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OPG Power Ventures (OPG)

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Tuesday 06 December, 2016

OPG Power Ventures

Half-year Report

RNS Number : 0248R
OPG Power Ventures plc
06 December 2016
 

6 December 2016

 

OPG Power Ventures plc

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

 

Unaudited results for the six months ended 30 September 2016

Maiden dividend - Revenue Doubled - Free cash flow

 

OPG (AIM: OPG), the developer and operator of group captive power generation plants, announces its unaudited results for the six months ended 30 September 2016 ("H1 FY17").

 

Maiden Dividend

·   Interim dividend of 0.26 pence

 

Financial Highlights

·   Revenue up 108% to £117.7 million

·   EBITDA up 81% to £42.1 million

·   EPS up 41% at 4.80 pence

·   Free cash flow generated of £20.6 million

·   Gearing of 55% down from 58% at 31 March 2016

 

Operational Highlights

·   Strong ramp up of assets commissioned last year - Gujarat (300 MW) at 71%, C4 (180 MW) at 80%

·   Total generation increased 30% at Chennai and 185% at Gujarat to 2.4 billion units

·   Reported Average PLF of 77% at Chennai and 71% for Gujarat

·   Average tariffs: Rs 5.45 Chennai, Rs 3.88 Gujarat

·   Effect of coal price spike softened by forward coal purchases in early 2016

·   Chennai cash collections stronger

 

Summary financial information (including historic financial data)

 

£ million

HY 30 Sep 16

HY 30 Sep 15

HY 30 Sep 14

HY 30 Sep 13

FY 31 Mar 16

Revenue

117.7

56.6

46.5

47.7

128.4

EBITDA

42.1

23.3

16.6

13.7

51.0

PBT

17.9

15.0

10.3

7.6

28.6

EPS (pence)

4.80

3.41

2.24

1.56

5.29

£:INR ex-rate

92.0

98.7

99.8

90.9

98.7

 

Underlying financial performance in INR (the functional currency of our operating businesses):

 

INR million

HY 30 Sep 16

HY 30 Sep 15

HY 30 Sep 14

HY 30 Sep 13

FY 31 Mar 16

Revenue

10,830

5,584

4,646

4,334

12,680

EBITDA

3,874

2,395

1,671

1,254

5,035

PBT

1,647

1,538

1,038

666

2,824

 

 

Net Debt (Millions)

30 Sep 16

30 Sep 15

31 Mar 16

INR

23,234

24,340

24,159

£:INR ex-rate

86.4

100.3

95.1

GBP (£)

269

243

254

 

Operations Summary

 


HY 30 Sep 16

HY 30 Sep 15

FY 31 Mar 16

Generation (million kWh)




 

414 MW Chennai

 

1,220

 

1,056

 

2,236

300 MW Gujarat

   960

   3371

   9271

Generation (MU) excluding auxiliary

2,180

1,393

3,163

Additional "deemed" offtake at Chennai

   191

     33

   184

Total Generation (MUe)2

2,371

1,426

3,347

 

Reported Average PLF (%)3




414 MW Chennai

77%

80%

78%

300 MW Gujarat

71%

NA

52%

 

Note:

1. Includes 704 million units generated until January 2016 from Gujarat for which results were capitalised

2. MU - millions units/kWh; MUe - millions units/kWH of equivalent power

3. Reported Average PLF based on MUe

 

Arvind Gupta, our chairman commented:

"Our new assets have ramped up well, operations have performed robustly and the Board remains confident in recommending a maiden dividend to shareholders.  It is the right time for us to pursue growth and all eyes are on India for growth amongst the world's major economies.  Having already recorded the highest growth rates, industrial production and demand levels seem set to rise into the long term.  Electricity is, and will continue to be, a key enabler in India's future and we aim to be a leader in servicing that demand."

 

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

 

OPG Power Ventures PLC

Arvind Gupta / V Narayan Swami

 

 

+91 (0) 44 429 11211

OPG Power Ventures PLC - Investor Relations

Ajay Paliwal / Pooja Maru

 

 

+44 (0) 20 7850 7070

Cenkos Securities (Nominated Adviser & Broker)

Stephen Keys / Camilla Hume

 

+44 (0) 20 7397 8900

 

Macquarie Capital (Europe) Limited (Joint Broker)

Raj Khatri / Nick Stamp

 

  

+44 (0) 20 3037 2000

Tavistock (Financial PR)

Simon Hudson / Barney Hayward / James Collins

 

+44 (0) 20 7920 3150

 

 

OPG operates and develops power generation related assets in India and at 30 September 2016 had 750 MW of assets with a further 186 MW under development or in the pipeline.  In the six months ended 30 September 2016, according to its unaudited results for the period, the Company generated revenues of £118 million, EBITDA of £42 million, profit before tax of £18 million and earnings per share of 4.80 pence.

 

 

Half year results statement

 

Revenues up 108%; Strong underlying growth in generation of 66%

Revenues for the period were £117.7 million, an increase of 108% resulting from a 66% increase in generation contributed by both plants in Chennai and Gujarat.

 

Chennai - 1.2 billion generated units and 1.4 billion paid units

Our Reported Average PLF at Chennai for the six month period was 77% as follows:

 

Chennai 414 MW

Half Year ended

30 Sep 16  (H1 FY17)


Units

(Million kWh)

Billing rate

(Rs/kWh)

PLF

(%)

Generation

1,220

5.45

67%

Additional "deemed" offtake with fixed capacity charge

191

1.50

10%

Total Generation/Reported Average PLF

1,411


77%

 

Generation at the Chennai plant in H1 FY17 was 1.2 billion units, 16% higher than in H1 FY16.  In periods with variable seasonal energy availability (eg surplus wind) in which the Company is not required to generate our full quantity of electricity under the Long Term Variable Tariff Agreement ("LTVT") with TANGEDCO, OPG is entitled to a fixed capacity payment for "deemed" offtake.  Incorporating the effect of this, OPG continues to expect the Reported Average PLF for the year at Chennai to be around 80%.

 

A total of 334 MW is now allocated from the Chennai plant for direct sales to industrial and commercial customers and 80 MW continues to be allocated to the 15 year LTVT signed with TANGEDCO in 2014. 

 

Gujarat operational ramp up - Average PLF of 71%

 

At 960 million units for the six months period, generation at the Gujarat plant was 185% higher than the same period of the prior year as a consequence of ramping up the plant which commissioned in full in February 2016.  The average PLF achieved in the period was 71% and the Company estimate an average load factor for the year at Gujarat of around 70%.  The national average for similar thermal plants has been 62%. 

 

Gujarat continues to benefit from a diverse sales mix. Approximately 47% of sales during the period have been to industrial consumers outside of Gujarat, a further 44% being sold to industrial customers within the state and balance 9% to the power exchange.  This gives the Company a diverse mix of contract sales (non-exchange) which are typically 1-3 year duration as well as a customer base both within and outside Gujarat.  The average tariff being achieved across all sales at Gujarat is Rs 3.88. 

 

EBITDA up 81% - forward purchasing of coal softened the impact of coal price spike  

 

EBITDA for the period was £42.1 million up 81% from £23.3 million in H1FY16 resulting principally from higher generation.  EBITDA margins were 36%, ahead of industry average despite the sharp increase in coal price which was largely offset due to forward purchasing.

 

The FOB price of coal has historically made up about two thirds of the factory gate cost of the Company's coal.  In the last few months, as is well publicised, benchmark international coal prices have almost doubled from their lows.  These increases were commonly thought to be a function of short term changes in supply policies in China and there is a widely held expectation for prices to decline again in the wake of subsequent change in policies.  Consensus forecasts currently point to a significant fall in spot prices in the coming months. 

 

Much of the sharp coal price increase experienced in H1 has been mitigated by way of advance purchase orders in the earlier part of the year.  Until now, even though Indian coal prices have remained stable over the same period, it has still been cheaper to use imported coal rather than to implement our ability to switch sources.

 

At 30 September, approximately two thirds of OPG's coal requirements for H2 had already been purchased.  Due to the average costing basis of coal consumed, we expect additional pre-tax costs of approximately £7 million to be reported in the current year based on recent and forecast price trends.

 

Chennai cash collections stronger

 

Cash collections directly from group captive customers are typically received within a month of billing.  Approximately £19 million has been collected from TANGEDCO since 31 March 2016 and recovery of old amounts continues to progress.  TANGEDCO has announced it will be signing up for the UDAY scheme introduced by the Government of India in order to provide an improvement in its liquidity position.

 

Group gearing has fallen by 3% (5% on a constant currency basis), and is low relative to industry peers.

  

Growth projects update

 

The Company has obtained in principle project finance to commence work on its 62 MW solar projects.  These are 15 year facilities at average variable rates of approximately 11% per annum and should enable us to order panels and commence onsite works in this current financial year. 

 

A further 124 MW is now in the pipeline, bringing our development and pipeline to an aggregate of 186 MW.  We are progressing towards our 300 MW initial solar target, prioritising projects that we expect can be funded from a combination of internal resources and asset level financing.  

 

Interim Dividend 0.26 pence

 

The Board has announced its maiden dividend payment, establishing an initial 15% pay-out ratio and we have elected to split the dividend into an interim and final component calculated as follows:

 

-      Interim: One third x pay-out ratio x FY16 (prior year) audited earnings

-      Final: Pay-out ratio x FY17 (current year) audited earnings minus Interim div paid

 

As a result dividends are to be paid by reference to audited earnings.  All dividends will be subject to the level of free cash flow generated after scheduled debt repayments and expected capital expenditure. 

 

Shareholders will also be able to elect to receive their interim dividend as a scrip dividend in the form of new shares.  A separate circular will be issued in this regard. 

 

Outlook

 

Notwithstanding the effect of the coal price increases referred to earlier, the Company expects generation to be strong and margins and free cash flow generation to remain attractive.  OPG continues to maintain the maiden dividend policy announced on 24 May 2016 of targeting a pay-out of 15% of full year net earnings.

 


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the period ended 30 September 2016

(All amount in £, unless otherwise stated)

 


Note

30-Sep-2016

30-Sep-2015

31-Mar-2016

Revenue


117,657,234

56,574,181

128,438,193

Cost of revenue


(68,823,912)

(31,161,354)

(71,895,139)

Gross profit


48,833,321

25,412,827

56,543,054

Other income

6

357,173

28,684

4,444,268

Distribution cost


(7,077,496)

(1,291,884)

(6,564,363)

General and administrative expenses


(6,226,297)

(3,648,980)

(9,967,112)

Operating profit


35,886,702

20,500,647

44,455,847

Financial costs

7

(18,231,294)

(5,904,582)

(16,712,169)

Financial income

8

241,324

715,421

806,453

Income from continuing operations (before tax, non-operational and/ or exceptional items)


17,896,732

15,311,486

28,550,131

Employee Share Option expenses


-

-

-

Pre-operative expenses (relating to project under construction)


-

(281,923)

-

Profit before tax


17,896,732

15,029,563

28,550,131

Tax expense


(1,024,457)

(3,017,797)

(9,972,626)

Profit for the year


16,872,275

12,011,766

18,577,505

Attributable to:





- Owners of the parent


16,854,765

11,999,228

18,558,014

- Non-controlling interest


17,510

12,538

19,491



16,872,275

12,011,766

18,577,505

Earnings per share





Basic earnings per share (in Pence)


4.80

3.41

5.29

Diluted earnings per share (in Pence)


4.68

3.33

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


-

-

5,133

- Current year gains


-

-

38,557

Currency translation differences on translation of foreign operations


12,513,808

(12,373,571)

(2,844,341)

Items that will not be reclassified subsequently to profit or loss





Currency translation differences on translation of foreign operations


12,526

(11,553)

2,755

Other comprehensive income/(loss)


12,526,334

(12,385,124)

(2,797,896)






Total comprehensive income/(loss) for the year


29,398,609

(373,358)

15,779,609

Attributable to:





- Owners of the parent


29,368,573

(374,343)

15,757,365

- Non-controlling interest


30,036

985

22,244



29,398,609

(373,358)

15,779,609

 

The financial statements were authorised for issue by the Board of Directors on 5 December 2016 and were signed by:

Arvind Gupta

V. Narayan Swami

Chief Executive Officer

Chief Financial Officer

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 September 2016

(All amount in £, unless otherwise stated)

 


Note

30-Sep-2016

30-Sep-2015

31-Mar-2016


Assets






Non-Current






Intangible assets

11

3,29,548

592,204

364,504


Property, plant and equipment

12

451,132,345

393,616,041

414,906,166


Investments and other assets


5,204,481

1,787,369

2,951,591


Restricted cash


3,219,576

2,595,316

1,940,600


Total Non-Current assets


459,885,950

398,590,930

420,162,861


Current






Trade and other receivables

9

59,518,010

38,866,648

57,840,717


Inventories


11,469,638

4,871,628

10,614,890


Cash and cash equivalents

10

13,115,608

2,816,872

7,153,455


Restricted cash


7,641,432

5,470,902

7,294,778


Current tax assets


2,215,515

292,718

715,214


Investments and other assets


20,199,292

25,019,058

13,365,243


Total Current assets


114,159,495

77,337,826

96,984,297


Total Assets


574,045,445

475,928,756

517,147,158


Equity and Liabilities











Equity:






Equity attributable to owners of the parent:






Share capital


51,671

51,671

51,671


Share premium


124,316,524

124,316,522

124,316,524


Other components of Equity


(1,138,917)

(23,509,216)

(13,652,725)


Retained earnings


86,539,220

63,125,670

69,684,455


Total


209,768,498

163,984,647

180,399,925


Non-controlling interest


306,360

255,064

276,325


Total Equity


210,074,858

164,239,711

180,676,250


Liabilities






Non-current






Borrowings

13

247,688,477

217,798,621

242,558,875


Trade and other payables


8,549,509

6,951,512

8,463,049


Deferred tax liability


8,933,725

3,705,921

9,310,429


Total Non-Current liabilities


265,171,711

228,456,054

260,332,353


Current






Borrowings


34,287,731

32,601,254

21,023,963


Trade and other payables


63,983,931

50,413,833

54,890,882


Other liabilities


5,27,214

217,900

223,710


Total Current liabilities


98,798,876

83,232,987

76,138,555


Total Liabilities


363,970,587

311,689,041

336,470,908


Total Equity and Liabilities


574,045,445

475,928,756

517,147,158


 

 


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(All amount in £, unless otherwise stated)

 

GROUP

Issued Capital (No. of Shares)

Share capital

Share Premium

Other Reserves

Foreign Currency Translation reserve

Retained earnings

Total of Parent equity

Non-Controlling Interest

Total Equity

Balance at 1 April, 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 payment options




-



-


-

Transactions with owners

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

Profit for the year from Operating Activities






16,854,765

16,854,765

17,510

16,872,275

Currency translation differences





12,513,808


12,513,808

12,526

12,526,334

Gains on sale / re-measurement of available-for-sale financial assets










Total comprehensive income for the year





12,513,808

16,854,765

29,368,572

30,036

29,398,609

Balance at 30 September, 2016

351,504,795

51,671

124,316,524

7,494,781

(8,621,172)

86,539,220

209,768,497

306361

210,074,859











Balance 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 payment options




283,571



283,571


283,571

Transactions with owners

351,504,795

51,671

124,316,524

7,451,091

(18,303,165)

51,126,441

164,642,562

254,079

164,896,641

Profit for the year from Operating Activities






18,558,014

18,558,014

19,491

18,577,505

Currency translation differences





(2,844,341)


(2,844,341)

2,755

(2,841,586)

Gains on sale / re-measurement of available-for-sale financial assets




43,690



43,690

-

43,690

Total comprehensive income for the year




43,690

(2,844,341)

18,558,014

15,757,363

22,246

15,779,609

Balance 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











Balance 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 payment options




-



-


-

Transactions with owners

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

Profit for the year from Operating Activities






11,999,228

11,999,228

12,538

12,011,766

Currency translation differences





(12,373,571)


(12,373,571)

(11,553)

(12,385,124)

Gains on sale / re-measurement of available-for-sale financial assets










Total comprehensive income for the year

-

-

-

-

(12,373,571)

11,999,228

 (374,342)

985

(373,358)

Balance at 30 September 2015

351,504,795

51,671

124,316,524

7,167,520

(30,676,736)

63,125,669

163,984,647

255,064

164,239,711


CONSOLIDATED STATEMENT OF CASH FLOWS

For the period ended 30 September 2016

(All amount in £, unless otherwise stated)

 

Particulars

30-Sep-2016

30-Sep-2015

31-Mar-2016

Cash flows from operating activities




Profit for the year before Tax

17,896,731

15,029,563

28,550,131

Unrealised Foreign Exchange Loss

(234,304)

(433,649)

299,256

Provision no longer required written back

-


(1,823,228)

Financial Expenses

18,219,479

5,904,582

16,460,854

Financial Income

(241,218)

(715,421)

(806,452)

Share based compensation costs



283,571

Depreciation

5,606,489

1,598,121

5,944,912





Changes in Working Capital




Trade and other receivables

3,847,284

(12,586,064)

(29,279,858)

Inventories

196,658

2,464,804

(2,918,712)

Other current assets

(1,029,843)

(1,976,215)

3,362,875

Trade and other payables

(4,493,048)

(552,659)

4,066,886

Other liabilities

(620,430)

(366,891)

(359,581)

Cash generated from operations

39,147,798

8,366,171

23,780,654

Income Taxes paid

(5,43,359)

(2,001,661)

(3,973,243)

Net Cash Generated by Operating activities

38,604,439

6,364,510

19,807,411





Cash flow from investing activities




Acquisition of property, plant and equipment

(4,064,731)

(10,318,234)

(13,321,443)

Interest received

241,218

709,053

690,548

Dividend income

-

-

-

Movement in restricted cash

(657,229)

(594,549)

(1,308,062)

Purchase of Investments, net

(3,458,985)

(5,292,943)

(1,030,280)

Net cash used in investing activities

(7,939,727)

(15,496,673)

(14,969,237)





Cash flows from financing activities




Proceeds from borrowings

8,340,030

26,585,872

77,159,277

Repayment of borrowings

(15,857,280)

(13,594,090)

(74,259,217)

Interest paid

(18,219,479)

(5,904,582)

(7,874,257)

Net cash provided by financing activities

(25,736,729)

7,087,200

(4,974,197)





4,927,983

(2,044,963)

(136,023)





Cash and cash equivalents at the beginning of the year

7,153,455

6,805,449

6,805,449

Effect of Exchange rate changes on the balance of cash held in foreign currencies

1,034,170

(1,943,614)

484,029

Cash and cash equivalents at the end of the year

13,115,608

2,816,872

7,153,455





 


NOTES TO THE CONSOLIDATED AND FINANCIAL STATEMENTS

For the period ended 30September 2016

(All amount in £, unless otherwise stated)

 

1. Corporate information

 

1.1.     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.

 

1.2.     Statement of compliance

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

 

1.3.     General information

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

 

The Consolidated Financial statement for the period ended 30 September 2016 were approved and authorised for issue by Board of Directors on 5 December 2016

 

2. 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', 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 recognized on the Group's trade receivables and investments in debt-type assets currently classified as available-for-sale (AFS) investments and held-to-maturity (HTM) investments, unless classified as at fair value through profit or loss in accordance with the new criteria; and

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

 

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

 

IFRS 15 'Revenue from Contracts with Customers'

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

 

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

 

Amendments to IFRS 11 'Joint Arrangements'

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

 

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

 

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

 

IFRS 16 'Leases'

On 13 January 2016, the IASB issued the final version of IFRS 16 'Leases'. IFRS 16 will replace the existing leases standard , IAS 17 'Leases', and related interpretations. The standard sets out the principles for recognition, measurement, presentation and disclosure of leases for both parties to a contract. IFRS 16 introduces a single lessee accounting model and requires a lessee to recognize 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.

 

3. 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 30th September 2016.

 

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 unrealized 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 recognized in 'other reserve' within statement of changes in equity.

 

c) Investments in associates and joint ventures

Investments in associates and joint ventures are accounted for using the equity method. The carrying amount of the investment in associates and joint ventures is increased or decreased to recognize 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.

 

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

 

d) List of subsidiaries and joint ventures

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

 

i) Subsidiaries

 

Subsidiaries

Immediate parent

Country of incorporation

% Voting Right

% Economic interest




Sep'2016

Sep' 2015

Sep' 2016

Sep' 2015

Caromia Holdings limited ('CHL')

OPGPV

Cyprus

100

100

100

100

Gita Power and Infrastructure Private Limited, ('GPIPL')

CHL

India

97.73

97.73

96.76

96.76

OPG Power Generation Private Limited ('OPGPG')

GPIPL

India

76.65

76.32

99.92

99.92

OPGS Power Gujarat Private Limited ('OPGG')

GPIPL

India

51.00

51.00

99.90

99.90

OPGS Industrial Infrastructure Developers Private Ltd ('OPIID')

OPGPG

India

100

100

100

100

OPGS Infrastructure Private Limited ('OPGIPL')

OPGPG

India

100

100

100

100

OPG Surya Vidyut  Private Limited  ('OPGSVPL')

OPGPG

India

100

-

100

-

Samriddhi Surya Vidyut  Private Limited  ('SSVPL')

OPGPG

India

100

-

100

-

Samriddhi Solar Power Private Limited  ('SSPPL')

OPGPG

India

100

-

100

-

Brics  Renewable Energy Private Limited  ('BREPL')

OPGPG

India

100

-

100

-

Mayfair Renewable Energy Private Limited  ('MREPL')

OPGPG

India

100

-

100

-

Aavanti  Solar Energy Private Limited  ('ASEPL')

OPGPG

India

100

-

100

-

Aavanti  Renewable Energy Private Limited  ('AREPL')

OPGPG

India

100

-

100

-

PowerGen Resources Pte. Ltd.

OPGPV

Singapore

100

-

100

-

 

ii) Joint ventures

 

Joint ventures

Venture

Country of incorporation

% Voting right

% Economic interest




March 2016

March 2015

March 2016

March 2015

Padma Shipping Ltd ("PSL")

OPGPV

Hong Kong

50

50

50

50

 

The Company has entered into a Joint Venture agreement with Noble Chartering Ltd ("Noble"), to secure competitive long term rates for international freight for its imported coal requirements.  Under the Long Term Freight Arrangement (LTFA), the company and Noble are to purchase and own, jointly and equally, two 64,000 MT cargo vessels through a Joint venture company Padma Shipping Ltd, Hong Kong ('Padma').

 

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. The joint venture has been reported using equity method as per the requirements of IFRS 11.

 

e) Foreign currency translation

The functional currency of the Company is the Great Britain Pound Sterling (£). The Cyprus entity is an extension of the parent and a 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.

 

Particulars

30-Sep-2016

30-Sep-2015

31-Mar-2016

Closing Rate

86.42

100.28

95.09

Average Rate

92.02

98.70

98.73

 

f) Revenue recognition

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

 

g) Operating expenses

Operating expenses are recognized in the statement of profit or loss upon utilization of the service or as incurred.

 

h) Taxes

Tax expense recognized in profit or loss comprises the sum of deferred tax and current tax not recognized 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 or 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 realization, 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 recognized to the extent that it is probable that they will be able to be utilized 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 recognized as a component of tax income or expense in profit or loss, except where they relate to items that are recognized in other comprehensive income or directly in equity, in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively.

 

I) Financial assets

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

 

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

 

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

I) loans and receivables

ii) available-for-sale financial assets.

The category determines subsequent measurement and whether any resulting income and expense is recognized 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 recognized 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 recognized in profit or loss. When the asset is disposed of or is determined to be impaired the cumulative gain or loss recognized 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 recognized in profit or loss only if the reversal can be objectively related to an event occurring after the impairment loss was recognized.

 

j) Financial liabilities

The Group's financial liabilities include borrowings and trade and other payables. Financial liabilities are measured subsequently at amortized 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 organized financial markets is determined by reference to quoted market prices at the close of business on the Statement of financial position date. For financial instruments where there is no active market, fair value is determined using valuation techniques. Such techniques may include using recent arm's length market transactions; reference to the current fair value of another instrument that is substantially the same; discounted cash flow analysis or other valuation models.

 

l) Property, plant and equipment

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

 

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 licenses are capitalized 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 capitalized costs are amortized 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 fulfillment 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 recognized 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 amortized over the period of the lease.

 

o) Borrowing costs

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

 

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

 

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

 

p) Impairment of non-financial assets

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

 

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset's or cash-generating unit's recoverable amount. A previously recognized 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 recognized. 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 recognized for the asset in prior years. Such reversal is recognized in the profit or loss.

 

q) Cash and cash equivalents

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

 

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

 

r) Inventories

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

 

s) Earnings per share

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

 

t) Other provisions and contingent liabilities

Provisions are recognized 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 recognized 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 recognized 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 recognized 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 recognized, unless it was assumed in the course of a business combination. In a business combination, contingent liabilities are recognized 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 recognized on the acquisition date, less any amortization.

 

u) Share based payments

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

 

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

 

If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognized in the current period. No adjustment is made to any expense recognized 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 recognizes the net obligation of a defined benefit plan in its statement of financial position as an asset or liability, respectively in accordance with IAS 19, Employee benefits. The discount rate is based on the Government securities yield. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to profit or loss in the statement of comprehensive income in the period in which they arise.

 

Employees Benefit Trust

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

 

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 recognized at the carrying amounts recognized 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 recognized in equity.

 

4. Significant accounting judgements, estimates and assumptions

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

 

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

 

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

 

a) Judgements

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

 

Deferred tax assets

The assessment of the probability of future taxable income in which deferred tax assets can be utilised is based on the Group's latest approved budget forecast, which is adjusted for significant non-taxable income and expenses and specific limits to the use of any unused tax loss or credit. The tax rules in India in which the Group operates are also carefully taken into consideration. If a positive forecast of taxable income indicates the probable use of a deferred tax asset, especially when it can be utilised without a time limit, that deferred tax asset is usually recognized 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.

 

Application of lease accounting

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

 

b) Estimates and uncertainties

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

 

i) Recoverability of deferred tax assets: The recognition of deferred tax assets requires assessment of future taxable profit.

 

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 amortized 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.

 

Impairment tests:

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

 

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

 

5. 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.

 

6. Other income

Other income comprises of:

 


30-Sep-2016

30-Sep-2015

31-Mar-2016

Provisions no longer required written back

-

-

1,823,228

Sale of fly ash and coal

34,572

28,684

2,393,076

Others

322,601

-

227,964

Total

357,173

28,684

4,444,268

 

7. Finance Cost

Finance cost comprises of:

 


30-Sep-2016

30-Sep-2015

31-Mar-2016

Interest expense on borrowings

17,711,368

5,694,014

15,793,916

Other finance costs

519,926

210,568

918,253

Total

18,231,294

5,904,582

16,712,169

 

8. Finance income

Finance income comprises of:

 


30-Sep-2016

30-Sep-2015

31-Mar-2016

Interest income




- Bank deposits

127,663

662,529

576,421

-Loans and receivables



-

Dividend income



-

Profit on disposal of financial instruments

113,661

52,892

230,032

Total

241,324

715,421

806,453

 

9. Trade and other receivables (£ Million)






30-Sep-2016

30-Sep-2015

31-Mar-2016

Current




Receivables from sale of power

54.82

38.54

57.73

Other receivables

4.70

0.33

0.11

Total

59.52

38.87

57.84

Ageing of receivables from sale of power






30-Sep-2016

30-Sep-2015

31-Mar-2016





Due & Outstanding

42.82

29.31

41.99

Accrued, not due

12.00

9.23

15.74

Total

54.82

38.54

57.73

 

Particulars

£ Millions

Total

> 180 days

< 180 days

Summary (OPGPG and OPGS)




a. Receivables of OPGS

24.95

14.53

10.42

b. Receivables of OPGPG

34.57

27.51

7.06

Total

59.52

42.04

17.48

 

Of the £29.52m outstanding as at 31 March 2016 from Tangedco, £19.91m has been since received.

 

Amounts receivable in Gujarat as at 30th September include £11.67m in respect of supplies made prior to commissioning and £8m in respect of supplies since commissioning in February 2016.  These amounts have been collected from our customers by the state utility and need to be paid over to us in accordance with the Captive Producer approval provided since the commencement of such supplies under the Electricity Act.

 

10. Cash and cash equivalents

Cash and short term deposits comprise of the following:

 


30-Sep-2016

30-Sep-2015

31-Mar-2016

Cash at bank and on hand

9,188,853

1,602,820

6,169,046

Short-term deposits

3,926,755

1,214,052

984,409

Total

13,115,608

2,816,872

7,153,455

 

11. Intangible assets

Acquired software licenses

Cost


At 1 April 2015

749,769

Additions

39,216

Exchange adjustments

(16,858)

At 31 March 2016

772,127

Additions

-

Exchange adjustments

36,541

At 30 September 2016

808,668

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

71,497

Exchange adjustments

-

At 30 September 2016

479,120

Net book value

At 30 September 2016

329,548

At 31 March 2016

364,504


12. Property, plant and equipment

 

 

The property, plant and equipment comprises of:

 



Land and

Power Stations

Other plant and

Vehicles

Assets under

Total



Buildings


Equipment


construction


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)

Transfer on capitalization

-

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


538,808


17,884


556,692

Transfer on capitalization







Exchange adjustments

1,270,755

39,131,114

10,072

29,251

750,191

41,191,384

At 30 September 2016

14,055,569

447,477,774

775,731

792,518

8,226,776

471,328,369

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& Adjustments

276,657

5,028,341

155,938

60,962

-

5,521,897

Exchange adjustments







At 30 September 2016

385,570

18,474,770

821,123

514.562

-

20,196,024

Net book value







At 30 September 2016

13,670,000

429,003,004

45,391

277,957

8,226,776

451,132,346

At 31 March 2016


12,675,901

394,361,423

100,474

291,783

7,476,585

414,906,166

 


13.   Borrowings

 

The borrowings comprises of the following:

 


30-Sep-2016

30-Sep-2015

31-Mar-2016

Term loans at amortized cost

281,976,208

250,273,012

263,582,838

Other borrowings


126,863

-





Total

281,976,208

250,399,875

263,582,838





 

-ends-


This information is provided by RNS
The company news service from the London Stock Exchange
 
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