- Assets
Held for sale
=============================== =========== =============== ======================== ============================
Associates % Voting Right % Economic interest
Country March 2022 March March 2022 March
of 2021 2021
incorporation
=============================== =========== =============== ======================== ============================
Avanti Solar Energy Private
Limited India 31 31 31 31
Mayfair Renewable Energy (I)
Private Limited India 31 31 31 31
Avanti Renewable Energy
Private Limited India 31 31 31 31
Brics Renewable Energy
Private Limited India 31 31 31 31
============================================ ============== ======================== ============================
a) Foreign currency translation
The functional currency of the Company is the Great Britain
Pound Sterling (GBP). The Cyprus entity is an extension of the
parent and pass through investment entity. Accordingly the
functional currency of the subsidiary in Cyprus is the Great
Britain Pound Sterling. The functional currency of the Company's
subsidiaries operating in India, determined based on evaluation of
the individual and collective economic factors is Indian Rupees ('
' or 'INR'). The presentation currency of the Group is the Great
Britain Pound (GBP) as submitted to the AIM counter of the London
Stock Exchange where the shares of the Company are listed.
At the reporting date the assets and liabilities of the Group
are translated into the presentation currency at the rate of
exchange prevailing at the reporting date and the income and
expense for each statement of profit or loss are translated at the
average exchange rate (unless this average rate is not a reasonable
approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expense are
translated at the rate on the date of the transactions). Exchange
differences are charged/ credited to other comprehensive income and
recognized in the currency translation reserve in equity.
Transactions in foreign currencies are translated at the foreign
exchange rate prevailing at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
Statement of financial position date are translated into functional
currency at the foreign exchange rate ruling at that date.
Aggregate gains and losses resulting from foreign currencies are
included in finance income or costs within the profit or loss.
exchange rates used to translate the Indian Rupee financial
information into the presentation currency of Great Britain Pound
(GBP) are the closing rate as at 31 March 2022: 99.37 (2021:
100.81) and the average rate for the year ended 31 March 2022:
101.62
(2021: 96.72).
b) Revenue recognition
In accordance with IFRS 15 - Revenue from contracts with
customers, the Group recognises revenue to the extent that it
reflects the expected consideration for goods or services provided
to the customer under contract, over the performance obligations
they are being provided. For each separable performance obligation
identified, the Group determines whether it is satisfied at a
"point in time" or "over time" based upon an evaluation of the
receipt and consumption of benefits, control of assets and
enforceable payment rights associated with that obligation. If the
criteria required for "over time" recognition are not met, the
performance obligation is deemed to be satisfied at a "point in
time". Revenue principally arises as a result of the Group's
activities in electricity generation and distribution. Supply of
power and billing satisfies performance obligations. The supply of
power is invoiced in arrears on a monthly basis and generally the
payment terms within the Group are 10 to 45 days.
Revenue
Revenue from providing electricity to captive power users and
sales to other customers is recognised on the basis of billing
cycle under the contractual arrangement with the captive power
users & customers respectively and reflects the value of units
of power supplied and the applicable tariff after deductions or
discounts. Revenue is earned at a point in time of joint meter
reading by both buyer and seller for each billing month.
Interest and dividend
Revenue from interest is recognised as interest accrued (using
the effective interest rate method). Revenue from dividends is
recognised when the right to receive the payment is
established.
c) Operating expenses
Operating expenses are recognised in the statement of profit or
loss upon utilisation of the service or as incurred.
d) Taxes
Tax expense recognised in profit or loss comprises the sum of
deferred tax and current tax not recognised in other comprehensive
income or directly in equity.
Current income tax assets and/or liabilities comprise those
obligations to, or claims from, taxation authorities relating to
the current or prior reporting periods, that are unpaid at the
reporting date. Current tax is payable on taxable profit, which
differs from profit or loss in the financial statements.
Calculation of current tax is based on tax rates and tax laws
that have been enacted or substantively enacted by the end of the
reporting period.
Deferred income taxes are calculated using the liability method
on temporary differences between the carrying amounts of assets and
liabilities and their tax bases. However, deferred tax is not
provided on the initial recognition of goodwill, nor on the initial
recognition of an asset or liability unless the related transaction
is a business combination or affects tax or accounting profit.
Deferred tax on temporary differences associated with investments
in subsidiaries is not provided if reversal of these temporary
differences can be controlled by the Group and it is probable that
reversal will not occur in the foreseeable future.
Deferred tax assets and liabilities are calculated, without
discounting, at tax rates that are expected to apply to their
respective period of realisation, provided they are enacted or
substantively enacted by the end of the reporting period. Deferred
tax liabilities are always provided for in full.
Deferred tax assets are recognised to the extent that it is
probable that they will be able to be utilised against future
taxable income. Deferred tax assets and liabilities are offset only
when the Group has a right and the intention to set off current tax
assets and liabilities from the same taxation authority. Changes in
deferred tax assets or liabilities are recognised as a component of
tax income or expense in profit or loss, except where they relate
to items that are recognised in other comprehensive income or
directly in equity, in which case the related deferred tax is also
recognised in other comprehensiveincome or equity,
respectively.
e) Financial assets
IFRS 9 Financial Instruments contains regulations on measurement
categories for financial assets and financial liabilities. It also
contains regulations on impairments, which are based on expected
losses.
"Financial assets are classified as financial assets measured at
amortized cost, financial assets measured at fair value through
other comprehensive income (FVOCI) and financial assets measured at
fair value through profit and loss (FVPL) based on the business
model and the characteristics of the cash flows. If a financial
asset is held for the purpose of collecting contractual cash flows
and the cash flows of the financial asset represent exclusively
interest and principal payments, then the financial asset is
measured at amortized cost. A financial asset is measured at fair
value through other comprehensive income (FVOCI) if it is used both
to collect contractual cash flows and for sales purposes and the
cash flows of the financial asset consist exclusively of interest
and principal payments. Unrealized gains and losses from financial
assets measured at fair value through other comprehensive income
(FVOCI), net of related deferred taxes, are reported as a component
of equity (other comprehensive income) until realized. Realized
gains and losses are determined by analyzing each transaction
individually. Debt instruments that do not exclusively serve to
collect contractual cash flows or to both generate contractual cash
flows and sales revenue, or whose cash flows do not exclusively
consist of interest and principal payments are measured at fair
value through profit and loss (FVPL). For equity instruments that
are held for trading purposes the Group has uniformly exercised the
option of recognizing changes in fair value through profit or loss
(FVPL). Refer to note 29""Summary of financial assets and
liabilities by category and their fair values""."
Impairments of financial assets are both recognized for losses
already incurred and for expected future credit defaults. The
amount of the impairment loss calculated in the determination of
expected credit losses is recognized on the income statement.
Impairment provisions for current and non-current trade receivables
are recognised based on the simplified approach within IFRS 9 using
a provision matrix in the determination of the lifetime expected
credit losses. During this process the probability of the
non-payment of the trade receivables is assessed. This probability
is then multiplied by the amount of the expected loss arising from
default to determine the lifetime expected credit loss for the
trade receivables. On confirmation that the trade receivable will
not be collectable, the gross carrying value of the asset is
written off against the associated provision.
f) Financial liabilities
The Group's financial liabilities include borrowings and trade
and other payables. Financial liabilities are measured subsequently
at amortised cost using the effective interest method. All
interest-related charges and, if applicable, changes in an
instrument's fair value that are reported in profit or loss are
included within 'finance costs' or 'finance income'.
g) Fair value of financial instruments
The fair value of financial instruments that are actively traded
in organised financial markets is determined by reference to quoted
market prices at the close of business on the Statement of
financial position date. For financial instruments where there is
no active market, fair value is determined using valuation
techniques. Such techniques may include using recent arm's length
market transactions; reference to the current fair value of another
instrument that is substantially the same; discounted cash flow
analysis or other valuation models.
h) Property, plant and equipment
Property, plant and equipment are stated at historical cost,
less accumulated depreciation and any impairment in value.
Historical cost includes expenditure that is directly attributable
to property plant & equipment such as employee cost, borrowing
costs for long- term construction projects etc, if recognition
criteria are met. Likewise, when a major inspection is performed,
its costs are recognised in the carrying amount of the plant and
equipment as a replacement if the recognition criteria are
satisfied. All other repairs and maintenance costs are recognised
in the profit or loss as incurred.
Land is not depreciated. Depreciation on all other assets is
computed on straight-line basis over the useful life of the asset
based on management's estimate as follows:
Nature of asset Useful life (years)
Buildings 40
Power stations 40
Other plant and equipment 3-10
Vehicles 5-11
========================== =============================================================
Assets in the course of construction are stated at cost and not
depreciated until commissioned.
An item of property, plant and equipment is derecognised 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 the carrying amount of the asset) is included in the
profit or loss in the year the asset is derecognised.
The assets residual values, useful lives and methods of
depreciation of the assets are reviewed at each financial year end,
and adjusted prospectively if appropriate.
Intangible assets
Acquired software
Acquired computer software licences are capitalised on the basis
of the costs incurred to acquire and install the specific
software.
Subsequent measurement
All intangible assets, including software are accounted for
using the cost model whereby capitalised costs are amortised on a
straight- line basis over their estimated useful lives, as these
assets are considered finite. Residual values and useful lives are
reviewed at each reporting date. The useful life of software is
estimated as 4 years.
e) Leases
All leases are accounted for by recognising a right-of-use asset
and a lease liability except for:
-- leases of low value assets; and
-- leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the
contractual payments due to the lessor over the lease term, with
the discount rate determined by reference to the rate inherent in
the lease unless (as is typically the case) this is not readily
determinable, in which case the group's incremental borrowing rate
on commencement of the lease is used. Variable lease payments are
only included in the measurement of the lease liability if they
depend on an index or rate. In such cases, the initial measurement
of the lease liability assumes the variable element will remain
unchanged throughout the lease term. Other variable lease payments
are expensed in the period to which they relate. On initial
recognition, the carrying value of the lease liability also
includes:
-- amounts expected to be payable under any residual value
guarantee;
-- the exercise price of any purchase option granted in favour
of the Group if it is reasonable certain to assess that option
and
-- any penalties payable for terminating the lease, if the term
of the lease has been estimated in the basis of termination option
being exercised.
Right of use assets are initially measured at the amount of the
lease liability, reduced for any lease incentives received, and
increased for:
-- lease payments made at or before commencement of the
lease;
-- initial direct costs incurred; and
-- the amount of any provision recognised where the Group is
contractually required to dismantle, remove or restore the leased
asset (typically leasehold dilapidations)"
Subsequent to initial measurement lease liabilities increase as
a result of interest charged at a constant rate on the balance
outstanding and are reduced for lease payments made. Right-of-use
assets are amortised on a straight-line basis over the remaining
term of the lease or over the remaining economic life of the asset
if, rarely, this is judged to be shorter than the lease term. When
the Group revises its estimate of the term of any lease (because,
for example, it re-assesses the probability of a lessee extension
or termination option being exercised), it adjusts the carrying
amount of the lease liability to reflect the payments to make over
the revised term, which are discounted using a revised discount
rate. The carrying value of lease liabilities is similarly revised
when the variable element of future lease payments dependent on a
rate or index is revised, except the discount rate remains
unchanged. In both cases an equivalent adjustment is made to the
carrying value of the right-of-use asset, with the revised carrying
amount being amortised over the remaining (revised) lease term. If
the carrying amount of the right-of-use asset is adjusted to zero,
any further reduction is recognised in profit or loss.
f) Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, that necessarily
take a substantial period of time to get ready for their intended
use or sale, are added to the cost of those assets. Interest income
earned on the temporary investment of specific borrowing pending
its expenditure on qualifying assets is deducted from the costs of
these assets.
Gains and losses on extinguishment of liability, including those
arising from substantial modification from terms of loans are not
treated as borrowing costs and are charged to profit or loss.
All other borrowing costs including transaction costs are
recognized in the statement of profit or loss in the period in
which they are incurred, the amount being determined using the
effective interest rate method.
g) Impairment of non-financial assets
The Group assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required,
the Group estimates the asset's recoverable amount. An asset's
recoverable amount is the higher of an asset's or cash-generating
unit's (CGU) fair value less costs to sell and its value in use and
is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from
other assets or Groups of assets. Where the carrying amount of an
asset or CGU exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset. In determining fair value less
costs to sell, an appropriate valuation model is used. These
calculations are corroborated by valuation multiples, quoted share
prices for publicly traded subsidiaries or other available fair
value indicators.
For assets excluding goodwill, an assessment is made at each
reporting date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may
have decreased. If such indication exists, the Group estimates the
asset's or cash-generating unit's recoverable amount. A previously
recognised impairment loss is reversed only if there has been a
change in the assumptions used to determine the asset's recoverable
amount since the last impairment loss was recognised. The reversal
is limited so that the carrying amount of the asset does not exceed
its recoverable amount, nor exceed the carrying amount that would
have been determined, net of depreciation, had no impairment loss
been recognised for the asset in prior years. Such reversal is
recognised in the profit or loss.
h) Non-current Assets Held for Sale and Discontinued Operations
Non-current assets and any corresponding liabilities held for
sale and any directly attributable liabilities are recognized
separately from other assets and liabilities in the balance sheet
in the line items "Assets held for sale" and "Liabilities
associated with assets held for sale" if they can be disposed of in
their current condition and if there is sufficient probability of
their disposal actually taking place. Discontinued operations are
components of an entity that are either held for sale or have
already been sold and can be clearly distinguished from other
corporate operations, both operationally and for financial
reporting purposes. Additionally, the component classified as a
discontinued operation must represent a major business line or a
specific geographic business segment of the Group. Non-current
assets that are held for sale either individually or collectively
as part of a disposal group, or that belong to a discontinued
operation, are no longer depreciated. They are instead accounted
for at the lower of the carrying amount and the fair value less any
remaining costs to sell. If this value is less than the carrying
amount, an impairment loss is recognized. The income and losses
resulting from the measurement of components held for sale as well
as the gains and losses arising from the disposal of discontinued
operations, are reported separately on the face of the income
statement under income/loss from discontinued operations, net, as
is the income from the ordinary operating activities of these
divisions. Prior-year income statement figures are adjusted
accordingly. However, there is no reclassification of prior-year
balance sheet line items attributable to discontinued
operations.
i) Cash and cash equivalents
Cash and cash equivalents in the Statement of financial position
includes cash in hand and at bank and short-term deposits with
original maturity period of 3 months or less.
For the purpose of the consolidated cash flow statement, cash
and cash equivalents consist of cash in hand and at bank and short-
term deposits. Restricted cash represents deposits which are
subject to a fixed charge and held as security for specific
borrowings and are not included in cash and cash equivalents.
j) Inventories
Inventories are stated at the lower of cost and net realisable
value. Costs incurred in bringing each product to its present
location and condition is accounted based on weighted average
price. Net realisable value is the estimated selling price in the
ordinary course of business, less estimated selling expenses.
k) Earnings per share
The earnings considered in ascertaining the Group's earnings per
share (EPS) comprise the net profit for the year attributable to
ordinary equity holders of the parent. The number of shares used
for computing the basic EPS is the weighted average number of
shares outstanding during the year. For the purpose of calculating
diluted earnings per share the net profit or loss for the period
attributable to equity share holders and the weighted average
number of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity share.
l) Other provisions and contingent liabilities
Provisions are recognised when present obligations as a result
of a past event will probably lead to an outflow of economic
resources from the Group and amounts can be estimated reliably.
Timing or amount of the outflow may still be uncertain. A present
obligation arises from the presence of a legal or constructive
obligation that has resulted from past events. Restructuring
provisions are recognised only if a detailed formal plan for the
restructuring has been developed and implemented, or management has
at least announced the plan's main features to those affected by
it. Provisions are not recognised for future operating losses.
Provisions are measured at the estimated expenditure required to
settle the present obligation, based on the most reliable evidence
available at the reporting date, including the risks and
uncertainties associated with the present obligation. Where there
are a number of similar obligations, the likelihood that an outflow
will be required in settlement is determined by considering the
class of obligations as a whole. Provisions are discounted to their
present values, where the time value of money is material.
Any reimbursement that the Group can be virtually certain to
collect from a third party with respect to the obligation is
recognised as a separate asset. However, this asset may not exceed
the amount of the related provision. All provisions are reviewed at
each reporting date and adjusted to reflect the current best
estimate.
In those cases where the possible outflow of economic resources
as a result of present obligations is considered improbable or
remote, no liability is recognised, unless it was assumed in the
course of a business combination. In a business combination,
contingent liabilities are recognised on the acquisition date when
there is a present obligation that arises from past events and the
fair value can be measured reliably, even if the outflow of
economic resources is not probable. They are subsequently measured
at the higher amount of a comparable provision as described above
and the amount recognised on the acquisition date, less any
amortisation.
m) Share based payments
The Group operates equity-settled share-based remuneration plans
for its employees. None of the Group's plans feature any options
for a cash settlement.
All goods and services received in exchange for the grant of any
share-based payment are measured at their fair values. Where
employees are rewarded using share-based payments, the fair values
of employees' services is determined indirectly by reference to the
fair value of the equity instruments granted. This fair value is
appraised at the grant date and excludes the impact of non-market
vesting conditions (for example profitability and sales growth
targets and performance conditions).
All share-based remuneration is ultimately recognised as an
expense in profit or loss with a corresponding credit to 'Other
Reserves'.
If vesting periods or other vesting conditions apply, the
expense is allocated over the vesting period, based on the best
available estimate of the number of share options expected to vest.
Non-market vesting conditions are included in assumptions about the
number of options that are expected to become exercisable.
Estimates are subsequently revised if there is any indication that
the number of share options expected to vest differs from previous
estimates. Any cumulative adjustment prior to vesting is recognised
in the current period. No adjustment is made to any expense
recognised in prior periods if share options ultimately exercised
are different to that estimated on vesting.
Upon exercise of share options, the proceeds received net of any
directly attributable transaction costs up to the nominal value of
the shares issued are allocated to share capital with any excess
being recorded as share premium.
n) Employee benefits
Gratuity
In accordance with applicable Indian laws, the Group provides
for gratuity, a defined benefit retirement plan ("the Gratuity
Plan") covering eligible employees. The Gratuity Plan provides a
lump-sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on
the respective employee's salary and the tenure of employment.
Liabilities with regard to the gratuity plan are determined by
actuarial valuation, performed by an independent actuary, at each
Statement of financial position date using the projected unit
credit method.
The Group recognises the net obligation of a defined benefit
plan in its statement of financial position as an asset or
liability, respectively in accordance with IAS 19, Employee
benefits. The discount rate is based on the Government securities
yield. Actuarial gains and losses arising from experience
adjustments and changes in actuarial assumptions are charged or
credited to profit or loss in the statement of comprehensive income
in the period in which they arise.
o) Business combinations
Business combinations arising from transfers of interests in
entities that are under the control of the shareholder that
controls the Group are accounted for as if the acquisition had
occurred at the beginning of the earliest comparative period
presented or, if later, at the date that common control was
established using pooling of interest method. The assets and
liabilities acquired are recognised at
the carrying amounts recognised previously in the Group
controlling shareholder's consolidated financial statements. The
components of equity of the acquired entities are added to the same
components within Group equity. Any excess consideration paid is
directly recognised in equity.
p) Segment reporting
The Group has adopted the "management approach" in identifying
the operating segments as outlined in IFRS 8 - Operating segments.
Segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker. The Board
of Directors being the chief operating decision maker evaluate the
Group's performance and allocates resources based on an analysis of
various performance indicators at operating segment level. During
the year 2021 the Group has deconsolidated solar entities and are
classified as associates (note 7(b)). Accordingly, during FY22
there is only only one operating segment thermal power. The solar
power business is classified as held for sale. There are no
geographical segments as all revenues arise from India. All the non
current assets are located in India.
6 Significant accounting judgements, estimates and assumptions
The preparation of financial statements in conformity with IFRS
requires management to make certain critical accounting estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period.
The principal accounting policies adopted by the Group in the
consolidated financial statements are as set out above. The
application of a number of these policies requires the Group to use
a variety of estimation techniques and apply judgment to best
reflect the substance of underlying transactions.
The Group has determined that a number of its accounting
policies can be considered significant, in terms of the management
judgment that has been required to determine the various
assumptions underpinning their application in the consolidated
financial statements presented which, under different conditions,
could lead to material differences in these statements. The actual
results may differ from the judgments, estimates and assumptions
made by the management and will seldom equal the estimated
results.
a) Judgements
The following are significant management judgments in applying
the accounting policies of the Group that have the most significant
effect on the financial statements.
Non-current assets held for sale and discontinued operations
"The Group exercises judgement in whether assets are held for
sale. After evaluation of all options, the Company decided that the
most efficient way to maximise shareholders' value from solar
operations is to dispose of the solar companies and it initiated
the process of disposition of the solar companies. Under IFRS 5,
such a transaction meets the 'Asset held for sale' when the
transaction is considered sufficiently probable and other relevant
criteria are met. Management consider that all the conditions under
IFRS 5 for classification of the solar business as held for sale
have been met as at 31 March 2022 and expects the interest in the
solar companies to be sold within the next 12 months. "
The investment in the joint venture Padma Shipping Limited and
associated advance net of impairments has been presented as asset
held for sale following the process of sale of the second vessel as
mentioned in note 7(a).
Recoverability of deferred tax assets
The recognition of deferred tax assets requires assessment of
future taxable profit (see note 5(h)).
b) Estimates and uncertainties:
The key assumptions concerning the future and other key sources
of estimation uncertainty at the Statement of financial position
date, that have a significant risk of causing material adjustments
to the carrying amounts of assets and liabilities within the next
financial year are discussed below:
i) Estimation of fair value of financial assets and financial
liabilities: While preparing the financial statements the Group
makes estimates and assumptions that affect the reported amount of
financial assets and financial liabilities.
Trade Receivables
The Group ascertains the expected credit losses (ECL) for all
receivables and adequate impairment provision are made. At the end
of each reporting period a review of the allowance for impairment
of trade receivables is performed. Trade receivables do not contain
a significant financing element, and therefore expected credit
losses are measured using the simplified approach permitted by IFRS
9, which requires lifetime expected credit losses to be recognised
on initial recognition. A provision matrix is utilised to estimate
the lifetime expected credit losses based on the age, status and
risk of each class of receivable, which is periodically updated to
include changes to both forward-looking and historical inputs.
Assets held for sale- Financial assets measured at FVPL
Valuation of Investment in joint venture Padma Shipping Limited
is based on estimates and subject to uncertainties (Note 7(a)).
Financial assets measured at FVPL
Management applies valuation techniques to determine the fair
value of financial assets measured at FVPL where active market
quotes are not available. This requires management to develop
estimates and assumptions based on market inputs, using observable
data that market participants would use in pricing the asset. Where
such data is not observable, management uses its best estimate.
Estimated fair values of the asset may vary from the actual prices
that would be achieved in an arm's length transaction at the
reporting date.
ii) Impairment tests: In assessing impairment, management
estimates the recoverable amount of each asset or cash-generating
units based on expected future cash flows and use an interest rate
for discounting them. Estimation uncertainty relates to assumptions
about future operating results including fuel prices, foreign
currency exchange rates etc. and the determination of a suitable
discount rate. The management considers impairment upon there being
evidence that there might be an impairment, such as a lower market
capitalization of the group or a downturn in results.
iii) Useful life of depreciable assets: Management reviews its
estimate of the useful lives of depreciable assets at each
reporting date, based on the expected utility of the assets.
7 (Loss)/Profit from discontinued operations
Non-current assets held for sale and (Loss)/Profit from
discontinued operations consists of:
Assets Held for Liabilities classified (Loss)/Profit
Sale as held for sale from discontinued
operations
At 31 March At 31 March At 31 March At 31 March For FY For
2022 2021 2022 2021 22 FY 21
============= ============= ============= ============ ============= =========
i Interest in Solar
entities Note 7(b) 13,497,027 16,425,368 - - - -
ii Share of (Loss)/Profit
on fair
value of investments,
in Solar
entities Note 7(b) - - - - (2,928,341) 117,710
iii Gain on deconsolidation
of
Solar entities - - - - - 881,688
============= ============= ============= ============ ============= =========
Total 13,497,027 16,425,368 - - (2,928,341) 999,398
============= ============= ============= ============ ============= =========
(a) Investment in joint venture Padma Shipping Limited - classified as held for sale
In 2014 the Company entered into a Joint Venture agreement with
Noble Chartering Ltd ("Noble"), to secure competitive long term
rates for international freight for its imported coal requirements.
Under the Arrangement, the company and Noble agreed to jointly
purchase and operate two 64,000 MT cargo vessels through a Joint
venture company Padma Shipping Ltd, Hong Kong ('Padma').
The Group has invested approximately GBP3,484,178 in equity and
GBP1,727,418 to date as advance. The Group impaired entire
investment in earlier years of GBP5,211,596 in joint venture on
account of the impending dissolution of the JV.
(b) Assets held for sale and discontinued operations of solar entities
During the year, the results of the operations of solar entities
Avanti Solar Energy Private Limited, Mayfair Renewable Energy
Private Limited, Avanti Renewable Energy Private Limited and Brics
Renewable Energy Private Limited continued to be classified as
Assets held for sale as the process of disposition of the solar
entities could not be implemented during FY22 due to pandemic
Covid-19 and expectation of comparatively better valuation for
sale. However the management expects the interest in the solar
entities to be sold within the next 12 months and continues to
locate a buyer. The Group continues owning a 31% equity interest in
the solar companies. Based on the term sheet available the Group's
investment in the solar companies was valued at GBP13.5 million as
compared to OPG's initial investment of GBP16.4 million. This loss
of GBP2.9 million is recognized as loss from discontinued
operations on account of the diminution in the value of
investment.
Non-current Assets held-for-sale and discontinued operations
(a) Assets of disposal group classified As at 31 March As at 31 March
as held-for-sale 2022 2021
Property, plant and equipment - -
Trade and other receivables - -
Other short-term assets - -
Restricted cash - -
Cash and cash equivalents - -
Investment in associates classsified
as held for sale 13,497,027 16,425,368
============================ ===========================
Total 13,497,027 16,425,368
============================ ===========================
(b) Analysis of the results of discontinued For FY 22 For FY 21
operations is as follows
Revenue - -
Operating profit before impairments - -
Finance income - -
Finance cost - -
Current Tax - -
Deferred tax - -
Share of (Loss)/Profit on fair value
of investments, in Solar entities (2,928,341) 117,710
Gain on deconsolidation of Solar entities - 881,688
============================ ===========================
(Loss)/Profit from Solar operations (2,928,341) 999,398
============================ ===========================
8 Segment Reporting
The Group has adopted the "management approach" in identifying
the operating segments as outlined in IFRS 8 - Operating segments.
Segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker. The Board
of Directors being the chief operating decision maker evaluate the
Group's C534performance and allocates resources based on an
analysis of various performance indicators at operating segment
level. During the year 2021 the Group has deconsolidated solar
entities and are classified as associates (note 7(b)). Accordingly,
during FY22 there is only only one operating segment thermal power.
The solar power business is classified as held for sale. There are
no geographical segments as all revenues arise from India. All the
non current assets are located in India.
Revenue on account of sale of power to one customer exceeding
10% of total sales revenue amounts to GBP16,282,629 (2021:
GBP28,720,575 ).
Segmental information disclosure
Continuing operations Discontinued operations
Thermal Solar
Segment Revenue FY22 FY21 FY22 FY21
================== ================ ================= =============
Sales 80,067,032 93,823,933 - -
Total 80,067,032 93,823,933 - -
Other Operating income - 9,420,712 - -
Depreciation, impairment (5,333,531) (5,705,538) - -
Profit from operation 16,076,355 27,495,324 - -
Finance Income 2,285,364 868,439 - -
Finance Cost (5,356,089) (6,803,137) - -
Tax expenses (4,097,184) (8,447,699) - -
Gain on deconsolidation of Solar
entities - - - 881,688
Share of Profit, (Loss) on fair
value of investments, in Solar entities - - (2,928,341) 117,710
Profit / (loss) for the year 8,908,446 13,112,927 (2,928,341) 999,398
Assets 242,561,040 239,076,536 13,497,027 16,425,368
Liabilities 85,991,813 93,934,834 - -
================== ================ ================= =============
9 Costs of inventories and employee benefit expenses included in
the consolidated statements of comprehensive income
a) Cost of fuel 31 March 31 March
2022 2021
Included in cost of revenue:
Cost of fuel consumed Other direct costs 53,886,250 54,095,390
2,614,714 2,797,675
============================================== ================= ===================
Total 56,500,964 56,893,065
============================================== ================= ===================
b) Employee benefit expenses forming part of general and administrative expenses are as follows:
31 March 31 March
2022 2021
2,247,996 2,139,303
Salaries and wages Employee benefit costs * 217,715 228,112
Long Tern Incentive Plan (Note 21) 194,778 535,247
=============== ==================
Total 2,660,589 2,902,662
=============================================== =============== ==================
* includes GBP22,925 (2021 GBP31,885) being expenses towards
gratuity which is a defined benefit plan (Note 5(v))
c) Auditor's remuneration for audit services amounting to
GBP59,000 (2021: GBP60,000) is included in general and
administrative expenses.
d) Foreign exchange movements (realised and unrealised) included
in the Finance costs is as follows:
31 March 31 March
2022 2021
214,048 213,524
Foreign exchange realised - loss Foreign exchange
unrealised- loss 184,880 46,931
================ ===================
Total 398,928 260,455
===================================================== ================ ===================
10 Other operating income and expenses
a) Other operating income 31 March 2022 31 March 2021
Contractual claims payments - 9,420,712
--------------- --------------
Total - 9,420,712
--------------- --------------
Other operating income represents contractual claims payments
from company's customers under the power purchase agreements which
were accumulated over several periods.
b) Other income 31 March 2022 31 March
2021
=================================================== ========================================= ===================
Sale of coal 7,338,941 616,708
Sale of fly ash 77,586 16,271
Power trading commission and other services 169,183 147,166
Others 469,155 1,141,401
=================================================== ========================================= ===================
Total 8,054,865 1,921,546
=================================================== ========================================= ===================
11 Finance costs
========================================== ========================================= ===================
Finance costs are comprised of: 31 March 2022 31 March
2021
========================================== ========================================= ===================
Interest expenses on borrowings 4,277,158 5,848,895
Net foreign exchange loss (Note 9) 398,928 260,455
Other finance costs 680,003 693,787
========================================== ========================================= ===================
Total 5,356,089 6,803,137
========================================== ========================================= ===================
Other finance costs include charges and cost related to LC's for
import of coal and other charges levied by bank on transactions
12 Finance income
Finance income is comprised of: 31 March 2022 31 March 2021
Interest income on bank deposits
and advances 891,467 401,194
-------------- --------------
Profit on disposal of financial instruments* 1,393,897 467,245
-------------- --------------
Total 2,285,364 868,439
-------------- --------------
*Financial instruments represent the mutual funds held during
the year and profits include GBP465,297 unrealised gain on mark to
market rate as on reporting date.
13 Tax expenses
Tax Reconciliation
Reconciliation between tax expense and the product of accounting
profit multiplied by India's domestic tax rate for the years ended
31 March 2022 and 2021 is as follows:
31 March 2022 31 March
2021
========================================================== ===================================== ===================
Accounting profit before taxes 13,005,630 21,560,626
Enacted tax rates 34.94% 34.94%
Tax expense on profit at enacted tax rate 4,544,687 7,534,145
Exempt Income due to tax holiday - (161,808)
Foreign tax rate differential (13,847) 487,920
Unused tax losses brought forward and carried
forward - 1,216,052
Non-taxable items (916,046) (216,590)
MAT credit (entitlement) / reversed 482,390 (412,019)
========================================================== ===================================== ===================
Actual tax for the period 4,097,184 8,447,699
========================================================== ===================================== ===================
31 March 2022 31 March
2021
========================================================== ===================================== ===================
Current tax 334,646 412,513
Deferred tax 3,762,538 8,035,186
========================================================== ===================================== ===================
Tax reported in the statement of comprehensive
income 4,097,184 8,447,699
========================================================== ===================================== ===================
The Company is subject to Isle of Man corporate tax at the
standard rate of zero percent. As such, the Company's tax liability
is zero. Additionally, Isle of Man does not levy tax on capital
gains. However, considering that the group's operations are
primarily based in India, the effective tax rate of the Group has
been computed based on the current tax rates prevailing in India.
Further, a portion of the profits of the Group's India operations
are exempt from Indian income taxes being profits attributable to
generation of power in India. Under the tax holiday the taxpayer
can utilize an exemption from income taxes for a period of any ten
consecutive years out of a total of fifteen consecutive years from
the date of commencement of the operations. However, the entities
in India are still liable for Minimum Alternate Tax (MAT) which is
calculated on the book profits of the respective entities currently
at a rate of 17.47% (31 March 2021: 17.47%).
The Group has carried forward credit in respect of MAT tax
liability paid to the extent it is probable that future taxable
profit will be available against which such tax credit can be
utilized.
Deferred income tax for the Group at 31 March 2022 and 2021
relates to the following:
31 March 2022 31 March
2021
================================== ===============
Deferred income tax assets
Unused tax losses brought forward - -
and carried forward
MAT credit entitlement 11,985,655 12,374,534
11,985,655 12,374,534
Deferred income tax liabilities
Property, plant and equipment 29,015,582 25,368,905
29,015,582 25,368,905
=============================================== ================================== ===============
Deferred income tax liabilities,
net 17,029,927 12,994,371
=============================================== ================================== ===============
Movement in temporary differences
during the year
=============================================== ================================== ===============
Particulars As at Deferred Classified Translation As at
01 April tax liability as Liability adjustment 31 March
2021 for the year held for 22
sale
========================= ==================== ================ ================= =============== ===============
Property, plant and
equipment (25,368,905) (3,280,148) - (366,529) (29,015,582)
Unused tax losses
brought - - - - -
forward and carried
forward
MAT credit
entitlement 12,374,534 (482,390) - 93,511 11,985,655
========================= ==================== ================ ================= =============== ===============
Deferred income tax
liabilities
net (12,994,371) (3,762,538) - (273,018) (17,029,927)
========================= ==================== ================ ================= =============== ===============
Particulars As at Deferred Classified Translation As at
01 April tax asset as Liability adjustment 31 March
2020 for the held for 21
year sale
================================= =============== ============= ================== =============== ==============
Property, plant and
equipment (18,902,358) - (6,466,547) - (25,368,905)
Unused tax losses brought
forward and carried
forward 1,216,052 - (1,216,052) - -
MAT credit entitlement 11,962,515 412,019 - - 12,374,534
================================= =============== ============= ================== =============== ==============
Deferred income tax
(liabilities)
/ assets, net (5,723,791) 412,019 (7,682,599) - (12,994,371)
================================= =============== ============= ================== =============== ==============
In assessing the recoverability of deferred income tax assets,
management considers whether it is more likely than not that some
portion or all of the deferred income tax assets will be realized.
The ultimate realization of deferred income tax assets is dependent
upon the generation of future taxable income during the periods in
which the temporary differences become deductible. The amount of
the deferred income tax assets considered realizable, however,
could be reduced in the near term if estimates of future taxable
income during the carry forward period are reduced.
Shareholders resident outside the Isle of Man will not suffer
any income tax in the Isle of Man on any income distributions to
them. However, dividends are taxable in India in the hands of the
recipient.
There is no unrecognised deferred tax assets and liabilities. As
at 31 March 2022 and 2021, there was no recognised deferred tax
liability for taxes that would be payable on the unremitted
earnings of certain of the Group's subsidiaries, as the Group has
determined that undistributed profits of its subsidiaries will not
be distributed in the foreseeable future.
14 Intangible assets Acquired software
licences
=== ============================== ================================
Cost
At 31 March 2020 827,065
Additions
Exchange adjustments (63,470)
At 31 March 2021 763,595
At 31 March 2021 763,595
Additions 11,875
Exchange adjustments 11,032
================================= ================================
At 31 March 2022 786,502
================================= ================================
Accumulated depreciation and
impairment
At 31 March 2020 818,020
Charge for the year 6,209
Exchange adjustments (63,028)
At 31 March 2021 761,201
At 31 March 2021 761,201
Charge for the year 2,438
Exchange adjustments 11,054
================================= ================================
At 31 March 2022 774,692
================================= ================================
Net book value
At 31 March 2022 11,810
At 31 March 2021 2,394
15 Property, plant and equipment
The property, plant and
equipment comprises of:
=== ================================================= ================== =============== =========== ================== ========= =============== ===========
Land & Power Other plant Vehicles Right- Asset under Total
Building Station & equipment of-use construction
=== ====================== ================ ==================== ================= =============== ========= =================== ==========================
Cost
At 1st April
2020 8,765,490 216,622,367 1,886,252 2,356,081 - 280,776 229,910,967
Additions 271,158 318,038 24,375 134,659 - 36,206 784,436
Transfers
on capitalisation 13,598 159,120 - - - (172,718) -
Sale / Disposals - - - (1,561,762) - - (1,561,762)
Exchange adjustments (661,265) (16,639,299) (143,908) (180,354) - (21,547) (17,646,373)
========================== ================ ==================== ================= =============== ========= =================== ==========================
At 31 March
2021 8,388,982 200,460,226 1,766,719 748,624 - 122,717 211,487,267
========================== ================ ==================== ================= =============== ========= =================== ==========================
At 1st April
2021 8,388,982 200,460,226 1,766,719 748,624 - 122,717 211,487,267
Additions 13,919 267,007 25,229 23,745 43,843 3,265,722 3,639,464
Transfers
on capitalisation - 1,584,477 38,134 - - (1,622,611) -
Sale / Disposals - - - (52,794) - - (52,794)
Exchange adjustments 119,437 2,905,807 25,366 10,730 - 1,392 3,062,732
========================== ================ ==================== ================= =============== ========= =================== ==========================
At 31 March
2022 8,522,337 205,217,516 1,855,448 730,306 43,843 1,767,219 218,136,670
========================== ================ ==================== ================= =============== ========= =================== ==========================
Accumulated
depreciation
and
impairment
At 1 April
2020 55,601 34,683,662 878,072 1,824,237 - - 37,441,572
Charge for
the year 12,081 5,230,238 262,333 194,677 - - 5,699,329
Sale /
Disposals - - - (1,263,537) - - (1,263,537)
Exchange
adjustments (6,363) (2,874,452) (77,955) (147,367) - - (3,106,137)
At 31 March
2021 61,319 37,039,448 1,062,450 608,010 - - 38,771,227
At 1 April
2021 61,319 37,039,448 1,062,450 608,010 - - 38,771,227
Charge for
the year 10,801 5,033,811 257,197 22,135 7,149 - 5,331,093
Sale /
Disposals - - - (52,794) - - (52,794)
Exchange
adjustments 1,433 649,528 21,170 9,190 146 - 681,467
=================== =============== =============== ================ ============== ========= ============== =================
At 31 March
2022 73,553 42,722,787 1,340,816 586,542 7,295 - 44,730,994
===================
Net book
value
At 31 March
2022 8,448,784 162,494,730 514,631 143,764 36,548 1,767,219 173,405,676
At 31 March
2021 8,327,663 163,420,778 704,269 140,614 - 122,717 172,716,040
The net book value of land and
buildings block comprises of:
31 March 2022 31 March
2021
Freehold land 8,029,665 7,917,345
Buildings 419,119 410,318
8,448,784 8,327,663
Property, plant and equipment with a carrying amount of
GBP167,788,550 (2021: GBP169,111,804) is subject to security
restrictions (refer note 22).
16 Other Assets
31 March 2022 31 March
2021
A. Short-term
Capital advances - 124,601
Financial instruments measured at fair
value through P&L 18,265,352 13,253,663
Advances and other receivables 7,917,571 4,427,290
Total 26,182,923 17,805,554
B. Long-term
Bank deposits 12,140 57,713
Other advances - 12,140
Total 12,140 69,853
The financial instruments of GBP18,265,352 (FY2021:
GBP13,253,663) represent investments in mutual funds and their fair
value is determined by reference to published data.
17 Trade and other receivables
31 March 2022 31 March 2021
Current
Trade Receivables 8,607,935 14,829,989
Total 8,607,935 14,829,989
18 Inventories
=====
31 March 31 March
2022 2021
=====
Coal and fuel 9,499,510 11,228,377
Stores and spares 966,310 958,267
Total 10,465,820 12,186,644
The entire amount of above inventories has been
pledged as security for borrowings (refer note
19 22)
Cash and cash equivalents and Restricted cash
a Cash and short term deposits comprise of the
following:
31 March 31 March
2022 2021
=====
Investment in Mutual funds 5,193,275 1,815,629
Cash at banks and on hand 2,498,117 7,105,324
Total 7,691,392 8,920,952
Short-term deposits are placed for varying periods, depending on
the immediate cash requirements of the Group. They are recoverable
on demand.
b Restricted cash
Current restricted cash represents deposits maturing between
three to twelve months amounting to GBP2,392,104 (2021:
GBP3,219,356) which have been pledged by the Group in order to
secure borrowing limits with the banks. Non-current restricted
represents investments in mutual funds maturing after twelve months
amounting to GBP10,427,847 (2021: GBP8,194,412). Investments of
GBP8,300,665 (2021: GBP8,182,445) are allocated to debenture
redemption fund earmarked towards redemption of non-convertible
debentures of GBP20,126,738 scheduled during FY 2024.
20 Issued share capital Share Capital
The Company presently has only one class of ordinary shares. For
all matters submitted to vote in the shareholders meeting, every
holder of ordinary shares, as reflected in the records of the Group
on the date of the shareholders' meeting, has one vote in respect
of each share held. All shares are equally eligible to receive
dividends and the repayment of capital in the event of liquidation
of the Group.
As at 31 March 2022, the Company has an authorised and issued
share capital of 400,733,511 (2021: 400,733,511) equity shares at
par value of GBP 0.000147 (2021: GBP 0.000147) per share amounting
to GBP58,909 (2020: GBP58,909) in total.
Reserves
Share premium represents the amount received by the Group over
and above the par value of shares issued. Any transaction costs
associated with the issuing of shares are deducted from share
premium, net of any related income tax benefits.
Foreign currency translation reserve is used to record the
exchange differences arising from the translation of the financial
statements of the foreign subsidiaries.
Other reserve represents the difference between the
consideration paid and the adjustment to net assets on change of
controlling interest, without change in control, other reserves
also includes any costs related with share options granted and
gain/losses on re- measurement of financial assets measured at fair
value through other comprehensive income.
Retained earnings include all current and prior period results
as disclosed in the consolidated statement of comprehensive income
less dividend distribution.
21 Share based payments
Long Term Incentive Plan In April 2019, the Board of Directors
has approved the introduction of Long Term Incentive Plan
(""LTIP""). The key terms of the LTIP are:
The number of performance-related awards is 14 million ordinary
shares (the "LTIP Shares") (representing approximately 3.6 per cent
of the Company's issued share capital). The grant date is 24 April
2019.
The LTIP Shares were awarded to certain members of the senior
management team as Nominal Cost Shares and will vest in three
tranches subject to continued service with Group until vesting and
meeting the following share price performance targets, plant load
factor ("PLF") and term loan repayments of the Chennai thermal
plant.
- 20% of the LTIP Shares shall vest upon meeting the target
share price of 25.16p before the first anniversary for the first
tranche, i.e. 24 April 2020, achievement of PLF during the period
April 2019 to March 2020 of at least 70% at the Chennai thermal
plant and repayment of all scheduled term loans;
- 40% of the LTIP Shares shall vest upon meeting the target
share price of 30.07p before the second anniversary for the second
tranche,
i.e. 24 April 2021, achievement of PLF during the period April
2020 to March 2021 of at least 70% at the Chennai thermal plant and
repayment of all scheduled term loans;
- 40% of the LTIP Shares shall vest upon meeting the target
share price of 35.00p before the third anniversary for the third
tranche, i.e. 24 April 2022, achievement of PLF of at least 70% at
the Chennai thermal plant during the period April 2021 to March
2022 and repayment of all scheduled term loans.
The nominal cost of performance share, i.e. upon the exercise of
awards, individuals will be required to pay up 0.0147p per share to
exercise their awards
The share price performance metric will be deemed achieved if
the average share price over a fifteen day period exceeds the
applicable target price. In the event that the share price or other
performance targets do not meet the applicable target, the number
of vesting shares would be reduced pro-rata, for that particular
year. However, no LTIP Shares will vest if actual performance is
less than 80 per cent of any of the performance targets in any
particular year. The terms of the LTIP provide that the Company may
elect to pay a cash award of an equivalent value of the vesting
LTIP Shares.
In April 2020, and upon meeting relevant performance targets,
2,190,519 LTIP shares vested (80% of the 1st tranche). These shares
will be issued later this year.
None of the LTIP Shares, once vested, can be sold until the
third anniversary of the award, unless required to meet personal
taxation obligations in relation to the LTIP award.
Second and third tranches of LTIP grant didn't meet relevant
performance targets and expired in April 2022.
For LTIP Shares awards, GBP194,778 (FY2021: 535,247) has been
recognised in General and administrative expenses.
Grant date Vesting date 24-Apr-19 24-Apr-19 24-Apr-19
Method of Settlement 24-Apr-20 24-Apr-21 24-Apr-22
Vesting of shares (%) Equity/ Cash Equity/ Cash Equity/
Cash
20% 40% 40%
Number of LTIP Shares granted 2,800,000 5,600,000 5,600,000
Exercise Price (pence per share) 0.0147 0.0147 0.0147
Fair Value of LTIP Shares granted
(pence per share) 0.1075 0.1217 0.1045
Expected Volatility (%)
22 Borrowings
The borrowings comprise of the
following: 68.00% 64.18% 55.97%
Interest rate (range %) Final maturity 31 March 2022 31 March 2021
Borrowings at amortised cost 9.9-10.851 June 2024 23,159,039 26,770,564
Non-Convertible Debentures at
amortised cost 9.85 June 2023 20,126,738 19,840,089
Total 43,285,777 46,610,653
1 Interest rate range for Project term loans and Working
Capital
The term loans of GBP21.6m, working capital loans of GBP1.6m and
non-convertible debentures of GBP20.1m are taken by the Group are
fully secured by the property, plant, assets under construction and
other current assets of subsidiaries which have availed such loans.
All term loans and working capital loans are personally guaranteed
by a Director.
Term loans contain certain covenants stipulated by the facility
providers and primarily require the Group to maintain specified
levels of certain financial metrics and operating results. As of 31
March 2022, the Group has met all the relevant covenants.
The fair value of borrowings at 31 March 2022 was GBP43,285,777
(2021: GBP46,610,653). The fair values have been calculated by
discounting cash flows at prevailing interest rates.
The borrowings are reconciled to the statement of financial
position as follows:
31 March 2022 31 March
2021
Current liabilities
Amounts falling due within one year 13,399,429 4,510,358
Non-current liabilities
Amounts falling due after 1 year but not
more than 5 years 29,886,348 42,100,295
Total 43,285,777 46,610,653
23 Trade and other payables
31 March 2022 31 March
2021
===
Current
Trade payables 24,402,850 32,368,058
Creditors for capital goods 37,474 128,777
Total 24,440,324 32,496,835
Non-current
Other payables 630,358 607,702
Total 630,358 607,702
Trade payables include credit availed from banks under letters
of credit for payments in USD to suppliers for coal purchased by
the Group. Other trade payables are normally settled on 45 days
terms credit. The arrangements are interest bearing and are payable
within one year. With the exception of certain other trade
payables, all amounts are short term. Creditors for capital goods
are non-interest bearing and are usually settled within a year.
Other payables include accruals for gratuity and other accruals for
expenses.
24 Related party transactions Key Management Personnel:
Name of the party Nature of relationship
N Kumar Non-executive Chairman (from 4 April 2022)
Arvind Gupta Chairman (till 4 April 2022)
Avantika Gupta Chief Executive Officer (from 4 April 2022)
Dmitri Tsvetkov Chief Financial Officer & Director (till 31
May 2022)
Ajit Pratap Singh Chief Financial Officer (from 31 May 2022)
Jeremy Warner Allen Deputy Chairman
Mike Grasby Director (from February 2021)
Related parties with whom the Group had transactions during the
period
Name of the party Nature of relationship
Padma Shipping Limited The Company has joint control
of the entity
Avanti Solar Energy Private Associates
Limited
Mayfair Renewable Energy (I) Associates
Private Limited
Avanti Renewable Energy Private Associates
Limited
Brics Renewable Energy Private Associates
Limited
Samriddhi Bubna Relative of Key Management Personnel
Summary of transactions with
related parties
Name of the party 31 March 2022 31 March
2021
Remuneration to Samriddhi Bubna 24,601 25,847
Sale of solar modules:
a) Avanti Solar Energy Private
Limited 188,741 198,299
b) Mayfair Renewable Energy
(I) Private Limited 75,664 79,496
Summary of balance with related
parties
Name of the party Nature of balance 31 March 2022 31 March
2021
Padma Shipping Limited Investment 3,448,882 3,448,882
Padma Shipping Limited Advances 1,727,418 1,727,418
Padma Shipping Limited Impairment provision (5,176,300) (5,176,300)
Avanti Solar Energy Private Limited Investment 4,863,575 4,766,864
Avanti Solar Energy Private Limited Trade payable - (67,391)
Avanti Solar Energy Private Limited Advance 538,038 6,022
Mayfair Renewable Energy Private
Limited Investment 5,277,364 5,352,890
Mayfair Renewable Energy Private
Limited Trade payable (52,035) (51,294)
Mayfair Renewable Energy Private
Limited Advance - 7,242
Avanti Renewable Energy Private
Limited Investment 5,804,055 5,895,541
Avanti Renewable Energy Private
Limited Trade payable - (147,583)
Avanti Renewable Energy Private
Limited Advance 298,745 9,047
Brics Renewable Energy Private
Limited Investment 362,664 410,073
Impairment provisions - Investments
in Solar (Associates) Investment (2,810,631) -
Outstanding balances at the year-end are unsecured. Related
party transaction are on arms length basis. There have been no
guarantees provided or received for any related party receivables
or payables except for corporate guarantees issued to lenders of
its solar entities classified as Assets held for sale (loans
outstanding GBP21,760,989 (2021: GBP23,300,131)) and corporate
guarantee to a director for his personal guarantees with respect to
the Group. The assessment of impairment is undertaken each
financial year through examining the financial position of the
related party and the market in which the related party
operates.
A director personally guaranteed loans of an associate solar
entity Nil (2021: GBP7,412,554)) which is classified as Asset Held
for Sale. Group's loans of GBP23,044,653 (2021: GBP25,368,634) are
personally guaranteed by a director.
Outstanding balances at the year-end are unsecured. Related
party transaction are on arms length basis. There have been no
guarantees provided or received for any related party receivables
or payables except for corporate guarantees issued to lenders of
its solar entities classified as Assets held for sale (loans
outstanding GBP21,760,989 (2021: GBP23,300,131)) and corporate
guarantee to a director for his personal guarantees with respect to
the Group. The assessment of impairment is undertaken each
financial year through examining the financial position of the
related party and the market in which the related party
operates.
A director personally guaranteed loans of an associate solar
entity Nil (2021: GBP7,412,554)) which is classified as Asset Held
for Sale. Group's loans of GBP23,044,653 (2021: GBP25,368,634) are
personally guaranteed by a director.
25 Earnings per share
Both the basic and diluted earnings per share have been
calculated using the profit attributable to shareholders of the
parent company as the numerator (no adjustments to profit were
necessary for the year ended March 2022 or 2021).
The company has issued LTIP over ordinary shares which could
potentially dilute basic earnings per share in the future.
The weighted average number of shares for the purposes of
diluted earnings per share can be reconciled to the weighted
average number of ordinary shares used in the calculation of basic
earnings per share (for the Group and the Company) as follows:
Particulars 31 March 31 March
2022 2021
Weighted average number of shares used
in basic earnings per share 402,924,030 400,733,511
Shares deemed to be issued for no consideration
in respect of share based payments - 2,190,519
Weighted average number of shares used
in diluted earnings per share 402,924,030 402,924,030
26 Directors remuneration
Name of directors 31 March 2022 31 March 2021
Arvind Gupta - -
Avantika Gupta 59,043 60,000
Dmitri Tsvetkov 1,50,000 1,50,000
Jeremy Warner Allen 25,000 25,000
N Kumar 22,500 22,500
Mike Grasby (from February 2021) 22,500 2,562
Total 2,79,043 2,60,062
As part of COVID-19 response, the Company has implemented
various cost reduction and efficiency improvement measures to
conserve cash and improve liquidity, including voluntary 100 per
cent salary reduction for Chairman and voluntary reductions up to
50 per cent in compensation for Executive and Non-Executive
Directors for FY22 and FY21.The above remuneration is in the nature
of short-term employee benefits. As the future liability for
gratuity and compensated absences is provided on actuarial basis
for the companies in the Group, the amount pertaining to the
directors is not individually ascertainable and therefore not
included above.
27 Commitments and contingencies
Operating lease commitments
The Group leases office premises under operating leases. The
leases typically run for a period up to 5 years, with an option to
renew the lease after that date. None of the leases includes
contingent rentals.
Non-cancellable operating lease rentals are payable as
follows:
31 March 31 March
2022 2021
Not later than one year 15,337 -
Later than one year and not later than five years 23,005 -
Later than five years - -
Total 38,342 -
Recognition of a right of use asset GBP36,548 (2021:
NIL) and a lease liability GBP36,228 (2021: NIL).
Contingent liabilities
Disputed income tax demands GBP3,715,194 (2021:
GBP816,358).
Future cash flows in respect of the above matters are
determinable only on receipt of judgements / decisions pending at
various forums / authorities.
Guarantees and Letter of credit
The Group has provided bank guarantees and letter of credits
(LC) to customers and vendors in the normal course of business. The
LC provided as at 31 March 2022: GBP13,964,728 (2021:
GBP20,167,583) and Bank Guarantee (BG) as at 31 March 2022:
GBP4,039,969 (2021:
GBP2,575,878). LC are supporting accounts payables already
recognised in statement of financial position. There have been no
guarantees provided or received for any related party receivables
or payables except for corporate guarantees issued to lenders of
its associate solar entities of GBP21,760,986 (2021:
GBP23,300,131). Working capital facilities limits, LCs and BGs are
personally guaranteed by a director. BG are treated as contingent
liabilities until such time it becomes probable that the Company
will be required to make a payment under the guarantee. The Company
provided a corporate guarantee to a director for his personal
guarantees with respect to the Group.
28 Financial risk management objectives and policies
The Group's principal financial liabilities, comprises of loans
and borrowings, trade and other payables, and other current
liabilities. The main purpose of these financial liabilities is to
raise finance for the Group's operations. The Group has loans and
receivables, trade and other receivables, and cash and short-term
deposits that arise directly from its operations. The Group also
hold investments designated financial assets measured at FVPL
categories.
The Group is exposed to market risk, credit risk and liquidity
risk.
The Group's senior management oversees the management of these
risks. The Group's senior management advises on financial risks and
the appropriate financial risk governance framework for the
Group.
The Board of Directors reviews and agrees policies for managing
each of these risks which are summarised below:
Market risk
Market risk is the risk that the fair values of future cash
flows of a financial instrument will fluctuate because of changes
in market prices. Market prices comprise three types of risk:
interest rate risk, currency risk and other price risk, such as
equity risk. Financial instruments affected by market risk include
loans and borrowings, deposits, financial assets measured at
FVPL.
The sensitivity analyses in the following sections relate to the
position as at 31 March 2022 and 31 March 2021 The following
assumptions have been made in calculating the sensitivity
analyses:
(i) The sensitivity of the statement of comprehensive income is
the effect of the assumed changes in interest rates on the net
interest income for one year, based on the average rate of
borrowings held during the year ended 31 March 2022, all other
variables being held constant. These changes are considered to be
reasonably possible based on observation of current market
conditions.
Interest rate risk
Interest rate risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Group's exposure to the risk
of changes in market interest rates relates primarily to the
Group's long-term debt obligations with average interest rates.
At 31 March 2022 and 31 March 2021, the Group had no interest
rate derivatives.
The calculations are based on a change in the average market
interest rate for each period, and the financial instruments held
at each reporting date that are sensitive to changes in interest
rates. All other variables are held constant. If interest rates
increase or decrease by 100 basis points with all other variables
being constant, the Group's profit after tax for the year ended 31
March 2022 would decrease or increase by GBP432,858 (2021:
GBP466,107).
Foreign currency risk
Foreign currency risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rate. The Group's presentation currency
is the Great Britain GBP. A majority of our assets are located in
India where the Indian rupee is the functional currency for our
subsidiaries. Currency exposures also exist in the nature of
capital expenditure and services denominated in currencies other
than the Indian rupee.
The Group's exposure to foreign currency arises where a Group
company holds monetary assets and liabilities denominated in a
currency different to the functional currency of that entity:
As at 31 March 2022 As at 31 March 2021
Currency Financial assets Financial Financial Financial
liabilities assets liabilities
United States Dollar (USD) 133,577 16,067,891 60,158 27,733,983
Set out below is the impact of a 10% change in the US dollar on
profit arising as a result of the revaluation of the Group's
foreign currency financial instruments:
As at 31 March 2022 As at 31 March 2021
Currency Closing Rate Effect of Closing Effect of
10% Rate 10%
(INR/USD) strengthening (INR/USD) strengthening
in
in USD against USD against
INR INR
- Translated - Translated
to GBP to GBP
United States Dollar (USD) 75.66 1,223,320 73.37 2,012,662
The impact on total equity is the same as the impact on net
earnings as disclosed above.
Credit risk analysis
Credit risk is the risk that counterparty will not meet its
obligations under a financial instrument or customer contract,
leading to a financial loss. The Group is exposed to credit risk
from its operating activities (primarily for trade and other
receivables) and from its financing activities, including
short-term deposits with banks and financial institutions, and
other financial assets. Further, the global economy has been
severely impacted by the global pandemic Covid-19 (Note 5(a)).
The maximum exposure for credit risk at the reporting date is
the carrying value of each class of financial assets amounting to
GBP34,802,998 (2021: GBP33,269,104) and corporate guarantees issued
to lenders of its associates solar entities of GBP21,760,986 (2021:
GBP23,300,131).
The Group has exposure to credit risk from accounts receivable
balances on sale of electricity. The operating entities of the
Group has entered into power purchase agreements with distribution
companies incorporated by the Indian state government (TANGEDCO) to
sell the electricity generated therefore the Group is committed to
sell power to these customers and the potential risk of default is
considered low. For other customers, the Group ensures
concentration of credit does not significantly impair the financial
assets since the customers to whom the exposure of credit is taken
are well established and reputed industries engaged in their
respective field of business. It is Group policy to assess the
credit risk of new customers before entering contracts and to
obtain credit information during the power purchase agreement to
highlight potential credit risks. The Group have established a
credit policy under which customers are analysed for credit
worthiness before power purchase agreement is signed. The Group's
review includes external ratings,when available, and in some cases
bank references. The credit worthiness of customers to which the
Group grants credit in the normal course of the business is
monitored regularly and incorporates forward looking information
and data available. The receivables outstanding at the year end are
reviewed till the date of signing the financial statements in terms
of recoveries made and ascertain if any credit risk has increased
for balance dues. Further, the macro economic factors and specific
customer industry status are also reviewed and if required the
search and credit worthiness reports, financial statements are
evaluated. The credit risk for liquid funds is considered
negligible, since the counterparties are reputable banks with high
quality external credit ratings.
To measure expected credit losses, trade and other receivables
have been grouped together based on shared credit risk
characteristics and the days past due. The Group determined that
some trade receivables were credit impaired as these were long past
their due date and there was an uncertainty about the recovery of
such receivables. The expected loss rates are based on an ageing
analysis performed on the receivables as well as historical loss
rates. The historical loss rates are adjusted to reflect current
and forward looking information that would impact the ability of
the customer to pay.
Trade and other receivables are written off when there is no
reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the
failure of the debtor to engage in a repayment plan, the debtor is
not operating anymore and a failure to make contractual payments
for a period of greater than 180 days.
31 March 2022 Within Days past due
Credit
Period More than More than More than Total
30 days 60 days 180 days
Expected general loss
allowance rate 0% 0% 0% 73.19% 54.68%
Gross carrying amount
- Trade Receivables
-TANGEDCO 727,191 656,818 2,158,116 7,199,394 10,741,520
Gross carrying amount
- Trade Receivables -Others 1,760,732 939,318 86,005 5,466,037 8,252,092
General loss allowance - - - 10,385,677 10,385,677
Total Loss allowance - - - 10,385,677 10,385,677
31 March 2022 Within Days past due
Credit
Period More than More than More than Total
30 days 60 days 180 days
Expected loss rate 0% 0% 0% 33.02% 58.76%
Gross carrying amount
- Trade Receivables -TANGEDCO 1,651,140 1,686,225 2,218,844 15,097,765 20,653,974
Gross carrying amount
- Trade Receivables -Others 7,862,837 1,154,009 460,326 5,831,930 15,309,103
General loss allowance - - 252,404 6,910,677 7,163,081
Specific loss allowance 13,970,007 13,970,007
Total Loss allowance - - 252,404 20,880,684 21,133,088
The closing loss allowances for trade receivables as at 31 March 2022
reconciles to the opening loss allowances as follows:
31 March 2022 31 March
2021
Opening loss allowance
as at 1 April 21,133,088 18,108,033
(Reversal)/Increase in
loss allowance (10,747,411)* 3,025,055
Total 10,385,677 21,133,088
*Out of this amount, (3,228,971) was adjusted in revenue and the
balance (7,518,440) was adjusted in individual accounts of the
receivables.
The Group's management believes that all the financial assets,
except as mentioned above are not impaired for each of the
reporting dates under review and are of good credit quality.
Liquidity risk analysis
The Group's main source of liquidity is its operating
businesses. The treasury department uses regular forecasts of
operational cash flow, investment and trading collateral
requirements to ensure that sufficient liquid cash balances are
available to service on-going business requirements. The Group
manages its liquidity needs by carefully monitoring scheduled debt
servicing payments for long-term financial liabilities as well as
cash outflows due in day-to-day business. Liquidity needs are
monitored in various time bands, on a day-to-day and week-to-week
basis, as well as on the basis of a rolling 90 day projection.
Long-term liquidity needs for a 90 day and a 30 day lookout period
are identified monthly.
The Group maintains cash and marketable securities to meet its
liquidity requirements for up to 60 day periods. Funding for
long-term liquidity needs is additionally secured by an adequate
amount of committed credit facilities and the ability to sell
long-term financial assets.
The following is an analysis of the group contractual
undiscounted cash flows payable under financial liabilities at 31
March 2022 and 31 March 2021.
As at 31 March 2021 Current Non Current Total
1 - 5 Years Later than
5 Years
Borrowings 13,399,429 9,759,610 - 23,159,039
Non-Convertible Debentures - 20,126,738 - 20,126,738
Trade and other payables 24,440,324 630,358 - 25,070,682
Other liabilities - 36,228 - 36,228
Other current liabilities 569,199 - - 569,199
Total 38,408,952 30,552,934 - 68,961,886
As at 31 March 2021 Current Non Current Total
1 - 5 Years Later than
5 Years
Borrowings 4,510,358 22,260,206 - 26,770,564
Non-Convertible Debentures - 19,840,089 - 19,840,089
Interest on Borrowings 6,803,137 7,816,034 - 14,619,171
Trade and other payables 32,495,799 607,702 - 33,103,501
Other current liabilities 1,226,309 - - 1,226,309
Total 45,035,603 50,524,031 - 95,559,634
Capital management
Capital includes equity attributable to the equity holders of
the parent and debt less cash and cash equivalents. The Group's
capital management objectives include, among others:
-- Ensure that it maintains a strong credit rating and healthy
capital ratios in order to support its business and maximise
shareholder value.
-- Ensure Group's ability to meet both its long-term and
short-term capital needs as a going concern.
-- To provide an adequate return to shareholders by pricing
products and services commensurately with the level of risk.
The Group manages its capital structure and makes adjustments to
it, in light of changes in economic conditions. To maintain or
adjust the capital structure, the Group may adjust the dividend
payment to shareholders, return capital to shareholders or issue
new shares.
No changes were made in the objectives, policies or processes
during the years end 31 March 2022.
The Group maintains a mixture of cash and cash equivalents,
long-term debt and short-term committed facilities that are
designed to ensure the Group has sufficient available funds for
business requirements. There are no imposed capital requirements on
Group or entities, whether statutory or otherwise.
The Capital for the reporting periods 31-Mar-22 31-Mar-21
under review is summarised as follows:
Total equity 17,00,66,254 16,15,67,070
Less: Cash and cash equivalent -76,91,392 -89,20,952
Capital 16,23,74,862 15,26,46,118
Total equity 17,00,66,254 16,15,67,070
Add: Borrowings 4,32,85,777 4,66,10,653
Overall financing 21,33,52,031 20,81,77,723
Capital to overall financing ratio 0.76 0.73
29 Summary of financial assets and liabilities by category and their fair values
Carrying Amount Fair Value
31 March 31 March 31 March 31 March
2022 2022 2022 2022
Financial assets measured at amortised
cost
Cash and cash equivalents 1 7,691,392 8,920,952 7,691,392 8,920,952
Restricted cash1 12,819,951 11,413,768 12,819,951 11,413,768
Current trade receivables1 8,607,935 14,829,989 8,607,935 14,829,989
Other long-term assets 12,140 69,853 12,140 69,853
Other short-term assets 2,724,296 2,736,262 2,724,296 2,736,262
Financial instruments measured at
fair value through profit or loss
Other short term assets - (Note 16
& 19)
Investments in Mutual funds 23,458,627 15,069,292 23,458,627 15,069,292
55,314,341 53,040,116 55,314,341 53,040,116
Financial liabilities measured at
amortised cost
Term loans (2) 23,159,039 26,770,564 23,159,039 26,770,564
Non-Convertible Debentures (2) 20,126,738 19,840,089 20,126,738 19,840,089
Current trade and other payables (1) 24,440,324 32,495,799 24,440,324 32,495,799
Provision for pledged deposits 36,228 - 36,228 -
Non-current trade and other payables
(2) 630,358 607,702 630,358 607,702
68,392,687 79,714,154 68,392,687 79,714,154
The fair value of the financial assets and liabilities are
included at the price that would be received to sell an asset or
paid to transfer a liability (i.e. an exit price) in an ordinary
transaction between market participants at the measurement date.
The following methods and assumptions were used to estimate the
fair values.
1. Cash and short-term deposits, trade receivables, trade
payables, and other borrowings like short-term loans, current
liabilities approximate their carrying amounts largely due to the
short-term maturities of these instruments.
2. The fair value of loans from banks and other financial
indebtedness, obligations under finance leases, financial
liabilities at fair value through profit or loss as well as other
non-current financial liabilities is estimated by discounting
future cash flows using rates currently available for debt or
similar terms and remaining maturities.
3. Fair value of financial assets measured at FVPL held for
trading purposes are derived from quoted market prices in active
markets. Fair value of financial assets measured at FVPL of
unquoted equity instruments are derived from valuation performed at
the year end. Fair Valuation of retained investments in PS and BV
is on basis of the last transaction.
Fair value measurements recognised in the statement of financial
position
The following table provides an analysis of financial
instruments that are measured subsequent to initial recognition at
fair value, grouped into Levels 1 to 3 based on the degree to which
the fair value is observable.
-- Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or
liabilities.
-- Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
-- Level 3 fair value measurements are those derived from
valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable
inputs).
Level 1 Level 2 Level 3 Total
Financial instruments measured
at fair value through profit
or loss
2022
Quoted securities 23,458,627 - - 23,458,627
Total 23,458,627 - - 23,458,627
2021
Quoted securities 15,069,292 - - 15,069,292
Total 15,069,292 - - 15,069,292
There were no transfers between Level 1 and 2 in the period.
Investments in mutual funds are valued at closing net asset value
(NAV).
The Group's finance team performs valuations of financial items
for financial reporting purposes, including Level 3 fair values.
Valuation techniques are selected based on the characteristics of
each instrument, with the overall objective of maximising the use
of market-based information. The finance team reports directly to
the chief financial officer (CFO).
Valuation processes and fair value changes are discussed by the
Board of Directors at least every year, in line with the Group's
reporting dates.
30 Ultimate controlling party
As disclosed in the Directors' Report the ultimate controlling
party is considered to be the Gupta family by virtue of their
majority shareholding in the Group.
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END
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September 30, 2022 02:02 ET (06:02 GMT)
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