REG - OPG Power Ventures - Final Results
25/09/2024 07:00
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RNS Number : 5205F OPG Power Ventures plc 25 September 2024
25 September 2024
OPG Power Ventures Plc
("OPG", the "Group" or the "Company")
Final Results for the Year Ended 31 March 2024
OPG (AIM: OPG), the developer and operator of power generation assets in
India, announces its final results for the year ended 31 March 2024 ("FY24").
FY24 Summary:
· Strong recovery in FY revenues to £155.7m (FY 2023 £58.7m) with
our Chennai operations performing well.
· OPG generated cash of £20.8m in the period. At the end of the
period, OPG had a net cash position of £3.6m (including restricted cash of
£10.1m being cash deposits and mutual fund holdings held as collateral).
· Adjusted EBITDA* was £16.7m in FY 24 (FY 23: £16.5m). The
comparable 2023 figure includes profit from opportunistic coal sales, and
income from an insurance settlement. Excluding the effects of these EBITDA in
2024 increased 57%.
· Statutory profit before tax was £7.5m in FY 24 (FY 23: £10.4m)
with the comparable again reflecting income from coal sales and settlement of
an insurance claim and also including an impairment reversal of £2.95m and
share of net Profit from associates of £1.36m.
· NAV per share of 42.3p per share principally represents the
carrying value of our core asset in Chennai. The Board estimates that the
replacement cost for assets of this nature and location is considerably higher
than the carrying value.
Unless specified, all figures in £m FY 24 FY 23
Revenue 155.7 58.7
Other Operating Income 3.6 1.17
Adjusted EBITDA 16.7 16.5
Profit before tax from continuing operations 7.5 10.4**
Earnings per share (pence) 1.02 1.8***
NAV Per Share (pence) 42.3 42.6
Total generation (including deemed) (billion kWh) 2.32 1.5
*Defined as Earnings before Interest, Tax, Depreciation & Amortization and
Share Based Payments
**Includes £2.2m coal sales and £3.5m insurance settlement.
*** Includes £2.2m coal sales, £3.5m insurance settlement and impairment
reversal of £2.95m and share of Net Profit from associates of £1.36m
Mr. N. Kumar, Non-Executive Chairman said: "The financial year 2023-24 saw OPG
record an impressive PLF and robust financial performance. This is a testimony
to the continued efforts of the Company to achieve excellence in all areas of
operations".
We continue to optimally use our facilities, improving efficiency and reducing
emissions thereby improving our operational performance. Our commitment to
sustainable practices has not only enhanced our operational resilience but
also reinforced our position as a responsible leader in the energy sector.
The international coal prices have stabilized after a long time being volatile
from the COVID induced supply chain issues and Russia-Ukraine war, marking a
return to normalcy. This reduction and stabilizing of prices have led to
improved power generation and consequently increased operating revenues and
profits.
"In light of the above, OPG looks forward to FY24/25 with an increasing level
of optimism."
For further information, please visit www.opgpower.com or contact:
OPG Power Ventures PLC Via Tavistock below
Ajit Pratap Singh
Cavendish Capital Markets Limited (Nominated Adviser & Broker) +44 (0) 20 7220 0500
Stephen Keys/Katy Birkin/George Lawson
Tavistock (Financial PR) +44 (0) 20 7920 3150
Simon Hudson / Nick Elwes
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK version of the EU
Market Abuse Regulation (2014/596) which is part of UK law by virtue of the
European Union (Withdrawal) Act 2018, as amended and supplemented from time to
time.
Chairman's Statement
Proof of Excellence
The financial year 2023-24 saw OPG record an impressive PLF and robust
financial performance. This is a testimony to the continued efforts of the
Company to achieve excellence in all areas of operations.
We continue to optimally use our facilities, improving efficiency and reducing
emissions thereby improving our operational performance. Our commitment to
sustainable practices has not only enhanced our operational resilience but
also reinforced our position as a responsible leader in the energy sector.
The international coal prices have stabilized after a long time being volatile
from the COVID induced supply chain issues and Russia-Ukraine war, marking a
return to normalcy. This reduction and stabilizing of prices have led to
improved power generation and consequently increased operating revenues and
profits.
Strong Performance
The current fiscal year saw the stabilization of coal prices. The Company was
able to operate its units at optimal levels thereby delivering strong
operating and financial performance. The Group report revenue of £155.7m and
an EBITDA of £16.7m.
The Group remains one of the least leveraged power generating companies in
India. Prudent cash flow management continues to be a prime focus area.
Building a Sustainable Future
The broad skill set within our team and their commitment to excellence steered
by an experienced leadership team have helped achieve a strong performance for
the year. The Group's continuous investment in its people and enhancing their
skill levels have made our business agile and robust. The FY 24 results are a
testimony of the collective efforts of our team. I am happy to note the
Company is well positioned to capitalize on opportunities for growth.
We are also pleased to present our fourth standalone ESG report for FY 24. The
report summarizes 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.
The Company recorded impressive growth in generation of power and consequently
on operating revenues. The performance of the Company is discussed in detail
in the CEO's and the CFO's reviews.
Indian Economy and Power Sector Update
With a GDP growth rate of 7.8 percent (Source: IMF World Economic Outlook
Projections, April 2024), India also witnessed a surge in power demand of
approximately 7.02 percent during FY 24, reaching 1,738.1 billion units (BU)
compared to 1,624.16 billion units (BU) in FY 23. The surge in energy demand
has been fuelled by a confluence of factors, including the Government of
India's "Power for All" initiative, population growth, rapid urbanization,
industrialization, rising air conditioning usage, and sustained economic
expansion.
During FY 24, India added 26 GW of new generation capacity and as of 31 March
2024 the total generation capacity reached 442 GW of which 211 GW is from
thermal sources. Compared with the 55% share in installed capacity, the
thermal sector contributed 76% of India's electricity generated during FY 24,
primarily on account of the higher load factors that thermal plants can
achieve.
In India, temperatures in most parts of the country are expected to be above
average during summer 2024. The Government of India has projected a peak power
demand of 260 GW during the summer season in light of an extended heat wave.
By 2030, the Government of India estimates peak electricity demand to exceed
400 GW.
Outlook
During FY 24, with increased generation and continued deleveraging, the
Company has significantly strengthened its balance sheet and liquidity
position which provides OPG with the financial strength and latitude to pursue
new growth opportunities in energy transition.
India is on track to become the world's third largest economy in the years to
come and the country's rapid economic growth and burgeoning population have
continued to create a significant demand for energy, prompting the country to
undergo a transformative shift in its power sector. Currently, while India
ranks third in total power consumption globally, it is significantly lagging
in per capita consumption. The demand for energy will continue to increase not
only in the industrial sector but also in the retail sector where the retail
customer will have an increased reliance on energy due to a rise in
temperature, improved lifestyle and increasing purchasing power. The
Government of India's initiatives have improved the state utilities financial
health, thus enhancing the investment climate for power generation and
transmission.
The increase in electricity demand and transformation in the power sector in
India provides a prime opportunity for OPG to continue to generate profitable
revenues through its sustainable operations.
The Company will continue to generate strong cash flows from operations and
deleverage its balance sheet to maximise returns to its shareholders.
I take this opportunity to extend my sincere gratitude to all our stakeholders
and employees for their continued support to our growth.
N. Kumar
Non-Executive Chairman
24 September 2024
CEO's Operational Review
OPG remains agile in its market strategy, continuously assessing opportunities
to optimize capacity and maximize margins. By balancing stable, long-term
contracts with short-term supplies and exchanges, the Group ensures robust
operational efficiency amid fluctuating market conditions. This proactive
approach underscores OPG's commitment to strategic resource management and
sustainable profitability.
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, Industry and Power
Exchanges, plant availability, plant load factors, and auxiliary power
consumption.
Following, the post-Covid stabilization of coal prices, ongoing geopolitical
tensions such as the Ukraine-Russian war and instability in the Middle East
pose potential risks of supply disruptions. Despite these challenges, the
Group has proactively secured its raw material procurement and put in place
robust processes to safeguard its operations from any potential interruptions.
This strategic approach underscores the Company's resilience in navigating
external uncertainties to maintain operational continuity.
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 24, including deemed offtake, was 2.32
billion units (FY 23: 1.53 billion units). The increased generation was due to
higher demand of electricity in India and the Company's ability to secure
short term profitable contracts. OPG continues to focus on such contracts in
the current financial year.
The plant load factor ('PLF'), including deemed offtake, in FY 24 was 69.21
percent (FY 23: 42.1 percent). Auxiliary consumption levels are a key measure
of plant efficiency, typically averaging around 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 24, the coal indices have decreased and the Group is consciously
focusing on using a mix of domestic and international coal with the ultimate
objective of generating electricity at optimum cost to achieve profitable
operations. In FY 24, owing to various measures taken by OPG, the plant
realised an average tariff of 7.5p (FY 23: 8.6p).
Coal and Freight
The Group has consistently imported low sulphur coal from reputable mines with
established long standing relationships. In FY 24, we purchased coal through
medium-term Fuel Supply Agreements (FSA) allowing us to procure 1,99,600
metric tons of Indian coal . 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
Total Recordable Incident Rate (TRIR) in FY 24. We continue to minimise water
consumption using air-cooled condensers and the Group's philosophy of
continual improvement to remain a zero discharge unit.
Avantika Gupta
Chief Executive Officer
24 September 2024
CFO's Financial Review
The following is a commentary on the Group's financial performance for the
year ending 31 March 2024.
Revenue
The Group's revenues saw an increase of £97m, representing a rise of 165.30
percent in FY 24. This strategic shift was driven by the Group's focus on
profitable operations and capitalising on opportunities.
Adjusted EBITDA for FY 24 amounted to £16.7m, equivalent to 10.71 percent of
revenues, compared to the previous year's figure of £16.5m, which constituted
28.15 percent of the previous year's revenue.
Income Statement
Year Ended 31 March FY 24 £m Percentage of revenue FY 24 £m Percentage of revenue
Revenue £155.7 £58.7
Cost of Revenue (excluding Depreciation) (£128.0) (£42.3)
Gross Profit £27.7 17.8 £16.4 28.0
Other Operating Income £3.6 1.18
Other Income £0.2 6.19
Distribution (£14.8) (£7.3)
General and Administrative Expenses
Adjusted EBITDA £16.7 10.7 £16.5 28.15
Depreciation (£5.5) (£5.7)
Net Finance Costs (£3.6) (£4.7)
Income Before Tax £7.6 4.9 £6.1 10.4
Reversal of Impairment provision and Share of Profits from Associates £0.0 £4.31
Profit Before Tax £7.6 4.9 £10.4 17.8
Taxes (£3.5) (£3.2)
Profit for the Year £4.1 2.6 £7.2 12.2
In FY 24, the average tariff realised was 7.5p/kWh, marking a 12.79 percent
decrease compared to the previous year's 8.6p/kWh. However, the total
generation (including deemed generation), amounted to 2,322m units, which
represented a substantial increase of 51.96 percent when compared to the
previous year's 1,528m units. The increased generation was due to higher
demand for electricity in India and the Company's ability to secure short term
profitable contracts. OPG continues to focus on such contracts in the current
financial year.
Coal prices stabilized during the year compared with the highly volatile
prices in the previous year. However, the continuing Russia-Ukraine conflict
and the unrest in the Middle East creates uncertainty with regard to
uninterrupted raw material supplies.
Operational Review FY 24 FY 23
Total generation, incl. "deemed" generation (m units) 2,322 1,528
Plant Load Factor (PLF) (percent) 69.21 42.1
Average tariff (pence/unit) 7.5 8.6
Gross Profit
In the fiscal year, Gross Profit (GP) amounted to £27.67m, equivalent to
17.77 percent of revenue. When compared to the previous year (FY 23 -
£16.42m, representing 27.98 percent of revenue), the GP increased by
£11.25mrepresenting a 68.66 percent rise. This increase is due to the
stabilisation of coal prices, where the Company was able to significantly
improve the power generation leading to higher revenues and consequently had a
positive impact on GP as compared to the previous year.
The cost of revenue primarily comprises fuel costs. The table below provides
insight into the average prices of coal consumed in FY 24 and FY 23.
Average price of coal consumed FY 24 FY 23
Average price of coal consumed (per MT) £71.0 £76.6
Average price of coal consumed (per mKCal) £23.6 £20.9
Change in Average price of coal consumed (per MT) (percent) 7.3 42.6
Change in Average price of coal consumed (per mKCal) (percent) 12.9 60.1
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.
Figures pertaining to FY 23 are reinstated on account of reclassification
completed during FY 24, where applicable.
In FY 24, Adjusted EBITDA amounted to £16.7m, in contrast to £16. 52m in FY
23, reflecting an increase of £0.16m or 0.97 percent. This increase can
primarily be attributed to increase in gross profit and revenue in the current
year when compared to the previous year.
Profit from operations before tax was £7.55m, equivalent to 4.85 percent of
revenue, as compared to £6.12m, representing 10.42 percent of revenue, in FY
23.
Profit Before Tax (PBT) reconciliation for FY 24 (£m)
PBT £m FY 24
PBT FY 24 £7.55
PBT FY 23 £10.42
Decrease in PBT (£2.87)
Increase in GP £11.25
Increase in Other Operating Income £2.43
Decrease in Other income (£6.02)
Increase in Distribution, General & Administrative Expenses, Expected (£7.50)
Credit Loss
Decrease in Net Finance Costs £1.10
Decrease in Depreciation and amortisation £0.18
Reversal of Impairment and 31% share Net Profit from Associates (£4.31)
Decrease in PBT (£2.87)
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.
The tax expense for the year amounted to £3.44m.
Profit After Tax from continuing operations
Profit After Tax from operations decreased by £3.15m (43.38 percent) from
£7.26m to £4.11m in FY 24. This is due to a one time impact recorded in FY23
as shown in the table above.
Karnataka Solar Projects
As previously announced, the Group has been seeking to divest its stake in the
solar assets which was impacted by Covid-19. In March this year the Group sold
its 31% interest in each asset for a total consideration of approximately
£291,000. This compares to an original investment by the Group in these
assets of approximately £2,115. The Group will continue to hold the
debentures of approximately £10.80m subscribed in these solar assets.
Despite this Board remains committed, as appropriate, to optimise its thermal
power business with alternative green solutions, like, bundled power, battery
energy storage system, biofuel etc., especially given the strong domestic
demand for power, and that the Government of India has placed trust on
capacity addition in thermal power sector.
Current Year's Operations
The plants are running well with a Plant Load Factor of 70%. 15% is for
long-term open access with 85% in short-term open access or exchange. The
exchange rates have a southward trend owing to increased rains in most part of
the Country as well as higher solar generation during the day. The Company is
continuing to work on securing domestic coal in government schemes to reduce
its costs.
Earnings per Share (EPS)
The Group's total reported EPS decreased from 1.80 Pence in FY 23 to 1.02
Pence in FY 24.
Dividend policy
The Board firmly believes that it is in the interests of stakeholders and the
Company to conserve cash to meet its operational and capex requirements and
also to provide for any adverse impact on account of economic uncertainties.
Therefore, the Board has decided not to declare a dividend for FY 24. 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 £1= INR
105.28 as at 31 March 2024 from a rate of £1= INR 101.44 as at 31 March 2023
resulting in an exchange loss of £0.02m. The same has been recognised under
"Exchange differences on translating foreign operations".
Property, Plant and Equipment & Intangible Assets
The decrease in net book value of our Property, Plant and Equipment &
Intangible assets to £157.6m principally relates to depreciation, deletions,
foreign exchange impact offset by additions during FY 24.
Other Non-Current Assets
Other Non-Current Assets (excluding Property, Plant and Equipment &
Intangible Assets) have decreased by £2.95m. The major components of this
decrease was £6.52m decrease in "Non-current restricted cash". Further, the
same is offset by increase in non-current investments by £3.06m from £15.25m
in FY23 to £18.31m.
Current Assets
Current Assets increased by 46.73 per cent or £30.15m from £64.52m to
£94.67m year on year. Some of the components of the change are as follows:
· increase in trade receivables by £5.17m,
· increase in inventories by £11.02m,
· increase in other short-term assets by £4.55m from £13.64m in FY 23
to £18.19m in FY 24,
· decrease in Current Tax Assets (Net) by £0.45m from £1.15m in FY 23
to £0.70m in FY 24,
· increase in current restricted cash by £1.47m and
· increase in cash and cash equivalents by £8.39m.
Liabilities
Current liabilities have increased by £5.83 m from £55.52m to £61.35m year
on year.
· Borrowings which include current maturities of long term debt
decreased by £16.48m from £25.50m to £9.02m principally relates to
repayment of debt totalling to £23.54m.
· Trade and other payables increased by £22.33m from £29.51m to
£51.85m.
· Other current liabilities decreased by £0.02m from £0.50m to
£0.48m.
Non-current liabilities have increased by £14.47m (54.77 percent) from
£26.63m last year to £41.10m this year.
· Non-Current portion of long term debt increased by £12.51m from
£7.10m to £19.61m on account of the net effect of repayments, new debt as
well as movements to current liabilities.
· Trade and other payables increased by £0.49m from £0.34m to
£0.83m.
Net Deferred Tax Liabilities increased by £1.47m from £19.19 m to £20.66m.
Financial position, debt, gearing and finance costs
As of 31st March 2024, total borrowings were £28.63m (31 March 2023:
£32.60m). The gearing ratio, net debt (i.e. total borrowings minus cash and
current and non-current investments in mutual funds)/ (equity plus net debt),
was 6.63 percent (31 March 2023: 8.58 percent). The gearing ratio is a useful
measure to identify the financial risk of a company.
The Company issued Non-Convertible Debentures (NCDs) (listed on the Bombay
Stock Exchange) equivalent to approximately £3m in August 2023.
During FY 24, net debt (total borrowings minus cash and current and
non-current investments in mutual funds) decreased to £6.50m from £16.11m.
The Net Debt to Adjusted EBITDA ratio also decreased to 0.39x from 1.00x. This
decrease was a result of the Company increasing its cash holdings and reducing
borrowings by the repayment of borrowings. During FY 24, the Company repaid
debt amounting to £23.54m and the same was offset by increasing the issuance
of Non-convertible debentures amounting to £3m in the month of August 2023.
The net debt position demonstrates the robustness of OPG's financial position.
The Group remains amongst the least leveraged power companies in India.
Finance costs have decreased by 6.07 percent or £0.36m to £5.57m in FY 24
from £5.93m in FY 23. This was primarily due to the impact of a decrease in
foreign exchange losses. Finance income increased by £0.75m from £1.22m in
FY 23 to £1.97m in FY 24.
Overall, this resulted in a decrease of £1.10m (23.35 percent increase) in
Net Finance Costs from £4.71m in FY 23 to £3.61m in FY 24.
Current restricted cash representing deposits and mutual funds maturing up to
twelve months amounted to £8.25m (FY 23: £6.79m) an increase of 21.5 percent
which have been pledged as security for Letters of Credit, Bank Guarantees and
debenture redemption fund.
Non-current restricted cash represents investments in mutual funds of £1.86m
(FY 23: £8.38m). Non-current restricted cash decreased by 77.80 percent.
Cash flow
Cash flow from operations; before, and after, the changes in working capital
was £17.4m (FY 23: £16.0m) and £20.8m (FY 23: £1.2m) respectively.
Movements (£m) FY 24 FY 23
Operating cash flows from operations before changes in working capital £17.4 £16.0
Tax Paid (£0.5) (£0.4)
Change in working capital assets and liabilities £4.6 (£16.8)
Net Cash generated by (used in) operating activities from operations £21.5 (£1.2)
Purchase of Property, Plant and equipment (net of disposals) (£3.5) (£1.1)
Investments(purchased)/sold, incl. in solar projects, shipping JV, market £3.5 £14.5
securities, movement in restricted cash and interest received
Net Cash(used in)/from investing activities £0.0 £13.4
Finance cost paid, incl. foreign exchange losses (£5.6) (£5.9)
Dividend paid
Total cash change from operations before net borrowings £15.0 £6.3
The Company is required under AIM Rule 19 to publish its FY 24 Accounts by 24
September 2024.
Ajit Pratap Singh
Chief Financial Officer
24 September 2024
Consolidated statement of financial position
As at 31 March 2024
(All amount in £, unless otherwise stated) As at As at
Notes 31-Mar-24 31-Mar-23
Assets
Non-current Assets
Intangible assets 14 17,010 13,401
Property, plant and equipment 15 157,565,290 165,607,650
Investments 16 18,307,543 15,245,56
Other long-term assets 17(b) 512,358 10,463
Restricted cash 21(b) 1,862,075 8,379,292
Total Non-current Assets 178,264,27 189,256,369
Current assets
Inventories 19 18,736,699 7,719,396
Trade and other receivables 18 37,086,020 31,914,606
Other short-term assets 17(a) 18,186,633 13,636,647
Current tax assets (net) 26 697,438 1,147,062
Restricted cash 21(a) 8,250,594 6,786,497
Cash and cash equivalents 20 11,714,256 3,319,344
Total Current Assets 94,671,640 64,523,372
Total Assets 272,935,916 253,779,741
Equity and liabilities
Equity
Share capital 22 58,909 58,909
Share premium 131,451,482 131,451,482
Other components of equity (20,305,279) (15,910,806)
Retained earnings 59,267,745 55,157,211
Equity attributable to owners of the Company 170,472,858 170,756,796
Non-controlling interests 5,822 875,541
Total Equity 170,478,680 171,632,337
Liabilities
Non-current Liabilities
Borrowings 24(b) 9,451,140 7,098,242
Non-Convertible Debentures 24(b) 10,163,461 -
Trade and other payables 25(b) 814,473 306,402
Other liabilities 27(b) 16,903 37,720
Deferred tax liabilities (net) 13 20,657,873 19,188,361
Total Non-current Liabilities 41,103,850 26,630,725
Current Liabilities
Borrowings 24(a) 9,022,924 25,498,900
Trade and other payables 25(a) 51847642 29,514,723
Other liabilities 27(a) 482,820 503,056
Total Current Liabilities 61,353,386 55,516,679
Total Liabilities 102,457,236 82,147,404
Total Equity and Liabilities 272,935,916 253,889,741
The notes are an integral part of these consolidated financial statements.
The financial statements were authorised for issue by the board of directors
on 24 Sep 2024 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 2024
(All amount in £, unless otherwise stated) Year ended Year ended
Notes 31-Mar-24 31-Mar-23
Revenue 8 155,687,252 58,683,036
Cost of revenue 9 (128,017,534) (42,263,205)
Gross profit 27,669,718 16,419,831
Other Operating income 10(a) 3,606,866 1,176,416
Other income 10(b) 169,536 6,191,066
Distribution cost (5,630,647) (1,225,949)
General and administrative expenses (9,134,819) (6,040,826)
Depreciation and amortisation (5,521,962) (5,696,860)
Operating profit 11,158,692 10,823,678
Finance costs 11 (5,571,272) (5,925,076)
Finance income 12 1,967,022 1,218,405
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 7,554,443 10,423,378
Current tax 13 (1,250,941) (539,716)
Deferred tax 13 (2,192,952) (2,623,880)
Tax expense 13 (3,443,893) (3,163,596)
Profit for the year from continued operations 4,110,550 7,259,782
Gain/(Loss) from discontinued operations, including Non-Controlling Interest 7(a) - -
Profit for the year 4,110,550 7,259,782
Profit for the year attributable to:
Owners of the Company 4,110,535 7,252,763
Non - controlling interests 15 7,019
4,110,550 7,259,782
Earnings per share from continued operations
Basic earnings per share (in pence) 29 1.02 1.80
Diluted earnings per share (in pence) 1.02 1.80
Earnings/(Loss) per share from discontinued operations
Basic earnings/(loss) per share (in pence) 29 - -
Diluted earnings/(loss) per share (in pence) - -
Earnings per share
-Basic (in pence) 29 1.02 1.80
-Diluted (in pence) 1.02 1.80
Other comprehensive (loss) / income
Items that will be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations (4,394,473) (5,689,558)
Income tax relating to items that will be reclassified
Items that will be not reclassified subsequently to profit or loss
Exchange differences on translating foreign operations, relating to 19,317 (4,140)
non-controlling interests
Total other comprehensive (loss) / income (4,375,156) (5,693,698)
Total comprehensive income (264,606) 1,566,084
Total comprehensive income / (loss) attributable to:
Owners of the Company (283,938) 1,563,205
Non-controlling interest 19,332 2,879
(264,606) 1,566,084
The notes are an integral part of these consolidated financial statements
The financial statements were authorised for issue by the board of directors
on 24 Sep 2024 and were signed on its behalf by:
N Kumar Ajit Pratap Singh
Non-Executive Chairman Chief Financial Officer
Consolidated statement of cash flows
For the Year ended 31 March 2024
(All amount in £, unless otherwise stated) Year ended Year ended
31 March 2024 31 March 2023
Notes
Cash flows from operating activities
Profit before income tax including discontinued operations and income from 7,554,443 10,423,378
associates
Adjustments for:
(Profit) / Loss from discontinued operations, net / Reversal of Impairment - (2,950,958)
(Profit) / Loss from associate companies - (1,355,413)
Unrealised foreign exchange (gain)/loss 170,950 (121,677)
Provisions created during the year 237,872 -
Financial costs 10 5,571,272 5,925,076
Financial income (including Profit on sale of Financial Instruments) 11 (1,967,022) (1,599,860)
Depreciation and amortisation 5,521,962 5,696,860
Changes in working capital
Trade and other receivables (5,409,286) (23,306,671)
Inventories (11,017,303) 2,746,424
Other assets (3,617,653) (924,487)
Trade and other payables 22,840,990 4,750,443
Other liabilities 1,428,458 (64,651)
Cash generated from continuing operations 21,314,681 (781,536)
Taxes paid (482,890) (436,692)
Cash provided by operating activities of continuing operations 20,831,791 (1,218,228)
Cash used for operating activities of discontinued operations - -
Net cash provided by operating activities 20,831,791 (1.218,228)
Cash flows from investing activities
Purchase of property, plant and equipment (including capital advances) (3,560,859) (1,112,976)
Proceeds from Disposal of property, plant and equipment 45,827 1,072
Interest received 1967,022 1,218,405
Movement in restricted cash 4,882,171 (2,345,838)
Purchase of investments (4,767,492) (68,534,422)
Sale of Investments 0 81,471,026
Redemption of Investments 1,203,617 2,673,310
Cash from / (used in) investing activities of continuing operations (229,714) 13,370,577
Cash from investing activities of discontinued operations - -
Net cash from / (used in) investing activities (229,714) 13,370,577
Cash flows from financing activities
Proceeds from borrowings (net of costs) 17,355,566 6,842,271
Proceeds/(Investments) from equity - (91)
Repayment of borrowings (21,315,183) (17,530,906)
Finance costs paid (5,571,272) (5,925,076)
Cash used in financing activities of continuing operations (9,530,888) (16,613,802)
Cash used in financing activities of discontinued operations - -
Net cash used in financing activities (9,530,888) (16,613,802)
Net (decrease) in cash and cash equivalents from continuing operations 11,071,189 (4,461,453)
Net decrease in cash and cash equivalents from discontinued operations - -
Net (decrease) in cash and cash equivalents 11,071,189 (4,461,453)
Cash and cash equivalents at the beginning of the year 3,319,344 7,691,392
Cash and cash equivalents on deconsolidation -
Exchange differences on cash and cash equivalents (2,676,277) 89,405
Cash and cash equivalents of the discontinued operations -
Cash and cash equivalents at the end of the year 11,714,256 3,319,344
The notes are an integral part of these consolidated financial statements.
Disclosure of Changes in financing liabilities:
Analysing of changes in Net debt - OPG PG Pvt Ltd 1 April 2023 Cash flows Forex Rate Impact 31 March 2024
Working Capital loan 1,951,831 1,004,384 3,863 2,960,079
Secured loan due within one year 23,496,705 (17,480,361) 46,501 6,062,845
Borrowings grouped under Current liabilities 25,448,536 (16,475,976) 50,364 9,022,924
Secured loan due after one year 7,030,298 2,380,444 40,398 9,451,140
Borrowings grouped under Non-current liabilities 7,030,298 2,380,444 40,398 9,451,140
Analysing of changes in Net debt 1 April 2022 Cash flows Forex Rate Impact 31 March 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
OPG Power Ventures Plc
Consolidated statement of changes in equity
For the Year ended 31 March 2024
(All amount in £, unless otherwise stated)
Particulars Issued capital (No. of shares) Ordinary shares Share premium Debenture Redemption reserve Other reserves Foreign currency translation reserve Revaluation Reserve Retained earnings Total attributable to owners of parent Non-controlling interests Total equity
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
At 1 April 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
Employee Share based payment LTIP (Note 22) - - - - - - - - - - -
Transaction with owners - - - - - - - - - - -
Net Additions for the year - - - - - - - 4,110,535 4,110,535 (889,036) 3,221,499
Other comprehensive income - - - - - (4,394,473) - - (4,394,473) 19,317 (4,375,156)
Total comprehensive income - - - - - (4,394,473) - 4,110,535 (283,938) (869,719) (1,153,657)
At 31 March 2024 400,733,511 58,909 131,451,482 - 8,216,152 (28,521,431) - 59,267,745 170,472,858 5,822 170,478,680
The notes are an integral part of these consolidated financial statements.
The financial statements were authorised for issue by the board of directors
on 24 Sep 2024 and were signed on its behalf by:
N. Kumar Ajit Pratap Singh
Non-Executive Chairman Chief Financial Officer
Notes to the consolidated financial statements
(All amounts are in £, unless otherwise stated)
1 Nature of operations
OPG Power Ventures Plc ('the Company' or 'OPGPV'), and its subsidiaries
(collectively referred to as 'the Group') are primarily engaged in the
development, owning, operation and maintenance of private sector power
projects in India. The electricity generated from the Group's plants is sold
principally to public sector undertakings and heavy industrial companies in
India or in the short term market. The business objective of the group is to
focus on the power generation business within India and thereby provide
reliable, cost effective power to the industrial consumers and other users
under the 'open access' provisions mandated by the Government of India.
2 Statement of compliance
The consolidated financial statements of the Group have been prepared in
accordance with International Financial Reporting Standards (IFRS) - 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 IFRS 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 ('₤'), the functional and presentation currency of the Company.
Going Concern
In response to the recent global challenges, including the Covid-19 pandemic
and the war in Ukraine, which have led to significant increases in commodity
prices and inflation, particularly impacting coal prices, the Group has
proactively conducted a Reverse Stress Test (RST). This analysis was aimed at
evaluating the potential effects on the receivables and other financial
assets.
(1)Despite the volatility in commodity prices and inflationary pressures, the
Group's financial health remains resilient.
(2) The Group has implemented robust risk management strategies, including
cost control measures and operational efficiencies, which have helped in
managing the increased financial pressures.
(3) As at 31 March 2024 the Group had £12.57m in cash and cumulative net
current assets of £33.77m and the Group's liquidity position remains strong,
ensuring that the Group can meet short-term obligations and navigate through
economic uncertainties without compromising the operational stability.
(4) The Group's ability to adapt to changing market conditions and rapidly
implement strategic adjustments has been crucial in sustaining the Group's
performance through these challenging times.
The Reverse Stress assessment affirms that the Group remains in a strong
position, and concerns regarding the Group's going concern status are not an
issue.
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 2024. 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.
Amidst rapid economic growth resulting in escalating electricity demand, the
Government of India has placed its trust on the capacity additions in the
thermal power sector, in order to meet the strong domestic demand for power in
the Country. Recognizing the need to align with this vision of the Nation, the
Board made a strategic decision to sharpen its focus on its core business of
thermal power and consequently decided to divest its investments in the solar
projects during FY 2023-24. Consequently, the Solar Companies, Aavanti Solar
Energy Private Limited, Aavanti Renewable Energy Private Limited, Mayfair
Renewable Energy (I) Private limited and Brics Renewables Energy Private
Limited, ceased to be the associate entities of the Group and the Saan
Renewable Private Limited Private Limited, Saman Renewable Private Limited,
Mark Renewables Private Limited, Mark Solar Private Limited and Saman Solar
Private Limited ceased to be the subsidiaries of the Group. However, the Group
continues to hold the debentures subscirbed on the solar assets, maintaining a
strategic interest in the renewable energy landscape.
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 parent Country of incorporation % Voting Right % Economic interest
March 2024 March 2023 March 2024 March 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 81.42 99.99 99.90
Samriddhi Surya Vidyut Private Limited OPGPG India 100.00 100.00 100.00 100.00
Powergen Resources Pte Ltd OPGPV Singapore 95 95 95 95
ii) Investments in Joint ventures
Joint ventures Venturer Country of incorporation % Voting right % Economic interest
March 2024 March 2023 March 2024 March 2023
Padma Shipping Limited ("PSL") OPGPV / OPGPG Hong Kong 0 50 0 50
The company has been deregistered and notice to the effect has been issued by
the Companies Registry, Hong Kong on 14-07-2023.
iii) Investments in Associates
Associates Country of incorporation % Voting Right % Economic interest
March 2024 March 2023 March 2024 March 2023
Aavanti Solar Energy Private Limited India - 31 - 31
Mayfair Renewable Energy (I) Private Limited India - 31 - 31
Aavanti Renewable Energy Private Limited India - 31 - 31
Brics Renewable Energy Private Limited India - 31 - 31
e) Foreign currency translation
The functional currency of the Company is the Great Britain Pound Sterling
(£). The Cyprus entity is an extension of the parent and pass through
investment entity. Accordingly the functional currency of the subsidiary in
Cyprus is the Great Britain Pound Sterling. The functional currency of the
Company's subsidiaries operating in India, determined based on evaluation of
the individual and collective economic factors is Indian Rupees ('₹' or
'INR'). The presentation currency of the Group is the Great Britain Pound (£)
as submitted to the AIM counter of the London Stock Exchange where the shares
of the Company are listed.
At the reporting date the assets and liabilities of the Group are translated
into the presentation currency at the rate of exchange prevailing at the
reporting date and the income and expense for each statement of profit or loss
are translated at the average exchange rate (unless this average rate is not a
reasonable approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expense are translated at the
rate on the date of the transactions). Exchange differences are charged/
credited to other comprehensive income and recognized in the currency
translation reserve in equity.
Transactions in foreign currencies are translated at the foreign exchange rate
prevailing at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies at the Statement of financial position date
are translated into functional currency at the foreign exchange rate ruling at
that date. Aggregate gains and losses resulting from foreign currencies are
included in finance income or costs within the profit or loss.
INR exchange rates used to translate the INR financial information into the
presentation currency of Great Britain Pound (£) are the closing rate as at
31 March 2024: 105.28 (2023: 101.44) and the average rate for the year ended
31 March 2024: 104.06 (2023: 96.79).
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 FY24 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.
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:
Assets Held for Sale Liabilities classified as held for sale Profit from discontinued operations
At 31 March 2024 At 31 March 2023 At 31 March 2024 At 31 March 2023 For FY 24 For FY 23
i Interest in Solar entities Note 7(b) - - - - - -
ii Share of Profit on fair value of investments, in Solar entities Note 7(b) - - - - - -
iii Gain on deconsolidation of Solar entities - - - - (2,078) -
Total - - - - (2,078) -
Non-current Assets held-for-sale and discontinued operations
(a) Assets of disposal group classified as held-for-sale As at 31st March 2024 As at 31st March 2023
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 - -
Total - -
(b) Analysis of the results of discontinued operations is as follows: For FY 24 For FY 23
Revenue - -
Operating profit before impairments - -
Other Expenses 1,921
Finance income - -
Finance cost 157 -
Current Tax - -
Deferred tax - -
Share of Profit/ (Loss) on fair value of investments, in Solar entities - -
Gain on deconsolidation of Solar entities (2,078) -
Profit / (Loss) from Solar operations - -
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 FY24 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.
Revenue on account of sale of power to customer exceeding 10% of total sales
revenue amounts to £47,386,876.84 from TANGEDCO & £43,510,481.54 from
IEX & £66,999,457.55 from STOA sales to Andhra Pradesh Discom (2023:
£51,247,620).
Segmental information disclosure
Continuing operations Discontinued operations
Thermal Solar
Segment Revenue FY24 FY23 FY24 FY23
Sales 155,687,252 58,683,036 - -
Total 155,687,252 58,683,036 - -
Other Operating income 3,606,866 1,455,039 - -
Depreciation, impairment (5,521,962) (5,696,860) - -
- -
Profit from operation 11,158,692 10,442,223 - -
Finance Income 1,967,022 1,599,860 - -
Finance Cost (5,571,272) (5,925,076) - -
Tax expenses (3,443,893) (3,163,596) - -
Reversal of FV Impairment of associates - (2,950,958) - -
Share of Profit, (Loss) on fair value of investments, in Solar entities - 1,355,413 - -
Profit / (loss) for the year 4,110,550 7,259,782 - -
Assets 272,935,916 253,779,545 - -
Liabilities 102,457,236 82,147,208 - -
9 Costs of inventories and employee benefit expenses included in the
consolidated statements of comprehensive income
a) Cost of fuel
31 March 2024 31 March
2023
Included in cost of revenue:
Cost of fuel consumed 124,371,190 39,021,545
Depreciation - -
Other direct costs 3,646,344 3,241,660
Total 128,017,534 42,263,205
b) Employee benefit expenses forming part of general and administrative expenses
are as follows:
31 March 2024 31 March
2023
Salaries and wages 2,492,231 2,651,267
Employee benefit costs * 487,530 186,396
Long Term Incentive Plan (Note 22) - -
Total 2,979,761 2,837,663
c) Foreign exchange movements (realised and unrealised) included in the Finance
costs is as follows:
31 March 2024 31 March
2023
Foreign exchange realised - loss/(gain) 75,627 1,278,303
Foreign exchange unrealised- loss/(gain) 170,950 (121,677)
Total 246,577 1,156,626
Auditor's remuneration for audit services amounting to £46,000 (2023:
£74,000) is included in general and administrative expenses and excludes
travel reimbursements.
10 Other operating income and expenses
a) Other operating income
31 March 2024 31 March
2023
Surcharge TANGEDCO 2,977,906 1,455,039
Margin on Trading of Power 628,960 (278,623)
Total 3,606,866 1,176,416
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 2024 31 March
2023
Provisions no longer required written back - -
Sale of coal (Margin) 338,390 2,240,486
Sale of fly ash 123,996 117,399
Power trading commission and other services - -
Profit on disposal of financial instruments* (297,408) 381,455
Others 4,559 3,451,727
Total 169,536 6,191,067
*Profits on disposal of financial instruments include £291,688 of unrealised
gain/loss on mark to market rate as on reporting date of mutual funds held
during the year.
*Profits on disposal of financial instruments include profit on sale of
investments in associate entities.
11 Finance Costs
Finance costs are comprised of:
31 March 2024 31 March
2023
Interest expenses on borrowings 4,572,000 4,242,700
Net foreign exchange loss (Note 9) 246,578 1,156,626
Other finance costs 752,695 525,750
Total 5,571,272 5,925,076
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 2024 31 March
2023
Interest income on bank deposits and advances 1,967,022 1,218,405
Total 1,967,022 1,218,405
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 2024 and
2023 is as follows:
31 March 2024 31 March
2023
Accounting profit before taxes 7,554,443 10,423,378
Enacted tax rates 34.94% 34.94%
Tax expense / profit at enacted tax rate 2,639,824 3,642,345
Exempt Income due to tax holiday - -
Foreign tax rate differential 15,618 (135,973)
Unused tax losses brought forward and carried forward - -
Non deductible / (Non-taxable) items 2,039,392 198,000
MAT credit (1,250,941) (540,777)
Others - -
Actual tax for the period 3,443,893 3,163,596
31 March 2024 31 March 2023
Current tax (1,250,941) (539,716)
Deferred tax (2,192,952) (2,623,880)
Total tax expenses on income from continued operations (3,443,893) (3,163,596)
Add: tax on income from discontinuing operations - -
Tax reported in the statement of comprehensive income (3,443,893) (3,163,596)
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 2023: 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 2024 and 2023 relates to the
following:
31 March 2024 31 March
2023
Deferred income tax assets
Unused tax losses brought forward and carried forward - -
MAT credit entitlement 10,920,740 11,741,110
10,920,740 11,741,110
Deferred income tax liabilities
Property, plant and equipment 31,578,613 30,929,471
Mark to market on available-for-sale financial assets - -
31,578,613 30,929,471
Deferred income tax liabilities, net 20,657,873 19,188,361
Movement in temporary differences during the year
Particulars As at 01 April 2023 Deferred tax asset / (liability) for the year Classified as (Asset) / Liability held for sale Translation adjustment
Property, plant and equipment (30,929,471) (2,810,234) - 2,161,091
Unused tax losses brought forward and carried forward - - - -
MAT credit entitlement 1,17,41,110 - - (8,20,370)
Mark to market gain / (loss) on financial assets measured at FVPL - - - -
Deferred income tax (liabilities) / assets, net (19,188,361) (2,810,234) - 1,340,721
Particulars As at 01 April 2022 Deferred tax asset / (liability) for the year Classified as (Asset) / Liability held for sale Translation adjustment
Property, plant and equipment (29,015,582) (2,505,899) - 592,011
Unused tax losses brought forward and carried forward - - - -
MAT credit entitlement 11,985,655 - - (244,545)
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
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.
14 Intangible assets Acquired software licences
Cost
At 31 March 2022 786,502
Additions 5,174
Exchange adjustments (14,577)
At 31 March 2023 777,099
At 31 March 2023 777,099
Additions 9,718
Exchange adjustments (28,387)
At 31 March 2024 758,430
Accumulated depreciation and impairment
At 31 March 2022 774,692
Charge for the year 3,255
Exchange adjustments (14,250)
At 31 March 2023 763,698
At 31 March 2023 763,698
Charge for the year 5,571
Exchange adjustments (27,849)
At 31 March 2024 741,419
Net book value
At 31 March 2024 17,010
At 31 March 2023 13,401
15 Property, plant and equipment
The property, plant and equipment comprises of:
Power stations Other plant & equipment Vehicles Right-of-use Asset under construction Total
Cost
At 1st April 2022 205,217,517 1,855,448 730,306 43,843 1,767,219 218,136,670
Additions 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 (3,803,566) (34,389) (13,536) (813) (32,754) (4,043,014)
At 31 March 2023 202,905,038 1,835,087 656,125 43,030 1,262,898 215,098,377
At 1st April 2023 202,905,038 1,835,087 656,125 43,030 1,262,898 215,098,377
Additions 671,051 176,718 2,329,426 - 359,225 3,548,339
Transfers on capitalisation - - - - - -
Sale / Disposals - (45,827) - (43,030) (19,821) (108,678)
Exchange adjustments (7,422,075) (66,375) (23,766) - (55,791) (7,872,817)
At 31 March 2024 196,154,014 1,899,603 2,961,784 0 1,546,509 210,665,221
Accumulated depreciation and impairment
At 1 April 2022 42,722,787 1,340,816 586,541 7,295 - 44,730,992
Charge for the year 5,361,890 281,236 36,666 - - 5,693,605
Sale / Disposals (15,949) - (60,645) (7,157) - (83,751)
Exchange adjustments (812,100) (25,385) (11,104) (138) (850,120)
At 31 March 2023 47,256,628 1,596,667 551,457 0 - 49,490,726
At 1 April 2023 47,256,628 1,596,667 551,457 0 - 49,490,726
Charge for the year 5,130,451 207,118 165,962 - - 5,516,391
Sale / Disposals - (38,738) - - - (38,738)
Exchange adjustments (1,782,585) (60,055) (21,801) - - (1,868,445)
Solar assets classified as Asset Held for Sale (note 7(b)) - - - - - -
Adjustments on account of deconsolidation of a subsidiary - - - - - -
At 31 March 2024 50,604,494 1,704,992 695,617 0 - 53,099,934
Net book value
At 31 March 2024 145,549,520 194,611 2,266,167 (0) 1,546,509 157,565,290
At 31 March 2023 155,648,411 238,420 104,667 43,030 1,262,898 165,607,650
The net book value of land and buildings block comprises of:
31 March 31 March
2024 2023
Freehold land 7,626,376 7,904,854
Buildings 382,106 405,372
8,008,482 8,310,226
Property, plant and equipment with a carrying amount of £ 155,869,612 (2023
£ 164,159,294) is subject to security restrictions.
(a) The Group considered both qualitative and quantitative factors when
determining whether an Asset or CGU may be impaired. Assets related to each
segment 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 23-24.
The recoverable amount of segment was determined based on value-in-use
calculations, covering a detailed 20 year period forecast for Thermal Assets
using DCF methodology by management. The present value of the expected cash
flows 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 2024 Thermal £ Mn
Present Value of Cash Flows 285.96
Carrying Cost of PPE 155.1
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 Assets.
Management's key assumptions included:
Cash flow projections reflect stable Profit Margins and Cash Flows on Thermal
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 83.01 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 when determining the appropriate adjustments to this rate.
(b) Cash flow projections
Thermal
Parameters Values
Plant Load Factors (%) 63 to 84
Realisable Tariff (Pence) 4.9 to 7.7
Price of Coal (USD/Ton) 60 to 50
WACC (%) 13.92
Cost of Debt (%) 8.71
(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 2025 FY 2025 FY 2026
PLF % 72 68.4 71.01
Cost of Coal ($) 54.86 57.6 56.45
Tariff (INR/Unit) 4.99 4.75 4.78
16 Investments accounted for using the equity method
The carrying amount of investments accounted for using the equity method is as
follows:
31 March 2024 31 March
2023
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 Associates classified as Assets held for sale -
Investments accounted for using the equity method - 16,159,133
a) Investment in associates (Note 5(d) 7(b))
Summarised aggregated financial information of the Group's share in the
associates.
31 March 2024 31 March 2023
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 details of
impairment analysis are provided in Note 15 above.
Aggregate carrying amount of the Group's interests in these associates &
other entities
31 March 2024 31 March 2023
Associates & Other Entities 18,307,543 15,245,563
Total carrying Amount 18,307,543 15,245,563
17 Other Assets
31 March 2024 31 March
2023
a) Short-term
Capital advances - -
Financial instruments measured at fair value through P&L 9,893,198 4,792,732
Advances and other receivables 8,293,435 8,843,735
Total 18,186,633 13,636,467
b) Long term
Advances to related parties - -
Classified as asset held for sale (note 7(a)) - -
Lease deposits - -
Bank deposits 512,358 10,463
Other advances - -
Total 512,358 10,463
18 Trade and other receivables
31 March 2024 31 March
2023
Current
Trade receivables 37,086,020 31,914,606
Other receivables - -
Total 37,086,020 31,914,606
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 2024 31 March 2023
Coal and fuel 17,317,906 6,706,467
Stores and spares 1,418,793 1,012,929
Total 18,736,699 7,719,396
The entire amount of above inventories has been pledged as security for
borrowings
20 Cash and cash equivalents
Cash and short term deposits comprise of the following:
31 March 2024 31 March 2023
Investment in Mutual funds - -
Cash at banks and on hand 8,768,162 3,319,344
Short-term deposits 2,946,094 -
Total 11,714,256 3,319,344
Short-term deposits are placed for varying periods, depending on the immediate
cash requirements of the Group. They are recoverable on demand.
21 Restricted cash
a. Restricted cash
Current restricted cash represents deposits and mutual funds with the maturity
up to twelve months amounting to £8,250,594 (2023 - £6,786,497) which have
been lien marked by the Group in order to establish Letters of Credits, Bank
Guarantees from the bankers and debenture redemption fund.
b. Restricted cash
Non-Current restricted cash represents deposits and mutual funds with the
maturity more than twelve months amounting to £1,862,075 (2023 -
£8,379,292).
22 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 2024, the Company has an authorised and issued share capital of
400,733,511 (2023: 400,733,511) equity shares at par value of £ 0.000147
(2023: £ 0.000147) per share amounting to £58,909 (2023: £58,909) 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.
23 Share based payments
Long term incentive plan
The number of performance-related awards is 14 m 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
FY24 and no shares were issued during FY 24. The Carry forward shares under
LTIP reserves will be issued in the year 24-25. 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 granted LTIP as at Movements during the period Expired/ LTIP Latest vesting
01-Apr-23 Outstanding
Cancelled Exercised
Arvind Gupta 24-Apr-19 1,185,185 0 Nil 1,185,185 24-Apr-20
Dmitri Tsvetkov 24-Apr-19 568,889 0 Nil 568,889 24-Apr-20
Avantika Gupta 24-Apr-19 284,445 0 Nil 284,445 24-Apr-20
24 Borrowings
Borrowings comprise of the following:
Interest rate (range %) Final maturity 31 March 2024 31 March
2023
Borrowings at amortised cost 9.9-10.85(1) Jan 2029 18,474,064 10,416,543
Non-Convertible Debentures at amortised cost 9.85-12.75 Nov 2026 10,163,461 22,180,599
Total 28,637,525 32,597,142
(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 2024, the Group has met all the
relevant covenants.
The fair value of borrowings at 31 March 2024 was £ 28,637,525 (2023: £
32,597,142). 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 2024 31 March
2023
a. Current liabilities
Amounts falling due within one year 9,022,924 25,498,900
b. Non-current liabilities
Amounts falling due after 1 year but not more than 5 years 19,614,601 7,098,242
Total 28,637,525 32,597,142
25 Trade and other payables
31 March 2024 31 March
2023
a. Current
Trade payables 51,742,313 29,251,178
Creditors for capital goods 105,329 263,545
Bank Overdraft - -
Other payables - -
Total 51,847,642 29,514,723
b. Non-current
Other payables
Provision for Gratuity 256,906 129,932
Provision for Leave Encashment 39,154 20,301
Others 518,413 156,169
Total 814,473 306,402
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.
26 Current tax assets (net)
Current tax assets (net) consists of Advance tax and Tax deducted at source
net of provision for income tax for the year, amounting to £697,438 (2023:
£1,147,062).
27 Other liabilities
31 March 2024 31 March
2023
a. Current - Other Liabilities
Advance from Customers 381,886 84,889
Other Liabilities 100,934 418,167
Total 482,820 503,056
Other Liabilities consists of Statutory liabilities of the Group.
b. Non-current - Other Liabilities
Other Liabilities 16,903 37,720
Total 16,903 37,720
28 Related party transactions
Where control exists:
Name of the party Nature of relationship
Caromia Holdings limited Subsidiary
OPG Power Generation Private Limited Subsidiary
Gita Power and Infrastructure Private Limited Subsidiary
Powergen Resources PTE Ltd Subsidiary
Key Management Personnel:
Name of the party Nature of relationship
N Kumar Non-executive Chairman (from 4th April 2022)
Avantika Gupta Chief Executive Officer (from 4th April 2022)
Ajit Pratap Singh Chief Financial Officer (from 31st May 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
Samriddhi Bubna Relative of Key Management Personnel
Summary of transactions with related parties
Name of the party 31 March 2024 31 March
2023
Remuneration to Samriddhi Bubna 52,854 61,990
Summary of balance with related parties
Name of the party Nature of balance 31 March 2024 31 March
2023
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. 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.
29 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 2024 or 2023).
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 2024 31 March
2023
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
30 Directors' remuneration
Name of directors 31 March 2024 31 March
2023
Ajit Pratap Singh 90,921 186,620
Avantika Gupta 115,317 229,861
Dmitri Tsvetkov - 25,000
Jeremy Warner Allen 43,972 42,920
N Kumar 45,000 45,000
Mike Grasby 45,000 45,000
Total 340,209 574,401
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.
31 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.
32 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 2024 31 March
2023
Not later than one year - -
Later than one year and not later than five years - -
Later than five years - -
Total - -
Recognition of a right of use asset NIL (2023 NIL).
Contingent liabilities
Disputed income tax demands £ 4,448,130 (2023:£ 341,841 ).
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
2024: £43,951,191.14 (2023: £27,109,682) and Bank Guarantee (BG) as at 31
March 2024:
£5,750,073 (2023: £5,481,828). 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. 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.
33 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 2024 and 31 March 2023.
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 2024, 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 2024 and 31 March 2023, 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 2024 would decrease or increase by £ 236,288 (2023: £
944,115).
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of
a financial instrument will fluctuate because of changes in foreign exchange
rate. The Group's presentation currency is the Great Britain £. A majority of
our assets are located in India where the Indian rupee is the functional
currency for our subsidiaries. Currency exposures also exist in the nature of
capital expenditure and services denominated in currencies other than the
Indian rupee.
The Group's exposure to foreign currency arises where a Group company holds
monetary assets and liabilities denominated in a currency different to the
functional currency of that entity:
As at 31 March 2024 As at 31 March 2023
Currency Financial assets Financial liabilities Currency Financial assets
United States Dollar (USD) - 5,54,92,762 United States Dollar (USD) -
As at 31 March 2024 As at 31 March 2023
Currency Closing Rate (INR/USD) Effect of 10% strengthening in USD against INR - Translated to GBP Currency Closing Rate (INR/USD)
United States Dollar (USD) 83.38 4,395,119 United States Dollar (USD) 83.38
The impact on total equity is the same as the impact on net earnings as
disclosed above
Credit risk analysis
Credit risk is the risk that counterparty will not meet its obligations under
a financial instrument or customer contract, leading to a financial loss. The
Group is exposed to credit risk from its operating activities (primarily for
trade and other receivables) and from its financing activities, including
short-term deposits with banks and financial institutions, and other financial
assets.
The 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 the receivables 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.
31 March 2024 Within Credit period Days past due
More than 30 days More than 60 days More than 180 days Total
Expected General loss allowance rate 0% 0% 0% 108.68% -
Gross carrying amount - Trade Receivables -TANGEDCO 7,665,256 2,555,085 1,846,436 4,203,879 16,270,656
Gross carrying amount - Trade Receivables -Others 19,515,683 3,856,338 2,090,000 894,723 26,356,744
General loss allowance - -- - 5,541,380 5,541,380
Total loss allowance - - - 5,541,380 5,541,380
31 March 2024 Within Credit period Days past due
More than 30 days More than 60 days More than 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 22,314,389
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
The closing loss allowances for trade receivables as at 31 March 2024
reconciles to the opening loss allowances as follows:
31 March 2024 31 March
2023
Opening loss allowance as at 1 April 10,005,333 10,385,677
(Reversal) in loss allowance (4,463,953) (380,344)
Total 5,541,380 10,005,333
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 2024 and 31 March 2023.
As at 31 March 2024
Current Non-Current
Within 12 months 1-5 years Later than 5 years
Borrowings 6,648,283 (712,320) 5,935,963
Non-Convertible Debentures 2,374,640 10,163,461 12,538,101
Trade and other payables 51,847,642 814,473 52,662,115
Other liabilities 482,820 20,674,775 21,157,596
Other current liabilities - - -
Total 61,353,386 30,940,388 92,293,775
As at 31 March 2023
Current Non-Current
Within 12 months 1-5 years Later than 5 years
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
Other liabilities 37,720 - 37,720
Other current liabilities 502,860 - 502,860
Total 55,554,203 7,404,644 62,958,847
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 2024.
The Group maintains a mixture of cash and cash equivalents, long-term debt and
short-term committed facilities that are designed to ensure the Group has
sufficient available funds for business requirements. There are no imposed
capital requirements on Group or entities, whether statutory or otherwise.
The Capital for the reporting periods under review is summarised as follows:
31 March 2024 31 March
2023
Total equity 170,478,680 171,632,337
Less: Cash and cash equivalents (11,714,256) (3,319,344)
Capital 158,764,424 168,312,993
Total equity 170,478,680 171,632,337
Add: Borrowings 28,637,525 32,597,142
Overall financing 199,116,205 204,229,479
Capital to overall financing ratio 0.80 0.82
34 Summary of financial assets and liabilities by category and their fair values
Carrying amount Fair value
March 2024 March 2023 March 2024 March 2023
Financial assets measured at amortised cost
Cash and cash equivalents (1) 11,714,256 3,319,344 11,714,256 3,319,344
Restricted cash (1) 10,112,669 15,165,789 10,112,669 15,165,789
Current trade receivables (1) 37,086,020 31,914,606 37,086,020 31,914,606
Other long-term assets 512,358 10,463 512,358 10,463
Other short-term assets 8,293,435 8,843,735 8,293,435 8,843,735
Financial instruments measured at fair value through profit or loss
Other short term assets (Note 17) 9,893,198 4,792,732 9,893,198 4,792,732
77,611,936 64,046,669 77,611,936 64,046,669
Financial assets measured at amortised cost
Term Loans(2) 18,474,064 10,416,543 18,474,064 10,416,543
LC Bill discounting & buyers' credit facility (1) - - - -
Non-Convertible Debentures(2) 10,163,461 22,180,599 10,163,461 22,180,599
Current trade and other payables (1) 51,847,642 29,514,723 51,847,642 29,514,723
Provision for pledged deposits 16,903 37,720 16,903 37,720
Non-current trade and other payables (2) 814,473 306,402 814,473 306,402
81,316,542 62,455,987 81,316,542 62,455,987
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
2024
Quoted securities 9,893,198 - - 9,893,198
Total 9,893,198 - - 9,893,198
2023
Quoted securities 4,792,732 - - 4,792,732
Total 4,792,732 - - 4,792,732
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 President of Finance & Accounts.
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 (2023: Nil) fair value
is estimated by discounting the estimated future cash outflows, adjusting for
risk at 17%.
Approved by the Board of Directors on 24 September 2024 and signed on its
behalf by:
N Kumar
Non-Executive Chairman
Ajit Pratap Singh
Chief Financial Officer
-ends-
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