TIDMOPG
RNS Number : 3302M
OPG Power Ventures plc
15 August 2011
15(th) August 2011
OPG Power Ventures PLC
("OPG", "the Group" or "the Company"),
Final Results for the Year to 31 March 2011
Milestone year provides solid platform for growth
OPG (AIM: OPG), the developer and operator of Group Captive
power plants in India, announces results for the year ended 31
March 2011.
Financial Highlights
-- Revenue up 188% to GBP33.15m
-- EBITDA up 124% to GBP15.54m
-- Income from continuing operations (before tax, non operational
/ exceptional items) up by 66% to GBP 13.01m (2010: GBP7.83m)
-- PBT up 105% to GBP11.16m
-- Earnings per share up 559 % to 2.129 pence
-- Over-subscribed c.GBP60m equity placing in February 2011
-- Cash and cash equivalents of GBP79.95m (including Available
for Sale Investments amounting to GBP8.85m) and long term
borrowings of GBP45.25m at 31 March 2011
-- 629 MW of growth projects equity fully funded from existing
resources and internal accruals.
Operational Highlights
-- 113 MW of capacity now fully operational (2010: 30 MW)
-- Chennai I (77 MW) stabilised in August 2010 with average
load factors approaching 90%
-- Chennai II (2(nd) 77 MW unit) commissioning on track for
2012
-- Chennai III converted to single unit of 160 MW in place
of 2 x 80 MW
-- Chennai expanded by 80 MW within the existing site
-- MoU with Government of Gujarat for development of 5,400
MW and planning commenced
-- Acquired 120 acre site for 12 MW development at Bellary
with potential for a further 250 MW
-- Coal supply flexibility: c. 70% of projects under development
with supplies from Indian coal companies. No supply shortages
experienced by OPG
M.C.Gupta, Chairman of OPG, commented:
"OPG made significant progress in the year, with the successful
commissioning of the 77 MW Chennai I facility and substantial
advancement of the development pipeline that is set to deliver in
excess of 742 MW by 2013, for which we are fully funded, and a
total 1250 MW of capacity by 2015.
"Significant uplifts in both revenue and profits were achieved
as operating capacity increased to 113 MW (2010: 30 MW). OPG has a
pipeline of 629 MW of development with equity fully funded. The
Company continues to benefit from a structural shortage in supply
of reliable power in India. With the planned additional supply
likely to fall acutely short of the 300-315 GW by 2017 required in
the next five years, we believe this dynamic will prevail and
prices will remain firm.
"The Company's profitability and cash generation now provide an
excellent platform for our long term growth. Given the market
backdrop, our fully funded development pipeline and our track
record, I remain confident of the Company's continued success."
For further information, please visit www.opgpower.com or
contact:
+91 (0) 44 429 11
OPG Power Ventures PLC 211
Arvind Gupta
V Narayan Swami
Cenkos Securities (Nominated Adviser
& Broker)
Stephen Keys / Camilla Hume +44 (0) 20 7397 8900
Scott Harris
Stephen Scott / Harry Dee +44 (0) 20 7653 0030
Tavistock Communications
Simon Hudson +44 (0) 20 7920 3150
Chief Executive's Statement
Milestone year provides solid platform for growth
The year ended 31 March 2011 was a landmark year for OPG, with
the successful commissioning of the Group's first major project of
77 MW. The Chennai I plant is now operating consistently at load
factors of around 90%, providing strong cash flow to the Group and
underpinning our track record of successful project delivery.
The over-subscribed equity raising of c.GBP60m (gross of
transaction fees) in February 2011 demonstrated support from the
Company's stakeholders and provides capital to fund a 629 MW
pipeline of projects under construction and development. Combined
with the 113 MW of existing operational capacity, this total
pipeline has increased substantially from the initial 377 MW that
we committed to at our IPO in May 2008. We remain on track to
deliver our target of 1250 MW of capacity by 2015.
Project Commissioning Schedule
Calendar Year MW 2011 2012 2013 2014 2015
OPERATIONS
Mayavaram 26 26
Waste heat 10 10
Chennai I 77 77
--------------------- ------- ------ ------ ------ ------ ------
DEVELOPMENT
Chennai II 77 77
Chennai III 160 160
Chennai IV 80 80
Bellary 12 12
Gujarat 300 300
--------------------- ------- ------ ------ ------ ------ ------
PIPELINE
Pipeline 508 508
--------------------- ------- ------ ------ ------ ------ ------
Cumulative Capacity 1250 113 190 742 742 1250
--------------------- ------- ------ ------ ------ ------ ------
Profitable operations and strong cash generation
Output levels and operations at Chennai I were successfully
stabilised in August 2010 and the plant's operational performance
has been in line with expectations. In the six months to June this
year, the plant performed at an average monthly output level of
88%.
Profit before tax was up 105 % to GBP11.16m, benefiting from a
partial contribution from Chennai I which began commercial
operations in August 2010. OPG's strong results for the year ended
March 2011 are reflective of the Group Captive / open market sales
strategy and the profit from continuing operations at 39 % of
Revenue is among the highest in the industry. Average price
realised for the year was Rs. 4.95/Kwh
In line with our stated strategy, we intend to continue to
utilise cash generated from operations principally to fund growth
and optimisation opportunities.
Projects remain on-track despite local challenges
The Group's current total capacity stands at 113 MW (inclusive
of the additional 6 MW of capacity recently added to the gas fired
power station at Mayavaram), a significant increase from the 19.4
MW of operating capacity at the time of the IPO in May 2008. The
Chennai development projects are progressing well; the accelerated
commissioning of the second 77 MW unit (Chennai II) for 2012 is set
to increase the Group's total operating capacity to 190 MW and
further progressive increases are expected thereafter to achieve
742 MW by 2013. Some local objections faced in the wake of
environmental clearances for the 300 MW Kutch project are now under
resolution and we are awaiting formal approval from the Ministry of
Environment and Forests, New Delhi. The project, which is fully
funded, remains on track for commissioning in 2013.
Also during the year, OPG signed an MOU with the Government of
Gujarat to build 5400 MW of capacity by 2018. Details of specific
projects and an implementation schedule are currently in
development and we look forward to reporting on further progress in
due course.
During the year and since then, the Group continues to operate
in an environment of elevated coal prices, administrative
challenges in obtaining key approvals and higher interest costs.
However, relative to our peer group we believe our margins and our
continued growth demonstrate that the Group is well positioned to
deal with such challenges through our local relationships and the
flexibility incorporated into our business model and plant
configurations. We have also incorporated key lessons from previous
developments into subsequent projects and as a result we continue
to be confident that the Company can deliver a profitable growth
pipeline on-time and within budget.
Indian power market remains in deficit
Despite volatility elsewhere in the global economy, India's GDP
is expected to continue to grow at around 8% in the coming years,
resulting in annual power demand growth of 10%. India's total
planned capacity additions as at 31 March 2011 were only 52% of the
targeted 78,000 MW and there remains an expected shortfall of
30-35% versus the target by March 2012. This trend points towards
continuing and increasing power production deficits which currently
run at about 10%.
With the planned additional supply likely to fall acutely short
of the 300-315 GW required over the next five years and given the
imperative for a correction in pricing by state utilities, we
believe this supply constrained environment will prevail and power
prices will remain firm.
OPG maintains flexibility in its procurement of coal
70% of OPG's projects under development have committed supplies
of Indian coal, with the remaining 30% utilising imported coal.
This balance of supply has enabled OPG to establish close working
relationships with both domestic and imported coal suppliers,
thereby mitigating the threat of coal not being available from any
one source.
With coal in relatively short supply, the Indian power sector
has unsurprisingly experienced upward price pressure for this key
input to the power business. Most Indian power producers, unlike
OPG, are reliant on obtaining coal either from the development of
coal blocks or entirely on imported coal. In addition, the design
of OPG's boilers allows the use of both high moisture imported and
higher ash domestic grades of coal either exclusively or in a
blended fuel source. We expect coal prices to remain firm in the
short term given the current economic growth rates in Asia,
although prices should eventually stabilise in the medium term as
coal supplies and demand fall more into line. The Company continues
to look for additional opportunities to enhance profitability by
optimising its fuel procurement.
Team
Our priority is to provide a safe, healthy working environment
to our employees and be responsible towards the communities in
which we operate.
Our talented team is central to achieving the objectives of the
Company. Over the last year the team has built upon its significant
experience and knowledge in developing and operating power plants
as evidenced by the high load factors being achieved at Chennai I
and the continued progression and expansion of the Company's growth
pipeline. We value their commitment and contribution and would like
to thank them for their continued efforts.
Summary
OPG has made significant progress in the year, successfully
commissioning the 77 MW Chennai I facility, producing significant
increases in both revenue and profits. In the current year we
expect to benefit from its full year contribution albeit in an
environment of high coal prices and borrowing costs. We expect our
operating model to provide flexibility with regards to these
challenges. Most importantly we believe the profitable operation of
Chennai I in 2011 creates a firm platform for the Company's long
term growth. Accordingly, we feel confident about the delivery of
our 2015 target of 1,250 MW.
Operational Review
2011 saw the commencement of generation from the 77 MW Chennai I
Plant. Across the Group, total power generation capacity was more
than triple the previous year at 113 MW. Operationally, all plants
performed well at availability factors between 89% and 95%.
Production and output levels:
Availability Plant Load Factor
Asset Generation (MWh) % %
------------------ ------------------- --------------- --------------------
2011 2010 2011 2010 2011 2010
------------------ --------- -------- ------- ------ --------- ---------
Chennai I (77MW)
(1) 329.3 N/A 83.8 - 75.3 -
------------------ --------- -------- ------- ------ --------- ---------
Waste Heat (10MW) 55.6 63.9 88.8 93.9 63.4 72.9
------------------ --------- -------- ------- ------ --------- ---------
Mayavaram
(25.4MW) (2) 128.1 104.6 91.5 94 81.3 66.4
------------------ --------- -------- ------- ------ --------- ---------
TOTAL 513 168.5
------------------ --------- -------- ------- ------ --------- ---------
(1) OPG Power Generation - Chennai (77 MW) commenced commercial
operations in Aug 2010.
(2) OPG Energy - Mayavaram (25.4 MW) has increased capacity by 6
MW as of June 2011.
Chennai I - 77 MW
In April 2010, the first unit of the Chennai power project was
synchronised with the grid. Following stabilisation, commercial
operation started in August 2010. The plant was used for testing in
the month of December 2010 to optimise performance and to ensure
high performance levels of the boiler for Chennai II.
During the year, the Chennai I plant achieved an average output
level of 75.3%. In the first 6 months of 2011 calendar year,
average output levels were higher at 88%. Chennai I is sustaining
these high levels of performance and on this basis, we are
confident of maintaining an average performance of over 85% for the
financial year 2012.
Waste Heat - 10 MW
The 10 MW waste heat fired plant near Chennai, which will
shortly be completing three years since commissioning, also
performed satisfactorily with output levels during the year
averaging 63.4% of capacity (2010: 73%). The lower output level was
on account of extended maintenance closure of the waste heat
furnaces of the sponge iron unit and we expect improved output
levels in the current year.
Mayavaram - 25.4 MW
The 19.4 MW gas fired plant in Mayavaram, now in its eighth year
of operation, delivered a satisfactory performance. Capacity was
enhanced to 25.4 MW in June 2011. Gas flow levels were restored
from August 2010 to the levels of 2008 following the connection of
additional productive wells. Consequently the plant load factor or
output level during the year was 81% compared to 66% in the
previous year. A significant increase in the gas prices was
absorbed and the operation remained profitable. The project has
been registered under the UNFCCC for carbon credit and is awaiting
validation and verification; CERs (Certified Emission Reductions)
will be available for trading thereafter.
Power output from all three operational plants was sold
principally in the short term market, achieving amongst the highest
tariffs available.
Development Projects
We are currently developing total capacity at the Chennai site
of 317 MW (previously 237 MW) through the following projects:
Chennai Planning permissions and financial closure are complete
II: for second phase of expansion of 77 MW at Chennai site
and the unit is now under active construction. The
civil works for Chennai II have been completed and
the construction of main equipment has already commenced
and is on course for commissioning by 2012.
Chennai A 160 MW facility, in place of the earlier 2 x 80 MW
III: unit, is under development. This revised configuration
will result in savings in coal consumption given the
lower turbine/boiler heat rate for a 160 MW unit. At
the same time, the reduced footprint of a 160 MW unit
makes available space on site for the newly committed
Chennai III. The targeted commissioning date for Chennai
IV remains 2013. Debt financing is in place, equipment
orders are being finalised and equity is available
from existing resources. Planning permissions have
been obtained and construction will commence shortly.
Chennai An additional 80 MW unit will be added at the present
IV: site taking the total expansion of capacity at this
location to 317 MW as against 237 MW initially envisaged.
The equity component of the required capital expenditure
is to be financed from the Group's internal resources.
Planning permission for the development has been obtained
and equipment delivery has commenced. The civil works
for Chennai III are in progress. The Company is targeting
commissioning in 2013.
The Gujarat 2 x 150 MW project has received Environmental
Clearance and construction is to commence once additional clearance
from the Ministry of Environment and Forests, New Delhi is received
for sea water intake and outfall. The proposal has been cleared by
the Expert Committee constituted by the Ministry and the Company is
awaiting formal approval shortly. In the meantime, the Company has
undertaken the required preparation to ensure this Project moves
into construction promptly, given its targeted commissioning in
2013.
Bellary
During the year OPG acquired a partially constructed 12MW themal
power plant in the industrial area of Bellary, Karnataka. The plant
is on a 120 acre site and has the potential to expand/build up to
250 MW of capacity. The 12 MW is expected to commission in
2013.
Financial Review
Income Statement Summary
Year ended 31st March 2011 2010 Change
GBP m GBP m %
Revenue 33.15 11.52 188%
EBITDA 15.54 6.95 124%
Net finance costs 1.32 (1.51) -187%
Income from continuing operations
(before tax, non operational
and / or exceptional items) 13.01 7.83 66%
Pre-operative expenditure on
projects under construction 0.40 1.17 -66%
ESOP Charge 1.45 1.21 20%
Profit before Tax 11.16 5.45 105%
Taxation 2.41 1.43 69%
Profit after tax 8.75 4.02 118%
----------------------------------- ------ ------- -------
Revenue
OPG's revenue increased to GBP33.15m, 188% growth year on year,
primarily due to the commencement of commercial operations at
Chennai I (77 MW) in August 2010.
Gross Profit
Gross profit increased to GBP14.4m in 2011 (2010: GBP7.3m).
Gross profit was also driven by the contribution of Chennai I since
August 2010 and offset by the increase in gas prices and the
difference in average exchange rate used in the income statement
(1GBP = INR 70.96 (2011) and INR 76.19 (2010))
Particulars GBPm
Gross Profit in 2011 14.48
-------------------------- ------
Gross Profit in 2010 7.35
Increase in Gross Profit 7.12
-------------------------- ------
EBITDA
EBITDA(3) for the year was GBP15.54m, up 124%, and reconciled
with profit after tax as follows:
Year ended 31st
March 2011 2010 Change
GBPm GBPm %
Profit after Tax 8.75 4.02 118%
Tax 2.41 1.43 69%
Depreciation 1.21 0.63 92%
ESOP Expenses 1.45 1.21 20%
Pre Operating
Expense 0.40 1.17 -66%
Net Finance Cost 1.32 (1.51) -187%
Total 15.54 6.95 124%
------------------ ------ ------- -------
(3) excludes exceptional or non-operational items such as the
annual charge for stock options which is a non-cash item or
expenses relating to projects under construction.
Taxation
The income tax charge of GBP2.41m in 2011 (2010: GBP1.43m)
comprises current tax of GBP2.11m (2010: GBP1.41m) and deferred tax
of GBP0.30m (2010: GBP0.02m). The current tax charge has increased
by GBP1m primarily due to the increase in profits which are subject
to Corporate Income Tax or Minimum Alternate Tax (MAT) as
appropriate. The majority of profits derived from OPG's operations
in India are subject to MAT. MAT is charged on book profits in
India at a rate of 19.93% but is available as a credit against
corporate income tax in the following 10 years. The deferred tax
charge of GBP0.30m (2010: GBP0.02m) in 2011 is mainly on account of
property, plant and equipment and the impact of depreciation
unabsorbed due to timing differences as between book and tax
depreciation. The Groups' 2011 effective tax rate for the year was
22% (2010: 26%).
Non-Operational Items
Pre-operating expenses represent expenses pertaining to Projects
under construction charged to the income statement. These expenses
in 2010-11 were lower at GBP0.40m in 2011 (2010: GBP1.17m) as one
major project commenced commercial operation during the year.
Employee Stock Option charges are linked to share based payments
to certain Directors and are non-cash in nature.
Profits after Tax
Profits after tax increased by GBP4.73m representing 118% year
on year growth, from GBP4.02m in 2010 to GBP8.75m in 2011, as a
result of the contribution from the 77 MW Chennai I.
Earnings per share
Earnings per share of 2.129 pence in 2011 represent an increase
of 559 % over 2010 on account of higher net earnings attributable
to shareholders from Chennai I in which the Group has an economic
interest of 99 %.
Property, Plant and Equipment
Property, Plant and Equipment increased during the period by
GBP11.36m, an 18% year on year growth, mainly reflecting the
increase in capital work in progress on account of additional power
plants in Chennai and Gujarat. Total Property, Plant &
Equipment at GBP73.99m (2010: GBP62.63m) includes assets under
construction amounting to GBP18.42m (2010: GBP47.46m) and Property,
Plant & Equipment (net of depreciation) amounting to GBP55.57m
(2010: GBP15.17m). During the year an amount of GBP 40.30m has been
capitalised in the Chennai 77 MW plant.
Current Assets
Current assets have increased by GBP68.81m to GBP132.13m year on
year primarily as a result of:
a. An increase of GBP57m in cash and cash equivalent following
the equity placement in January 2011
b. An increase of GBP8.9m in Inventories and Trade and other
receivables due to the commencement of operations in the
77 MW power plant
c. An increase of GBP2.91m net in Investments and other current
assets
Current Liabilities
Current liabilities have increased by GBP5.43m primarily due to
the commencement of operations in the 77 MW power plant.
Other Non Current Liabilities
Other non current liabilities have increased by GBP13.7m
primarily on account of an increase in bank borrowing to meet the
capital project expenses.
Cash Flow
Cash Flow 2011 2010
GBPm GBPm
Operating Cash 15.15 5.77
----------------------------------- -------- --------
Tax Paid (1.97) (1.06)
Change in Working Capital
Assets and Liabilities (9.43) 7.16
Purchase of Property, Plant
and Equipment (net of disposals) (19.76) (29.02)
Other Investments 1.41 (10.32)
Net Cash used in Investing
Activities (18.35) (39.34)
Net Interest Paid (2.65) (0.61)
Free Cash Flow (17.25) (28.07)
Equity Issued (net) 57.38 -
----------------------------------- -------- --------
Total Cash Change before Net
borrowings 40.14 (28.07)
----------------------------------- -------- --------
Operating cash flow increased from GBP5.77m in 2010 to GBP15.15m
in 2011, an increase of GBP9.38m, or162%. The increase is primarily
driven by an increase in operational activity. Net proceeds of
GBP57.4m were from the equity raising January 2011.
Debt and Liquidity
2011 2010
GBPm GBPm
Gross Debt (50.31) (37.33)
Cash and Cash equivalent 71.10 14.17
Investments and Other Financial
Assets 8.85 12.98
Net Cash / (Debt) 29.64 (10.18)
Total Equity 151.03 88.59
Gearing % (net debt/(net debt
+ total equity)) -24% 10%
--------------------------------- -------- --------
The Group has net cash of GBP29.64m (2010: net debt GBP10.18m)
and negative gearing of 24% (2010: positive gearing of 10%). As
development of projects proceeds it is expected that the gearing
may turn positive. The borrowings are in respect of the
construction of power stations. The Group is in a position to raise
borrowings for its power station developments. All of the Group's
debt is denominated in Indian Rupees being the functional currency
of its Indian Operations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2011
(All amounts in GBP, unless otherwise stated)
Particulars Notes 2011 2010
Revenue 33,147,184 11,515,409
Cost of revenue 6 (18,669,898) (4,161,175)
------------- ------------
Gross profit 14,477,286 7,354,234
Other income 7 2,537,869 242,765
Distribution Cost (865,832) (501,021)
General and administrative expenses 6 (3,666,390) (3,153,982)
------------- ------------
Operating profit 12,482,933 3,941,996
Financial costs 8 (2,647,296) (608,209)
Financial income 9 1,326,695 2,116,056
------------- ------------
Profit/(loss) before tax 11,162,332 5,449,843
Tax expense 10 (2,408,443) (1,432,338)
Profit/(loss) for the year attributable
to: 8,753,889 4,017,505
============= ============
Owners of the parent 6,227,842 926,473
Non controlling interest 2,526,047 3,091,032
Earnings per share 21
Basic earnings per share (in Pence) 2.129 0.323
Diluted earnings per share (in Pence) 2.093 0.318
Other Comprehensive Income
Available for Sale Financial Assets
- Reclassification to profit and loss 185,459 124,334
- Current year losses on remeasurement (255,542) (68,293)
Currency translation differences on
translation of foreign operations (5,076,545) 6,497,808
Other comprehensive income (5,146,628) 6,553,849
Total comprehensive income for the year
attributable to: 3,607,261 10,571,354
============= ============
Owners of the parent 1,627,114 6,750,867
Non controlling interest 1,980,147 3,820,487
3,607,261 10,571,354
============= ============
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 March 2011
(All amounts in GBP, unless otherwise stated)
Notes 2011 2010
ASSETS
Non Current
Property, plant and equipment 11 73,995,296 62,629,258
Investments and other financial assets 12 6,941,814 5,470,257
Deferred tax asset 10 55,512 51,505
Restricted cash 15 1,214,699 1,333,253
Total Non Current assets 82,307,321 69,484,273
------------ ------------
Current
Inventories 14 5,605,523 1,867,915
Trade and other receivables 13 8,576,366 3,348,207
Cash and Cash Equivalents 15 71,104,280 14,168,453
Restricted Cash 15 1,080,877 148,641
Current tax assets 272,105 404,196
Investments and other financial assets 12 45,486,243 43,379,680
Total Current assets 132,125,394 63,317,092
------------ ------------
Total Assets 214,432,715 132,801,365
------------------------------------------ ------ ------------ ------------
EQUITY AND LIABILITIES
Equity:
Equity attributable to owners of the
parent:
Share Capital 51,671 42,187
Share Premium 124,316,524 66,943,323
Other components of Equity 7,803,844 10,950,324
Retained earnings/ (Accumulated deficit) 9,050,027 2,822,186
------------ ------------
Total 141,222,066 80,758,020
Non-Controlling Interest 9,807,809 7,827,662
Total Equity 151,029,876 88,585,682
------------ ------------
Liabilities
Non current
Borrowings 18 45,254,399 30,800,245
Trade and other payables 19 1,231,509 2,261,141
Deferred tax liability 10 849,446 514,235
Total Non Current liabilities 47,335,354 33,575,621
------------ ------------
Current
Borrowings 18 5,064,797 6,531,797
Trade and other payables 19 10,716,961 3,918,117
Other liabilities 241,112 190,000
Current Tax Liabilities 44,615 148
------------ ------------
Total Current liabilities 16,067,486 10,640,062
------------ ------------
Total Liabilities 63,402,840 44,215,683
------------ ------------
Total Equity and Liabilities 214,432,715 132,801,365
------------------------------------------ ------ ------------ ------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2011
(All amounts in GBP, unless otherwise stated)
Issued Foreign
Capital Currency Total of Non-
(No. of Share Share Other Translation Retained Parent Controlling Total
GROUP Shares) capital Premium reserves reserve earnings equity Interest Equity
-------------------- ------------ -------- ------------ ---------- ------------ ------------ ------------ ------------ ------------
Balance at 1 April,
2010 286,989,795 42,187 66,943,323 3,228,892 7,721,432 2,822,186 80,758,020 7,827,662 88,585,682
Issue of Equity
Shares 64,515,000 9,484 57,373,201 57,382,685 - 57,382,685
Employee Share
based payment
options 1,454,247 1,454,247 - 1,454,247
Transactions with
owners 351,504,795 51,671 124,316,524 4,683,139 39,594,952 7,827,662 147,422,614
------------ -------- ------------ ---------- ------------ ------------ ------------ ------------ ------------
Profit for the year 6,227,842 6,227,842 2,526,048 8,753,889
Currency
translation
differences (4,531,791) 4,531,791) (544,754) (5,076,545)
Gains/(losses) on
sale /
re-measurement of
available-for-sale
financial assets (68,936) (68,936) (1,147) (70,083)
Total comprehensive
income for the
year - - - (68,936) 3,189,641 9,050,027 1,627,114 1,980,147 3,607,262
------------ -------- ------------ ---------- ------------ ------------ ------------ ------------ ------------
Balance at 31
March, 2011 351,504,795 51,671 124,316,524 4,614,203 3,189,641 9,050,027 141,222,066 9,807,809 151,029,876
-------------------- ------------ -------- ------------ ---------- ------------ ------------ ------------ ------------ ------------
Balance at 1 April,
2009 as previously
reported 286,989,795 42,187 66,943,323 (151,716) 2,667,855 3,309,434 72,811,084 3,996,285 76,807,369
Restatement (refer
note 26) 2,125,121 (722,289) (1,413,721) (10,890) 10,890
------------ -------- ------------ ---------- ------------ ------------ ------------ ------------ ------------
Balance at 1 April,
2009 (as
restated) 286,989,795 42,187 66,943,323 1,973,405 1,945,566 1,895,713 72,800,194 4,007,175 76,807,369
Employee Share
based payment
options 1,206,959 1,206,959 1,206,959
Transactions with
owners 286,989,795 42,187 66,943,323 3,180,364 74,007,153 4,007,175 78,014,328
------------ -------- ------------ ---------- ------------ ------------ ------------ ------------ ------------
Profit for the year 926,473 926,473 3,091,032 4,017,505
Currency
translation
differences 5,775,866 5,775,866 721,942 6,497,808
Gains/(losses) on
sale /
re-measurement of
available-for-sale
financial assets 48,528 48,528 7,513 56,041
Total comprehensive
income for the
year - - - 48,528 7,721,432 2,822,186 6,750,867 3,820,487 10,571,354
------------ -------- ------------ ---------- ------------ ------------ ------------ ------------ ------------
Balance at 31
March, 2010 286,989,795 42,187 66,943,323 3,228,892 7,721,432 2,822,186 80,758,020 7,827,662 88,585,682
-------------------- ------------ -------- ------------ ---------- ------------ ------------ ------------ ------------ ------------
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2011
(All amounts in GBP, unless otherwise stated)
Particulars 2011 2010
------------------------------------------------ ------------- -------------
Cash flows from operating activities
Profit / (Loss) for the year after Tax 8,753,889 4,017,505
Income tax expense 2,408,443 1,432,338
Financial Expenses 2,647,296 608,209
Financial Income (1,326,695) (2,116,056)
Share based compensation costs 1,454,247 1,206,959
Depreciation 1,208,461 625,324
------------- -------------
15,145,641 5,774,279
Movements in Working Capital
(Increase) / Decrease in trade and other
receivables (5,706,441) (1,418,191)
(Increase) / Decrease in inventories (3,948,601) (1,636,191)
(Increase) / Decrease in other current assets (2,048,059) 988,313
Increase / (Decrease) in trade and other
payables 5,258,094 5,139,417
Increase / (Decrease) in Other liabilites (2,981,158) 4,086,706
------------- -------------
Cash (used in) / generated from operations 5,719,477 12,934,333
Interest paid (2,647,296) (608,209)
Income Taxes paid, net of refunds (1,964,628) (1,056,450)
------------- -------------
Net Cash Generated by / (used in) Operating
activities 1,107,552 11,269,674
============= =============
Cash flow from investing activites
Acquisition of property, plant and equipment (19,758,114) (29,017,680)
Sale of property, plant and equipment - 2,493
(Increase) / Decrease in Advances - (9,610,586)
Finance Income 782,508 1,171,217
Dividend income 544,187 944,839
Movement in restricted cash (931,303) 385,765
Net cash outflow on acquisition of subsidiaries -
Sale / (Purchase) of Investments, net 3,124,948 (3,222,067)
(Increase) / Decrease in land lease Deposits (2,115,283) 1,260
Net cash (used) / generated by investing
activities (18,353,056) (39,344,759)
============= =============
Cash flows from financing activities
Proceeds from issue of Ordinary Shares 57,382,685 -
Proceeds from borrowings 16,985,286 14,249,387
Repayment of borrowings - (5,205,136)
Net cash provided by financing activities 74,367,971 9,044,251
============= =============
Net increase / (decrease) in cash and cash
equivalents 57,122,467 (19,030,834)
Cash and cash equivalents at the beginning of
the year / period 14,168,453 32,319,842
Effect of Exchange rate changes on the balance
of cash held in foreign currencies (186,639) 879,445
Cash and cash equivalents at the end of the
year / period 71,104,280 14,168,453
============= =============
NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS
For the year ended 31 March 2011
(All amounts in GBP, unless otherwise stated)
1. Corporate information
1.1. Nature of operations
OPG Power Ventures plc ('the Company' or 'OPGPV'), 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 its plants is sold principally to public
sector undertakings and heavy industrial companies in India or in
the short term market. The business objective of the group is to
focus on the power generation business within India and thereby
provide reliable, cost effective power to the industrial consumers
and other users under the 'open access' provisions mandated by the
Government of India.
1.2. Statement of compliance
The consolidated and Company financial statements have been
prepared in accordance with International Financial Reporting
Standards (IFRS) and its interpretations as adopted by the European
Union (EU) and the provisions of the Isle of Man, Companies Act
2006 applicable to companies reporting under IFRS.
1.3 General information
OPG Power Ventures plc, a limited liability corporation, is the
Group's ultimate parent Company and is incorporated and domiciled
in the Isle of Man. The address of the Company's registered Office,
which is also the principal place of business, is IOMA House, Hope
Street, Douglas, Isle of Man 1M1 1JA. The Company's equity shares
are listed on the Alternative Investment Market (AIM) of the London
Stock Exchange.
The Financial statements were approved by the Board of Directors
on 12(th) August, 2011
2. Changes in accounting policies
The Group has adopted the following revision and amendments to
IAS 27 Consolidated and Separate Financial Statements (Revised
2008) issued by the International Accounting Standards Board, which
are relevant to and effective for the Group's financial statements
for the annual period beginning 1 April 2010:
IAS 27R introduced changes to the accounting requirements for
transactions with non-controlling (formerly called 'minority')
interests and the loss of control of a subsidiary. The group had
already made an accounting policy decision to treat such
transactions in a similar manner as suggested by the revised
standard. Hence there was no financial impact on these financial
statements.
2.1. Standards, amendments and Interpretations to existing
standards that are not effective and have not been early adopted by
the Group.
At the date of authorisation of these financial statements,
certain new standards, amendments and interpretations to existing
standards have been published but are not yet effective, and have
not been adopted early by the Group.
Management anticipates that all of the relevant pronouncements
will be adopted in the Group's accounting policies for the first
period beginning after the effective date of the pronouncement.
Information on new standards, amendments and interpretations that
are expected to be relevant to the Group's financial statements is
provided below. Certain other new standards and interpretations
have been issued but are not expected to have a material impact on
the Group's financial statements.
Standards and Interpretations adopted by the European Union as
at 31 March 2011
Standard Description Effective for in reporting
periods starting on
or after
----------- ------------------------------------ ---------------------------
IAS 24 (R) Related Party Disclosures 1 January 2011
IFRIC 14 Prepayments of a Minimum Funding 1 January 2011
Requirement - Amendment
IFRIC 19 Extinguishing Financial Liabilities 1 July 2010
with Equity Instruments
----------- ------------------------------------ ---------------------------
The management does not expect the application of the other
standards to have any material impact on its financial statements
when those Standards become effective. The Group does not intend to
apply any of these pronouncements early.
3. Summary of significant accounting policies
3.1. Basis of preparation
The consolidated financial statements have been prepared on a
historical cost basis, except for financial assets and liabilities
at fair value through profit or loss and available-for-sale
financial assets measured at fair value.
The consolidated financial statements are presented in
accordance with IAS 1 Presentation of Financial Statements (Revised
2007) and have been presented in Great Britain Pound ('LIR'), which
is the functional and presentation currency of the Company.
3.2. Basis of consolidation
The consolidated financial statements incorporate the financial
information of OPG Power Ventures Plc and its subsidiaries for the
year ended 31 March 2011.
A subsidiary is defined as an entity controlled by the Company.
Control is achieved where the Company has the power to govern the
financial and operating policies of an entity so as to obtain
benefits from its activities. Subsidiaries are fully consolidated
from the date of acquisition, being the date on which control is
acquired by the Group, and continue to be consolidated until the
date that such control ceases. All subsidiaries have a reporting
date of 31(st) March and use consistent accounting policies adopted
by the Group.
All intra-group balances, income and expenses and any resulting
unrealized gains arising from intra-group transactions are
eliminated in full on consolidation.
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 minority
interests/ other venturer in the Group where there is no loss of
control are accounted for using the equity method, whereby, the
difference between the consideration paid or received and the book
value of the share of the net assets is recognised in 'other
reserve' within statement of changes in equity.
3.3. List of subsidiaries
Details of the Group's subsidiary which are consolidated into
the Group's consolidated financial statement, are as follows:
Immediate Country of % % Economic
Subsidiaries parent incorporation Voting Right Interest
2011 2010 2011 2010
-------------------------------------------- ------ ------- ------ ---------
Caromia
Holdings
limited
('CHL') OPGPV Cyprus 100 100 - -
Gita Energy
Private
Limited
('GEPL')
(refer note
below) CHL Cyprus 100 100 100 100
Gita Holdings
Private
Limited
('GHPL') (1) CHL Cyprus 100 100 100 100
OPG Power
Generation
Private
Limited GEPL and
('OPGPG') GHPL India 71.76 71.76 99 99
OPG Power
Gujarat
Private
Limited GEPL and
('OPGG') GHPL India 65.90 65.90 99 99
OPG Renewable
Energy Private
Limited GEPL and
('OPGRE')(2) GHPL India 22 22 33 33
OPG Energy
Private
Limited
('OPGE') (3) OPGPG India 29.78 29.78 44.22 44.22
Gita Power and
Infrastructure
Private
Limited,
('GPIPL') GHPL India 100 100 97.91 97.91
---------------- ----------- --------------- ------ ------- ------ ---------
( )
(1 ) As of 10 February, 2011 pursuant to agreement for assignment of debt between CHL and OPGPV the entire shares held in GEPL and GHPL have been transferred by "OPGPV" to "CHL". .
(2) Pursuant to the voting rights agreement entered by GEPL with
Tamil Nadu Properties and Salem Food Products Limited ( hereinafter
collectively referred as "investors'), the investors agreed that in
consideration of GEPL agreeing to subscribe for shares in OPGRE,
the investors will exercise all voting rights in accordance of the
directions of GEPL. The total voting rights held by the investors
amount to 56.35 percent. Further the investors have also appointed
GEPL as the lawful attorney to exercise their voting rights.
Therefore the combination of the directly held interests together
with the voting rights of the investors controlled by the group via
contracts, have the effect that the group controls a majority of
voting rights in OPGE. Accordingly this is considered to be a
subsidiary of the group.
(3 ) Pursuant to the voting rights agreement entered by OPGPG with Tamil Nadu Properties and Salem Food Products Limited ( hereinafter collectively referred as "investors'), the investors agreed that in consideration of OPGPG agreeing to subscribe for shares in OPGE, all voting rights in OPGE will be exercised in accordance with the directions of OPGPG. The total voting rights held by the investors amount to 36.88 percent. Further the investors also appointed OPGPG as the lawful attorney to exercise their voting rights. Therefore the combination of the directly held interests together with the voting rights of the investors controlled by the group via contracts, have the effect that the group controls a majority of voting rights in OPGE. Accordingly this is considered to be a subsidiary of the group.
3.4. Foreign currency translation
The functional currency of the Company is the Great Britain
Pound Sterling (GBP). The Cypriot entities are an extension of the
parent and pass through investment entities. Accordingly the
functional currency of the subsidiaries 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.
The presentation currency of the Group is the Great Britain Pound
(GBP) as submitted to the AIM market 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 which is Great
Britain Pound Sterling (GBP) at the rate of exchange ruling at the
Statement of financial position date and the statement of
comprehensive income is translated at the average exchange rate for
the year. 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 ruling 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.
Non-monetary assets and liabilities that are measured in terms of
historical cost in a foreign currency are translated using the
exchange rate at the date of the transaction. Non-monetary assets
and liabilities denominated in foreign currencies that are stated
at fair value are translated to functional currency at foreign
exchange rates ruling at the dates the fair value was
determined.
3.5. Revenue recognition
Revenue is recognised to the extent that it is probable that the
economic benefits associated with the transaction will flow to the
Group, and revenue can be reliably measured. Revenue is measured at
the fair value of the consideration received or receivable in
accordance with the relevant agreements, net of discounts, rebates
and other applicable taxes and duties.
Sale of electricity
Revenue comprises revenue from sale of electricity. Revenue from
the sale of electricity is recognised when earned on the basis of
contractual arrangement with the customers and reflects the value
of units supplied including an estimated value of units supplied to
the customers between the date of their last meter reading and the
reporting date.
Interest and dividend
Revenue from interest is recognised as interest accrues (using
the effective interest rate method). Revenue from dividends is
recognised when the right to receive the payment is
established.
3.6. 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. For management's assessment of the probability of
future taxable income to utilise against deferred tax assets.
Deferred tax assets and liabilities are offset only when the Group
has a right and 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.
3.7. Financial assets
Financial assets are derecognised when the contractual rights to
the cash flows from the financial asset expire, or when the
financial asset and all substantial risks and rewards are
transferred. A financial liability is derecognised when it is
extinguished, discharged, cancelled or expires.
Financial assets and financial liabilities are measured
initially at fair value adjusted by transactions costs, except for
financial assets and financial liabilities carried at fair value
through profit or loss, which are measured initially at fair
value.
Financial assets and financial liabilities are measured
subsequently as described below
For the purpose of subsequent measurement, financial assets are
classified into the following categories upon initial
recognition:
-- loans and receivables
-- available-for-sale financial assets.
The category determines subsequent measurement and whether any
resulting income and expense is recognised in profit or loss or in
other comprehensive income.
Loans and receivables:
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. After initial recognition these are measured at amortised
cost using the effective interest method, less provision for
impairment. Discounting is omitted where the effect of discounting
is immaterial. The Group's cash and cash equivalents, trade and
most other receivables fall into this category of financial
instruments.
Individually significant receivables are considered for
impairment when they are past due or when other objective evidence
is received that a specific counterparty will default. Receivables
that are not considered to be individually impaired are reviewed
for impairment in groups, which are determined by reference to the
industry and region of a counterparty and other shared credit risk
characteristics. The impairment loss estimate is then based on
recent historical counterparty default rates for each identified
group.
Investment in subsidiaries
In the parent company's financial statements, the investments in
subsidiaries are accounted for using the cost method with income
from the investment being recognised only to the extent that the
parent company receives distributions from accumulated profits of
the investee arising after the date of acquisition.
Available-for-sale financial assets:
Available-for-sale financial assets are non-derivative financial
assets that are either designated to this category or do not
qualify for inclusion in any of the other categories of financial
assets. The Group's available-for-sale financial assets include
Mutual funds and listed securities. Available-for-sale financial
assets are measured at fair value. Gains and losses are recognised
in other comprehensive income and reported within the
available-for-sale reserve within equity, except for impairment
losses and foreign exchange differences on monetary assets, which
are recognised in profit or loss. When the asset is disposed of or
is determined to be impaired the cumulative gain or loss recognised
in other comprehensive income is reclassified from the equity
reserve to profit or loss and presented as a reclassification
adjustment within other comprehensive income.
Reversals of impairment losses are recognised in other
comprehensive income, except for financial assets that are debt
securities which are recognised in profit or loss only if the
reversal can be objectively related to an event occurring after the
impairment loss was recognised.
3.8. Financial liabilities
The Group's financial liabilities include borrowings, trade and
other payables. Financial liabilities are measured subsequently at
amortised cost using the effective interest method, except for
financial liabilities held for trading or designated at fair value
through profit or loss, that are carried subsequently at fair value
with gains or losses recognised in profit or loss.
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'.
3.9. 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 bid 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.
3.10 Property, plant and equipment
Property, plant and equipment are stated at cost, net of
accumulated depreciation and/or impairment losses, if any. The cost
includes expenditures that are 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.
The present value of the expected costs of decommissioning of
the asset after its use is included in the costs of the respective
asset, if the recognition of the criteria for a provision is
met.
Land is not depreciated. Depreciation on 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 30-40
Power stations 15-40
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 are reviewed at each financial year end, and adjusted
prospectively if appropriate.
3.11. Leases
The determination of whether an arrangement is, or contains a
lease is based on the substance of the arrangement at inception
date whether fulfilment of the arrangement is dependent on the use
of a specific asset or assets or the arrangement conveys a right to
use the asset.
Group as a lessee
Contracts to lease assets are classified as finance leases if
they transfer substantially all the risks and rewards of ownership
of the asset to the group. Leases where the Group does not acquire
substantially all the risks and benefits of ownership of the asset
are classified as operating leases.
Operating lease payments are recognised as an expense in the
profit or loss on a straight line basis over the lease term. Lease
of land is classified separately and is amortised over the period
of lease.
3.12. 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 profit or loss in the period in which they are
incurred, the amount being determined using the effective interest
rate method.
3.13. 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 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 unless the asset is carried at
revalued amount, in which case the reversal is treated as a
revaluation increase.
3.14. Cash and cash equivalents
Cash and cash equivalents in the Statement of financial position
comprise cash at banks and on hand and short-term deposits.
For the purpose of the consolidated cash flow statement, cash
and cash equivalents consist of cash and short-term deposits, net
of restricted cash and outstanding bank overdrafts.
3.15. 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.
3.16. Earnings per share
The earnings considered in ascertaining the Group's earning 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.
3.17. 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
commitment that has resulted from past events, for example, product
warranties granted, legal disputes or onerous contracts.
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.
3.18. 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 are 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.
3.20. 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.
3.21. 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.
4. Significant accounting judgements, estimates and
assumptions
The preparation of financial statements in conformity with IFRS
requires management to make certain critical accounting estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period.
The principal accounting policies adopted by the Group in the
consolidated financial statements are as set out above. The
application of a number of these policies require 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 following are significant management judgements in applying
the accounting policies of the Group that have the most significant
effect on the financial statements.
-- Leases:
In applying the classification of leases in IAS 17, management
considers its leases of a power plant by OPG Renewable
Energy Private Limited as an operating lease arrangement.
In some cases, the lease transaction is not always conclusive,
and management uses judgment in determining whether the
lease is an operating lease arrangement that transfers
substantially all the risks and rewards incidental to ownership.
-- Deferred tax assets:
The assessment of the probability of future taxable income
in which deferred tax assets can be utilised is based on
the Group's latest approved budget forecast, which is adjusted
for significant non-taxable income and expenses and specific
limits to the use of any unused tax loss or credit. The
tax rules in India in which the Group operates are also
carefully taken into consideration. If a positive forecast
of taxable income indicates the probable use of a deferred
tax asset, especially when it can be utilised without a
time limit, that deferred tax asset is usually recognised
in full. The recognition of deferred tax assets that are
subject to certain legal or economic limits or uncertainties
is assessed individually by management based on the specific
facts and circumstances.
Estimates and uncertainties:
When preparing the financial statements management undertakes a
number of judgements, estimates and assumptions about recognition
and measurement of assets, liabilities, income and expenses. The
actual results may differ from the judgments, estimates and
assumptions made by management, and will seldom equal the estimated
results. Information about significant judgments, estimates and
assumptions that have the most significant effect on recognition
and measurement of assets, liabilities, income and expenses is
provided below.
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 a material
adjustments to the carrying amounts of assets and liabilities
within the next financial year are discussed below:
-- Recoverability of deferred tax assets: The recognition
of deferred tax assets requires assessment of future
taxable profit. (see note 3.6).
-- Estimation of fair value of acquired 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. Specifically, the Group make
estimates relating to
-- Other financial liabilities: Borrowings held by the Group
are measured at amortised cost except where designated
at fair value through profit or loss. Further, liabilities
associated with financial guarantee contracts in the
Company financial statements are initially measured at
fair value and re-measured at each Statement of financial
position date. (see note 3.9 and note 28); and
-- Impairment tests: The determination of recoverable amounts
of the CGUs assessed in the annual impairment test requires
the Group to estimate of their fair value net of disposal
costs as well as their value in use. The assessment
of value in use requires assumptions to be made with
respect to the operating cash flows of the CGUs as well
as the discount rates;
-- Useful life of depreciable assets: Management reviews
the useful lives of depreciable assets at each reporting
date, based on the expected utility of the assets to
the Group.
-- Provisions: The Group is currently defending a lawsuit
where the actual outcome may vary from the amount recognised
in the financial statements. Refer note on contingent
liabilities for details.
-- Uncollectability of trade receivables: Analysis of historical
payment patterns, customer concentrations, customer
credit-worthiness and current economic trends. If the
financial condition of a customer deteriorates, additional
allowances may be required (see note 19); and
-- Claims by the group: These accounts include an amount
of GBP 2,064,455 recognised as claim for loss of profit
and disclosed as other income. This is a provisional
amount based on what is reliably measurable at March
31, 2011 for recoverability of loss of revenue from
operations due to delay in commissioning and non achievement
of guaranteed performance parameters at a plant owned
by OPGPG. The claims have been recognised where such
payments are certain to be recovered under the agreements
with the contractor.
Actual results can differ from estimates.
5. Segment information
The Group has adopted the "management approach" in identifying
the operating segments as outlined in IFRS 8. Operating segments
are reported in a manner consistent with the internal reporting
provided to the chief operating decision maker. The chief operating
decision maker, who is responsible for allocating resources and
assessing performance of the operating segment has been identified
as the steering committee that makes strategic decisions.
Management has analysed the information that the chief operating
decision maker reviews and concluded on the segment disclosure. In
identifying its operating segments, management generally follows
the Group's service lines, which represent the generation of the
power and other related services provided by the Group. The
activities undertaken by the Power generation segment includes sale
of power and other related services. The accounting policies used
by the Group for segment reporting are the same as those used for
Consolidated financial statements.
For management purposes, the Group is organised into only a
single business unit of power generation and distribution of the
same to customers. There are no geographical segments as all
revenues arise from India.
Revenue on account of sale of power to one party amounts to GBP
25,790,162 (2010: GBP 4,312,446).
6. Depreciation, costs of inventories and employee benefit
expenses included in the consolidated and Company's statements of
comprehensive income
(a) Depreciation and costs of inventories included in the
consolidated statements of comprehensive income
Consolidated
------------------------------ -----------------------
2011 2010
------------------------------ ----------- ----------
Included in cost of revenue:
Fuel costs 14,931,913 2,809,587
Depreciation 1,145,380 429,683
------------------------------ ----------- ----------
For the group depreciation included in general and
administrative expenses amount to GBP 63,081 (2010: GBP
195,461)
For the company depreciation included in general and
administrative expenses amount to GBP Nil (2010: GBP Nil)
(b) Employee benefit expenses forming part of general and
administrative expenses are as follows:
Consolidated
----------------------
2011 2010
------------------------ ---------- ----------
Salaries and wages 781,534 676,553
Employee benefit costs 60,083 58,205
Employee Stock Option 1,454,247 1,206,959
---------- ----------
Total 2,295,864 1,941,717
---------- ----------
(c) Auditor's remuneration for audit services amounting to GBP
35,000 (2010: GBP 35,612) is included in general and administrative
expenses.
(d) Foreign exchange (loss)/gain included in the general and
administrative expenses/ other income is as follows:
Consolidated
--------------------
2011 2010
----------------------------- -------- ----------
Foreign Exchange(Loss)/Gain 113,052 (114,430)
-------- ----------
Total 113,052 (114,430)
----------------------------- -------- ----------
7. Other income
a) Other income comprises of:
Consolidated
--------------------
2011 2010
--------------------------------- ---------- --------
Sale of Coal 206,203 160,274
Compensation for loss of profit 1,888,294 -
Miscellaneous income/expense 443,372 82,491
---------- --------
Total 2,537,869 242,765
--------------------------------- ---------- --------
The item "Compensation for loss of profit" includes
GBP1,021,691, due to OPG PG, a subsidiary, from the EPC contractor
for delay in guaranteed commissioning date of their 77 MW plant,
non achievement of guaranteed performance parameters at the plant
and consequent loss of revenue to OPG PG. This amount represents
loss of profits which is reliably measurable as at the reporting
date and has been recognized based on the terms and conditions as
specified in the EPC Contract.
8. Finance costs
Finance costs comprises of:
Consolidated
--------------------
2011 2010
------------------------------- ---------- --------
Interest expenses on loans
and borrowings 2,271,354 362,302
Loss on disposal of financial
instruments 255,542 131,334
Other Finance Costs 120,400 114,573
---------- --------
Total 2,647,296 608,209
------------------------------- ---------- --------
Interest expenses on loans and borrowings, includes interest
expenses on financial liability at amortised cost of GBP 2,271,354
(2010: GBP362,302) in consolidated financial statement.
9. Finance income
The finance income comprises of:
Consolidated
----------------------
2011 2010
----------------------------------- ---------- ----------
Interest income
- Bank deposit 239,872 953,859
- Loans and receivables 162,340 210,818
Dividend income 544,187 944,524
Other Finance Income 372,106 -
Unwinding of discount on security
deposits 8,190 6,855
---------- ----------
Total 1,326,695 2,116,056
----------------------------------- ---------- ----------
10. Tax expense / (income)
The major components of income tax expense for the years ended
31 March 2011 and 2010
Consolidated statement of comprehensive income
2011 2010
----------------------------- ---------- ----------
Current tax 2,105,976 1,416,412
Deferred tax 302,467 15,926
---------- ----------
Tax expense reported in the
statement of comprehensive
income 2,408,443 1,432,338
----------------------------- ---------- ----------
Consolidated statement of changes in equity: 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 2011 and 2010 is as follows:
2011 2010
-------------------------------- ------------ ----------
Accounting profit before taxes 11,162,332 5,449,843
Enacted tax rates 32.45% 33.99%
Tax on profit at enacted tax
rate 3,621,619 1,852,402
Differences on account MAT
Rate (1,596,807) (420,064)
Items taxed at Zero Rate 417,480 -
Others (33,849) -
Actual tax expense 2,408,443 1,432,338
-------------------------------- ------------ ----------
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 Company's operations are
entirely based in India, the effective tax rate of the Group has
been computed based on the current tax rates prevailing in India.
Further, a substantial portion of the profits of the Group's India
operations are exempt from Indian income taxes being profits
attributable to generation of power in India. Under the tax holiday
the taxpayer can utilize an exemption from income taxes for a
period of any ten consecutive years out of the fifteen years from
the date of commencement of the operations.
The Group is subject to the provisions of Minimum Alternate Tax
('MAT') under the Indian Income taxes for the year ended 31 March
2011 and 2010. Accordingly, the Group calculated the tax liability
for current taxes in India after considering MAT. 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 2011 and 2010
relates to the following:
2011 2010
------------------------------------------------------- -------- --------
Deferred income tax assets
Lease transactions and others 30,294 -
Mark to Market of Available for sale financial assets 125,218 51,505
155,512 51,505
Deferred income tax liabilities
Difference in depreciation on Property, plant and
equipment 849,446 514,235
-------- --------
849,446 514,235
Deferred income tax liabilities, net 693,934 462,730
-------- --------
Movement in temporary differences during the year
As at Recognised As at
1 April in Income Recognised Translation 31 March
Particulars 2010 Statement in Equity Adjustment 2011
-------------- ---------- ----------- ----------- ------------ ----------
Property,
plant and
equipment
and others (514,235) (302,467) - (2,450) (819,152)
Mark to
market gain
/ (loss) on
available
for sale
financial
assets 51,505 73,712 - 125,218
(462,730) (302,467) 73,712 (2,450) (693,934)
---------- ----------- ----------- ------------ ----------
As at Recognised As at
1 April in Income Recognised Translation 31 March
Particulars 2009 Statement in Equity Adjustment 2010
------------- ---------- ------------ ----------- ------------ ----------
Property,
plant and
equipment
and others (446,451) (15,926) - (51,857) (514,235)
Mark to
market gain
/ (loss) on
available
for sale
financial
assets 60,909 - (7,482) (1,922) 51,505
(385,542) (15,926) (7,482) (53,779) (462,730)
---------- ------------ ----------- ------------ ----------
In assessing the reliability 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. Further, dividends are not taxable in India in the hands of
the recipient. However, the Company will be subject to a "dividend
distribution tax" currently at the rate of 15% (plus applicable
surcharge and education cess) on the total amount distributed as
dividend.
As at 31 March 2011 and 31 March 2010, there was no recognised
deferred tax liability for taxes that would be payable on the
unremitted earnings of certain of the Group's subsidiaries, the
Group has determined that undistributed profits of its subsidiaries
will not be distributed in the foreseeable future.
11. Property, plant and equipment, net
The property, plant and equipment comprises of:
A. Gross
Block
Other
Land and Power plant and Assets under
Particulars Buildings Stations equipment Vehicles construction Total
------------- ---------- ----------- ---------- --------- ------------- -------------
As at 1
April 2009 7,744,639 7,675,718 47,282 124,063 29,174,655 44,766,356
- Additions 974,219 30,664 43,231 25,414 15,581,342 16,654,870
- Disposals - (145,870) - (17,983) - (163,854)
- Exchange
Adjustments 709,877 710,692 4,381 11,497 2,703,627 4,140,074
As at 31
March 2010 9,428,735 8,271,204 94,894 142,991 47,459,624 65,397,446
------------- ---------- ----------- ---------- --------- ------------- -------------
As at 1
April 2010 9,428,735 8,271,204 94,894 142,991 47,459,624 65,397,446
- Additions 444,197 42,059,353 49,460 71,375 9,635,644 52,260,030
- Disposals (53,270) - - - (35,578,462) (35,631,732)
- Exchange
Adjustments (614,406) (538,929) (6,233) (9,318) (3,092,620) (4,261,505)
As at 31
March 2011 9,205,256 49,791,628 138,121 205,048 18,424,186 77,764,239
------------- ---------- ----------- ---------- --------- ------------- -------------
B. Accumulated
Depreciation
Other
Land and Power plant and Assets under
Particulars Buildings Stations equipment Vehicles construction Total
------------- ---------- ----------- ---------- --------- ------------- -------------
As at 1
April 2009 159,867 1,833,000 19,537 22,391 - 2,034,795
- Additions 24,948 555,440 18,736 26,200 - 625,324
- Disposals (5,600) - (13,187) - (18,787)
- Exchange
Adjustments 22,988 96,086 4,110 3,672 - 126,856
As at 31
March 2010 207,803 2,478,926 42,383 39,076 - 2,768,188
------------- ---------- ----------- ---------- --------- ------------- -------------
As at 1
April 2010 207,803 2,478,926 42,383 39,076 - 2,768,188
- Additions 34,166 1,111,445 27,228 35,580 - 1,208,419
- Disposals - - - - - -
- Exchange
Adjustments (14,313) (186,610) (3,393) (3,350) - (207,664)
As at 31
March 2011 227,656 3,403,761 6,218 71,306 - 3,768,943
------------- ---------- ----------- ---------- --------- ------------- -------------
C.Net Block
Other
Land and Power plant and Assets under
Particulars Buildings Stations equipment Vehicles construction Total
------------- ---------- ----------- ---------- --------- ------------- -------------
As at 31st
March 2010 9,220,932 5,792,278 52,511 103,915 47,459,624 62,629,258
As at 31st
March 2011 8,977,600 46,387,867 71,903 133,742 18,424,186 73,995,296
The net book value of land and buildings block comprises of:
2011 2010
----------- ---------- ----------
Freehold 8,203,467 8,359,192
Buildings 774,133 861,740
----------- ---------- ----------
Total 8,977,600 9,220,932
----------- ---------- ----------
Property, plant and equipment with a carrying amount of GBP
55,365,467 (2010: GBP 15,013,210) is subject to security
restrictions (refer note 18).
12. Investments and other financial assets
Consolidated
------------------------
2011 2010
------------------------------------- ----------- -----------
A. Current
Available for sale financial assets 8,851,675 12,977,604
Loans and Receivables
- Advance to Suppliers 2,377,033 33,819
- Capital advances 31,286,228 23,339,592
- Other advances 2,971,307 7,028,665
----------- -----------
Total 45,486,243 43,379,680
----------- -----------
B. Non-current
Investments in subsidiaries - -
Loans and Receivables
- Prepayments 5,108,701 3,618,405
- Lease deposits 1,065,537 961,213
- Other advances 767,576 890,639
Total 6,941,814 5,470,257
----------- -----------
Available-for-sale investment - quoted short-term mutual fund
units
The Group has investments in mutual fund units. The fair value
of the quoted mutual fund instruments are determined by reference
to published data.
Loans and receivables (Current)
Advance to Suppliers include the amounts paid as advance for
supply of fuel to the group. Other advances of the group primarily
includes duty drawback receivable and transmission charges
receivable amounting to GBP 2,169,718 (2010: 157,383). For the
previous year GEPL and GHPL (step down subsidiaries of the company)
had advanced an amount of GBP 3,438,102 as inter corporate loan.
Also, an amount of GBP 2,806,644 was receivable from the bank on
sale of available for sale investments. Capital advances comprise
of payment made to EPC contractors for construction of assets and
advances paid for purchase of capital equipments. The management
expects to realise these in the next one year.
Loans and receivables of the company primarily includes non
interest-bearing inter-corporate deposits of GBP 58,981,826 (2010:
GBP 61,145,096) being the loan advanced by the company to Caromia
Holdings Limited by the company which is repayable on demand.
Investment in subsidiaries
Investment refers investments in subsidiaries in the Company
financial statements. CHL is a 100 percent held subsidiary of the
Company. In the previous year GEPL and GHPL were 100 percent
subsidiaries of the Company. The carrying amounts disclosed above
are maximum possible credit risk exposure in relation to these
financial assets.
13. Trade and other receivables
Consolidated
------------------- ----------------------
2011 2010
------------------- ---------- ----------
Current
Trade receivables 6,518,201 2,478,584
Unbilled revenues 99,425 255,216
Other receivables 1,958,740 614,407
------------------- ---------- ----------
Total 8,576,366 3,348,207
------------------- ---------- ----------
Trade receivables are non-interest bearing and are generally due
within 14 days terms. Out of the above, GBP 8,576,366 (2010: GBP
3,348,207) has been pledged for security as borrowings (refer note
18). As at 31 March 2011, trade receivables of GBP Nil (2010 GBP
Nil) were collectively impaired and provided for.
The age analysis of the overdue trade receivables is as
follows:
Neither past
Total due nor impaired Past due but not impaired
----- ---------- ------------------
< 90 days 90-180 days > 180 days
----- ---------- ------------------ ---------- ------------ -----------
2011 6,518,201 5,376,841 392,754 142,336 606,270
2010 2,478,584 986,454 300,530 754,066 437,534
----- ---------- ------------------ ---------- ------------ -----------
14. Inventories
Consolidated
------------------- ----------------------
2011 2010
------------------- ---------- ----------
Coal & Fuel 5,368,042 1,738,189
Stores and spares 237,481 129,726
---------- ----------
Total 5,605,523 1,867,915
------------------- ---------- ----------
Out of the above, GBP 4,708,191 (2010: GBP129,725) has been
pledged for security as borrowings (refer note 18)
15. Cash and cash equivalents
Cash and short term deposits comprise of the following:
Consolidated
------------------------
2011 2010
--------------------------- ----------- -----------
Cash at banks and on hand 69,884,386 7,359,657
Short-term deposits 1,219,894 6,808,796
----------- -----------
Total 71,104,280 14,168,453
--------------------------- ----------- -----------
Short-term deposits are made for varying periods, depending on
the immediate cash requirements of the Group. They are recoverable
on demand.
Restricted cash represents deposits which have been pledged by
the group in order to fulfil collateral requirements (refer note
18)
16. Issued share capital
Share Capital
The Company presently has only one class of ordinary shares. For
all matters submitted to vote in the shareholders meeting, every
holder of ordinary shares, as reflected in the records of the Group
on the date of the shareholders' meeting, has one vote in respect
of each share held. All shares are equally eligible to receive
dividends and the repayment of capital in the event of liquidation
of the Group.
The Company has an authorized share capital of 351,504,795
equity shares (2010: 286,989,795) at par value of GBP 0.000147
(2010: GBP 0.000147) per share amounting to GBP 51,671 (2010: GBP
42,187).
The Company has issued share capital at par value of GBP 51,671
(GBP0.000147) per share.
Reserves
Share premium represents the amount received by the Group over
and above the par value of shares issued and the excess of the fair
value of share issued in business combination over the par value of
such shares. Any transaction costs associated with the issuing of
shares are deducted from securities premium, net of any related
income tax benefits.
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 orof Available for sale financial
assets.
Retained earnings include all current and prior period results
as disclosed in the statement of comprehensive income less dividend
distribution.
17. Share based payments
The board has granted share options to directors and nominees of
directors which are limited to 10 percent of the group's share
capital. Once granted, the share must be exercised within ten years
of the date of grant otherwise the options would lapse.
The vesting conditions are as follows:
-- The 300 MW power plant of Kutch in the state of Gujarat must
have been in commercial operation for three months.
-- The Closing share price being at least GBP 1.00 for
consecutive three business days.
The related expense has been amortised over the estimated
vesting period of 4.21 years (expected completion of the Kutch
plant) and an expense amounting to GBP 1,454,207 (2010: GBP
1,206,959) was recognised in the profit or loss with a
corresponding credit to other reserves.
Movement in the number of share options outstanding and their
related weighted average exercise price are as follows:
Particulars 2011 2010
------------- ----------- -----------
At 1 April 22,524,234 -
Granted - 22,524,234
Forfeited - -
Exercised - -
Expired - -
------------- ----------- -----------
At 31 March 22,524,234 22,524,234
------------- ----------- -----------
Assumptions on Valuation of Options
The weighted average price fair value of options granted during
the previous period was determined using the Black-Scholes
valuation model was GBP 0.28 per option. The significant inputs
into the model were weighted average share price of GBP 0.66 (2011)
at the grant date, exercise price shown above, volatility of GBP
0.60 (2010 GBP 0.60), dividend yield of NIL (2010 NIL), an expected
option life of 4.21 years (2010 - 3.71 Yrs) and annual risk free
rate of 3% .The volatility measured at the standard deviation of
continuously compounded share returns is based on daily share
prices of the last three years.
18. Borrowings
The borrowings comprise of the following:
Interest rate
(range %) Final Maturity 2011 2010
--------------- ---------------------------------- ----------- -----------
Financial
liabilities
measured at
amortised cost 12.30 -14.62 March - 23 45,254,399 30,800,245
Short-term loans 12.30 -14.62 March - 12 3,367,529 3,882,815
Cash Credit and Working capital arrangements 1,294,930 2,648,982
L C bills discounting and buyers'
credit facility March - 12 402,338 -
Total 50,319,196 37,332,042
---------------------------------------------------- ----------- -----------
Total debt of GBP 50,319,196 (2010: GBP37,332,042) is secured as
follows:
-- Financial liabilities measured at amortised cost of the
Group is fully secured on the property, plant and other
movable current assets of subsidiaries which have availed
such loans and by a personal guarantee by the promoter.
-- The short-term loan and cash credits taken by the Group
is secured against hypothecation of deposits and margin
money as collateral. In addition to the same, a Director
has given personal guarantee for the same.
-- L C bills discounting, buyers' credit facility, cash credit
and other working capital facilities is fully secured
against margin money deposits and other fixed deposits
of the respective entities availing the loan facilities.
Long-term "project finance" loan contains certain restrictive
covenants for the benefit of the facility providers and primarily
requires the Group to maintain specified levels of certain
financial ratios and operating results. The terms of the other
borrowings arrangements also contain certain restrictive covenants
primarily requiring the Group to maintain certain financial ratios.
As of 31 March 2011, the Group has met all the relevant
covenants.
The fair value of borrowings at 31 March 2011 was GBP 50,319,196
(2010: GBP37,332,042). The fair values have been calculated by
discounting cash flows at prevailing interest rates.
The borrowings mature as follows:
Consolidated
------------------------
2011 2010
--------------------------------------------- ----------- -----------
Current liabilities
Amounts falling due within one year 5,064,797 6,531,797
Non-current liabilities
Amounts falling due after 1 year but not
more than 5 years 24,694,855 29,735,967
Amounts falling due in more than five years 20,559,544 1,064,278
----------- -----------
Total 50,319,196 37,332,042
--------------------------------------------- ----------- -----------
19. Trade and other payables
Consolidated
-----------------------
2011 2010
----------------------------- ----------- ----------
Current
Trade payables 9,499,104 3,224,109
Creditors for Capital Goods 314,977 504,283
Other Payables 902,880 189,725
----------- ----------
Total 10,716,961 3,918,117
----------- ----------
Non-current
Trade Payables 1,231,509 2,261,141
----------- ----------
Total 1,231,509 2,261,141
----------- ----------
With the exception of certain trade payables, all amounts
are short term.
-- Trade payables are non-interest bearing and are normally
settled on 45 days terms.
-- Creditors for capital goods are non interest bearing and
are usually settled within a year.
-- Other payables include provision for gratuity and other
provision for expenses.
-- Non current trade payable comprises retention money which
will be settled after completion and successful installation
of the projects.
20. Related party transactions
Where control exists:
Name of the party Nature of relationship
---------------------------------------------- -----------------------
Gita investments Limited Ultimate parent
Caromia Holdings limited Subsidiary
Gita Energy Private Limited Subsidiary
Gita Holdings Private Limited Subsidiary
OPG Power Generation Private Limited Subsidiary
OPG Power Gujarat Private Limited Subsidiary
OPG Renewable Energy Private Limited Subsidiary
OPG Energy Private Limited Subsidiary
Gita Power and Infrastructure Private Limited Subsidiary
---------------------------------------------- -----------------------
Key Management Personnel:
Name of the party Nature of relationship
----------------------- -----------------------
Arvind Gupta Chief Executive
V.Narayan Swami Chief Financial
Officer
M.C.Gupta Chairman
Martin Gatto Director
Ravi Gupta Director
Patrick Michael Grasby Director
----------------------- -----------------------
Related parties with whom the group had transactions during the
period
Name of the Related Party Nature of Relationship
------------------------------------- -------------------------------------
Sri Hari Vallabhaa Enterprises Entity in which Key management
& Investments (P) Limited personnel has Control / Significant
Influence
Dhanvarsha Enterprises & Investments Entity in which Key management
Private Limited personnel has Control / Significant
Influence
Goodfaith Vinimay (P) Ltd Entity over which KMP exercises
Control / Significant Influence
through relatives
Salem Food Products Limited Entity in which Key management
personnel has Control / Significant
Influence
Sri Rukmani Rolling Mill Private Entity in which Key management
Limited personnel has Control / Significant
Influence
Kanishk Steel Industries Limited Entity in which Key management
personnel has Control / Significant
Influence
Gita Energy and Generation Private Entity in which Key management
Limited personnel has Control / Significant
Influence
Gita Devi Relative of Key Management Personnel
Rajesh Gupta Relative of Key Management Personnel
Ravi Gupta Relative of Key Management Personnel
------------------------------------- -------------------------------------
Related party transactions during the year
The following table provides the total amount of transactions
that have been entered into with related parties and the
outstanding balances as the end of the relevant financial
years:
Name of the party 2011 2010
-----------------------------------------------
Amount Amount
(GBP) (GBP)
----------------------------------------------- ---------- ----------
Summary of transactions with related parties
Kanishk Steel Industries Limited
a)Sharing of power 495,323 790,753
b)Cost of Power Generated 24,607 8,946
c) Lease deposit 1,308,553 -
d) Lease rent paid 148,478 236,226
e) Reimbursement of expenses 10,851 16,015
Salem Food Products Limited
a)Sharing of power 23,757 -
b)Interest Received 66,130 89,660
c)Receipt on account of repayment of loan 137,742 -
Sri Rukmani Rolling Mill Private Limited
a)Sharing of power 35,469
b)Sale of coal 1,889 -
Gita devi
a) Rent paid - 2,100
b) Reimbursement of expenses 1,043 -
Ravi Gupta
a)Remuneration 25,000 25,000
Gita Energy and Generation Private Limited
a)Advance paid 2,403,604 1,719,051
Gita Power and Infrastructure Private Limited
a)Advance paid - 3,394,260
----------------------------------------------- ---------- ----------
Name of the party 2011 2010
-----------------------------------------------
Amount Amount
(GBP) (GBP)
----------------------------------------------- ---------- ----------
Summary of balances with related parties.
Salem Food Products Limited
a) Loan outstanding 759,494 890,639
b) Trade and other receivables - 970
Kanishk Steel Industries Limited
a) Trade and other receivables 331,769 632,955
b) Lease deposit outstanding 4,611,201 3,532,783
Sri Rukmani Rolling Mill Private Limited
a) Trade and other receivables 28,028 -
(1) Outstanding balances at the year-end are unsecured,
interest-bearing in case of loans and inter-corporate deposits and
other loans and advances are repayable on demand.. The interest
rates charged closely approximate to the market rates. There have
been no guarantees provided or received for any related party
receivables or payables. For the year ended 31 March 2011, the
Group has not recorded any impairment of receivables relating to
amounts owed by related parties (2010: GBP Nil). This assessment is
undertaken each financial year through examining the financial
position of the related party and the market in which the related
party operates.
(2 ) There are no other long term benefits and termination
benefits which are payable to the key management personnel.
(3 ) The short-term loan and cash credits taken by the Group is
secured against hypothecation of deposits and margin money as
collateral. In addition to the same, a Director has given personal
guarantee for the same.
21. 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 in 2010 or 2011).
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 2011 2010
------------------------------------------------- ------------ ------------
Weighted average number of shares used in
basic earnings per share 292,469,151 286,989,795
Shares deemed to be issued for no consideration
in respect of share based payments 5,104,499 4,383,911
------------ ------------
Weighted average number of shares used in
diluted earnings per share 297,573,650 291,373,706
------------------------------------------------- ------------ ------------
22. Director's Remuneration
Name of Directors 2011 2010
------------------- -------- --------
Arvind Gupta 169,109 157,480
V Narayan Swami 50,734 47,244
Martin Gatto 25,000 25,000
Mike Grasby 25,000 25,000
MC Gupta 25,000 25,000
Ravi Gupta 25,000 25,000
Total 319,843 304,724
------------------- -------- --------
23. Commitments and contingencies
Operating lease commitments
The Group leases land and a functional plant under operating
leases. The leases typically run for a period of 15 to 30 years,
with an option to renew the lease after that date. None of the
leases includes contingent rentals.
Non-cancellable operating lease rentals are payable as
follows:
2011 2010
--------------------------------------------- ---------- ----------
Not later than one year 339,703 236,537
Later than one year and not later than five
years 1,358,810 946,149
Later than five years 2,813,221 2,427,833
---------- ----------
Total 4,511,734 3,610,519
--------------------------------------------- ---------- ----------
During the year ended 31 March 2011, GBP 339,703 (2010: 'GBP'
236,537) was recognised as an expense in the statement of
comprehensive income in respect of operating leases.
Capital commitments
During the year ended 31 March 2011, the Group entered into a
contract to purchase property, plant and equipment for GBP
92,009,451 (2010: GBP 142,629,414).
Guarantees
a. LC and Bank Guarantee are as disclosed below
Particulars As at 31 March 2011 As at 31 March 2010
---------------------------------- -------------------- --------------------
Group Group
---------------------------------- -------------------- --------------------
Towards outstanding Letter of
Credit 9,185,515 5,674,858
---------------------------------- -------------------- --------------------
Towards outstanding Bank
Guarantees 3,293,417 7,814,483
---------------------------------- -------------------- --------------------
Contingent Liabilities
1. As per Tamil Nadu Tax on Consumption or Sale of Electricity
Act, 2003, every licensee shall collect and pay every month to the
Government in the prescribed manner, a tax on the electricity sold
during the previous month at the rates specified. The operating
companies of the group have during the year made sales to non
government customers amounting to GBP 10,067,052 which is liable to
electricity tax. However, no tax has been collected/remitted by the
Company to the government. The Company, based on a legal opinion,
is advised that it is the obligation of the consumer to pay the tax
to the government on such sales. In addition, the Company is
advised that in case of any claim by the Government on such sales,
the same would be charged back to the customers. However,
considering the uncertainty, the Company has disclosed this as an
contingent liability.
2. OPG Energy Pvt Ltd (OPGE) had entered into a Power Sharing
Agreement with Precot Meridian Ltd (PML) on November 30, 2002 and
further had entered into a Memorandum of Understanding on March 30,
2003, in terms of which PML had invested GBP 46,832 in OPGE towards
Equity investment and GBP152,894 towards 13% Cumulative Redeemable
Preference Shares. Under this MoU OPGE had agreed to supply 2MW of
Pro-rata power of 17.5 MW. On July 29, 2005, OPGE redeemed the
Preference share in full and subsequently with approval of PML,
converted the equity shares into Class - C shares, which have no
voting rights. Subsequently, from April 2008, OPGE stopped its
power supply to PML, since in the opinion of OPGE, the obligation
of the Company to supply power to PML ceased with the redemption of
the preference shares and subsequent re-classification of its
shares into non-voting shares. However, PML has raised a demand
through arbitration for an amount of GBP 786,068 towards the
additional cost incurred by PML in getting power through other
sources for the period from April 2008 to October 2010 and GBP
275,485 for litigation fee along with 18% interest against the
company vide its claim on December 26, 2010 under the Arbitration
& conciliation act 1996 and the matter is pending before the
Arbitration Tribunal. OPGE has sought the opinion of its legal
counsel and believes that there is no merit in the claim of PML.
However, considering the uncertainty, the claim by PML is disclosed
as contingent liability.
24. Financial risk management objectives and policies
The Group's principal financial liabilities, comprises of loans
and borrowings, trade and other payables, and other current
liabilities. The main purpose of these financial liabilities is to
raise finance for the Group's operations. The Group has loans and
receivables, trade and other receivables, and cash and short-term
deposits that arise directly from its operations. The Group also
hold investments designated at fair value through profit or loss
and available-for-sale categories.
The Group is exposed to market risk, credit risk and liquidity
risk.
The Group's senior management oversees the management of these
risks. The Group's senior management is supported by a financial
risk committee that advises on financial risks and the appropriate
financial risk governance framework for the Group. The financial
risk committee provides assurance to the Group's senior management
that the Group's financial risk-taking activities are governed by
appropriate policies and procedures and that financial risks are
identified, measured and managed in accordance with Group policies
and group risk appetite.
The Board of Directors reviews and agrees policies for managing
each of these risks which are summarised below:
Market risk
Market risk is the risk that the fair values of future cash
flows of a financial instrument will fluctuate because of changes
in market prices. Market prices comprise three types of risk:
interest rate risk, currency risk and other price risk, such as
equity risk. Financial instruments affected by market risk include
loans and borrowings, deposits, available-for-sale investments and
investment at fair value through profit or loss.
The sensitivity analyses in the following sections relate to the
position as at 31 March 2011 and 31 March 2010.
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 floating rate borrowings
held at 31 March 2011, 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 floating interest
rates.
At 31 March 2011 and 31 March 2010, the Group had no interest
rate derivatives.
The sensitivity analyses have been prepared on the basis that
the amount of net debt, the ratio of fixed to floating interest
rates of the debt as at 31 March 2011.
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 2011 would decrease or increase by GBP
143,355 (2010: GBP 162,315). Increase/decrease in interest rates
would have an immaterial impact on the Group's equity.
Increase/decrease in interest rates would have no impact on the
Company's equity as there are no borrowings.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rate. The Group's presentation currency
is the Great Britain GBP A majority of our assets are located in
India where the Indian rupee is the functional currency for our
subsidiaries. Currency exposures also exist in the nature of
capital expenditure and services denominated in currencies other
than the Indian rupee.
Currency fluctuations may have a large impact on our Group
financial results. We are subject to currency risks affecting the
underlying cost base in the operating subsidiary companies and also
the translation of unit cash costs, profit or loss and the
Statement of financial position (including non-Great Britain GBP
denominated borrowings) in the consolidated financial statements,
where the functional currency is not the Great Britain GBP.
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 with
Indian Rupee being the major foreign currency exposure of the
Group's main operating subsidiaries:
As at March 31 2011 As at March 31 2010
-------------- ------------------------------ ------------------------------
Financial Financial Financial Financial
Currency Assets Liabilities Assets Liabilities
-------------- -------------- -------------- -------------- --------------
Indian Rupee
(INR) 4,428,878,407 3,969,312,333 3,333,877,427 2,538,659,229
United states - 11,897,358 - -
Dollar
(USD)
-------------- -------------- -------------- -------------- --------------
Set out below is the impact of a 10% change in the Indian Rupee
and US dollar on profit arising as a result of the revaluation of
the Group's foreign currency financial instruments:
As at March 31 2011 As at March 31 2010
---------------------- ------------------------- -------------------------
Effect of 10% Effect of 10%
Strengthening Strengthening
Closing of GBP on net Closing of GBP on net
Currency Rate earnings Rate earnings
---------------------- -------- --------------- -------- ---------------
Indian Rupee (INR) 72.60 (642,936) 67.87 (1,065,162)
United states Dollar
(USD) 45.29 (742,124) - -
---------------------- -------- --------------- -------- ---------------
The impact on total equity is the same as the impact on net
earnings as disclosed above.
Credit risk analysis
Credit risk is the risk that counterparty will not meet its
obligations under a financial instrument or customer contract,
leading to a financial loss. The Group is exposed to credit risk
from its operating activities (primarily for trade and other
receivables) and from its financing activities, including
short-term deposits with banks and financial institutions, and
other financial assets.
The maximum exposure for credit risk at the reporting date is
the carrying value of each class of financial assets amounting to
GBP 122,022,795 (2010: GBP 55,266,730).
The Group has exposure to credit risk from a limited customer
group on account of supply of power. However, the Group ensures
concentration of credit does not significantly impair the financial
assets since the customers to whom the exposure of credit is taken
are well established and reputed industries engaged in their
respective field of business. The credit worthiness of customers to
which the Group grants credit in the normal course of the business
is monitored regularly. The credit risk for liquid funds and other
short-term financial assets is considered negligible, since the
counterparties are reputable banks with high quality external
credit ratings.
The Group's/ Company's maximum exposure for financial guarantees
are noted in note 23.
The Group's management believes that all the above financial
assets, except as mentioned in note 12 and 13, 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 ongoing 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 2011:
Current Non - current Total
-----------
within 12 Later than
On demand months 1-5 years 5 years
------------- ----------- ----------- ----------- ----------- -----------
Borrowings 9,644,576 37,494,29 17,733,219 64,872,091
Trade and other payables 10,544,783 1,231,509 - 11,776,292
Other current liabilities 241,113 - - 241,113
Total 20,430,472 38,725,805 17,733,219 76,889,496
-------------------------- ----------- ----------- ----------- -----------
The Company's contractual undiscounted cash flows payable under
financial liabilities as at 31 March 2011 is GBP 72,691 (2010: GBP
44,747).
Capital management
Capital includes equity attributable to the equity holders of
the parent and debt.
The primary objective of the Group's capital management is to
ensure that it maintains a strong credit rating and healthy capital
ratios in order to support its business and maximise shareholder
value Objectives include, among others:
-- Ensure Group's ability to meet both its long-term and
short-term capital needs as a going concern;
-- 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 2011 and 2010.
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.
The SPVs in the Group engaged in the business of captive power
generation are subject to statutory requirement of maintaining the
captive consumers' equity at 26% of the total equity. Apart from
the aforementioned requirement, there are no other imposed capital
requirements on Group or entities, whether statutory or
otherwise.
The Capital for the reporting periods under review is summarised
as follows:
2011 2010
-------------------------------------------- ------------- -------------
Total equity 151,167,738 88,585,682
Less: Cash and cash equivalents (71,104,280) (14,168,453)
-------------------------------------------- ------------- -------------
Capital 80,063,458 74,417,229
Total equity 151,167,738 88,585,682
Add: Borrowings (including buyer's credit) 50,319,196 37,332,042
-------------------------------------------- ------------- -------------
Overall financing 201,486,934 125,917,724
Capital to overall financing ratio 0.40 0.59
-------------------------------------------- ------------- -------------
25. Summary of financial assets and liabilities by category and
their fair values
Set out below is a comparison by class of the carrying amounts
and fair value of the Group's financial instruments that are
carried in the financial statements:
Carrying amount Fair value
------------------------
2011 2010 2011 2010
------------------------ ------------ ----------- ------------ -----------
Financial assets
Cash and cash
equivalents (1) 71,104,280 14,168,453 71,104,280 14,168,453
Available-for-sale
quoted instruments
(4) 8,851,675 12,977,604 8,851,675 12,977,604
Loans and Receivables
(4) 36,634,568 30,402,076 36,634,568 30,402,076
Current trade and other
receivables (1) 8,576,366 3,348,207 8,576,366 3,348,207
Non-current trade and
other receivables (2) 6,941,814 5,470,257 6,941,814 5,470,257
------------------------ ------------ ----------- ------------ -----------
132,108,703 66,366,597 132,108,703 66,366,597
------------------------ ------------ ----------- ------------ -----------
Financial liabilities
Long-term "project
finance" loans (3) 45,254,399 30,800,245 45,254,399 30,800,245
Short-term loans (1) 4,662,459 6,531,797 4,662,459 6,531,797
LC Bill discounting &
buyers' credit
facility (1) 402,339 - 402,339 -
Current trade and other
payables (1) 10,544,783 3,918,117 10,544,783 3,918,117
Non-current trade and
other payables (3) 1,231,509 2,261,141 1,231,509 2,261,141
------------------------ ------------ ----------- ------------ -----------
62,095,489 43,511,300 62,095,489 43,511,300
------------------------ ------------ ----------- ------------ -----------
The fair value of the financial assets and liabilities are
included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a
forced or liquidation sale. 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.) Long-term loans and receivables and trade receivables are
evaluated by the Group based on parameters such as interest rates,
individual creditworthiness of the customer and the risk
characteristics of the financed project. As of 31 March 2011, the
carrying amounts of such receivables, net of allowances,
approximate their fair values.
(3.) The fair value of unquoted equity instruments at fair value
through profit and loss account, 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.
(4.) Fair value of available-for-sale instruments and other
financial assets held for trading purposes are derived from quoted
market prices in active markets, if available. In certain cases,
fair value is estimated using an appropriate valuation
technique.
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 Level Level
1 2 3 Total
--------------------------------- ---------- ------ ------ ----------
Financial assets at FVTPL
Non-derivative financial assets
held for trading - - - -
Available-for-sale financial
assets
Unquoted equities - - - -
Quoted equities 8,836,450 - - 8,836,450
---------- ------ ------ ----------
Total 8,836,450 - - 8,836,450
---------- ------ ------ ----------
There were no transfers between Level 1 and 2 in the period.
26. Restatement
a. During the year, the Group identified that negative goodwill
arising on common control transactions during financial year ended
March 31, 2009 was presented through profit and loss which was not
in accordance with the accounting policy for common control
transactions as adopted by the Group which requires identified
negative goodwill on common control transactions to be routed
through equity. Further, on a re-computation of the reported
negative goodwill, the Group identified an error in the model used
which resulted in a reduction in the reported negative goodwill to
the extent of GBP722,289 for the year ended March 31, 2009. The
impact of this error was an understatement in the reported other
reserves as at 31 March, 2009 by GBP2,125,121 with a corresponding
overstatement in Retained earnings by GBP1,413,721 and in
translation reserve by GBP 722,289. The Impact on the Statement of
Comprehensive Income was a reduction in the reported profits for
the year ended March 2009 by GBP1,413,721.
b. The company has in the previous years accounted for exchange
difference arising on translating monetary items at reporting date
through other comprehensive income which needs to be brought in
conformity with IAS 21, which requires such exchange differences to
be recognised in profit or loss. During the year ended 2010 the
company accounted an amount of GBP2,594,435 (2009: GBP3,135,891)
through other comprehensive income as foreign currency translation
reserve which has been restated and recognised through the profit
and loss account resulting in an increase in retained earnings as
on 1 April 2009 by GBP3,135,891 and a decrease in profit for the
year ended 2010 by GBP2,594,435.
On account of the above revisions and a change in the method of
presentation, the cash flow statements have been restated for the
year ended march 2010. Considering that the above revisions only
impact the components within equity with no impact on other
balances of the statement of financial position as at 31 March,
2009, the Group has not presented a third statement of Financial
position at the beginning of the earliest comparative period as
required by IAS1.
27. Reclassification of the consolidated financial statements
for the prior years
Prior year's figures in the consolidated financial statements
have been regrouped and reclassified wherever necessary to conform
to the current year's figures. The Group has reclassified the
following items which do not have any impact upon the income
statement, cash flows, equity and financial position and
performance of the group.
Capital Advances relating to construction of power stations
amounting to GBP21,160,152 which was disclosed as non current has
now been reclassified to Investments and other financial assets
(Current).
Capital Work in Progress relating to construction of power
stations amounting to GBP2,387,533 which was disclosed as non
current has now been reclassified to Investment and other financial
assets.
Restricted Cash amounting to GBP1,333,253 which was disclosed as
current has been reclassified to non current.
Financial assets amounting to GBP259,123 has been reclassified
to Trade and Other receivables.
Current Tax Assets (GBP2,003,214) and Provision for Taxation
(GBP 1,599,018) which were shown on a gross basis have been
disclosed on a net basis.
The Group has made significant presentational changes in the
income statement, to further improve comparability of its results
to those of other Power sector companies and to allow readers to
make a more accurate assessment of the sustainable earnings
capacity of the Group.
Operating revenue (GBP 1,357,189) and Cost of Generation (GBP
1,196,914) - relating to purchase and sale of coal have been
regrouped to other income.
Other expenses (GBP 495,104), employee costs (GBP 1,373,055),
depreciation (GBP 195,461), pre operative expenses (GBP 1,171,626)
have been reclassified to general and administration expenses.
Other gains and losses (GBP 1,028,559) has been reclassified to
other income (GBP 84,035) and to Finance Income (GBP 944,524).
An amount of GBP 46,252 has been reclassified from finance
income to finance expense.
28. Subsequent Events
OPGPG acquired certain assets of M/s Bellary Steels & Alloys
Ltd, which consist primarily of 120 acres of land with partially
completed 12 MW power plant for a consideration of GBP 8.89 million
(Rs. 649 million). The company was not operational for the last two
years and was under liquidation. Subsequent to the reporting date,
the group, having paid the bid price in full, has acquired
possession of the same. The group has assessed this transaction as
an acquistion of assets and not as a acquisition of business in the
absence of any process which is part of a set of integrated
activities to create any output.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR USSURAAAWAUR
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