Final Results

RNS Number : 7638F

OPG Power Ventures plc

01 August 2016

 

1 August 2016

OPG Power Ventures plc

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

Preliminary results for the year ended 31^st March 2016

Delivery, Performance and Progress

Record Results

OPG (AIM: OPG), the developer and operator of power generation assets in India, announces its preliminary results for the year ended 31^st March 2016 ("FY16").

Highlights

·   480 MW new capacity commissioned in the year - total operating capacity 750 MW

·   EBITDA margin of 39.5% up from 33.4% compared with FY15

·   Profit before tax of £28.6 million up by 32% compared with FY15

·   EPS of 5.29 pence up by 8% compared with FY15

·   Q1 FY17 aggregate group revenues approx. £57 million and average group PLF 72%

·   334 MW allocated to 2-3 year captive sales agreements at Chennai plant - transforms sales mix

·   Initial target dividend of 15% of net earnings commencing with an interim in calendar 2016

·   62 MW solar growth projects expected to be funded from a combination of new debt facilities and internal equity

Summary financial information

	£ million		INR million
	FY16	FY15	FY16	FY15
Revenue	128.4	100.0	12,681	9,838
EBITDA	50.7	33.4	5,004	3,287
Profit before tax	28.6	21.7	2,819	2,130
EPS (pence)	5.29	4.91	-	-
Net debt	254.1	250.6	24,159	23,251
Total units (millions)	3,163*	1,861
£:INR ex-rate	98.7	98.4

*includes 704m units from Gujarat for which results are being capitalised

Commenting on the results, Mr M C Gupta, Chairman stated: "The OPG management team have much to be proud of upon the completion of their 750 MW programme.  The Company's results and continued growth in revenues are a testament to this.  This positions the Company uniquely well, in my view, to take advantage of the many good growth opportunities the Indian power sector will have to offer in the years to come.  After the Board having announced a firm approach to dividends I have informed the Board of my decision to retire and I wish to thank my Board colleagues and the entire team at OPG for their warmth and for their efforts in making this a company of the future - I have every reason to believe OPG is well on its way to achieving its goal of leadership in the Indian energy sector."

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

OPG Power Ventures PLC Arvind Gupta / V Narayan Swami	[phone]
Investor Relations Ajay Paliwal/Pooja Maru	[phone]
Cenkos Securities (Nominated Adviser & Broker) Stephen Keys / Camilla Hume	[phone]
Macquarie Capital (Europe) Limited (Joint Broker) Raj Khatri / Nick Stamp	[phone]
Tavistock (Financial PR) Simon Hudson / James Collins	[phone]

Disclaimer

This announcement does not constitute or form part of any offer or invitation on to sell or issue, or any solicitation on of any offer to purchase or subscribe for any securities. The making of this announcement does not constitute a recommendation on regarding any securities. Certain statements, beliefs and opinions contained in this announcement, particularly those regarding the possible or assumed future financial or other performance of OPG, industry growth or other trend projections are or may be forward looking statements. Forward‐looking statements can be identified by the use of forward looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "plans", "goal", "target", "aim", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward looking statements include all matters that are not historical facts. By their nature, forward‐looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond OPG's ability to control or predict. Forward‐looking statements are not guarantees of future performance. No representation on is made that any of these statements or forecasts will come to pass or that any forecast result will be achieved. Neither OPG, nor any of its associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward‐looking statements in this announcement will actually occur. You are cautioned not to place reliance on these forward‐looking statements. Other than in accordance with its legal or regulatory obligations, OPG is not under any obligation and OPG expressly disclaims any intention or obligation to update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise.

No statement in this announcement is intended as a profit forecast or a profit estimate and no statement in this announcement should be interpreted to mean that earnings per OPG share for the current or future financial years would necessarily match or exceed the historical published earnings per OPG share.

Chief Executive's review

Performance Overview

This has been something of a landmark year of an eight year journey during which the Company has delivered record results, completed its 750 MW program and is now embarking on an exciting new phase of development. 

During FY16, OPG generated a record 3.2 billion units of electricity as a result of which reported revenues rose by 28% to £128 million.  A 480 MW uplift in capacity has been delivered progressively through FY16 and the Q1 FY17 revenues of approximately £57 million reflect the ramp up to date of this newly delivered capacity.  Profit before tax was up 32%, and operating margins were higher than last year, tracking delivered coal prices.

The low point of the year was some of the worst flooding ever seen in Chennai with severe impact upon communities in the region. Although generation at the Chennai plant was impacted it remained available throughout to supply electricity and more importantly the plant had an essential role in providing emergency drainage to nearby communities where the impact could have been significantly greater.

As well as knowing their Company has been playing its part in the community, shareholders will be pleased that we announced the timing and basis for our initial dividend policy with an initial pay out target of 15% of net earnings (subject to cash flows and commitments) commencing with an interim payment in the current calendar year and with an intention to grow that pay out over time.  We also re-affirmed our strategy of pursuing responsible, sustainable growth from new projects, mirroring the energy mix of India in the longer term, in line with which we recently announced our entry into the promising solar energy segment.

Market

This is a time of opportunity in the Indian power sector especially for cash generative participants due to the major developments taking place. 

-      The Company operates in the fastest growing major economy of the world with GDP growth of over 7% in the last fiscal year.  Electricity is a key growth enabler and a further 480 GW will need to be added to India's power generating capacity in order to reach the government's stated per capita consumption target of 1800 kWh by 2034 and to provide electricity for approximately 260 million people.  Population growth, industrialisation, electrification and urbanisation continue apace in India 

-      Financial restructuring of state utilities, the biggest buyers of electricity in India, by way of a program known as UDAY, is expected to bring about a material reduction in finance costs to a large number of utilities.  This together with reforms in the banking sector are expected to provide a boost to the availability of efficient financing for well-run thermal and renewable energy players

-      Fuel availability and mix is changing rapidly.  India produces more coal than ever and globally, supplies have remained strong while producer currencies have been weak, keeping prices subdued.    Utilities and regulators have sought to track those dynamics in power pricing.  Renewable energy is also much more relevant

-     Following the COP21 meeting of nations in December 2015, India committed to fast-track renewables development and responsible growth in thermal capacity.  Thermal energy is still forecast to remain the backbone of the country's power needs for several decades to come where a focal point will be mobilising idle capacity in that segment.  FY16 also saw over 5 GW of new solar energy projects commissioned and the pace of this development is expected to quicken as 10 GW of solar projects are anticipated to be auctioned every year.  With solar development costs in India being amongst the lowest in the world and continuing to maintain a benign momentum, projects have become viable without subsidies. 

We believe these features make India the most exciting power market in the world seeking, to add 20 GW of new capacity every year to keep pace with demand.  Both thermal and renewables will be important and around a third of all energy generation is expected to be from renewable sources from by 2030.  We believe our entry into renewables and our strong thermal portfolio will ensure we are well placed across the spectrum of opportunities.

Future Projects

Against this fast evolving backdrop, last year the Company outlined to shareholders its aim of replicating the power generation mix of the nation and on 5^th July 2016, the Company announced the investment of £45 million in four new solar projects (total 62 MW) across various locations in Karnataka, one of the most industrialised states in India.  This investment is expected to be funded from a combination of internal cash generation and debt and the Directors consider all four of these new projects capable of generating cash flow by June 2017.  The fully permitted projects were secured in a competitive bidding process and the Company has signed long term (25 year) power purchase agreements (PPAs) at an average tariff of Rs 5 with Karnataka State Electricity Distribution companies ("Discoms").  The targeted return levels are expected to be met without any subsidies and the Board expects these projects to deliver long term returns ahead of our average cost of capital.

OPG's Priorities

With many potential opportunities, the Board seeks to augment the Company's strong track record by focusing management on certain priorities as follows:  

-      Our first priority has been and must remain maximising the cash generation and performance of existing operations.  This means making the most of our multi-year contracts in Chennai, achieving cost, working capital, safety and environmental performance leadership there and of course, ramping up Gujarat as profitably as possible.  We need to maintain our unbroken track record on timely coal procurement and as well as our cost of operations, seek to continually optimise our cost of capital.  With the normal determined efforts of the OPG team, these efforts will be the backbone of our cash generation, dividends and growth. 

-      Our second priority is to engage in responsible and sustainable growth.  We should seek to navigate some of the pitfalls experienced by others seeking out profitable megawatts only.  In so doing we will retain our ability to be selective if and when interesting growth opportunities arise to achieve the Company's true potential.  In the context of this priority, we believe our commitment to internally fund growth of 300 MW of solar over the coming years and paying out returns from the free cash flow generated from them is achievable and exciting for shareholders.

-      And in everything we do, it's a priority that we must be conscious of the need to protect our people and our environment.  Due to its recent construction, our existing portfolio operates well within all Indian regulatory requirements and we want our plans to involve continual improvement in this regard.  As a result, as well as rebalancing our portfolio with renewable energy regeneration, in implementing any growth in thermal, our management team has undertaken to the Board to target improvements in the environmental performance of our thermal portfolio as a whole following such growth.  This is an important part of becoming a leader in the sector.

Board and other developments

Mr M. C Gupta, our Chairman, has informed of his wish to retire from the Board at the next general meeting.  I have the special privilege of thanking him for his leadership and guidance over the last eight years.  In my view we could not have achieved what we have without his direction and counsel.  He has overseen the forty-fold growth of OPG from its initial size, which gives us the platform for our continued growth.  On behalf of shareholders, my Board colleagues and I, we wish Mr M.C. Gupta well for his retirement.

We have identified a new non-executive director to join the Board and I look forward to welcoming Mr Jeremy Beeton to our Board.  Jeremy's experience in emerging markets and on the boards of many leading companies as well as his leadership in delivering large, complex projects including the London Olympics in 2012 will be valuable to the  Company.  We will make a further announcement regarding the appointment of Jeremy Beeton in due course which will include the requisite AIM Rule disclosures.

Being familiar amongst our shareholders, having completed our 750 MW program and built a strong, stable and capable commercial and operations team, the Board has considered it appropriate that I take on the role of Executive Chairman of OPG, which I have agreed to accept. 

Finally, I am delighted to welcome Mr T Chandramoulee to the new position of Group Chief Operating Officer, with a non-Board responsibility for running the day-to-day operating affairs of the Company.  T Chandramoulee has been with OPG since 2007, is known to our customers, suppliers and lenders and has played a leading role in all aspects of the development and operation of the Chennai and Gujarat plants.

In other developments, the Board continues to evaluate with its advisors the possibility of a move to the Main Market.

Summary

A lot has changed in the last eight years to position the Company well as a potential leader in the sector.  We will look to continue our momentum onwards from this landmark year by introducing our dividend shortly and by judiciously identifying good growth projects.  There is no doubt that encouraging and major reforms are going on in our sector and our vision is to couple the opportunities they bring with our natural skills and to become a sector leader known for its all round performance. 

I want to pay a special tribute to the efforts of our team, many of whom have been an integral part of the entire journey.  I look forward to their continued support and dedication without which we cannot achieve our desired leadership status.

Similarly, as the Board and I look forward with confidence to the Company's future, we wish to place on record our thanks to all of our shareholders for their support and participation during our journey.

Financial Review

The following is a commentary on Group's financial performance in the year.

Income Statement (£m)

Year ended 31st March	2016	% of	2015	% of
		Revenue		Revenue
Revenue	128.44		99.97
Cost of Revenue (Excluding Depreciation)	(66.60)		(58.46)
Gross Profit	61.84	48.15	41.51	41.5
Other income	4.44		0.13
Distribution , General & Administrative expenses (Excluding Depreciation, Employee Stock Option Charge, Expenditure during the period on expansion project,)	(15.60)		(8.25)
EBITDA	50.68	39.4	33.39	33.4
Depreciation	(5.94)		(3.15)
Net finance costs	(15.91)		(7.97)
Income from continuing operations (before tax	28.83	22.4	22.27	22.2
non-operational and / or exceptional items)
Expenditure during the period on expansion projects	-		(0.38)
Employee Stock Option Charge	(0.28)		(0.24)
Charge on de consolidated Investments	-		-
Profit before Tax	28.55	22.2	21.65	21.6
Taxation	(9.97)		(4.36)
Profit after tax	18.57	14.45	17.29	17.2

Revenue

OPG revenue has increased by £28.4m, reflecting a 28% growth year on year.  Overall generation increased 70% on account of the commissioning of the 180 MW Chennai and the 300 MW Gujarat plant partway through the year.  Generation for revenue purposes increased 32% to 2,459 million units in FY16 from 1,861 in FY15 with the balance 704 million units from Gujarat until 30 January being capitalised.

Production and output levels from the Group's operating power plants in Chennai and Gujarat compared to the prior year were as follows:

Particulars	FY 16	FY 15
Generation (Mn Units)	3163	1861
PLF %	72	91
Average Tariff (INR/Unit)	5.58	5.71

*includes 704m units from Gujarat for which results are being capitalised 

Generation at Chennai was lower due to seasonal demand, availability of grid during the year and heavy rainfall.

Gross Profit

Gross profit ("GP"), net of depreciation included in Cost of Revenue inFY16 was 48.15% of Revenue (41.5% in FY15).  The GP growth came from lower factory gate prices on Coal.

The cost of revenue represents fuel costs (including the depreciation added therein in the audited accounts but excluded for the purpose of this review).  The average factory gate costs for Indian coal decreased by 1.6% and those for Indonesian coal by 20.7%.  The table below shows the price and blend of Indian and Indonesian coal consumed in FY 16 and FY15.

The coal blend in FY16:

Financial Year	Average factory gate price (INR/MT)		Average factory gate price (INR per million KCal)		Blend %
	Indian coal	Indonesian Coal	Indian coal	Indonesian Coal	Indian:Indonesian
FY 16	3013	3216	879	769	22:78
FY 15	3062	4056	988	966	32.68
Change %	-1.6	-20.71

EBITDA

Earnings Before Interest, Taxation, Depreciation & Amortisation (EBITDA) is a measure of a business's  cash generation from operations before depreciation, interest and exceptional and non-standard or non-operational changes such as the annual charge for stock options which is a non-cash item or expenses relating to projects under construction. 

EBITDA was £ 50.68m in FY16 up from £33.39 m in FY15 and EBITDA margin was higher at 39.4 % in FY16 against 33.4% in FY15 on account of increase in GP margin.

Profit before Tax (£m)

	Total
Profit Before Tax (PBT) 2015-2016	28.55
Profit Before Tax (PBT) 2014-2015	21.65
Increase/(Decrease) in PBT	6.90
Reconciliation
Increase in GP	20.33
Increase in other income	4.31
Increase Distribution , General & Administrative expenses	(7.35)
Increase in Depreciation	(2.79)
Increase in Net finance cost	(7.94)
Reduction in expenses on expansion of projects	0.38
Increase in ESOP expense	(0.04)
Increase/(Decrease) in PBT	6.90

Taxation

The Company's operating subsidiaries are under a tax holiday period but are subject to Minimum Alternate Tax ('MAT') on its accounting profits.  Any tax paid under MAT can be off set against future taxable profits once the tax holiday period is over.  The tax charged during the year was £ 9.97m (FY15: £4.36m) which includes current tax of £ 3.99m (FY15: £2.85m) and deferred tax of £ 5.97m (FY15: £1.51m).  The deferred tax charge arises from timing differences in the amounts of depreciation charged in the tax accounts as against these published accounts.

Expenditure on Projects

This relates to expenses incidental to projects under construction.  These expenses in FY16 were £ Nil m in (FY15: £0.38m).

Employee Stock Options charge 

This relates to the amortization of the value of stock options granted to certain Directors and is non cash in nature and were fully amortised during the year.

Profits after Tax

Profits After tax have increased by £ 1.28m from £17.29m in FY15 to £18.57m in FY16. 

Property, Plant and Equipment

The net book value of our property, plant and equipment principally relates to production assets capitalized post the construction of our new plants at Chennai and Gujarat.

Other Non-Current Assets

Other Non-current assets have decreased by £ 0.64m year on year primarily as a result of investments made in the shipping business and in the restricted cash holding for more than 12 months.

Trade Receivables (£m)

	FY 16	FY 15
Receivables from sales of power	53.00	28.28
Other receivables	4.84	0.35
Total	57.84	28.63

Current Assets

Current Assets have increased by £ 23.87m to £96.980m year on year primarily as a result of the following:

-     Increase in trade receivables by £29.21m (on account of slower payment by TANGEDCO, the short term supply contracts with this entity having ceased in May 2016)

-     Reduction in Investments & Other Assets by £10.54m on account of reduction in advances to suppliers for the projects in Chennai & Gujarat with corresponding increase in assets under Property, Plant & Equipment.

-     Increase in Inventory holdings by £2.72m and

-     Increase in other assets by £2.47m

Current Liabilities

Current liabilities have increased by £4.8m primarily on account of increase in retention money.

Other Non-Current Liabilities

Other Non-Current liabilities have increased by £ 2.39m primarily on account of

-      increase in short term bank borrowing by £ 4.62m

-      And increase in deferred tax liability and reduction in trade and other liabilities by £ -2.2 Mn

Net Debt and Gearing

Net borrowings (Borrowings net of Cash and cash equivalents and available for sale of investments) are £254.06m. Project debt on 480 MW of new capacity was fully drawn down during the year.  The Gearing ratio was 58%.

The restricted cash balances totaling FY16: £9.23 m (FY15: £8.1m) comprise deposits have been pledged as security against the Company's borrowings.

Cash Flows

Operating cash flow has increased from £ 32.87m in FY15 to £48.90 m in FY16, an increase of £16.03m, or 48%.  The increase is primarily due to the increased gross margin.

Movements (£m)	FY16	FY15
Operating Cash	48.9	32.88
Tax Paid	-3.97	(3.22)
Change in Working capital assets and liabilities	-25.13	(9.74)
Net cash generated by operating activities	19.80	19.92
Purchase of Property, Plant and Equipment (net of disposals)	-13.32	(77.11)
Other Investments	-1.65	10.57
Net cash used in Investing activities	-14.97	(66.54)
Net Interest paid	-7.87	(9.41)
Total Cash change before Net borrowings	-3.04	(56.03)

Operations review

The following is a review of operations by the Group's Chief Operating Officer.

Project Delivery

During FY16 the Company commissioned its two largest assets to date, a 300 MW plant in Gujarat and 180 MW unit in Chennai, bringing its installed generation capacity to 750 MW.  The 480 MW uplift in capacity has been delivered progressively throughout the year, with the full revenue impact expected to be reflected across the next two years.   

Plant availability

Our operational performance is affected by our revenue generation model, plant availability and load factors and auxiliary power consumption (the internal deployment of the plant's production as this is not saleable production). 

Both coal availability and water consumption are two factors which have disrupted the availability and load factors of other thermal power plants in India in recent years.  OPG's plants are designed to be able to use a wide range of fuels, both domestic and international, and the Company further has the capability to maintain reserves of coal.  This has been integral to coal availability at its locations and we haven't faced any interruptions on account of coal since commissioning each unit.  In addition, the plants are designed to limit the consumption of water as they are built with air cooled condenser technology rather than being water cooled.  As a result our plant availability has remained consistently over 90%. This is important as availability is the basis of our reward on the 74 MW LTVT (Long Term Variable Tariff) which is discussed further below.  

Our load factors take account of plant availability as reduced by external factors like normal seasonal demand adjustments to their offtake under the LTVT (though the customer still pays us as discussed further below), enforced system back downs and once off disruptions to demand such as due to weather.  Accordingly our PLF for the enlarged 414 MW Chennai plant in FY16 as a whole was 70% versus a national average for thermal plants of 62%.     

Auxiliary consumption levels, also a key measure of plant efficiency, is typically between 7.5-8% for our plants which compares favourably to national averages of around 9% for similar sized units in India. 

Sales contracts

In October 2015, the Company commenced supplies directly to industrial customers under multi-year contracts in Chennai.  The tenure of sales contracts entered into with industrial customers at Chennai was between 2 and 3 years. This is expected to accelerate cash collections and improve visibility of earnings.  The capacity allocated to industrial customers under such contracts has recently risen from 257 MW to 334 MW, or 82% of the plant's installed capacity and nearly half of group capacity.  74 MW of Chennai capacity has remained available for supply on the LTVT.  Against the LTVT we earned revenue for our normal available capacity throughout the year including approximately £3.7 million for the c250 million units that were not drawn by TANGEDCO as normal seasonal demand adjustments by them.  We can expect this seasonality in FY17 too but similarly expect to earn a profitable capacity charge for it.

The increasing supply of electricity to industrial customers provides an element of protection from grid-related issues.  During the year the state of Tamil Nadu was forced to restrict grid access by reducing its purchases of electricity from many generators of conventional power during an especially strong wind season due to grid constraints.  Industrial customers are not normally affected by such restrictions as the state seeks to ensure continuity of supply to business. 

Power sales from the new 300 MW Gujarat plant have been to mainly industrial customers on short term contracts and to the power exchange.  The industrial customers are also supplied by the state government utilities, which operates a power surplus and is able to determine how grid access is allocated.  Grid access is being made available gradually, with the result that the plant has ramped up gradually as we had previously reported, achieving a load factor of 68% for the first three months of FY17, compared with 52% for the two month period since commissioning from February to March 2016. 

We expect both plants to operate at an average load factor of 75% for the current year as a whole and for average tariff levels to be around Rs 4.40.

Coal supply

The Company has consistently been able to import low sulphur coal from a small number of high class Indonesian coal producers and traders with whom it has developed longstanding relationships.  The Company has also participated in short term price hedging which has been beneficial as prices have fallen.  In addition, the Company has had a consistent record of supply through it's shipping desk, which has resulted in no delays or unexpected losses.

Safety and environmental compliance

The Company made good progress with its safety programme, recording no fatalities and a reported incident rate in FY16 for Chennai of 0.33 versus 0.40 in FY15 and 0.49 in FY14.  Our target for FY16 was 0.35.  Gujarat performance will become a focus in the current year as it was recently commissioned and contractor numbers are greatly reduced. 

The Company continues to minimise its consumption of water through air cooling and we operate with a philosophy of continual improvement with regards to any effluent.  For the latter we achieve and report our continued compliance with all existing prescribed limits and furthermore are now in the process of adopting the new national pollution limits announced in late 2015.  These new limits are required to be met by December 2018 but we anticipate achieving compliance ahead of that.

Consolidated statements of comprehensive income

	Notes	Year ended	Year ended
(All amounts in £, unless otherwise stated)		31 March 2016	31 March 2015
Revenue		128,438,193	99,974,648
Cost of revenue	8 (a)	(71,895,139)	(61,228,358)
Gross profit		56,543,054	38,746,290
Other income	9	4,444,268	127,268
Distribution cost		(6,564,363)	(1,863,441)
General and administrative expenses		(9,967,112)	(7,388,392)
Operating profit		44,455,847	29,621,725
Finance costs	10	(16,712,169)	(9,410,037)
Finance income	11	806,453	1,437,763
Profit before tax		28,550,131	21,649,451
Tax expense	12	(9,972,626)	(4,360,769)
Profit for the year		18,577,505	17,288,682
Profit for the year attributable to:
Owners of the Company		18,558,014	17,270,192
Non - controlling interests		19,491	18,490
		18,577,505	17,288,682
Earnings per share
-Basic (in pence)	24	5.29	4.91
-Diluted (in pence)		5.13	4.80
Other comprehensive income
Items that will be reclassified subsequently to profit or loss
Available for sale financial assets
-Reclassification to profit or loss		5,133	(32,633)
-Current year gains/(losses)		38,557	(5,133)
Exchange differences on translating foreign operations		(2,844,341)	10,481,124
Items that will be not reclassified subsequently to profit or loss
Exchange differences on translating foreign operations		2,755	9,875
Total other comprehensive income		(2,797,896)	10,453,233
Total comprehensive income		15,779,609	27,741,915
Total comprehensive income attributable to:
Owners of the Company		15,757,365	27,713,554
Non-controlling interest		22,244	28,361
		15,779,609	27,741,915

The notes are an integral part of these consolidated financial statements.

Consolidated statements of financial position

(All amounts in £, unless otherwise stated)	Notes	As at	As at
		31 March 2016	31 March 2015
Assets
Non-current assets
Intangible assets	13	364,504	665,673
Property, plant and equipment	14	414,906,166	414,552,876
Investment and other assets	15	2,951,591	2,754,393
Restricted cash		1,940,600	2,784,990
		420,162,861	420,757,932
Current assets
Trade and other receivables	16	57,840,717	28,628,701
Inventories	17	10,614,890	7,889,661
Cash and cash equivalents	18	7,153,455	6,805,449
Restricted cash		7,294,778	5,303,217
Current tax assets (net)		715,214	574,834
Investment and other assets	15	13,365,243	23,907,952
		96,984,297	73,109,814
Total assets		517,147,158	493,867,746
Equity and liabilities
Equity
Share capital		51,671	51,671
Share premium		124,316,524	124,316,524
Other components of equity		(13,652,725)	(11,135,645)
Retained earnings		69,684,455	51,126,441
Equity attributable to owners of the Company		180,399,925	164,358,991
Non-controlling interests		276,325	254,079
Total equity		180,676,250	164,613,070
Liabilities
Non-current liabilities
Borrowings	21	242,558,875	237,936,689
Trade and other payables	22	8,463,049	16,795,079
Deferred tax liability	12	9,310,429	3,205,851
		260,332,353	257,937,619
Current liabilities
Borrowings	21	21,023,963	22,851,498
Trade and other payables	22	54,890,882	47,839,604
Other liabilities		223,710	625,955
		76,138,555	71,317,057
Total liabilities		336,470,908	329,254,676
Total equity and liabilities		517,147,158	493,867,746

The notes are an integral part of these consolidated financial statements.

The financial statements were authorised for issue by the board of directors on 29 July 2016 and were signed on its behalf by:

Arvind Gupta	V. Narayan Swami
Chief Executive Officer	Chief Financial Officer

Consolidated statements of changes in equity

(All amounts in £, unless otherwise stated)	Issued capital (No. of shares)	Ordinary shares	Share premium	Other reserves	Foreign currency translation reserve	Retained earnings	Total attributable to owners of parent	Non-controlling interests	Total equity
At 1 April 2014	351,504,795	51,671	124,316,524	6,962,395	(28,784,289)	33,856,249	136,402,550	225,717	136,628,267
Employee share based payments		-	-	242,888	-	-	242,888	-	242,888
Transaction with owners		51,671	124,316,524	7,205,283	(28,784,289)	33,856,249	136,645,438	225,717	136,871,155
Profit for the year		-	-	-	-	17,270,192	17,270,192	18,490	17,288,682
Other comprehensive income
Currency translation differences		-	-	-	10,481,124	-	10,481,124	9,875	10,490,999
Gain on sale/re-measurement of available for sale financial assets		-	-	(37,763)	-	-	(37,763)	(3)	(37,766)
Total comprehensive income		-	-	(37,763)	10,481,124	17,270,192	27,713,553	28,362	27,741,915
At 31 March 2015	351,504,795	51,671	124,316,524	7,167,520	(18,303,165)	51,126,441	164,358,991	254,079	164,613,070
Employee share based payments		-	-	283,571	-	-	283,571	-	283,571
Transaction with owners		51,671	124,316,524	7,451,091	(18,303,165)	51,126,441	164,642,562	254,079	164,896,641
Profit for the year		-	-	-	-	18,558,014	18,558,014	19,491	18,577,505
Other comprehensive income
Currency translation differences		-	-	-	(2,844,341)	-	(2,844,341)	2,755	(2,841,586)
Gain on sale/re-measurement of available for sale financial assets		-	-	43,690	-	-	43,690	-	43,690
Total comprehensive income		-	-	43,690	(2,844,341)	18,558,014	15,757,363	22,246	15,779,609
At 31 March 2016	351,504,795	51,671	124,316,524	7,494,781	(21,147,506)	69,684,455	180,399,925	276,325	180,676,250

The notes are an integral part of these consolidated financial statements.

Consolidated statements of cash flows

(All amounts in £, unless otherwise stated)	Year ended	Year ended
	31 March 2016	31 March 2015
Cash flows from operating activities
Profit before income tax	28,550,131	21,649,451
Adjustments for
Unrealised foreign exchange loss	299,256	(131,219)
Provisions no longer required written back	(1,823,228)	-
Financial costs	16,460,854	9,410,037
Financial income	(806,452)	(1,437,763)
Share based compensation costs	283,571	242,888
Depreciation and amortisation	5,944,912	3,145,119
Changes in working capital
Trade and other receivables	(29,279,858)	(5,835,530)
Inventories	(2,918,712)	5,595,078
Other assets	3,362,875	(1,025,573)
Trade and other payables	4,066,886	(6,002,207)
Other liabilities	(359,581)	(2,474,534)
Cash generated from operations	23,780,654	23,135,747
Taxes paid	(3,973,243)	(3,218,221)
Net cash from operating activities	19,807,411	19,917,526
Cash flows from investing activities
Purchase of property, plant and equipment (including capital advances)	(13,321,443)	(77,111,796)
Interest received	690,548	1,375,174
Dividend received	-	53,543
Movement in restricted cash	(1,308,062)	101,759
Sale of investments1	42,247,590	128,973,581
Purchase of investments1	(43,277,870)	(119,935,336)
Net cash used in investing activities	(14,969,237)	(66,543,075)
Cash flows from financing activities
Proceeds from borrowings (net of costs)	77,159,277	59,998,942
Repayment of borrowings	(74,259,217)	(5,026,019)
Interest paid	(7,874,257)	(9,410,037)
Net cash from financing activities	(4,974,197)	45,562,886
Net increase in cash and cash equivalents	(136,023)	(1,062,663)
Cash and cash equivalents at the beginning of the year	6,805,449	6,636,577
Exchange differences on cash and cash equivalents	484,029	1,231,535
Cash and cash equivalents at the end of the year	7,153,455	6,805,449

¹ Investments maturing during the year have been reinvested upon maturity in similar instruments of short tenor. The figures reported under "Purchase of investments" and "Sale of investments" in the above consolidated cash flow statements are aggregate of such maturities and reinvestments made during the period reported.

Notes to the consolidated financial statements

All amounts in £, unless otherwise stated

1. Nature of operations

OPG Power Ventures Plc ('the Company' or 'OPGPV'), and its subsidiaries (collectively referred to as 'the Group') are primarily engaged in the development, owning, operation and maintenance of private sector power projects in India. The electricity generated from the Group's plants is sold principally to public sector undertakings and heavy industrial companies in India or in the short term market.  The business objective of the group is to focus on the power generation business within India and thereby provide reliable, cost effective power to the industrial consumers and other users under the 'open access' provisions mandated by the Government of India..

2. Statement of compliance

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) and their interpretations as adopted by the European Union (EU) and the provisions of the Isle of Man, Companies Act 2006 applicable to companies reporting under IFRS.

3. General information

OPG Power Ventures Plc, a limited liability corporation, is the Group's ultimate parent Company and is incorporated and domiciled in the Isle of Man.  The address of the Company's registered Office, which is also the principal place of business, is  IOMA House, Hope Street, Douglas, Isle of Man 1M1 1JA.  The Company's equity shares are listed on the Alternative Investment Market (AIM) of the London Stock Exchange.

The Consolidated Financial statements for the year ended 31 March 2016 were approved and authorised for issue by the Board of Directors on 29 July 2016

4. Recent accounting pronouncements

a) Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by the Group

At the date of authorisation of these financial statements, certain new standards, and amendments to existing standards have been published by the IASB that are not yet effective, and have not been adopted early by the Group. Information on those expected to be relevant to the Group's financial statements is provided below.

Management anticipates that all relevant pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective date of the pronouncement. New standards, interpretations and amendments not either adopted or listed below are not expected to have a material impact on the Group's financial statements.

IFRS 9 'Financial Instruments' (2014)

The IASB recently released IFRS 9 'Financial Instruments' (2014), representing the completion of its project to replace IAS 39 'Financial Instruments: Recognition and Measurement'. The new standard introduces extensive changes to IAS 39's guidance on the classification and measurement of financial assets and introduces a new 'expected credit loss' model for the impairment of financial assets. IFRS 9 also provides new guidance on the application of hedge accounting. Management has started to assess the impact of IFRS 9 but is not yet in a position to provide quantified information. At this stage the main areas of expected impact are as follows:

i) the classification and measurement of the Group's financial assets will need to be reviewed based on the new criteria that considers the assets' contractual cash flows and the business model in which they are managed;

ii) an expected credit loss-based impairment will need to be recognised on the Group's trade receivables (see note 16) and investments in debt-type assets currently classified as AFS and HTM (see note 15), unless classified as at fair value through profit or loss in accordance with the new criteria; and

iii) it will no longer be possible to measure equity investments at cost less impairment and all such investments will instead be measured at fair value. Changes in fair value will be presented in profit or loss unless the Group makes an irrevocable designation to present them in other comprehensive income.

IFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018.

IFRS 15 'Revenue from Contracts with Customers'

IFRS 15 presents new requirements for the recognition of revenue, replacing IAS 18 'Revenue', IAS 11 'Construction Contracts', and several revenue-related Interpretations. The new standard establishes a control-based revenue recognition model and provides additional guidance in many areas not covered in detail under existing IFRSs, including how to account for arrangements with multiple performance obligations, variable pricing, customer refund rights, supplier repurchase options, and other common complexities.

IFRS 15 is effective for annual reporting periods beginning on or after 1 January 2018. Management has started to assess the impact of IFRS 15 but is not yet in a position to provide quantified information.

Amendments to IFRS 11 'Joint Arrangements'

These amendments provide guidance on the accounting for acquisitions of interests in joint operations constituting a business. The amendments require all such transactions to be accounted for using the principles on business combinations accounting in IFRS 3 'Business Combinations' and other IFRSs except where those principles conflict with IFRS 11. Acquisitions of interests in joint ventures are not impacted by this new guidance.

The Group's only investment made to date in a joint arrangement (note 5(d)(ii)) is characterised as a joint venture in which the Group has rights to a share of the arrangement's net assets rather than direct rights to underlying assets and obligations for underlying liabilities. Accordingly, if adopted today, these amendments would not have a material impact on the consolidated financial statements.

The amendments are effective for reporting periods beginning on or after 1 January 2016.

IFRS 16 'Leases'

On 13 January 2016, the IASB issued the final version of IFRS 16 'Leases'. IFRS 16 will replace the existing leases standard , IAS 17 'Leases', and related interpretations. The standard sets out the principles for recognition, measurement, presentation and disclosure of leases for both parties to a contract. IFRS 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. Currently, operating lease expenses are charged to the statment of comprehensive income. The standard also contains enhanced disclosure requirements for lessees. IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17.

The effective date for adoption of IFRS 16 is annual periods beginning on or after 1 January 2019, though early adoption is permitted for companies applying IFRS 15 'Revenue from Contracts with Customers'. The Group is yet to evaluate the requirements of IFRS 16 and the impact on the consolidated financial statements.

5. Summary of significant accounting policies

a) Basis of preparation

The consolidated financial statements of the Group have been prepared on a historical cost basis, except for financial assets and liabilities at fair value through profit or loss and available-for-sale financial assets measured at fair value.

The financial statements have been prepared on going concern basis which assumes the Group will have sufficient funds to continue its operational existence for the foreseeable future covering at least 12 months. As the Group has forecast it will be able to meet its debt facility interest and repayment obligations, and that sufficient funds will be available to continue with the projects development, the assumption that these financial statements are prepared on a going concern basis is appropriate.

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

b) Basis of consolidation

The consolidated financial statements include the assets, liabilities, and results of the operation of the Company and all of its subsidiaries as of 31 March 2016. All subsidiaries have a reporting date of 31 March.

A subsidiary is defined as an entity controlled by the Company. The parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. Subsidiaries are fully consolidated from the date of acquisition, being the date on which effective control is acquired by the Group, and continue to be consolidated until the date that such control ceases.

All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.

Non-controlling interest represents the portion of profit or loss and net assets that is not held by the Group and is presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position, separately from parent shareholders' equity. Acquisitions of additional stake or dilution of stake from/ to non-controlling interests/ other venturer in the Group where there is no loss of control are accounted for as an equity transaction, whereby, the difference between the consideration paid or received and the book value of the share of the net assets is recognised in 'other reserve' within statement of changes in equity.

c) Investments in associates and joint ventures

Investments in associates and joint ventures are accounted for using the equity method. The carrying amount of the investment in associates and joint ventures is increased or decreased to recognise the Group's share of the profit or loss and other comprehensive income of the associate and joint venture, adjusted where necessary to ensure consistency with the accounting policies of the Group.

Unrealised gains and losses on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group's interest in those entities. Where unrealised losses are eliminated, the underlying asset is also tested for impairment.

d) List of subsidiaries and joint ventures

Details of the Group's subsidiaries and joint ventures, which are consolidated into the Group's consolidated financial statements, are as follows:

i) Subsidiaries

Subsidiaries	Immediate parent	Country of incorporation	% Voting Right		% Economic interest
			March 2016	March 2015	March 2016	March 2015
Caromia Holdings limited ('CHL')	OPGPV	Cyprus	100	100	100	100
Gita Power and Infrastructure Private Limited, ('GPIPL')	CHL	India	100	100	100	100
OPG Power Generation Private Limited ('OPGPG')	GPIPL	India	76.96	93.94	99	99
OPGS Power Gujarat Private Limited ('OPGG')	GPIPL	India	99.09	62.07	99	99
OPGS Industrial Infrastructure Developers Private Ltd ('OPIID')	OPGG	India	100	100	100	100
OPGS Infrastructure Private Limited ('OPGIPL')	OPGG	India	100	100	100	100

ii) Joint ventures

Joint ventures	Venturer	Country of incorporation	% Voting right		% Economic interest
			March 2016	March 2015	March 2016	March 2015
Padma Shipping Ltd ("PSL")	OPGPV	Hong Kong	50	50	50	50

The Company has entered into a Joint Venture agreement with Noble Chartering Ltd ("Noble"), to secure competitive long term rates for international freight for its imported coal requirements.  Under the Long Term Freight Arrangement (LTFA), the company and Noble are to purchase and own, jointly and equally, two 64,000 MT cargo vessels through a Joint venture company Padma Shipping Ltd, Hong Kong ('Padma').  The company will commit to provide 1.5 million tonnes of coal per annum for carriage by the two vessels for a minimum period of 10 years at competitive long term rates. Pursuant to this agreement, Padma Shipping Ltd has been incorporated in order to execute the joint arrangement for procuring two cargo ships of 64,000 MT capacity from Cosco Shipyard, Hong Kong which are expected to be delivered by 2017.  The company and Noble are to invest approximately US$ 9 million over the period of delivery of the vessels as their equity contribution thereby and during the current period, the company has paid an advance of US$ 782,897 (2015: US$ 2,801,700). Accordingly the joint venture has been reported using equity method as per the requirements of IFRS 11.

e) Foreign currency translation

The functional currency of the Company is the Great Britain Pound Sterling (£). The Cyprus entity is an extension of the parent and pass through investment entity. Accordingly the functional currency of the subsidiary in Cyprus is the Great Britain Pound Sterling. The functional currency of the Company's subsidiaries operating in India, determined based on evaluation of the individual and collective economic factors is Indian Rupees ('₹' or 'INR'). The presentation currency of the Group is the Great Britain Pound (£) as submitted to the AIM counter of the London Stock Exchange where the shares of the Company are listed.

At the reporting date the assets and liabilities of the Group are translated into the presentation currency at the rate of exchange prevailing at the reporting date and the income and expense for each statement of profit or loss are translated at the average exchange rate (unless this average rate is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expense are translated at the rate on the date of the transactions). Exchange differences are charged/ credited to other comprehensive income and recognized in the currency translation reserve in equity.

Transactions in foreign currencies are translated at the foreign exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the Statement of financial position date are translated into functional currency at the foreign exchange rate ruling at that date. Aggregate gains and losses resulting from foreign currencies are included in finance income or costs within the profit or loss.

INR exchange rates used to translate the INR financial information into the presentation currency of Great Britain Pound (£) are the closing rate as at 31 March 2016: 95.09 (2015: 92.76) and the average rate for the year ended 31 March 2016: 98.73 (2015: 98.41).

f) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction will flow to the Group, and revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable in accordance with the relevant agreements, net of discounts, rebates and other applicable taxes and duties.

Sale of electricity

Revenue from the sale of electricity is recognised when earned on the basis of contractual arrangement with the customers and reflects the value of units supplied including an estimated value of units supplied to the customers between the date of their last meter reading and the reporting date.

Interest and dividend

Revenue from interest is recognised as interest accrued (using the effective interest rate method). Revenue from dividends is recognised when the right to receive the payment is established.

g) Operating expenses

Operating expenses are recognised in the statement of profit or loss upon utilisation of the service or as incurred.

h) Taxes

Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other comprehensive income or directly in equity.

Current income tax assets and/or liabilities comprise those obligations to, or claims from, taxation authorities relating to the current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the financial statements.

Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with investments in subsidiaries is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future.

Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted by the end of the reporting period. Deferred tax liabilities are always provided for in full.

Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against future taxable income. Deferred tax assets and liabilities are offset only when the Group has a right and the intention to set off current tax assets and liabilities from the same taxation authority. Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or loss, except where they relate to items that are recognised in other comprehensive income or directly in equity, in which case the related deferred tax is also recognised in other comprehensive income or equity, respectively.

i) Financial assets

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of any financial instrument and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value through profit or loss which are measured initially at fair value.

Financial assets are de-recognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is de-recognised when it is extinguished, discharged, cancelled or expires.

Financial assets are classified into the following categories upon initial recognition:

i) loans and receivables

ii) available-for-sale financial assets.

The category determines subsequent measurement and whether any resulting income and expense is recognised in profit or loss or in other comprehensive income.

Loans and receivables:

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets except for assets having maturities greater than 12 months after the reporting date. These are classified as non-current assets. After initial recognition these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables fall into this category of financial instruments.

Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default. Receivables that are not considered to be individually impaired are reviewed for impairment in groups, which are determined by reference to the industry and region of a counterparty and other shared credit risk characteristics. The impairment loss estimate is then based on recent historical counterparty default rates for each identified group.

Available-for-sale financial assets:

Available-for-sale financial assets are non-derivative financial assets that are either designated to this category or do not qualify for inclusion in any of the other categories of financial assets. The Group's available-for-sale financial assets include Mutual funds and equity instruments. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the reporting date. Available-for-sale financial assets are measured at fair value. Gains and losses are recognised in other comprehensive income and reported within the other reserves in equity, except for impairment losses and foreign exchange differences on monetary assets, which are recognised in profit or loss. When the asset is disposed of or is determined to be impaired the cumulative gain or loss recognised in other comprehensive income is reclassified from the equity reserve to profit or loss and presented as a reclassification adjustment within other comprehensive income. The fair value of the mutual fund units is based on the net asset value publicly made available by the respective mutual fund manager.

Reversals of impairment losses are recognized in other comprehensive income, except for financial assets that are debt securities which are recognised in profit or loss only if the reversal can be objectively related to an event occurring after the impairment loss was recognised.

j) Financial liabilities

The Group's financial liabilities include borrowings and trade and other payables. Financial liabilities are measured subsequently at amortised cost using the effective interest method.

All interest-related charges and, if applicable, changes in an instrument's fair value that are reported in profit or loss are included within 'finance costs' or 'finance income'.

k) Fair value of financial instruments

The fair value of financial instruments that are actively traded in organised financial markets is determined by reference to quoted market prices at the close of business on the Statement of financial position date. For financial instruments where there is no active market, fair value is determined using valuation techniques. Such techniques may include using recent arm's length market transactions; reference to the current fair value of another instrument that is substantially the same; discounted cash flow analysis or other valuation models.

l) Property, plant and equipment

Property, plant and equipment are stated at historical cost, less accumulated depreciation and any impairment in value. Historical cost includes expenditure that is directly attributable to property plant & equipment such as employee cost, borrowing costs for long-term construction projects etc, if recognition criteria are met.  Likewise, when a major inspection is performed, its costs are recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repairs and maintenance costs are recognised in the profit or loss as incurred.

Land is not depreciated. Depreciation on all other assets is computed on straight-line basis over the useful life of the asset based on management's estimate as follows:

Nature of asset	Useful life (years)
Buildings	40
Power stations	40
Other plant and equipment	3-10
Vehicles	5-11

Assets in the course of construction are stated at cost and not depreciated until commissioned.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the profit or loss in the year the asset is derecognised.

The assets residual values, useful lives and methods of depreciation of the assets are reviewed at each financial year end, and adjusted prospectively if appropriate.

m) Intangible assets

Acquired software

Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and install the specific software.

Subsequent measurement

All intangible assets, including software are accounted for using the cost model whereby capitalised costs are amortised on a straight-line basis over their estimated useful lives, as these assets are considered finite. Residual values and useful lives are reviewed at each reporting date. The useful life of software is estimated as 4 years.

n) Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at inception date and whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset.

Group as a lessee

Contracts to lease assets are classified as finance leases if they transfer substantially all the risks and rewards of ownership of the asset to the group. Leases where the Group does not acquire substantially all the risks and benefits of ownership of the asset are classified as operating leases.

Operating lease payments are recognised as an expense in the profit or loss on a straight line basis over the lease term. Lease of land is classified separately and is amortised over the period of the lease.

o) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets. Interest income earned on the temporary investment of specific borrowing pending its expenditure on qualifying assets is deducted from the costs of these assets.

Gains and losses on extinguishment of liability, including those arising from substantial modification from terms of loans are not treated as borrowing costs and are charged to profit or loss.

All other borrowing costs including transaction costs are recognized in the statement of profit or loss in the period in which they are incurred, the amount being determined using the effective interest rate method.

p) Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's (CGU) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset's or cash-generating unit's recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the profit or loss.

q) Cash and cash equivalents

Cash and cash equivalents in the Statement of financial position includes cash in hand and at bank and short-term deposits with original maturity period of 3 months or less.

For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash in hand and at bank and short-term deposits. Restricted cash represents deposits which are subject to a fixed charge and held as security for specific borrowings and are not included in cash and cash equivalents.

r) Inventories

Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition is accounted for based on weighted average price. Net realisable value is the estimated selling price in the ordinary course of business, less estimated selling expenses.

s) Earnings per share

The earnings considered in ascertaining the Group's earnings per share (EPS) comprise the net profit for the year attributable to ordinary equity holders of the parent. The number of shares used for computing the basic EPS is the weighted average number of shares outstanding during the year. For the purpose of calculating diluted earnings per share the net profit or loss for the period attributable to equity share holders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity share.

t) Other provisions and contingent liabilities

Provisions are recognised when present obligations as a result of a past event will probably lead to an outflow of economic resources from the Group and amounts can be estimated reliably. Timing or amount of the outflow may still be uncertain. A present obligation arises from the presence of a legal or constructive obligation that has resulted from past events. Restructuring provisions are recognised only if a detailed formal plan for the restructuring has been developed and implemented, or management has at least announced the plan's main features to those affected by it. Provisions are not recognised for future operating losses.

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Provisions are discounted to their present values, where the time value of money is material.

Any reimbursement that the Group can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision. All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

In those cases where the possible outflow of economic resources as a result of present obligations is considered improbable or remote, no liability is recognised, unless it was assumed in the course of a business combination. In a business combination, contingent liabilities are recognised on the acquisition date when there is a present obligation that arises from past events and the fair value can be measured reliably, even if the outflow of economic resources is not probable. They are subsequently measured at the higher amount of a comparable provision as described above and the amount recognised on the acquisition date, less any amortisation.

u) Share based payments

The Group operates equity-settled share-based remuneration plans for its employees. None of the Group's plans feature any options for a cash settlement.

All goods and services received in exchange for the grant of any share-based payment are measured at their fair values. Where employees are rewarded using share-based payments, the fair values of employees' services is determined indirectly by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date and excludes the impact of non-market vesting conditions (for example profitability and sales growth targets and performance conditions).

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

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

v) Employee benefits

Gratuity

In accordance with applicable Indian laws, the Group provides for gratuity, a defined benefit retirement plan ("the Gratuity Plan") covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment.

Liabilities with regard to the gratuity plan are determined by actuarial valuation, performed by an independent actuary, at each Statement of financial position date using the projected unit credit method.

The Group recognises the net obligation of a defined benefit plan in its statement of financial position as an asset or liability, respectively in accordance with IAS 19, Employee benefits. The discount rate is based on the Government securities yield. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to profit or loss in the statement of comprehensive income in the period in which they arise.

Employees Benefit Trust

Effective during the previous year, the Group has established an Employees Benefit Trust (hereinafter 'the EBT') for investments in the Company's shares for employee benefit schemes. IOMA Fiduciary in the Isle of Man have been appointed as Trustees of the EBT with full discretion invested in the Trustee, independent of the company, in the matter of share purchases. As at present, no investments have been made by the Trustee nor any funds advanced by the Company to the EBT. The Company is yet to formulate any employee benefit schemes or to make awards thereunder.

w) Business combinations

Business combinations arising from transfers of interests in entities that are under the control of the shareholder that controls the Group are accounted for as if the acquisition had occurred at the beginning of the earliest comparative period presented or, if later, at the date that common control was established using pooling of interest method. The assets and liabilities acquired are recognised at the carrying amounts recognised previously in the Group controlling shareholder's consolidated financial statements. The components of equity of the acquired entities are added to the same components within Group equity. Any excess consideration paid is directly recognised in equity.

6. Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with IFRS requires management to make certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The principal accounting policies adopted by the Group in the consolidated financial statements are as set out above. The application of a number of these policies requires the Group to use a variety of estimation techniques and apply judgment to best reflect the substance of underlying transactions.

The Group has determined that a number of its accounting policies can be considered significant, in terms of the management judgment that has been required to determine the various assumptions underpinning their application in the consolidated financial statements presented which, under different conditions, could lead to material differences in these statements. The actual results may differ from the judgments, estimates and assumptions made by the management and will seldom equal the estimated results.

a) Judgements

The following are significant management judgments in applying the accounting policies of the Group that have the most significant effect on the financial statements.

Deferred tax assets

The assessment of the probability of future taxable income in which deferred tax assets can be utilised is based on the Group's latest approved budget forecast, which is adjusted for significant non-taxable income and expenses and specific limits to the use of any unused tax loss or credit. The tax rules in India in which the Group operates are also carefully taken into consideration. If a positive forecast of taxable income indicates the probable use of a deferred tax asset, especially when it can be utilised without a time limit, that deferred tax asset is usually recognised in full. The recognition of deferred tax assets that are subject to certain legal or economic limits or uncertainties is assessed individually by management based on the specific facts and circumstances. (refer note 12).

Application of lease accounting

Significant judgment is required to apply lease accounting rules under IFRIC 4 Determining whether an arrangement contains a Lease and IAS 17 Leases. In assessing the applicability to arrangements entered into by the Group, management has exercised judgment to evaluate customer's right to use the underlying assets, substance of the transaction including legally enforced arrangements and other significant terms and conditions of the arrangement to conclude whether the arrangements meet the criteria under IFRIC 4.

b) Estimates and uncertainties

The key assumptions concerning the future and other key sources of estimation uncertainty at the Statement of financial position date, that have a significant risk of causing  material adjustments to the carrying amounts of assets and liabilities within the next financial year are discussed below:

i) Recoverability of deferred tax assets: The recognition of deferred tax assets requires assessment of future taxable profit. (see note 5(h)).

ii) Estimation of fair value of financial assets and financial liabilities: While preparing the financial statements the Group makes estimates and assumptions that affect the reported amount of financial assets and financial liabilities.

Available for sale financial assets:

Management applies valuation techniques to determine the fair value of available for sale financial assets where active market quotes are not available. This requires management to develop estimates and assumptions based on market inputs, using observable data that market participants would use in pricing the asset. Where such data is not observable, management uses its best estimate. Estimated fair values of the asset may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date.

Other financial liabilities:

Borrowings held by the Group are measured at amortised cost. Further, liabilities associated with financial guarantee contracts in the Company financial statements are initially measured at fair value and re-measured at each Statement of financial position date. (see note 5(j) and note 28); and

Impairment tests:

In assessing impairment, management estimates the recoverable amount of each asset or cash-generating units based on expected future cash flows and use an interest rate for discounting them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate;

iii) Useful life of depreciable assets: Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets.

7. Segment reporting

The Group has adopted the "management approach" in identifying the operating segments as outlined in IFRS 8 - Operating segments. Segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker evaluates the Group's performance and allocates resources based on an analysis of various performance indicators at operating segment level. Accordingly, there is only a single operating segment "generation and sale of electricity". The accounting policies used by the Group for segment reporting are the same as those used for consolidated financial statements. There are no geographical segments as all revenues arise from India.

Revenue on account of sale of power to one party amounts to £ 53,345,178 (2015: £82,182,445)

8. Depreciation, costs of inventories and employee benefit expenses included in the consolidated statements of comprehensive income

a) Depreciation and cost of fuel

	31 March 2016	31 March 2015
Included in cost of revenue:
Cost of fuel consumed	63,797,398	55,187,812
Depreciation	5,294,947	2,772,529
Other direct costs	2,802,794	3,268,017
Total	71,895,139	61,228,358

Depreciation included in general and administrative expenses amount to £649,965 (2015: £372,590)

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

	31 March 2016	31 March 2015
Salaries and wages	4,246,864	2,970,704
Employee benefit costs	714,113	855,207
Employee stock option	283,571	242,888
Total	5,244,548	4,068,799

c) Auditor's remuneration for audit services amounting to £ 48,663 (2015: £ 45,000) is included in general and administrative expenses.

d) Foreign exchange movements (realised and unrealised) included in the general and administrative expenses is as follows:

	31 March 2016	31 March 2015
Foreign exchange realized- (loss)	(533,976)	(444,409)
Foreign exchange unrealized- (loss)/gain	(299,256)	131,219
Total	(833,232)	(313,190)

9. Other income

Other income is comprised of:

	31 March 2016	31 March 2015
Provisions no longer required written back	1,823,228	-
Sale of coal	2,335,834	-
Sale of fly ash	57,242	40,583
Others	227,964	86,685
Total	4,444,268	127,268

10. Finance costs

Finance costs are comprised of:

	31 March 2016	31 March 2015
Interest expenses on borrowings	15,793,916	8,735,529
Other finance costs	918,253	674,508
Total	16,712,169	9,410,037

11. Finance income

Finance income is comprised of:

	31 March 2016	31 March 2015
Interest income
Bank deposits	576,421	634,619
Dividend income	-	53,544
Profit on disposal of financial instruments*	230,032	749,600
Total	806,453	1,437,763

*Financial instruments represent the mutual funds held during the year.

12. Tax expenses

Tax Reconciliation

Reconciliation between tax expense and the product of accounting profit multiplied by India's domestic tax rate for the years ended 31 March 2016 and 2015 is as follows:

	31 March 2016	31 March 2015
Accounting profit before taxes	28,550,131	21,649,451
Enacted tax rates	34.61%	33.99%
Tax on profit at enacted tax rate	9,880,629	7,358,648
Differences on account MAT Rate	(2,442,698)	(3,210,347)
Items taxed at zero rate	-	(1,572,734)
Changes in unrecognised deferred tax assets	1,965,073	-
Others	569,622	1,785,202
Actual tax expense	9,972,626	4,360,769
	31 March 2016	31 March 2015
Current tax	3,993,441	2,848,045
Deferred tax	5,979,185	1,512,724
Tax expense reported in the statement of comprehensive income	9,972,626	4,360,769

The Company is subject to Isle of Man corporate tax at the standard rate of zero percent. As such, the Company's tax liability is zero. Additionally, Isle of Man does not levy tax on capital gains. However, considering that the Group's operations are entirely based in India, the effective tax rate of the Group has been computed based on the current tax rates prevailing in India. Further, a substantial portion of the profits of the Group's India operations are exempt from Indian income taxes being profits attributable to generation of power in India. Under the tax holiday the taxpayer can utilise an exemption from income taxes for a period of any ten consecutive years out of a total of fifteen consecutive years from the date of commencement of the operations.

The Group is subject to the provisions of Minimum Alternate Tax ('MAT') under the Indian Income taxes for the year ended 31 March 2016 and 2015. Accordingly, the Group calculated the tax liability for current taxes in India after considering MAT.

The Group has carried forward credit in respect of MAT tax liability paid to the extent it is probable that future taxable profit will be available against which such tax credit can be utilized.

Deferred income tax for the Group at 31 March 2016 and 2015 relates to the following:

	31 March 2016	31 March 2015
Deferred income tax assets
Lease transactions and others	-	67,360
Provisions	-	749,677
	-	817,037
Deferred income tax liabilities
Property, plant and equipment	9,287,307	4,024,156
Mark to market on available-for-sale financial assets	23,122	(1,268)
	9,310,429	4,022,888
Deferred income tax liabilities, net	9,310,429	3,205,851

Movement in temporary differences during the year

Particulars	As at  01 April 2015	Recognised in income statement	Recognised in other comprehensive income	Translation adjustment	As at 31 March 2016
Property, plant and equipment and others	(4,024,156)	(5,162,148)	-	(101,003)	(9,287,307)
Lease transactions	67,360	(67,360)	-	-	-
Provisions	749,677	(749,677)	-	-	-
Mark to market gain / (loss) on available for sale financial assets	1,268	-	(24,390)	-	(23,122)
	(3,205,851)	(5,979,185)	(24,390)	(101,003)	(9,310,429)
Particulars	As at  01 April 2014	Recognised in income statement	Recognised in other comprehensive income	Translation adjustment	As at 31 March 2015
Property, plant and equipment and others	(2,251,032)	(1,518,906)	-	(254,218)	(4,024,156)
Lease transactions	56,728	6,182	-	4,450	67,360
Provisions	699,442	-	-	50,235	749,677
Mark to market gain / (loss) on available for sale financial assets	(14,991)	-	16,259	-	1,268
	(1,509,853)	(1,512,724)	16,259	(199,533)	(3,205,851)

In assessing the recoverability of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. The amount of the deferred income tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.

Shareholders resident outside the Isle of Man will not suffer any income tax in the Isle of Man on any income distributions to them. Further, dividends are not taxable in India in the hands of the recipient. However, the Group will be subject to a "dividend distribution tax" currently at the rate of 15% (plus applicable surcharge and education cess) on the total amount distributed as dividend.

As at 31 March 2016 and 31 March 2015, there was no recognised deferred tax liability for taxes that would be payable on the unremitted earnings of certain of the Group's subsidiaries, as the Group has determined that undistributed profits of its subsidiaries will not be distributed in the foreseeable future.

13. Intangible assets

	Acquired software licences
Cost
At 1 April 2014	529,415
Additions	171,860
Exchange adjustments	48,494
At 31 March 2015	749,769
Additions	39,216
Exchange adjustments	(16,858)
At 31 March 2016	772,127
Accumulated depreciation and impairment
At 1 April 2014	54,756
Charge for the year	23,949
Exchange adjustments	5,391
At 31 March 2015	84,096
Charge for the year	313,589
Exchange adjustments	9,938
At 31 March 2016	407,623
Net book value
At 31 March 2016	364,504
At 31 March 2015	665,673

14. Property, plant and equipment

The property, plant and equipment comprises of:

	Land & Buildings	Power stations	Other plant & equipment	Vehicles	Asset under construction	Total
Cost
At 1 April 2014	12,140,751	109,110,905	588,065	660,699	162,573,007	285,073,427
Additions	283,011	304,404	124,166	45,759	122,319,301	123,076,641
Exchange adjustments	561,251	8,102,195	(716)	(5,140)	6,797,276	15,454,866
At 31 March 2015	12,985,013	117,517,504	711,515	701,318	291,689,584	423,604,934
Additions	138,719	309,514	69,298	58,980	17,847,939	18,424,450
Deletions	(25,323)	-	(370)	-	(2,608,174)	(2,633,867)
Transfers on capitalisation	-	282,423,229	-	-	(282,423,229)	-
Exchange adjustments	(313,595)	7,557,605	(14,784)	(14,915)	(17,029,535)	(9,815,224)
At 31 March 2016	12,784,814	407,807,852	765,659	745,383	7,476,585	429,580,293
Accumulated depreciation and impairment
At 1 April 2014	55,950	4,949,021	228,542	218,631	-	5,452,144
Charge for the year	34,644	2,772,529	192,985	121,012	-	3,121,170
Exchange adjustments	5,582	426,874	25,124	21,164	-	478,744
At 31 March 2015	96,176	8,148,424	446,651	360,807	-	9,052,058
Charge for the year	14,536	5,294,947	223,959	97,881	-	5,631,323
Exchange adjustments	(1,799)	3,058	(5,425)	(5,088)	-	(9,254)
At 31 March 2016	108,913	13,446,429	665,185	453,600	-	14,674,127
Net book value
At 31 March 2016	12,675,901	394,361,423	100,474	291,783	7,476,585	414,906,166
At 31 March 2015	12,888,837	109,369,080	264,864	340,511	291,689,584	414,552,876

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

	31 March 2016	31 March 2015
Freehold land	12,545,682	12,699,397
Buildings	130,219	189,440
	12,675,901	12,888,837

Property, plant and equipment with a carrying amount of £ 414,433,996 (2015: £ 413,947,500) is subject to security restrictions (refer note 21).

An amount of £ 17,575,016 (2015: £ 19,129,734) pertaining to interest on borrowings made specifically for the qualifying assets was capitalised as the funds were deployed for the construction of qualifying assets.

15. Investments and other assets

	31 March 2016	31 March 2015
A. Current
Available for sale financial assets	2,364,269	1,233,620
Capital advances	3,516,716	11,747,387
Loans and receivables
- Advance to suppliers	5,651,654	8,991,147
- Others	1,832,604	1,935,798
Total	13,365,243	23,907,952
B. Non-current
Investment in joint venture*	2,236,804	1,681,058
Prepayments	622,206	637,848
Loans and  receivables
- Lease deposits	92,581	94,908
- Other advances	-	340,579
Total	2,951,591	2,754,393

* Represents investment made in Padma Shipping Limited. The venturers are entitled for a share in the net assets of Padma Shipping Limited which is a separate legal entity. Accordingly, the Company has used equity method of accounting for the same.

Available-for-sale investments are comprised of:

Quoted short-term mutual fund units

The fair value of the mutual fund instruments are determined by reference to published data. These mutual fund investments are redeemable on demand.

Investments in other assets

The investments in OPG E and OPG RE, (fair value of retained non-controlling Investments) have been fairly valued and the share of the group has been determined and disclosed as available for sale classified as non-current. . There is no change in the valuation technique to those adopted in the previous year. The fair value of OPGE and OPG RE is determined using discounted cash flow approach. Significant inputs into the model are based on management's assumption of the expected cash flows up to 31 March 2024 and a discount rate of 17%. These investments are fully impaired as at 31 March 2016.

Loans and receivables (current)

Advances to suppliers include the amounts paid as advance for supply of fuel. Capital advances comprise of payments made to contractors for construction of assets and advances paid for purchase of capital equipment. The management expects to realise these in the next one year.

16. Trade and other receivables

	31 March 2016	31 March 2015
Current
Trade receivables	56,687,426	27,964,156
Unbilled revenues	1,045,219	314,803
Other receivables	108,072	349,742
	57,840,717	28,628,701

Trade receivables are generally due within 30 days terms and are therefore short term and the carrying values are considered a reasonable approximation of fair value.  An amount of £57,840,717 (2015: £28,628,701) has been pledged as security for borrowings. As at 31 March 2016, trade receivables of £Nil (2015: £563,827) were collectively impaired and provided for. Trade receivables that are neither past due nor impaired represents billings for the month of March.

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

Year	Total	Neither past due nor impaired			Past due but not impaired
					Within 90 days	90 to 180 days	Over 180 days
2016	56,687,426		15,743,623		9,721,710	5,725,198	25,496,895
2015	27,964,156		6,394,665		13,700,217	7,869,274	-

Subsequent to the reporting date, the Company has received £15,715,917 from Tamil Nadu Generation and Distribution Corporation (TANGEDCO) towards the sale made during the months of May 2015 to July 2015 under short term sale agreement and for October 2015 to March 2016 under 15 year variable tariff LTOA contract.

The movement in the provision for trade receivables is as follows:

Year	Opening balance	Provision for the year	Write off/Reversal	Closing balance
2016	563,827	-	(563,827)	-
2015	527,883	-	35,944	563,827

The creation of provision for impaired receivables has been included in general and administrative expenses in the consolidated statement of comprehensive income. Amounts charged to the allowance account are generally written off, when there is no expectation of recovering additional cash. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The group does not hold any collateral as security.

17. Inventories

	31 March 2016	31 March 2015
Coal and fuel	9,477,390	6,860,904
Stores and spares	1,137,500	1,028,757
Total	10,614,890	7,889,661

The entire amount of £10,614,890 (2015: £7,889,661) has been pledged as security for borrowings (refer note 21).

18. Cash and cash equivalents

Cash and short term deposits comprise of the following:

	31 March 2016	31 March 2015
Cash at banks and on hand	6,169,046	6,200,830
Short-term deposits	984,409	604,619
Total	7,153,455	6,805,449

Short-term deposits are placed for varying periods, depending on the immediate cash requirements of the Group. They are recoverable on demand. Restricted cash represents deposits maturing between three to twelve months amounting to £7,294,778 (previous year £5,303,217) and maturing after twelve months amounting to £1,940,600 (previous year £2,784,990) which have been pledged by the Group in order to secure borrowing limits with banks. (Refer note 21).

19. Issued share capital

Share capital

The Company presently has only one class of ordinary shares. For all matters submitted to vote in the shareholders meeting, every holder of ordinary shares, as reflected in the records of the Group on the date of the shareholders' meeting, has one vote in respect of each share held. All shares are equally eligible to receive dividends and the repayment of capital in the event of liquidation of the Group.

The Company has an authorized and issued share capital of 351,504,795 equity shares (2015: 351,504,795) at par value of £ 0.000147 (2014: £ 0.000147) per share amounting to £ 51,671 (2015: £ 51,671) in total.

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.

Foreign currency translation reserve is used to record the exchange differences arising from the translation of the financial statements of the foreign subsidiaries.

Other reserve represents the difference between the consideration paid and the adjustment to net assets on change of controlling interest, without change in control, other reserves also includes any costs related with share options granted and gain/losses on re-measurement of Available for sale financial assets.

Retained earnings include all current and prior period results as disclosed in the statement of comprehensive income less dividend distribution.

20. Share based payments

The board has granted share options to directors and nominees of directors which are limited to 10 percent of the group's share capital. Once granted, the share must be exercised within ten years of the date of grant otherwise the options would lapse.

The vesting conditions are as follows:

· The 300 MW power plant of Kutch in the state of Gujarat must have been in commercial operation for three months.

· The Closing share price being at least £1.00 for consecutive three business days.

The related expense has been amortised over the remaining estimated vesting period and an expense amounting to £283,571 (2015: £242,888) was recognised in the profit or loss with a corresponding credit to other reserves.

Movement in the number of share options outstanding are as follows:

	31 March 2016	31 March 2015
At 1 April	22,524,234	22,524,234
Granted	1,000,000	-
At 31 March	23,524,234	22,524,234

The fair value of options granted and the assumptions used under the Black-Scholes option pricing model are as follows:

	Granted in
	2015	2011
Weighted average fair value of options granted	0.37	0.28
Exercise price	0.60	0.60
Weighted average share price	0.78	0.66
Volatility (%)	40.95%	31.34%
Annual risk free rate (%)	1.26%	3.00%
Expected option life (years)	5.36	4.96

21. Borrowings

The borrowings comprise of the following:

	Interest rate (range %)	Final maturity	31 March 2016	31 March 2015
Term loans at amortized cost	10.80-15.17	March - 2025	263,582,838	258,694,310
Other borrowings		March - 2015	-	2,093,877
Total			263,582,838	260,788,187

Total debt of £263,582,838 (2015: £ 260,788,187) is secured as follows:

> The term loans taken by the Group are fully secured by the property, plant, assets under construction and other current assets of subsidiaries which have availed such loans. All the loans are personally guaranteed by a director.

> The cash credits and working capital arrangements availed by the Group are secured against hypothecation of current assets and in certain cases by deposits and margin money is provided as collateral.

> Other borrowings are fully secured by hypothecation of current assets and in certain cases by margin money deposits and other fixed deposits of the respective entities availing the facility.

Term loans contain certain covenants stipulated by the facility providers and primarily require the Group to maintain specified levels of certain financial metrics and operating results. The terms of the other borrowings arrangements also contain certain covenants primarily requiring the Group to maintain certain financial metrics. As of 31 March 2016, the Group has met all the relevant covenants.

During the year instalment of loan amounting to £2,748,080 relating to Unit I, II & III was prepaid up to June 2016 and £3,885,656 relating to Unit IV was prepaid up to September 2016.

The fair value of borrowings at 31 March 2016 was £263,582,838 (2015: £260,788,187). The fair values have been calculated by discounting cash flows at prevailing interest rates.

The borrowings are reconciled to the statement of financial position as follows:

	31 March 2016	31 March 2015
Current liabilities
Amounts falling due within one year	21,023,963	22,851,498
Non-current liabilities
Amounts falling due after 1 year but not more than 5 years	123,362,705	220,969,216
Amounts falling due in more than five years	119,196,170	16,967,473
Total non-current	242,558,875	237,936,689
Total	263,582,838	260,788,187

22. Trade and other payables

	31 March 2016	31 March 2015
Current
Trade payables	34,645,009	21,161,525
Creditors for capital goods	2,016,958	11,080,339
Other payables	18,228,915	15,597,740
Total	54,890,882	47,839,604
Non-current
Retention money	8,296,003	16,670,794
Other payables	167,046	124,285
Total	8,463,049	16,795,079

With the exception of retention money and certain other trade payables, all amounts are short term. Trade payables are non-interest bearing and are normally settled on 45 days terms. Creditors for capital goods are non-interest bearing and are usually settled within a year. Other payables include accruals for gratuity and other accruals for expenses.

23. Related party transactions

Where control exists:

Name of the party	Nature of relationship
Gita Investments Limited	Ultimate parent
Caromia Holdings limited	Subsidiary
OPG Power Generation Private Limited	Subsidiary
OPGS Power Gujarat Private Limited	Subsidiary
Gita Power and Infrastructure Private Limited	Subsidiary
OPGS Industrial Infrastructure Developers Private Ltd	Subsidiary
OPGS Infrastructure Private Limited	Subsidiary

Key Management Personnel:

Name of the party	Nature of relationship
Arvind Gupta	Chief Executive Officer
V. Narayan Swami	Chief Financial Officer
M. C. Gupta	Chairman
Martin Gatto	Director
Ravi Gupta	Director
Patrick Michael Grasby	Director

Related parties with whom the group had transactions during the period

Name of the party	Nature of relationship
Chennai Ferrous Limited	Entity in which Key Management personnel has Control/Significant Influence
Kanishk Steel Industries Limited	Entity in which Key Management personnel has Control/Significant Influence
Padma Shipping Limited	Entity in which Key Management personnel has Control/Significant Influence
Avantika Gupta	Relative of Key Management Personnel

Summary of transactions with related parties

Name of the party	31 March 2016	31 March 2015
Kanishk Steel Industries Limited
a) Class A shares allotted	1,052	-
b) Share application money received	-	7,526
Padma Shipping Limited
a) Investment	561,288	1,681,058
Chennai Ferrous Industries Ltd
a) Sale of coal	-	399,470
Avantika Gupta
a) Remuneration	60,774	60,971

Summary of balance with related parties

Name of the party	31 March 2016	31 March 2015
Padma Shipping
a) Investments	2,242,346	1,681,058

Outstanding balances at the year-end are unsecured. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2016, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (2015: £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.

24. Earnings per share

Both the basic and diluted earnings per share have been calculated using the profit attributable to shareholders of the parent company as the numerator (no adjustments to profit were necessary for the year ended March 2016 or 2015).

The weighted average number of shares for the purposes of diluted earnings per share can be reconciled to the weighted average number of ordinary shares used in the calculation of basic earnings per share (for the group and the company) as follows:

Particulars	31 March 2016	31 March 2015
Weighted average number of shares used in basic earnings per share	351,504,795	351,504,795
Shares deemed to be issued for no consideration in respect of share based payments	10,949,551	8,400,981
Weighted average number of shares used in diluted earnings per share	362,454,346	359,905,776

25. Directors remuneration

Name of directors	31 March 2016	31 March 2015
Arvind Gupta	1,350,000	1,200,000
V Narayan Swami	97,239	97,554
Martin Gatto	45,000	45,000
Mike Grasby	45,000	45,000
MC Gupta	45,000	45,000
Ravi Gupta	45,000	45,000
Total	1,627,239	1,477,554

The above remuneration is in the nature of short-term employee benefits. As the future liability for gratuity and compensated absences is provided on actuarial basis for the companies in the Group, the amount pertaining to the directors is not individually ascertainable and therefore not included above.

26. Commitments and contingencies

Operating lease commitments

The Group leases land under operating leases. The leases typically run for a period of 15 to 30 years, with an option to renew the lease after that date. None of the leases includes contingent rentals.

Non-cancellable operating lease rentals are payable as follows:

	31 March 2016	31 March 2015
Not later than one year	29,035	29,764
Later than one year and not later than five years	116,140	119,056
Later than five years	435,525	474,105
Total	580,700	622,925

During the year ended 31 March 2016, £27,965 (2015: £28,054) was recognised as an expense in the statement of comprehensive income in respect of operating leases.

Capital commitments

During the year ended 31 March 2016, the Group entered into a contract to purchase property, plant and equipment for £Nil (2015: £3,256,530) for its power generation projects under development. In respect of its interest in joint ventures the Group is committed to incur capital expenditure of £15,834,660 (2015: £16,232,097) of their share of interest.

Contingent liabilities

OPGS had entered into a Bulk Power Transmission Agreement (BPTA) with Gujarat Energy Transmission Corporation Limited (GETCO) for availing the transmission network for power generated from its plants. Pursuant to the BPTA, GETCO has raised demand for transmission charges of £9,889,766 for the period from April 2013 to December 2015. OPGS has challenged the aforesaid demand in the Hon'ble Supreme Court in India. Based on a legal opinion management believes that they have good grounds for favorable disposal of the case and accordingly no adjustment to the financial statements is considered necessary.

Guarantees and Letter of credit

The group has provided bank guarantees and letter of credits (LC) to customers and vendors in the normal course of business. The LC provided as at 31 March 2016: £25,462,779 (2015: £40,347,660) and Bank Guarantee as at 31 March 2016: £12,223,606 (2015: £10,248,750) are treated as contingent liabilities until such time it becomes probable that the Company will be required to make a payment under the guarantee.

27. Financial risk management objectives and policies

The Group's principal financial liabilities, comprises of loans and borrowings, trade and other payables, and other current liabilities. The main purpose of these financial liabilities is to raise finance for the Group's operations. The Group has loans and receivables, trade and other receivables, and cash and short-term deposits that arise directly from its operations. The Group also hold investments designated at available-for-sale categories.

The Group is exposed to market risk, credit risk and liquidity risk.

The Group's senior management oversees the management of these risks. The Group's senior management advises on financial risks and the appropriate financial risk governance framework for the Group.

The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below:

Market risk

Market risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: interest rate risk, currency risk and other price risk, such as equity risk. Financial instruments affected by market risk include loans and borrowings, deposits, available-for-sale investments.

The sensitivity analyses in the following sections relate to the position as at 31 March 2016 and 31 March 2015.

The following assumptions have been made in calculating the sensitivity analyses:

(i) The sensitivity of the statement of comprehensive income is the effect of the assumed changes in interest rates on the net interest income for one year, based on the average rate of borrowings held during the year ended 31 March 2016, all other variables being held constant. These changes are considered to be reasonably possible based on observation of current market conditions.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group's exposure to the risk of changes in market interest rates relates primarily to the Group's long-term debt obligations with average interest rates.

At 31 March 2016 and 31 March 2015, the Group had no interest rate derivatives.

The calculations are based on a change in the average market interest rate for each period, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant. If interest rates increase or decrease by 100 basis points with all other variables being constant, the Group's profit after tax for the year ended 31 March 2016 would decrease or increase by £2,692,161 (2015: £2,047,577).

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rate. The Group's presentation currency is the Great Britain £. A majority of our assets are located in India where the Indian rupee is the functional currency for our subsidiaries. Currency exposures also exist in the nature of capital expenditure and services denominated in currencies other than the Indian rupee.

The Group's exposure to foreign currency arises where a Group company holds monetary assets and liabilities denominated in a currency different to the functional currency of that entity:

	As at 31 March 2016		As at 31 March 2015
Currency	Financial assets	Financial liabilities	Financial assets	Financial liabilities
United States Dollar (USD)	-	21,487,313	-	15,590,116

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

	As at 31 March 2016		As at 31 March 2015
Currency	Closing Rate	Effect of 10% strengthening of GBP on net earnings	Closing Rate	Effect of 10% strengthening of GBP on net earnings
United States Dollar (USD)	66.25	2,549,030	62.53	1,546,417

The impact on total equity is the same as the impact on net earnings as disclosed above.

Credit risk analysis

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily for trade and other receivables) and from its financing activities, including short-term deposits with banks and financial institutions, and other financial assets.

The maximum exposure for credit risk at the reporting date is the carrying value of each class of financial assets amounting to £60,204,986 (2015: £37,889,350).

The Group has exposure to credit risk from accounts receivable balances on sale of electricity. The operating entities of the Group has entered into short term agreements with transmission companies incorporated by the Indian state government (TANGEDCO) to sell the electricity generated Therefore the group is committed, in the short term, to sell power to these customers and the potential risk of default is considered low. For other customers, the Group ensures concentration of credit does not significantly impair the financial assets since the customers to whom the exposure of credit is taken are well established and reputed industries engaged in their respective field of business. The credit worthiness of customers to which the Group grants credit in the normal course of the business is monitored regularly. The credit risk for liquid funds is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

The Group's management believes that all the above financial assets, except as mentioned in note 15 and 16, are not impaired for each of the reporting dates under review and are of good credit quality.

Liquidity risk analysis

The Group's main source of liquidity is its operating businesses. The treasury department uses regular forecasts of operational cash flow, investment and trading collateral requirements to ensure that sufficient liquid cash balances are available to service on-going business requirements. The Group manages its liquidity needs by carefully monitoring scheduled debt servicing payments for long-term financial liabilities as well as cash-outflows due in day-to-day business. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on the basis of a rolling 90 day projection. Long-term liquidity needs for a 90 day and a 30 day lookout period are identified monthly.

The Group maintains cash and marketable securities to meet its liquidity requirements for up to 60 day periods. Funding for long-term liquidity needs is additionally secured by an adequate amount of committed credit facilities and the ability to sell long-term financial assets.

The following is an analysis of the group contractual undiscounted cash flows payable under financial liabilities at 31 March 2016 and 31 March 2015:

As at 31 March 2016
	Current	Non-Current		Total
	Within 12 months	1-5 years	Later than 5 years
Borrowings	21,023,963	123,362,705	119,196,170	263,582,838
Trade and other payables	54,890,882	8,463,049	-	63,353,931
Other current liabilities	223,710	-	-	223,710
Total	76,138,555	131,825,754	119,196,170	327,160,479
As at 31 March 2015
	Current	Non-Current		Total
	Within 12 Months	1-5 Years	Later than 5 years
Borrowings	49,981,971	198,541,687	104,228,299	352,751,957
Trade and other payables	48,152,547	16,795,079	-	64,947,626
Other current liabilities	625,957	-	-	625,957
Total	98,760,475	215,336,766	104,228,299	418,325,540

Capital management

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

The Group's capital management objectives include, among others:

· Ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value

· Ensure Group's ability to meet both its long-term and short-term capital needs as a going concern;

· To provide an adequate return to shareholders

by pricing products and services commensurately with the level of risk.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

No changes were made in the objectives, policies or processes during the years end 31 March 2016 and 2015.

The Group maintains a mixture of cash and cash equivalents, long-term debt and short-term committed facilities that are designed to ensure the Group has sufficient available funds for business requirements. There are no imposed capital requirements on Group or entities, whether statutory or otherwise.

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

	31 March 2016	31 March 2015
Total equity	180,676,250	164,613,070
Less: Cash and cash equivalents	(7,153,455)	(6,805,449)
Capital	173,522,795	157,807,621
Total equity	180,676,250	164,613,070
Add: Borrowings (including buyer's credit)	263,582,838	260,788,187
Overall financing	444,259,088	425,401,257
Capital to overall financing ratio	0.39	0.37

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

	Carrying amount		Fair value
	March 2016	March 2015	March 2016	March 2015
Financial assets
Loans and receivables
·         Cash and cash equivalents 1	7,153,455	6,805,449	7,153,455	6,805,449
·         Restricted cash 1	9,235,378	8,088,207	9,235,378	8,088,207
·         Current trade receivables 1	57,840,717	28,628,701	57,840,717	28,628,701
Available-for-sale instruments 3	2,364,269	1,233,620	2,364,269	1,233,620
	76,593,819	44,755,977	76,593,819	44,755,977
Financial liabilities
Term loans	263,582,838	258,694,310	263,582,838	258,694,310
LC Bill discounting & buyers' credit facility 1	-	2,093,877	-	2,093,877
Current trade and other payables 1	54,890,882	48,152,547	54,890,882	48,152,547
Non-current trade and other payables 2	8,463,049	16,795,079	8,463,049	16,795,079
	326,936,769	325,735,813	326,936,769	325,735,813

The fair value of the financial assets and liabilities are included at the price that would be received to sell an asset or paid to transfer a liability (i.e. a exit price) in an ordinary transaction between market participants at the measurement date. The following methods and assumptions were used to estimate the fair values. 

1.  Cash and short-term deposits, trade receivables, trade payables, and other borrowings like short-term loans, current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

2.  The fair value of loans from banks and other financial indebtedness, obligations under finance leases, financial liabilities at fair value through profit or loss as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt or similar terms and remaining maturities.

3.  Fair value of available-for-sale instruments held for trading purposes are derived from quoted market prices in active markets. Fair value of available-for-sale unquoted equity instruments are derived from valuation performed at the year end.

Fair value measurements recognised in the statement of financial position

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

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

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

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

	Level 1	Level 2	Level 3	Total
Available-for-sale financial assets
Unquoted securities	-	-	-	-
Quoted securities	2,364,269	-	-	2,364,269
Total	2,364,269	-	-	2,364,269

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

The Group's finance team performs valuations of financial items for financial reporting purposes, including Level 3 fair values. Valuation techniques are selected based on the characteristics of each instrument, with the overall objective of maximising the use of market-based information. The finance team reports directly to the chief financial officer (CFO).

Valuation processes and fair value changes are discussed by the Board of Directors at least every year, in line with the Group's reporting dates.

29. Post - reporting date events

No adjusting or significant non-adjusting events have occurred between the reporting date and the date of authorisation.

-ends-

 

END

 

 

FR UARURNWABOUR