REG - OPG Power Ventures - Half-year Report
07/12/2022 13:45
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RNS Number : 9483I OPG Power Ventures plc 07 December 2022
7 December 2022
OPG Power Ventures plc
("OPG", the "Group" or the "Company")
Unaudited results for the six months ended 30 September 2022
OPG (AIM: OPG), the developer and operator of power generation plants in
India, announces its unaudited results for the six months ended 30 September
2022 ("H1 FY23").
Key Points
· Net debt has decreased from £6.9 million as at 31 March 2022 to
£4.2 million as at 30 September 2022
· Conscious decision taken to operate at low PLF with a focus on
profitable operations due to significant increases in international coal and
freight prices
· Revenue decreased by 51 per cent to £27.0 million in H1 FY23 from
£55.6 million in H1 FY22 due to lower level of operations in view of higher
international coal prices
· Adjusted EBITDA decreased by 41 per cent from £11.6 million in H1
FY22 to £6.9 million in H1 FY23
Summary financial information (including historic financial data)
six months ended six months ended Year ended
30 Sep 22 30 Sep 21 31 Mar 22
(£ million) (£ million) (£ million)
Revenue 27.0 55.6 80.1
Adjusted EBITDA(*) 6.9 11.6 21.6
Profit before Tax 0.7 7.4 13.0
Profit after Tax (1.2) 4.2 6.0
(*)Adjusted EBITDA is calculated as operating profit before depreciation,
amortisation and share based payments
Mr. N. Kumar, OPG's Non-Executive Chairman, commented
"As the prices of international coal and freight have increased significantly,
we have taken a conscious decision to operate at low PLF with a focus on
profitable operations. This abnormal increase in coal price is likely to
affect our PLF, revenue and operating profit significantly for the year ending
31 March 2023.
"However, as a positive measure due to the unprecedented spike in
international coal prices, the Government of India has allowed the coal based
thermal power plants to pass through these abnormally high coal costs to state
owned distribution utilities. This measure covers the quantum of electricity
that OPG supplies to the state utility."
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.
For further information, please visit www.opgpower.com or contact:
OPG Power Ventures PLC Via Tavistock below
Ajit Pratap Singh
Cenkos Securities (Nominated Adviser & Broker) +44 (0) 20 7397 8900
Stephen Keys/Katy Birkin
Tavistock (Financial PR) +44 (0) 20 7920 3150
Simon Hudson / Nick Elwes
Chairman's Statement
The Company continued to be plagued with abnormally high coal prices and
freight tariffs in H1 FY23 due to the ongoing international conflict between
Russia and Ukraine. The Board remains convinced that our strategy of focusing
on profitable operations and repaying borrowings has helped the Company in
paring down obligatory interest costs.
Operations Summary
six months ended six months ended Year ended
30 Sep 22 30 Sep 21 31 Mar 22
Generation (including deemed) MUe 487.01 1,296.00 1,925.66
Reported Average PLF (per cent) 26.8 71.3 53.0
Average Tariff Realised (₹/kWh) ₹9.14 ₹5.47 ₹5.60
The generation (including deemed) at the Chennai plant in H1 FY23 was 0.48
billion units, 62 per cent lower than in H1 FY22. This decrease in generation
was due to high coal prices, which consequently led to the plant operating at
lower PLF as compared to the previous corresponding period.
The average tariffs realised in H1 FY23 was ₹9.14/kWh as compared with
₹5.47/kWh in H1 FY22. The increase in tariff is due to the central
government's decision for the pass through of high fuel costs to state owned
distribution utilities and short-term contracts signed by the state government
of Tamil Nadu with attractive tariffs.
Raw material costs have increased significantly, primarily due to the
international conflict between Russia and Ukraine, as well as the refiring of
coal plants in Europe and the continued high demand from China and India.
While OPG is partially covered from increases in prices due to its fixed price
agreements for coal and freight, the Company remains exposed to the unhedged
portion of its coal and freight requirements. OPG continues to explore various
options of sourcing coal (including domestic sources) to reduce the unit cost
of electricity.
The Indian Economy and the power sector
Amidst the global slowdown and forecasts of recession in the US, the
International Monetary Fund (IMF) in its World Economic Outlook (October'2022)
has projected that the Indian economy will grow at a rate of 6.8 per cent in
FY22 and 6.1 per cent in FY23 against the global average of 3.2 per cent and
2.7 per cent. Both S&P and Morgan Stanley forecast that India would become
the third largest economy by 2030.
The Reserve Bank of India (RBI), which was pursuing a growth supportive policy
until FY22, has increased the repo rate by 225 basis points (bps) since
Apr'2022, citing inflation as a key concern, which has been in line with the
increases in interest rates globally.
With the US Dollar Index (DXY) strengthening by nearly 10 per cent from the
lows of CY22, Indian Rupee has depreciated 14 per cent resulting in higher
cost of coal imports.
Considering improvement in economic activities in India, power demand in India
continued to be robust. Power consumption grew by 11.65% to 786.5 billion
units during the first six months of this financial year compared to 740.4
billion units in the same period in 2021. Moreover, India's per capita power
consumption in FY22 was 1,255 kWh, which is substantially lower than the
global average of over 3,000 kWh. Electricity demand in the country will
continue to grow strongly considering the continued electrification,
urbanisation, and growth in Indian manufacturing sector and recovery in
economic activities post the pandemic induced lockdown. With thermal power
contributing to nearly 82% of India's electricity generation, coal will
continue to remain a significant source of electricity.
Outlook
In times of uncertainty, OPG continues to reduce debt, which has decreased
from £6.9 million as at 31 March 2022 to £4.2 million as at 30 September
2022.
Both policy support and rising energy needs aid OPG in its aim to play a
meaningful role in India's energy sector. Having managed to build a strong
position as a leading power generator, we will continue to apply our
capabilities to innovate, scale and accelerate the transformation of India's
energy ecosystem.
Whilst the revenue for FY23 will be lower than the revenue in FY22 primarily
due to higher coal and freight prices, the long-term fundamentals of the Group
remain unchanged. Post the rationalization of coal prices and freight costs,
the Company expects to deliver excellent operational and financial performance
as management seeks to deliver its long term, profitable and sustainable
business model. OPG also intends to continue to focus upon advancing its ESG
agenda.
I would also like to take this opportunity to thank all our stakeholders for
their continued support.
OPG Power Ventures Plc
Consolidated statement of financial position
As at 30 September 2022
(All amount in £, unless otherwise stated)
As at As at As at
Notes 30 September 2022 30 September 31 March 2022
2021
Assets
Non-current assets
Intangible assets 14 11,544 1,206 11,810
Property, plant and equipment 15 184,767,266 171,809,578 173,369,128
Right-of-use assets 15 35,599 - 36,548
Investments 2,113,307 - 2,113,307
Other long-term assets 16 6,907 83,308 12,140
Restricted cash 19 14,556 9,262,942 10,427,847
186,949,179 181,157,034 185,970,780
Current assets
Inventories 18 13,978,471 13,634,187 10,465,820
Trade and other receivables 17 14,395,765 17,329,073 8,607,935
Other short-term assets 16 27,310,761 32,026,018 26,182,923
Current tax assets (net) 1,330,939 1,147,676 1,250,086
Restricted cash 19(b) 16,023,839 3,122,794 2,392,104
Cash and cash equivalents 19(a) 7,689,179 9,440,379 7,691,392
Assets held for sale 7 13,590,031 16,638,171 13,497,027
94,318,985 93,338,298 70,087,287
Total assets 281,268,164 274,495,332 256,058,067
Equity and liabilities
Equity
Share capital 20 58,909 58,909 58,909
Share premium 20 131,451,482 131,451,482 131,451,482
Other components of equity 2,307,769 11,055,720 (10,221,248)
Retained earnings 46,768,970 46,123,296 47,904,448
Equity attributable to owners of the Company 180,587,130 166,577,967 169,193,591
Non-controlling interests 854,169 876,369 872,663
Total equity 181,441,299 167,454,336 170,066,254
Liabilities
Non-current liabilities
Borrowings 22 5,494,074 17,938,299 9,759,610
Non-Convertible Debentures 22 - 20,043,153 20,126,738
Trade and other payables 707,978 613,923 630,358
Other liabilities 39,153 - 36,228
Deferred tax liabilities (net) 13 20,381,491 16,369,637 17,029,927
26,622,696 54,965,012 47,582,861
Current liabilities
Borrowings 22 13,916,260 9,830,045 13,399,429
Non-Convertible Debentures 22 20,919,366 - -
Trade and other payables 37,715,768 37,103,471 24,440,324
Other liabilities 652,775 5,142,468 569,199
73,204,169 52,075,984 38,408,952
Total liabilities 99,826,865 107,040,996 85,991,813
Total equity and liabilities 281,268,164 274,495,332 256,058,067
The notes are an integral part of these consolidated financial statements.
The financial statements were authorised for issue by the board of directors
on 7 December 2022 and were signed on its behalf by:
N Kumar Ajit Pratap Singh
Non-Executive Chairman Executive Director & Chief Financial Officer
OPG Power Ventures Plc` Notes Six months Six months Year ended
Consolidated statement of Comprehensive Income period ended period ended 31 March 2022
for the six months period ended 30 September 2022 30 Sep 2022 30 Sep 2021
(All amount in £, unless otherwise stated)
Revenue 8 27,049,374 55,603,742 80,067,032
Cost of revenue 9 (19,779,729) (41,068,565) (56,500,964)
Gross profit 7,269,645 14,535,177 23,566,068
Other Operating income 10(a) 114,817 - -
Other income 10(b) 2,844,556 1,240,131 8,054,865
Distribution cost (679,819) (2,037,380) (3,894,563)
General and administrative expenses (2,680,663) (2,247,971) (6,316,484)
Depreciation and amortisation (2,908,457) (2,800,143) (5,333,531)
Operating profit 3,960,079 8,689,814 16,076,355
Finance costs 11 (4,177,521) (2,675,395) (5,356,089)
Finance income 12 942,774 1,367,175 2,285,364
Profit before tax 725,332 7,381,594 13,005,630
Tax expense 13 (1,984,036) (3,390,062) (4,097,184)
Profit / (Loss) for the period from continued operations (1,258,704) 3,991,532 8,908,446
Gain / (Loss) from discontinued operations, including Non-Controlling Interest 7 93,004 212,803 (2,928,341)
Profit / (Loss) for the period (1,165,700) 4,204,335 5,980,105
Profit / (Loss) for the period attributable to:
Owners of the Company (1,135,478) 4,213,016 5,994,168
Non - controlling interests (30,222) (8,682) (14,063)
(1,165,700) 4,204,335 5,980,105
Earnings / (Loss) per share from continued operations
Basic earnings per share (in pence) (0.31) 1.00 2.23
Diluted earnings per share (in pence) (0.31) 1.00 2.23
Earnings / (Loss) per share from discontinued operations
Basic earnings/(loss) per share (in pence) (0.03) 0.05 (0.73)
Diluted earnings/(loss) per share (in pence) (0.03) 0.05 (0.73)
Earnings /(Loss) per share
Basic earnings/(loss) per share (in pence) (0.28) 1.05 1.50
Diluted earnings/(loss) per share (in pence) (0.28) 1.05 1.50
Other comprehensive income
Items that will be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations 12,529,017 1,582,361 2,319,444
Items that will be not reclassified subsequently to profit or loss
Exchange differences on translating foreign operations, relating to 11,728 3,182 4,857
non-controlling interests
Total other comprehensive income 12,540,745 1,585,544 2,324,301
Total comprehensive income 11,375,045 5,789,878 8,304,406
Total comprehensive income / (loss) attributable to:
Owners of the Company 11,393,539 5,795,377 8,313,612
Non-controlling interest (18,494) (5,500) (9,206)
11,375,045 5,789,878 8,304,406
The notes are an integral part of these consolidated financial statements.
The financial statements were authorised for issue by the board of directors
on 7 December 2022 and were signed on its behalf by:
N Kumar Ajit Pratap Singh
Non-Executive Chairman Executive Director & Chief Financial Officer
OPG Power Ventures Plc`
Consolidated statement of changes in equity
for the six months period ended 30 September 2022
(All amount in £, unless otherwise stated)
Issued capital Ordinary shares Share premium Other reserves Foreign currency translation reserve Retained earnings Total attributable to owners of parent Non-controlling interests Total equity
(No of shares)
At 1 April 2021 400,733,511 58,909 131,451,482 8,021,374 (20,756,844) 41,910,280 160,685,201 881,869 161,567,070
Employee Share based payment LTIP (Note 21) - - - 194,778 - - 194,778 - 194,778
Transaction with owners - - - 194,778 - - 194,778 - 194,778
Profit for the year - - - - - 5,994,168 5,994,168 (14,063) 5,980,105
Other comprehensive income - - - - 2,319,444 - 2,319,444 4,857 2,324,301
Total comprehensive income - - - - 2,319,444 5,994,168 8,313,612 (9,206) 8,304,406
400,733,511 58,909 131,451,482 8,216,152 (18,437,400) 47,904,448 169,193,591 872,663 170,066,254
At 31 March 2022
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 21) - - - - - - - - -
Transaction with owners - - - - - - - - -
Profit for the year - - - - - (1,135,478) (1,135,478) (30,222) (1,165,700)
Other comprehensive income - - - - 12,529,017 - 12,529,017 11,728 12,540,745
Total comprehensive income - - - - 12,529,017 (1,135,478) 11,393,539 (18,494) 11,375,045
400,733,511 58,909 131,451,482 8,216,152 (5,908,383) 46,768,970 180,587,130 854,169 181,441,299
At 30 September 2022
The notes are an integral part of these consolidated financial statements.
The financial statements were authorised for issue by the board of directors
on 7 December 2022 and were signed on its behalf by:
N Kumar Ajit Pratap Singh
Non-Executive Chairman Executive Director & Chief Financial Officer
`
OPG Power Ventures Plc
Consolidated statement of cash flows
for the period ended 30 September 2022
(All amount in £, unless otherwise stated)
Notes Six months Six months Year ended
period ended period ended 31 March 2022
30 Sep 2022 30 Sep 2021
Cash flows from operating activities
Profit before income tax including discontinued operations 818,336 7,594,397 10,077,289
Adjustments for:
(Profit) / Loss from discontinued operations, net 7 (93,004) (212,803) 2,928,341
Unrealised foreign exchange loss 9(c) 1,056,629 35,633 184,880
Financial costs 11 3,120,881 2,638,111 5,171,207
Financial income 12 (942,774) (1,367,175) (2,285,364)
Share based compensation costs 21 - 97,389 194,778
Depreciation and amortisation 2,908,456 2,800,143 5,333,531
Changes in working capital
Trade and other receivables (4,795,753) (2,297,761) 6,294,982
Inventories (2,565,482) (1,294,895) 1,854,857
Other assets (975,119) (2,590,907) (3,283,261)
Trade and other payables 9,258,618 3,507,337 (9,121,460)
Other liabilities (63,036) 3,611,458 (969,674)
Cash generated from continuing operations 7,727,752 12,520,927 16,380,106
Taxes paid - (673,053) (48,554)
Cash provided by operating activities of continuing operations 7,727,752 11,847,874 16,331,552
Cash used for operating activities of discontinued operations - - -
Net cash provided by operating activities 7,727,752 11,847,874 16,331,552
Cash flows from investing activities
Purchase of property, plant and equipment (including capital advances) (402,293) (181,177) (3,534,707)
Interest received 942,774 1,367,175 2,285,364
Movement in restricted cash (2,099,722) (837,100) (1,213,769)
Purchase of investments - 1,861,443 (10,490,070) (6,760,520)
Sale of investments in mutual funds - -
Cash (used in) / from investing activities of continuing operations 302,202 (10,141,172) (9,223,632)
Cash (used in) / from investing activities of discontinued operations - -
Net cash (used in) / from investing activities 302,202 (10,141,172) (9,223,632)
Cash flows from financing activities
Proceeds from borrowings (net of costs) - 1,799,014 -
Repayment of borrowings (6,204,342) (1,095,275) (3,909,695)
Finance costs paid (2,432,146) (1,992,151) (4,528,565)
Cash used in financing activities of continuing operations (8,636,488) (1,288,412) (8,438,260)
Net cash used in financing activities (8,636,488) (1,288,412) (8,438,260)
Net (decrease) / Increase in cash and cash equivalents from continuing (606,534) 418,290 (1,330,340)
operations
Net (decrease) / Increase in cash and cash equivalents from - - -
discontinuing operations
Net (decrease) / increase in cash and cash equivalents (606,534) 418,290 (1,330,340)
Cash and cash equivalents at the beginning of the year 7,691,392 8,920,952 8,920,952
Exchange differences on cash and cash equivalents 604,321 101,137 100,780
Cash and cash equivalents at the end of the year 7,689,179 9,440,379 7,691,392
Analysis of changes in Net debt 1 April 2022 Cash flows Forex rate impact Movement Current- Non Current 30 September 2022
Working Capital loan 1,641,791 (1,688,201) 64,657 - 18,247
-
20,919,366
Secured loan due within one year 11,757,638 (4,516,141) 6,656,516 13,898,013
Non-Convertible Debentures - - - 20,919,366
Borrowings grouped under Current liabilities 13,399,429 (6,204,342) 6,721,173 20,919,366 34,835,626
Secured loan due after one year 9,759,610 - (4,265,536) - 5,494,074
Non-Convertible Debentures 20,126,738 - 792,628 (20,919,366) -
Borrowings grouped under Non-current liabilities 29,886,348 - (3,472,908) (20,919,366) 5,494,074
Disclosure of changes in financing liabilities:
OPG Power Ventures Plc
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.
The Consolidated Financial statements for the six months period ended 30
September 2022 were approved and authorised for issue by the Board of
Directors on 7 December 2022.
4. Recent accounting pronouncements
a. Standards, amendments and interpretations to existing standards that
are not yet effective and have not been adopted early by the Group
At the date of authorisation of these financial statements, certain new
standards, and amendments to existing standards have been published by the
IASB that are not yet effective, and have not been adopted early by the Group.
Information on those expected to be relevant to the Group's financial
statements is provided below.
Management anticipates that all relevant pronouncements will be adopted in the
Group's accounting policies for the first period beginning after the effective
date of the pronouncement. New standards, interpretations and amendments not
either adopted or listed below are not expected to have a material impact on
the Group's financial statements.
b. Changes in accounting Standards
The following standards and amendments to IFRSs became effective for the
period and did not have a material impact on the consolidated financial
statements:
i. Property, Plant and Equipment: Proceeds before intended use -
Amendments to IAS 16
The amendment to IAS 16 Property, Plant and Equipment (PP&E) prohibits an
entity from deducting from the cost of an item of PP&E any proceeds
received from selling items produced while the entity is preparing the asset
for its intended use. It also clarifies that an entity is 'testing whether the
asset is functioning properly' when it assesses the technical and physical
performance of the asset. The financial performance of the asset is not
relevant to this assessment.
ii. Reference to the Conceptual Framework - Amendments to IFRS 3
Minor amendments were made to IFRS 3 Business Combinations to update the
references to the Conceptual Framework for Financial Reporting and to add an
exception for the recognition of liabilities and contingent liabilities within
the scope of IAS 37 Provisions, Contingent Liabilities and Contingent Assets
and Interpretation 21 Levies. The amendments also confirm that contingent
assets should not be recognised at the acquisition date.
iii. Onerous Contracts - Cost of Fulfilling a Contract amendments to IAS
37
The amendment to IAS 37 clarifies that the direct costs of fulfilling a
contract include both the incremental costs of fulfilling the contract and an
allocation of other costs directly related to fulfilling contracts. Before
recognising a separate provision for an onerous contract, the entity
recognises any impairment loss that has occurred on assets used in fulfilling
the contract.
iv. Annual Improvements to IFRS Standards 2018-2020
• IFRS 9 Financial Instruments - clarifies which fees should be included
in the 10% test for derecognition of financial liabilities.
• IFRS 16 Leases - amendment of illustrative example 13 to remove the
illustration of payments from the lessor relating to leasehold improvements,
to remove any confusion about the treatment of lease incentives.
· IFRS 1 First-time Adoption of International Financial Reporting
Standards - allows entities that have measured their assets and liabilities at
carrying amounts recorded in their parent's books to also measure any
cumulative translation differences using the amounts reported by the parent.
This amendment will also apply to associates and joint ventures that have
taken the same IFRS 1 exemption.
· IAS 41 Agriculture - removal of the requirement for entities to exclude
cash flows for taxation when measuring fair value under IAS 41. This amendment
is intended to align with the requirement in the standard to discount cash
flows on a post-tax basis.
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:
IFRS 17 Insurance Contracts
IFRS 17 was issued in May 2017 as replacement for IFRS 4 Insurance Contracts.
It requires a current measurement model where estimates are remeasured in each
reporting period. Contracts are measured using the building blocks of:
• discounted probability-weighted cash flows
• an explicit risk adjustment, and
• a contractual service margin (CSM) representing the unearned
profit of the contract which is recognised as revenue over the coverage
period.
The standard allows a choice between recognising changes in discount rates
either in the statement of profit or loss or directly in other comprehensive
income. The choice is likely to reflect how insurers account for their
financial assets under IFRS 9. An optional, simplified premium allocation
approach is permitted for the liability for the remaining coverage for short
duration contracts, which are often written by non-life insurers. There is a
modification of the general measurement model called the 'variable fee
approach' for certain contracts written by life insurers where policyholders
share in the returns from underlying items. When applying the variable fee
approach, the entity's share of the fair value changes of the underlying items
is included in the CSM. The results of insurers using this model are therefore
likely to be less volatile than under the general model.
The new rules will affect the financial statements and key performance
indicators of all entities that issue insurance contracts or investment
contracts with discretionary participation features. Targeted amendments made
in July 2020 aimed to ease the implementation of the standard by reducing
implementation costs and making it easier for entities to explain the results
from applying IFRS 17 to investors and others. The amendments also deferred
the application date of IFRS 17 to 1 January 2023.
Amendments to IAS 1, Presentation of financial statements' on classification
of liabilities - Deferred until accounting periods starting not earlier than 1
January 2024
These narrow-scope amendments to IAS 1, 'Presentation of financial
statements', clarify that liabilities are classified as either current or
non-current, depending on the rights that exist at the end of the reporting
period. Classification is unaffected by the expectations of the entity or
events after the reporting date (for example, the receipt of a waiver or a
breach of covenant). The amendment also clarifies what IAS 1 means when it
refers to the 'settlement' of a liability.
Narrow scope amendments to IAS 1, Practice statement 2 and IAS 8 - Annual
periods beginning on or after 1 January 2023
The amendments aim to improve accounting policy disclosures and to help users
of the financial statements to distinguish between changes in accounting
estimates and changes in accounting policies.
Amendment to IAS 12- deferred tax related to assets and liabilities arising
from a single transaction - Annual periods beginning on or after 1 January
2023
These amendments require companies to recognise deferred tax on transactions
that, on initial recognition, give rise to equal amounts of taxable and
deductible temporary differences.
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.
During the current period, the results of the operations of solar entities
Avanti Solar Energy Private Limited, Mayfair Renewable Energy Private Limited,
Avanti Renewable Energy Private Limited and Brics Renewable Energy Private
Limited continued to be classified as Assets held for sale pending the process
of disposition of the solar entities. However, the Management expects the
interest in the solar entities to be sold within the next 6 months. The Group
continues owning a 31% equity interest in the solar entities.
Going Concern
As at 30 September 2022, the Group had £7.7m in cash and net current assets
of £21.1m. The Group has performed sensitivity analysis on the assumptions
used for business projections and based on current estimates expects the
carrying amount of these assets will be recovered and no material impact on
the financial results inter-alia including the carrying value of various
current and non-current assets are expected to arise for the period ended 30
September 2022. The Group will continue to closely monitor any variation due
to the changes in situation and these changes will be taken into
consideration, if necessary, as and when they crystallise. The directors and
management have prepared a cash flow forecast to December 2023, 12 months from
the date this report has been approved. Based on the business projections, we
can conclude that the Group is in a position to go through the current
situation caused by very high prices of Coal and going concern is not an
issue.
The Group experiences sensitivity in its cash flow forecasts due to the
exposure to potential increase in USD denominated coal prices and a decrease
in the value of the Indian Rupee. The Directors and management are confident
that the Group will be trading in line with its forecast and that any exposure
to a fluctuation in coal prices or the exchange rate INR/USD has been taken
into consideration and therefore prepared the financial statements on a going
concern basis.
Sharp rises in global coal price during the second half of the year 2021
deterred import of coal, putting further pressure on demand for domestic
(Indian) coal. The war between Russia and Ukraine from February 2022 has
further aggravated the situation, with a sharp upward movement in global coal
prices that have not yet softened up. If global coal prices do not correct to
normal levels there can be a material adverse effect on the group's results of
operations and financial condition. The Group has taken certain commercial and
technical measures to reduce the impact of this adverse development including
blending comparatively cheaper coal, modifications to boilers to facilitate
different quality coal firing and renegotiation of the tariff and commercial
terms of the power sale arrangement with the power consumers.
b. Basis of consolidation
The consolidated financial statements include the assets, liabilities and
results of the operation of the Company and all of its subsidiaries as of 30
September 2022. All subsidiaries have an annual reporting date of 31 March.
A subsidiary is defined as an entity controlled by the Company. The parent
controls a subsidiary if it is exposed, or has rights, to variable returns
from its involvement with the subsidiary and has the ability to affect those
returns through its power over the subsidiary. Subsidiaries are fully
consolidated from the date of acquisition, being the date on which effective
control is acquired by the Group, and continue to be consolidated until the
date that such control ceases.
All transactions and balances between Group companies are eliminated on
consolidation, including unrealised gains and losses on transactions between
Group companies. Where unrealised losses on intra-group asset sales are
reversed on consolidation, the underlying asset is also tested for impairment
from a group perspective. Amounts reported in the financial statements of
subsidiaries have been adjusted where necessary to ensure consistency with the
accounting policies adopted by the Group.
Non-controlling interest represents the portion of profit or loss and net
assets that is not held by the Group and is presented separately in the
consolidated statement of comprehensive income and within equity in the
consolidated statement of financial position, separately from parent
shareholders' equity. Acquisitions of additional stake or dilution of stake
from/ to non-controlling interests/ other venturer in the Group where there is
no loss of control are accounted for as an equity transaction, whereby, the
difference between the consideration paid to or received from and the book
value of the share of the net assets is recognised in 'other reserve' within
statement of changes in equity.
c. Investments in associates and joint ventures
Investments in associates and joint ventures are accounted for using the
equity method. The carrying amount of the investment in associates and joint
ventures is increased or decreased to recognise the Group's share of the
profit or loss and other comprehensive income of the associate and joint
venture, adjusted where necessary to ensure consistency with the accounting
policies of the Group.
Unrealised gains and losses on transactions between the Group and its
associates and joint ventures are eliminated to the extent of the Group's
interest in those entities. Where unrealised losses are eliminated, the
underlying asset is also tested for impairment.
d. List of subsidiaries, joint ventures, and associates
Details of the Group's subsidiaries and joint ventures, which are consolidated
into the Group's consolidated financial statements, are as follows:
i. Subsidiaries
Subsidiaries Immediate parent Country of incorporation % Voting Right % Economic interest
September 2022 September 2021 March 2022 September 2022 September 2021 March 2022
Caromia Holdings limited ('CHL') OPGPV Cyprus 100 100 100 100 100 100
Gita Power & Infrastructure Private Limited, ('GPIPL') CHL India 100 100 100 100 100 100
OPG Power Generation Private Limited ('OPGPG') GPIPL India 81.42 73.77 75.38 99.94 99.92 99.92
Samriddhi Surya Vidyut Private Limited OPGPG India 81.42 73.77 75.38 99.94 99.92 99.92
Powergen Resources Pte Ltd OPGPV Singapore 99.07 98.69 98.77 100 100 100
Mark Renewables Private Limited OPGPG India 81.42 - - 99.94 - -
Mark Solar Private Limited OPGPG India 81.42 - - 99.94 - -
Saan Renewable Private Limited OPGPG India 81.42 - - 99.94 - -
Saman Renewable Private Limited OPGPG India 81.42 - - 99.94 - -
Saman Solar Private Limited OPGPG India 81.42 - - 99.94 - -
ii. Joint ventures - Assets Held for sale
Joint ventures Venturer Country % Voting Right September 2021 % Economic interest September 2021
of incorporation September 2022 March 2022 September 2022 March 2022
Padma Shipping Limited ("PSL") OPGPV / OPGPG Hong Kong 50 50 50 50 50 50
iii. Associates- Assets Held for sale
Associates Country of incorporation % Voting Right % Economic interest
September 2022 September 2021 March 2022 September 2022 September 2021 March 2022
Avanti Solar Energy Private Limited India 31 31 31 31 31 31
Mayfair Renewable Energy (I) Private Limited India 31 31 31 31 31 31
Avanti Renewable Energy Private Limited India 31 31 31 31 31 31
Brics Renewable Energy Private Limited India 31 31 31 31 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
30 September 2022: 91.946 (31 March 2022: 99.37, 30 September 2021: 99.78) and
the average rate for the period ended 30 September 2022: 95.61 (FY 2022:
101.62, September 2021: 101.94).
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 based on 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.
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 29"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.
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 shareholders 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.
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.
The solar power business is classified as held for sale. There are no
geographical segments as all revenues arise from India. All the non-current
assets are located in India.
6. Significant accounting judgements, estimates and assumptions
The preparation of financial statements in conformity with IFRS requires
management to make certain critical accounting estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
The principal accounting policies adopted by the Group in the consolidated
financial statements are as set out above. The application of a number of
these policies requires the Group to use a variety of estimation techniques
and apply judgment to best reflect the substance of underlying transactions.
The Group has determined that a number of its accounting policies can be
considered significant, in terms of the management judgment that has been
required to determine the various assumptions underpinning their application
in the consolidated financial statements presented which, under different
conditions, could lead to material differences in these statements. The actual
results may differ from the judgments, estimates and assumptions made by the
management and will seldom equal the estimated results.
a. Judgements
The following are significant management judgments in applying the accounting
policies of the Group that have the most significant effect on the financial
statements.
Non-current assets held for sale and discontinued operations
The Group exercises judgement in whether assets are held for sale. After
evaluation of all options, the Company decided that the most efficient way to
maximise shareholders' value from solar operations is to dispose of the solar
companies and it initiated the process of disposition of the solar companies.
Under IFRS 5, such a transaction meets the 'Asset held for sale' when the
transaction is considered sufficiently probable and other relevant criteria
are met. Management consider that all the conditions under IFRS 5 for
classification of the solar business as held for sale have been met and
expects the interest in the solar companies to be sold within the next 12
months.
Recoverability of deferred tax assets
The recognition of deferred tax assets requires assessment of future taxable
profit (see note 5(h)).
b. Estimates and uncertainties:
The key assumptions concerning the future and other key sources of estimation
uncertainty at the Statement of financial position date, that have a
significant risk of causing material adjustments to the carrying amounts of
assets and liabilities within the next financial year are discussed below:
i. 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.
ii. 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;
iii. Useful life of depreciable assets: Management reviews its estimate
of the useful lives of depreciable assets at each reporting date, based on the
expected utility of the assets.
7. Profit/(Loss) from discontinued operations
Non-current assets held for sale and Profit/(Loss) from discontinued
operations consists of:
Assets Held for Sale Liabilities classified as held for sale Profit from discontinued operations
At 30 September 2022 At 30 September 2021 At 31 March 2022 At 30 September 2022 At 31 September 2021 At 31 March 2022 At 30 September 2022 At 30 September 2021 At 31 March 2022
i Interest in Solar entities 13,590,031 16,638,171 13,497,027 - - - - - -
ii Share of Profit from Solar entities - - - - - 93,004 212,803
Total 13,590,031 16,638,171 13,497,027 - - 93,004 212,803 -
a. Investment in joint venture Padma Shipping Limited - classified as
held for sale
In 2014, the Company entered into a Joint Venture agreement with Noble
Chartering Ltd ("Noble"), to secure competitive long-term rates for
international freight for its imported coal requirements. Under the
Arrangement, the company and Noble agreed to jointly purchase and operate two
64,000 MT cargo vessels through a Joint venture company Padma Shipping Ltd,
Hong Kong ('Padma').
The Group has invested approximately £3,484,178 in equity and £1,727,418 to
date as advance. The Group impaired entire investment in earlier years of
£5,211,596 in joint venture on account of the impending dissolution of the
JV.
b. Assets held for sale and discontinued operations of solar entities
During the period, the results of the operations of solar entities Avanti
Solar Energy Private Limited, Mayfair Renewable Energy Private Limited, Avanti
Renewable Energy Private Limited and Brics Renewable Energy Private Limited
continued to be classified as Assets held for sale as the process of
disposition of the solar entities could not be implemented during FY22 due to
pandemic Covid-19, expectation of comparatively better valuation for sale and
extension of diligence period by interested party. However, the management
expects the interest in the solar entities to be sold within the next 12
months. The Group continues owning a 31% equity interest in the solar
companies.
Non-current Assets held-for-sale and discontinued operations
(a) Assets of disposal group classified as held-for-sale As at As at As at
30 September 2022
30 September 2021
31st March 2022
Investment in associates classified as held for sale 13,590,031 16,638,171 13,497,027
Total 13,590,031 16,638,171 13,497,027
(b) Liabilities of disposal group classified as held-for-sale As at As at As at
30 September 2022
30 September 2021
31st March 2022
Liabilities of disposal group classified as held-for-sale - - -
Total - - -
(c) Analysis of the results of discontinued operations is as follows: Six months ended Six months ended FY2022
30 September 2022
30 September 2021
Share of Profit / (Loss) from Solar entities 93,004 212,803 (2,928,341)
Profit / (Loss) from Solar operations 93,004 212,803 (2,928,341)
8. Segment Reporting
The Group has adopted the "management approach" in identifying the operating
segments as outlined in IFRS 8 - Operating segments. Segments are reported in
a manner consistent with the internal reporting provided to the chief
operating decision maker. The Board of Directors being the chief operating
decision maker evaluate the Group's performance and allocates resources based
on an analysis of various performance indicators at operating segment level.
The solar power business is classified as held for sale. There are no
geographical segments as all revenues arise from India. All the non-current
assets are located in India.
Revenue on account of sale of power to one customer exceeding 10% of total
sales revenue amounts to £21,934,170 (Year 2022: £16,282,629, September
2021:£5,883,758).
Segmental information disclosure
Continuing operations Discontinued operations
Thermal Solar
Segment Revenue Six months ended Six months ended FY 22 Six months ended Six months ended FY 22
30 September 2022
30 September 2021
30 September 2022
30 September 2021
Sales 27,049,374 55,603,742 80,067,032 - - -
Total 27,049,374 55,603,742 80,067,032 - - -
Other Operating income 114,817 - - - -
Depreciation (2,908,457) (2,800,143) (5,333,531) - - -
Profit from operation 3,960,079 8,689,814 16,076,355 - - -
Finance Income 942,774 1,367,175 2,285,364 - - -
Finance Cost (4,177,521) (2,675,395) (5,356,089) - - -
Tax expenses (1,984,036) (3,390,062) (4,097,184) - - -
Share of Profit in Solar entities - - - 93,004 212,803 (2,928,341)
Profit / (loss) for the year / Period (1,258,704) 3,991,532 8,908,446 93,004 212,803 (2,928,341)
Assets 267,678,133 257,857,161 242,561,040 13,590,031 16,638,171 13,497,027
Liabilities 99,826,865 107,040,996 85,991,813 - - -
9. Costs of inventories and employee benefit expenses included in the
consolidated statements of comprehensive income
a. Cost of fuel
Six months ended Six months ended FY 2022
30 September 2022
30 September 2021
Included in cost of revenue:
Cost of fuel consumed 17,542,123 38,721,460 53,886,250
Other direct costs 2,237,606 2,347,105 2,614,714
Total 19,779,729 41,068,565 56,500,964
b. Employee benefit expenses forming part of general and administrative
expenses are as follows:
Six months ended Six months ended FY 2022
30 September 2022
30 September 2021
Salaries and wages 1,227,829 1,037,241 2,247,996
Employee benefit costs 114,829 96,035 217,715
Long Tern Incentive Plan - 97,389 194,778
Total 1,342,658 1,230,665 2,660,489
* includes £11,400 (FY 2022: 22,995) being expenses towards gratuity which is
a defined benefit plan (Note 5(w))
c. Foreign exchange movements (realised and unrealised) included in the
Finance costs is as follows:
Six months ended Six months ended FY 2022
30 September 2022
30 September 2021
Foreign exchange realised - loss / (gain) 552,436 202,607 214,048
Foreign exchange unrealised- loss / (gain) 1,056,627 44,532 184,880
Total 1,609,063 247,139 398,928
10. Other operating income and expenses
a. Other operating income
Six months ended Six months ended FY 2022
30 September 2022
30 September 2021
Contractual claims payments 114,817 - -
Total 114,817 - -
The operating income represents contractual claims payments from company's
customers under the power purchase agreements, which were accumulated over
several
periods.
b. Other income
Six months ended Six months ended FY 2022
30 September 2022
30 September 2021
Sale of coal 1,233,780 749,197 7,338,941
Sale of fly ash 87,543 41,392 77,586
Power trading commission and other services 12,765 120,242 169,183
Others 1,510,468 329,300 469,155
Total 2,844,556 1,240,131 8,054,865
11. Finance costs
Finance costs are comprised of:
Six months ended Six months ended FY 2022
30 September 2022
30 September 2021
Interest expenses on borrowings 1,836,199 2,128,085 4,277,158
Net foreign exchange loss (Note 9) 1,609,063 126,565 398,928
Other finance costs 732,259 420,745 680,003
Total 4,177,521 2,675,395 5,356,089
Other finance costs include charges and cost related to LC's for import of
coal and other charges levied by bank on transactions
12. Finance income
Finance income is comprised of:
Six months ended Six months ended FY 2022
30 September 2022
30 September 2021
Interest income on bank deposits and advances 644,269 302,882 891,467
Gain on disposal / fair value of financial instruments* 298,505 1,064,293 1,393,897
Total 942,774 1,367,175 2,285,364
*Financial instruments represent the mutual funds held during the period.
13. Tax expenses
Six months ended Six months ended FY 2022
30 September 2022
30 September 2021
Current tax 85,037 334,646
Deferred tax 1,898,999 3,762,538
Tax reported in the statement of comprehensive income 1,984,036 - 4,097,184
The Company is subject to Isle of Man corporate tax at the standard rate of
zero percent. As such, the Company's tax liability is zero. Additionally, Isle
of Man does not levy tax on capital gains. However, considering that the
group's operations are primarily based in India, the effective tax rate of the
Group has been computed based on the current tax rates prevailing in India.
Further, a substantial portion of the profits of the Group's India operations
are exempt from Indian income taxes being profits attributable to generation
of power in India. Under the tax holiday the taxpayer can utilize an exemption
from income taxes for a period of any ten consecutive years out of a total of
fifteen consecutive years from the date of commencement of the operations.
However, the entities in India are still liable for Minimum Alternate Tax
(MAT) which is calculated on the book profits of the respective entities
currently at a rate of 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 relates to the following:
Six months ended Six months ended FY 2022
30 September 2022
30 September 2021
Deferred income tax assets
MAT credit entitlement 11,985,655 11,985,655
11,985,655 - 11,985,655
Deferred income tax liabilities
Property, plant and equipment 32,367,146 29,015,582
32,367,146 - 29,015,582
Deferred income tax liabilities, net 20,381,491 17,029,927
Movement in temporary differences during the year
Particulars As at 01 April 2022 Deferred tax asset / (liability) for the year Classified as (Asset) / Liability held for sale Translation adjustment As at 30 September 2022
Property, plant and equipment (29,015,582) (1,898,999) - (1,452,565) (32,367,146)
MAT credit entitlement 11,985,655 - - - 11,985,655
Deferred income tax (liabilities) / assets, net (17,029,927) (1,898,999) - (1,452,565) (20,381,491)
In assessing the recoverability of deferred income tax assets, management
considers whether it is more likely than not that, some portion or all of the
deferred income tax assets will be realized. The ultimate realization of
deferred income tax assets is dependent upon the generation of future taxable
income during the periods in which the temporary differences become
deductible. The amount of the deferred income tax assets considered
realizable, however, could be reduced in the near term if estimates of future
taxable income during the carry forward period are
reduced.
Shareholders resident outside the Isle of Man will not suffer any income tax
in the Isle of Man on any income distributions to them. However, dividends are
taxable in India in the hands of the
recipient.
There is no unrecognised deferred tax assets and liabilities. There was no
recognised deferred tax liability for taxes that would be payable on the
unremitted earnings of certain of the Group's subsidiaries, as the Group has
determined that undistributed profits of its subsidiaries will not be
distributed in the foreseeable
future.
14. Intangible assets
Intangible assets Acquired software licences
Cost 30 September 22 30 September 21 31-Mar-22
Opening 786,502 763,595 763,595
Additions - - 11,875
Exchange adjustments 63,507 7,816 11,032
Total 850,009 771,411 786,502
Accumulated depreciation and impairment
Opening 774,692 761,201 761,201
Charge for the year / Period 1,219 1,187 2,438
Exchange adjustments 62,553 7,817 11,053
Total 838,464 770,205 774,692
Net book value 11,544 1,206 11,810
15. Property, plant and equipment
The property, plant and equipment comprises of:
Land & Buildings Power stations Other plant & equipment Vehicles Right-of-use Asset under construction Total
Cost
At 1st April 2021 8,388,982 200,460,226 1,766,719 748,624 - 122,717 211,487,267
Additions 13,919 267,007 25,229 23,745 43,843 3,265,722 3,639,464
Transfers on capitalisation - 1,584,477 38,134 - - (1,622,611) -
Sale / Disposals - - - (52,794) - - (52,794)
Exchange adjustments 119,437 2,905,807 25,366 10,730 - 1,392 3,062,732
At 31 March 2022 8,522,337 205,217,516 1,855,448 730,306 43,843 1,767,219 218,136,670
At 1st April 2022 8,522,337 205,217,516 1,855,448 730,306 43,843 1,767,219 218,136,670
Additions - 127,523 5,962 498 - 248,866 382,850
Sale / Disposals - - - - - - -
Exchange adjustments 555,978 17,003,129 (106,561) 112,333 3,556 142,697 17,711,131
At 30 September 2022 9,078,315 222,348,169 1,754,849 843,136 47,399 2,158,782 236,230,650
Accumulated depreciation and impairment
At 1 April 2021 61,319 37,039,448 1,062,450 608,010 - - 38,771,227
Charge for the year 10,801 5,033,811 257,197 22,135 7,149 - 5,331,093
Sale / Disposals - - - (52,794) - - (52,794)
Exchange adjustments 1,433 649,528 21,170 9,190 146 - 681,467
Adjustments on account of deconsolidation of a subsidiary 73,553 42,722,787 1,340,816 586,542 7,295 - 44,730,994
At 31 March 2022
At 1 April 2022 73,553 42,722,787 1,340,816 586,542 7,295 - 44,730,994
Charge for the period - 2,860,638 - 42,700 3,900 - 2,907,238
Sale / Disposals - - - - - - -
Exchange adjustments 28,570 3,521,799 136,930 101,649 605 - 3,789,553
At 30 September 2022 102,124 49,105,224 1,477,746 730,891 11,800 - 51,427,785
Net book value
At 30 September 2022 8,976,191 173,242,944 277,103 112,246 35,599 2,158,782 184,802,865
At 31 March 2022 8,448,784 162,494,729 514,631 143,764 36,548 1,767,219 173,405,676
At 30 September 2021 8,404,943 162,478,435 591,217 127,646 - 207,337 171,809,578
16. Other
Assets
As at As at As at
30 September 2022
30 September 2021
31 March 2022
A. Short-term
Capital advances - 105,907 -
Financial instruments measured at fair value through P&L 17,808,329 24,125,311 18,265,352
Advances and other receivables 9,502,432 7,794,800 7,917,571
Total 27,310,761 32,026,018 26,182,923
B. Long-term
Lease deposits - - -
Bank deposits - 71,168 12,140
Other advances 6,907 12,140 -
Total 6,907 83,308 12,140
The financial instruments represent investments in mutual funds and bonds.
Their fair value is determined by reference to published data.
17. Trade and other receivables
As at As at As at
30 September 2022
30 September 2021
31 March 2022
Current
Trade receivables 14,395,765 17,329,073 8,607,935
14,395,765 17,329,073 8,607,935
18. Inventories
As at As at As at
30 September 2022
30 September 2021
31 March 2022
Coal and fuel 12,876,693 12,230,429 9,499,510
Stores and spares 1,101,778 1,403,758 966,310
Total 13,978,471 13,634,187 10,465,820
The entire amount of above inventories has been pledged as security for
borrowings
19. Cash and cash equivalents and Restricted cash
a. Cash and short term deposits comprise of the following:
As at As at As at
30 September 2022
30 September 2021
31 March 2022
Investment in Mutual funds 5,449,474 1,834,212 5,193,275
Cash at banks and on hand 2,239,705 7,606,168 2,498,117
Total 7,689,179 9,440,379 7,691,392
Short-term deposits are placed for varying periods, depending on the immediate
cash requirements of the Group. They are recoverable on demand.
b. Restricted cash
"Current restricted cash includes: (i) deposits maturing between three to
twelve months amounting to £6,509,208 (FY 2022: £2,392,104; September
2021:£3,122,794) which have been pledged by the Group in order to secure
borrowing limits with the banks, (ii) Investments in mutual funds of £
9,514,631 ((for comparative periods was part of Non-current restricted cash FY
2022: £8,300,665; September 2021:£8,266,192) are allocated to debenture
redemption fund earmarked towards redemption of non-convertible debentures
scheduled during FY2024 of £20,919,366.
Non-current restricted cash represents investments in deposits (for previous
period's investment in mutual funds) maturing after twelve months amounting to
£14,556 (FY 2022: £10,427,847; September 2021: £9,262,942).
20. Issued share capital
Share Capital
The Company presently has only one class of ordinary shares. For all matters
submitted to vote in the shareholders meeting, every holder of ordinary
shares, as reflected in the records of the Group on the date of the
shareholders' meeting, has one vote in respect of each share held. All shares
are equally eligible to receive dividends and the repayment of capital in the
event of liquidation of the Group.
As at 30 September 2022, the Company has an authorised and issued share
capital of 400,733,511 (31 March 2022: 400,733,511; 30 September 2021:
400,733,511) equity shares at par value of £ 0.000147 (31 March 2022 £
0.000147; 30 September 2021: £ 0.000147) per share amounting to £58,909 (31
March 2022: £58,909; 30 September 2021: £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 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.
21. Share based payments
Long Term Incentive Plan
In April 2019, the Board of Directors has approved the introduction of Long
Term Incentive Plan ("LTIP"). The key terms of the LTIP are:
The number of performance-related awards is 14 million ordinary shares (the
"LTIP Shares") (representing approximately 3.6 per cent of the Company's
issued share capital). The grant date is 24 April 2019.
The LTIP Shares were awarded to certain members of the senior management team
as Nominal Cost Shares and will vest in three tranches subject to continued
service with Group until vesting and meeting the following share price
performance targets, plant load factor ("PLF") and term loan repayments of the
Chennai thermal plant.
¾ 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;
¾ 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;
¾ 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.
In April 2020, and upon meeting relevant performance targets, 2,190,519 LTIP
shares vested (80% of the 1st tranche). These shares will be issued later.
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.
For LTIP Shares awards, £ Nil (FY22: 194,778; September 2021: £97,389) has
been recognised in General and administrative expenses.
Grant date 24-Apr-19 24-Apr-19 24-Apr-19
Vesting date 24-Apr-20 24-Apr-21 24-Apr-22
Method of Settlement Equity/ Cash Equity/ Cash Equity/ Cash
Vesting of shares (%) 20% 40% 40%
Number of LTIP Shares granted 2,800,000 5,600,000 5,600,000
Exercise Price (pence per share) 0.0147 0.0147 0.0147
Fair Value of LTIP Shares granted (pence per share) 0.1075 0.1217 0.1045
Expected Volatility (%) 68.00% 64.18% 55.97%
22. Borrowings
The borrowings comprise of the following:
Interest rate (range %) Final maturity 30 September 2022 30 September 2021 31 March 2022
Borrowings at amortised cost 10.35-11.40 June 2024 19,410,334 27,768,344 23,159,039
Non-Convertible Debentures at amortised cost 9.85 June 2023 20,919,366 20,043,153 20,126,738
Total 40,329,700 47,811,497 43,285,777
The term loans of £19.4m, non-convertible debentures of £20.9m and working
capital loans of £0.02m taken by the Group are fully secured by the property,
plant, assets under construction and other current assets of subsidiaries
which have availed such loans. All term loans and working capital loans are
personally guaranteed by a director.
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 30 September 2022, the Group has met all
the relevant covenants. The Group raised approximately GBP 20.0 million
(₹2000 million) during June 2020 through non-convertible debentures (NCDs)
issue with a three years term and coupon rate of 9.85%. NCD's proceeds was
used to repay the FY21 and FY22 (i.e. to March 2022) principal term loans
obligations.
The fair value of borrowings at 30 September 2022 was £40,329,700 (FY2022:
£43,285,777, 30 September 2021 £47,811,497). 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:
30 September 2022 30 September 2021 31 March 2022
Current liabilities
Amounts falling due within one year 34,835,626 9,830,045 13,399,429
Non-current liabilities
Amounts falling due after 1 year but not more than 5 years 5,494,074 37,981,452 29,886,348
Total 40,329,700 47,811,497 43,285,777
Approved by the Board of Directors on 7 December 2022 and signed on its behalf
by:
N Kumar Ajit Pratap Singh
Non-Executive Chairman Executive Director & Chief Financial Officer
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