TIDMOPG
RNS Number : 7638F
OPG Power Ventures plc
01 August 2016
1 August 2016
OPG Power Ventures plc
("OPG", the "Group" or the "Company")
Preliminary results for the year ended 31(st) March 2016
Delivery, Performance and Progress
Record Results
OPG (AIM: OPG), the developer and operator of power generation
assets in India, announces its preliminary results for the year
ended 31(st) March 2016 ("FY16").
Highlights
-- 480 MW new capacity commissioned in the year - total operating capacity 750 MW
-- EBITDA margin of 39.5% up from 33.4% compared with FY15
-- Profit before tax of GBP28.6 million up by 32% compared with FY15
-- EPS of 5.29 pence up by 8% compared with FY15
-- Q1 FY17 aggregate group revenues approx. GBP57 million and average group PLF 72%
-- 334 MW allocated to 2-3 year captive sales agreements at Chennai plant - transforms sales mix
-- Initial target dividend of 15% of net earnings commencing with an interim in calendar 2016
-- 62 MW solar growth projects expected to be funded from a
combination of new debt facilities and internal equity
Summary financial information
GBP million INR million
------------------------ --------------- ----------------
FY16 FY15 FY16 FY15
------------------------ ------- ------ ------- -------
Revenue 128.4 100.0 12,681 9,838
------------------------ ------- ------ ------- -------
EBITDA 50.7 33.4 5,004 3,287
------------------------ ------- ------ ------- -------
Profit before tax 28.6 21.7 2,819 2,130
------------------------ ------- ------ ------- -------
EPS (pence) 5.29 4.91 - -
------------------------ ------- ------ ------- -------
Net debt 254.1 250.6 24,159 23,251
------------------------ ------- ------ ------- -------
Total units (millions) 3,163* 1,861
------------------------ ------- ------ ------- -------
GBP:INR ex-rate 98.7 98.4
------------------------ ------- ------ ------- -------
*includes 704m units from Gujarat for which results are being
capitalised
Commenting on the results, Mr M C Gupta, Chairman stated: "The
OPG management team have much to be proud of upon the completion of
their 750 MW programme. The Company's results and continued growth
in revenues are a testament to this. This positions the Company
uniquely well, in my view, to take advantage of the many good
growth opportunities the Indian power sector will have to offer in
the years to come. After the Board having announced a firm approach
to dividends I have informed the Board of my decision to retire and
I wish to thank my Board colleagues and the entire team at OPG for
their warmth and for their efforts in making this a company of the
future - I have every reason to believe OPG is well on its way to
achieving its goal of leadership in the Indian energy sector."
For further information, please visit www.opgpower.com or
contact:
OPG Power Ventures PLC +91 (0) 44 429 11
Arvind Gupta / V Narayan Swami 211
Investor Relations
Ajay Paliwal/Pooja Maru +44 (0) 20 7850 7070
Cenkos Securities (Nominated Adviser
& Broker)
Stephen Keys / Camilla Hume +44 (0) 20 7397 8900
Macquarie Capital (Europe) Limited
(Joint Broker)
Raj Khatri / Nick Stamp +44 (0) 20 3037 2000
Tavistock (Financial PR)
Simon Hudson / James Collins +44 (0) 20 7920 3150
Disclaimer
This announcement does not constitute or form part of any offer
or invitation on to sell or issue, or any solicitation on of any
offer to purchase or subscribe for any securities. The making of
this announcement does not constitute a recommendation on regarding
any securities. Certain statements, beliefs and opinions contained
in this announcement, particularly those regarding the possible or
assumed future financial or other performance of OPG, industry
growth or other trend projections are or may be forward looking
statements. Forward--looking statements can be identified by the
use of forward looking terminology, including the terms "believes",
"estimates", "anticipates", "expects", "intends", "plans", "goal",
"target", "aim", "may", "will", "would", "could" or "should" or, in
each case, their negative or other variations or comparable
terminology. These forward looking statements include all matters
that are not historical facts. By their nature, forward--looking
statements involve risks and uncertainties because they relate to
events and depend on circumstances that may or may not occur in the
future and may be beyond OPG's ability to control or predict.
Forward--looking statements are not guarantees of future
performance. No representation on is made that any of these
statements or forecasts will come to pass or that any forecast
result will be achieved. Neither OPG, nor any of its associates or
directors, officers or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed
or implied in any forward--looking statements in this announcement
will actually occur. You are cautioned not to place reliance on
these forward--looking statements. Other than in accordance with
its legal or regulatory obligations, OPG is not under any
obligation and OPG expressly disclaims any intention or obligation
to update or revise any forward--looking statements, whether as a
result of new information, future events or otherwise.
No statement in this announcement is intended as a profit
forecast or a profit estimate and no statement in this announcement
should be interpreted to mean that earnings per OPG share for the
current or future financial years would necessarily match or exceed
the historical published earnings per OPG share.
Chief Executive's review
Performance Overview
This has been something of a landmark year of an eight year
journey during which the Company has delivered record results,
completed its 750 MW program and is now embarking on an exciting
new phase of development.
During FY16, OPG generated a record 3.2 billion units of
electricity as a result of which reported revenues rose by 28% to
GBP128 million. A 480 MW uplift in capacity has been delivered
progressively through FY16 and the Q1 FY17 revenues of
approximately GBP57 million reflect the ramp up to date of this
newly delivered capacity. Profit before tax was up 32%, and
operating margins were higher than last year, tracking delivered
coal prices.
The low point of the year was some of the worst flooding ever
seen in Chennai with severe impact upon communities in the region.
Although generation at the Chennai plant was impacted it remained
available throughout to supply electricity and more importantly the
plant had an essential role in providing emergency drainage to
nearby communities where the impact could have been significantly
greater.
As well as knowing their Company has been playing its part in
the community, shareholders will be pleased that we announced the
timing and basis for our initial dividend policy with an initial
pay out target of 15% of net earnings (subject to cash flows and
commitments) commencing with an interim payment in the current
calendar year and with an intention to grow that pay out over time.
We also re-affirmed our strategy of pursuing responsible,
sustainable growth from new projects, mirroring the energy mix of
India in the longer term, in line with which we recently announced
our entry into the promising solar energy segment.
Market
This is a time of opportunity in the Indian power sector
especially for cash generative participants due to the major
developments taking place.
- The Company operates in the fastest growing major economy of
the world with GDP growth of over 7% in the last fiscal year.
Electricity is a key growth enabler and a further 480 GW will need
to be added to India's power generating capacity in order to reach
the government's stated per capita consumption target of 1800 kWh
by 2034 and to provide electricity for approximately 260 million
people. Population growth, industrialisation, electrification and
urbanisation continue apace in India
- Financial restructuring of state utilities, the biggest buyers
of electricity in India, by way of a program known as UDAY, is
expected to bring about a material reduction in finance costs to a
large number of utilities. This together with reforms in the
banking sector are expected to provide a boost to the availability
of efficient financing for well-run thermal and renewable energy
players
- Fuel availability and mix is changing rapidly. India produces
more coal than ever and globally, supplies have remained strong
while producer currencies have been weak, keeping prices subdued.
Utilities and regulators have sought to track those dynamics in
power pricing. Renewable energy is also much more relevant
- Following the COP21 meeting of nations in December 2015, India
committed to fast-track renewables development and responsible
growth in thermal capacity. Thermal energy is still forecast to
remain the backbone of the country's power needs for several
decades to come where a focal point will be mobilising idle
capacity in that segment. FY16 also saw over 5 GW of new solar
energy projects commissioned and the pace of this development is
expected to quicken as 10 GW of solar projects are anticipated to
be auctioned every year. With solar development costs in India
being amongst the lowest in the world and continuing to maintain a
benign momentum, projects have become viable without subsidies.
We believe these features make India the most exciting power
market in the world seeking, to add 20 GW of new capacity every
year to keep pace with demand. Both thermal and renewables will be
important and around a third of all energy generation is expected
to be from renewable sources from by 2030. We believe our entry
into renewables and our strong thermal portfolio will ensure we are
well placed across the spectrum of opportunities.
Future Projects
Against this fast evolving backdrop, last year the Company
outlined to shareholders its aim of replicating the power
generation mix of the nation and on 5(th) July 2016, the Company
announced the investment of GBP45 million in four new solar
projects (total 62 MW) across various locations in Karnataka, one
of the most industrialised states in India. This investment is
expected to be funded from a combination of internal cash
generation and debt and the Directors consider all four of these
new projects capable of generating cash flow by June 2017. The
fully permitted projects were secured in a competitive bidding
process and the Company has signed long term (25 year) power
purchase agreements (PPAs) at an average tariff of Rs 5 with
Karnataka State Electricity Distribution companies ("Discoms"). The
targeted return levels are expected to be met without any subsidies
and the Board expects these projects to deliver long term returns
ahead of our average cost of capital.
OPG's Priorities
With many potential opportunities, the Board seeks to augment
the Company's strong track record by focusing management on certain
priorities as follows:
- Our first priority has been and must remain maximising the
cash generation and performance of existing operations. This means
making the most of our multi-year contracts in Chennai, achieving
cost, working capital, safety and environmental performance
leadership there and of course, ramping up Gujarat as profitably as
possible. We need to maintain our unbroken track record on timely
coal procurement and as well as our cost of operations, seek to
continually optimise our cost of capital. With the normal
determined efforts of the OPG team, these efforts will be the
backbone of our cash generation, dividends and growth.
- Our second priority is to engage in responsible and
sustainable growth. We should seek to navigate some of the pitfalls
experienced by others seeking out profitable megawatts only. In so
doing we will retain our ability to be selective if and when
interesting growth opportunities arise to achieve the Company's
true potential. In the context of this priority, we believe our
commitment to internally fund growth of 300 MW of solar over the
coming years and paying out returns from the free cash flow
generated from them is achievable and exciting for
shareholders.
- And in everything we do, it's a priority that we must be
conscious of the need to protect our people and our environment.
Due to its recent construction, our existing portfolio operates
well within all Indian regulatory requirements and we want our
plans to involve continual improvement in this regard. As a result,
as well as rebalancing our portfolio with renewable energy
regeneration, in implementing any growth in thermal, our management
team has undertaken to the Board to target improvements in the
environmental performance of our thermal portfolio as a whole
following such growth. This is an important part of becoming a
leader in the sector.
Board and other developments
Mr M. C Gupta, our Chairman, has informed of his wish to retire
from the Board at the next general meeting. I have the special
privilege of thanking him for his leadership and guidance over the
last eight years. In my view we could not have achieved what we
have without his direction and counsel. He has overseen the
forty-fold growth of OPG from its initial size, which gives us the
platform for our continued growth. On behalf of shareholders, my
Board colleagues and I, we wish Mr M.C. Gupta well for his
retirement.
We have identified a new non-executive director to join the
Board and I look forward to welcoming Mr Jeremy Beeton to our
Board. Jeremy's experience in emerging markets and on the boards of
many leading companies as well as his leadership in delivering
large, complex projects including the London Olympics in 2012 will
be valuable to the Company. We will make a further announcement
regarding the appointment of Jeremy Beeton in due course which will
include the requisite AIM Rule disclosures.
Being familiar amongst our shareholders, having completed our
750 MW program and built a strong, stable and capable commercial
and operations team, the Board has considered it appropriate that I
take on the role of Executive Chairman of OPG, which I have agreed
to accept.
Finally, I am delighted to welcome Mr T Chandramoulee to the new
position of Group Chief Operating Officer, with a non-Board
responsibility for running the day-to-day operating affairs of the
Company. T Chandramoulee has been with OPG since 2007, is known to
our customers, suppliers and lenders and has played a leading role
in all aspects of the development and operation of the Chennai and
Gujarat plants.
In other developments, the Board continues to evaluate with its
advisors the possibility of a move to the Main Market.
Summary
A lot has changed in the last eight years to position the
Company well as a potential leader in the sector. We will look to
continue our momentum onwards from this landmark year by
introducing our dividend shortly and by judiciously identifying
good growth projects. There is no doubt that encouraging and major
reforms are going on in our sector and our vision is to couple the
opportunities they bring with our natural skills and to become a
sector leader known for its all round performance.
I want to pay a special tribute to the efforts of our team, many
of whom have been an integral part of the entire journey. I look
forward to their continued support and dedication without which we
cannot achieve our desired leadership status.
Similarly, as the Board and I look forward with confidence to
the Company's future, we wish to place on record our thanks to all
of our shareholders for their support and participation during our
journey.
Financial Review
The following is a commentary on Group's financial performance
in the year.
Income Statement (GBPm)
Year ended 31st March 2016 % of 2015 % of
------------------------------------------ -------- --------
Revenue Revenue
------------------------------------------ -------- -------- -------- --------
Revenue 128.44 99.97
Cost of Revenue (Excluding Depreciation) (66.60) (58.46)
Gross Profit 61.84 48.15 41.51 41.5
Other income 4.44 0.13
Distribution , General & Administrative
expenses (Excluding Depreciation,
Employee Stock Option Charge,
Expenditure during the period
on expansion project,) (15.60) (8.25)
EBITDA 50.68 39.4 33.39 33.4
Depreciation (5.94) (3.15)
Net finance costs (15.91) (7.97)
Income from continuing operations
(before tax
non-operational and / or exceptional
items) 28.83 22.4 22.27 22.2
Expenditure during the period
on expansion projects - (0.38)
Employee Stock Option Charge (0.28) (0.24)
Charge on de consolidated Investments - -
Profit before Tax 28.55 22.2 21.65 21.6
Taxation (9.97) (4.36)
Profit after tax 18.57 14.45 17.29 17.2
------------------------------------------ -------- -------- -------- --------
Revenue
OPG revenue has increased by GBP28.4m, reflecting a 28% growth
year on year. Overall generation increased 70% on account of the
commissioning of the 180 MW Chennai and the 300 MW Gujarat plant
partway through the year. Generation for revenue purposes increased
32% to 2,459 million units in FY16 from 1,861 in FY15 with the
balance 704 million units from Gujarat until 30 January being
capitalised.
Production and output levels from the Group's operating power
plants in Chennai and Gujarat compared to the prior year were as
follows:
Particulars FY 16 FY 15
--------------------------- ------ ------
Generation (Mn Units) 3163 1861
--------------------------- ------ ------
PLF % 72 91
--------------------------- ------ ------
Average Tariff (INR/Unit) 5.58 5.71
--------------------------- ------ ------
*includes 704m units from Gujarat for which results are being
capitalised
Generation at Chennai was lower due to seasonal demand,
availability of grid during the year and heavy rainfall.
Gross Profit
Gross profit ("GP"), net of depreciation included in Cost of
Revenue inFY16 was 48.15% of Revenue (41.5% in FY15). The GP growth
came from lower factory gate prices on Coal.
The cost of revenue represents fuel costs (including the
depreciation added therein in the audited accounts but excluded for
the purpose of this review). The average factory gate costs for
Indian coal decreased by 1.6% and those for Indonesian coal by
20.7%. The table below shows the price and blend of Indian and
Indonesian coal consumed in FY 16 and FY15.
The coal blend in FY16:
Financial Average factory gate Average factory gate Blend %
Year price (INR/MT) price (INR per million
KCal)
----------- ----------------------- -------------------------- ------------------
Indian Indonesian Indian coal Indonesian Indian:Indonesian
coal Coal Coal
----------- --------- ------------ ------------- ----------- ------------------
FY 16 3013 3216 879 769 22:78
----------- --------- ------------ ------------- ----------- ------------------
FY 15 3062 4056 988 966 32.68
----------- --------- ------------ ------------- ----------- ------------------
Change % -1.6 -20.71
----------- --------- ------------ ------------- ----------- ------------------
EBITDA
Earnings Before Interest, Taxation, Depreciation &
Amortisation (EBITDA) is a measure of a business's cash generation
from operations before depreciation, interest and exceptional and
non-standard or non-operational changes such as the annual charge
for stock options which is a non-cash item or expenses relating to
projects under construction.
EBITDA was GBP 50.68m in FY16 up from GBP33.39 m in FY15 and
EBITDA margin was higher at 39.4 % in FY16 against 33.4% in FY15 on
account of increase in GP margin.
Profit before Tax (GBPm)
Total
Profit Before Tax (PBT) 2015-2016 28.55
Profit Before Tax (PBT) 2014-2015 21.65
----------------------------------------------------------- --------
Increase/(Decrease) in PBT 6.90
----------------------------------------------------------- --------
Reconciliation
Increase in GP 20.33
Increase in other income 4.31
Increase Distribution , General & Administrative expenses (7.35)
Increase in Depreciation (2.79)
Increase in Net finance cost (7.94)
Reduction in expenses on expansion of projects 0.38
Increase in ESOP expense (0.04)
Increase/(Decrease) in PBT 6.90
----------------------------------------------------------- --------
Taxation
The Company's operating subsidiaries are under a tax holiday
period but are subject to Minimum Alternate Tax ('MAT') on its
accounting profits. Any tax paid under MAT can be off set against
future taxable profits once the tax holiday period is over. The tax
charged during the year was GBP 9.97m (FY15: GBP4.36m) which
includes current tax of GBP 3.99m (FY15: GBP2.85m) and deferred tax
of GBP 5.97m (FY15: GBP1.51m). The deferred tax charge arises from
timing differences in the amounts of depreciation charged in the
tax accounts as against these published accounts.
Expenditure on Projects
This relates to expenses incidental to projects under
construction. These expenses in FY16 were GBP Nil m in (FY15:
GBP0.38m).
Employee Stock Options charge
This relates to the amortization of the value of stock options
granted to certain Directors and is non cash in nature and were
fully amortised during the year.
Profits after Tax
Profits After tax have increased by GBP 1.28m from GBP17.29m in
FY15 to GBP18.57m in FY16.
Property, Plant and Equipment
The net book value of our property, plant and equipment
principally relates to production assets capitalized post the
construction of our new plants at Chennai and Gujarat.
Other Non-Current Assets
Other Non-current assets have decreased by GBP 0.64m year on
year primarily as a result of investments made in the shipping
business and in the restricted cash holding for more than 12
months.
Trade Receivables (GBPm)
FY 16 FY 15
Receivables from sales of power 53.00 28.28
Other receivables 4.84 0.35
--------------------------------- ------ ------
Total 57.84 28.63
--------------------------------- ------ ------
Current Assets
Current Assets have increased by GBP 23.87m to GBP96.980m year
on year primarily as a result of the following:
- Increase in trade receivables by GBP29.21m (on account of
slower payment by TANGEDCO, the short term supply contracts with
this entity having ceased in May 2016)
- Reduction in Investments & Other Assets by GBP10.54m on
account of reduction in advances to suppliers for the projects in
Chennai & Gujarat with corresponding increase in assets under
Property, Plant & Equipment.
- Increase in Inventory holdings by GBP2.72m and
- Increase in other assets by GBP2.47m
Current Liabilities
Current liabilities have increased by GBP4.8m primarily on
account of increase in retention money.
Other Non-Current Liabilities
Other Non-Current liabilities have increased by GBP 2.39m
primarily on account of
- increase in short term bank borrowing by GBP 4.62m
- And increase in deferred tax liability and reduction in trade
and other liabilities by GBP -2.2 Mn
Net Debt and Gearing
Net borrowings (Borrowings net of Cash and cash equivalents and
available for sale of investments) are GBP254.06m. Project debt on
480 MW of new capacity was fully drawn down during the year. The
Gearing ratio was 58%.
The restricted cash balances totaling FY16: GBP9.23 m (FY15:
GBP8.1m) comprise deposits have been pledged as security against
the Company's borrowings.
Cash Flows
Operating cash flow has increased from GBP 32.87m in FY15 to
GBP48.90 m in FY16, an increase of GBP16.03m, or 48%. The increase
is primarily due to the increased gross margin.
Movements (GBPm) FY16 FY15
-------------------------------------------- ------- --------
Operating Cash 48.9 32.88
Tax Paid -3.97 (3.22)
Change in Working capital assets
and liabilities -25.13 (9.74)
Net cash generated by operating activities 19.80 19.92
Purchase of Property, Plant and Equipment
(net of disposals) -13.32 (77.11)
Other Investments -1.65 10.57
Net cash used in Investing activities -14.97 (66.54)
Net Interest paid -7.87 (9.41)
Total Cash change before Net borrowings -3.04 (56.03)
-------------------------------------------- ------- --------
Operations review
The following is a review of operations by the Group's Chief
Operating Officer.
Project Delivery
During FY16 the Company commissioned its two largest assets to
date, a 300 MW plant in Gujarat and 180 MW unit in Chennai,
bringing its installed generation capacity to 750 MW. The 480 MW
uplift in capacity has been delivered progressively throughout the
year, with the full revenue impact expected to be reflected across
the next two years.
Plant availability
Our operational performance is affected by our revenue
generation model, plant availability and load factors and auxiliary
power consumption (the internal deployment of the plant's
production as this is not saleable production).
Both coal availability and water consumption are two factors
which have disrupted the availability and load factors of other
thermal power plants in India in recent years. OPG's plants are
designed to be able to use a wide range of fuels, both domestic and
international, and the Company further has the capability to
maintain reserves of coal. This has been integral to coal
availability at its locations and we haven't faced any
interruptions on account of coal since commissioning each unit. In
addition, the plants are designed to limit the consumption of water
as they are built with air cooled condenser technology rather than
being water cooled. As a result our plant availability has remained
consistently over 90%. This is important as availability is the
basis of our reward on the 74 MW LTVT (Long Term Variable Tariff)
which is discussed further below.
Our load factors take account of plant availability as reduced
by external factors like normal seasonal demand adjustments to
their offtake under the LTVT (though the customer still pays us as
discussed further below), enforced system back downs and once off
disruptions to demand such as due to weather. Accordingly our PLF
for the enlarged 414 MW Chennai plant in FY16 as a whole was 70%
versus a national average for thermal plants of 62%.
Auxiliary consumption levels, also a key measure of plant
efficiency, is typically between 7.5-8% for our plants which
compares favourably to national averages of around 9% for similar
sized units in India.
Sales contracts
In October 2015, the Company commenced supplies directly to
industrial customers under multi-year contracts in Chennai. The
tenure of sales contracts entered into with industrial customers at
Chennai was between 2 and 3 years. This is expected to accelerate
cash collections and improve visibility of earnings. The capacity
allocated to industrial customers under such contracts has recently
risen from 257 MW to 334 MW, or 82% of the plant's installed
capacity and nearly half of group capacity. 74 MW of Chennai
capacity has remained available for supply on the LTVT. Against the
LTVT we earned revenue for our normal available capacity throughout
the year including approximately GBP3.7 million for the c250
million units that were not drawn by TANGEDCO as normal seasonal
demand adjustments by them. We can expect this seasonality in FY17
too but similarly expect to earn a profitable capacity charge for
it.
The increasing supply of electricity to industrial customers
provides an element of protection from grid-related issues. During
the year the state of Tamil Nadu was forced to restrict grid access
by reducing its purchases of electricity from many generators of
conventional power during an especially strong wind season due to
grid constraints. Industrial customers are not normally affected by
such restrictions as the state seeks to ensure continuity of supply
to business.
Power sales from the new 300 MW Gujarat plant have been to
mainly industrial customers on short term contracts and to the
power exchange. The industrial customers are also supplied by the
state government utilities, which operates a power surplus and is
able to determine how grid access is allocated. Grid access is
being made available gradually, with the result that the plant has
ramped up gradually as we had previously reported, achieving a load
factor of 68% for the first three months of FY17, compared with 52%
for the two month period since commissioning from February to March
2016.
We expect both plants to operate at an average load factor of
75% for the current year as a whole and for average tariff levels
to be around Rs 4.40.
Coal supply
The Company has consistently been able to import low sulphur
coal from a small number of high class Indonesian coal producers
and traders with whom it has developed longstanding relationships.
The Company has also participated in short term price hedging which
has been beneficial as prices have fallen. In addition, the Company
has had a consistent record of supply through it's shipping desk,
which has resulted in no delays or unexpected losses.
Safety and environmental compliance
The Company made good progress with its safety programme,
recording no fatalities and a reported incident rate in FY16 for
Chennai of 0.33 versus 0.40 in FY15 and 0.49 in FY14. Our target
for FY16 was 0.35. Gujarat performance will become a focus in the
current year as it was recently commissioned and contractor numbers
are greatly reduced.
The Company continues to minimise its consumption of water
through air cooling and we operate with a philosophy of continual
improvement with regards to any effluent. For the latter we achieve
and report our continued compliance with all existing prescribed
limits and furthermore are now in the process of adopting the new
national pollution limits announced in late 2015. These new limits
are required to be met by December 2018 but we anticipate achieving
compliance ahead of that.
Consolidated statements of comprehensive income
Notes Year ended Year ended
---------------------------------------------- ------ ------------- -------------
(All amounts in GBP, unless otherwise 31 March 31 March
stated) 2016 2015
---------------------------------------------- ------ ------------- -------------
Revenue 128,438,193 99,974,648
---------------------------------------------- ------ ------------- -------------
Cost of revenue 8 (a) (71,895,139) (61,228,358)
---------------------------------------------- ------ ------------- -------------
Gross profit 56,543,054 38,746,290
---------------------------------------------- ------ ------------- -------------
Other income 9 4,444,268 127,268
---------------------------------------------- ------ ------------- -------------
Distribution cost (6,564,363) (1,863,441)
---------------------------------------------- ------ ------------- -------------
General and administrative expenses (9,967,112) (7,388,392)
---------------------------------------------- ------ ------------- -------------
Operating profit 44,455,847 29,621,725
---------------------------------------------- ------ ------------- -------------
Finance costs 10 (16,712,169) (9,410,037)
---------------------------------------------- ------ ------------- -------------
Finance income 11 806,453 1,437,763
---------------------------------------------- ------ ------------- -------------
Profit before tax 28,550,131 21,649,451
---------------------------------------------- ------ ------------- -------------
Tax expense 12 (9,972,626) (4,360,769)
---------------------------------------------- ------ ------------- -------------
Profit for the year 18,577,505 17,288,682
---------------------------------------------- ------ ============= =============
Profit for the year attributable to:
---------------------------------------------- ------ ------------- -------------
Owners of the Company 18,558,014 17,270,192
---------------------------------------------- ------ ------------- -------------
Non - controlling interests 19,491 18,490
---------------------------------------------- ------ ------------- -------------
18,577,505 17,288,682
---------------------------------------------- ------ ============= =============
Earnings per share
---------------------------------------------- ------ ------------- -------------
-Basic (in pence) 24 5.29 4.91
---------------------------------------------- ------ ------------- -------------
-Diluted (in pence) 5.13 4.80
---------------------------------------------- ------ ------------- -------------
Other comprehensive income
---------------------------------------------- ------ ------------- -------------
Items that will be reclassified subsequently
to profit or loss
---------------------------------------------- ------ ------------- -------------
Available for sale financial assets
---------------------------------------------- ------ ------------- -------------
-Reclassification to profit or loss 5,133 (32,633)
---------------------------------------------- ------ ------------- -------------
-Current year gains/(losses) 38,557 (5,133)
---------------------------------------------- ------ ------------- -------------
Exchange differences on translating
foreign operations (2,844,341) 10,481,124
---------------------------------------------- ------ ------------- -------------
Items that will be not reclassified
subsequently to profit or loss
---------------------------------------------- ------ ------------- -------------
Exchange differences on translating
foreign operations 2,755 9,875
---------------------------------------------- ------ ------------- -------------
Total other comprehensive income (2,797,896) 10,453,233
---------------------------------------------- ------ ------------- -------------
Total comprehensive income 15,779,609 27,741,915
---------------------------------------------- ------ ============= =============
Total comprehensive income attributable
to:
---------------------------------------------- ------ ------------- -------------
Owners of the Company 15,757,365 27,713,554
---------------------------------------------- ------ ------------- -------------
Non-controlling interest 22,244 28,361
---------------------------------------------- ------ ------------- -------------
15,779,609 27,741,915
---------------------------------------------- ------ ============= =============
The notes are an integral part of these consolidated financial
statements.
Consolidated statements of financial position
(All amounts in GBP, unless otherwise Notes As at As at
stated)
31 March 31 March
2016 2015
--------------------------------------- ------ ------------- -------------
Assets
Non-current assets
Intangible assets 13 364,504 665,673
Property, plant and equipment 14 414,906,166 414,552,876
Investment and other assets 15 2,951,591 2,754,393
Restricted cash 1,940,600 2,784,990
------------- -------------
420,162,861 420,757,932
------------- -------------
Current assets
Trade and other receivables 16 57,840,717 28,628,701
Inventories 17 10,614,890 7,889,661
Cash and cash equivalents 18 7,153,455 6,805,449
Restricted cash 7,294,778 5,303,217
Current tax assets (net) 715,214 574,834
Investment and other assets 15 13,365,243 23,907,952
------------- -------------
96,984,297 73,109,814
------------- -------------
Total assets 517,147,158 493,867,746
============= =============
Equity and liabilities
Equity
Share capital 51,671 51,671
Share premium 124,316,524 124,316,524
Other components of equity (13,652,725) (11,135,645)
Retained earnings 69,684,455 51,126,441
------------- -------------
Equity attributable to owners of the
Company 180,399,925 164,358,991
Non-controlling interests 276,325 254,079
------------- -------------
Total equity 180,676,250 164,613,070
------------- -------------
Liabilities
Non-current liabilities
Borrowings 21 242,558,875 237,936,689
Trade and other payables 22 8,463,049 16,795,079
Deferred tax liability 12 9,310,429 3,205,851
------------- -------------
260,332,353 257,937,619
------------- -------------
Current liabilities
Borrowings 21 21,023,963 22,851,498
Trade and other payables 22 54,890,882 47,839,604
Other liabilities 223,710 625,955
------------- -------------
76,138,555 71,317,057
------------- -------------
Total liabilities 336,470,908 329,254,676
------------- -------------
Total equity and liabilities 517,147,158 493,867,746
============= =============
The notes are an integral part of these consolidated financial
statements.
The financial statements were authorised for issue by the board
of directors on 29 July 2016 and were signed on its behalf by:
Arvind Gupta V. Narayan Swami
Chief Executive Officer Chief Financial Officer
Consolidated statements of changes in equity
Issued Foreign Total
(All amounts in GBP, capital currency attributable
unless (No. of Ordinary Share Other translation Retained to owners Non-controlling Total
otherwise stated) shares) shares premium reserves reserve earnings of parent interests equity
------------ --------- ------------ ---------- ------------- ----------- ------------- ---------------- ------------
At 1 April 2014 351,504,795 51,671 124,316,524 6,962,395 (28,784,289) 33,856,249 136,402,550 225,717 136,628,267
Employee share based
payments - - 242,888 - - 242,888 - 242,888
Transaction with
owners 51,671 124,316,524 7,205,283 (28,784,289) 33,856,249 136,645,438 225,717 136,871,155
------------ --------- ------------ ---------- ------------- ----------- ------------- ---------------- ------------
Profit for the year - - - - 17,270,192 17,270,192 18,490 17,288,682
Other comprehensive
income
Currency translation
differences - - - 10,481,124 - 10,481,124 9,875 10,490,999
Gain on
sale/re-measurement
of available for
sale financial
assets - - (37,763) - - (37,763) (3) (37,766)
Total comprehensive
income - - (37,763) 10,481,124 17,270,192 27,713,553 28,362 27,741,915
------------ --------- ------------ ---------- ------------- ----------- ------------- ---------------- ------------
At 31 March 2015 351,504,795 51,671 124,316,524 7,167,520 (18,303,165) 51,126,441 164,358,991 254,079 164,613,070
------------ --------- ------------ ---------- ------------- ----------- ------------- ---------------- ------------
Employee share based
payments - - 283,571 - - 283,571 - 283,571
Transaction with
owners 51,671 124,316,524 7,451,091 (18,303,165) 51,126,441 164,642,562 254,079 164,896,641
------------ --------- ------------ ---------- ------------- ----------- ------------- ---------------- ------------
Profit for the year - - - - 18,558,014 18,558,014 19,491 18,577,505
Other comprehensive
income
Currency translation
differences - - - (2,844,341) - (2,844,341) 2,755 (2,841,586)
Gain on
sale/re-measurement
of available for
sale financial
assets - - 43,690 - - 43,690 - 43,690
Total comprehensive
income - - 43,690 (2,844,341) 18,558,014 15,757,363 22,246 15,779,609
------------ --------- ------------ ---------- ------------- ----------- ------------- ---------------- ------------
At 31 March 2016 351,504,795 51,671 124,316,524 7,494,781 (21,147,506) 69,684,455 180,399,925 276,325 180,676,250
------------ --------- ------------ ---------- ------------- ----------- ------------- ---------------- ------------
The notes are an integral part of these consolidated financial
statements.
Consolidated statements of cash flows
(All amounts in GBP, unless otherwise stated) Year ended Year ended
31 March 31 March
2016 2015
--------------------------------------------------- ------------- --------------
Cash flows from operating activities
Profit before income tax 28,550,131 21,649,451
Adjustments for
Unrealised foreign exchange loss 299,256 (131,219)
Provisions no longer required written back (1,823,228) -
Financial costs 16,460,854 9,410,037
Financial income (806,452) (1,437,763)
Share based compensation costs 283,571 242,888
Depreciation and amortisation 5,944,912 3,145,119
Changes in working capital
Trade and other receivables (29,279,858) (5,835,530)
Inventories (2,918,712) 5,595,078
Other assets 3,362,875 (1,025,573)
Trade and other payables 4,066,886 (6,002,207)
Other liabilities (359,581) (2,474,534)
------------- --------------
Cash generated from operations 23,780,654 23,135,747
Taxes paid (3,973,243) (3,218,221)
------------- --------------
Net cash from operating activities 19,807,411 19,917,526
------------- --------------
Cash flows from investing activities
Purchase of property, plant and equipment
(including capital advances) (13,321,443) (77,111,796)
Interest received 690,548 1,375,174
Dividend received - 53,543
Movement in restricted cash (1,308,062) 101,759
Sale of investments(1) 42,247,590 128,973,581
Purchase of investments(1) (43,277,870) (119,935,336)
------------- --------------
Net cash used in investing activities (14,969,237) (66,543,075)
------------- --------------
Cash flows from financing activities
Proceeds from borrowings (net of costs) 77,159,277 59,998,942
Repayment of borrowings (74,259,217) (5,026,019)
Interest paid (7,874,257) (9,410,037)
------------- --------------
Net cash from financing activities (4,974,197) 45,562,886
------------- --------------
Net increase in cash and cash equivalents (136,023) (1,062,663)
Cash and cash equivalents at the beginning
of the year 6,805,449 6,636,577
Exchange differences on cash and cash equivalents 484,029 1,231,535
------------- --------------
Cash and cash equivalents at the end of the
year 7,153,455 6,805,449
------------- --------------
(1) Investments maturing during the year have been reinvested
upon maturity in similar instruments of short tenor. The figures
reported under "Purchase of investments" and "Sale of investments"
in the above consolidated cash flow statements are aggregate of
such maturities and reinvestments made during the period
reported.
Notes to the consolidated financial statements
All amounts 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) and their interpretations as adopted by the
European Union (EU) 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 IOMA House, Hope
Street, Douglas, Isle of Man 1M1 1JA. 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 2016 were approved and authorised for issue by the Board of
Directors on 29 July 2016
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.
IFRS 9 'Financial Instruments' (2014)
The IASB recently released IFRS 9 'Financial Instruments'
(2014), representing the completion of its project to replace IAS
39 'Financial Instruments: Recognition and Measurement'. The new
standard introduces extensive changes to IAS 39's guidance on the
classification and measurement of financial assets and introduces a
new 'expected credit loss' model for the impairment of financial
assets. IFRS 9 also provides new guidance on the application of
hedge accounting. Management has started to assess the impact of
IFRS 9 but is not yet in a position to provide quantified
information. At this stage the main areas of expected impact are as
follows:
i) the classification and measurement of the Group's financial
assets will need to be reviewed based on the new criteria that
considers the assets' contractual cash flows and the business model
in which they are managed;
ii) an expected credit loss-based impairment will need to be
recognised on the Group's trade receivables (see note 16) and
investments in debt-type assets currently classified as AFS and HTM
(see note 15), unless classified as at fair value through profit or
loss in accordance with the new criteria; and
iii) it will no longer be possible to measure equity investments
at cost less impairment and all such investments will instead be
measured at fair value. Changes in fair value will be presented in
profit or loss unless the Group makes an irrevocable designation to
present them in other comprehensive income.
IFRS 9 is effective for annual reporting periods beginning on or
after 1 January 2018.
IFRS 15 'Revenue from Contracts with Customers'
IFRS 15 presents new requirements for the recognition of
revenue, replacing IAS 18 'Revenue', IAS 11 'Construction
Contracts', and several revenue-related Interpretations. The new
standard establishes a control-based revenue recognition model and
provides additional guidance in many areas not covered in detail
under existing IFRSs, including how to account for arrangements
with multiple performance obligations, variable pricing, customer
refund rights, supplier repurchase options, and other common
complexities.
IFRS 15 is effective for annual reporting periods beginning on
or after 1 January 2018. Management has started to assess the
impact of IFRS 15 but is not yet in a position to provide
quantified information.
Amendments to IFRS 11 'Joint Arrangements'
These amendments provide guidance on the accounting for
acquisitions of interests in joint operations constituting a
business. The amendments require all such transactions to be
accounted for using the principles on business combinations
accounting in IFRS 3 'Business Combinations' and other IFRSs except
where those principles conflict with IFRS 11. Acquisitions of
interests in joint ventures are not impacted by this new
guidance.
The Group's only investment made to date in a joint arrangement
(note 5(d)(ii)) is characterised as a joint venture in which the
Group has rights to a share of the arrangement's net assets rather
than direct rights to underlying assets and obligations for
underlying liabilities. Accordingly, if adopted today, these
amendments would not have a material impact on the consolidated
financial statements.
The amendments are effective for reporting periods beginning on
or after 1 January 2016.
IFRS 16 'Leases'
On 13 January 2016, the IASB issued the final version of IFRS 16
'Leases'. IFRS 16 will replace the existing leases standard , IAS
17 'Leases', and related interpretations. The standard sets out the
principles for recognition, measurement, presentation and
disclosure of leases for both parties to a contract. IFRS 16
introduces a single lessee accounting model and requires a lessee
to recognise assets and liabilities for all leases with a term of
more than 12 months, unless the underlying asset is of low value.
Currently, operating lease expenses are charged to the statment of
comprehensive income. The standard also contains enhanced
disclosure requirements for lessees. IFRS 16 substantially carries
forward the lessor accounting requirements in IAS 17.
The effective date for adoption of IFRS 16 is annual periods
beginning on or after 1 January 2019, though early adoption is
permitted for companies applying IFRS 15 'Revenue from Contracts
with Customers'. The Group is yet to evaluate the requirements of
IFRS 16 and the impact on the consolidated financial
statements.
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
available-for-sale financial assets measured at fair value.
The financial statements have been prepared on going concern
basis which assumes the Group will have sufficient funds to
continue its operational existence for the foreseeable future
covering at least 12 months. As the Group has forecast it will be
able to meet its debt facility interest and repayment obligations,
and that sufficient funds will be available to continue with the
projects development, the assumption that these financial
statements are prepared on a going concern basis is
appropriate.
The consolidated financial statements are presented in
accordance with IAS 1 Presentation of Financial Statements and have
been presented in Great Britain Pounds ('LIR'), the functional and
presentation currency of the Company.
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 2016. 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 or received 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 and joint ventures
Details of the Group's subsidiaries and joint ventures, which
are consolidated into the Group's consolidated financial
statements, are as follows:
i) Subsidiaries
Immediate Country % Economic
Subsidiaries parent of incorporation % Voting Right interest
March March March March
2016 2015 2016 2015
-------------------------------- ----------- ------------------- -------- ------- ------ ------
Caromia Holdings
limited ('CHL') OPGPV Cyprus 100 100 100 100
Gita Power and Infrastructure
Private Limited,
('GPIPL') CHL India 100 100 100 100
OPG Power Generation
Private Limited ('OPGPG') GPIPL India 76.96 93.94 99 99
OPGS Power Gujarat
Private Limited ('OPGG') GPIPL India 99.09 62.07 99 99
OPGS Industrial Infrastructure
Developers Private
Ltd ('OPIID') OPGG India 100 100 100 100
OPGS Infrastructure
Private Limited ('OPGIPL') OPGG India 100 100 100 100
ii) Joint ventures
Venturer Country % Economic
Joint ventures of incorporation % Voting right interest
March March March March
2016 2015 2016 2015
-------------------- ---------- ------------------- -------- ------- ------ ------
Padma Shipping Ltd
("PSL") OPGPV Hong Kong 50 50 50 50
The Company has 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 Long Term Freight Arrangement (LTFA), the company and
Noble are to purchase and own, jointly and equally, two 64,000 MT
cargo vessels through a Joint venture company Padma Shipping Ltd,
Hong Kong ('Padma'). The company will commit to provide 1.5 million
tonnes of coal per annum for carriage by the two vessels for a
minimum period of 10 years at competitive long term rates. Pursuant
to this agreement, Padma Shipping Ltd has been incorporated in
order to execute the joint arrangement for procuring two cargo
ships of 64,000 MT capacity from Cosco Shipyard, Hong Kong which
are expected to be delivered by 2017. The company and Noble are to
invest approximately US$ 9 million over the period of delivery of
the vessels as their equity contribution thereby and during the
current period, the company has paid an advance of US$ 782,897
(2015: US$ 2,801,700). Accordingly the joint venture has been
reported using equity method as per the requirements of IFRS
11.
e) 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.
INR exchange rates used to translate the INR financial
information into the presentation currency of Great Britain Pound
(GBP) are the closing rate as at 31 March 2016: 95.09 (2015: 92.76)
and the average rate for the year ended 31 March 2016: 98.73 (2015:
98.41).
f) Revenue recognition
Revenue is recognised to the extent that it is probable that the
economic benefits associated with the transaction will flow to the
Group, and revenue can be reliably measured. Revenue is measured at
the fair value of the consideration received or receivable in
accordance with the relevant agreements, net of discounts, rebates
and other applicable taxes and duties.
Sale of electricity
Revenue from the sale of electricity is recognised when earned
on the basis of contractual arrangement with the customers and
reflects the value of units supplied including an estimated value
of units supplied to the customers between the date of their last
meter reading and the reporting date.
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.
g) Operating expenses
Operating expenses are recognised in the statement of profit or
loss upon utilisation of the service or as incurred.
h) 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 comprehensive income or equity,
respectively.
i) Financial assets
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions of any
financial instrument and are measured initially at fair value
adjusted by transactions costs, except for those carried at fair
value through profit or loss which are measured initially at fair
value.
Financial assets are de-recognised when the contractual rights
to the cash flows from the financial asset expire, or when the
financial asset and all substantial risks and rewards are
transferred. A financial liability is de-recognised when it is
extinguished, discharged, cancelled or expires.
Financial assets are classified into the following categories
upon initial recognition:
i) loans and receivables
ii) available-for-sale financial assets.
The category determines subsequent measurement and whether any
resulting income and expense is recognised in profit or loss or in
other comprehensive income.
Loans and receivables:
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are included in current assets except for assets
having maturities greater than 12 months after the reporting date.
These are classified as non-current assets. After initial
recognition these are measured at amortised cost using the
effective interest method, less provision for impairment.
Discounting is omitted where the effect of discounting is
immaterial. The Group's cash and cash equivalents, trade and most
other receivables fall into this category of financial
instruments.
Individually significant receivables are considered for
impairment when they are past due or when other objective evidence
is received that a specific counterparty will default. Receivables
that are not considered to be individually impaired are reviewed
for impairment in groups, which are determined by reference to the
industry and region of a counterparty and other shared credit risk
characteristics. The impairment loss estimate is then based on
recent historical counterparty default rates for each identified
group.
Available-for-sale financial assets:
Available-for-sale financial assets are non-derivative financial
assets that are either designated to this category or do not
qualify for inclusion in any of the other categories of financial
assets. The Group's available-for-sale financial assets include
Mutual funds and equity instruments. They are included in
non-current assets unless management intends to dispose of the
investment within 12 months of the reporting date.
Available-for-sale financial assets are measured at fair value.
Gains and losses are recognised in other comprehensive income and
reported within the other reserves in equity, except for impairment
losses and foreign exchange differences on monetary assets, which
are recognised in profit or loss. When the asset is disposed of or
is determined to be impaired the cumulative gain or loss recognised
in other comprehensive income is reclassified from the equity
reserve to profit or loss and presented as a reclassification
adjustment within other comprehensive income. The fair value of the
mutual fund units is based on the net asset value publicly made
available by the respective mutual fund manager.
Reversals of impairment losses are recognized in other
comprehensive income, except for financial assets that are debt
securities which are recognised in profit or loss only if the
reversal can be objectively related to an event occurring after the
impairment loss was recognised.
j) 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'.
k) 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.
l) 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.
m) 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.
n) Leases
The determination of whether an arrangement is, or contains, a
lease is based on the substance of the arrangement at inception
date and whether fulfilment of the arrangement is dependent on the
use of a specific asset or assets or the arrangement conveys a
right to use the asset.
Group as a lessee
Contracts to lease assets are classified as finance leases if
they transfer substantially all the risks and rewards of ownership
of the asset to the group. Leases where the Group does not acquire
substantially all the risks and benefits of ownership of the asset
are classified as operating leases.
Operating lease payments are recognised as an expense in the
profit or loss on a straight line basis over the lease term. Lease
of land is classified separately and is amortised over the period
of the lease.
o) 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.
p) 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.
q) 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.
r) 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 for based on weighted average
price. Net realisable value is the estimated selling price in the
ordinary course of business, less estimated selling expenses.
s) 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.
t) 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.
u) 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).
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.
v) 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.
Employees Benefit Trust
Effective during the previous year, the Group has established an
Employees Benefit Trust (hereinafter 'the EBT') for investments in
the Company's shares for employee benefit schemes. IOMA Fiduciary
in the Isle of Man have been appointed as Trustees of the EBT with
full discretion invested in the Trustee, independent of the
company, in the matter of share purchases. As at present, no
investments have been made by the Trustee nor any funds advanced by
the Company to the EBT. The Company is yet to formulate any
employee benefit schemes or to make awards thereunder.
w) 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.
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.
Deferred tax assets
The assessment of the probability of future taxable income in
which deferred tax assets can be utilised is based on the Group's
latest approved budget forecast, which is adjusted for significant
non-taxable income and expenses and specific limits to the use of
any unused tax loss or credit. The tax rules in India in which the
Group operates are also carefully taken into consideration. If a
positive forecast of taxable income indicates the probable use of a
deferred tax asset, especially when it can be utilised without a
time limit, that deferred tax asset is usually recognised in full.
The recognition of deferred tax assets that are subject to certain
legal or economic limits or uncertainties is assessed individually
by management based on the specific facts and circumstances. (refer
note 12).
Application of lease accounting
Significant judgment is required to apply lease accounting rules
under IFRIC 4 Determining whether an arrangement contains a Lease
and IAS 17 Leases. In assessing the applicability to arrangements
entered into by the Group, management has exercised judgment to
evaluate customer's right to use the underlying assets, substance
of the transaction including legally enforced arrangements and
other significant terms and conditions of the arrangement to
conclude whether the arrangements meet the criteria under IFRIC
4.
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) Recoverability of deferred tax assets: The recognition of
deferred tax assets requires assessment of future taxable profit.
(see note 5(h)).
ii) 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.
Available for sale financial assets:
Management applies valuation techniques to determine the fair
value of available for sale financial assets 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.
Other financial liabilities:
Borrowings held by the Group are measured at amortised cost.
Further, liabilities associated with financial guarantee contracts
in the Company financial statements are initially measured at fair
value and re-measured at each Statement of financial position date.
(see note 5(j) and note 28); and
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 and the determination of a suitable discount
rate;
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. 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 chief
operating decision maker evaluates the Group's performance and
allocates resources based on an analysis of various performance
indicators at operating segment level. Accordingly, there is only a
single operating segment "generation and sale of electricity". The
accounting policies used by the Group for segment reporting are the
same as those used for consolidated financial statements. There are
no geographical segments as all revenues arise from India.
Revenue on account of sale of power to one party amounts to GBP
53,345,178 (2015: GBP82,182,445)
8. Depreciation, costs of inventories and employee benefit
expenses included in the consolidated statements of comprehensive
income
a) Depreciation and cost of fuel
31 March 2016 31 March 2015
------------------------------ -------------- --------------
Included in cost of revenue:
Cost of fuel consumed 63,797,398 55,187,812
Depreciation 5,294,947 2,772,529
Other direct costs 2,802,794 3,268,017
------------------------------ -------------- --------------
Total 71,895,139 61,228,358
------------------------------ -------------- --------------
Depreciation included in general and administrative expenses
amount to GBP649,965 (2015: GBP372,590)
b) Employee benefit expenses forming part of general and
administrative expenses are as follows:
31 March 2016 31 March 2015
------------------------ -------------- --------------
Salaries and wages 4,246,864 2,970,704
Employee benefit costs 714,113 855,207
Employee stock option 283,571 242,888
------------------------ -------------- --------------
Total 5,244,548 4,068,799
------------------------ -------------- --------------
c) Auditor's remuneration for audit services amounting to GBP
48,663 (2015: GBP 45,000) is included in general and administrative
expenses.
d) Foreign exchange movements (realised and unrealised) included
in the general and administrative expenses is as follows:
31 March 2016 31 March 2015
------------------------------------------ -------------- --------------
Foreign exchange realized- (loss) (533,976) (444,409)
Foreign exchange unrealized- (loss)/gain (299,256) 131,219
------------------------------------------ -------------- --------------
Total (833,232) (313,190)
------------------------------------------ -------------- --------------
9. Other income
Other income is comprised of:
31 March 2016 31 March 2015
--------------------------------------- -------------- --------------
Provisions no longer required written 1,823,228 -
back
Sale of coal 2,335,834 -
Sale of fly ash 57,242 40,583
Others 227,964 86,685
--------------------------------------- -------------- --------------
Total 4,444,268 127,268
--------------------------------------- -------------- --------------
10. Finance costs
Finance costs are comprised of:
31 March 2016 31 March 2015
--------------------------------- -------------- --------------
Interest expenses on borrowings 15,793,916 8,735,529
Other finance costs 918,253 674,508
--------------------------------- -------------- --------------
Total 16,712,169 9,410,037
--------------------------------- -------------- --------------
11. Finance income
Finance income is comprised of:
31 March 2016 31 March 2015
---------------------------------------------- -------------- --------------
Interest income
Bank deposits 576,421 634,619
Dividend income - 53,544
Profit on disposal of financial instruments* 230,032 749,600
---------------------------------------------- -------------- --------------
Total 806,453 1,437,763
---------------------------------------------- -------------- --------------
*Financial instruments represent the mutual funds held during
the year.
12. 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 2016 and 2015 is as follows:
31 March 2016 31 March 2015
--------------------------------------- -------------- --------------
Accounting profit before taxes 28,550,131 21,649,451
Enacted tax rates 34.61% 33.99%
Tax on profit at enacted tax rate 9,880,629 7,358,648
Differences on account MAT Rate (2,442,698) (3,210,347)
Items taxed at zero rate - (1,572,734)
Changes in unrecognised deferred
tax assets 1,965,073 -
Others 569,622 1,785,202
--------------------------------------- -------------- --------------
Actual tax expense 9,972,626 4,360,769
--------------------------------------- -------------- --------------
31 March 2016 31 March 2015
--------------------------------------- -------------- --------------
Current tax 3,993,441 2,848,045
Deferred tax 5,979,185 1,512,724
--------------------------------------- -------------- --------------
Tax expense reported in the statement
of comprehensive income 9,972,626 4,360,769
--------------------------------------- -------------- --------------
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
entirely based in India, the effective tax rate of the Group has
been computed based on the current tax rates prevailing in India.
Further, a substantial 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 utilise 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.
The Group is subject to the provisions of Minimum Alternate Tax
('MAT') under the Indian Income taxes for the year ended 31 March
2016 and 2015. Accordingly, the Group calculated the tax liability
for current taxes in India after considering MAT.
The Group has carried forward credit in respect of MAT 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 2016 and 2015
relates to the following:
31 March 2016 31 March 2015
-------------------------------------- -------------- --------------
Deferred income tax assets
Lease transactions and others - 67,360
Provisions - 749,677
-------------- --------------
- 817,037
Deferred income tax liabilities
Property, plant and equipment 9,287,307 4,024,156
Mark to market on available-for-sale
financial assets 23,122 (1,268)
-------------- --------------
9,310,429 4,022,888
-------------------------------------- -------------- --------------
Deferred income tax liabilities,
net 9,310,429 3,205,851
-------------------------------------- -------------- --------------
Movement in temporary differences during the year
Particulars Recognised
Recognised in other
As at 01 in income comprehensive Translation As at 31
April 2015 statement income adjustment March 2016
--------------------- ------------ ------------ --------------- ------------ ------------
Property, plant
and equipment and
others (4,024,156) (5,162,148) - (101,003) (9,287,307)
Lease transactions 67,360 (67,360) - - -
Provisions 749,677 (749,677) - - -
Mark to market
gain / (loss) on
available for sale
financial assets 1,268 - (24,390) - (23,122)
--------------------- ------------ ------------ --------------- ------------ ------------
(3,205,851) (5,979,185) (24,390) (101,003) (9,310,429)
--------------------- ------------ ------------ --------------- ------------ ------------
Particulars Recognised
Recognised in other
As at 01 in income comprehensive Translation As at 31
April 2014 statement income adjustment March 2015
--------------------- ------------ ------------ --------------- ------------ ------------
Property, plant
and equipment and
others (2,251,032) (1,518,906) - (254,218) (4,024,156)
Lease transactions 56,728 6,182 - 4,450 67,360
Provisions 699,442 - - 50,235 749,677
Mark to market
gain / (loss) on
available for sale
financial assets (14,991) - 16,259 - 1,268
--------------------- ------------ ------------ --------------- ------------ ------------
(1,509,853) (1,512,724) 16,259 (199,533) (3,205,851)
--------------------- ------------ ------------ --------------- ------------ ------------
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. Further, dividends are not taxable in India in the hands of
the recipient. However, the Group will be subject to a "dividend
distribution tax" currently at the rate of 15% (plus applicable
surcharge and education cess) on the total amount distributed as
dividend.
As at 31 March 2016 and 31 March 2015, 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.
13. Intangible assets
Acquired software licences
---------------------------
Cost
At 1 April 2014 529,415
Additions 171,860
Exchange adjustments 48,494
---------------------------
At 31 March 2015 749,769
Additions 39,216
Exchange adjustments (16,858)
---------------------------
At 31 March 2016 772,127
---------------------------
Accumulated depreciation and impairment
At 1 April 2014 54,756
Charge for the year 23,949
Exchange adjustments 5,391
---------------------------
At 31 March 2015 84,096
Charge for the year 313,589
Exchange adjustments 9,938
---------------------------
At 31 March 2016 407,623
---------------------------
Net book value
At 31 March 2016 364,504
At 31 March 2015 665,673
14. Property, plant and equipment
The property, plant and equipment comprises of:
Other
Land & Power plant Asset under
Buildings stations & equipment Vehicles construction Total
----------- ------------ ------------- --------- -------------- ------------
Cost
At 1 April 2014 12,140,751 109,110,905 588,065 660,699 162,573,007 285,073,427
Additions 283,011 304,404 124,166 45,759 122,319,301 123,076,641
Exchange adjustments 561,251 8,102,195 (716) (5,140) 6,797,276 15,454,866
----------- ------------ ------------- --------- -------------- ------------
At 31 March 2015 12,985,013 117,517,504 711,515 701,318 291,689,584 423,604,934
Additions 138,719 309,514 69,298 58,980 17,847,939 18,424,450
Deletions (25,323) - (370) - (2,608,174) (2,633,867)
Transfers on capitalisation - 282,423,229 - - (282,423,229) -
Exchange adjustments (313,595) 7,557,605 (14,784) (14,915) (17,029,535) (9,815,224)
----------- ------------ ------------- --------- -------------- ------------
At 31 March 2016 12,784,814 407,807,852 765,659 745,383 7,476,585 429,580,293
----------- ------------ ------------- --------- -------------- ------------
Accumulated depreciation
and impairment
At 1 April 2014 55,950 4,949,021 228,542 218,631 - 5,452,144
Charge for the
year 34,644 2,772,529 192,985 121,012 - 3,121,170
Exchange adjustments 5,582 426,874 25,124 21,164 - 478,744
----------- ------------ ------------- --------- -------------- ------------
At 31 March 2015 96,176 8,148,424 446,651 360,807 - 9,052,058
Charge for the
year 14,536 5,294,947 223,959 97,881 - 5,631,323
Exchange adjustments (1,799) 3,058 (5,425) (5,088) - (9,254)
----------- ------------ ------------- --------- -------------- ------------
At 31 March 2016 108,913 13,446,429 665,185 453,600 - 14,674,127
----------- ------------ ------------- --------- -------------- ------------
Net book value
At 31 March 2016 12,675,901 394,361,423 100,474 291,783 7,476,585 414,906,166
At 31 March 2015 12,888,837 109,369,080 264,864 340,511 291,689,584 414,552,876
----------- ------------ ------------- --------- -------------- ------------
The net book value of land and buildings block comprises of:
31 March 2016 31 March 2015
--------------- -------------- --------------
Freehold land 12,545,682 12,699,397
Buildings 130,219 189,440
--------------- -------------- --------------
12,675,901 12,888,837
--------------- -------------- --------------
Property, plant and equipment with a carrying amount of GBP
414,433,996 (2015: GBP 413,947,500) is subject to security
restrictions (refer note 21).
An amount of GBP 17,575,016 (2015: GBP 19,129,734) pertaining to
interest on borrowings made specifically for the qualifying assets
was capitalised as the funds were deployed for the construction of
qualifying assets.
15. Investments and other assets
31 March 2016 31 March 2015
------------------------------------- -------------- --------------
A. Current
Available for sale financial assets 2,364,269 1,233,620
Capital advances 3,516,716 11,747,387
Loans and receivables
- Advance to suppliers 5,651,654 8,991,147
- Others 1,832,604 1,935,798
-------------- --------------
Total 13,365,243 23,907,952
-------------- --------------
B. Non-current
Investment in joint venture* 2,236,804 1,681,058
Prepayments 622,206 637,848
Loans and receivables
- Lease deposits 92,581 94,908
- Other advances - 340,579
------------------------------------- -------------- --------------
Total 2,951,591 2,754,393
------------------------------------- -------------- --------------
* Represents investment made in Padma Shipping Limited. The
venturers are entitled for a share in the net assets of Padma
Shipping Limited which is a separate legal entity. Accordingly, the
Company has used equity method of accounting for the same.
Available-for-sale investments are comprised of:
Quoted short-term mutual fund units
The fair value of the mutual fund instruments are determined by
reference to published data. These mutual fund investments are
redeemable on demand.
Investments in other assets
The investments in OPG E and OPG RE, (fair value of retained
non-controlling Investments) have been fairly valued and the share
of the group has been determined and disclosed as available for
sale classified as non-current. . There is no change in the
valuation technique to those adopted in the previous year. The fair
value of OPGE and OPG RE is determined using discounted cash flow
approach. Significant inputs into the model are based on
management's assumption of the expected cash flows up to 31 March
2024 and a discount rate of 17%. These investments are fully
impaired as at 31 March 2016.
Loans and receivables (current)
Advances to suppliers include the amounts paid as advance for
supply of fuel. Capital advances comprise of payments made to
contractors for construction of assets and advances paid for
purchase of capital equipment. The management expects to realise
these in the next one year.
16. Trade and other receivables
31 March 2016 31 March 2015
------------------- -------------- --------------
Current
Trade receivables 56,687,426 27,964,156
Unbilled revenues 1,045,219 314,803
Other receivables 108,072 349,742
------------------- -------------- --------------
57,840,717 28,628,701
------------------- -------------- --------------
Trade receivables are generally due within 30 days terms and are
therefore short term and the carrying values are considered a
reasonable approximation of fair value. An amount of GBP57,840,717
(2015: GBP28,628,701) has been pledged as security for borrowings.
As at 31 March 2016, trade receivables of GBPNil (2015: GBP563,827)
were collectively impaired and provided for. Trade receivables that
are neither past due nor impaired represents billings for the month
of March.
The age analysis of the (overdue) trade receivables is as
follows:
Year Total Neither past due nor Past due but not impaired
impaired
------------------------------------
Within 90 90 to 180 Over 180
days days days
------ ----------- --------------------- ----------- ---------- -----------
2016 56,687,426 15,743,623 9,721,710 5,725,198 25,496,895
2015 27,964,156 6,394,665 13,700,217 7,869,274 -
------ ----------- --------------------- ----------- ---------- -----------
Subsequent to the reporting date, the Company has received
GBP15,715,917 from Tamil Nadu Generation and Distribution
Corporation (TANGEDCO) towards the sale made during the months of
May 2015 to July 2015 under short term sale agreement and for
October 2015 to March 2016 under 15 year variable tariff LTOA
contract.
The movement in the provision for trade receivables is as
follows:
Year Opening balance Provision Write off/Reversal Closing balance
for the year
------ ---------------- -------------- ------------------- ----------------
2016 563,827 - (563,827) -
2015 527,883 - 35,944 563,827
------ ---------------- -------------- ------------------- ----------------
The creation of provision for impaired receivables has been
included in general and administrative expenses in the consolidated
statement of comprehensive income. Amounts charged to the allowance
account are generally written off, when there is no expectation of
recovering additional cash. The maximum exposure to credit risk at
the reporting date is the carrying value of each class of
receivable mentioned above. The group does not hold any collateral
as security.
17. Inventories
31 March 2016 31 March
2015
------------------- -------------- ----------
Coal and fuel 9,477,390 6,860,904
Stores and spares 1,137,500 1,028,757
------------------- -------------- ----------
Total 10,614,890 7,889,661
------------------- -------------- ----------
The entire amount of GBP10,614,890 (2015: GBP7,889,661) has been
pledged as security for borrowings (refer note 21).
18. Cash and cash equivalents
Cash and short term deposits comprise of the following:
31 March 2016 31 March
2015
---------------------------- -------------- ----------
Cash at banks and on hand 6,169,046 6,200,830
Short-term deposits 984,409 604,619
---------------------------- -------------- ----------
Total 7,153,455 6,805,449
---------------------------- -------------- ----------
Short-term deposits are placed for varying periods, depending on
the immediate cash requirements of the Group. They are recoverable
on demand. Restricted cash represents deposits maturing between
three to twelve months amounting to GBP7,294,778 (previous year
GBP5,303,217) and maturing after twelve months amounting to
GBP1,940,600 (previous year GBP2,784,990) which have been pledged
by the Group in order to secure borrowing limits with banks. (Refer
note 21).
19. 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.
The Company has an authorized and issued share capital of
351,504,795 equity shares (2015: 351,504,795) at par value of GBP
0.000147 (2014: GBP 0.000147) per share amounting to GBP 51,671
(2015: GBP 51,671) in total.
The Company has issued share capital at par value of GBP 51,671
(GBP0.000147 per share).
Reserves
Share premium represents the amount received by the Group over
and above the par value of shares issued and the excess of the fair
value of share issued in business combination over the par value of
such shares. Any transaction costs associated with the issuing of
shares are deducted from securities 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 Available for sale financial
assets.
Retained earnings include all current and prior period results
as disclosed in the statement of comprehensive income less dividend
distribution.
20. Share based payments
The board has granted share options to directors and nominees of
directors which are limited to 10 percent of the group's share
capital. Once granted, the share must be exercised within ten years
of the date of grant otherwise the options would lapse.
The vesting conditions are as follows:
-- The 300 MW power plant of Kutch in the state of Gujarat must
have been in commercial operation for three months.
-- The Closing share price being at least GBP1.00 for
consecutive three business days.
The related expense has been amortised over the remaining
estimated vesting period and an expense amounting to GBP283,571
(2015: GBP242,888) was recognised in the profit or loss with a
corresponding credit to other reserves.
Movement in the number of share options outstanding are as
follows:
31 March 31 March
2016 2015
------------- ----------- -----------
At 1 April 22,524,234 22,524,234
Granted 1,000,000 -
------------- ----------- -----------
At 31 March 23,524,234 22,524,234
------------- ----------- -----------
The fair value of options granted and the assumptions used under
the Black-Scholes option pricing model are as follows:
Granted in
------------------------------------------------ ----------------
2015 2011
------------------------------------------------ ------- -------
Weighted average fair value of options granted 0.37 0.28
Exercise price 0.60 0.60
Weighted average share price 0.78 0.66
Volatility (%) 40.95% 31.34%
Annual risk free rate (%) 1.26% 3.00%
Expected option life (years) 5.36 4.96
21. Borrowings
The borrowings comprise of the following:
Interest Final maturity 31 March 31 March
rate (range 2016 2015
%)
------------------------- -------------- ---------------- ------------ ------------
Term loans at amortized
cost 10.80-15.17 March - 2025 263,582,838 258,694,310
Other borrowings March - 2015 - 2,093,877
----------------------------------------- --------------- ------------ ------------
Total 263,582,838 260,788,187
----------------------------------------------------------- ------------ ------------
Total debt of GBP263,582,838 (2015: GBP 260,788,187) is secured
as follows:
> The term loans 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 the loans are
personally guaranteed by a director.
> The cash credits and working capital arrangements availed
by the Group are secured against hypothecation of current assets
and in certain cases by deposits and margin money is provided as
collateral.
> Other borrowings are fully secured by hypothecation of
current assets and in certain cases by margin money deposits and
other fixed deposits of the respective entities availing the
facility.
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. The
terms of the other borrowings arrangements also contain certain
covenants primarily requiring the Group to maintain certain
financial metrics. As of 31 March 2016, the Group has met all the
relevant covenants.
During the year instalment of loan amounting to GBP2,748,080
relating to Unit I, II & III was prepaid up to June 2016 and
GBP3,885,656 relating to Unit IV was prepaid up to September
2016.
The fair value of borrowings at 31 March 2016 was GBP263,582,838
(2015: GBP260,788,187). 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 31 March
2016 2015
--------------------------------------------- ------------ ------------
Current liabilities
Amounts falling due within one year 21,023,963 22,851,498
Non-current liabilities
Amounts falling due after 1 year but not
more than 5 years 123,362,705 220,969,216
Amounts falling due in more than five years 119,196,170 16,967,473
------------ ------------
Total non-current 242,558,875 237,936,689
--------------------------------------------- ------------ ------------
Total 263,582,838 260,788,187
--------------------------------------------- ------------ ------------
22. Trade and other payables
31 March 31 March
2016 2015
----------------------------- ----------- -----------
Current
Trade payables 34,645,009 21,161,525
Creditors for capital goods 2,016,958 11,080,339
Other payables 18,228,915 15,597,740
----------- -----------
Total 54,890,882 47,839,604
----------- -----------
Non-current
Retention money 8,296,003 16,670,794
Other payables 167,046 124,285
----------------------------- ----------- -----------
Total 8,463,049 16,795,079
----------------------------- ----------- -----------
With the exception of retention money and certain other trade
payables, all amounts are short term. Trade payables are
non-interest bearing and are normally settled on 45 days terms.
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.
23. Related party transactions
Where control exists:
Name of the party Nature of relationship
---------------------------------------------- -----------------------
Gita Investments Limited Ultimate parent
Caromia Holdings limited Subsidiary
OPG Power Generation Private Limited Subsidiary
OPGS Power Gujarat Private Limited Subsidiary
Gita Power and Infrastructure Private Limited Subsidiary
OPGS Industrial Infrastructure Developers Subsidiary
Private Ltd
OPGS Infrastructure Private Limited Subsidiary
Key Management Personnel:
Name of the party Nature of relationship
----------------------- ------------------------
Arvind Gupta Chief Executive Officer
V. Narayan Swami Chief Financial Officer
M. C. Gupta Chairman
Martin Gatto Director
Ravi Gupta Director
Patrick Michael Grasby Director
Related parties with whom the group had transactions during the
period
Name of the party Nature of relationship
------------------------- ---------------------------------------------
Chennai Ferrous Limited Entity in which Key Management personnel has
Control/Significant Influence
Kanishk Steel Industries Entity in which Key Management personnel has
Limited Control/Significant Influence
Padma Shipping Limited Entity in which Key Management personnel has
Control/Significant Influence
Avantika Gupta Relative of Key Management Personnel
Summary of transactions with related parties
Name of the party 31 March 31 March
2016 2015
------------------------------------- --------- ----------
Kanishk Steel Industries Limited
a) Class A shares allotted 1,052 -
b) Share application money received - 7,526
Padma Shipping Limited
a) Investment 561,288 1,681,058
Chennai Ferrous Industries Ltd
a) Sale of coal - 399,470
Avantika Gupta
a) Remuneration 60,774 60,971
------------------------------------- --------- ----------
Summary of balance with related parties
Name of the party 31 March 31 March
2016 2015
------------------- ---------- ----------
Padma Shipping
a) Investments 2,242,346 1,681,058
------------------- ---------- ----------
Outstanding balances at the year-end are unsecured. There have
been no guarantees provided or received for any related party
receivables or payables. For the year ended 31 March 2016, the
Group has not recorded any impairment of receivables relating to
amounts owed by related parties (2015: GBPNil). This assessment is
undertaken each financial year through examining the financial
position of the related party and the market in which the related
party operates.
24. 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 2016 or 2015).
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
2016 2015
------------------------------------------------- ------------ ------------
Weighted average number of shares used in
basic earnings per share 351,504,795 351,504,795
Shares deemed to be issued for no consideration
in respect of share based payments 10,949,551 8,400,981
------------
Weighted average number of shares used in
diluted earnings per share 362,454,346 359,905,776
------------------------------------------------- ------------ ------------
25. Directors remuneration
Name of directors 31 March 31 March
2016 2015
------------------- ---------- ----------
Arvind Gupta 1,350,000 1,200,000
V Narayan Swami 97,239 97,554
Martin Gatto 45,000 45,000
Mike Grasby 45,000 45,000
MC Gupta 45,000 45,000
Ravi Gupta 45,000 45,000
----------
Total 1,627,239 1,477,554
------------------- ---------- ----------
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.
26. Commitments and contingencies
Operating lease commitments
The Group leases land under operating leases. The leases
typically run for a period of 15 to 30 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
2016 2015
--------------------------------------------- --------- ---------
Not later than one year 29,035 29,764
Later than one year and not later than five
years 116,140 119,056
Later than five years 435,525 474,105
---------
Total 580,700 622,925
--------------------------------------------- --------- ---------
During the year ended 31 March 2016, GBP27,965 (2015: GBP28,054)
was recognised as an expense in the statement of comprehensive
income in respect of operating leases.
Capital commitments
During the year ended 31 March 2016, the Group entered into a
contract to purchase property, plant and equipment for GBPNil
(2015: GBP3,256,530) for its power generation projects under
development. In respect of its interest in joint ventures the Group
is committed to incur capital expenditure of GBP15,834,660 (2015:
GBP16,232,097) of their share of interest.
Contingent liabilities
OPGS had entered into a Bulk Power Transmission Agreement (BPTA)
with Gujarat Energy Transmission Corporation Limited (GETCO) for
availing the transmission network for power generated from its
plants. Pursuant to the BPTA, GETCO has raised demand for
transmission charges of GBP9,889,766 for the period from April 2013
to December 2015. OPGS has challenged the aforesaid demand in the
Hon'ble Supreme Court in India. Based on a legal opinion management
believes that they have good grounds for favorable disposal of the
case and accordingly no adjustment to the financial statements is
considered necessary.
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 2016: GBP25,462,779 (2015:
GBP40,347,660) and Bank Guarantee as at 31 March 2016:
GBP12,223,606 (2015: GBP10,248,750) are treated as contingent
liabilities until such time it becomes probable that the Company
will be required to make a payment under the guarantee.
27. 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 at available-for-sale 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, available-for-sale investments.
The sensitivity analyses in the following sections relate to the
position as at 31 March 2016 and 31 March 2015.
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 2016, 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 2016 and 31 March 2015, 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 2016 would decrease or increase by GBP2,692,161 (2015:
GBP2,047,577).
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 2016 As at 31 March 2015
---------------------- -------------------------- -------------------------
Currency Financial Financial Financial Financial
assets liabilities assets liabilities
---------------------- ----------- ------------- ---------- -------------
United States Dollar
(USD) - 21,487,313 - 15,590,116
---------------------- ----------- ------------- ---------- -------------
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 2016 As at 31 March 2015
----------------------------- -----------------------------
Currency Closing Effect of Closing Effect of
Rate 10% strengthening Rate 10% strengthening
of GBP on of GBP on
net earnings net earnings
---------------------- -------- ------------------- -------- -------------------
United States Dollar
(USD) 66.25 2,549,030 62.53 1,546,417
---------------------- -------- ------------------- -------- -------------------
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.
The maximum exposure for credit risk at the reporting date is
the carrying value of each class of financial assets amounting to
GBP60,204,986 (2015: GBP37,889,350).
The Group has exposure to credit risk from accounts receivable
balances on sale of electricity. The operating entities of the
Group has entered into short term agreements with transmission
companies incorporated by the Indian state government (TANGEDCO) to
sell the electricity generated Therefore the group is committed, in
the short term, 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. The credit worthiness of
customers to which the Group grants credit in the normal course of
the business is monitored regularly. The credit risk for liquid
funds is considered negligible, since the counterparties are
reputable banks with high quality external credit ratings.
The Group's management believes that all the above financial
assets, except as mentioned in note 15 and 16, 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 2016 and 31 March 2015:
As at 31 March 2016
Current Non-Current Total
Within 12 1-5 years Later than
months 5 years
--------------------------- ----------- ------------ ------------ ------------
Borrowings 21,023,963 123,362,705 119,196,170 263,582,838
Trade and other payables 54,890,882 8,463,049 - 63,353,931
Other current liabilities 223,710 - - 223,710
Total 76,138,555 131,825,754 119,196,170 327,160,479
--------------------------- ----------- ------------ ------------ ------------
As at 31 March 2015
Current Non-Current Total
Within 12 1-5 Years Later than
Months 5 years
--------------------------- ----------- ------------ ------------ ------------
Borrowings 49,981,971 198,541,687 104,228,299 352,751,957
Trade and other payables 48,152,547 16,795,079 - 64,947,626
Other current liabilities 625,957 - - 625,957
------------
Total 98,760,475 215,336,766 104,228,299 418,325,540
--------------------------- ----------- ------------ ------------ ------------
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 2016 and 2015.
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 under review is summarised
as follows:
31 March 31 March
2016 2015
-------------------------------------------- ------------ ------------
Total equity 180,676,250 164,613,070
Less: Cash and cash equivalents (7,153,455) (6,805,449)
-------------------------------------------- ------------ ------------
Capital 173,522,795 157,807,621
Total equity 180,676,250 164,613,070
Add: Borrowings (including buyer's credit) 263,582,838 260,788,187
-------------------------------------------- ------------ ------------
Overall financing 444,259,088 425,401,257
Capital to overall financing ratio 0.39 0.37
-------------------------------------------- ------------ ------------
28. Summary of financial assets and liabilities by category and
their fair values
Carrying amount Fair value
March 2016 March 2015 March 2016 March 2015
---------------------------------- ------------ ------------ ------------ ------------
Financial assets
Loans and receivables
-- Cash and cash equivalents
(1) 7,153,455 6,805,449 7,153,455 6,805,449
-- Restricted cash (1) 9,235,378 8,088,207 9,235,378 8,088,207
-- Current trade receivables
(1) 57,840,717 28,628,701 57,840,717 28,628,701
Available-for-sale instruments
(3) 2,364,269 1,233,620 2,364,269 1,233,620
------------ ------------
76,593,819 44,755,977 76,593,819 44,755,977
---------------------------------- ------------ ------------ ------------ ------------
Financial liabilities
Term loans 263,582,838 258,694,310 263,582,838 258,694,310
LC Bill discounting & buyers'
credit facility (1) - 2,093,877 - 2,093,877
Current trade and other payables
(1) 54,890,882 48,152,547 54,890,882 48,152,547
Non-current trade and other
payables (2) 8,463,049 16,795,079 8,463,049 16,795,079
------------ ------------
326,936,769 325,735,813 326,936,769 325,735,813
---------------------------------- ------------ ------------ ------------ ------------
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. a 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 available-for-sale instruments held for trading
purposes are derived from quoted market prices in active markets.
Fair value of available-for-sale unquoted equity instruments are
derived from valuation performed at the year end.
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
------------------------------ ---------- -------- -------- ----------
Available-for-sale financial
assets
Unquoted securities - - - -
Quoted securities 2,364,269 - - 2,364,269
----------
Total 2,364,269 - - 2,364,269
------------------------------ ---------- -------- -------- ----------
There were no transfers between Level 1 and 2 in the period.
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.
29. Post - reporting date events
No adjusting or significant non-adjusting events have occurred
between the reporting date and the date of authorisation.
-ends-
This information is provided by RNS
The company news service from the London Stock Exchange
END
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(END) Dow Jones Newswires
August 01, 2016 02:01 ET (06:01 GMT)