TIDMOPG
RNS Number : 4163S
OPG Power Ventures plc
06 November 2023
6 November 2023
OPG Power Ventures plc
("OPG", the "Group" or the "Company")
Final Results for the Year Ended 31 March 2023, Publication of
Annual Report and Accounts and Resumption of Trading in Ordinary
Shares
OPG (AIM: OPG), the developer and operator of power generation
assets in India, announces its final results for the year ended 31
March 2023 ("FY 23").
FY 23 Summary:
-- FY 23 revenue decreased by 26.7 per cent to GBP58.7 million
(FY 22: GBP80.1 million) primarily due to lower generation on
account of high coal prices and the Group's focus on profitable
contracts
-- Gross Debt decreased from GBP43.3 million in FY 22 to GBP32.60 million in FY 23.
-- Adjusted EBITDA defined as Earnings before Interest, Tax,
Depreciation & Amortization and Share Based Payments was
GBP16.1 million (27.5 per cent margin) in FY 23 (FY 22: GBP21.6
million (27.0 per cent margin)).
-- Profit before tax was GBP10.4 million (17.8 per cent) in FY
23 (FY 22: GBP13.0 million (16.2 per cent)).
-- Profit for the year was GBP7.3 million (12.4 per cent) in FY
23 (FY 22: GBP6.0 million (7.5 per cent)).
-- Basic earnings per share was 1.8 pence in FY 23 as compared to 1.5 pence in FY 22
Unless specified, all figures in GBP
million FY23 FY22
Revenue 58.7 80.1
----- -----
Other Operating Income 1.5 0.0
----- -----
Adjusted EBITDA 16.1 21.6
----- -----
Profit before tax from continuing operations 10.4 13.0
----- -----
Profit/(Loss) from discontinued operations,
incl. NCI 0.0 -2.9
----- -----
Profit for the year 7.3 6.0
----- -----
Earnings per share (pence) 1.8 1.5
----- -----
Total generation (including deemed) (billion
kWh) 1.5 1.9
----- -----
Current developments and highlights
-- Plant Load Factor ("PLF") including 'deemed' for the half
year period to 30 September 2023 was at 64 per cent. OPG continues
to focus on operations with profitability and to operate at an
optimum PLF with a mix of long term and short term contracts with
state utilities, and supplies through the Exchange.
-- Due to increased electricity demand, the Government of India
has approved a pass through of the fuel prices up to June 2024.
Indian Economy and Power sector update
-- The World Bank in its India Development Update estimates that
India is expected to grow at 6.3 per cent in FY 23/24.
-- Electricity demand in India is expected to increase by 70 per
cent by 2032 on account of rising urbanization and increased demand
from construction, manufacturing and services sectors and coal will
continue to command the major share of power generation in
India.
-- India's electricity consumption grew nearly nine per cent in
FY 23 and nearly eight per cent in the first half of FY 24 from
April to September.
-- Peak power demand in India reached 240 GW on 1 September
2023. For FY 25 the Government of India has forecasted that all
India peak power demand will be over 256 GW.
Mr. N. Kumar, Non-Executive Chairman said: "We are delighted
that in FY 23, OPG Power has achieved robust financial results
despite volatile markets and high coal prices. This outcome serves
as a testament to the agility and resilience of our business model
to adapt to macroeconomic turbulence."
Following publication of the Company's annual report and
accounts for the year ended 31 March 2023 on the Company's website
at www.opgpower.com , the suspension of the Company's Ordinary
Shares from trading on AIM will be lifted at 7.30 a.m. this
morning.
As part of its commitment to engaging with investors, OPG will
host a webinar at 11 a.m. GMT on Wednesday 8 November. Investors
and potential investors wishing to attend this presentation should
register using the following link:
https://www.investormeetcompany.com/opg-power-ventures-plc/register-investor
The presentation is open to all. Investors who already follow
OPG on the Investor Meet Company platform will automatically be
invited. Questions can be submitted pre-event via the Investor Meet
Company dashboard up until 9 a.m. GMT the day before the meeting or
at any time during the event.
For further information, please visit www.opgpower.com or
contact:
OPG Power Ventures PLC Via Tavistock
below
Ajit Pratap Singh
C avendish Capital Markets Limited +44 (0) 20 7
(Nominated Adviser & Broker) 220 0500
Stephen Keys / Katy Birkin
+44 (0) 20 7920
Tavistock (Financial PR) 3150
Simon Hudson / Nick Elwes
Chairman's Statement
Proof of Resilient Business
We are glad that in FY 23, OPG Power has achieved robust
financial results across its key segments. This outcome serves as a
testament to the agility and resilience of our business model to
adapt to macroeconomic turbulence.
Just as the world was recovering from the after-effects of
COVID-19, it was shocked by Russia's invasion of Ukraine, which
left lasting economic and political impacts, along with tragic
humanitarian casualties. Supply bottlenecks, surges in commodity
prices, disrupted trade relations, and elevated energy costs have
contributed to a severe energy shortage, disrupting the otherwise
recovering world economy post-COVID. Inflation in many developed
countries has experienced a sudden and historic increase,
surpassing 8 percent.
Numerous countries have found themselves in precarious
positions, reliant on others for crucial resources. Consequently,
there has been a global reassessment of supply chain strategies.
The "China plus One" policy is gaining momentum as companies and
nations seek to diversify their reliance away from China to
alternative destinations. India, with its emphasis on local
indigenous manufacturing, finds itself in a favourable position.
Energy security and top- tier infrastructure will be pivotal to the
success of this journey. The trifecta of manufacturing,
infrastructure, and energy, combined with a focus on
digitalisation, has the potential to drive India's economic growth
further, unlock fresh business prospects, and generate employment
opportunities. It is anticipated that India's GDP will double to
US$7.5 trillion by 2031, with a significant increase in
contribution from the manufacturing sector.
Despite ongoing uncertainties and emerging challenges, such as
the Russia-Ukraine conflict and geopolitical tensions, India is
well-positioned to achieve robust GDP growth rates. The Indian
government's focus on initiatives like Aatma Nirbhar Bharat, Make
in India, and the Performance Linked Incentive (PLI) schemes bode
well for the industry's future.
Delivering Performance
In the current fiscal year, we operated in a challenging and
uncertain macro-environment marked by prolonged geopolitical
conflicts, subsequent energy shortages, and assertive monetary
policies implemented by Central Banks. Our team delivered strong
performance despite the challenges presented by volatile commodity
markets and supply chain realignments. The Group reported revenue
of GBP58.7 Million and an EBITDA of GBP16.1 Million. The Board has
deemed it prudent to conserve cash in the best interests of the
Group and its stakeholders. The conserved cash will be allocated
towards debt repayment, the growth of ESG-focused projects, and
maintaining a robust and resilient Balance Sheet to weather
turbulent times.
Despite the challenges faced throughout the year, OPG has
consistently generated strong cash flow and reduced its gross debt.
The Group remains one of the least leveraged power generating
companies in India.
Building a Sustainable Future
With a GDP growth rate of 6.8 percent (Source: IMF World
Economic Outlook Projections, April 2023), India also witnessed a
surge in power demand of approximately 10 percent during FY 23,
reaching 132 Billion Units (Bus). This increased demand is driven
not only by the Government of India's commitment to "Power for all"
but also by factors like population growth, rapid urbanisation,
industrialisation, the rising demand for air conditioning, and
sustained economic expansion. In the fourth quarter of FY 22,
energy prices soared to 20 per unit due to a peak in demand caused
by an intense heatwave and coal shortages, prompting the invocation
of Section 11 of the Electricity Act, 2003, urging thermal power
plants to operate at full capacity.
Our investment in a strong culture of skill development,
learning, and empowerment has made our business more agile. The
relentless efforts of our teams, our resilient business model, and
strategic leadership have collectively supported our performance.
The achievements in FY 23 serve as a remarkable example of a
company dedicated to sustainable growth on a significant scale.
We are delighted to present our third standalone ESG report for
FY 23, summarising our objectives, activities, and performance from
an ESG perspective. This report showcases instances of how we have
upheld our commitments and implemented our management approach
across various ESG areas, including environmental stewardship,
health and safety, community engagement, and corporate
governance.
In the current volatile environment with high coal prices,
company faced challenges and hence operated at low plant load
factor with focus on profitable generation. Due to higher coal
prices, OPG reduced its generation volumes. The performance of the
company is discussed in detail in the CEO's and the CFO's
review.
Indian Economy and Power Sector Update
To implement the Hon'ble Prime Minister's vision to propel India
into a US$5 trillion economy by FY 25, the Government of India is
undertaking numerous initiatives such as "Make In India," "Vocal to
Local," rapid and widespread strides in digitisation, reforms in
the labour market, improvements in logistics and ease of doing
business initiatives. These initiatives position India as a viable
alternative to move manufacturing from China.
India holds the distinction of being the third-largest power
consumer globally, historically correlating power demand growth
with GDP growth. Peak power demand in India reached a historic high
of 240 GW on September 1 2023, with expectations of further growth
in future.
In the face of limited expansion in thermal projects in the last
eight years and the substantial challenges associated with
expanding nuclear and renewable energy storage projects, the
outlook for thermal power generation in India remains
optimistic.
Outlook
The current decade (2020-2029) is set to witness a profound
transformation in India's power sector, spanning demand growth,
energy sources, market dynamics, innovation, and an expanded power
supply network to reach all corners of the nation. Under the Indian
government's "Power to All" initiative, the aim is to ensure
reliable and continuous access to sufficient electricity while
accelerating the transition to cleaner, renewable energy sources,
and reducing reliance on fossil fuels. Future investments in the
power sector will benefit from robust demand fundamentals, policy
support, and increasing government emphasis on infrastructural
development.
The government has ambitious plans to establish a renewable
energy capacity of 500 GW by FY 30. The Central Electricity
Authority (CEA) forecasts India's power requirement to reach 817 GW
by FY 30. Additionally, by FY 30, CEA anticipates an increase in
the share of renewable energy generation while the share of
generation from thermal energy will decrease.
We anticipate substantial opportunities unfolding in the coming
years. Our focus remains on profitable operations, value creation
through growth projects, scaling innovation and digitalisation, and
advancing towards ESG targets. We are committed to enhancing our
financial profile and maintaining disciplined capital allocation.
The Group's medium and long-term fundamentals remain steadfast,
supported by robust cash flows that enable OPG to continue its
journey of responsible growth and sustainable returns to
shareholders.
On this positive note, we extend our gratitude to all our
stakeholders for believing in our growth story. We seek your
continued support as we strive to create value for all and
contribute to India's remarkable economic rise.
N. Kumar
Non-Executive Chairman
3 November 2023
CEO's Operational Review
The challenging environment of FY23 demonstrated the
adaptability of OPG's business model allowing us to benefit from a
blend of profitable short term contracts and stable long term
contracts. Our readiness for an ever-evolving and dynamic business
environment is the result of the enterprising and bold decisions
made by our team.
In the past year, we have reinforced our commitment to
sustainable business stewardship and reaffirmed our determination
to prove that our purpose-driven, impact-focused business can
deliver sustainable performance today and well into the future. The
Group continues to honour all its commitments to all
stakeholders.
A review of the Group's operations is as follows:
Plant Availability and Generation
OPG's operational performance depends on its sales model, which
includes a mix of power purchase agreements with various state
utilities and captive power shareholders, plant availability, plant
load factors, and auxiliary power consumption.
Integration into the global economy has brought challenges, such
as the impact of the COVID lockdown and the Russia-Ukraine
conflict, resulting in a sharp increase in coal prices. During FY
23, we strategically focused on short term contracts, bilateral
contracts, and the Day Ahead Markets (DAM) on the Indian Energy
Exchange Limited (IEX), where profit margins were substantially
higher. These strategic measures and timely actions ensured
profitability and cash flow.
OPG's plants are designed to use a wide range of fuels from
various sources and are equipped with world- class air-cooled
condenser technology to minimise water consumption. This
flexibility, though initially capital-intensive, paid dividends
during challenging times, allowing us to use cheaper coal from
various sources, including Indian coal.
Total generation at our plant in FY 23, including 'deemed'
offtake, was 1.53 billion units (FY 22: 1.87 billion units), with
the reduction attributed to our focus on profitable short-term
contracts and contractual obligations under the Long Term Supply
Agreement.
The plant load factor ('PLF'), including 'deemed' offtake, in FY
23 was 42.1 percent (FY 22: 51.5 percent). Auxiliary consumption
levels are a key measure of plant efficiency, typically ranging
from 7.5 percent to 8.5 percent for our units. OPG has implemented
several measures and technical improvements to enhance plant
efficiency by optimising auxiliary power consumption.
Power Offtake
In FY 23, considering the steep increase in international coal
prices, the Group focused on profitable operations, supplying power
under short- term bilateral contracts and IEX. This strategic move
accelerated cash collections and improved earnings, despite high
coal prices. In FY 23, owing to various measures taken by OPG, the
plant realised an average tariff of 8.6p (FY 22: 5.5p).
Additionally, the tariff under the LTSA was revised upward due
to abnormal increases in coal prices following the directives of
Government of India. This pass-through, which was initially valid
until December 2022, is now extended till 30 June 2024, providing
significant support and insulation from coal price volatility.
Coal and Freight
The Group has consistently imported low-sulphur coal from
reputable coal producers and traders with established longstanding
relationships. In FY 23, we purchased coal through short and
medium-term contracts to mitigate the risk of coal price volatility
in the market. We have entered into medium-term Fuel Supply
Agreements (FSA) allowing us to procure up to 153,000 metric tons
of Indian coal per annum. These contracts are signed with Mahanadi
Coalfields Ltd (a subsidiary of Coal India Ltd.).
The average coal price was GBP76.6 per ton in FY 23,
representing a 43 percent increase from FY 22's average of GBP53.7
per ton.
Current coal prices and sea freight rates are returning to
normal levels and the Group continues to actively review its
procurement policy to mitigate the impact of coal price
volatility.
Safety and Environmental Compliance
The Group has made excellent progress with its safety programs,
recording zero fatalities and Total Recordable Incident Rate (TRIR)
in FY 23. We continue to minimise water consumption using
air-cooled condensers and the Groups' philosophy of continual
improvement to remain 'zero discharge unit'
Investment in Atsuya Technologies
OPG invested in Atsuya Technologies Private Limited (Atsuya) as
part of its strategy to diversify into energy savings/ESG-compliant
opportunities. Atsuya utilises artificial intelligence, deep tech,
and the internet of things (IOT) to monitor energy consumption and
provide solutions to save the same. Atsuya's clients include
new-age Unicorns as well as a Fortune 500 Indian energy
company.
Avantika Gupta
Chief Executive Officer
3 November 2023
CFO's Financial Review
The following is a commentary on the Group's financial
performance for the year ending 31 March 2023.
Revenue
In the face of challenging circumstances, FY 23 proved to be a
year where resilience and adaptability were key. The Group's
revenues saw a decrease of GBP21.4 million, representing a decline
of 26.7 percent in FY 23. This strategic shift was driven by the
Group's sharp focus on profitable operations, especially in light
of soaring coal prices. With a higher cost of production, OPG
narrowed its focus only on profitable generation leading to lower
generation volumes.
Adjusted EBITDA for FY 23 amounted to GBP16.1 million,
equivalent to 27.5 percent of revenues, compared to the previous
year's figure of GBP21.6 million, which constituted 27 percent of
previous year's revenue.
Income Statement
Year ended 31 March 2023 2022
================================= ============ ============
Percent Percent
GBPm of revenue GBPm of revenue
================================= ========== ============ ========== ============
Revenue GBP58.7 GBP80.1
Cost of revenue (excluding
depreciation) (GBP42.3) (GBP56.5)
================================= ========== ============ ========== ============
Gross profit GBP16.4 GBP28.0 GBP23.6 GBP29.4
Other operating income GBP1.5 GBP0.0
Other income GBP5.5 GBP8.1
Distribution, general
and administrative expenses,
Ecl (excluding depreciation,
employee stock option
charge,expenditure during
the period on expansion
project) (GBP7.3) (GBP10.0)
Adjusted EBITDA GBP16.1 GBP27.5 GBP21.6 GBP27.0
Share Based compensation GBP0.0 (GBP0.2)
Depreciation (GBP5.7) (GBP5.3)
Net finance costs (GBP4.3) (GBP3.1)
---------- ------------ ---------- ------------
Income from continuing
operations (before tax
non-operational and/or
exceptional items) GBP6.1 GBP10.4 GBP13.0 GBP16.2
Impairment (provision)
write back for profit
(loss) on investments
and assets under construction GBP4.3 GBP0.0
Profit (Loss) on Extraordinary
Items
========== ============ ========== ============
Profit before tax GBP10.4 GBP17.8 GBP13.0 GBP16.2
Taxation (GBP3.2) (GBP4.1)
================================= ---------- ------------ ---------- ------------
Profit after tax GBP7.3 GBP12.4 GBP8.9 GBP11.1
================================= ========== ============ ========== ============
Profit/(Loss) from discontinued
operations, including
Non-Controlling Interest GBP0.0 (GBP2.9)
================================= ---------- ============ ---------- ============
(Loss)/Profit for the
year GBP7.3 GBP12.4 GBP6.0 GBP7.5
================================= ========== ============ ========== ============
In FY 23, the average tariff realised was 8.6p/kWh, marking a
substantial 50 percent increase compared to the previous year's
5.5p/kWh. However, the total generation (including deemed
generation), amounted to 1,528 million units, which represented a
decrease of 18.2 percent when compared to the previous year's 1,868
million units. This reduction can be primarily attributed to the
elevated cost of coal and reduced generation during FY 23, with a
focus on profitable operations. The surge in coal prices was driven
by heightened global demand for coal, with China, Europe, and the
Ukraine-Russia conflict exacerbating the challenges.
Operational Overview FY 23 FY 22
--------------------------------------------- ------ ------
Total generation, incl. "deemed" generation
(million units) 1,528 1,868
--------------------------------------------- ------ ------
Plant Load Factor (PLF) (percent) 42.1 51.5
--------------------------------------------- ------ ------
Average tariff (pence/unit) 8.6 5.5
--------------------------------------------- ------ ------
Gross Profit
In the fiscal year, Gross Profit (GP) amounted to GBP16.4
million, equivalent to 28 percent of revenue. When compared to the
previous year (FY 22 - GBP23.6 million, representing 29.4 percent
of revenue), the GP declined by GBP7.1 Million representing a 30.3
percent fall. This decline can be attributed to the substantial
impact of high international coal prices and reduced generation and
supply.
The cost of revenue primarily comprises fuel costs. The table
below provides insight into the average prices of coal consumed in
FY 23 and FY 22.
Average price of coal consumed FY 23 FY 22
------------------------------------------ -------- --------
Average price of coal consumed (per
MT) GBP76.6 GBP53.7
------------------------------------------ -------- --------
Average price of coal consumed (per GBP20.9 GBP13.1
mKCal)
------------------------------------------ -------- --------
Change in Average price of coal consumed
(per MT) (percent) 42.6 25.9
------------------------------------------ -------- --------
Change in Average price of coal consumed
(per mKCal) (percent) 60.1 27.6
------------------------------------------ -------- --------
Adjusted EBITDA
Adjusted Earnings before Interest, Depreciation, Taxes and
Amortisation ('Adjusted EBITDA') serves as a measure of a
business's cash generation from operations before accounting for
depreciation, interests, exceptional charges, and non-standard or
non-operational expenses, such as share-based compensation, amongst
others. Adjusted EBITDA is a valuable tool for analysing and
comparing profitability over different periods and amongst
companies, as it removes the impact of financing and capital
expenditure.
In FY 23, Adjusted EBITDA amounted to GBP16.1 million, in
contrast to GBP21.6 million in FY 22, reflecting a decrease of
GBP5.5 million or 25.3 percent. This decline can primarily be
attributed to steep increase in international coal prices,
reduction in other income and decrease in coal sales as well.
Profit from continuing operations before tax was GBP6.1 million,
equivalent to 10.4 percent of revenue, as compared to GBP13
million, representing 16.2 percent of revenue, in FY 22.
Profit Before Tax (PBT) reconciliation for FY 23 (GBPm)
PBT (GBPm) FY 23
--------------------------------------------------- ---------
PBT FY 23 GBP10.4
PBT FY 22 GBP13.0
--------------------------------------------------- ---------
Decrease in PBT (GBP2.6)
Decrease in GP (GBP7.1)
Increase in Other Operating Income GBP1.5
Decrease in Other Income (GBP2.5)
Decrease in Distribution, General & Administrative GBP2.9
Expenses, Expected Credit Loss
Increase in Net Finance Costs (GBP1.3)
Increase in Depreciation and Amortisation (GBP0.4)
--------------------------------------------------- ---------
Reversal of Impairment and 31 percent GBP4.3
share of Net Profit from Associates
--------------------------------------------------- ---------
Decrease in PBT (GBP2.6)
--------------------------------------------------- ---------
Taxation
The Group's operating subsidiary continues to benefit from a tax
holiday period. However, the subsidiary is subject to Minimum
Alternate Tax (MAT) on its accounting profits. The taxes paid under
MAT can be used to offset future tax liabilities that may arise
after the conclusion of the tax holiday period.
Owing to the lower level of operations and the high cost of coal
during the year, the tax expense for the year amounted to GBP3.2
million.
Profit After Tax from continuing operations
Profit After Tax from continuing operations decreased by GBP1.6
million (18.5 percent) from GBP8.9 million to GBP7.3 million in FY
23.
Assets - Karnataka Solar Projects as part of Associate
Entities
In FY 18, four solar projects under different Special Purpose
Vehicles (SPV's) totalling to 62 MW were commissioned in the state
of Karnataka. OPG continues to hold a 31 percent equity interest in
these projects, which it intends to divest. The management is yet
to identify a suitable buyer who can provide the right valuation
for the sale of these assets. However, in compliance with IFRS 5,
the solar assets are being reclassified from "Assets Held for Sale"
to being "Associate Entities" and for FY 23. Profits from these
solar entities have been accounted to the extent of 31 percent of
its shareholding in the financial statements. The Group continues
to evaluate options to divest its 31 percent holding in these solar
entities.
Earnings per Share (EPS)
The Group's total reported EPS increased from 1.5 Pence in FY 22
to 1.8 Pence in FY 23.
Dividend policy
One of the OPG's paramount objectives is to maximise
stakeholders' long-term value. Keeping in mind, the disruptions and
uncertainty caused by the extraordinary volatility in coal prices
and related freight, the management, in consonance with the Board
believes that it is in the best interests of the Group and its
stakeholders to conserve cash. The cash thus accumulated will be
used to maintain a strong and resilient balance sheet to withstand
turbulent times. Therefore, the Board decided not to declare a
dividend for FY 23. The Board will revisit the Group's dividend
policy in due course.
The Foreign Exchange Gain / Loss on Translation
The British Pound to Indian Rupee appreciated to a closing rate
of GBP1= INR 101.44 as at 31 March 2023 from a rate of GBP1= INR
99.37 as at 31 March 2022 resulting in an exchange loss of GBP5.7
million. The same has been recognised under "Exchange differences
on translating foreign operations".
Property, Plant and Equipment
The decrease in net book value of our Property, Plant and
Equipment to GBP165.61 million principally relates to
additions/deletions during the year offset by depreciation and
foreign exchange impact as at the end of FY 23.
Other Non-Current Assets
Other Non-Current Assets (excluding Property, Plant and
Equipment & Intangible Assets) have increased by GBP11.1
million. The major components of this increase was a GBP13.1
million increase in "Non Current Investments" comprising the
transfer of "Assets Held for Sale" to "Associated Entities".
Non-current restricted cash decreased by GBP2.0 million from
GBP10.4 million in FY22 to GBP8.4 million in FY23.
Overall, this resulted in an increase of GBP1.26 million (40
percent increase) in Net Finance Costs from GBP3.1 million in FY 22
to GBP4.3 million in FY 23.
Current restricted cash representing deposits maturing up to
twelve months amounted to GBP6.8 million ( FY 22: GBP2.4 million)
an increase of 183.7 percent which have been pledged as security
for Letters of Credit and Bank Guarantees.
Non-current restricted cash represents investments in mutual
funds of GBP8.4 million (FY 22: GBP10.4 million). Non-current
restricted cash decreased by 20 percent.
Cash flow
Cash flow from continuing operations; before, and after, the
changes in working capital was GBP16.0 million (FY 22: GBP21.6
million) and negative GBP1.2 million (FY 22: GBP16.3 million)
respectively.
Movements (GBPm) FY23 FY22
=========================================== ========== =========
Operating cash flows from continuing
operations before changes in working
capital GBP16.0 GBP21.6
Tax paid (GBP0.4) (GBP0.0)
Change in working capital assets and
liabilities (GBP16.8) (GBP5.2)
Net cash generated by / (used in)
operating activities from continuing
operations (GBP1.2) GBP16.3
Purchase of property, plant and equipment
(net of disposals) (GBP1.1) (GBP3.5)
Investments (purchased)/sold, incl.
in solar projects, shipping JV, market
securities, movement in restricted
cash and interest received (1) GBP14.5 (GBP5.7)
Net cash (used in)/from continuing
investing activities GBP13.4 (GBP9.2)
Finance costs paid, incl. foreign exchange
losses (GBP5.9) (GBP4.5)
Dividend paid
=========================================== ========== =========
Total cash change from continuing
operations before net borrowings GBP6.2 GBP2.6
------------------------------------------- ---------- ---------
The Company is required under AIM Rule 19 to publish its FY 23
Accounts by 30 September 2023. There has been a delay in the
financial reporting close process resulting in suspension of the
Company's ordinary shares from trading on AIM and trading will be
reinstated upon the publication of these FY 23 audited
accounts.
Ajit Pratap Singh
Chief Financial Officer
3 November 2023
Consolidated Statement of Financial Position
As at 31 March 2023
( All amount in GBP, unless As at 31 As at 31
otherwise March March
stated) Notes 2023 2022
---------------------------------- ----------------------------------
Assets
Non-current assets
Intangible assets 14 13,401 11,810
Property, plant and equipment 15 165,607,650 173,369,128
Right-of-use assets - 36,548
Investments 16 15,245,563 2,113,307
Other long-term assets 17 9,734 12,140
Restricted cash 17 8,379,292 10,427,847
---------------------------------- ----------------------------------
189,255,640 185,970,780
---------------------------------- ----------------------------------
Current assets
Inventories 19 7,719,396 10,465,820
Trade and other receivables 18 31,914,606 8,607,935
Other short-term assets 17 13,637,196 26,182,923
Current tax assets (net) 1,147,062 1,250,086
Restricted cash 20(b) 6,786,497 2,392,104
Cash and cash equivalents 20(a) 3,319,148 7,691,392
Assets held for sale 7 - 13,497,027
---------------------------------- ----------------------------------
64,523,905 70,087,287
---------------------------------- ----------------------------------
Total assets 253,779,545 256,058,067
---------------------------------- ----------------------------------
Equity and liabilities
Equity
Share capital 21 58,909 58,909
Share premium 131,451,482 131,451,482
Other components of equity (15,910,806) (10,221,248)
Retained earnings 55,157,211 47,904,448
---------------------------------- ----------------------------------
Equity attributable to owners
of the Company 170,756,796 169,193,591
Non-controlling interests 875,541 872,663
---------------------------------- ----------------------------------
Total equity 171,632,337 170,066,254
---------------------------------- ----------------------------------
Liabilities
Non-current liabilities
Borrowings 23 7,098,242 9,759,610
Non-Convertible Debentures 23 - 20,126,738
Trade and other payables 24 306,402 630,358
Other liabilities 37,720 36,228
Deferred tax liabilities (net) 13 19,188,361 17,029,927
---------------------------------- ----------------------------------
26,630,725 47,582,861
---------------------------------- ----------------------------------
Current liabilities
Borrowings 23 25,498,900 13,399,429
Trade and other payables 24 29,514,723 24,440,324
Other liabilities 502,860 569,199
Liabilities classified as held
for sale - -
---------------------------------- ----------------------------------
55,516,483 38,408,952
---------------------------------- ----------------------------------
Total liabilities 82,147,208 85,991,813
---------------------------------- ----------------------------------
Total equity and liabilities 253,779,545 256,058,067
---------------------------------- ----------------------------------
The notes are an integral part of these consolidated financial
statements.
The financial statements were authorised for issue by the board
of directors on 3 November 2023 and were signed on its behalf
by:
N Kumar Ajit Pratap Singh
Non-Executive Chairman Chief Financial Officer
------------------------
Consolidated statement of Comprehensive Income
For the Year ended 31 March 2023
(All amount in GBP, unless otherwise
stated) Notes Year ended Year ended
31 March 2023 31 March 2022
-------------- --------------
Revenue 8 58,683,036 80,067,032
Cost of revenue 9 (42,263,205) (56,500,964)
-------------- --------------
Gross profit 16,419,831 23,566,068
-------------- --------------
Other Operating income 10(a) 1,455,039 -
Other income 10(b) 5,530,988 8,054,865
Distribution cost (1,225,949) (3,894,563)
General and administrative expenses (6,040,826) (6,316,484)
Depreciation and amortisation (5,696,860) (5,333,531)
-------------- --------------
Operating profit 10,442,223 16,076,355
-------------- --------------
Finance costs 11 (5,925,076) (5,356,089)
Finance income 12 1,599,860 2,285,364
Share of net profit from associates 1,355,413
Reversal of FV Impairment of associates
made in 21-22 2,950,958
-------------- --------------
Profit before tax 10,423,378 13,005,630
-------------- --------------
Tax expense 13 (3,163,596) (4,097,184)
-------------- --------------
Profit for the year from continued
operations 7,259,782 8,908,446
-------------- --------------
Gain/(Loss) from discontinued operations,
including Non-Controlling Interest 7(a) - (2,928,341)
-------------- --------------
Profit for the year 7,259,782 5,980,105
============== ==============
Profit for the year attributable
to:
Owners of the Company 7,252,763 5,994,168
Non - controlling interests 7,019 (14,063)
-------------- --------------
7,259,782 5,980,105
============== ==============
Earnings per share from continued
operations
Basic earnings per share (in pence) 26 1.80 2.23
Diluted earnings per share (in
pence) 1.80 2.23
Earnings/(Loss) per share from
discontinued operations
Basic earnings/(loss) per share
(in pence) 26 - (0.73)
Diluted earnings/(loss) per share
(in pence) - (0.73)
Earnings per share
-Basic (in pence) 26 1.80 1.50
-Diluted (in pence) 1.80 1.50
Other comprehensive (loss) / income
Items that will be reclassified
subsequently to profit or loss
Exchange differences on translating
foreign operations (5,689,558) 2,319,444
Items that will be not reclassified
subsequently to profit or loss
Exchange differences on translating
foreign operations, relating to
non-controlling interests (4,140) 4,857
-------------- --------------
Total other comprehensive (loss)
/ income (5,693,698) 2,324,301
-------------- --------------
Total comprehensive income 1,566,084 8,304,406
============== ==============
Total comprehensive income / (loss)
attributable to:
Owners of the Company 1,563,205 8,313,612
Non-controlling interest 2,879 (9,206)
-------------- --------------
1,566,084 8,304,406
============== ==============
The notes are an integral part of these consolidated financial
statements.
Consolidated statement of
changes in equity
For the Year ended 31 March
2023
`
(All amount in GBP, unless
otherwise stated)
Issued Foreign Total
capital Debenture currency attributable
(No. of Ordinary Share Redemption Other translation Revaluation Retained to owners Non-controlling Total
shares) shares premium reserve reserves reserve Reserve earnings of parent interests equity
At 1 April 2021 400,733,511 58,909 131,451,482 - 8,021,374 (20,756,844) - 41,910,280 160,685,201 881,869 161,567,070
------------ --------- ------------ ----------- ---------- ------------- ------------ ----------- ------------- ---------------- ------------
Employee Share
based
payment LTIP
(Note
22) - - - - 194,778 - - - 194,778 - 194,778
------------ --------- ------------ ----------- ---------- ------------- ------------ ----------- ------------- ---------------- ------------
Transaction with
owners - - - - 194,778 - - - 194,778 - 194,778
------------ --------- ------------ ----------- ---------- ------------- ------------ ----------- ------------- ---------------- ------------
Net Additions
for
the year - - - - - - 5,994,168 5,994,168 (14,063) 5,980,105
Deconsolidation
(note
7b)
Other
comprehensive
income - - - - - 2,319,444 - 2,319,444 4,857 2,324,301
------------ --------- ------------ ----------- ---------- ------------- ------------ ----------- ------------- ---------------- ------------
Total
comprehensive
income - - - - - 2,319,444 - 5,994,168 8,313,612 (9,206) 8,304,406
------------ --------- ------------ ----------- ---------- ------------- ------------ ----------- ------------- ---------------- ------------
At 31 March 2022 400,733,511 58,909 131,451,482 - 8,216,152 (18,437,400) - 47,904,448 169,193,591 872,663 170,066,254
------------ --------- ------------ ----------- ---------- ------------- ------------ ----------- ------------- ---------------- ------------
At 1 April 2022 400,733,511 58,909 131,451,482 - 8,216,152 (18,437,400) - 47,904,448 169,193,591 872,663 170,066,254
Employee Share
based
payment LTIP
(Note
22) - - - - - - - - - -
------------ --------- ------------ ----------- ---------- ------------- ------------ ----------- ------------- ---------------- ------------
Transaction with
owners - - - - - - - - - - -
Net Additions
for
the year - - - - - - - 7,252,763 7,252,763 7,019 7,259,782
Other
comprehensive
income - - - - - (5,689,558) - (5,689,558) (4,141) (5,693,699)
------------ --------- ------------ ----------- ---------- ------------- ------------ ----------- ------------- ---------------- ------------
Total
comprehensive
income - - - - - (5,689,558) - 7,252,763 1,563,205 2,878 1,566,083
------------ --------- ------------ ----------- ---------- ------------- ------------ ----------- ------------- ---------------- ------------
At 31 March 2023 400,733,511 58,909 131,451,482 - 8,216,152 (24,126,958) - 55,157,211 170,756,796 875,541 171,632,337
------------ --------- ------------ ----------- ---------- ------------- ------------ ----------- ------------- ---------------- ------------
The notes are an integral part of these consolidated financial
statements.
Consolidated statement of cash
flows
For the Year ended 31 March 2023
(All amount in GBP, unless otherwise
stated) Year ended Year ended
Notes 31 March 2023 31 March 2022
-------------- --------------
Cash flows from operating activities
Profit before income tax including
discontinued operations and income
from associates 10,423,378 10,077,289
Adjustments for:
(Profit) / Loss from discontinued
operations, net / Reversal of Impairment (2,950,958) 2,928,341
(Profit) / Loss from associate companies (1,355,413) -
Unrealised foreign exchange (gain)/loss 9(c) (121,677) 184,880
Provisions created during the year - -
Financial costs 5,925,076 5,171,209
Financial income (including Profit
on sale of Financial Instruments) (1,599,860) (2,285,364)
Share based compensation costs 21 - 194,778
Depreciation and amortisation 5,696,860 5,333,531
Impairment of Investment/PPE - -
Changes in working capital
Trade and other receivables (23,306,671) 6,294,982
Inventories 2,746,424 1,854,857
Other assets (924,487) (3,283,261)
Trade and other payables 4,750,443 (9,121,460)
Other liabilities (64,847) (969,676)
-------------- --------------
Cash generated from continuing
operations (781,732) 16,380,106
Taxes paid (436,692) (48,554)
-------------- --------------
Cash provided by operating activities
of continuing operations (1,218,424) 16,331,552
Cash used for operating activities
of discontinued operations - -
-------------- --------------
Net cash provided by operating
activities (1,218,424) 16,331,552
-------------- --------------
Cash flows from investing activities
Purchase of property, plant and
equipment (including capital advances) (1,112,976) (3,534,707)
Proceeds from Disposal of property,
plant and equipment 1,072 -
Interest received 1,218,405 2,285,364
Movement in restricted cash (2,345,838) (1,213,769)
Purchase of investments (68,534,422) (6,760,520)
Sale of Investments 81,471,026 -
Redemption of Investments 2,673,310 -
Investment in subsidiaries & associates - -
Cash from / (used in) investing
activities of continuing operations 13,370,577 (9,223,632)
Cash from investing activities of
discontinued operations - -
-------------- --------------
Net cash from / (used in) investing
activities 13,370,577 (9,223,632)
-------------- --------------
Cash flows from financing activities
Proceeds from borrowings (net of
costs) 6,842,271 -
Proceeds/(Investments) from equity (91) -
Repayment of borrowings (17,530,906) (3,909,695)
Dividend paid - -
Finance costs paid (5,925,076) (4,528,565)
-------------- --------------
Cash used in financing activities
of continuing operations (16,613,802) (8,438,260)
Cash used in financing activities
of discontinued operations - -
-------------- --------------
Net cash used in financing activities (16,613,802) (8,438,260)
-------------- --------------
Net (decrease) in cash and cash
equivalents from continuing operations (4,461,649) (1,330,340)
Net decrease in cash and cash equivalents
from discontinued operations - -
Net (decrease) in cash and cash
equivalents (4,461,649) (1,330,340)
Cash and cash equivalents at the
beginning of the year 7,691,392 8,920,952
Cash and cash equivalents on deconsolidation - -
Exchange differences on cash and
cash equivalents 89,405 100,780
Cash and cash equivalents of the
discontinued operations - -
-------------- --------------
Cash and cash equivalents at the
end of the year 3,319,148 7,691,392
-------------- --------------
Disclosure of Changes in
financing liabilities :
Analysing changes in Net 1 April Forex rate 31 March
debt 2022 Cash flows impact 2023
----------------------------- ----------- ------------- -------------- -----------
Working Capital loan 1,641,791 360,042 (50,002) 1,951,831
Secured loan due within one
year 11,757,638 12,554,455 (815,388) 23,496,705
Borrowings grouped under
Current liabilities 13,399,429 12,914,497 (865,390) 25,448,536
Secured loan due after one
year 29,886,348 (23,197,596) 341,546 7,030,298
Borrowings grouped under
Non-current liabilities 29,886,348 (23,197,596) 341,546 7,030,298
----------------------------- ----------- ------------- -------------- -----------
Analysing changes in Net 1 April 31 March
debt 2021 Cash flows Other Changes 2022
----------------------------- ----------- ------------- -------------- -----------
Working Capital loan 3,788,314 (2,152,472) 5,949 1,641,791
Secured loan due within one
year 722,044 10,780,822 254,772 11,757,638
Borrowings grouped under
Current liabilities 4,510,358 8,628,350 260,721 13,399,429
Secured loan due after one
year 42,100,295 (12,538,045) 324,098 29,886,348
Borrowings grouped under
Non-current liabilities 42,100,295 (12,538,045) 324,098 29,886,348
----------------------------- ----------- ------------- -------------- -----------
The notes are an integral part of these consolidated financial
statements.
Notes to the Consolidated Financial Statements
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) - as issued by the International Accounting
Standards Board 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 55 Athol street,
Douglas, Isle of Man IM1 1LA. The Company's equity shares are
listed on the Alternative Investment Market (AIM) of the London
Stock Exchange.
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.
b. Changes in accounting Standards
The following standards and amendments to IFRSs became effective
for the period beginning on 1 January 2022 and did not have a
material impact on the consolidated financial statements:
-- IFRS 1, 'First time adoption of IFRS' has been amended for a
subsidiary that becomes a first-time adopter after its parent. The
subsidiary may elect to measure cumulative translation differences
for foreign operations using the amounts reported by the parent at
the date of the parent's transition to IFRS.
-- IFRS 9, 'Financial Instruments' has been amended to include
only those costs or fees paid between the borrower and the lender
in the calculation of "the 10% test" for derecognition of a
financial liability. Fees paid to third parties are excluded from
this calculation.
-- IFRS 16, 'Leases', amendment to the Illustrative Example 13
that accompanies IFRS 16 to remove the illustration of payments
from the lessor relating to leasehold improvements. The amendment
intends to remove any potential confusion about the treatment of
lease incentives.
i Amendments to IFRS 16, Covid 19 "related rent concessions"
The amendments permit lessees, as a practical expedient, not to
assess whether particular rent concessions occurring as a direct
consequence of the Covid-1 pandemic are lease modifications and
instead, to account for those rent concessions as they were not in
lease modifications. Initially, these amendments were to apply
until June 30, 2021.
ii Amendments to IFRS 16, Covid 19 "related rent concessions beyond 30 June 2021"
In light of the fact that the Covid-19 pandemic is continuing,
the LASB extended the application period of the practical
expenditure with respect to accounting for Covid-19-related rent
concessions through June 30, 2022
iii Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4, and IFRS 16
"Interest rate benchmark reform (phase 2)"
IFRS9. IAS 39, IFRS 7, The amendments provide temporary relief
to adopters regarding the financial reporting impact that will
result from replacing Interbank Offered Rates (IBOR) with
alternative risk-free rates (RFRS). The amendments provide for the
following practical expedients: Treatment of contract modifications
or changes in contractual cash flows due directly to the
Reform-such as fluctuations in a market interest rate-as changes in
a floating rate, Allow changes to the designation and documentation
of a hedging relationship required by IBOR reform without
discontinuing hedge accounting. Temporary relief from having to
meet the separately identifiable requirement when an RFR instrument
is designated as a hedge of a risk comes in connection with the
IBOR Reform.
iv Amendments to IFRS 9, IAS 39 and IFRS 7, "Interest Rate Benchmark Reform"
In September 2019, the IASB published amendments to IFRS 9, IAS
39 and IFRS 7, "Interest Rate Benchmark Reform." The Phase 1
amendments of the IASB's Interest Rate Benchmark Reform project
(IBOR reform) provide for temporary exemption from applying
specific hedge accounting requirements to hedging relationships
that are directly affected by IBOR reform. The exemptions have the
effect that IBOR reform should not generally cause hedge
relationships to be terminated due to uncertainty about when and
how reference interest rates will be replaced. However, any hedge
ineffectiveness should continue to be recorded in the income
statement under both IAS 39 and IFRS 9. Furthermore, the amendments
set out triggers for when the exemptions will end, which include
the uncertainty arising from IBOR reform. The amendments have no
impact on Group's Consolidated Financial Statements.
v Amendments to IFRS 4, "Extension of the temporary exemption from IFRS 9"
Deferral of initial application of IFRS 9 for insurers
c. Standards and Interpretations Not Yet Applicable
The IASB and the IFRS IC have issued the following additional
standards and interpretations. Group does not apply these rules
because their application is not yet mandatory. Currently, however,
these adjustments are not expected to have a material impact on the
consolidated financial statements of the Group:
i Amendments to IAS 16-proceeds before intended use
The amendments prohibit a company from deducting from the cost
of property, plant and equipment amounts received from selling
items produced while the Company is preparing the asset for its
intended use. Instead, a company will recognize such sales proceeds
and related cost in profit or loss.
ii Amendments to IAS 37-Onerous contracts-cost of Fulfilling a
contract
Clarification that all costs directly attributable to a contract
must be considered when determining the cost of fulfilling the
contract.
iii Amendments to IFRS 3-Reference to the Conceptual
Framework
Reference to the revised 2018 IFRS Conceptual Framework.
Priority application of LAS 37 or IFRIC 21 by the acquirer to
identify acquired liabilities. No recognition of contingent assets
acquired allowed.
iv Annual Improvements Project-Annual Improvements to IFRSs
2018-2020 Cycle
Minor amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41.
v IFRS 17 "Insurance contracts including Amendments to IFRS
17"
The new IFRS 17 standard governs the accounting for insurance
contracts and supersedes IFRS 4.
vi Amendment to IFRS 17-Initial Application of IFRS 17 and IFRS
9-Comparative Information
The amendment concerns the transitional provisions for the
initial joint application of IFRS 17 and IFRS 9.
vii Amendments to IAS 1-Classification of Liabilities as Current
or Non-current Amendments to IAS 1-Classification of Liabilities as
Current or Non-current-Deferral of Effective Date
Clarification that the classification of liabilities as current
or non-current is based on the rights the entity has at the end of
the reporting period.
viii Amendments to IAS 1 and IFRS Practice Statement
2-Disclosure of Accounting Policies
Clarification that an entity must disclose all material
(formerly ""significant"") accounting policies. The main
characteristic of these items is that, together with other
information included in the financial statements, they can
influence the decisions of primary users of the financial
statements.
ix Amendments to IAS 8-Definition of Accounting Estimates
Clarification with regard to the distinction between changes in
accounting policies (retrospective application) and changes in
accounting estimates (prospective application).
x Amendments to IAS 12-Deferred Tax related to Assets and
Liabilities arising from a Single transaction.
Clarification that the initial recognition exemption of IAS 12
does not apply to leases and decommissioning obligations. Deferred
tax is recognized on the initial recognition of assets and
liabilities arising from such transactions.
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 financial
assets measured at FVPL.
The consolidated financial statements are presented in
accordance with IAS 1 Presentation of Financial Statements and have
been presented in Great Britain Pounds ('LIR'), the functional and
presentation currency of the Company.
During the current year, the profits for the purpose of
consolidation generated by the Solar entities Aavanti Solar Energy
Private Limited, Mayfair Renewable Energy (I) Private Limited,
Aavanti Renewable Energy Private Limited and Brics Renewable Energy
Private Limited were considered in the books for finalizing the
group level financials. These Assets could not be continued to be
held for sale as the process of sale could not get completed within
a reasonable time frame. The Effect of Impairment provided during
the earlier years when these were categorised as Assets held for
sale were reversed and the current years profits / loss together
with earlier years carried forward reserves were recognised as
Share of Profits to the extent of 31% share holding, from the
Associate Entities.
Going Concern
As at 31 March 2023 the Group had GBP3.3m in cash and cumulative
net current assets of GBP15.8 m. The Group has considered the
possible effects that may result from the pandemic on the carrying
amounts of receivables and other financial assets and carried out a
Reverse Stress Test (RST). In developing the assumptions relating
to the possible future uncertainties in the global economic
conditions, the Group, as at the date of approval of these
financial statements has used internal and external sources of
information. The Group has performed sensitivity analysis on the
assumptions used for business projections and based on current
estimates expects the carrying amount of these assets will be
recovered and no material impact on the financial results
inter-alia including the carrying value of various current and
non-current assets are expected to arise for the year ended 31
March 2023. The Group will continue to closely monitor any
variation due to the changes in situation and these changes will be
taken into consideration, if necessary, as and when they
crystalise. The directors and management have prepared a cash flow
forecast for
24 months and this report has been approved. Based on the RST
analysis on PLF Cost of Coal (Dollar per Ton) Common Tariff (INR
per UNIT) and FX Rate (INR / USD), we can conclude that the Group
is in strong position to go through the current situation and
continuing as a going concern is not an issue.
The highly volatile Coal Prices during the year under review
22-23, primarily due to Russia-Ukraine war, had impact on the group
businesses resulting in reduced level of operations with focus on
profitability. This has resulted in lesser generation and export of
power. Further the higher coal prices reduced the net margins as
well. Though demand for electricity continued to increase during
the year, the government power distribution companies could not
adequately increase the tariff to their consumers consequent to
which the group also could not adequately pass through the increase
in coal prices to its captive consumers. The group received no
materially significant public support measures such as tax relief
or compensatory mechanisms except for pass through of coal prices
from TANGEDCO under long term power purchase agreement.
As explained, the surge in global coal price during second half
of the previous year 21-22 and continued increase in the first 8
months of FY 22-23 deterred import of coal, putting further
pressure on demand for domestic (Indian) coal. The export embargo
from Indonesia and the war between Russia and Ukraine further
aggravated the situation, with a sharp upward movement in global
coal prices. As power demand in India continues to be met mainly
through thermal generation, continued surge in power demand put
pressure on fuel supply. The unanticipated rise in demand for
electricity with pickup in economic activities was not met by
proportional growth in coal supplies (also in part due to sharp
jump in global coal price), resulting in severe coal shortages. To
mitigate the risk of abnormal coal price increase in international
markets, the Government of India decided to reduce dependency on
imported coal and increased domestic production as well as
initiated allotment of coal mines to private sector for commercial
mining. The Government of India has kept an ambitious target to
become net exporter of coal and to start export of coal by FY
2025-26. Over the later half of the year 22-23 and the recent
downward trend in coal prices have raised hopes of the
International prices getting stabilised at Precovid levels. The
Group continues to take commercial and technical measures to reduce
the impact of any adverse development including blending
comparatively cheaper coal, modifications to boilers to facilitate
different quality coal firing and continues to engage in meaningful
renegotiation of the tariff and commercial terms of the power sale
arrangement with the power consumers.
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 2023. 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 to or received from and
the book value of the share of the net assets is recognised in
'other reserve' within statement of changes in equity.
c) Investments in associates and joint ventures
Investments in associates and joint ventures are accounted for
using the equity method. The carrying amount of the investment in
associates and joint ventures is increased or decreased to
recognise the Group's share of the profit or loss and other
comprehensive income of the associate and joint venture, adjusted
where necessary to ensure consistency with the accounting policies
of the Group.
Unrealised gains and losses on transactions between the Group
and its associates and joint ventures are eliminated to the extent
of the Group's interest in those entities. Where unrealised losses
are eliminated, the underlying asset is also tested for
impairment.
d) List of subsidiaries, joint ventures, and associates
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 Country % Voting % Economic
parent of incorporation Right interest
March March March March
2023 2022 2023 2023
-------------------------------- ------------ -------------------- -------- -------- -------- --------
Caromia Holdings limited
('CHL') OPGPV Cyprus 100 100 100 100
Gita Power and Infrastructure
Private Limited, ('GPIPL') CHL India 97.73 97.73 97.73 97.73
Saan Renewable Private
Limited Private Limited OPGPG India 100 100
Saman Renewable Private
Limited OPGPG India 100 100
Mark Renewables Private
Limited OPGPG India 100 100
Mark Solar Private
Limited OPGPG India 100 100
Saman Solar Private
Limited OPGPG India 100 100
OPG Power Generation
Private Limited ('OPGPG') GPIPL India 81.42 75.38 99.92 99.90
Samriddhi Surya Vidyut
Private Limited OPGPG India 100.00 100.00 100.00 100.00
Powergen Resources
Pte Ltd OPGPV Singapore 95.00 95.00 95 95
ii) Investments in Joint Ventures
Joint ventures Venture Country % Voting right % Economic
of incorporation interest
March March March March
2023 2022 2023 2022
------------------- ----------- -------------------- -------- -------- ------- -------
Padma Shipping OPGPV
Limited ("PSL") / OPGPG Hong Kong 50 50 50 50
iii) Investments in Associates
Associates Country % Voting Right % Economic
of incorporation interest
March March March March
2023 2022 2023 2022
------------------------------- -------------------- -------- -------- ------- -------
Aavanti Solar Energy Private
Limited India 31 31 31 31
Mayfair Renewable Energy
(I) Private Limited India 31 31 31 31
Aavanti Renewable Energy
Private Limited India 31 31 31 31
Brics Renewable Energy
Private Limited India 31 31 31 31
e) Foreign currency translation
The functional currency of the Company is the Great Britain
Pound Sterling (GBP). The Cyprus entity is an extension of the
parent and pass through investment entity. Accordingly the
functional currency of the subsidiary in Cyprus is the Great
Britain Pound Sterling. The functional currency of the Company's
subsidiaries operating in India, determined based on evaluation of
the individual and collective economic factors is Indian Rupees ('
' or 'INR'). The presentation currency of the Group is the Great
Britain Pound (GBP) as submitted to the AIM counter of the London
Stock Exchange where the shares of the Company are listed.
At the reporting date the assets and liabilities of the Group
are translated into the presentation currency at the rate of
exchange prevailing at the reporting date and the income and
expense for each statement of profit or loss are translated at the
average exchange rate (unless this average rate is not a reasonable
approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expense are
translated at the rate on the date of the transactions). Exchange
differences are charged/ credited to other comprehensive income and
recognized in the currency translation reserve in equity.
Transactions in foreign currencies are translated at the foreign
exchange rate prevailing at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
Statement of financial position date are translated into functional
currency at the foreign exchange rate ruling at that date.
Aggregate gains and losses resulting from foreign currencies are
included in finance income or costs within the profit or loss.
INR exchange rates used to translate the INR financial
information into the presentation currency of Great Britain Pound
(GBP) are the closing rate as at 31 March 2023: 101.44 (2022:
99.37) and the average rate for the year ended 31 March 2023: 96.79
(2022: 101.62).
f) Revenue recognition
In accordance with IFRS 15 - Revenue from contracts with
customers, the group recognises revenue to the extent that it
reflects the expected consideration for goods or services provided
to the customer under contract, over the performance obligations
they are being provided. For each separable performance obligation
identified, the Group determines whether it is satisfied at a
"point in time" or "over time" based upon an evaluation of the
receipt and consumption of benefits, control of assets and
enforceable payment rights associated with that obligation. If the
criteria required for "over time" recognition are not met, the
performance obligation is deemed to be satisfied at a "point in
time". Revenue principally arises as a result of the Group's
activities in electricity generation and distribution. Supply of
power and billing satisfies performance obligations. The supply of
power is invoiced in arrears on a monthly basis and generally the
payment terms within the Group are 10 to 45 days.
Revenue
Revenue from providing electricity to captive power shareholders
and sales to other customers is recognised on the basis of billing
cycle under the contractual arrangement with the captive power
shareholders & customers respectively and reflects the value of
units of power supplied and the applicable tariff after deductions
or discounts. Revenue is earned at a point in time of joint meter
reading by both buyer and seller for each billing month.
For STOA, revenue is earned at a point in time of joint meter
reading by both buyer and seller for each billing month. For IEX,
revenue is earned on daily basis of supply based on the bid and
allotted quantum which gets reconciled at a point in time of meter
reading for each billing month.
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
IFRS 9 Financial Instruments contains regulations on measurement
categories for financial assets and financial liabilities. It also
contains regulations on impairments, which are based on expected
losses.
Financial assets are classified as financial assets measured at
amortized cost, financial assets measured at fair value through
other comprehensive income (FVOCI) and financial assets measured at
fair value through profit and loss (FVPL) based on the business
model and the characteristics of the cash flows. If a financial
asset is held for the purpose of collecting contractual cash flows
and the cash flows of the financial asset represent exclusively
interest and principal payments, then the financial asset is
measured at amortized cost. A financial asset is measured at fair
value through other comprehensive income (FVOCI) if it is used both
to collect contractual cash flows and for sales purposes and the
cash flows of the financial asset consist exclusively of interest
and principal payments. Unrealized gains and losses from financial
assets measured at fair value through other comprehensive income
(FVOCI), net of related deferred taxes, are reported as a component
of equity (other comprehensive income) until realized. Realized
gains and losses are determined by analyzing each transaction
individually. Debt instruments that do not exclusively serve to
collect contractual cash flows or to both generate contractual cash
flows and sales revenue, or whose cash flows do not exclusively
consist of interest and principal payments are measured at fair
value through profit and loss (FVPL). For equity instruments that
are held for trading purposes the group has uniformly exercised the
option of recognizing changes in fair value through profit or loss
(FVPL). Refer to note 30""Summary of financial assets and
liabilities by category and their fair values".
Impairments of financial assets are both recognized for losses
already incurred and for expected future credit defaults. The
amount of the impairment loss calculated in the determination of
expected credit losses is recognized on the income statement.
Impairment provisions for current and non-current trade receivables
are recognised based on the simplified approach within IFRS 9 using
a provision matrix in the determination of the lifetime expected
credit losses. During this process the probability of the
non-payment of the trade receivables is assessed. This probability
is then multiplied by the amount of the expected loss arising from
default to determine the lifetime expected credit loss for the
trade receivables. On confirmation that the trade receivable will
not be collectable, the gross carrying value of the asset is
written off against the associated provision.
j) Financial liabilities
The Group's financial liabilities include borrowings and trade
and other payables. Financial liabilities are measured subsequently
at amortised cost using the effective interest method. All
interest-related charges and, if applicable, changes in an
instrument's fair value that are reported in profit or loss are
included within 'finance costs' or 'finance income'.
k) Fair value of financial instruments
The fair value of financial instruments that are actively traded
in organised financial markets is determined by reference to quoted
market prices at the close of business on the Statement of
financial position date. For financial instruments where there is
no active market, fair value is determined using valuation
techniques. Such techniques may include using recent arm's length
market transactions; reference to the current fair value of another
instrument that is substantially the same; discounted cash flow
analysis or other valuation models.
l) Property, plant and equipment
Property, plant and equipment are stated at historical cost,
less accumulated depreciation and any impairment in value.
Historical cost includes expenditure that is directly attributable
to property plant & equipment such as employee cost, borrowing
costs for long-term construction projects etc., if recognition
criteria are met. Likewise, when a major inspection is performed,
its costs are recognised in the carrying amount of the plant and
equipment as a replacement if the recognition criteria are
satisfied. All other repairs and maintenance costs are recognised
in the profit or loss as incurred.
Land is not depreciated. Depreciation on all other assets is
computed on straight-line basis over the useful life of the asset
based on management's estimate as follows:
Nature of asset Useful life (years)
---------------------------- ---------------------
Buildings 40
Power stations 40
Other plant and equipment 3-10
Vehicles 5-11
---------------------------- ---------------------
Assets in the course of construction are stated at cost and not
depreciated until commissioned.
An item of property, plant and equipment is derecognised upon
disposal or when no future economic benefits are expected from its
use or disposal. Any gain or loss arising on derecognition of the
asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in the
profit or loss in the year the asset is derecognised.
The assets residual values, useful lives and methods of
depreciation of the assets are reviewed at each financial year end,
and adjusted prospectively if appropriate.
m) Intangible assets
Acquired software
Acquired computer software licences are capitalised on the basis
of the costs incurred to acquire and install the specific
software.
Subsequent measurement
All intangible assets, including software are accounted for
using the cost model whereby capitalised costs are amortised on a
straight-line basis over their estimated useful lives, as these
assets are considered finite. Residual values and useful lives are
reviewed at each reporting date. The useful life of software is
estimated as 4 years.
n) Leases
All leases are accounted for by recognising a right-of-use asset
and a lease liability except for:
-- Leases of low value assets; and
-- Leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the
contractual payments due to the lessor over the lease term, with
the discount rate determined by reference to the rate inherent in
the lease unless (as is typically the case) this is not readily
determinable, in which case the group's incremental borrowing rate
on commencement of the lease is used. Variable lease payments are
only included in the measurement of the lease liability if they
depend on an index or rate. In such cases, the initial measurement
of the lease liability assumes the variable element will remain
unchanged throughout the lease term. Other variable lease payments
are expensed in the period to which they relate. On initial
recognition, the carrying value of the lease liability also
includes:
-- amounts expected to be payable under any residual value guarantee;
-- the exercise price of any purchase option granted in favour
of the group if it is reasonable certain to assess that option;
-- any penalties payable for terminating the lease, if the term
of the lease has been estimated in the basis of termination option
being exercised.
Right of use assets are initially measured at the amount of the
lease liability, reduced for any lease incentives received, and
increased for:
-- lease payments made at or before commencement of the lease;
-- initial direct costs incurred; and
-- the amount of any provision recognised where the group is
contractually required to dismantle, remove or restore the leased
asset (typically leasehold dilapidations)"
Subsequent to initial measurement lease liabilities increase as
a result of interest charged at a constant rate on the balance
outstanding and are reduced for lease payments made. Right-of-use
assets are amortised on a straight-line basis over the remaining
term of the lease or over the remaining economic life of the asset
if, rarely, this is judged to be shorter than the lease term. When
the group revises its estimate of the term of any lease (because,
for example, it re-assesses the probability of a lessee extension
or termination option being exercised), it adjusts the carrying
amount of the lease liability to reflect the payments to make over
the revised term, which are discounted using a revised discount
rate. The carrying value of lease liabilities is similarly revised
when the variable element of future lease payments dependent on a
rate or index is revised, except the discount rate remains
unchanged. In both cases an equivalent adjustment is made to the
carrying value of the right-of-use asset, with the revised carrying
amount being amortised over the remaining (revised) lease term. If
the carrying amount of the right-of-use asset is adjusted to zero,
any further reduction is recognised in profit or loss.
o) Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, that necessarily
take a substantial period of time to get ready for their intended
use or sale, are added to the cost of those assets. Interest income
earned on the temporary investment of specific borrowing pending
its expenditure on qualifying assets is deducted from the costs of
these assets.
Gains and losses on extinguishment of liability, including those
arising from substantial modification from terms of loans are not
treated as borrowing costs and are charged to profit or loss.
All other borrowing costs including transaction costs are
recognized in the statement of profit or loss in the period in
which they are incurred, the amount being determined using the
effective interest rate method.
p) Impairment of non-financial assets
The Group assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required,
the Group estimates the asset's recoverable amount. An asset's
recoverable amount is the higher of an asset's or cash-generating
unit's (CGU) fair value less costs to sell and its value in use and
is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from
other assets or Groups of assets. Where the carrying amount of an
asset or CGU exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset. In determining fair value less
costs to sell, an appropriate valuation model is used. These
calculations are corroborated by valuation multiples, quoted share
prices for publicly traded subsidiaries or other available fair
value indicators.
For assets excluding goodwill, an assessment is made at each
reporting date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may
have decreased. If such indication exists, the Group estimates the
asset's or cash-generating unit's recoverable amount. A previously
recognised impairment loss is reversed only if there has been a
change in the assumptions used to determine the asset's recoverable
amount since the last impairment loss was recognised. The reversal
is limited so that the carrying amount of the asset does not exceed
its recoverable amount, nor exceed the carrying amount that would
have been determined, net of depreciation, had no impairment loss
been recognised for the asset in prior years. Such reversal is
recognised in the profit or loss.
q) Non-current Assets Held for Sale and Discontinued
Operations
Non-current assets and any corresponding liabilities held for
sale and any directly attributable liabilities are recognized
separately from other assets and liabilities in the balance sheet
in the line items "Assets held for sale" and "Liabilities
associated with assets held for sale" if they can be disposed of in
their current condition and if there is sufficient probability of
their disposal actually taking place. Discontinued operations are
components of an entity that are either held for sale or have
already been sold and can be clearly distinguished from other
corporate operations, both operationally and for financial
reporting purposes. Additionally, the component classified as a
discontinued operation must represent a major business line or a
specific geographic business segment of the Group. Non- current
assets that are held for sale either individually or collectively
as part of a disposal group, or that belong to a discontinued
operation, are no longer depreciated. They are instead accounted
for at the lower of the carrying amount and the fair value less any
remaining costs to sell. If this value is less than the carrying
amount, an impairment loss is recognized. The income and losses
resulting from the measurement of components held for sale as well
as the gains and losses arising from the disposal of discontinued
operations, are reported separately on the face of the income
statement under income/loss from discontinued operations, net, as
is the income from the ordinary operating activities of these
divisions. Prior-year income statement figures are adjusted
accordingly. However, there is no reclassification of prior-year
balance sheet line items attributable to discontinued
operations.
In case of reclassification, previously recognised impairment
loss is reversed only if there has been a change in the assumptions
used to determine the investment's recoverable amount since the
last impairment loss was recognised. The reversal is limited so
that the carrying amount of the investment does not exceed its
recoverable amount, nor exceed the carrying amount that would have
been determined, had no impairment loss been recognised for the
investments in prior years. Such reversal is recognised in the
profit or loss. Once the Company ceases to classify a component as
assets held for sale, the results of that component previously
presented in discontinued operations will be reclassified and
included in income from continuing operation for the period
presented.
r) 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.
s) Inventories
Inventories are stated at the lower of cost and net realisable
value. Costs incurred in bringing each product to its present
location and condition is accounted based on weighted average
price. Net realisable value is the estimated selling price in the
ordinary course of business, less estimated selling expenses.
t) 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.
u) 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.
v) 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.
w) Employee benefits
Gratuity
In accordance with applicable Indian laws, the Group provides
for gratuity, a defined benefit retirement plan ("the Gratuity
Plan") covering eligible employees. The Gratuity Plan provides a
lump-sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on
the respective employee's salary and the tenure of employment.
Liabilities with regard to the gratuity plan are determined by
actuarial valuation, performed by an independent actuary, at each
Statement of financial position date using the projected unit
credit method.
The Group recognises the net obligation of a defined benefit
plan in its statement of financial position as an asset or
liability, respectively in accordance with IAS 19, Employee
benefits. The discount rate is based on the Government securities
yield. Actuarial gains and losses arising from experience
adjustments and changes in actuarial assumptions are charged or
credited to profit or loss in the statement of comprehensive income
in the period in which they arise.
Employees Benefit Trust
The Group has established an Employees Benefit Trust
(hereinafter 'the EBT') for investments in the Company's shares for
employee benefit schemes. IOMA Fiduciary in the Isle of Man have
been appointed as Trustees of the EBT with full discretion invested
in the Trustee, independent of the company, in the matter of share
purchases. As at present, no investments have been made by the
Trustee nor any funds advanced by the Company to the EBT. The
Company is yet to formulate any employee benefit schemes or to make
awards thereunder.
x) 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.
y) 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 Board
of Directors being the chief operating decision maker evaluate the
Group's performance and allocates resources based on an analysis of
various performance indicators at operating segment level. During
the year 2021 the Group has deconsolidated solar entities and are
classified as associates (note 7(b)). Accordingly, during FY23
there is only one operating segment thermal power. There are no
geographical segments as all revenues arise from India. All the non
current assets are located in India.
6. Significant accounting judgements, estimates and assumptions
The preparation of financial statements in conformity with IFRS
requires management to make certain critical accounting estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period.
The principal accounting policies adopted by the Group in the
consolidated financial statements are as set out above. The
application of a number of these policies requires the Group to use
a variety of estimation techniques and apply judgment to best
reflect the substance of underlying transactions.
The Group has determined that a number of its accounting
policies can be considered significant, in terms of the management
judgment that has been required to determine the various
assumptions underpinning their application in the consolidated
financial statements presented which, under different conditions,
could lead to material differences in these statements. The actual
results may differ from the judgments, estimates and assumptions
made by the management and will seldom equal the estimated
results.
a) Judgements
The following are significant management judgments in applying
the accounting policies of the Group that have the most significant
effect on the financial statements.
Non-current assets held for sale and discontinued operations
During the current year, the profits for the purpose of
consolidation generated by the Solar entities Aavanti Solar Energy
Private Limited, Mayfair Renewable Energy (I) Private Limited,
Aavanti Renewable Energy Private Limited and Brics Renewable Energy
Private Limited were considered in the books for finalizing the
group level financials. The Assets could not be continued to be
held for sale as the process of sale could not get completed within
a reasonable time frame. Consequently, the effect of Impairment
provided during the earlier years when these were categorised as
Assets held for sale were reversed and the current years profits
together with earlier years carried forward reserves were
recognised as Share of Profits to the extent of 31% share holding,
from the Associate Entities.
The decision to reversal of impairment was undertaken based on
the impairment workings carried out for solar assets using the
Discounted Cash Flow method (refer Note 15 & 16).
Recoverability of deferred tax assets
The recognition of deferred tax assets requires assessment of
future taxable profit (see note 5(h)). Deferred tax assets are
recognised to the extent that it is probable that they will be able
to be utilised against future taxable income.
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:
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.
Trade Receivables
The group ascertains the expected credit losses (ECL) for all
receivables and adequate impairment provision are made. At the end
of each reporting period a review of the allowance for impairment
of trade receivables is performed. Trade receivables do not contain
a significant financing element, and therefore expected credit
losses are measured using the simplified approach permitted by IFRS
9, which requires lifetime expected credit losses to be recognised
on initial recognition. A provision matrix is utilised to estimate
the lifetime expected credit losses based on the age, status and
risk of each class of receivable, which is periodically updated to
include changes to both forward-looking and historical inputs.
Financial assets measured at FVPL
Management applies valuation techniques to determine the fair
value of financial assets measured at FVPL 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.
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 including fuel prices, foreign
currency exchange rates etc. and the determination of a suitable
discount rate. The management considers impairment upon there being
evidence that there might be an impairment, such as a lower market
capitalization of the group or a downturn in results.
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. Profit from discontinued operations
Non-current assets held for sale and Profit from discontinued
operations consists of:
Liabilities Profit from
Assets Held classified as discontinued
for Sale held for sale operations
---------------------
At 31 At 31 At 31 At 31
March March March March For For FY
2023 2022 2023 2022 FY 23 22
----- ----------------------------- -------- ------- ------- ------------
i Interest in Solar
entities Note 7(b) - 13,497,027 - - - -
------------------------------- ----------- -------- ------- ------- ------------
Share of Profit on
fair value of investments,
in Solar entities
ii Note 7(b) - - - - - (2,928,341)
------------------------------- ----------- -------- ------- ------- ------------
iii Gain on deconsolidation
of Solar entities - - - - - -
------------------------------- ----------- -------- ------- ------- ------------
Total - 13,497,027 - - - (2,928,341)
------------------------------- ----------- -------- ------- ------- ------------
a) Assets held for sale and discontinued operations of solar
entities
As explained above, during the current year, the profits for the
purpose of consolidation generated by the Solar entities Aavanti
Solar Energy Private Limited, Mayfair Renewable Energy (I) Private
Limited, Aavanti Renewable Energy Private Limited and Brics
Renewable Energy Private Limited were considered in the books for
finalizing the group level financials. The Assets could not be
continued to be held for sale as the process of sale could not get
completed within a reasonable time frame. The Effect of Impairment
provided during the earlier years when these were categorised as
Assets held for sale were reversed and the current years profits
together with earlier years carried forward reserves were
recognised as Share of Profits to the extent of 31% shareholding,
from the Associate Entities.
The Solar Assets were tested for Impairment and the variables
like PPA Tariff, PLF and other reasonable O & M costs were
evaluated. Future Cash flows were determined under the DCF method.
The PV of earnings were found to be higher than the carrying cost
these assets and no impairment was found to be existent. The Solar
Assets have been evaluated as Associate entities and the Previous
Year's impairment of GBP2,950,958 has been reversed in the current
year 22-23 and 31% share of Profits of GBP1,355,413 has been
considered in the books of current year 22-23.
Non-current Assets held-for-sale and discontinued
operations
(a) Assets of disposal group classified of solar As at As at
entities 31st 31st
March March
2023 2022
Property, plant and equipment - -
Trade and other receivables - -
Other short-term assets - -
Restricted cash - -
Cash and cash equivalents - -
Investment in associates classified as held for
sale - 13,497,027
-------- -----------
Total - 13,497
----------------------------------------------------- -------- -----------
(b) Analysis of the results of discontinued For For FY
operations is as follows: FY 23 22
Revenue - -
Operating profit before impairments - -
Finance income - -
Finance cost - -
Current Tax - -
Deferred tax - -
Share of Profit/ (Loss) on fair value of
investments, in Solar entities - (2,928,341)
Gain on deconsolidation of - -
Solar entities
-------- ------------
Profit / (Loss) from Solar
operations - (2,928,341)
8 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 Board
of Directors being the chief operating decision maker evaluate the
Group's performance and allocates resources based on an analysis of
various performance indicators at operating segment level. During
FY23 there is only one operating segment thermal power. The solar
power business has been considered as an Associate Entity which was
earlier classified as held for sale. There are no geographical
segments as all revenues arise from India. All the non current
assets are located in India.
Revenue on account of sale of power to customer exceeding 10% of
total sales revenue amounts to GBP42,358,711 from TANGEDCO &
GBP8,888,909 from IEX (2022: GBP11,465,934).
Continuing operations Discontinued operations
Thermal Solar
Segment Revenue FY23 FY22 FY23 FY22
Sales 58,683,036 80,067,032 - -
Total 58,683,036 80,067,032 - -
------------ ------------ -------- ----------------
Other Operating 1,455,039 - - -
income
Depreciation, impairment (5,696,860) (5,333,531) - -
Profit from operation 10,442,223 16,076,355 - -
Finance Income 1,599,860 2,285,364 - -
Finance Cost (5,925,076) (5,356,089) - -
Tax expenses (3,163,596) (4,097,184) - -
Reversal of FV Impairment 2,950,958 - - -
of associates
Share of Profit, (Loss)
on fair value of investments,
in Solar entities 1,355,413 - - (2,928,341)
Profit / (loss) for the
year 7,259,782 8,908,446 - (2,928,341)
------------ ------------ -------- ----------------
Assets 253,779,545 242,561,040 - 13,497,027
Liabilities 82,147,208 85,991,813 - -
9 Costs of inventories and employee benefit expenses included in
the consolidated statements of comprehensive income
a) Cost of fuel
31 March 2023 31 March 2022
--------------- --------------------
Included in cost of revenue:
Cost of fuel consumed 39,021,545 53,886,250
Depreciation - -
Other direct costs 3,241,660 2,614,714
--------------- --------------------
Total 42,263,205 56,500,964
--------------- --------------------
b) Employee benefit expenses forming part of general and
administrative expenses are as follows:
31 March 2023 31 March 2022
--------------- --------------------
Salaries and wages 2,651,267 2,247,996
Employee benefit costs 186,396 217,715
Long Tern Incentive Plan (Note 22) - 194,779
--------------- --------------------
Total 2,837,663 2,660,490
--------------- --------------------
Auditor's remuneration for audit services amounting to GBP74,000
(2022: GBP59,000) is included in general and administrative
expenses and excludes travel reimbursements.
c) Foreign exchange movements (realised and unrealised) included
in the Finance costs is as follows:
31 March 2023 31 March 2022
------------- -------------
Foreign exchange realised - loss /
(gain) 1,278,303 214,048
Foreign exchange unrealised- loss
/ (gain) (121,677) 184,880
------------- -------------
Total 1,156,626 398,928
------------- -------------
10 Other operating income and expenses
a) Other operating income
31 March 2023 31 March 2022
------------- -------------
Surcharge TANGEDCO 1,455,039 -
Contractual claims payments - -
------------- -------------
Total 1,455,039 -
------------- -------------
Other operating income represents contractual claims payments
from company's customers under the power purchase agreements which
were accumulated over several periods.
b) Other income
31 March 2023 31 March 2022
------------- -------------
Provisions no longer required written - -
back
Sale of coal 2,240,486 7,338,941
Sale of fly ash 117,399 77,586
Power trading commission and other
services - 169,183
Others* 3,173,104 469,155
------------- -------------
Total 5,530,988 8,054,865
------------- -------------
*Others include Insurance Claim of GBP2,211,883 received during
the year
11 Finance costs
Finance costs are comprised of:
31 March 2023 31 March 2022
------------- -------------
Interest expenses on borrowings 4,242,700 4,277,158
Net foreign exchange loss (Note 9) 1,156,626 398,928
Other finance costs 525,750 680,003
------------- -------------
Total 5,925,076 5,356,089
------------- -------------
Other finance costs include charges and cost related to LC's for
import of coal and other charges levied by bank on
transactions.
12 Finance income
Finance income is comprised of:
31 March 2023 31 March 2022
------------- -------------
Interest income on bank deposits
and advances 1,218,405 891,467
Profit on disposal of financial instruments* 381,455 1,393,897
------------- -------------
Total 1,599,860 2,285,364
------------- -------------
*Financial instruments represent the mutual funds held during
the year and profits include GBP465,297 unrealised gain on mark to
market rate as on reporting date.
13 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 2023 and 2022 is as follows:
31 March 2023 31 March 2022
------------- -------------
Accounting profit before taxes 10,423,378 13,005,630
Enacted tax rates 34.94% 34.94%
Tax expense / profit at enacted tax
rate 3,642,345 4,544,687
Exempt Income due to tax holiday - -
Foreign tax rate differential (135,973) (13,847)
Unused tax losses brought forward and - -
carried forward
Non deductible / (Non-taxable) items 198,000 (916,046)
MAT credit (540,777) 482,390
Others - -
------------- -------------
Actual tax for the period 3,163,596 4,097,184
------------- -------------
31 March 2023 31 March 2022
------------- -------------
Current tax (539,716) 334,646
Deferred tax (2,623,880) 3,762,538
------------- -------------
Total tax expenses on income from continued
operations (3,163,596) 4,097,184
Tax reported in the statement of comprehensive
income (3,163,596) 4,097,184
------------- -------------
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
primarily based in India, the effective tax rate of the Group has
been computed based on the current tax rates prevailing in India.
Further, a 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 (MAT) which is
calculated on the book profits of the respective entities currently
at a rate of 17.47% (31 March 2022: 17.47%).
The Group has carried forward credit in respect of MAT tax
liability paid to the extent it is probable that future taxable
profit will be available against which such tax credit can be
utilized.
Deferred income tax for the group at 31 March 2023 and 2022
relates to the following:
31 March 2023 31 March 2022
------------- -------------
Deferred income tax assets
Unused tax losses brought forward and - -
carried forward
MAT credit entitlement 11,741,110 11,985,655
11,741,110 11,985,655
Deferred income tax liabilities
Property, plant and equipment 30,929,471 29,015,582
Mark to market on available-for-sale - -
financial assets
30,929,471 29,015,582
------------- -------------
Deferred income tax liabilities, net 19,188,361 17,029,927
Movement in temporary differences during the year
Particulars As at Deferred Classified Translation As at
01 April tax asset as (Asset) adjustment 31 Mar
2022 / (liability) / Liability 2023
for the held
year for sale
-------------------------------------- ------------- --------------- ------------- ------------ -------------
Property, plant and
equipment (29,015,582) (2,505,899) - 592,011 (30,929,470)
Unused tax losses brought forward - - - - -
and carried forward
MAT credit entitlement 11,985,655 - - (244,545) 11,741,110
Mark to market gain / (loss) on - - - - -
financial assets measured at FVPL
-------------------------------------- -------------
Deferred income tax (liabilities)
/ assets, net (17,029,927) (2,505,899) - 347,466 (19,188,360)
------------------------------------- ------------- --------------- ------------- ------------ -------------
Particulars As at Deferred Classified Translation As at
01 April tax asset as (Asset) adjustment 31 Mar
2021 / (liability) / Liability 2022
for the held
year for sale
-------------------------------------- ------------- --------------- ------------- ------------ -------------
Property, plant and
equipment (25,368,905) (3,280,148) - (366,529) (29,015,582)
Unused tax losses brought forward - - - - -
and carried forward
MAT credit entitlement 12,374,534 (482,390) - 93,511 11,985,655
Mark to market gain / (loss) on - - - - -
financial assets measured at FVPL
-------------------------------------- -------------
Deferred income tax (liabilities)
/ assets, net (12,994,371) (3,762,538) - (273,018) (17,029,927)
------------------------------------- ------------- --------------- ------------- ------------ -------------
In assessing the recoverability of deferred income tax assets,
management considers whether it is more likely than not that some
portion or all of the deferred income tax assets will be realized.
The ultimate realization of deferred income tax assets is dependent
upon the generation of future taxable income during the periods in
which the temporary differences become deductible. The amount of
the deferred income tax assets considered realizable, however,
could be reduced in the near term if estimates of future taxable
income during the carry forward period are reduced.
Shareholders resident outside the Isle of Man will not suffer
any income tax in the Isle of Man on any income distributions to
them. However, dividends are taxable in India in the hands of the
recipient.
There is no unrecognised deferred tax assets and liabilities. As
at 31 March 2023 and 2022, 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.
14 Intangible assets
Intangible assets Acquired software
licences
------------------
Cost
At 31 March 2021 763,595
Additions 11,875
Exchange adjustments 11,032
At 31 March 2022 786,502
At 31 March 2022 786,502
Additions 5,174
Exchange adjustments (14,577)
At 31 March 2023 777,099
Accumulated depreciation and impairment
At 31 March 2021 761,201
Charge for the year 2,438
Exchange adjustments 11,054
At 31 March 2022 774,692
At 31 March 2022 774,692
Charge for the year 3,255
Exchange adjustments (14,250)
At 31 March 2023 763,697
Net book value
At 31 March 2023 13,401
At 31 March 2022 11,810
------------------
15 Property, plant and equipment
The property, plant and equipment comprises of:
At 1 April 2022 73,553 42,722,787 1,340,816 586,541 7,295 - 44,730,993
---------------------------- ----------- ------------- ----------- --------- -------- ----------- -------------
Cost
At 1 st April
2021 8,388,982 200,460,226 1,766,719 748,624 - 122,717 211,487,268
Additions 13,919 267,007 25,229 23,745 43,843 3,265,722 3,639,465
Transfers on capitalisation - 1,584,477 38,134 - - (1,622,611) -
Sale / Disposals - - - (52,794) - - (52,794)
Exchange adjustments 119,437 2,905,807 25,366 10,730 - 1,392 3,062,732
----------- ------------- ----------- --------- -------- ----------- -------------
At 31 March 2022 8,522,338 205,217,517 1,855,448 730,306 43,843 1,767,219 218,136,670
----------- ------------- ----------- --------- -------- ----------- -------------
At 1 st April
2022 8,522,338 205,217,517 1,855,448 730,306 43,843 1,767,219 218,136,670
Additions 31,818 385,220 14,028 - - 676,736 1,107,802
Transfers on capitalisation - 1,148,303 (1,148,303) -
Sale / Disposals - (42,436) - (60,645) - - (103,081)
Exchange adjustments (157,956) (3,803,566) (34,389) (13,536) (813) (32,754) (4,043,014)
----------- ------------- ----------- --------- -------- ----------- -------------
At 31 March 2023 8,396,200 202,905,038 1,835,087 656,125 43,030 1,262,898 215,098,377
Accumulated depreciation
and impairment
At 1 April 2021 61,319 37,039,448 1,062,450 608,010 - - 38,771,227
Charge for the
year 10,801 5,033,811 257,196 22,135 7,149 - 5,331,093
Sale / Disposals - - - (52,794) - - (52,794)
Exchange adjustments 1,433 649,528 21,170 9,190 146 - 681,467
----------- ------------- ----------- --------- -------- ----------- -------------
At 31 March 2022 73,553 42,722,787 1,340,816 586,541 7,295 - 44,730,993
----------- ------------- ----------- --------- -------- ----------- -------------
At 1 April 2022 73,553 42,722,787 1,340,816 586,541 7,295 - 44,730,993
----------- ------------- ----------- --------- -------- ----------- -------------
Charge for the
year 13,813 5,361,890 281,236 36,666 - - 5,693,605
----------- ------------- ----------- --------- -------- ----------- -------------
Sale / Disposals - (15,949) - (60,645) (7,157) - (83,751)
----------- ------------- ----------- --------- -------- ----------- -------------
Exchange adjustments (1,393) (812,100) (25,385) (11,104) (138) (850,120)
----------- ------------- ----------- --------- -------- ----------- -------------
At 31 March 2023 85,973 47,256,628 1,596,667 551,458 0 - 49,490,728
----------- ------------- ----------- --------- -------- ----------- -------------
Net book value
----------- ------------- ----------- --------- -------- ----------- -------------
At 31 March 2023 8,310,226 155,648,411 238,420 104,666 43,030 1,262,898 165,607,650
----------- ------------- ----------- --------- -------- ----------- -------------
At 31 March 2022 8,448,784 162,494,730 514,632 143,765 36,548 1,767,219 173,405,677
----------- ------------- ----------- --------- -------- ----------- -------------
The net book value of land and buildings block comprises of:
31 March 2023 31 March 2022
------------- -------------
Freehold land 7,904,853 8,029,665
Buildings 405,372 419,119
------------- -------------
8,310,225 8,448,784
------------- -------------
Property, plant and equipment with a carrying amount of GBP
164,159,294 (2022 GBP167,962,534) is subject to security
restrictions (refer note 22).
a) The Group considered both qualitative and quantitative
factors when determining whether an Asset or CGU may be impaired.
Assets related to each segment (Thermal & Solar) and the cash
inflows generated by each are separately identifiable and
independent of other assets or groups of assets. No impairment loss
was recognized for the consulting segment during the year
22-23.
The recoverable amount of segment was determined based on
value-in-use calculations, covering a detailed 18 year period
forecast for Thermal Assets and 20 Year period for the Solar Assets
using DCF methodology by management. The present value of the
expected cash flows of each segment is determined by applying a
suitable discount rate reflecting current market assessments of the
time value of money and risks specific to the segment.
The Present Value of Cash Flows thus determined were compared
with the Carrying Cost of PPE and it was found that the PV Values
were on the Higher side of the Carrying cost of Property Plant and
Equipment.
Year ended 31 March Thermal Solar
2023 GBP Mn GBP Mn
Present Value of
Cash Flows 309.1 56.4
--------------------- -------- --------
Carrying Cost of
PPE 169.5 35.1
--------------------- -------- --------
Appropriate sensitivities to understand impact on key estimates
and under all scenarios were tested and no impairment was
triggered. Group has also considered the impact of climate change
and global energy transition. Coal fired power generation will
remain key to the energy mix for India over the life of the Power
Station. With the above calculations, it was concluded that there
is no impairment in Thermal and Solar Assets. The Impairment
provided for in earlier years for Solar Assets was accordingly
reversed amounting to GBP2.9 Million.
Management's key assumptions included:
Cash flow projections reflect stable Profit Margins and Cash
Flows on both Thermal & Solar Assets. No expected efficiency
improvements have been taken into account and expenses were
considered based on forecasts of inflation and our current actual
expenses and the Revenue forecasts were based on the Rates at which
the PPA with Utility companies were entered or are prevalent in the
market.
Current exchange rate of 1USD to INR 84.24 has been considered
and is depreciated by 2 % Year on Year over the forecast period.
The exchange rate is estimated to be consistent with the average
market forward exchange rate over the budget period.
The discount rate was derived based on weighted average cost of
capital (WACC) for comparable entities in the industry, based on
market data. The discount rates reflect appropriate adjustments
relating to market risk and specific risk factors of each segment.
Further, management considered the maturity and stability of the
both the segments when determining the appropriate adjustments to
this rate.
b) Cash flow projections
Cash flow projections are based on management's approved
estimates, followed by an extrapolation of expected cash flows for
the remaining useful lives using the various variables as outlined
below
Thermal
Parameters Values
Deemed Plant Load Factors (%) 65 to 73
-----------
Realisable Tariff (Pence) 4.9 to 7.7
-----------
Price of Coal (USD/Ton) 60 to 50
-----------
WACC (%) 13.58
-----------
Cost of Debt (%) 10.5
-----------
Solar
Parameters Values
Plant Load Factors (%) 21%
--------------
Applicable Tariff (Pence) 5.1
--------------
Annual Degradation of Solar Modules 0.50%
(%)
--------------
WACC (%) 8.2 to 9.1
--------------
Cost of Debt (%) 8.9
--------------
c) From the results of the Reverse Stress Test as under, it may
be observed that Significant Issues would be required to Impact the
Cash flows of the entity, only in extreme cases in the Year 24
where PLF drops from 68 % to 16 % and Cost of Coal Increases from $
61 to $ 143 and Tariff per Unit Drops from INR 7.5 to INR 4.7 and
Forex Rate of INR to $ increases from 84 to 199 and no
consequential impact in the ability of generating Revenue and
Profits were found.
Variables Base Case Reverse Stress Test
FY 24 FY 25 FY 24 FY 25
------ ------ ---------- ----------
PLF % 68 68 16 16
------ ------ ---------- ----------
Cost of Coal 61 59 143 150
------ ------ ---------- ----------
Tariff (INR/Unit) 7.5 7.7 4.7 4.8
------ ------ ---------- ----------
F/X Rate
(INR/$) 84 86 199 202
------ ------ ---------- ----------
16 Investments accounted for using the equity method
The carrying amount of investments accounted for using the
equity method is as follows:
31 March 2023 31 March
2022
------------- ----------
Investments in joint venture - -
Impairment provision for investments in joint - -
venture (Note 7(a))
Investments in Associates 16,159,133 -
Balance value of Investments in joint venture
classified as Assets held for sale - 13,497,027
------------- ----------
Investments accounted for using the equity
method 16,159,133 13,497,027
------------- ----------
a) Investment in associates (Note 5(d) 7(b))
Summarised aggregated financial information of the Group's share
in the associates.
31 March 2023 31 March 2022
------------- ---------------
Profit from continuing operations 1,355,413 -
Other comprehensive income - -
Total comprehensive Income 1,355,413 -
Future Cash flows were determined under the DCF method for the
PPA period. The Present Value of cash flows were found to be higher
than the carrying cost of these assets and no impairment was found
to be existent. The Solar Assets have been evaluated as Associate
entities and the Previous Year's impairment of GBP2,950,958 has
been reversed in the current year 22-23 and 31% share of Profits of
GBP1,355,413 has been considered in the books of current year
22-23.
Aggregate carrying amount of the Group's interests in these
associates & other entities
31 March 2023 31 March 2022
------------- ---------------
Associates & Other Entities
Total carrying Amount 15,245,563 2,113,307
------------- ---------------
15,245,563 2,113,307
------------- ---------------
17 Other Assets
31 March 2023 31 March 2022
------------- -------------
A. Short-term
Capital advances - -
Financial instruments measured at fair value
through P&L 4,792,732 18,265,352
Advances and other receivables 8,844,464 7,917,571
------------- -------------
Total 13,637,196 26,182,923
------------- -------------
B. Long-term
Advances to related parties - -
Classified as asset held for sale (note 7(a)) - -
Lease deposits - -
Bank deposits 9,734 12,140
Other advances - -
Restricted Cash 8,379,292 10,427,847
------------- -------------
Total 8,389,026 10,439,987
------------- -------------
The financial instruments of GBP 4,792,732 (FY22: GBP18,265,352)
represent investments in mutual funds and Bonds- their fair value
is determined by reference to published data.
18 Trade and other receivables
31 March 2023 31 March 2022
------------- -------------
Current
Trade receivables 31,914,606 8,607,935
Other receivables - -
------------- -------------
Total 31,914,606 8,607,935
------------- -------------
The Group's trade receivables are classified at amortised cost
unless stated otherwise and are measured after allowances for
future expected credit losses, see "Credit risk analysis" in note
30 "Financial risk management objectives and policies" for more
information on credit risk. The carrying amounts of trade and other
receivables, which are measured at amortised cost, approximate
their fair value and are predominantly non-interest bearing.
19 Inventories
31 March 2023 31 March 2022
------------- -------------
Coal and fuel 6,706,467 9,499,510
Stores and spares 1,012,929 966,310
------------- -------------
Total 7,719,396 10,465,820
------------- -------------
The entire amount of above inventories has been pledged as
security for borrowings (refer note 22)
20 Cash and cash equivalents and Restricted cash
a) Cash and short term deposits comprise of the following:
31 March 2023 31 March 2022
------------- -------------
Investment in Mutual funds - 5,193,275
Cash at banks and on hand 3,319,148 2,498,117
Short-term deposits -
------------- -------------
Total 3,319,148 7,691,392
------------- -------------
Short-term deposits are placed for varying periods, depending on
the immediate cash requirements of the Group. They are recoverable
on demand.
b Restricted cash
Current restricted cash represents deposits and mutual funds
with the maturity up to twelve months amounting to
GBP6,786,497(2022 - GBP2,392,104 ) which have been lien marked by
the Group in order to establish Letters of Credits, Bank Guarantees
from the bankers and debenture redemption fund.
21 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.
As at 31 March 2023, the Company has an authorised and issued
share capital of 400,733,511 (2022: 400,733,511) equity shares at
par value of GBP 0.000147 (2022: GBP 0.000147) per share amounting
to GBP58,909 (2022: GBP58,909) in total.
Reserves
Share premium represents the amount received by the Group over
and above the par value of shares issued. Any transaction costs
associated with the issuing of shares are deducted from share
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 financial assets measured at fair
value through other comprehensive income.
Retained earnings include all current and prior period results
as disclosed in the consolidated statement of comprehensive income
less dividend distribution.
22 Share based payments
Long Term Incentive Plan
In April 2019, the Board of Directors has approved the
introduction of Long Term Incentive Plan (""LTIP""). The key terms
of the LTIP are:-
The number of performance-related awards is 14 million ordinary
shares (the "LTIP Shares") (representing approximately 3.6 per cent
of the Company's issued share capital). The grant date is 24 April
2019.
The LTIP Shares were awarded to certain members of the senior
management team as Nominal Cost Shares and will vest in three
tranches subject to continued service with Group until vesting and
meeting the following share price performance targets, plant load
factor ("PLF") and term loan repayments of the Chennai thermal
plant.
- 20% of the LTIP Shares shall vest upon meeting the target
share price of 25.16p before the first anniversary for the first
tranche, i.e. 24 April 2020, achievement of PLF during the period
April 2019 to March 2020 of at least 70% at the Chennai thermal
plant and repayment of all scheduled term loans.
- 40% of the LTIP Shares shall vest upon meeting the target
share price of 30.07p before the second anniversary for the second
tranche, i.e. 24 April 2021, achievement of PLF during the period
April 2020 to March 2021 of at least 70% at the Chennai thermal
plant and repayment of all scheduled term loans.
40% of the LTIP Shares shall vest upon meeting the target share
price of 35.00p before the third anniversary for the third tranche,
i.e. 24 April 2022, achievement of PLF of at least 70% at the
Chennai thermal plant during the period April 2021 to March 2022
and repayment of all scheduled term loans.
The nominal cost of performance share, i.e. upon the exercise of
awards, individuals will be required to pay up 0.0147p per share to
exercise their awards.
The share price performance metric will be deemed achieved if
the average share price over a fifteen day period exceeds the
applicable target price. In the event that the share price or other
performance targets do not meet the applicable target, the number
of vesting shares would be reduced pro-rata, for that particular
year. However, no LTIP Shares will vest if actual performance is
less than 80 per cent of any of the performance targets in any
particular year. The terms of the LTIP provide that the Company may
elect to pay a cash award of an equivalent value of the vesting
LTIP Shares.
None of the LTIP Shares, once vested, can be sold until the
third anniversary of the award, unless required to meet personal
taxation obligations in relation to the LTIP award. No
changes/revisions were made to LTIP during the FY23 and no shares
were issued during FY 23. The Carry forward shares under LTIP
reserves will be issued in the year 23-24. The shares have not been
issued because that was the time of COVID lock downs and related
disruptions including Administrative and Logistics issues, thus
delaying the process of allocation of shares to the Executives over
the three year period from 2020.
LTIP as Movements during the Latest
at period Expired/ LTIP Outstanding vesting
LTIP
granted 1-Apr-22 Granted Cancelled Exercised 31-Mar-23 Date
------------ ---------- -------- --------- --------- ---------------- --------------
Arvind Gupta 24-Apr-19 1,185,185 Nil 0 Nil 1,185,185 24-Apr-20
Dmitri Tsvetkov 24-Apr-19 568,889 Nil 0 Nil 568,889 24-Apr-20
Avantika Gupta 24-Apr-19 284,445 Nil 0 Nil 284,445 24-Apr-20
------------ ---------- -------- --------- --------- ---------------- --------------
23 Borrowings
The borrowings comprise of the following:
Interest rate 31 March 31 March
(range %) Final maturity 2023 2022
----------------------------------------------------------------------------- --------------- ---------- ----------
Borrowings at amortised
cost 9.9-10.851 June 2024 10,416,543 23,159,039
Non-Convertible Debentures
at amortised cost 9.85-12.75 June 2023 22,180,599 20,126,738
---------- ----------
Total 32,597,142 43,285,777
---------- ----------
1 Interest rate range for Project term loans and Working
Capital
The term loans, working capital loans and non-convertible
debentures 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.
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. As of 31
March 2023, the Group has met all the relevant covenants. The fair
value of borrowings at 31 March 2023 was GBP3,25,97,142 (2022:
GBP43,285,777). 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 2023 31 March 2022
------------- -------------
Current liabilities
Amounts falling due within one year 25,498,900 13,399,429
Non-current liabilities
Amounts falling due after 1 year but not
more than 5 years 7,098,242 29,886,348
------------- -------------
Total 32,597,142 43,285,777
------------- -------------
24 Trade and other payables
31 March 2023 31 March 2022
------------- -------------
Current
Trade payables 29,251,178 24,402,850
Creditors for capital goods 263,545 37,474
Bank Overdraft - -
Other payables - -
------------- -------------
Total 29,514,723 24,440,324
------------- -------------
Non-current
Other payables 306,402 630,358
------------- -------------
Total 306,402 630,358
------------- -------------
Trade payables include credit availed from banks under letters
of credit for payments in USD to suppliers for coal purchased by
the Group. Other trade payables are normally settled on 45 days
terms credit. The arrangements are interest bearing and are payable
within one year. With the exception of certain other trade
payables, all amounts are short term. 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.
25 Related party transactions
Key Management Personnel:
Name of the party Nature of relationship
--------------------------------- --------------------------------------
N Kumar Non-executive Chairman (from 4thApril
2022)
Arvind Gupta Chairman (till 4thApril 2022)
Avantika Gupta Chief Executive Officer (from 4thApril
2022)
Dmitri Tsvetkov Chief Financial Officer & Director
(till 31stMay 2022)
Ajit Pratap Singh Chief Financial Officer (from 31stMay
2022)
Jeremy Warner Allen Deputy Chairman
Mike Grasby (from February 2021) Director
Related parties with whom the group had transactions during the
period
Name of the party Nature of relationship
------------------------------------- ----------------------
Powergen Resources PTE Ltd Subsidiary
Aavanti Solar Energy Private Limited Associates
Mayfair Renewable Energy (I) Private Associates
Limited
Aavanti Renewable Energy Private Associates
Limited
Brics Renewable Energy Private Associates
Limited
------------------------------------- ----------------------
Summary of transactions with related parties
Name of the party 31 March 2023 31 March 2022
--------------------------------- ------------- -------------
Remuneration to Samriddhi Bubna 61,990 24,601
Sale of solar modules :
a) Aavanti Solar Energy Private
Limited - 188,741
b) Mayfair Renewable Energy (I)
Private Limited - 75,664
--------------------------------- ------------- -------------
Summary of balance with related parties
Name of the party Nature of 31 March 2023 31 March 2022
balance
---------------------------------- ---------------- ------------- -------------
Padma Shipping Limited Investment - 3,448,882
Padma Shipping Limited Advances - 1,727,418
Impairment
Padma Shipping Limited provision - (5,176,300)
Aavanti Solar Energy Private
Limited Investment 4,875,473 4,863,575
Aavanti Solar Energy Private Trade payable - -
Limited
Aavanti Solar Energy Private
Limited Advance 871,983 538,038
Mayfair Renewable Energy (I)
Private Limited Investment 5,295,192 5,277,364
Mayfair Renewable Energy (I)
Private Limited Trade payable - (52,035)
Mayfair Renewable Energy (I)
Private Limited Advance 101,273 -
Aavanti Renewable Energy Private
Limited Investment 4,270,391 5,804,055
Aavanti Renewable Energy Private Trade payable - -
Limited
Aavanti Renewable Energy Private
Limited Advance 115,979 298,745
Brics Renewable Energy Private
Limited Investment 362,664 362,664
Brics Renewable Energy Private
Limited Advance 2,447 -
---------------------------------- ---------------- ------------- -------------
Outstanding balances at the year-end are unsecured. Related
party transaction are on arms length basis. There have been no
guarantees provided or received for any related party receivables
or payables except for corporate guarantees issued to lenders of
its solar entities. The assessment of impairment is undertaken each
financial year through examining the financial position of the
related party and the market in which the related party
operates.
26 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 2023 or 2022).
The company has issued LTIP over ordinary shares which could
potentially dilute basic earnings per share in the future.
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 2023 31 March 2022
------------- -------------
Weighted average number of shares used
in basic
earnings per share 402,924,030 402,924,030
Shares deemed to be issued for no consideration
in respect of share based payments - -
Weighted average number of shares used
in diluted earnings per share 402,924,030 402,924,030
------------- -------------
27 Directors remuneration
Name of directors 31 March 2023 31 March 2022
------------- -------------
Ajit Pratap Singh 186,620 -
Avantika Gupta 229,861 59,043
Dmitri Tsvetkov 25,000 150,000
Jeremy Warner Allen 42,920 25,000
N Kumar 45,000 22,500
Mike Grasby (from February 2021) 45,000 22,500
------------- -------------
Total 574,401 279,043
------------- -------------
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.
28 Business combination within the group without loss of control
As per the original structure of the group, two Cypriot
subsidiaries of OPGPV, namely Gita Energy Private Limited ('GEPL')
and Gita Holdings Private Limited ('GHPL'), held the investments in
the equity of the Group's Special Purpose Vehicles (SPV) in India.
During the year ended 31 March 2013, the management decided to
interpose an Indian holding Company, GPIPL in the structure and
warehouse the SPV investments in GPIPL. Accordingly, the
shareholders of GEPL, GHPL and GPIPL had entered into a scheme of
arrangement to effect the above restructuring of the group. As part
of the regulatory requirements in India, the group had applied and
obtained approval from the High court of Madras on 28 October 2011
subject to fulfilment of certain conditions including approval of
relevant regulatory authorities, allotment of shares etc. The
scheme had been consummated with effect from 25 January 2013 upon
issue of shares to the shareholders of GEPL and GHPL, namely CHL
and the assets and liabilities of GEPL and GHPL have been taken
over by GPIPL. Consequent to the scheme of arrangement, the group
also has gained 100% economic interest over GPIPL by virtue of an
agreement entered into with the minority shareholders of GPIPL
dated 01 April 2012.
The above arrangement has been considered as a business
combination involving companies under the group since then and has
been accounted at the date that common control was established
using pooling of interest method. The assets and liabilities
transferred 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.
There was no excess consideration paid in this transaction.
29 Commitments and contingencies
Operating lease commitments
The Group leases office premises under operating leases. The
leases typically run for a period up to 5 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 2023 31 March 2022
------------- -------------
Not later than one year - 15,337
Later than one year and not later than
five years - 23,005
Later than five years - -
------------- -------------
Total - 38,342
------------- -------------
Recognition of a right of use asset NIL (2022: 36548).
Contingent liabilities
Disputed income tax demands GBP341,841(2022:GBP3,715,194 ).
Future cash flows in respect of the above matters are
determinable only on receipt of judgements / decisions pending at
various forums / authorities.
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 2023: GBP27,109,682(2022: GBP12,233,195)
and Bank Guarantee (BG) as at 31 March 2023: GBP5,481,828(2022:
GBP4,039,969). LC are supporting accounts payables already
recognised in statement of financial position. There have been no
guarantees provided or received for any related party receivables
or payables except for corporate guarantees issued to lenders of
its associate solar entities of GBP 20,228,371 (2022:
GBP21,760,986). BG are treated as contingent liabilities until such
time it becomes probable that the Company will be required to make
a payment under the guarantee.
30 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 financial assets measured at FVPL
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, financial assets measured at
FVPL.
The sensitivity analyses in the following sections relate to the
position as at 31 March 2023 and 31 March 2022
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 2023, 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 2023 and 31 March 2022, 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 2023 would decrease or increase by GBP944,115 (2022:
GBP432,858).
Foreign currency risk
Foreign currency risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rate. The Group's presentation currency
is the Great Britain GBP. A majority of our assets are located in
India where the Indian rupee is the functional currency for our
subsidiaries. Currency exposures also exist in the nature of
capital expenditure and services denominated in currencies other
than the Indian rupee.
The Group's exposure to foreign currency arises where a Group
company holds monetary assets and liabilities denominated in a
currency different to the functional currency of that entity:
As at 31 March 2023 As at 31 March 2022
------------------------------------------------ -------------------------------------------------
Financial Financial Financial Financial
Currency assets liabilities assets liabilities
----------------------- ----------------------- ----------------------- ------------------------
United States
Dollar
(USD) - 33,651,568 133,577 16,067,891
----------------------- ----------------------- ----------------------- ------------------------
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 2023 As at 31 March 2022
---------------------------------------------------------- ----------------------------------------------------------
Effect of Effect of
10% strengthening 10% strengthening
in USD against in USD against
Closing Rate INR - Translated Closing Rate INR - Translated
Currency (INR/USD) to GBP (INR/USD) to GBP
----------------------- --------------------------------- ----------------------- ---------------------------------
United
States
Dollar
(USD) 81.72 2,710,968 75.66 1,223,320
----------------------- --------------------------------- ----------------------- ---------------------------------
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. Further, the global economy has been
severely impacted by the global pandemic Covid-19 (Note 5(a)).
The maximum exposure for credit risk at the reporting date is
the carrying value of each class of financial assets amounting to
GBP11,922,073 (2022: GBP33,269,104) and corporate guarantees issued
to lenders of its associates solar entities of GBP20,228,371 (2022:
GBP21,760,986).
The Group has exposure to credit risk from accounts receivable
balances on sale of electricity. The operating entities of the
group has entered into power purchase agreements with distribution
companies incorporated by the Indian state government (TANGEDCO) to
sell the electricity generated therefore the group is committed 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. It is Group policy to assess the
credit risk of new customers before entering contracts and to
obtain credit information during the power purchase agreement to
highlight potential credit risks. The Group have established a
credit policy under which customers are analysed for credit
worthiness before power purchase agreement is signed. The Group's
review includes external ratings, when available, and in some cases
bank references. The credit worthiness of customers to which the
Group grants credit in the normal course of the business is
monitored regularly and incorporates forward looking information
and data available. The receivables outstanding at the year end are
reviewed till the date of signing the financial statements in terms
of recoveries made and ascertain if any credit risk has increased
for balance dues. Further, the macro economic factors and specific
customer industry status are also reviewed and if required the
search and credit worthiness reports, financial statements are
evaluated. The credit risk for liquid funds is considered
negligible, since the counterparties are reputable banks with high
quality external credit ratings.
To measure expected credit losses, trade and other receivables
have been grouped together based on shared credit risk
characteristics and the days past due. The Group determined that
some trade receivables were credit impaired as these were long past
their due date and there was an uncertainty about the recovery of
such receivables. The expected loss rates are based on an ageing
analysis performed on thereceivables as well as historical loss
rates. The historical loss rates are adjusted to reflect current
and forward looking information that would impact the ability of
the customer to pay.
Trade and other receivables are written off when there is no
reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the
failure of the debtor to engage in a repayment plan, the debtor is
not operating anymore and a failure to make contractual payments
for a period of greater than 180 days.
Days past due
--------------
Within Credit More than More than More than
31 March 2023 period 30 days 60 days 180 days Total
-------------- ------------ ------------ ------------- ------------
Expected general loss
allowance rate 0% 0% 0% 117.55%
Gross carrying amount
- Trade Receivables
-TANGEDCO 14,536,783 2,305,759 134,789 5,337,057 22,314,388
Gross carrying amount
- Trade Receivables
-Others 12,289,965 2,572,888 1,567,981 3,174,717 19,605,551
General loss allowance - - - 10,005,333 10,005,333
-------------- ------------ ------------ ------------- ------------
Total Loss allowance - - - 10,005,333 10,005,333
-------------- ------------ ------------ ------------- ------------
Days past due
--------------
Within Credit More than More than More than
31 March 2022 period 30 days 60 days 180 days Total
-------------- ------------ ------------ ------------- ------------
Expected loss rate 0% 0% 0% 82.00%
Gross carrying amount
- Trade Receivables
-TANGEDCO 727,191 656,818 2,158,116 7,199,394 10,741,520
Gross carrying amount
- Trade Receivables
-Others 1,760,732 939,318 86,005 5,466,037 8,252,092
General loss allowance 10,385,677 10,385,677
Specific loss allowance - - - - -
-------------- ------------ ------------ ------------- ------------
Total Loss allowance - - - 10,385,677 10,385,677
-------------- ------------ ------------ ------------- ------------
The closing loss allowances for trade receivables as at 31 March
2023 reconciles to the opening loss allowances as follows:
Particulars 31 March 2023 31 March 2022
------------- -------------
Opening loss allowance as at 1 April 10,385,677 21,133,088
(Reversal) in loss allowance (380,344) (10,747,411)
------------- -------------
Total 10,005,333 10,385,677
------------- -------------
The Group's management believes that all the financial assets,
except as mentioned above 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 2023 and 31 March 2022.
Non-Current
---------------------- ------------------
Current Within Later than
As at 31 March 2023 12 months 1-5 years 5 years Total
---------------------- ----------------- ------------- ------------------
Borrowings 3,318,301 7,098,242 - 10,416,543
Non-Convertible Debentures 22,180,599 - - 22,180,599
Trade and other payables 29,514,723 306,402 - 29,821,125
Provision for pledged - - - -
deposits
Other liabilities 37,720 - - 37,720
Other current liabilities 502,860 - - 502,860
---------------------- ----------------- ------------- ------------------
Total 55,554,203 7,404,644 - 62,958,847
---------------------- ----------------- ------------- ------------------
Non-Current
---------------------- ------------------
Current Within Later than
As at 31 March 2022 12 Months 1-5 Years 5 years Total
---------------------- ------------------ ---------------- ------------------
Borrowings 13,399,429 9,759,610 - 23,159,039
Non-Convertible Debentures - 20,126,738 - 20,126,738
Trade and other payables 24,440,324 630,358 - 25,070,682
Other liabilities - 36,228 - 36,228
Other current liabilities 569,199 - - 569,199
---------------------- ------------------ ---------------- ------------------
Other current liabilities 38,408,952 30,552,934 - 68,961,886
---------------------- ------------------ ---------------- ------------------
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 2023.
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:
Particulars 31 March 2023 31 March 2022
------------- -------------
Total equity 171,632,337 170,066,254
Less: Cash and cash equivalents (3,319,148) (7,691,392)
------------- -------------
Capital 168,313,189 162,374,862
------------- -------------
Total equity 171,632,337 170,066,254
Add: Borrowings 32,597,142 43,285,777
------------- -------------
Overall financing 204,229,479 213,352,031
------------- -------------
Capital to overall financing ratio 0.82 0.76
------------- -------------
31 Summary of financial assets and liabilities by category and their fair values
Carrying amount Fair value
March 2023 March 2022 March 2023 March 2022
-------------- ------------- -------------- -------------
Financial assets measured
at
amortised cost
* Cash and cash equivalents1 3,319,148 7,691,392 3,319,148 7,691,392
* Restricted cash1 15,165,789 12,819,951 15,165,789 12,819,951
* Current trade receivables1 31,914,606 8,607,935 31,914,606 8,607,935
* Other long-term assets 9,734 12,140 9,734 12,140
* Other short-term assets 8,844,464 2,724,296 8,844,464 2,724,296
Financial instruments measured
at
fair value through profit
or loss
* Other short term assets - (Note 17) 4,792,732 23,458,627 4,792,732 23,458,627
-------------- ------------- -------------- -------------
64,046,473 55,314,341 64,046,473 55,314,341
-------------- ------------- -------------- -------------
Financial liabilities measured
at
amortised cost
Term loans2 10,416,543 23,159,039 10,416,543 23,159,039
LC Bill discounting & buyers' - - - -
credit facility1
Non-Convertible Debentures2 22,180,599 20,126,738 22,180,599 20,126,738
Current trade and other payables1 29,514,723 24,440,324 29,514,723 24,440,324
Provision for pledged deposits 37,720 36,228 37,720 36,228
Non-current trade and other
payables2 306,402 630,358 306,402 630,358
-------------- ------------- -------------- -------------
62,455,987 68,392,687 62,455,987 68,392,687
-------------- ------------- -------------- -------------
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 financial assets measured at FVPL held for
trading purposes are derived from quoted market prices in active
markets. Fair value of financial assets measured at FVPL of
unquoted equity instruments are derived from valuation performed at
the year end. Fair Valuation of retained investments in PS and BV
is on basis of the last transaction.
Fair value measurements recognised in the statement of financial
position
The following table provides an analysis of financial
instruments that are measured subsequent to initial recognition at
fair value, grouped into Levels 1 to 3 based on the degree to which
the fair value is observable.
-- Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or
liabilities.
-- Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
-- Level 3 fair value measurements are those derived from
valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable
inputs).
Level 1 Level 2 Level 3 Total
---------- ------- ------- ----------
Financial instruments measured
at fair
value through profit or loss
2023
Quoted securities 4,792,732 - - 4,792,732
---------- ------- ------- ----------
Total 4,792,732 - - 4,792,732
---------- ------- ------- ----------
2022
Quoted securities 23,458,627 - - 23,458,627
---------- ------- ------- ----------
Total 23,458,627 - - 23,458,627
---------- ------- ------- ----------
There were no transfers between Level 1 and 2 in the period.
Investments in mutual funds are valued at closing net asset value
(NAV).
The Group's finance team performs valuations of financial items
for financial reporting purposes, including Level 3 fair values.
Valuation techniques are selected based on the characteristics of
each instrument, with the overall objective of maximising the use
of market-based information. The finance team reports directly to
the chief financial officer (CFO).
Valuation processes and fair value changes are discussed by the
Board of Directors at least every year, in line with the Group's
reporting dates.
The fair value of contingent consideration related to the level
3 investments is estimated using a present value technique. The Nil
(2022: Nil) fair value is estimated by discounting the estimated
future cash outflows, adjusting for risk at 17%.
-ends-
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END
FR UVVAROVUARUA
(END) Dow Jones Newswires
November 06, 2023 02:00 ET (07:00 GMT)
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