Final Results

RNS Number : 2049S

OPG Power Ventures plc

29 September 2017

 

29 September 2017

OPG Power Ventures plc

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

Final results for the year ended 31 March 2017

OPG (AIM: OPG), the developer and operator of power generation assets in India, announces its final results for the year ended 31 March 2017 ("FY17").

Highlights

·      Profit after tax of £23.1 m up 24% compared with £18.6 m in FY16

·      EPS of 8.43 pence per share on attributable basis up by 59% compared with FY16

·      Full year dividend of 0.98p per share, including interim dividend of 0.26p already paid

·      Generation up 30% to 4.4 billion units from 3.3 billion units in FY16

·      Revenue up 60% to £205m from £128m in FY16

·      EBITDA margin of 32% despite higher coal costs

·      Net Debt £308m; gearing of 57% consistent with FY16

·      62 MW solar project construction started and on track for commissioning in FY18

Summary financial information

	£ million		INR million
	FY17	FY16	FY17	FY16
Revenue	205.0	128.4	17,937	12,681
EBITDA	66.7	50.7	5,840	5,004
Profit before tax	17.5	28.6	1,530	2,819
EPS (pence)	8.43	5.29	-	-
Net debt	308	254.1	24,885	24,159
Total units (millions)	4,397*	3,347*
£:INR ex-rate	87.5	98.7

*In FY17 includes 364 million units of deemed generation for Chennai Unit 3 and 184 million units in FY16

Commenting, Arvind Gupta, Executive Chairman said: "The Company has recorded its ninth successive year in FY17 of increasing revenues.  It has also been a year of rising earnings and our maiden dividend.  This differentiates us.  I believe the current year will prove to be a year of re-alignment, setting the business on its course to recover increased profitability in FY19 due to the prospective strong tariff potential and reduction in coal prices."

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.

Executive Chairman's Review

Overall performance overview

In the year ended 31 March 2017, we witnessed more of the potential from our 714 MW portfolio.  At 4.4 billion units, OPG generated 30% more electricity than the previous year, benefitting from a full year of operation at Gujarat. The Company's full year profit after tax increased by 24% to £23.1 million and earnings per share increased by 59% to 8.43 pence per share. 

The Company has recorded its ninth successive year of increasing revenues, a near-zero lost time injury rate and improved environmental performance measures. The strategy of maximising our existing assets to make our business stronger in the long term has led the Board proposing a final dividend of 0.72 pence per share bringing the total dividend payable in respect of FY17 to 0.98 pence per share. A further, formal announcement setting out the record date and payment date for the final dividend as well as scrip option will follow in due course.

Maximising our assets, demonstrating resilience

Since 2010 we have consistently achieved plant load factors above published national thermal averages and FY17 was also such a year. In addition, our clean dark spreads (being the difference between tariff and cost on a per unit basis) at our flagship Chennai plant were Rs 2.63 per kWh in FY17 in spite of unforeseen events such as the spike in coal costs and other external factors that we reported during FY17. We believe that this reflects margins amongst the best in the sector.

On the majority of our sales at both plants, we continued to be paid within sixty days of billing industrial customers. However, slow remittances and recoveries from state electricity boards ("SEBs") have continued to impact the Indian power sector and it is pleasing that our track record in recovering amounts due has been relatively good and the backlog in Chennai has been appreciably reduced. We expect to achieve similar progress in Gujarat now that we have amended the share capital structure.

Pursuing the maximisation of our assets strengthens our ability to withstand external events while keeping gearing at a sustainable level. The Company's gearing remained stable at 57% in FY17 and FY16. Further, to better align our debt obligations and cash flows, we have extended our loan repayment at Gujarat by ten years. This includes a period of low repayments in the next five years and thereby reduces principal amounts to be repaid by £67 million up to 2022.  We were cushioned, to a degree, by good volumes, our sales tariffs under group captive power business model, the diversity of our largely industrial customer base and some short term forward purchasing of coal. We believe that the underlying business remains resilient primarily because of the captive power business model.

Building towards a bright future

Macro - gathering momentum

Alongside a buoyant stock market, the broader trend of economic growth in India remains strong. The government has continued to undertake reforms on a transformational scale which, in our view, bode well for momentum and growth over the long term such that both power consumption, system efficiency and cost of capital should improve. These include the long-awaited introduction of a uniform system of indirect taxes (GST) across the country designed to improve interstate commerce, prioritising non-performing assets in the banking sector, achieving higher levels of electrification across the country and implementing reforms to improve profitability of state power distribution companies (UDAY scheme). We believe these reforms will make the Indian power market stronger from the next year.

UDAY - implementing a game changer for tariffs and efficiencies

Almost all states in India, including Gujarat and Tamil Nadu are now signed up to the UDAY scheme. This benefits the SEBs through a reduction in debt and interest costs, while committing them to a yearly tariff review and increased efficiency. Tariff orders issued by most signatory states imply an average 10% annual improvement in SEB finances from tariff and other changes. In Tamil Nadu, under a MoU with the Ministry of Power, the state government and the utility have agreed to raise tariffs by an average of 6% for FY18-19 across all categories of consumers.  

As well as being resilient, we believe our underlying business is in a good position to benefit from these changes which will progressively compound the visibility of revenues brought about as a result of the multi-year sale agreements the Company has now negotiated for nearly 500 MW of its output (including the 74 MW long term contract with the state of Tamil Nadu).

Managing availability and cost of landed coal

For most of the last seven years we have enjoyed highly attractive clean dark spreads and uninterrupted coal supply, unlike many plants in India. We regularly highlight the risk that seaborne coal prices present to our sector, but the last twelve months have seen unheralded and prolonged coal price volatility, against which short term price hedging can only provide limited protection. Intuitively with market consensus index coal prices still forecast to decline by over 20% in the next two years, our coal procurement strategy will require careful management and execution, with the timing of any forward purchases being a major strategic consideration. As a result of the optionality that we have to switch between several types of coal, we are exploring additional strategies to buffer our trading operations for FY19 and beyond. 

Historically, freight costs have also been volatile. In 2014, we announced a joint venture with Noble Chartering Limited, a wholly owned subsidiary of Noble Resources Group, aimed at acquiring and managing two new build carrier vessels supported by the carriage of OPG cargo.  The new vessels are approaching delivery in mid-2018, and are expected to provide a degree of protection against any sharp or prolonged rise in future seaborne freight rates for nearly half of coal movements. 

The outlook for thermal and renewable power

Coal India Limited, the world's largest coal producer, has recently stated publicly its own expectation that coal will remain the mainstay of the Indian energy sector for decades to come with the possibility of an increase in its use. The Ministry of Power has voiced similar expectations. As a result of a surplus of domestic coal, there are plans in India to significantly reduce thermal coal imports over the next two to three years, with state owned power plants importing significantly less. The reduction of coal imports by India, the recent Chinese policy measures to restrict coal imports and suspend new capacity development and ongoing global investments in renewables are generally expected to underpin the outlook for lower international coal prices going forward.

In fact, the latest directive issued recently by the Chinese authorities enforcing stricter environmental norms and closure of manufacturing units in several industries, including metals, is expected to further depress international coal prices.

Growth in renewables is progressing, with many players bidding for new projects at highly competitive tariff levels. Pursuant to recent trends in tariff bidding, as well as volatility in solar panel prices and in coal prices in our core business, we continue to approach new projects from a perspective of seeking returns rather than purely scale. Our focus remains on delivering our 62 MW solar entry project this year and being selective about further projects while maintaining our target of 300 MW solar over the next few years. 

Outlook

Following a year of rising revenues and earnings in FY17, the first several months of FY18 have as previously announced been challenging given the sustained and unexpectedly high seaborne thermal coal prices that have impacted our sector as a whole. Whilst consensus prices for coal in the second half of FY18 are expected to reduce, the board will continue to review all options to ensure that any impact is minimised should this expected reduction not take place.

India has achieved a GDP growth of over 7% in FY17 and electricity markets grew at 5.4% CAGR over the last 10 years, which indicates steady growth in demand for electricity going forward. Operationally the business has continued to deliver high load factors which we believe puts us in a strong position to withstand the short-term challenges to the business and we are working on a number of initiatives that we believe will mitigate the impact of volatility in coal prices on our business. With coal prices continuing to point downwards, positive pipeline developments on tariffs and our renewable projects progressing, I believe the current year will prove to be a year of re-alignment, setting the business on its course to recover increased profitability in FY19 due to the prospective strong tariff potential and reduction in coal prices.

At the Annual General Meeting, the Board will seek a renewal of customary authorisation to purchase ordinary shares in the Company up to 10% of the Ordinary Shares in issue. Finally, the Board and I wish to place on record our immense gratitude to our team who have built up the Company's track record of success carrying the responsibility of navigating the Company through multiple challenges.  After all, the mark of a solid team is how we respond to the challenges presented to us and it is this team strength at OPG that enables the Board to stand by its confidence in the Company's future.

Financial Review

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

Income statement (£m)

		% of		% of
Year ended 31 March	2017	revenue	2016	revenue
Revenue	205.00		128.44
Cost of revenue (excluding depreciation)	(115.10)		(66.60)
Gross profit	89.90	43.85	61.84	48.15
Other income	0.90		4.44
Distribution, general and administrative expenses (excluding depreciation, employee stock option charge)	(24.05)		(15.60)
EBITDA	66.75	32.56	50.68	39.4
Depreciation	(11.94)		(5.94)
Net finance costs	(37.24)		(15.91)
Income from continuing operations (before tax non-operational and/or exceptional items)	17.57	8.57	28.83	22.4
Employee stock option charge	(0.09)		(0.28)
Profit before tax	17.48	8.53	28.55	22.2
Taxation	5.59		(9.97)
Profit after tax	23.08	11.26	18.57	14.45

Revenue

The Group's revenue has increased by £76.56m, reflecting a 60% growth year on year. The total generation for revenue increased 63% on account of the 300 MW Gujarat plants billed through the year. Generation exported to customers and billed for revenue increased by 63% to 3,695m units in FY17 from 2,272 in FY16.

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

Particulars	FY17	FY16
Generation (million units)	4003	3,1631
PLF (%)	702	70
Average tariff, incl. capacity charge (INR/unit)	4.86	5.58

1 Includes 704m units from Gujarat for which results were being capitalised.

2 Chennai Unit 3: Deemed PLF (%) has been included.

Gross profit

Gross profit ('GP'), net of depreciation on Plant and machinery included in cost of revenue in FY17 was 43.85% of revenue (FY16: 48.15%). The reduction in GP is partly on account of reduction in Tariff during the year.

The cost of revenue represents fuel costs (including the depreciation on plant & machinery added therein in the audited accounts but excluded for the purpose of this review). The average factory gate costs for Indian coal increased by 9.5% and those for imported coal by 10.85%. The table below shows the price and blend of Indian and Indonesian coal consumed in FY17 and FY 16.

	Average factory gate price		Average factory gate price
	(INR/mt)		(INR per m KCal)		Blend %
Financial year	Indian coal	Imported Coal	Indian coal	Imported coal	Indian: Imported
FY17	3,301	3,565	904	835	5:95
FY16	3,013	3,216	879	769	22:78
Change %	9.56	10.85

EBITDA

Earnings before interest, taxation, depreciation and 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 £66.75m in FY17 up from £50.68m in FY16 and EBITDA margin was lower at 32.56% in FY17 against 39.46% in FY16 on account of decrease in GP margin.

Profit before tax reconciliation ('PBT') (£m)	FY17
PBT 2016-17	17.48
PBT 2015-16	28.55
Decrease in PBT	(11.07)
Reconciliation
Increase in GP	22.06
Decrease in other income	(3.55)
Increase in distribution, general and administrative expenses	(8.25)
Increase in depreciation*	(0.01)
Increase in net finance cost1	(21.33)
Decrease in PBT	(11.07)

*excluding depreciation on Property, Plant and equipment £11.30m (FY16: £5.29m) included in cost of revenue, adjusted in the GP.

¹ The increase in Net finance costs of £21.33m is attributable to the full year effect of interest costs relating to debt on the Gujarat plant commissioned on 30 January 2016.

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 offset against future tax liabilities arising after the tax holiday period.

The tax credit during the year was £5.60m (FY16: expense of £9.97m) which includes current tax (MAT) expense of £3.32m (FY16: £3.99m) and deferred tax income of £14.49 m net of deferred tax expense of £5.58 M. (FY16: expense of £5.97m).

The deferred tax expense arises from timing differences in the amounts of depreciation charged in the tax accounts as against these published accounts.

The Group has carried forward credits in respect of MAT tax paid in earlier periods to the extent it is probable that future taxable profits will be available against which such tax credits can be utilized. Consequent to a change in laws from 1 April 2017, companies in India can now carry forward and take benefit of tax credits in respect of MAT up to the fifteenth assessment year as against ten assessment years as was previously allowed. This has resulted in the group recognising a deferred tax asset amounting to £14.49m, out of which £11.17m was previously unrecognised.

Details of Tax credit during the year(£m)	FY17
Current tax FY 2016-17	3.32
Deferred Tax on Property, Plant & Equipment	5.59
Credit for MAT	(14.49)
Tax expense/ (income)	(5.59)

Profits after tax

Profits after tax have increased by £4.50m from £18.51mn in FY16 to £23.08m in FY17.

Earnings per Share (EPS)

The Company's attributable reported EPS increased from 5.29 pence to 8.43 pence on account of increase in PAT due to attributable loss to minority shareholders.

Dividend

In line with our dividend policy, the Board approved FY17 full year dividend at 0.98 pence per share, including interim dividend of 0.26 pence per share already paid.  No dividends were paid in FY16.

Foreign exchange gain on translation

The Company's total assets/ liabilities increased during the year by £112.55m, which is primarily on account of foreign exchange translation during the year of £91.30m. (FY 17: 1 £= INR 80.82; FY 16: 1 £=INR 95.09)

Property, plant and equipment

The increase in net book value of our property, plant and equipment principally relates to forex gain on account of translation during the year.

Other non-current assets

Other non-current assets (excluding Property, plant and equipment & Intangible assets) have increased by £2.94m year on year primarily as a result of increase in the restricted cash holding for more than 12 months.

Current assets

Current assets have increased by £44.75m to £141.73m year on year primarily as a result of the following:

•    Increase in trade receivables of £26.43m, including cross subsidy charges deducted on invoices pertaining to Gujarat subsidiary of £14.50m. (Total amount of cross subsidy charges withheld from the sales invoices of Gujarat subsidiary was £26m as at 31 March 2017).

•    During the year the Company collected £24m of the £35m outstanding from TANGEDCO as at 31 March 2016.

•    Increase in cash and bank balances (including restricted cash) by £12.65m

•    Increase in inventory holdings by £6.23m.

•    Effective 2011, the Group's investments in the minority owned plants OPG Energy Pvt Ltd or OPGE & OPG Renewable Energy Pvt Ltd or OPGRE in which the Group holds, respectively, 29.8% and 22% of the paid-up equity were deconsolidated from these accounts and accounted as non-current investments. In terms of Fair valuation exercises carried out at the time and subsequently, these investments are carried, since 30 November 2011 at NIL value in these accounts.

•    The Group has been informed by OPGE & OPGRE that these companies propose, shortly, to make an offer of buy back of their shares at face value. Having completed the due process in this respect, the Group intends, if and when such an offer is extended to the shareholders, to tender its shares under the offer.

Current liabilities

Current liabilities have increased by £31.37m primarily on account of an increase in trade creditors of £15.81m (including an increase in Gujarat of £22.5m offset by a decrease in Chennai) and in borrowings of £15.52m.

Other non-current liabilities

Other non-current liabilities have increased by £25.37m primarily on account of forex impact on translation during the year.

Net debt, gearing and finance costs

Net borrowings (borrowings net of cash and cash equivalents and available-for-sale of investments) are £308m. The gearing ratio is 57% in FY17.

Total borrowings (current and non-current portions) didn't change significantly during the year and amounted to Rs25.9 billion as at 31 March 2017 (31 March 2016 - Rs25.1  billion) while GBP equivalent increased from £263.6 million to £321 million due to significant strengthening of INR against GBP in FY17. Increase in total borrowings (current and non-current) £263.6m in FY16 to £321m in FY17 and increase of £57.41m (increase on account forex is £46.53m and £10.88m due to increase in debt)

Finance costs have increased from £16.71 million in FY16 to £38.82 million in FY17 primarily due to:

i) the incidence of full year of interest on the Gujarat plant term loan included in the income statement (such interest having been capitalised before the completion date of 1 February 2016) and ii) significant strengthening of INR against GBP in FY17. FY18 finance costs are expected to be similar to FY17 finance costs.

Finance income increased from £0.8 million in FY16 to £1.58 million in FY17 and therefore net finance costs in FY17 amounted to £37.24 million.

The FY17 restricted cash balances totalling £17.83m (FY16: £9.23m) comprise deposits that have been pledged as security against the Company's specific borrowings.

Cash flow

Operating cash flow has increased from £48.90m in FY16 to £66.51m in FY17, an increase of £17.61m or 36%. The increase is primarily due to the increased gross profit sales.

Movements (£m)	FY17	FY16
Operating cash	66.78	48.90
Tax paid	(3.91)	(3.97)
Change in working capital assets and liabilities	(6.78)	(25.13)
Net cash generated by operating activities	56.09	19.80
Purchase of property, plant and equipment (net of disposals)	(5.14)	(13.32)
Other investments	(10.03)	(1.65)
Net cash used in investing activities	(15.17)	(14.97)
Net interest paid	(38.82)	(7.87)
Dividend paid	(0.91)	0
Total cash change before net borrowings	1.19	(3.04)

Consolidated statements of comprehensive income

(All amounts in £, unless otherwise stated)

	Notes	Year ended 31 March 2017	Year ended 31 March 2016
Revenue		204,998,415	128,438,193
Cost of revenue	8(a)	(126,397,331)	(71,895,139)
Gross profit		78,601,084	56,543,054
Other income	9	897,551	4,444,268
Distribution cost		(13,693,144)	(6,564,363)
General and administrative expenses		(11,081,178)	(9,967,112)
Operating profit		54,724,313	44,455,847
Share of profit/(loss) from equity accounted investments	15	(352)	-
Finance costs	10	(38,817,909)	(16,712,169)
Finance income	11	1,577,702	806,453
Profit before tax		17,483,754	28,550,131
Tax income/ (expense)	12	5,592,150	(9,972,626)
Profit for the year		23,075,904	18,577,505
Profit for the year attributable to:
Owners of the Company		29,614,506	18,558,014
Non-controlling interests		(6,538,602)	19,491
		23,075,904	18,577,505
Earnings per share
- Basic (in pence)	25	8.43	5.29
- Diluted (in pence)		8.39	5.13
Other comprehensive income
Items that will be reclassified subsequently to profit or loss
Available-for-sale financial assets
- Reclassification to profit or loss		(38,557)	5,133
- Current year gains		73,351	38,557
Exchange differences on translating foreign operations		34,890,638	(2,844,341)
Items that will be not reclassified subsequently to profit or loss
Exchange differences on translating foreign operations		(1,166,597)	2,755
Total other comprehensive income		33,758,835	(2,797,896)
Total comprehensive income		56,834,739	15,779,609
Total comprehensive income attributable to:
Owners of the Company		64,539,938	15,757,365
Non-controlling interest		(7,705,199)	22,244
		56,834,739	15,779,609

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

The financial statements were authorised for issue by the Board of Directors on 28 September 2017 and were signed on its behalf by:

Arvind Gupta, Executive Chairman

V Narayan Swami, Finance Director

Consolidated statements of financial position

(All amounts in £, unless otherwise stated)

	Notes	As at 31 March 2017	As at 31 March 2016
Assets
Non-current assets
Intangible assets	13	223,224	364,504
Property, plant and equipment	14	479,904,726	414,906,166
Investments accounted for using equity method	15	1,342,395	552,028
Other long-term assets	16	2,665,892	2,951,591
Restricted cash	19	3,825,733	1,940,600
		487,961,970	420,162,861
Current assets
Inventories	18	16,853,761	10,614,890
Trade and other receivables	17	84,271,986	57,840,717
Other short-term assets	16	12,686,018	13,365,243
Current tax assets (net)		826,398	715,214
Restricted cash	19	14,009,027	7,294,778
Cash and cash equivalents	19	13,086,123	7,153,455
		141,733,313	96,984,297
Total assets		629,695,283	517,147,158
Equity and liabilities
Equity
Share capital		51,672	51,671
Share premium		124,319,142	124,316,524
Other components of equity		22,065,498	(13,652,725)
Retained earnings		101,491,205	69,684,455
Equity attributable to owners of the Company		247,927,517	180,399,925
Non-controlling interests		(11,239,914)	276,325
Total equity		236,687,603	180,676,250
Liabilities
Non-current liabilities
Borrowings	22	284,415,451	242,558,875
Trade and other payables	23	283,754	8,463,049
Deferred tax liability (Net)	12	1,007,851	9,310,429
		285,707,056	260,332,353
Current liabilities
Borrowings	22	36,576,466	21,023,963
Trade and other payables	23	70,706,795	54,890,882
Other liabilities		17,363	223,710
		107,300,624	76,138,555
Total liabilities		393,007,680	336,470,908
Total equity and liabilities		629,695,283	517,147,158

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 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	-	-	-	283,571	-	-	283,571	-	283,571
Profit for the year	-	-	-	-	-	18,558,014	18,558,014	19,491	18,577,505
Other comprehensive income	-	-	-	43,690	(2,844,341)	-	(2,800,651)	2,755	(2,797,896)
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
Employee share based payments		-	-	87,907	-		87,907	-	87,907
Change in non-controlling interests without change in control (Refer note 5 (d))		-	-	(893,826)	1,598,710	3,106,156	3,811,040	(3,811,040)	-
Dividends#	4,160	1	2,618	-	-	(913,912)	(911,293)	-	(911,293)
Transaction with owners	4,160	1	2,618	(805,919)	1,598,710	2,192,244	2,987,654	(3,811,040)	(823,386)
Profit for the year		-	-	-	-	29,614,506	29,614,506	(6,538,602)	23,075,904
Other comprehensive income			-	34,794	34,890,638	-	34,925,432	(1,166,597)	33,758,835
Total comprehensive income		-	-	34,794	34,890,638	29,614,506	64,539,938	(7,705,199)	56,834,739
At 31 March 2017	351,508,955	51,672	124,319,142	6,723,656	15,341,842	101,491,205	247,927,517	(11,239,914)	236,687,603

# During the year, in addition to the cash dividend paid of £911,293, the Company had declared a stock dividend of 4,160 shares.

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

Consolidated statements of cash flows

(All amounts in £, unless otherwise stated)

	Year ended 31 March 2017	Year ended 31 March 2016
Cash flows from operating activities
Profit before income tax	17,483,754	28,550,131
Adjustments for
Unrealised foreign exchange loss	54,616	299,256
Provisions no longer required written back	-	(1,823,228)
Finance costs	38,817,909	16,460,854
Finance income	(1,577,702)	(806,452)
Share-based compensation costs	87,907	283,571
Depreciation and amortisation	11,908,819	5,944,912
Changes in working capital
Trade and other receivables	(2,634,413)	(29,279,858)
Inventories	(4,364,886)	(2,918,712)
Other assets	(4,095,766)	3,362,875
Trade and other payables	5,434,569	4,066,886
Other liabilities	(1,116,616)	(359,581)
Cash generated from operations	59,998,191	23,780,654
Taxes paid	(3,910,745)	(3,973,243)
Net cash from operating activities	56,087,446	19,807,411
Cash flows from investing activities
Purchase of property, plant and equipment (including capital advances)	(5,136,876)	(13,321,443)
Interest received	1,413,781	690,548
Dividend received	163,920	-
Movement in restricted cash	(6,381,763)	(1,308,062)
Sale of investments1	88,415,450	42,247,590
Purchase of investments1	(93,639,958)	(43,277,870)
Net cash used in investing activities	(15,165,446)	(14,969,237)
Cash flows from financing activities
Proceeds from borrowings (net of costs)	29,264,909	77,159,277
Repayment of borrowings	(27,080,680)	(74,259,217)
Interest paid	(38,817,909)	(7,874,257)
Dividend  paid	(911,293)	-
Net cash from financing activities	(37,544,973)	(4,974,197)
Net increase in cash and cash equivalents	3,377,027	(136,023)
Cash and cash equivalents at the beginning of the year	7,153,455	6,805,449
Exchange differences on cash and cash equivalents	2,555,641	484,029
Cash and cash equivalents at the end of the year	13,086,123	7,153,455

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 2017 were approved and authorised for issue by the Board of Directors on 28th September 2017.

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'

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 IFRS, 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.

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 statement 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 2017. 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,  joint ventures and associates

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

			% Voting Right		% Economic Interest
Subsidiaries	Immediate Parent	Country of Incorporation	March 2017	March 2016	March 2017	March 2016
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	77.07	76.96	99.90	99.90
OPGS Power Gujarat Private Limited ('OPGG') #	GPIPL	India	51	53.27	51	99.90
OPGS Industrial Infrastructure Developers Private Ltd ('OPIID')	OPGG	India	Nil	100	Nil	100
OPGS Infrastructure Private Limited ('OPGIPL')	OPGG	India	Nil	100	Nil	100
Samriddhi Solar Power Private Limited	OPGPG	India	77.07	Nil	99.90	Nil
Samriddhi Surya Vidyut Private Limited*	OPGPG	India	77.07	Nil	99.90	Nil
OPG Surya Vidyut Private Limited*	OPGPG	India	77.07	Nil	99.90	Nil
Powergen Resources Pte Ltd*	OPGPV	Singapore	77.07	Nil	99.90	Nil

# During the current financial year, OPGG had amendments to the share capital rights with retrospective effect from 01 April 2015. By means of the amendment, the voting rights and economic rights of all shareholders, irrespective of the class of shares held, were aligned. The aforesaid transaction is accounted as an equity transaction, and accordingly no gain or loss is recognized in the consolidated income statement.

* These companies were incorporated by the group during the year.

ii) Joint ventures

	Venturer	Country of incorporation	% voting right		% economic interest
Joint ventures			March 2017	March 2016	March 2017	March 2016
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 mid-2018.  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 further invested US$ 1,072,193 (2016: US$ 782,897). Accordingly, the joint venture has been reported using equity method as per the requirements of IFRS 11.

iii) Associates The Group has invested in the following entities which are engaged in the business of solar projects in India.
Associates	Venturer	Country of incorporation	% voting right		% economic interest
			March 2017	March 2016	March 2017	March 2016
Avanti Solar Energy Private Limited	OPGPG	India	31	Nil	31	Nil
Mayfair Renewable Energy Private Limited	OPGPG	India	31	Nil	31	Nil
Avanti Renewable Energy Private Limited	OPGPG	India	31	Nil	31	Nil
Brics Renewable Energy Private Limited	OPGPG	India	31	Nil	31	Nil

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 2017: 80.82 (2016: 95.09) and the average rate for the year ended 31 March 2017: 87.52 (2016: 98.73).

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

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

i)    loans and receivables; and

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 and 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 recognised 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 CGU'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 three 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 EPS the net profit or loss for the period attributable to equity shareholders 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).

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

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

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

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.

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 judgement 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 judgement 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 judgements, estimates and assumptions made by the management and will seldom equal the estimated results.

a) Judgements

The following are significant management judgements 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 (see note 12).

Application of lease accounting

Significant judgement 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 judgement to evaluate customers' rights 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.

Recognition of revenue and collectability of receivables:

The captive consumers of OPGS Power Gujarat Private Limited (OPGG) (a subsidiary of the Company) have withheld from the sales invoices an amount of £ 26,098,738 towards Cross Subsidy Surcharge (CSS) levied by GUVNL through their DISCOMs for the financial years 2015-2016 and 2016-2017, challenging the grounds of fulfilment of required shareholding criteria by OPGG to qualify as a captive power generating unit as per Rule 3 of the Electricity Rules, 2005. The Group, based on a legal opinion, strongly believes that OPGG is in compliance with the said provisions and qualifies as a captive power generating unit. Further, in order to settle the matter amicably, OPGG based on an order obtained from the High court has entered into a scheme of arrangement wherein the share capital of OPGG has been reconstituted to give effect to the required economic interest and voting rights to the Captive shareholders retrospectively from 01 April 2015 and to be treated continuously as a captive generating unit. In making its judgement, the group has considered the criteria for recognition of revenue as set out in IAS 18 and the relevant regulatory requirements and is of the opinion that recognition of revenue is appropriate.

Further, the Group has assessed that the levy of CSS is in violation of certain regulatory orders and such unilateral and arbitrary action does not impact the 'flow of the said economic benefit' to the group. Accordingly, the management believes that recovery of the aforementioned amounts is highly probable and hence the same has been recognised after considering necessary provisions on a prudent basis.

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).

iii) Impairment tests

      In assessing impairment, management estimates the recoverable amount of each asset or CGUs based on expected future cash flow 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:

iv)  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 £ 18,489,011 (2016: £ 53,345,178)

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 2017	31 March 2016
Included in cost of revenue:
Cost of fuel consumed	109,521,406	63,797,398
Depreciation	11,296,791	5,294,947
Other direct costs	5,579,134	2,802,794
Total	126,397,331	71,895,139

Depreciation included in general and administrative expenses amount to £639,572 (2016: £649,965)

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

	31 March 2017	31 March 2016
Salaries and wages	3,406,416	4,246,864
Employee benefit costs	384,464	714,113
Employee stock option	87,907	283,571
Total	3,878,787	5,244,548

c) Auditor's remuneration for audit services amounting to £ 90,000 (2016: £ 48,663) 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 2017	31 March 2016
Foreign exchange realised - (loss)	(282,416)	(533,976)
Foreign exchange unrealised - (loss)/gain	(54,615)	(299,256)
Total	(337,031)	(833,232)

9. Other income

Other income is comprised of:

	31 March 2017	31 March 2016
Provisions no longer required written back	-	1,823,228
Sale of coal	398,911	2,335,834
Sale of fly ash	109,815	57,242
Others	388,825	227,964
Total	897,551	4,444,268

10. Finance costs

Finance costs are comprised of:

	31 March 2017	31 March 2016
Interest expenses on borrowings	35,836,445	15,793,916
Other finance costs	2,981,464	918,253
Total	38,817,909	16,712,169

11. Finance income

Finance income is comprised of:

	31 March 2017	31 March 2016
Interest income
- Bank deposits	1,118,400	576,421
Profit on disposal of financial instruments1	459,302	230,032
Total	1,577,702	806,453

1   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 2017 and 2016 is as follows:

	31 March 2017	31 March 2016
Accounting profit before taxes	17,483,754	28,550,131
Enacted tax rates	34.61%	34.61%
Tax on profit at enacted tax rate	6,050,778	9,880,629
Differences on account tax holiday and MAT rates	2,843,959	(477,625)
MAT credit entitlement	(14,489,964)	-
Others	3,077	569,622
Actual tax expense/ (income) for the period	(5,592,150)	9,972,626

	31 March 2017	31 March 2016
Current tax	3,321,205	3,993,441
Deferred tax	(8,913,355)	5,979,185
Tax expense/ (income) reported in the statement of comprehensive income	(5,592,150)	9,972,626

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 utilize an exemption from income taxes for a period of any ten consecutive years out of a total of fifteen consecutive years from the date of commencement of the operations. However, the entities in India are still liable for Minimum Alternate Tax which is calculated on the book profits of the respective entities currently at a rate of 21.34% (31 March 2016: 21.34%).

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. Consequent to change in laws proposed by Finance Bill 2017, operating companies in India can now carry forward and take benefit of tax credits in respect of MAT up to the fifteenth assessment year as against ten assessment years as was previously allowed. This has resulted in the group recognising a deferred tax asset for the MAT credit amounting to £ 14,489,964, out of which £ 11,168,759 pertains to the previous years, now recognised.

Deferred income tax for the Group at 31 March 2017 and 2016 relates to the following:

	31 March 2017	31 March 2016
Deferred income tax assets
MAT credit entitlement	15,691,186	-
	15,691,186	-
Deferred income tax liabilities
Property, plant and equipment	16,684,770	9,287,307
Mark to market on available-for-sale financial assets	14,267	23,122
	16,699,037	9,310,429
Deferred income tax liabilities, net	1,007,851	9,310,429

Movement in temporary differences during the year

Particulars	As at 1 April 2016	Recognised in income statement	Recognised in other comprehensive income	Translation adjustment	As at 31 March 2017
Property, plant and equipment and others	(9,287,307)	(5,576,609)	-	(1,820,854)	(16,684,770)
MAT credit entitlement	-	14,489,964	-	1,201,222	15,691,186
Mark to market gain/(loss) on available-for-sale financial assets	(23,122)	-	8,855	-	(14,267)
	(9,310,429)	8,913,355	8,855	(619,632)	(1,007,851)

Particulars	As at 1 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)

In assessing the recoverability of deferred income tax assets, management considers whether it is more likely than not that some portion or all 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 2017 and 2016, 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 2015	749,769
Additions	39,216
Exchange adjustments	(16,858)
At 31 March 2016	772,127
Additions	27,298
Exchange adjustments	138,577
At 31 March 2017	938,002
Accumulated depreciation and impairment
At 1 April 2015	84,096
Charge for the year	313,589
Exchange adjustments	9,938
At 31 March 2016	407,623
Charge for the year	215,462
Exchange adjustments	91,693
At 31 March 2017	714,778
Net book value
At 31 March 2017	223,224
At 31 March 2016	364,504

14. Property, plant and equipment

The property, plant and equipment comprises of:

	Land and buildings	Power stations	Other plant and equipment	Vehicles	Asset under construction	Total
Cost
At 1 April 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
Additions	153,123	2,143,268	64,318	1,818,377	71,418	4,250,504
Deletions	-	-	-	(29,531)	-	(29,531)
Exchange adjustments	2,677,442	72,256,562	140,920	279,887	932,873	76,287,684
At 31 March 2017	15,615,379	482,207,682	970,897	2,814,116	8,480,876	510,088,950
Accumulated depreciation and impairment
At 1 April 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
Charge for the year	14,142	11,296,791	131,980	277,988	-	11,720,901
Exchange adjustments	20,342	3,629,865	35,232	103,757	-	3,789,196
At 31 March 2017	143,397	28,373,085	832,397	835,345	-	30,184,224
Net book value
At 31 March 2017	15,471,982	453,834,597	138,500	1,978,771	8,480,876	479,904,726
At 31 March 2016	12,675,901	394,361,423	100,474	291,783	7,476,585	414,906,166

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

	31 March 2017	31 March 2016
Freehold land	15,032,841	12,545,682
Buildings	439,141	130,219
	15,471,982	12,675,901

Property, plant and equipment with a carrying amount of £ 477,787,455 (2016: £ 414,433,996) is subject to security restrictions (refer note 22).

An amount of £ Nil (2016: £ 17,575,016) 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 accounted for using the equity method

	31 March 2017	31 March 2016
The carrying amount of investments accounted for using the equity method is as follows:
Investment in joint venture	1,339,635	552,028
Investments in associates	2,760	-
Total	1,342,395	552,028

The Group's share of profit from equity accounted investments is as follows:
	31 March 2017	31 March 2016
Investment in joint venture	-	-
Investments in associates	(352)	-
Total	(352)	-
a)    Investment in joint venture (Refer note 5(d))

The investment in Padma Shipping Limited ("PSL") is accounted for using the equity method in accordance with IAS 28. Summarized financial information for Padma Shipping Limited ("PSL") is set out below:

	31 March 2017	31 March 2016
Non-current assets	5,802,605	-
Current assets (a)	317,646	5,070,540
Total Assets	6,120,251	5,070,540

Current liabilities (b)	3,440,982	3,966,483
Total Liabilities	3,440,982	3,966,483

Net Assets

2,679,269

1,104,057

	31 March 2017	31 March 2016
a) Includes cash and cash equivalents	10,540	34,303
b) Includes financial liabilities (excluding trade and other payables and provisions)	3,440,982	3,966,483

A reconciliation of the above summarized financial information to the carrying amount of the  investment in PSL is set out below:	31 March 2017	31 March 2016
Total net assets of PSL	2,679,269	1,104,057
Proportion of ownership interests held by the Group	50%	50%
Carrying amount of investment in PSL	1,339,635	552,028

(b)  Investment in associates (Refer note 5(d)) Summarized aggregated financial information of the Group's share in the associates:	31 March 2017	31 March 2016
Profit from continuing operations	(352)	-
Total Comprehensive Income	(352)	-

Aggregate carrying amount of the Group's interests in these associates

2,760

-

16. Other assets	31 March 2017	31 March 2016
A. Current
Available-for-sale financial assets	2,757,272	2,364,269
Capital advances	1,724,432	3,516,716
Bank Deposits	2,903,273	-
Loans and receivables
- Advance to suppliers	176,486	5,651,654
- Others	5,124,555	1,832,604
Total	12,686,018	13,365,243

B. Non-current
Prepayments	-	622,206
Advances to related parties (Refer note 24)	1,575,484	1,684,776
Lease deposits	-	92,581
Bank deposits	681,746	-
Other advances	408,662	-
Total	2,665,892	2,399,563

Available-for-sale investments are comprised of:

Quoted short-term mutual fund units

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

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.

17. Trade and other receivables

	31 March 2017	31 March 2016
Current
Trade receivables	80,546,225	56,687,426
Unbilled revenues	3,716,051	1,045,219
Other receivables	9,710	108,072
	84,271,986	57,840,717

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 £83,157,785 (2016: £57,840,717) has been pledged as security for borrowings. As at 31 March 2017, trade receivables of £1,177,967 (2016: £Nil) 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:

		Neither past due nor impaired		Past due but not impaired
Year	Total			Within 90 days	90 to 180 days	Over 180 days
2017	80,546,225		19,867,879	11,203,698	7,499,958	41,974,690
2016	56,687,426		15,743,623	9,721,710	5,725,198	25,496,895

Subsequent to the reporting date, the Company has received £14,927,895 from Tamil Nadu Generation and Distribution Corporation (TANGEDCO) towards the sale made during the month of September 2016 under short term sale agreement and for November 2016 to March 2017 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
2017	-	1,177,967	-	1,177,967
2016	563,827	-	(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.

18. Inventories

	31 March 2017	31 March 2016
Coal and fuel	14,947,860	9,477,390
Stores and spares	1,905,901	1,137,500
Total	16,853,761	10,614,890

The entire amount of  £ 16,853,761 (2016: £ 10,614,890) has been pledged as security for borrowings (refer note 22)

19. Cash and cash equivalents

Cash and short-term deposits comprise of the following:

	31 March 2017	31 March 2016
Cash at banks and on hand	13,049,622	6,169,046
Short-term deposits	36,501	984,409
Total	13,086,123	7,153,455

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 £14,009,027 (previous year £7,294,778) and maturing after twelve months amounting to £3,825,733 (previous year £1,940,600) which have been pledged by the group in order to secure borrowing limits with banks. (Refer note 22).

20. Issued share capital

Share capital

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

The Company has an authorized and issued share capital of 351,508,955 equity shares (2016: 351,504,795) at par value of £ 0.000147 (2016: £ 0.000147) per share amounting to £ 51,672 (2016: £ 51,671) in total.

The Company has issued share capital at par value of £51,672 (£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.

21. 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 £ 87,907 (2016: £ 283,571) 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 2017	31 March 2016
At 1 April	23,524,234	22,524,234
Granted	-	1,000,000
Forfeited/Exercised/Expired	(250,000)	-
At 31 March	23,274,234	23,524,234

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

22. Borrowings

The borrowings comprise of the following:

	Interest rate (range %)	Final maturity	31 March 2017	31 March 2016
Term loans at amortised cost	10.80-15.17	March 2025	320,991,917	263,582,838
Total			320,991,917	263,582,838

Total debt of £320,991,917 (2016: £263,582,838) 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 except loans with a cumulative debt balance of £ 158.82m as at year end 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 2017, the Group has met all the relevant covenants.

During the year instalment of loan amounting to £242,549 relating to Unit I, II and III was prepaid up to April 2017.

The fair value of borrowings at 31 March 2017 was £320,991,917 (2016: £263,582,838). 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 2017	31 March 2016
Current liabilities
Amounts falling due within one year	36,576,466	21,023,963
Non-current liabilities
Amounts falling due after one year but not more than five years	104,970,101	123,362,705
Amounts falling due in more than five years	179,445,350	119,196,170
Total non-current	284,415,451	242,558,875
Total	320,991,917	263,582,838

23. Trade and other payables

	31 March 2017	31 March 2016
Current
Trade payables	52,526,424	34,645,009
Creditors for capital goods	8,547,998	2,016,958
Bank Overdraft	5,609,229	6,235,017
Other payables	4,023,144	11,993,898
Total	70,706,795	54,890,882
Non-current
Retention money	54,321	8,296,003
Other payables	229,433	167,046
Total	283,754	8,463,049

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.

24. Related party transactions

Key management personnel

Name of the party	Nature of relationship
Arvind Gupta	Executive Chairman
V Narayan Swami	Finance Director
M. C. Gupta (until November 2016)	Chairman
Martin Gatto	Director
Ravi Gupta	Director
Patrick Michael Grasby	Director
Jeremy Beeton (from November 2016)	Director

Related parties with whom the Group had transactions during the period

Name of the party	Nature of relationship
Chennai Ferrous Industries 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
Avanti Solar Energy Private Limited	Entity in which Key Management personnel has Control/Significant Influence
Mayfair Renewable Energy Private Limited	Entity in which Key Management personnel has Control/Significant Influence
Avanti Renewable Energy Private Limited	Entity in which Key Management personnel has Control/Significant Influence
Brics Renewable Energy Private 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 2017	31 March 2016
Kanishk Steel Industries Limited
a) Class A shares allotted	-	1,052
Padma Shipping Limited
a) Investment	746,268	561,288
Chennai Ferrous Industries Ltd
a) Purchase of coal	10,322	-
Avantika Gupta
a) Remuneration	68,556	60,774

Name of the party	Nature of balance	31 March 2017	31 March 2016
Summary of balance with related parties
Padma Shipping Limited	Investment	1,339,635	552,028
Padma Shipping Limited	Advance	1,167,169	1,684,776
Avanti Solar Energy Private Limited	Investment	690	-
Avanti Solar Energy Private Limited	Advance	123,732	-
Mayfair Renewable Energy Private Limited	Investment	690	-
Mayfair Renewable Energy Private Limited	Advance	123,732	-
Avanti Renewable Energy Private Limited	Investment	690	-
Avanti Renewable Energy Private Limited	Advance	123,732	-
Brics Renewable Energy Private Limited	Investment	690	-
Brics Renewable Energy Private Limited	Advance	37,120	-

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 2017, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (2016: £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.

25. Earnings per share

Both the basic and diluted earnings per share have been calculated using the profit attributable to shareholders of the parent company as the numerator (no adjustments to profit were necessary for the year ended March 2017 or 2016).

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 2017	31 March 2016
Weighted average number of shares used in basic earnings per share	351,505,142	351,504,795
Shares deemed to be issued for no consideration in respect of share-based payments	1,264,567	10,949,551
Weighted average number of shares used in diluted earnings per share	352,769,709	362,454,346

26. Directors' remuneration

Name of Director	31 March 2017	31 March 2016
Arvind Gupta	1,110,000	1,350,000
V Narayan Swami	109,689	97,239
Martin Gatto	45,000	45,000
Mike Grasby	45,000	45,000
MC Gupta (until November 2016)	27,880	45,000
Ravi Gupta	45,000	45,000
Jeremy Beeton (from November 2016)	22,500	-
Total	1,405,069	1,627,239

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

27. Commitments and contingencies

Operating lease commitments

The Group leases 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 2017	31 March 2016
Not later than one year	43,226	29,035
Later than one year and not later than five years	157,056	116,140
Later than five years	-	435,525
Total	200,282	580,700

During the year ended 31 March 2017, £41,204 (2016: £27,965) was recognised as an expense in the statement of comprehensive income in respect of operating leases.

Capital commitments

During the year ended 31 March 2017, the Group entered into a contract to purchase property, plant and equipment for £ Nil (2016: £ Nil) for its power generation projects under development. In respect of its interest in joint ventures the Group is committed to incur capital expenditure of £18,630,157 (2016: £15,834,660) 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 £11,635,734 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 favourable 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 2017: £40,497,741 (2016: £25,462,779) and Bank Guarantee as at 31 March 2017: £ 23,425,291 (2016: £12,223,606) are treated as contingent liabilities until such time it becomes probable that the Company will be required to make a payment under the guarantee.

28. Financial risk management objectives and policies

The Group's principal financial liabilities, comprises of loans and borrowings, trade and other payables, and other current liabilities. The main purpose of these financial liabilities is to raise finance for the Group's operations. The Group has loans and receivables, trade and other receivables, and cash and short-term deposits that arise directly from its operations. The Group also hold investments designated 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 2017 and 31 March 2016

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 2017, 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 2017 and 31 March 2016, 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 2017 would decrease or increase by £2,865,102 (2016: £2,692,161).

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 2017		As at 31 March 2016
Currency	Financial assets	Financial liabilities	Financial assets	Financial liabilities
United States Dollar	3,000,000	19,852,758	-	21,487,313

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 2017		As at 31 March 2016
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	64.75	1,226,728	66.25	2,549,030

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 £ 87,029,258 (2016: £ 60,204,986).

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 6(a), 16 and 17, 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 2017 and 31 March 2016:

As at 31 March 2017

		Non-current
	Current within 12 months	1-5 years	Later than 5 years	Total
Borrowings	36,576,466	104,970,101	179,445,350	320,991,917
Interest on borrowings	33,903,890	45,442,677	123,948,503	203,295,070
Trade and other payables	70,706,795	283,754	-	70,990,549
Other current liabilities	17,363	-	-	17,363
Total	141,204,514	150,696,532	303,393,853	595,294,899

As at 31 March 2016

		Non-current
	Current within 12 months		1-5 years	Later than 5 years	Total
Borrowings	21,023,963		123,362,705	119,196,170	263,582,838
Interest on borrowings	31,280,267		47,246,652	106,939,534	185,466,453
Trade and other payables	54,890,882		8,463,049	-	63,353,931
Other current liabilities	223,710		-	-	223,710
Total	107,418,822		179,072,406	226,135,704	512,626,932

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; and 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 2017 and 2016. 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 2017	31 March 2016
Total equity	236,687,603	180,676,250
Less: Cash and cash equivalents	(13,086,123)	(7,153,455)
Capital	223,601,480	173,522,795
Total equity	236,687,603	180,676,250
Add: Borrowings (including buyer's credit)	320,991,917	263,582,838
Overall financing	557,679,520	444,259,088
Capital to overall financing ratio	0.40	0.39

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

	Carrying amount		Fair value
	March 2017	March 2016	March 2017	March 2016
Financial assets
Loans and receivables
- Cash and cash equivalents1	13,086,123	7,153,455	13,086,123	7,153,455
- Restricted cash1	17,834,760	9,235,378	17,834,760	9,235,378
- Current trade receivables1	84,271,986	57,840,717	84,271,986	57,840,717
- Available-for-sale instruments3	2,757,272	2,364,269	2,757,272	2,364,269
	117,950,141	76,593,819	117,950,141	76,593,819
Financial liabilities
Term loans	320,991,917	263,582,838	320,991,917	263,582,838
Current trade and other payables1	70,706,795	54,890,882	70,706,795	54,890,882
Non-current trade and other payables2	283,754	8,463,049	283,754	8,463,049
	391,982,466	326,936,769	391,982,466	326,936,769

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	2,757,272	-	-	2,757,272
Total	2,757,272	-	-	2,757,272

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.

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

30. Post-reporting date events

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

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