Final Results

RNS Number : 3302M

OPG Power Ventures plc

15 August 2011

15^th August 2011

OPG Power Ventures PLC

("OPG", "the Group" or "the Company"),

Final Results for the Year to 31 March 2011

Milestone year provides solid platform for growth

OPG (AIM: OPG), the developer and operator of Group Captive power plants in India, announces results for the year ended 31 March 2011.

Financial Highlights
•	Revenue up 188% to £33.15m
•	EBITDA up 124% to £15.54m
•	Income from continuing operations (before tax, non operational / exceptional items) up by 66% to £ 13.01m (2010: £7.83m)
•	PBT up 105% to £11.16m
•	Earnings per share up 559 % to 2.129 pence
•	Over-subscribed c.£60m equity placing in February 2011
•	Cash and cash equivalents of £79.95m (including Available for Sale Investments amounting to £8.85m) and long term borrowings of £45.25m at 31 March 2011
•	629 MW of growth projects equity fully funded from existing resources and internal accruals.

Operational Highlights
•	113 MW of capacity now fully operational (2010: 30 MW)
•	Chennai I (77 MW) stabilised in August 2010 with average load factors approaching 90%
•	Chennai II (2^nd 77 MW unit) commissioning on track for 2012
•	Chennai III converted to single unit of 160 MW in place of 2 x 80 MW
•	Chennai expanded by 80 MW within the existing site
•	MoU with Government of Gujarat for development of 5,400 MW and planning commenced
•	Acquired 120 acre site for 12 MW development at Bellary with potential for a further 250 MW
•	Coal supply flexibility: c. 70% of projects under development with supplies from Indian coal companies. No supply shortages experienced by OPG

M.C.Gupta, Chairman of OPG, commented:

"OPG made significant progress in the year, with the successful commissioning of the 77 MW Chennai I facility and substantial advancement of the development pipeline that is set to deliver in excess of 742 MW by 2013, for which we are fully funded, and a total 1250 MW of capacity by 2015.

"Significant uplifts in both revenue and profits were achieved as operating capacity increased to 113 MW (2010: 30 MW). OPG has a pipeline of 629 MW of development with equity fully funded. The Company continues to benefit from a structural shortage in supply of reliable power in India. With the planned additional supply likely to fall acutely short of the 300-315 GW by 2017 required in the next five years, we believe this dynamic will prevail and prices will remain firm.

"The Company's profitability and cash generation now provide an excellent platform for our long term growth. Given the market backdrop, our fully funded development pipeline and our track record, I remain confident of the Company's continued success."

For further information, please visit www.opgpower.com or contact:

OPG Power Ventures PLC	+91 (0) 44 429 11 211
Arvind Gupta
V Narayan Swami

Cenkos Securities (Nominated Adviser & Broker)
Stephen Keys / Camilla Hume	+44 (0) 20 7397 8900

Scott Harris
Stephen Scott / Harry Dee	+44 (0) 20 7653 0030

Tavistock Communications
Simon Hudson	+44 (0) 20 7920 3150

Chief Executive's Statement

Milestone year provides solid platform for growth

The year ended 31 March 2011 was a landmark year for OPG, with the successful commissioning of the Group's first major project of 77 MW. The Chennai I plant is now operating consistently at load factors of around 90%, providing strong cash flow to the Group and underpinning our track record of successful project delivery.

The over-subscribed equity raising of c.£60m (gross of transaction fees) in February 2011 demonstrated support from the Company's stakeholders and provides capital to fund a 629 MW pipeline of projects under construction and development. Combined with the 113 MW of existing operational capacity, this total pipeline has increased substantially from the initial 377 MW that we committed to at our IPO in May 2008. We remain on track to deliver our target of 1250 MW of capacity by 2015.

Project Commissioning Schedule

Calendar Year	MW	2011	2012	2013	2014	2015
OPERATIONS
Mayavaram	26	26
Waste heat	10	10
Chennai I	77	77
DEVELOPMENT
Chennai II	77		77
Chennai III	160			160
Chennai IV	80			80
Bellary	12			12
Gujarat	300			300
PIPELINE
Pipeline	508					508
Cumulative Capacity	1250	113	190	742	742	1250

Profitable operations and strong cash generation

Output levels and operations at Chennai I were successfully stabilised in August 2010 and the plant's operational performance has been in line with expectations. In the six months to June this year, the plant performed at an average monthly output level of 88%.

Profit before tax was up 105 % to £11.16m, benefiting from a partial contribution from Chennai I which began commercial operations in August 2010. OPG's strong results for the year ended March 2011 are reflective of the Group Captive / open market sales strategy and the profit from continuing operations at 39 % of Revenue is among the highest in the industry. Average price realised for the year was Rs. 4.95/Kwh

In line with our stated strategy, we intend to continue to utilise cash generated from operations principally to fund growth and optimisation opportunities.

Projects remain on-track despite local challenges

The Group's current total capacity stands at 113 MW (inclusive of the additional 6 MW of capacity recently added to the gas fired power station at Mayavaram), a significant increase from the 19.4 MW of operating capacity at the time of the IPO in May 2008. The Chennai development projects are progressing well; the accelerated commissioning of the second 77 MW unit (Chennai II) for 2012 is set to increase the Group's total operating capacity to 190 MW and further progressive increases are expected thereafter to achieve 742 MW by 2013. Some local objections faced in the wake of environmental clearances for the 300 MW Kutch project are now under resolution and we are awaiting formal approval from the Ministry of Environment and Forests, New Delhi. The project, which is fully funded, remains on track for commissioning in 2013.

Also during the year, OPG signed an MOU with the Government of Gujarat to build 5400 MW of capacity by 2018. Details of specific projects and an implementation schedule are currently in development and we look forward to reporting on further progress in due course.

During the year and since then, the Group continues to operate in an environment of elevated coal prices, administrative challenges in obtaining key approvals and higher interest costs. However, relative to our peer group we believe our margins and our continued growth demonstrate that the Group is well positioned to deal with such challenges through our local relationships and the flexibility incorporated into our business model and plant configurations. We have also incorporated key lessons from previous developments into subsequent projects and as a result we continue to be confident that the Company can deliver a profitable growth pipeline on-time and within budget.

Indian power market remains in deficit

Despite volatility elsewhere in the global economy, India's GDP is expected to continue to grow at around 8% in the coming years, resulting in annual power demand growth of 10%. India's total planned capacity additions as at 31 March 2011 were only 52% of the targeted 78,000 MW and there remains an expected shortfall of 30-35% versus the target by March 2012. This trend points towards continuing and increasing power production deficits which currently run at about 10%.

With the planned additional supply likely to fall acutely short of the 300-315 GW required over the next five years and given the imperative for a correction in pricing by state utilities, we believe this supply constrained environment will prevail and power prices will remain firm.

OPG maintains flexibility in its procurement of coal

70% of OPG's projects under development have committed supplies of Indian coal, with the remaining 30% utilising imported coal. This balance of supply has enabled OPG to establish close working relationships with both domestic and imported coal suppliers, thereby mitigating the threat of coal not being available from any one source.

With coal in relatively short supply, the Indian power sector has unsurprisingly experienced upward price pressure for this key input to the power business. Most Indian power producers, unlike OPG, are reliant on obtaining coal either from the development of coal blocks or entirely on imported coal. In addition, the design of OPG's boilers allows the use of both high moisture imported and higher ash domestic grades of coal either exclusively or in a blended fuel source. We expect coal prices to remain firm in the short term given the current economic growth rates in Asia, although prices should eventually stabilise in the medium term as coal supplies and demand fall more into line. The Company continues to look for additional opportunities to enhance profitability by optimising its fuel procurement.

Team

Our priority is to provide a safe, healthy working environment to our employees and be responsible towards the communities in which we operate.

Our talented team is central to achieving the objectives of the Company. Over the last year the team has built upon its significant experience and knowledge in developing and operating power plants as evidenced by the high load factors being achieved at Chennai I and the continued progression and expansion of the Company's growth pipeline. We value their commitment and contribution and would like to thank them for their continued efforts.

Summary

OPG has made significant progress in the year, successfully commissioning the 77 MW Chennai I facility, producing significant increases in both revenue and profits. In the current year we expect to benefit from its full year contribution albeit in an environment of high coal prices and borrowing costs. We expect our operating model to provide flexibility with regards to these challenges. Most importantly we believe the profitable operation of Chennai I in 2011 creates a firm platform for the Company's long term growth. Accordingly, we feel confident about the delivery of our 2015 target of 1,250 MW.

Operational Review

2011 saw the commencement of generation from the 77 MW Chennai I Plant. Across the Group, total power generation capacity was more than triple the previous year at 113 MW. Operationally, all plants performed well at availability factors between 89% and 95%.

Production and output levels:

Asset	Generation (MWh)		Availability %		Plant Load Factor %
	2011	2010	2011	2010	2011	2010
Chennai I (77MW) ¹	329.3	N/A	83.8	-	75.3	-
Waste Heat (10MW)	55.6	63.9	88.8	93.9	63.4	72.9
Mayavaram (25.4MW) ²	128.1	104.6	91.5	94	81.3	66.4
TOTAL	513	168.5

¹ OPG Power Generation - Chennai (77 MW) commenced commercial operations in Aug 2010.

² OPG Energy - Mayavaram (25.4 MW) has increased capacity by 6 MW as of June 2011.

Chennai I - 77 MW

In April 2010, the first unit of the Chennai power project was synchronised with the grid. Following stabilisation, commercial operation started in August 2010. The plant was used for testing in the month of December 2010 to optimise performance and to ensure high performance levels of the boiler for Chennai II.

During the year, the Chennai I plant achieved an average output level of 75.3%. In the first 6 months of 2011 calendar year, average output levels were higher at 88%. Chennai I is sustaining these high levels of performance and on this basis, we are confident of maintaining an average performance of over 85% for the financial year 2012.

Waste Heat - 10 MW

The 10 MW waste heat fired plant near Chennai, which will shortly be completing three years since commissioning, also performed satisfactorily with output levels during the year averaging 63.4% of capacity (2010: 73%). The lower output level was on account of extended maintenance closure of the waste heat furnaces of the sponge iron unit and we expect improved output levels in the current year.

Mayavaram - 25.4 MW

The 19.4 MW gas fired plant in Mayavaram, now in its eighth year of operation, delivered a satisfactory performance. Capacity was enhanced to 25.4 MW in June 2011. Gas flow levels were restored from August 2010 to the levels of 2008 following the connection of additional productive wells. Consequently the plant load factor or output level during the year was 81% compared to 66% in the previous year. A significant increase in the gas prices was absorbed and the operation remained profitable. The project has been registered under the UNFCCC for carbon credit and is awaiting validation and verification; CERs (Certified Emission Reductions) will be available for trading thereafter.

Power output from all three operational plants was sold principally in the short term market, achieving amongst the highest tariffs available.

Development Projects

We are currently developing total capacity at the Chennai site of 317 MW (previously 237 MW) through the following projects:

Chennai II:	Planning permissions and financial closure are complete for second phase of expansion of 77 MW at Chennai site and the unit is now under active construction. The civil works for Chennai II have been completed and the construction of main equipment has already commenced and is on course for commissioning by 2012.
Chennai III:	A 160 MW facility, in place of the earlier 2 x 80 MW unit, is under development. This revised configuration will result in savings in coal consumption given the lower turbine/boiler heat rate for a 160 MW unit. At the same time, the reduced footprint of a 160 MW unit makes available space on site for the newly committed Chennai III. The targeted commissioning date for Chennai IV remains 2013. Debt financing is in place, equipment orders are being finalised and equity is available from existing resources. Planning permissions have been obtained and construction will commence shortly.
Chennai IV:	An additional 80 MW unit will be added at the present site taking the total expansion of capacity at this location to 317 MW as against 237 MW initially envisaged. The equity component of the required capital expenditure is to be financed from the Group's internal resources. Planning permission for the development has been obtained and equipment delivery has commenced. The civil works for Chennai III are in progress. The Company is targeting commissioning in 2013.

The Gujarat 2 x 150 MW project has received Environmental Clearance and construction is to commence once additional clearance from the Ministry of Environment and Forests, New Delhi is received for sea water intake and outfall. The proposal has been cleared by the Expert Committee constituted by the Ministry and the Company is awaiting formal approval shortly. In the meantime, the Company has undertaken the required preparation to ensure this Project moves into construction promptly, given its targeted commissioning in 2013.

Bellary

During the year OPG acquired a partially constructed 12MW themal power plant in the industrial area of Bellary, Karnataka. The plant is on a 120 acre site and has the potential to expand/build up to 250 MW of capacity. The 12 MW is expected to commission in 2013.

Financial Review

Income Statement Summary

Year ended 31st March	2011	2010	Change
	£ m	£ m	%
Revenue	33.15	11.52	188%
EBITDA	15.54	6.95	124%
Net finance costs	1.32	(1.51)	-187%
Income from continuing operations (before tax, non operational and / or exceptional items)	13.01	7.83	66%
Pre-operative expenditure on projects under construction	0.40	1.17	-66%
ESOP Charge	1.45	1.21	20%
Profit before Tax	11.16	5.45	105%
Taxation	2.41	1.43	69%
Profit after tax	8.75	4.02	118%

Revenue

OPG's revenue increased to £33.15m, 188% growth year on year, primarily due to the commencement of commercial operations at Chennai I (77 MW) in August 2010.

Gross Profit

Gross profit increased to £14.4m in 2011 (2010: £7.3m). Gross profit was also driven by the contribution of Chennai I since August 2010 and offset by the increase in gas prices and the difference in average exchange rate used in the income statement (1GBP = INR 70.96 (2011) and INR 76.19 (2010))

Particulars	£m
Gross Profit in 2011	14.48
Gross Profit in 2010	7.35
Increase in Gross Profit	7.12

EBITDA

EBITDA³ for the year was £15.54m, up 124%, and reconciled with profit after tax as follows:

Year ended 31st March	2011	2010	Change
	£m	£m	%
Profit after Tax	8.75	4.02	118%
Tax	2.41	1.43	69%
Depreciation	1.21	0.63	92%
ESOP Expenses	1.45	1.21	20%
Pre Operating Expense	0.40	1.17	-66%
Net Finance Cost	1.32	(1.51)	-187%
Total	15.54	6.95	124%

³excludes exceptional or non-operational items such as the annual charge for stock options which is a non-cash item or expenses relating to projects under construction.

Taxation

The income tax charge of £2.41m in 2011 (2010: £1.43m) comprises current tax of £2.11m (2010: £1.41m) and deferred tax of £0.30m (2010: £0.02m). The current tax charge has increased by £1m primarily due to the increase in profits which are subject to Corporate Income Tax or Minimum Alternate Tax (MAT) as appropriate. The majority of profits derived from OPG's operations in India are subject to MAT. MAT is charged on book profits in India at a rate of 19.93% but is available as a credit against corporate income tax in the following 10 years. The deferred tax charge of £0.30m (2010: £0.02m) in 2011 is mainly on account of property, plant and equipment and the impact of depreciation unabsorbed due to timing differences as between book and tax depreciation. The Groups' 2011 effective tax rate for the year was 22% (2010: 26%).

Non-Operational Items

Pre-operating expenses represent expenses pertaining to Projects under construction charged to the income statement. These expenses in 2010-11 were lower at £0.40m in 2011 (2010: £1.17m) as one major project commenced commercial operation during the year.

Employee Stock Option charges are linked to share based payments to certain Directors and are non-cash in nature.

Profits after Tax

Profits after tax increased by £4.73m representing 118% year on year growth, from £4.02m in 2010 to £8.75m in 2011, as a result of the contribution from the 77 MW Chennai I.

Earnings per share

Earnings per share of 2.129 pence in 2011 represent an increase of 559 % over 2010 on account of higher net earnings attributable to shareholders from Chennai I in which the Group has an economic interest of 99 %.

Property, Plant and Equipment

Property, Plant and Equipment increased during the period by £11.36m, an 18% year on year growth, mainly reflecting the increase in capital work in progress on account of additional power plants in Chennai and Gujarat. Total Property, Plant & Equipment at £73.99m (2010: £62.63m) includes assets under construction amounting to £18.42m (2010: £47.46m) and Property, Plant & Equipment (net of depreciation) amounting to £55.57m (2010: £15.17m). During the year an amount of £ 40.30m has been capitalised in the Chennai 77 MW plant.

Current Assets

Current assets have increased by £68.81m to £132.13m year on year primarily as a result of:

a.	An increase of £57m in cash and cash equivalent following the equity placement in January 2011
b.	An increase of £8.9m in Inventories and Trade and other receivables due to the commencement of operations in the 77 MW power plant
c.	An increase of £2.91m net in Investments and other current assets

Current Liabilities

Current liabilities have increased by £5.43m primarily due to the commencement of operations in the 77 MW power plant.

Other Non Current Liabilities

Other non current liabilities have increased by £13.7m primarily on account of an increase in bank borrowing to meet the capital project expenses.

Cash Flow

Cash Flow	2011	2010
	£m	£m
Operating Cash	15.15	5.77
Tax Paid	(1.97)	(1.06)
Change in Working Capital Assets and Liabilities	(9.43)	7.16
Purchase of Property, Plant and Equipment (net of disposals)	(19.76)	(29.02)
Other Investments	1.41	(10.32)
Net Cash used in Investing Activities	(18.35)	(39.34)
Net Interest Paid	(2.65)	(0.61)
Free Cash Flow	(17.25)	(28.07)
Equity Issued (net)	57.38	-
Total Cash Change before Net borrowings	40.14	(28.07)

Operating cash flow increased from £5.77m in 2010 to £15.15m in 2011, an increase of £9.38m, or162%. The increase is primarily driven by an increase in operational activity. Net proceeds of £57.4m were from the equity raising January 2011.

Debt and Liquidity

	2011	2010
	£m	£m
Gross Debt	(50.31)	(37.33)
Cash and Cash equivalent	71.10	14.17
Investments and Other Financial Assets	8.85	12.98
Net Cash / (Debt)	29.64	(10.18)
Total Equity	151.03	88.59
Gearing % (net debt/(net debt + total equity))	-24%	10%

The Group has net cash of £29.64m (2010: net debt £10.18m) and negative gearing of 24% (2010: positive gearing of 10%). As development of projects proceeds it is expected that the gearing may turn positive. The borrowings are in respect of the construction of power stations. The Group is in a position to raise borrowings for its power station developments. All of the Group's debt is denominated in Indian Rupees being the functional currency of its Indian Operations.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2011

(All amounts in £, unless otherwise stated)

Particulars	Notes	2011	2010

Revenue		33,147,184	11,515,409
Cost of revenue	6	(18,669,898)	(4,161,175)
Gross profit		14,477,286	7,354,234

Other income	7	2,537,869	242,765
Distribution Cost		(865,832)	(501,021)
General and administrative expenses	6	(3,666,390)	(3,153,982)
Operating profit		12,482,933	3,941,996
Financial costs	8	(2,647,296)	(608,209)
Financial income	9	1,326,695	2,116,056
Profit/(loss) before tax		11,162,332	5,449,843

Tax expense	10	(2,408,443)	(1,432,338)

Profit/(loss) for the year attributable to:		8,753,889	4,017,505

Owners of the parent		6,227,842	926,473
Non controlling interest		2,526,047	3,091,032

Earnings per share	21
Basic earnings per share (in Pence)		2.129	0.323
Diluted earnings per share (in Pence)		2.093	0.318

Other Comprehensive Income
Available for Sale Financial Assets
- Reclassification to profit and loss		185,459	124,334
- Current year losses on remeasurement		(255,542)	(68,293)
Currency translation differences on translation of foreign operations		(5,076,545)	6,497,808

Other comprehensive income		(5,146,628)	6,553,849

Total comprehensive income for the year attributable to:		3,607,261	10,571,354

Owners of the parent		1,627,114	6,750,867
Non controlling interest		1,980,147	3,820,487
		3,607,261	10,571,354

CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION

As at 31 March 2011

(All amounts in £, unless otherwise stated)

	Notes	2011	2010
ASSETS
Non Current
Property, plant and equipment	11	73,995,296	62,629,258
Investments and other financial assets	12	6,941,814	5,470,257
Deferred tax asset	10	55,512	51,505
Restricted cash	15	1,214,699	1,333,253
Total Non Current assets		82,307,321	69,484,273

Current
Inventories	14	5,605,523	1,867,915
Trade and other receivables	13	8,576,366	3,348,207
Cash and Cash Equivalents	15	71,104,280	14,168,453
Restricted Cash	15	1,080,877	148,641
Current tax assets		272,105	404,196
Investments and other financial assets	12	45,486,243	43,379,680
Total Current assets		132,125,394	63,317,092

Total Assets		214,432,715	132,801,365

EQUITY AND LIABILITIES
Equity:
Equity attributable to owners of the parent:
Share Capital		51,671	42,187
Share Premium		124,316,524	66,943,323
Other components of Equity		7,803,844	10,950,324
Retained earnings/ (Accumulated deficit)		9,050,027	2,822,186
Total		141,222,066	80,758,020

Non-Controlling Interest		9,807,809	7,827,662

Total Equity		151,029,876	88,585,682

Liabilities
Non current
Borrowings	18	45,254,399	30,800,245
Trade and other payables	19	1,231,509	2,261,141
Deferred tax liability	10	849,446	514,235
Total Non Current liabilities		47,335,354	33,575,621

Current
Borrowings	18	5,064,797	6,531,797
Trade and other payables	19	10,716,961	3,918,117
Other liabilities		241,112	190,000
Current Tax Liabilities		44,615	148
Total Current liabilities		16,067,486	10,640,062

Total Liabilities		63,402,840	44,215,683

Total Equity and Liabilities		214,432,715	132,801,365

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 March 2011

(All amounts in £, unless otherwise stated)

GROUP	Issued Capital (No. of Shares)	Share capital	Share Premium	Other reserves	Foreign Currency Translation reserve	Retained earnings	Total of Parent equity	Non- Controlling Interest	Total Equity

Balance at 1 April, 2010	286,989,795	42,187	66,943,323	3,228,892	7,721,432	2,822,186	80,758,020	7,827,662	88,585,682
Issue of Equity Shares	64,515,000	9,484	57,373,201				57,382,685	-	57,382,685
Employee Share based payment options				1,454,247			1,454,247	-	1,454,247
Transactions with owners	351,504,795	51,671	124,316,524	4,683,139			39,594,952	7,827,662	147,422,614

Profit for the year						6,227,842	6,227,842	2,526,048	8,753,889
Currency translation differences					(4,531,791)		4,531,791)	(544,754)	(5,076,545)
Gains/(losses) on sale / re-measurement of available-for-sale financial assets				(68,936)			(68,936)	(1,147)	(70,083)
Total comprehensive income for the year	-	-	-	(68,936)	3,189,641	9,050,027	1,627,114	1,980,147	3,607,262

Balance at 31 March, 2011	351,504,795	51,671	124,316,524	4,614,203	3,189,641	9,050,027	141,222,066	9,807,809	151,029,876

Balance at 1 April, 2009 as previously reported	286,989,795	42,187	66,943,323	(151,716)	2,667,855	3,309,434	72,811,084	3,996,285	76,807,369
Restatement (refer note 26)				2,125,121	(722,289)	(1,413,721)	(10,890)	10,890

Balance at 1 April, 2009 (as restated)	286,989,795	42,187	66,943,323	1,973,405	1,945,566	1,895,713	72,800,194	4,007,175	76,807,369
Employee Share based payment options				1,206,959			1,206,959		1,206,959
Transactions with owners	286,989,795	42,187	66,943,323	3,180,364			74,007,153	4,007,175	78,014,328

Profit for the year						926,473	926,473	3,091,032	4,017,505
Currency translation differences					5,775,866		5,775,866	721,942	6,497,808
Gains/(losses) on sale / re-measurement of available-for-sale financial assets				48,528			48,528	7,513	56,041
Total comprehensive income for the year	-	-	-	48,528	7,721,432	2,822,186	6,750,867	3,820,487	10,571,354

Balance at 31 March, 2010	286,989,795	42,187	66,943,323	3,228,892	7,721,432	2,822,186	80,758,020	7,827,662	88,585,682

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 March 2011

(All amounts in £, unless otherwise stated)

Particulars	2011	2010
Cash flows from operating activities
Profit / (Loss) for the year after Tax	8,753,889	4,017,505
Income tax expense	2,408,443	1,432,338
Financial Expenses	2,647,296	608,209
Financial Income	(1,326,695)	(2,116,056)
Share based compensation costs	1,454,247	1,206,959
Depreciation	1,208,461	625,324
	15,145,641	5,774,279
Movements in Working Capital
(Increase) / Decrease in trade and other receivables	(5,706,441)	(1,418,191)
(Increase) / Decrease in inventories	(3,948,601)	(1,636,191)
(Increase) / Decrease in other current assets	(2,048,059)	988,313
Increase / (Decrease) in trade and other payables	5,258,094	5,139,417
Increase / (Decrease) in Other liabilites	(2,981,158)	4,086,706
Cash (used in) / generated from operations	5,719,477	12,934,333
Interest paid	(2,647,296)	(608,209)
Income Taxes paid, net of refunds	(1,964,628)	(1,056,450)
Net Cash Generated by / (used in) Operating activities	1,107,552	11,269,674

Cash flow from investing activites
Acquisition of property, plant and equipment	(19,758,114)	(29,017,680)
Sale of property, plant and equipment	-	2,493
(Increase) / Decrease in Advances	-	(9,610,586)
Finance Income	782,508	1,171,217
Dividend income	544,187	944,839
Movement in restricted cash	(931,303)	385,765
Net cash outflow on acquisition of subsidiaries		-
Sale / (Purchase) of Investments, net	3,124,948	(3,222,067)
(Increase) / Decrease in land lease Deposits	(2,115,283)	1,260
Net cash (used) / generated by investing activities	(18,353,056)	(39,344,759)

Cash flows from financing activities
Proceeds from issue of Ordinary Shares	57,382,685	-
Proceeds from borrowings	16,985,286	14,249,387
Repayment of borrowings	-	(5,205,136)
Net cash provided by financing activities	74,367,971	9,044,251

Net increase / (decrease) in cash and cash equivalents	57,122,467	(19,030,834)

Cash and cash equivalents at the beginning of the year / period	14,168,453	32,319,842
Effect of Exchange rate changes on the balance of cash held in foreign currencies	(186,639)	879,445
Cash and cash equivalents at the end of the year / period	71,104,280	14,168,453

NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS

For the year ended 31 March 2011

(All amounts in £, unless otherwise stated)

1. Corporate information

1.1. Nature of operations

OPG Power Ventures plc ('the Company' or 'OPGPV'), 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 its 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.

1.2. Statement of compliance

The consolidated and Company financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and its 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.

1.3 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 Financial statements were approved by the Board of Directors on 12^th August, 2011

2. Changes in accounting policies

The Group has adopted the following revision and amendments to IAS 27 Consolidated and Separate Financial Statements (Revised 2008) issued by the International Accounting Standards Board, which are relevant to and effective for the Group's financial statements for the annual period beginning 1 April 2010:

IAS 27R introduced changes to the accounting requirements for transactions with non-controlling (formerly called 'minority') interests and the loss of control of a subsidiary. The group had already made an accounting policy decision to treat such transactions in a similar manner as suggested by the revised standard. Hence there was no financial impact on these financial statements.

2.1. Standards, amendments and Interpretations to existing standards that are not effective and have not been early adopted by the Group.

At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been adopted early by the Group.

Management anticipates that all of the relevant pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Group's financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Group's financial statements.

Standards and Interpretations adopted by the European Union as at 31 March 2011

Standard	Description	Effective for in reporting periods starting on or after
IAS 24 (R)	Related Party Disclosures	1 January 2011
IFRIC 14	Prepayments of a Minimum Funding Requirement - Amendment	1 January 2011
IFRIC 19	Extinguishing Financial Liabilities with Equity Instruments	1 July 2010

The management does not expect the application of the other standards to have any material impact on its financial statements when those Standards become effective. The Group does not intend to apply any of these pronouncements early.

3. Summary of significant accounting policies

3.1. Basis of preparation

The consolidated financial statements 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 consolidated financial statements are presented in accordance with IAS 1 Presentation of Financial Statements (Revised 2007) and have been presented in Great Britain Pound ('₤'), which is the functional and presentation currency of the Company.

3.2. Basis of consolidation

The consolidated financial statements incorporate the financial information of OPG Power Ventures Plc and its subsidiaries for the year ended 31 March 2011.

A subsidiary is defined as an entity controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Subsidiaries are fully consolidated from the date of acquisition, being the date on which control is acquired by the Group, and continue to be consolidated until the date that such control ceases. All subsidiaries have a reporting date of 31^st March and use consistent accounting policies adopted by the Group.

All intra-group balances, income and expenses and any resulting unrealized gains arising from intra-group transactions are eliminated in full on consolidation.

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 minority interests/ other venturer in the Group where there is no loss of control are accounted for using the equity method, 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.

3.3. List of subsidiaries

Details of the Group's subsidiary which are consolidated into the Group's consolidated financial statement, are as follows:

Subsidiaries	Immediate parent	Country of incorporation	% Voting Right		% Economic Interest
			2011	2010	2011	2010
Caromia Holdings limited ('CHL')	OPGPV	Cyprus	100	100	-	-
Gita Energy Private Limited ('GEPL') (refer note below)	CHL	Cyprus	100	100	100	100
Gita Holdings Private Limited ('GHPL') ¹	CHL	Cyprus	100	100	100	100
OPG Power Generation Private Limited ('OPGPG')	GEPL and GHPL	India	71.76	71.76	99	99
OPG Power Gujarat Private Limited ('OPGG')	GEPL and GHPL	India	65.90	65.90	99	99
OPG Renewable Energy Private Limited ('OPGRE')²	GEPL and GHPL	India	22	22	33	33
OPG Energy Private Limited ('OPGE') ³	OPGPG	India	29.78	29.78	44.22	44.22
Gita Power and Infrastructure Private Limited, ('GPIPL')	GHPL	India	100	100	97.91	97.91

¹As of 10 February, 2011 pursuant to agreement for assignment of debt between CHL and OPGPV the entire shares held in GEPL and GHPL have been transferred by "OPGPV" to "CHL". .

² Pursuant to the voting rights agreement entered by GEPL with Tamil Nadu Properties and Salem Food Products Limited ( hereinafter collectively referred as "investors'), the investors agreed that in consideration of GEPL agreeing to subscribe for shares in OPGRE, the investors will exercise all voting rights in accordance of the directions of GEPL. The total voting rights held by the investors amount to 56.35 percent. Further the investors have also appointed GEPL as the lawful attorney to exercise their voting rights. Therefore the combination of the directly held interests together with the voting rights of the investors controlled by the group via contracts, have the effect that the group controls a majority of voting rights in OPGE. Accordingly this is considered to be a subsidiary of the group.

³Pursuant to the voting rights agreement entered by OPGPG with Tamil Nadu Properties and Salem Food Products Limited ( hereinafter collectively referred as "investors'), the investors agreed that in consideration of OPGPG agreeing to subscribe for shares in OPGE, all voting rights in OPGE will be exercised in accordance with the directions of OPGPG. The total voting rights held by the investors amount to 36.88 percent. Further the investors also appointed OPGPG as the lawful attorney to exercise their voting rights. Therefore the combination of the directly held interests together with the voting rights of the investors controlled by the group via contracts, have the effect that the group controls a majority of voting rights in OPGE. Accordingly this is considered to be a subsidiary of the group.

3.4. Foreign currency translation

The functional currency of the Company is the Great Britain Pound Sterling (£). The Cypriot entities are an extension of the parent and pass through investment entities. Accordingly the functional currency of the subsidiaries 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. The presentation currency of the Group is the Great Britain Pound (£) as submitted to the AIM market 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 which is Great Britain Pound Sterling (£) at the rate of exchange ruling at the Statement of financial position date and the statement of comprehensive income is translated at the average exchange rate for the year. 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 ruling 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. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to functional currency at foreign exchange rates ruling at the dates the fair value was determined.

3.5. 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 comprises revenue from 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 accrues (using the effective interest rate method). Revenue from dividends is recognised when the right to receive the payment is established.

3.6. 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. For management's assessment of the probability of future taxable income to utilise against deferred tax assets. Deferred tax assets and liabilities are offset only when the Group has a right and 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.

3.7. Financial assets

Financial assets are derecognised 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 derecognised when it is extinguished, discharged, cancelled or expires.

Financial assets and financial liabilities are measured initially at fair value adjusted by transactions costs, except for financial assets and financial liabilities carried at fair value through profit or loss, which are measured initially at fair value.

Financial assets and financial liabilities are measured subsequently as described below

For the purpose of subsequent measurement, financial assets are classified into the following categories upon initial recognition:

•	loans and receivables
•	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. 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.

Investment in subsidiaries

In the parent company's financial statements, the investments in subsidiaries are accounted for using the cost method with income from the investment being recognised only to the extent that the parent company receives distributions from accumulated profits of the investee arising after the date of acquisition.

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 listed securities. Available-for-sale financial assets are measured at fair value. Gains and losses are recognised in other comprehensive income and reported within the available-for-sale reserve within 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.

Reversals of impairment losses are recognised 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.

3.8. Financial liabilities

The Group's financial liabilities include borrowings, trade and other payables. Financial liabilities are measured subsequently at amortised cost using the effective interest method, except for financial liabilities held for trading or designated at fair value through profit or loss, that are carried subsequently at fair value with gains or losses recognised in profit or loss.

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'.

3.9. 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 bid 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.

3.10 Property, plant and equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation and/or impairment losses, if any. The cost includes expenditures that are 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.

The present value of the expected costs of decommissioning of the asset after its use is included in the costs of the respective asset, if the recognition of the criteria for a provision is met.

Land is not depreciated. Depreciation on 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	30-40
Power stations	15-40
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 are reviewed at each financial year end, and adjusted prospectively if appropriate.

3.11. Leases

The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date 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 lease.

3.12. 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 profit or loss in the period in which they are incurred, the amount being determined using the effective interest rate method.

3.13. 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 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 unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase.

3.14. Cash and cash equivalents

Cash and cash equivalents in the Statement of financial position comprise cash at banks and on hand and short-term deposits.

For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash and short-term deposits, net of restricted cash and outstanding bank overdrafts.

3.15. Inventories

Inventories are stated at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition is accounted based on weighted average price.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated selling expenses.

3.16. Earnings per share

The earnings considered in ascertaining the Group's earning 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.

3.17. 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 commitment that has resulted from past events, for example, product warranties granted, legal disputes or onerous contracts. 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.

3.18. 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 are determined indirectly by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date and excludes the impact of non-market vesting conditions (for example profitability and sales growth targets and performance conditions).

All share-based remuneration is ultimately recognised as an expense in profit or loss with a corresponding credit to 'Other Reserves'.

If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior periods if share options ultimately exercised are different to that estimated on vesting.

Upon exercise of share options, the proceeds received net of any directly attributable transaction costs up to the nominal value of the shares issued are allocated to share capital with any excess being recorded as share premium.

3.20. 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.

3.21. 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.

4. 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 require 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 following are significant management judgements in applying the accounting policies of the Group that have the most significant effect on the financial statements.

•

Leases:

In applying the classification of leases in IAS 17, management considers its leases of a power plant by OPG Renewable Energy Private Limited as an operating lease arrangement. In some cases, the lease transaction is not always conclusive, and management uses judgment in determining whether the lease is an operating lease arrangement that transfers substantially all the risks and rewards incidental to ownership.

•

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.

Estimates and uncertainties:

When preparing the financial statements management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgments, estimates and assumptions made by management, and will seldom equal the estimated results. Information about significant judgments, estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below.

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 a material adjustments to the carrying amounts of assets and liabilities within the next financial year are discussed below:

•	Recoverability of deferred tax assets: The recognition of deferred tax assets requires assessment of future taxable profit. (see note 3.6).
•	Estimation of fair value of acquired 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. Specifically, the Group make estimates relating to
	○	Other financial liabilities: Borrowings held by the Group are measured at amortised cost except where designated at fair value through profit or loss. 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 3.9 and note 28); and
•	Impairment tests: The determination of recoverable amounts of the CGUs assessed in the annual impairment test requires the Group to estimate of their fair value net of disposal costs as well as their value in use. The assessment of value in use requires assumptions to be made with respect to the operating cash flows of the CGUs as well as the discount rates;
•	Useful life of depreciable assets: Management reviews the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets to the Group.
•	Provisions: The Group is currently defending a lawsuit where the actual outcome may vary from the amount recognised in the financial statements. Refer note on contingent liabilities for details.
•	Uncollectability of trade receivables: Analysis of historical payment patterns, customer concentrations, customer credit-worthiness and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required (see note 19); and
•	Claims by the group: These accounts include an amount of £ 2,064,455 recognised as claim for loss of profit and disclosed as other income. This is a provisional amount based on what is reliably measurable at March 31, 2011 for recoverability of loss of revenue from operations due to delay in commissioning and non achievement of guaranteed performance parameters at a plant owned by OPGPG. The claims have been recognised where such payments are certain to be recovered under the agreements with the contractor.

Actual results can differ from estimates.

5. Segment information

The Group has adopted the "management approach" in identifying the operating segments as outlined in IFRS 8. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segment has been identified as the steering committee that makes strategic decisions. Management has analysed the information that the chief operating decision maker reviews and concluded on the segment disclosure. In identifying its operating segments, management generally follows the Group's service lines, which represent the generation of the power and other related services provided by the Group. The activities undertaken by the Power generation segment includes sale of power and other related services. The accounting policies used by the Group for segment reporting are the same as those used for Consolidated financial statements.

For management purposes, the Group is organised into only a single business unit of power generation and distribution of the same to customers. There are no geographical segments as all revenues arise from India.

Revenue on account of sale of power to one party amounts to £ 25,790,162 (2010: £ 4,312,446).

6. Depreciation, costs of inventories and employee benefit expenses included in the consolidated and Company's statements of comprehensive income

(a) Depreciation and costs of inventories included in the consolidated statements of comprehensive income

	Consolidated
	2011	2010
Included in cost of revenue:
Fuel costs	14,931,913	2,809,587
Depreciation	1,145,380	429,683

For the group depreciation included in general and administrative expenses amount to £ 63,081 (2010: £ 195,461)

For the company depreciation included in general and administrative expenses amount to £ Nil (2010: £ Nil)

(b) Employee benefit expenses forming part of general and administrative expenses are as follows:

	Consolidated
	2011	2010
Salaries and wages	781,534	676,553
Employee benefit costs	60,083	58,205
Employee Stock Option	1,454,247	1,206,959
Total	2,295,864	1,941,717

(c) Auditor's remuneration for audit services amounting to £ 35,000 (2010: £ 35,612) is included in general and administrative expenses.

(d) Foreign exchange (loss)/gain included in the general and administrative expenses/ other income is as follows:

	Consolidated
	2011	2010
Foreign Exchange(Loss)/Gain	113,052	(114,430)
Total	113,052	(114,430)

7. Other income

a) Other income comprises of:

	Consolidated
	2011	2010
Sale of Coal	206,203	160,274
Compensation for loss of profit	1,888,294	-
Miscellaneous income/expense	443,372	82,491
Total	2,537,869	242,765

The item "Compensation for loss of profit" includes £1,021,691, due to OPG PG, a subsidiary, from the EPC contractor for delay in guaranteed commissioning date of their 77 MW plant, non achievement of guaranteed performance parameters at the plant and consequent loss of revenue to OPG PG. This amount represents loss of profits which is reliably measurable as at the reporting date and has been recognized based on the terms and conditions as specified in the EPC Contract.

8. Finance costs

Finance costs comprises of:

	Consolidated
	2011	2010
Interest expenses on loans and borrowings	2,271,354	362,302
Loss on disposal of financial instruments	255,542	131,334
Other Finance Costs	120,400	114,573
Total	2,647,296	608,209

Interest expenses on loans and borrowings, includes interest expenses on financial liability at amortised cost of £ 2,271,354 (2010: £362,302) in consolidated financial statement.

9. Finance income

The finance income comprises of:

	Consolidated
	2011	2010
Interest income
- Bank deposit	239,872	953,859
- Loans and receivables	162,340	210,818
Dividend income	544,187	944,524
Other Finance Income	372,106	-
Unwinding of discount on security deposits	8,190	6,855
Total	1,326,695	2,116,056

10. Tax expense / (income)

The major components of income tax expense for the years ended 31 March 2011 and 2010

Consolidated statement of comprehensive income

	2011	2010
Current tax	2,105,976	1,416,412
Deferred tax	302,467	15,926
Tax expense reported in the statement of comprehensive income	2,408,443	1,432,338

Consolidated statement of changes in equity: 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 2011 and 2010 is as follows:

	2011	2010
Accounting profit before taxes	11,162,332	5,449,843
Enacted tax rates	32.45%	33.99%
Tax on profit at enacted tax rate	3,621,619	1,852,402
Differences on account MAT Rate	(1,596,807)	(420,064)
Items taxed at Zero Rate	417,480	-
Others	(33,849)	-
Actual tax expense	2,408,443	1,432,338

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 Company'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 utilize an exemption from income taxes for a period of any ten consecutive years out of the fifteen 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 2011 and 2010. 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 2011 and 2010 relates to the following:

	2011	2010
Deferred income tax assets
Lease transactions and others	30,294	-
Mark to Market of Available for sale financial assets	125,218	51,505
	155,512	51,505
Deferred income tax liabilities
Difference in depreciation on Property, plant and equipment	849,446	514,235
	849,446	514,235
Deferred income tax liabilities, net	693,934	462,730

Movement in temporary differences during the year

Particulars	As at 1 April 2010	Recognised in Income Statement	Recognised in Equity	Translation Adjustment	As at 31 March 2011
Property, plant and equipment and others	(514,235)	(302,467)	-	(2,450)	(819,152)
Mark to market gain / (loss) on available for sale financial assets	51,505		73,712	-	125,218
	(462,730)	(302,467)	73,712	(2,450)	(693,934)

Particulars	As at 1 April 2009	Recognised in Income Statement	Recognised in Equity	Translation Adjustment	As at 31 March 2010
Property, plant and equipment and others	(446,451)	(15,926)	-	(51,857)	(514,235)
Mark to market gain / (loss) on available for sale financial assets	60,909	-	(7,482)	(1,922)	51,505
	(385,542)	(15,926)	(7,482)	(53,779)	(462,730)

In assessing the reliability 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 Company 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 2011 and 31 March 2010, there was no recognised deferred tax liability for taxes that would be payable on the unremitted earnings of certain of the Group's subsidiaries, the Group has determined that undistributed profits of its subsidiaries will not be distributed in the foreseeable future.

11. Property, plant and equipment, net

The property, plant and equipment comprises of:

A. Gross Block
Particulars	Land and Buildings	Power Stations	Other plant and equipment	Vehicles	Assets under construction	Total
As at 1 April 2009	7,744,639	7,675,718	47,282	124,063	29,174,655	44,766,356
- Additions	974,219	30,664	43,231	25,414	15,581,342	16,654,870
- Disposals	-	(145,870)	-	(17,983)	-	(163,854)
- Exchange Adjustments	709,877	710,692	4,381	11,497	2,703,627	4,140,074
As at 31 March 2010	9,428,735	8,271,204	94,894	142,991	47,459,624	65,397,446

As at 1 April 2010	9,428,735	8,271,204	94,894	142,991	47,459,624	65,397,446
- Additions	444,197	42,059,353	49,460	71,375	9,635,644	52,260,030
- Disposals	(53,270)	-	-	-	(35,578,462)	(35,631,732)
- Exchange Adjustments	(614,406)	(538,929)	(6,233)	(9,318)	(3,092,620)	(4,261,505)
As at 31 March 2011	9,205,256	49,791,628	138,121	205,048	18,424,186	77,764,239

B. Accumulated Depreciation
Particulars	Land and Buildings	Power Stations	Other plant and equipment	Vehicles	Assets under construction	Total
As at 1 April 2009	159,867	1,833,000	19,537	22,391	-	2,034,795
- Additions	24,948	555,440	18,736	26,200	-	625,324
- Disposals		(5,600)	-	(13,187)	-	(18,787)
- Exchange Adjustments	22,988	96,086	4,110	3,672	-	126,856
As at 31 March 2010	207,803	2,478,926	42,383	39,076	-	2,768,188

As at 1 April 2010	207,803	2,478,926	42,383	39,076	-	2,768,188
- Additions	34,166	1,111,445	27,228	35,580	-	1,208,419
- Disposals	-	-	-	-	-	-
- Exchange Adjustments	(14,313)	(186,610)	(3,393)	(3,350)	-	(207,664)
As at 31 March 2011	227,656	3,403,761	6,218	71,306	-	3,768,943

C.Net Block
Particulars	Land and Buildings	Power Stations	Other plant and equipment	Vehicles	Assets under construction	Total
As at 31st March 2010	9,220,932	5,792,278	52,511	103,915	47,459,624	62,629,258
As at 31st March 2011	8,977,600	46,387,867	71,903	133,742	18,424,186	73,995,296

The net book value of land and buildings block comprises of:

	2011	2010
Freehold	8,203,467	8,359,192
Buildings	774,133	861,740
Total	8,977,600	9,220,932

Property, plant and equipment with a carrying amount of £ 55,365,467 (2010: £ 15,013,210) is subject to security restrictions (refer note 18).

12. Investments and other financial assets

	Consolidated
	2011	2010
A. Current
Available for sale financial assets	8,851,675	12,977,604
Loans and Receivables
- Advance to Suppliers	2,377,033	33,819
- Capital advances	31,286,228	23,339,592
- Other advances	2,971,307	7,028,665
Total	45,486,243	43,379,680
B. Non-current
Investments in subsidiaries	-	-
Loans and Receivables
- Prepayments	5,108,701	3,618,405
- Lease deposits	1,065,537	961,213
- Other advances	767,576	890,639
Total	6,941,814	5,470,257

Available-for-sale investment - quoted short-term mutual fund units

The Group has investments in mutual fund units. The fair value of the quoted mutual fund instruments are determined by reference to published data.

Loans and receivables (Current)

Advance to Suppliers include the amounts paid as advance for supply of fuel to the group. Other advances of the group primarily includes duty drawback receivable and transmission charges receivable amounting to £ 2,169,718 (2010: 157,383). For the previous year GEPL and GHPL (step down subsidiaries of the company) had advanced an amount of £ 3,438,102 as inter corporate loan. Also, an amount of £ 2,806,644 was receivable from the bank on sale of available for sale investments. Capital advances comprise of payment made to EPC contractors for construction of assets and advances paid for purchase of capital equipments. The management expects to realise these in the next one year.

Loans and receivables of the company primarily includes non interest-bearing inter-corporate deposits of £ 58,981,826 (2010: £ 61,145,096) being the loan advanced by the company to Caromia Holdings Limited by the company which is repayable on demand.

Investment in subsidiaries

Investment refers investments in subsidiaries in the Company financial statements. CHL is a 100 percent held subsidiary of the Company. In the previous year GEPL and GHPL were 100 percent subsidiaries of the Company. The carrying amounts disclosed above are maximum possible credit risk exposure in relation to these financial assets.

13. Trade and other receivables

	Consolidated
	2011	2010
Current
Trade receivables	6,518,201	2,478,584
Unbilled revenues	99,425	255,216
Other receivables	1,958,740	614,407
Total	8,576,366	3,348,207

Trade receivables are non-interest bearing and are generally due within 14 days terms. Out of the above, £ 8,576,366 (2010: £ 3,348,207) has been pledged for security as borrowings (refer note 18). As at 31 March 2011, trade receivables of £ Nil (2010 £ Nil) were collectively impaired and provided for.

The age analysis of the overdue trade receivables is as follows:

	Total	Neither past due nor impaired	Past due but not impaired
	Total	Neither past due nor impaired	< 90 days	90-180 days	> 180 days
2011	6,518,201	5,376,841	392,754	142,336	606,270
2010	2,478,584	986,454	300,530	754,066	437,534

14. Inventories

	Consolidated
	2011	2010
Coal & Fuel	5,368,042	1,738,189
Stores and spares	237,481	129,726
Total	5,605,523	1,867,915

Out of the above, £ 4,708,191 (2010: £129,725) has been pledged for security as borrowings (refer note 18)

15. Cash and cash equivalents

Cash and short term deposits comprise of the following:

	Consolidated
	2011	2010
Cash at banks and on hand	69,884,386	7,359,657
Short-term deposits	1,219,894	6,808,796
Total	71,104,280	14,168,453

Short-term deposits are made for varying periods, depending on the immediate cash requirements of the Group. They are recoverable on demand.

Restricted cash represents deposits which have been pledged by the group in order to fulfil collateral requirements (refer note 18)

16. 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 share capital of 351,504,795 equity shares (2010: 286,989,795) at par value of £ 0.000147 (2010: £ 0.000147) per share amounting to £ 51,671 (2010: £ 42,187).

The Company has issued share capital at par value of £ 51,671 (£0.000147) 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.

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 orof 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.

17. 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 £ 1.00 for consecutive three business days.

The related expense has been amortised over the estimated vesting period of 4.21 years (expected completion of the Kutch plant) and an expense amounting to £ 1,454,207 (2010: £ 1,206,959) was recognised in the profit or loss with a corresponding credit to other reserves.

Movement in the number of share options outstanding and their related weighted average exercise price are as follows:

Particulars	2011	2010
At 1 April	22,524,234	-
Granted	-	22,524,234
Forfeited	-	-
Exercised	-	-
Expired	-	-
At 31 March	22,524,234	22,524,234

Assumptions on Valuation of Options

The weighted average price fair value of options granted during the previous period was determined using the Black-Scholes valuation model was £ 0.28 per option. The significant inputs into the model were weighted average share price of £ 0.66 (2011) at the grant date, exercise price shown above, volatility of £ 0.60 (2010 £ 0.60), dividend yield of NIL (2010 NIL), an expected option life of 4.21 years (2010 - 3.71 Yrs) and annual risk free rate of 3% .The volatility measured at the standard deviation of continuously compounded share returns is based on daily share prices of the last three years.

18. Borrowings

The borrowings comprise of the following:

	Interest rate (range %)	Final Maturity	2011	2010
Financial liabilities measured at amortised cost	12.30 -14.62	March - 23	45,254,399	30,800,245
Short-term loans	12.30 -14.62	March - 12	3,367,529	3,882,815
Cash Credit and Working capital arrangements			1,294,930	2,648,982
L C bills discounting and buyers' credit facility		March - 12	402,338	-
Total			50,319,196	37,332,042

Total debt of £ 50,319,196 (2010: £37,332,042) is secured as follows:

▪	Financial liabilities measured at amortised cost of the Group is fully secured on the property, plant and other movable current assets of subsidiaries which have availed such loans and by a personal guarantee by the promoter.
▪	The short-term loan and cash credits taken by the Group is secured against hypothecation of deposits and margin money as collateral. In addition to the same, a Director has given personal guarantee for the same.
▪	L C bills discounting, buyers' credit facility, cash credit and other working capital facilities is fully secured against margin money deposits and other fixed deposits of the respective entities availing the loan facilities.

Long-term "project finance" loan contains certain restrictive covenants for the benefit of the facility providers and primarily requires the Group to maintain specified levels of certain financial ratios and operating results. The terms of the other borrowings arrangements also contain certain restrictive covenants primarily requiring the Group to maintain certain financial ratios. As of 31 March 2011, the Group has met all the relevant covenants.

The fair value of borrowings at 31 March 2011 was £ 50,319,196 (2010: £37,332,042). The fair values have been calculated by discounting cash flows at prevailing interest rates.

The borrowings mature as follows:

	Consolidated
	2011	2010
Current liabilities
Amounts falling due within one year	5,064,797	6,531,797
Non-current liabilities
Amounts falling due after 1 year but not more than 5 years	24,694,855	29,735,967
Amounts falling due in more than five years	20,559,544	1,064,278
Total	50,319,196	37,332,042

19. Trade and other payables

	Consolidated
	2011	2010
Current
Trade payables	9,499,104	3,224,109
Creditors for Capital Goods	314,977	504,283
Other Payables	902,880	189,725
Total	10,716,961	3,918,117
Non-current
Trade Payables	1,231,509	2,261,141
Total	1,231,509	2,261,141

With the exception of certain 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 provision for gratuity and other provision for expenses.
▪	Non current trade payable comprises retention money which will be settled after completion and successful installation of the projects.

20. Related party transactions

Where control exists:

Name of the party	Nature of relationship
Gita investments Limited	Ultimate parent
Caromia Holdings limited	Subsidiary
Gita Energy Private Limited	Subsidiary
Gita Holdings Private Limited	Subsidiary
OPG Power Generation Private Limited	Subsidiary
OPG Power Gujarat Private Limited	Subsidiary
OPG Renewable Energy Private Limited	Subsidiary
OPG Energy Private Limited	Subsidiary
Gita Power and Infrastructure Private Limited	Subsidiary

Key Management Personnel:

Name of the party	Nature of relationship
Arvind Gupta	Chief Executive
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 Related Party	Nature of Relationship
Sri Hari Vallabhaa Enterprises & Investments (P) Limited	Entity in which Key management personnel has Control / Significant Influence
Dhanvarsha Enterprises & Investments Private Limited	Entity in which Key management personnel has Control / Significant Influence
Goodfaith Vinimay (P) Ltd	Entity over which KMP exercises Control / Significant Influence through relatives
Salem Food Products Limited	Entity in which Key management personnel has Control / Significant Influence
Sri Rukmani Rolling Mill Private Limited	Entity in which Key management personnel has Control / Significant Influence
Kanishk Steel Industries Limited	Entity in which Key management personnel has Control / Significant Influence
Gita Energy and Generation Private Limited	Entity in which Key management personnel has Control / Significant Influence
Gita Devi	Relative of Key Management Personnel
Rajesh Gupta	Relative of Key Management Personnel
Ravi Gupta	Relative of Key Management Personnel

Related party transactions during the year

The following table provides the total amount of transactions that have been entered into with related parties and the outstanding balances as the end of the relevant financial years:

Name of the party	2011	2010
Name of the party	Amount (£)	Amount (£)
Summary of transactions with related parties
Kanishk Steel Industries Limited
a)Sharing of power	495,323	790,753
b)Cost of Power Generated	24,607	8,946
c) Lease deposit	1,308,553	-
d) Lease rent paid	148,478	236,226
e) Reimbursement of expenses	10,851	16,015

Salem Food Products Limited
a)Sharing of power	23,757	-
b)Interest Received	66,130	89,660
c)Receipt on account of repayment of loan	137,742	-

Sri Rukmani Rolling Mill Private Limited
a)Sharing of power	35,469
b)Sale of coal	1,889	-

Gita devi
a) Rent paid	-	2,100
b) Reimbursement of expenses	1,043	-

Ravi Gupta
a)Remuneration	25,000	25,000

Gita Energy and Generation Private Limited
a)Advance paid	2,403,604	1,719,051

Gita Power and Infrastructure Private Limited
a)Advance paid	-	3,394,260

Name of the party	2011	2010
Name of the party	Amount (£)	Amount (£)
Summary of balances with related parties.
Salem Food Products Limited
a) Loan outstanding	759,494	890,639
b) Trade and other receivables	-	970

Kanishk Steel Industries Limited
a) Trade and other receivables	331,769	632,955
b) Lease deposit outstanding	4,611,201	3,532,783

Sri Rukmani Rolling Mill Private Limited
a) Trade and other receivables	28,028	-

¹ Outstanding balances at the year-end are unsecured, interest-bearing in case of loans and inter-corporate deposits and other loans and advances are repayable on demand.. The interest rates charged closely approximate to the market rates. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2011, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (2010: £ Nil). 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.

²There are no other long term benefits and termination benefits which are payable to the key management personnel.

³The short-term loan and cash credits taken by the Group is secured against hypothecation of deposits and margin money as collateral. In addition to the same, a Director has given personal guarantee for the same.

21. 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 in 2010 or 2011).

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	2011	2010
Weighted average number of shares used in basic earnings per share	292,469,151	286,989,795
Shares deemed to be issued for no consideration in respect of share based payments	5,104,499	4,383,911
Weighted average number of shares used in diluted earnings per share	297,573,650	291,373,706

22. Director's Remuneration

Name of Directors	2011	2010
Arvind Gupta	169,109	157,480
V Narayan Swami	50,734	47,244
Martin Gatto	25,000	25,000
Mike Grasby	25,000	25,000
MC Gupta	25,000	25,000
Ravi Gupta	25,000	25,000
Total	319,843	304,724

23. Commitments and contingencies

Operating lease commitments

The Group leases land and a functional plant 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:

	2011	2010
Not later than one year	339,703	236,537
Later than one year and not later than five years	1,358,810	946,149
Later than five years	2,813,221	2,427,833
Total	4,511,734	3,610,519

During the year ended 31 March 2011, £ 339,703 (2010: '£' 236,537) was recognised as an expense in the statement of comprehensive income in respect of operating leases.

Capital commitments

During the year ended 31 March 2011, the Group entered into a contract to purchase property, plant and equipment for £ 92,009,451 (2010: £ 142,629,414).

Guarantees

a. LC and Bank Guarantee are as disclosed below

Particulars	As at 31 March 2011	As at 31 March 2010
Particulars	Group	Group
Towards outstanding Letter of Credit	9,185,515	5,674,858
Towards outstanding Bank Guarantees	3,293,417	7,814,483

Contingent Liabilities

1. As per Tamil Nadu Tax on Consumption or Sale of Electricity Act, 2003, every licensee shall collect and pay every month to the Government in the prescribed manner, a tax on the electricity sold during the previous month at the rates specified. The operating companies of the group have during the year made sales to non government customers amounting to £ 10,067,052 which is liable to electricity tax. However, no tax has been collected/remitted by the Company to the government. The Company, based on a legal opinion, is advised that it is the obligation of the consumer to pay the tax to the government on such sales. In addition, the Company is advised that in case of any claim by the Government on such sales, the same would be charged back to the customers. However, considering the uncertainty, the Company has disclosed this as an contingent liability.

2. OPG Energy Pvt Ltd (OPGE) had entered into a Power Sharing Agreement with Precot Meridian Ltd (PML) on November 30, 2002 and further had entered into a Memorandum of Understanding on March 30, 2003, in terms of which PML had invested £ 46,832 in OPGE towards Equity investment and £152,894 towards 13% Cumulative Redeemable Preference Shares. Under this MoU OPGE had agreed to supply 2MW of Pro-rata power of 17.5 MW. On July 29, 2005, OPGE redeemed the Preference share in full and subsequently with approval of PML, converted the equity shares into Class - C shares, which have no voting rights. Subsequently, from April 2008, OPGE stopped its power supply to PML, since in the opinion of OPGE, the obligation of the Company to supply power to PML ceased with the redemption of the preference shares and subsequent re-classification of its shares into non-voting shares. However, PML has raised a demand through arbitration for an amount of £ 786,068 towards the additional cost incurred by PML in getting power through other sources for the period from April 2008 to October 2010 and £ 275,485 for litigation fee along with 18% interest against the company vide its claim on December 26, 2010 under the Arbitration & conciliation act 1996 and the matter is pending before the Arbitration Tribunal. OPGE has sought the opinion of its legal counsel and believes that there is no merit in the claim of PML. However, considering the uncertainty, the claim by PML is disclosed as contingent liability.

24. 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 fair value through profit or loss and 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 is supported by a financial risk committee that advises on financial risks and the appropriate financial risk governance framework for the Group. The financial risk committee provides assurance to the Group's senior management that the Group's financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with Group policies and group risk appetite.

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 and investment at fair value through profit or loss.

The sensitivity analyses in the following sections relate to the position as at 31 March 2011 and 31 March 2010.

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 floating rate borrowings held at 31 March 2011, 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 floating interest rates.

At 31 March 2011 and 31 March 2010, the Group had no interest rate derivatives.

The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt as at 31 March 2011.

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 2011 would decrease or increase by £ 143,355 (2010: £ 162,315). Increase/decrease in interest rates would have an immaterial impact on the Group's equity.

Increase/decrease in interest rates would have no impact on the Company's equity as there are no borrowings.

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 £ 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.

Currency fluctuations may have a large impact on our Group financial results. We are subject to currency risks affecting the underlying cost base in the operating subsidiary companies and also the translation of unit cash costs, profit or loss and the Statement of financial position (including non-Great Britain £ denominated borrowings) in the consolidated financial statements, where the functional currency is not the Great Britain £.

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 with Indian Rupee being the major foreign currency exposure of the Group's main operating subsidiaries:

	As at March 31 2011		As at March 31 2010
Currency	Financial Assets	Financial Liabilities	Financial Assets	Financial Liabilities
Indian Rupee (INR)	4,428,878,407	3,969,312,333	3,333,877,427	2,538,659,229
United states Dollar (USD)	-	11,897,358	-	-

Set out below is the impact of a 10% change in the Indian Rupee and US dollar on profit arising as a result of the revaluation of the Group's foreign currency financial instruments:

	As at March 31 2011		As at March 31 2010
Currency	Closing Rate	Effect of 10% Strengthening of GBP on net earnings	Closing Rate	Effect of 10% Strengthening of GBP on net earnings
Indian Rupee (INR)	72.60	(642,936)	67.87	(1,065,162)
United states Dollar (USD)	45.29	(742,124)	-	-

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 £ 122,022,795 (2010: £ 55,266,730).

The Group has exposure to credit risk from a limited customer group on account of supply of power. However, 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 and other short-term financial assets is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

The Group's/ Company's maximum exposure for financial guarantees are noted in note 23.

The Group's management believes that all the above financial assets, except as mentioned in note 12 and 13, 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 ongoing 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 2011:

	Current		Non - current		Total
	On demand	within 12 months	1-5 years	Later than 5 years	Total
Borrowings		9,644,576	37,494,29	17,733,219	64,872,091
Trade and other payables		10,544,783	1,231,509	-	11,776,292
Other current liabilities		241,113	-	-	241,113
Total		20,430,472	38,725,805	17,733,219	76,889,496

The Company's contractual undiscounted cash flows payable under financial liabilities as at 31 March 2011 is £ 72,691 (2010: £ 44,747).

Capital management

Capital includes equity attributable to the equity holders of the parent and debt.

The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value Objectives include, among others:

•	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 2011 and 2010.

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.

The SPVs in the Group engaged in the business of captive power generation are subject to statutory requirement of maintaining the captive consumers' equity at 26% of the total equity. Apart from the aforementioned requirement, there are no other imposed capital requirements on Group or entities, whether statutory or otherwise.

The Capital for the reporting periods under review is summarised as follows:

	2011	2010
Total equity	151,167,738	88,585,682
Less: Cash and cash equivalents	(71,104,280)	(14,168,453)
Capital	80,063,458	74,417,229

Total equity	151,167,738	88,585,682
Add: Borrowings (including buyer's credit)	50,319,196	37,332,042
Overall financing	201,486,934	125,917,724
Capital to overall financing ratio	0.40	0.59

25. Summary of financial assets and liabilities by category and their fair values

Set out below is a comparison by class of the carrying amounts and fair value of the Group's financial instruments that are carried in the financial statements:

	Carrying amount		Fair value
	2011	2010	2011	2010
Financial assets
Cash and cash equivalents ¹	71,104,280	14,168,453	71,104,280	14,168,453
Available-for-sale quoted instruments ⁴	8,851,675	12,977,604	8,851,675	12,977,604
Loans and Receivables ⁴	36,634,568	30,402,076	36,634,568	30,402,076
Current trade and other receivables ¹	8,576,366	3,348,207	8,576,366	3,348,207
Non-current trade and other receivables ²	6,941,814	5,470,257	6,941,814	5,470,257
	132,108,703	66,366,597	132,108,703	66,366,597
Financial liabilities
Long-term "project finance" loans ³	45,254,399	30,800,245	45,254,399	30,800,245
Short-term loans ¹	4,662,459	6,531,797	4,662,459	6,531,797
LC Bill discounting & buyers' credit facility ¹	402,339	-	402,339	-
Current trade and other payables ¹	10,544,783	3,918,117	10,544,783	3,918,117
Non-current trade and other payables ³	1,231,509	2,261,141	1,231,509	2,261,141
	62,095,489	43,511,300	62,095,489	43,511,300

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. 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. Long-term loans and receivables and trade receivables are evaluated by the Group based on parameters such as interest rates, individual creditworthiness of the customer and the risk characteristics of the financed project. As of 31 March 2011, the carrying amounts of such receivables, net of allowances, approximate their fair values.

^3. The fair value of unquoted equity instruments at fair value through profit and loss account, 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.

^4. Fair value of available-for-sale instruments and other financial assets held for trading purposes are derived from quoted market prices in active markets, if available. In certain cases, fair value is estimated using an appropriate valuation technique.

Fair value measurements recognised in the statement of financial position

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

	Level 1	Level 2	Level 3	Total
Financial assets at FVTPL
Non-derivative financial assets held for trading	-	-	-	-
Available-for-sale financial assets
Unquoted equities	-	-	-	-
Quoted equities	8,836,450	-	-	8,836,450
Total	8,836,450	-	-	8,836,450

There were no transfers between Level 1 and 2 in the period.

26. Restatement

a. During the year, the Group identified that negative goodwill arising on common control transactions during financial year ended March 31, 2009 was presented through profit and loss which was not in accordance with the accounting policy for common control transactions as adopted by the Group which requires identified negative goodwill on common control transactions to be routed through equity. Further, on a re-computation of the reported negative goodwill, the Group identified an error in the model used which resulted in a reduction in the reported negative goodwill to the extent of £722,289 for the year ended March 31, 2009. The impact of this error was an understatement in the reported other reserves as at 31 March, 2009 by £2,125,121 with a corresponding overstatement in Retained earnings by £1,413,721 and in translation reserve by £ 722,289. The Impact on the Statement of Comprehensive Income was a reduction in the reported profits for the year ended March 2009 by £1,413,721.

b. The company has in the previous years accounted for exchange difference arising on translating monetary items at reporting date through other comprehensive income which needs to be brought in conformity with IAS 21, which requires such exchange differences to be recognised in profit or loss. During the year ended 2010 the company accounted an amount of £2,594,435 (2009: £3,135,891) through other comprehensive income as foreign currency translation reserve which has been restated and recognised through the profit and loss account resulting in an increase in retained earnings as on 1 April 2009 by £3,135,891 and a decrease in profit for the year ended 2010 by £2,594,435.

On account of the above revisions and a change in the method of presentation, the cash flow statements have been restated for the year ended march 2010. Considering that the above revisions only impact the components within equity with no impact on other balances of the statement of financial position as at 31 March, 2009, the Group has not presented a third statement of Financial position at the beginning of the earliest comparative period as required by IAS1.

27. Reclassification of the consolidated financial statements for the prior years

Prior year's figures in the consolidated financial statements have been regrouped and reclassified wherever necessary to conform to the current year's figures. The Group has reclassified the following items which do not have any impact upon the income statement, cash flows, equity and financial position and performance of the group.

Capital Advances relating to construction of power stations amounting to £21,160,152 which was disclosed as non current has now been reclassified to Investments and other financial assets (Current).

Capital Work in Progress relating to construction of power stations amounting to £2,387,533 which was disclosed as non current has now been reclassified to Investment and other financial assets.

Restricted Cash amounting to £1,333,253 which was disclosed as current has been reclassified to non current.

Financial assets amounting to £259,123 has been reclassified to Trade and Other receivables.

Current Tax Assets (£2,003,214) and Provision for Taxation (£ 1,599,018) which were shown on a gross basis have been disclosed on a net basis.

The Group has made significant presentational changes in the income statement, to further improve comparability of its results to those of other Power sector companies and to allow readers to make a more accurate assessment of the sustainable earnings capacity of the Group.

Operating revenue (£ 1,357,189) and Cost of Generation (£ 1,196,914) - relating to purchase and sale of coal have been regrouped to other income.

Other expenses (£ 495,104), employee costs (£ 1,373,055), depreciation (£ 195,461), pre operative expenses (£ 1,171,626) have been reclassified to general and administration expenses.

Other gains and losses (£ 1,028,559) has been reclassified to other income (£ 84,035) and to Finance Income (£ 944,524).

An amount of £ 46,252 has been reclassified from finance income to finance expense.

28. Subsequent Events

OPGPG acquired certain assets of M/s Bellary Steels & Alloys Ltd, which consist primarily of 120 acres of land with partially completed 12 MW power plant for a consideration of £ 8.89 million (Rs. 649 million). The company was not operational for the last two years and was under liquidation. Subsequent to the reporting date, the group, having paid the bid price in full, has acquired possession of the same. The group has assessed this transaction as an acquistion of assets and not as a acquisition of business in the absence of any process which is part of a set of integrated activities to create any output.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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