TIDMOPG
RNS Number : 9167T
OPG Power Ventures plc
14 December 2011
14 December 2011
OPG Power Ventures PLC
("OPG" or the "Company")
Unaudited Results for the Six Months ended 30(th) September,
2011
Higher output from flagship asset, growth projects remain on
track
OPG Power Ventures PLC, the developer and operator of group
captive power plants in India announces its unaudited results for
the six months ended 30(th) September 2011.
Financial Highlights
-- Revenue GBP23.85m up 166%
-- EBITDA GBP6.34m up 34%
-- Profit attributable to shareholders up 35% and EPS up 11% (on a higher capital base)
-- Average tariff achieved in the period of Rs 4.72/KWh (30 Sep 2010: Rs 4.80/KWh)
-- Contract signed for 53 MW at Rs 5.05/Kwh for period October 2011 to May 2012
-- Cash & cash equivalents of GBP66.84m; long- term borrowings of GBP62.78m
Operational Highlights
-- No coal shortages experienced during the period
-- Delivered power up 190% on comparative period in 2011 and 8.5% on preceding six months
-- 77 MW Chennai I at average 91% PLF delivering 15% more units than preceding six months
-- Accelerated delivery of 77 MW Chennai II project - expected in Q2 2012
-- 80 MW Chennai IV brownfield project - construction and equipment delivery commenced
-- Coastal Regulatory Zone (CRZ) environmental clearance for 300 MW Gujarat project
Commenting on the results, Mr M C Gupta, Chairman said: "I'm
pleased to report that OPG has continued its expansion programme
and announced further growth during this period that keeps us on
track to achieve our targeted capacity of 1,250 MW by 2015. Our
current trading environment remains challenging but during the half
year OPG demonstrated the resilience and flexibility of our assets
and our operating model, both of which I referred to in the 2011
Annual Report. I commend the strength of our management team in
optimising the performance of our flagship asset, 77 MW Chennai I,
and in doing so, working hard to restrict the impact of current
external headwinds. Concurrently, the focus has been maintained on
our goal of delivering 1,250 MW of profitable generation capacity
and as much of these growth projects are planned to be replicas of
Chennai I, the optimisation of that plant strengthens OPG's long
term prospects further.
"We are confident about our ability to maintain our operating
margins through the remainder of the year. Most importantly, with
our growth projects on track and the fundamentals of the power
sector in India remaining intact, I believe we continue to be well
placed for the longer term. This is particularly so given the
positive structural developments now taking place in our sector
such as those relating to a move to more realistic utility power
tariffs."
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) 207653 0030
Tavistock Communications
Simon Hudson +44 (0) 20 7920 3150
Disclaimer
This announcement does not constitute or form part of any offer
or invitation to sell or issue, or any solicitation of any offer to
purchase or subscribe for any securities. The making of this
announcement does not constitute a recommendation regarding any
securities. Certain statements, beliefs and opinions contained in
this announcement, particularly those regarding the possible or
assumed future financial or other performance of OPG, industry
growth or other trend projections are or may be forward looking
statements. Forward-looking statements can be identified by the use
of forward-looking terminology, including the terms "believes",
"estimates", "anticipates", "expects", "intends", "plans", "goal",
"target", "aim", "may", "will", "would", "could" or "should" or, in
each case, their negative or other variations or comparable
terminology. These forward looking statements include all matters
that are not historical facts. By their nature, forward-looking
statements involve risks and uncertainties because they relate to
events and depend on circumstances that may or may not occur in the
future and may be beyond OPG's ability to control or predict.
Forward-looking statements are not guarantees of future
performance. No representation is made that any of these statements
or forecasts will come to pass or that any forecast result will be
achieved. Neither OPG, nor any of its associates or directors,
officers or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in
any forward-looking statements in this announcement will actually
occur. You are cautioned not to place undue reliance on these
forward-looking statements. Other than in accordance with its legal
or regulatory obligations, OPG is not under any obligation and OPG
expressly disclaims any intention or obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
No statement in this announcement is intended as a profit
forecast or a profit estimate and no statement in this announcement
should be interpreted to mean that earnings per OPG share for the
current or future financial years would necessarily match or exceed
the historical published earnings per OPG share.
Chief Executive's Review
During the period, OPG continued to make significant progress
towards achieving its targeted capacity of 1,250 MW by 2015. The
company announced an additional 80 MW brownfield project,
accelerated the delivery of the 77 MW Chennai II and identified
development efficiencies achievable through the combination of
other projects at Chennai. Furthermore, construction at the 300 MW
Gujarat was commenced. All growth projects remain on track.
In the period under review, OPG has demonstrated the merits of a
flexible group captive/short term sales model which secure for the
company the best prices available in the market. This is
particularly important as it has helped to weather the impact of
external factors upon our business. In addition, we have a stronger
expectation of higher tariffs both in the group captive and short
term markets following structural changes in our industry that are
now under way and to which I refer in more detail below.
Our flagship asset, 77 MW Chennai I, the design and construction
of which is being replicated in our other projects, performed
particularly strongly delivering 15% higher output of power
compared with the immediately preceding six month period.
Increased revenues across operations in the period compared to
the corresponding period of the prior year reflected the operation
of Chennai I for the whole of the period. Average tariffs achieved
per kWh of Rs 4.72 were similar to the corresponding period in the
prior year, re-affirming the advantages of our flexible business
model. This notwithstanding that the average tariff was lowered as
a result of sales to TNEB between June and September 2011,
currently being booked at a tariff of Rs 3.80, a rate that the
Company continues to challenge.
Gross margins remained healthy at 34% and the fuel-flexibility
of Chennai I in particular enabled us to maintain a high level of
production and gross margins in the wake of increased average
international coal prices and the imposition of a 5 per cent import
duty by the Indian government.
Rising interest rates and a sharply appreciating US dollar
against the Indian Rupee also impacted power producers including
ourselves. Our current expectation, based on certain market data,
is for present interest rates to prevail for the remainder of the
financial year trending downwards thereafter and for the Indian
Rupee to remain close to prevailing levels for the remainder of the
year. Notably, capital equipment purchases are principally
denominated in Indian Rupees and accordingly projects remain within
budget.
Overall, the strong operating performance of Chennai I eclipsed
that of our smaller, legacy plants in which the group's economic
interest is also much smaller. Accordingly, despite a challenging
trading environment, OPG delivered earnings per share of 0.61p in
the period, on an enlarged equity base of 351 million ordinary
shares.
Most importantly, we remain confident in our ability to bring
development projects on-line within our stated timeline and budget,
leveraging our significant in-house capabilities and experience.
OPG remains on track to achieve its target of 742 MW of capacity by
2013 and a total 1,250 MW of capacity by 2015.
Structural change on the horizon - expected tariff changes are
good for OPG
State utilities, constituting the country's dominant power
producers and distributors, have held their price lines for the
sale of power virtually static in the last several years
notwithstanding cost and supply pressures. This has had the effect
of affecting margins for all producers especially private players
with long term PPA's with fixed pricing over a 20-25 year
period.
Looking ahead, however, there are clear signs that the long
awaited structural changes in the sector, primarily in the form of
realistic tariffs and pricing by the utilities, are under way.
Given the stretched financial position of the state utilities, the
central regulator has directed state regulators to ensure that
tariffs are reviewed annually. Several state utilities have
already, in the last few weeks, filed applications with their state
regulators for significant tariff increases.
In Tamil Nadu, where the State Electricity Board's ("SEB")
financial position is considered to be particularly acute, the SEB
has acknowledged the position and in seeking to achieve partial
redress for accumulated losses has filed an application with the
state regulator for a minimum tariff increase of 25 % over current
levels for industry. In addition, the SEB has asked that the
regulator permit it to pass on fuel price increases to its
customers by means of a monthly surcharge. If adopted in the
requested form, we expect short term tariffs including tariffs
contracted with the SEB to move upwards correspondingly and for OPG
to see the benefit of this. Tariffs charged to industrial customers
under the group captive model are correlated to SEB rates and
should therefore also rise.
We expect that any new pricing will apply, following regulatory
decisions, by April 2012. OPG welcomes the initiatives under way as
a realistic tariff regime is one that will lead to a healthier
utility sector.
India's power current power balance remains unchanged
The period under review saw no substantive improvement in the
country's power supply position with peak deficits of some 10.6 %
at the end of September, 2011. Addition of new capacity during the
current Five year Plan (April 2007 - March 2012) up to the end of
September 2011 was 50 GW, indicating that no more than 65 % of the
target capacity of 78 GW could be achieved by the end of the Plan
period. Power deficits are expected to remain at 10-12% in the
medium term due to delays in the scheduled capacity to be
commissioned and OPG is well positioned to benefit by bringing
additional capacity in the next 24 months.
Operational Review
Total power delivered ahead of prior periods as our flagship
asset performed well
The Group delivered a record 405.2 GWh of power to its customers
compared with 139.6 GWh in the corresponding period of the prior
year and 373.5 GWh in the six months ended 31 March 2011. This
represents an increase of 190% on the prior year and 8.5% on the
immediately preceding six month period. This increased level of
output and the resulting increased contributions partly mitigated
the impact of cost increases such as coal, exchange rates and
interest rates.
77 MW Chennai I
Following its stabilisation in August 2010, this plant has
operated at consistent output levels averaging 85%. During the
period under review the plant operated at an average load factor of
91%. About 50 MW of the output from this plant, now in its second
year of operations, is being sold to the Tamil Nadu Electricity
Board with the remainder being sold to industrial customers under
short term contracts. The current financial year, to 31 March 2012,
is expected to see the first full year contribution from this
plant.
Since the commencement of operating at the 77 MW plant, supplies
of linkage coal are being received as committed. Unlike other
producers OPG is not affected by any shortages as the proximity of
our plants to ports and the capability of our boilers means we are
able to import coal. Since OPG boilers can burn either exclusively
imported high moisture coal or Indian coal or a blend of the two
coals in any proportion, our new plants coming on stream in 2012
and 2013 are also expected to be insulated from in this way.
Accordingly, we have not experienced and currently do not
anticipate any coal supply shortages at our presently slated
operations and developments.
25.4 MW Natural gas plant, Mayavaram
The Mayavaram gas fired plant, in which the Company has a 44%
economic interest, whilst remaining profitable, generated lower
output during the period due to limited availability of gas. We
expect the operations of this plant to continue to at current
levels for the remainder of the year and for margins to be affected
by a 15-20% rise in input gas prices going forward.
10 MW Waste heat plant, Chennai
Output levels at the 10 MW plant, in which the Company has a 33%
economic interest, were lower at about 55 % of capacity during the
period due to limited availability of quality iron ore for the
supplying sponge iron (waste heat) furnaces during the greater part
of the first half. The lower quality ore resulted in reduced heat
output and hence power production. We expect the average to remain
at this level until normalisation of waste energy supplies from the
sponge iron plant (not owned by the Company).
Whilst their performance is currently consolidated as part of
the Group's results, due to the Group's low economic interest, the
impact of the natural gas and waste heat units on Group earnings
per share has become less material now than previously and this
trend is expected to continue as each of our projects is
commissioned.
Funded development projects of 629 MW are progressing on
schedule to achieve 1,250 MW by 2015
In all of the projects below, land and environmental approvals
have been received and equipment ordered. Equity and fuel supply
arrangements are in place for all the projects except Chennai Phase
IV, for which a coal linkage is being progressed. With the
principal risks mitigated, the Group's priority is to deliver 742
MW on-time and budget by 2013 and to increase its generation
portfolio to 1,250 MW by 2015.
Chennai
OPG is implementing development plans to expand generation
capacity at its Chennai site from the present 77 MW level to a
total of 394 MW by 2013.
77 MW Chennai II:The construction of this 77 MW unit, a twin of
the existing operational unit, has made further appreciable
progress and, as announced previously, is expected to see
accelerated commissioning during the second quarter of calendar
2012.
160 MW Chennai III: This relates to the projects (originally
conceived as two separate modules of 80 MW each) which will now be
developed as an upgraded single unit of 160 MW. Construction work
relating to this unit will commence shortly. Environmental
approvals are already held for this development for which the
necessary equipment has also been ordered. The unit is on course
for commissioning in 2013.
80 MW Chennai IV:Construction of this additional 80 MW unit,
announced in July 2011, has commenced and commissioning is
anticipated in calendar year 2013. Environmental approvals have
been received, construction work at site has commenced and
equipment delivery commenced for this additional unit on the
present site. The equity component of the capex for this project
will be met through internal cashflows.
300 MW (2 x 150) Gujarat
Formal CRZ approval was received in September 2011 from the
Ministry of Environment and Forests ("MoEF") for proposals in
connection with sea water intake and outfall for this 300MW (2
x150) power project in Gujarat. Construction at the site has
commenced and deliveries of equipment are expected to start
shortly. Some local objections relating to the environmental
clearances already obtained are in the process of being resolved
and have not impacted our construction schedule. Accordingly, the
project is still expected to be commissioned in calendar 2013.
Financial Review
OPG's revenue increased by 166 % to GBP23.85 million (GBP8.95
million Sep 2010) in the six months ended 30 September 2011. Gross
Profit increased by 86% to GBP8.04 million (GBP4.31 million Sep
2010). This reflected the operation of Chennai I for the whole of
the period ended 30 September 2011.
Average tariffs comparable with prior period and expected to
improve in second half
The average tariff achieved on all sales in the first six months
of the year was Indian Rupees (Rs) 4.72 per kWh. The average tariff
in the period has been lowered as a result of sales to TNEB between
June and September 2011 currently being booked at a tariff of Rs
3.80, a rate that continues to be challenged by the Company.
Following a recently announced order issued by the Tamil Nadu
Electricity Regulator to the Tamil Nadu Electricity Board ("TNEB"),
the Company has now signed an agreement with TNEB for the supply by
the Company of 53 MW between October 2011 and May 2012 at a price
of Rs 5.05 per kWh. On this basis and taking into account recent
sales to industrial and commercial customers, the Company currently
expects average tariffs across all power sales for the year ending
31 March 2012 to be approximately Rs 4.90 comparable with last
year's average tariff of Rs 4.95 per kWh.
Flexible revenue model - Resilient gross margins expected to be
maintained
Gross margins were 34%, notably taking into account increased
coal prices and adverse exchange rate movements which also have an
impact on the cost of coal. The fuel-flexibility of Chennai I in
particular enabled us to optimize our coal purchases even with some
additional cost resulting from the imposition of a 5 per cent
import duty by the Indian government.
The period since July 2010 has witnessed a steep and persistent
depreciation of the Rupee relative to the US Dollar and this has
had the effect of increasing fuel costs by about 15 % to 20 % for
the rest of the year. Given that OPG revenues are based on
short-term contracts ranging around 5 per Kwh, the Company has been
able to absorb this increase better than other producers most of
whom have a lower average revenue base under the long term PPA
model.
Interest cost
Interest rates have increased from c.13% to c.15.5% in the last
12 months, in response to rising inflation rates, and have impacted
businesses and in particular the infrastructure sector across
India. There is a widely publicized expectation that interest rates
may start to come down in the next fiscal year. Due to the
capitalization of project related interest costs, the impact on our
earnings is deferred until the amortization of such projects
commences.
Translation effect
Results for the period have also been affected by the impact of
an appreciation in GBP versus Indian Rupee, the group's functional
currency, from Rs 69 to Rs 73.5.
Outlook
Our trading environment remains a challenging one with many of
the macro features described above still in existence. However, we
believe some of the structural changes that are appearing on the
horizon, such as those potentially relating to tariffs, are likely
to be helpful to our industry. Most importantly, our projects
remain on track and accordingly we remain positive about the
Company's long term prospects. Having taken steps to optimize the
performance of our key "model" asset and having established a
significant contract for sale of power during the remainder of this
year we remain confident about our ability to maintain our
operating margins during the rest of the year.
We are proud of the in-house capabilities built through the
Chennai I project in both project execution and plant operations
and thank our team in their unremitting efforts.
We would also like to thank our shareholders for their support
and I look forward to the reporting the Company's continuing
progress upon completion of the second half of the financial
year.
Arvind Gupta
Chief Executive
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 30 September 2011
(All amounts in GBP, unless otherwise stated)
Consolidated
30/09/2011 30/09/2010 31/03/2011
(Unaudited) (Unaudited) (Audited)
------------- ------------- -------------
Revenue 23,855,762 8,952,068 33,147,184
Cost of revenue (15,811,704) (4,634,263) (18,669,898)
Gross profit 8,044,058 4,317,805 14,477,286
Other income 373,566 907,928 2,537,869
Distribution Cost (1,199,051) (428,854) (865,832)
General and administrative expenses (1,764,473) (460,821) (1,808,943)
Operating profit 5,454,101 4,336,058 14,340,379
Financial costs (3,213,932) (543,927) (2,647,296)
Financial income 1,736,596 441,538 1,326,695
------------- ------------- -------------
Income from continuing operations
(before tax, non operational and
/ or exceptional items) 3,976,764 4,233,670 13,019,778
Employee Share Option expenses (727,124) (727,124) (1,454,247)
Pre-Operative expenses (relating
to projects under construction) (217,032) (171,073) (403,200)
Profit/(loss) before tax 3,032,609 3,335,474 11,162,332
Tax Expense (881,643) (661,007) (2,408,443)
Profit/(loss) for the year 2,150,966 2,674,467 8,753,889
============= ============= =============
Profit/(loss) for the year attributable
to:
Owners of the parent 2,148,050 1,591,462 6,227,842
Non controlling interests 2,915 1,083,004 2,526,047
Earnings per share
Basic earnings per share (in Pence) 0.611 0.555 2.129
Diluted earnings per share (in
Pence) 0.602 0.549 2.093
Other Comprehensive Income
Available for Sale Financial Assets
- Reclassification to profit and
loss 169,288 50,621 185,459
- Current year losses on re-measurement (117,644) (19,812) (255,542)
Currency translation differences
on translation of foreign operations (4,803,747) (4,948,972) (5,076,545)
Other comprehensive income (4,752,103) (4,918,163) (5,146,628)
Total comprehensive income for
the year (2,601,137) (1,516,573) 3,607,261
============= ============= =============
Total comprehensive income for
the year attributable to:
Owners of the parent (1,980,544) (2,284,757) 1,627,114
Non controlling interests (620,592) 768,185 1,980,147
(2,601,137) (1,516,573) 3,607,261
------------------------------------------ ------------- -------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 September 2011
(All amounts in GBP, unless otherwise stated)
Consolidated
------------------------------------------
30/09/2011 30/09/2010 31/03/2011
(Unaudited) (Unaudited) (Audited)
------------- ------------- ------------
ASSETS
Non Current
Property, plant and equipment 79,740,424 64,694,151 73,995,296
Investments and other financial
assets 11,895,047 4,958,451 6,941,814
Deferred tax asset 156,883 39,576 155,512
Restricted cash 1,063,800 422,377 1,214,699
Total Non Current assets 92,856,155 70,114,554 82,307,321
------------- -------------
Current
Inventories 7,841,872 4,050,953 5,605,523
Trade and other receivables 12,062,870 8,805,564 8,576,366
Cash and Cash Equivalents 62,529,002 17,012,201 71,104,280
Restricted Cash 2,775,913 985,545 1,080,877
Current tax assets 323,100 348,144 272,105
Investments and other financial
assets 53,768,764 30,449,488 45,486,243
Total Current assets 139,301,521 61,651,895 132,125,394
------------- -------------
Total Assets 232,157,676 131,766,449 214,432,715
------------- ------------- ------------
EQUITY AND LIABILITIES
Equity:
Equity attributable to owners
of the parent:
Share Capital 51,671 42,187 51,671
Share Premium 124,316,524 66,943,323 124,316,524
Other components of Equity 4,402,373 7,074,105 7,803,844
Retained earnings/ (accumulated
deficit) 11,198,076 4,413,647 9,050,027
------------- ------------- ------------
Total 139,968,645 78,473,262 141,222,066
Non-Controlling Interests 9,187,217 8,595,847 9,807,809
------------
Total Equity 149,155,862 87,069,109 151,029,876
------------- ------------- ------------
Liabilities
Non current
Borrowings 54,862,631 28,507,146 45,254,399
Trade and other payables 1,153,224 2,129,252 1,231,509
Deferred tax liability 1,472,509 568,654 849,446
Total Non Current liabilities 57,488,365 31,205,052 47,335,354
------------- -------------
Current
Borrowings 7,926,680 2,576,129 5,064,797
Trade and other payables 12,472,948 10,721,346 10,716,961
Other liabilities 5,051,158 194,664 241,113
Current Tax Liabilities 62,664 148 44,615
------------- ------------- ------------
Total Current liabilities 25,513,450 13,492,288 16,067,486
------------- ------------- ------------
Total Liabilities 83,001,815 44,697,340 63,402,840
------------- ------------- ------------
Total Equity and Liabilities 232,157,676 131,766,449 214,432,715
--------------------------------- ------------- ------------- ------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 30 September 2011
(All amounts in GBP, unless otherwise stated)
GROUP Share Share Other Forign Retained Total of Non-Controlling Total
capital Premium Reserves Currency earnings Parent Interests Equity
Translation equity
reserve
-------- ------------ ---------- ------------ ----------- ------------ ----------------
Balance at 1 April,
2011 51,671 124,316,524 4,614,203 3,189,641 9,050,027 141,222,066 9,807,809 151,029,876
Issue of Equity
Shares - - - - - - - -
Employee Share
based payment
options - - 727,124 - - 727,124 - 727,124
Transactions with
owners 51,671 124,316,524 5,341,327 3,189,641 9,050,027 141,949,190 9,807,809 151,757,000
-------- ------------ ---------- ------------ ----------- ------------ ----------------
Profit for the year - - - - 2,148,049 2,148,049 2,915 2,150,965
Currency
translation
differences - - - (4,118,521) - (4,118,521) (685,226) (4,803,747)
Gains/(losses) on
sale /
re-measurement of
available-for-sale
financial assets - - (10,074) - - (10,074) 61,718 51,644
Total comprehensive
income
for the year - - (10,074) (4,118,521) 2,148,049 (1,980,546) (620,592) (2,601,138)
-------- ------------ ---------- ------------ ----------- ------------ ----------------
Balance at 30
September
2011 51,671 124,316,524 5,331,253 (928,879) 11,198,076 139,968,645 9,187,217 149,155,862
-------------------- -------- ------------ ---------- ------------ ----------- ------------ ---------------- ------------
Balance at 1 April,
2010 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 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 51,671 124,316,524 4,683,139 - - 139,594,952 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 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,
2010 42,187 66,943,323 3,228,892 7,721,432 2,822,186 80,758,020 7,827,662 88,585,682
Employee Share
based payment
options - - 727,124 - - 727,124 - 727,124
Transactions with
owners 42,187 66,943,323 3,956,016 - - 81,485,144 7,827,662 89,312,806
-------- ------------ ---------- ------------ ----------- ------------ ----------------
Profit for the year - - - - 1,591,462 1,591,462 1,083,005 2,674,466
Currency
translation
differences - - - (4,634,153) - (4,634,153) (314,819) (4,948,972)
Gains/(losses) on
sale /
re-measurement of
available-for-sale
financial assets - - 30,809 - - 30,809 - 30,809
Total comprehensive
income
for the year - - 30,809 3,087,279 4,413,647 (3,011,882) 768,186 (2,243,696)
-------- ------------ ---------- ------------ ----------- ------------ ----------------
Balance at 30
September
2010 42,187 66,943,323 3,986,825 3,087,279 4,413,647 78,473,262 8,595,848 87,069,110
-------------------- -------- ------------ ---------- ------------ ----------- ------------ ---------------- ------------
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 September 2011
(All amounts in GBP, unless otherwise stated)
For the period For the For the
ended 30th period ended year ended
September 2011 30th September 31st March
2010 2011
(Unaudited) (Unaudited) (Audited)
---------------- ----------------
Cash flows from operating activities
Profit / (Loss) for the year
after Tax 2,150,966 2,674,467 8,753,889
Income tax expense 881,643 661,007 2,408,443
Financial Expenses 3,213,932 27,275 2,647,296
Financial Income (1,349,816) (885,846) (1,326,695)
Share based compensation costs 727,124 727,124 1,454,247
Depreciation 776,487 410,040 1,208,461
6,400,337 3,614,066 15,145,641
Movements in Working Capital
(Increase) / Decrease in trade
and other receivables (4,233,803) (5,891,265) (5,706,441)
(Increase) / Decrease in inventories (2,734,874) (2,284,095) (3,948,601)
(Increase) / Decrease in other
current assets 421,343 449,240 (2,048,059)
Increase / (Decrease) in trade
and other payables 1,149,816 3,012,854 5,258,094
Increase / (Decrease) in Other
liabilities 106,079 29,492 (2,981,158)
Cash (used in) / generated from
operations 1,108,896 (1,069,707) 5,719,476
Interest paid (3,148,586) (27,275) (2,647,296)
Income Taxes paid, net of refunds (218,473) (545,643) (1,964,628)
Net Cash Generated by / (used
in) operating activities (2,258,163) (1,642,625) 1,107,552
================ ================ =============
Cash flow from investing activities
Acquisition of property, plant
and equipment (25,213,585) (12,624,171) (19,758,114)
Sale of property, plant and equipment - - -
(Increase) / Decrease in Advances 2,400,464 15,441,450 -
Finance Income 1,254,927 409,228 782,508
Dividend income 119,057 207,258 544,187
Movement in restricted cash (1,782,752) (129,575) (931,303)
Net cash outflow on acquisition
of subsidiaries - (2,057,447) -
Sale / (Purchase) of Investments,
net 798,709 6,602,651 3,124,948
Refund of Share Application Money - - -
(Increase) / Decrease in land
lease Deposits (680,302) - (2,115,283)
Net cash (used) / generated by
investing activities (23,103,482) 7,849,393 (18,353,056)
================ ================ =============
Cash flows from financing activities
Proceeds from issue of Ordinary
Shares - - 57,382,685
Proceeds from borrowings 15,449,115 - 16,985,286
Repayment of borrowings - (2,131,685) -
Net cash provided by financing
activities 15,449,115 (2,131,685) 74,367,971
================ ================ =============
Net increase / (decrease) in
cash and cash equivalents (9,912,530) 4,075,083 57,122,466
Cash and cash equivalents at
the beginning of the year / period 71,104,280 14,168,453 14,168,453
Effect of Exchange rate changes
on the balance of cash held in
foreign currencies 1,337,253 (1,231,334) (186,639)
---------------- ---------------- -------------
Cash and cash equivalents at
the end of the year / period 62,529,003 17,012,202 71,104,280
================ ================ =============
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
For the period ended 30 September 2011
(All amount in LIR, 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 these 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 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 IOMAHouse, 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.
2. Summary of significant accounting policies
2.1 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.
Comparative results for a corresponding period 30th Sept.2010
and for the year ended 31st March 2011 have been re-categorised for
consistent presentation.
The consolidated, unaudited, interim financial statements of the
Group for the six months ended 30th Sept.2011 were approved by the
Board of Directors.
2.2 Basis of consolidation
These consolidated financial statements incorporate the
financial information of OPG Power Ventures Plc and its
subsidiaries for the year ended 30 September 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 30th September 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.
2.3 List of subsidiaries
Details of the Group's subsidiary which are consolidated into
the Group's consolidated financial statement, are as follows:
Subsidiaries % %
Immediate Country of Voting Economic
parent incorporation Right Interest
2011 2011
------------------------------- ------------ ---------------- -------- ----------
Caromia Holdings limited
('CHL') OPGPV Cyprus 100 100
Gita Energy Private Limited
('GEPL') (refer note
below) CHL Cyprus 100 100
Gita Holdings Private
Limited ('GHPL') (1) CHL Cyprus 100 100
OPG Power Generation GEPL and
Private Limited ('OPGPG') GHPL India 71.76 99
OPG Power Gujarat Private GEPL and
Limited ('OPGG') GHPL India 65.90 99
OPG Renewable Energy GEPL and
Private Limited ('OPGRE')(2) GHPL India 22 33
OPG Energy Private Limited
('OPGE') (3) OPGPG India 29.78 44.22
Gita Power and Infrastructure
Private Limited, ('GPIPL') GHPL India 100 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.
2.4 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.
30 September 30 September 31 March
Particulars 2011 2010 2011
-------------- ------------- ------------- ---------
Closing rate 77.53 70.91 72.60
Average rate 73.50 70.26 70.96
-------------- ------------- ------------- ---------
2.5 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.
2.6 Taxes
Current tax provision in these statements represents amounts of
tax payable based on applicable taxation Law in the Group's country
of operations. 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.
Deferred income tax is determined based on timing differences as
at reporting date between the amounts of assets and liabilities
carried in these financial reports and their tax bases
2.7 Use of Estimates
The preparation of financial statements necessarily involves the
making of assumptions and estimations by the Management which
impact on amounts of assets and liabilities as well as on
contingent assets/liabilities reported in these statements. Similar
estimations and assumptions by the Management are involved in the
compilation of revenues and expenses for the period.
Management formulates its estimates and assumptions based on
past experience and current developments as well as other factors
to reach what it considers to be reasonable judgment in the total
circumstances. Actual results may differ from the estimates
depending on the assumptions used and conditions prevailed
prevailing at the relevant point in time.
2.8 Segment Reporting:
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.
3. Cash and cash equivalents
Cash and short term deposits comprise of the following:
Consolidated
-------------------------------------
September September March
2011 2010 2011
---------------------------- ----------- ----------- -----------
Cash at banks and on hand 61,751,764 11,426,347 69,884,386
Short-term deposits 777,238 5,585,853 1,219,894
----------- ----------- -----------
Total 62,529,002 17,012,200 71,104,280
---------------------------- ----------- ----------- -----------
Short-term deposits are made for varying periods, depending on
the immediate cash requirements of the Group. They are recoverable
on demand.
4. Other income
Consolidated
----------------------------------
September September March
2011 2010 2011
------------------------------ ---------- ---------- ----------
Sale of Coal/fly ash 352,516 120,412 206,203
Compensation for loss of
profit - - 1,888,294
Miscellaneous income/expense 21,050 787,516 443,372
---------- ---------- ----------
Total 373,566 907,928 2,537,869
------------------------------ ---------- ---------- ----------
5. Property, plant and equipment, net - consolidation for the
period ended 30 September 2011
The property, plant and equipment comprises of:
A. Gross Block
------------ ------------ --------------- --------- ---------------------
Land
and Power Other plant Assets
Particulars Buildings Stations and equipment Vehicles under construction Total
As at 1 April
2010 9,428,735 8,270,456 95,643 142,991 47,459,623 65,397,447
- 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) (3,092,619) (4,261,505)
As at 31 March
2011 9,205,256 49,790,880 138,870 205,048 18,424,186 77,764,241
As at 1 April
2011 9,205,256 49,790,880 138,870 205,048 18,424,186 77,764,241
- Additions 153,183 355,402 34,795 68,402 10,573,220 11,185,002
- Disposals - - - - - -
- Exchange
adjustments (585,039) (3,165,123) (8,828) (13,035) (1,171,195) (4,943,219)
------------ ------------ --------------- --------- --------------------- -------------
As at 30 Sep
2011 8,773,399 46,981,159 164,837 260,416 27,826,212 84,006,023
------------ ------------ --------------- --------- --------------------- -------------
B. Accumulated Depreciation
------------------------------- ------------ --------------- --------- --------------------- -------------
Land
and Power Other plant Assets
Particulars Buildings Stations and equipment Vehicles under construction Total
As at 1 April
2010 207,803 2,478,598 42,713 39,076 - 2,768,190
- Additions 34,166 1,111,445 27,233 35,580 - 1,208,425
- Disposals - - - - - -
- Exchange
adjustments (14,313) (186,610) (3,398) (3,350) - (207,670)
As at 31 March
2011 227,656 3,403,433 66,548 71,307 - 3,768,944
As at 1 April
2011 227,656 3,403,433 66,548 71,307 - 3,768,944
- Additions 17,105 724,295 14,788 20,299 - 776,487
- Disposals - - - - - -
- Exchange
adjustments (15,361) (253,884) (4,999) (5,588) - (279,832)
As at 30 Sep
2011 229,401 3,873,844 76,337 86,018 - 4,265,599
Net Block
2010-11 8,977,599 46,387,447 72,322 133,742 18,424,186 73,995,296
2011-12 8,543,998 43,107,315 88,500 174,398 27,826,212 79,740,424
------------ ------------ --------------- --------- --------------------- -------------
-ends-
This information is provided by RNS
The company news service from the London Stock Exchange
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