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Chairman’s Statement
I have pleasure in presenting the results for the financial year ended 31st March 2010 which is the
second set of full year results since the listing of the Company on AIM in May 2008.
Financial Results
Group revenue of GBP 12.87 Million (2009: GBP 7.31 Million) includes a full year contribution from the
10 MW waste heat plant commissioned in September 2008. The revenue for the year includes sale of
power in the short term market at attractive prices.
Income from continuing operations before tax, period expenses relating to projects under construction
and non-recurring items was GBP 6.62 Million (2009: GBP 5.75 Million).
Progress
The principal milestone attained by your Company since the previous year’s report has been the
commissioning, in April 2010, of the 77 MW coal fired power plant near Chennai. The Company has
thus delivered the first of the two major projects for which resources were raised in the AIM listing.
Following this development, the operating capacity of your Company’s plants now stands at 107 MW,
an increase of over 250 % from the previous level of about 30 MW. The commissioning of the 77 MW
plant represents the first step in the transformation of your company to a power producer, whose
stated aim is to achieve a critical mass of 400 MW and beyond over the next few years.
The Environmental Clearance for the Gujarat project has now been obtained and construction on site
will commence shortly.
The Indian Economy & the Power Sector
In my previous report to shareholders, I referred to a growth rate of 6.7 % attained by the Indian
Economy in 2008 – 09, a significant result given the overall global economic conditions prevailing
during that period. Early indications are that the growth rate is likely to be 7.5 % if not higher for the
year 2009 - 10, a significant level of performance in the context of the slow growth in major world
economies and second only to that of China among the BRIC countries.
The growth rate announced for the most recent quarter (January – March 2010) is still higher at 8.6
% and, within this overall growth rate, growth in the manufacturing sector has been higher at 10.3 %,
indicating strong consumer spending on cars and other manufactured goods. The corollary to this rate
of industrial growth is, of course, increased demand for power with a multiplier effect, usually thought
to be about 1.2 times the growth in other sectors.
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Per capita electricity consumption has risen from 566 Kwh in 2003 to 704 Kwh in 2008. However, the
creation of new generating capacity of some 27 GW (2007 – 10) suggests the 5 year target of 78 GW
(2007 -12) will not be met. This is underscored by an all-India peak power deficit of 13.3 % as at March
2010 (2009: 11.1 %). As a result, investment in power generation continues to be a highly promising
proposition.
The Current Year
With the increased throughput of power available from the 77 MW facility and, given buoyant conditions
in the power market, the current year promises increased growth and scale of operations for the Group.
OPG looks to the year ahead with confidence and enthusiasm.
M. C. Gupta
Chairman
4th July 2010
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Chief Executive’s Review of Operations
The commissioning of the 77 MW power plant in April 2010, immediately following the financial year
end, rounded off another year of progress for your Company. With an operating capacity today of 107
MW, we look ahead to the completion of the 2 x 150 MW development under way in Kutch, Gujarat.
Significant Developments during the Period
The newly commissioned 77 MW facility is undergoing a period of stabilization. We expect to stabilize
the output at high levels.
As previously announced, the Environmental clearance in respect of the 2 x 150 Mw Kutch project
has now been received. Site work will commence in August 2010. Tata Power Ltd are taking steps
to expedite the implementation of the project. An assured supply of coal from the public sector coal
mines for the life of the plant has been obtained from the Government of India for 70 % of the fuel
requirements of the Kutch plant. This linkage spells enhanced fuel security and diversity for this unit
when it goes on stream.
Following the Carbon Credit registration in respect of the 19.4 MW gas fired plant at Mayavaram
received last year, a process of validation and verification is expected to be completed in about three
months. Certified Emission Reductions will become available for trading thereafter. For the 10 MW
waste heat fired facility near Chennai, a similar process of validation of the emission levels is also under
way on completion of which, Verified Emission Reductions will become available.
Financial Review
The Group’s revenue during the year ended March 31, 2010 was GBP 12.87 Million (2009: GBP 7.3
Million). Profit from Continuing Operations before Tax, period expenses relating to projects under
construction and extraordinary items at GBP 6.62 Million (2009: GBP 5.75 Million) was after provision
of GBP 1.20 Million towards amortization for the period of fair value cost of stock options awarded, a
non cash item (2009: Nil). The Net Income after Taxes amounted to GBP 4.02 Million (2009: GBP
5.33 Million inclusive of a one time release of negative goodwill of GBP 1.49 Million) with EBITDA for
the period (prior to deduction of pre-operative expenses on new projects in the course of construction)
being GBP 5.43 Million. Cash as at 31 March 2010 was GBP 14.17 Million.
Operational Review
The 19.4 MW gas-cum-waste heat fired plant at Mayavaram operated satisfactorily for the seventh year
running. On account of a reduction in gas flow from the on shore fields, the plant output levels for the
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year were 71 % as against 83 % in the previous year. During the year ahead the gas flow position has
improved and a higher output level for the plant is forecast.
The 10 MW waste heat fired facility operated satisfactorily during its second year of continuous
operation. Output levels averaged a stable 78 % of capacity.
A sizeable proportion of the total generation from these two plants was sold on the short term markets
at higher realizations. The average price earned during the year was Rs. 5.54 per Kwh (2009: Rs 4.11).
Projects in the Pipeline
We reported last year that further expansion of the facilities at the Chennai 77 MW plant and at the
Kutch 2 x 150 MW development was under active consideration.
In Chennai, it will be possible to add three further units of 77 / 80 MW at the existing site. Aside from
the availability of land, we hold final Environmental clearance in respect of an additional unit. Firm
offers of debt have been obtained in respect of all three additional units as well as coal linkages from
the Government of India.
Outlook
With the enhanced generation capacity and the buoyant power markets, we anticipate an increase in
operating and financial performance in 2010 – 11. The key next step for us is to commence ground
works on our site at Kutch in August. Our focus will continue to remain the development and operation
of power generation assets and the achievement of higher sale realizations.
Arvind Gupta
Chief Executive
4th July 2010
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Directors’ Report
The Directors are pleased to submit their report and audited consolidated financial statements for the
year ended 31 March 2010.
Principal activities and review of business
The principal activities of the Group are developing, owning and operating power stations in India. The
electricity generated from its plants is sold principally to captive consumers or in the short term market
in India.
Results and Dividends
The Group’s Net Income after tax for the reporting period amounted to GBP 4.02 Million. The Group is
conscious of the need to retain capital to expand the business while bearing in mind the shareholders
focus on cash flow returns. For the year ended 31 March 2010 the Directors do not recommend a
dividend considering the need to conserve cash flows for the continuing expansion of the business.
Directors
The Directors during the year were as follows
Mr M.C.Gupta
Mr Martin Gatto
Mr Mike Grasby
Mr Ravi Gupta
Mr Arvind Gupta
Mr V.Narayan Swami
Non Executive Chairman
Non Executive
Non Executive
Non Executive
Managing Director & CEO
Finance Director
Directors’ Biographical Information
Mr M.C.Gupta (age 71) is a retired civil servant belonging to the Indian Administrative Service, the
premier civil service of India. During his service, Mr Gupta held a number of senior appointments,
notably those of Secretary, Ministry of Industry, Government of India and Chief Secretary to the State
Government of Haryana. As Secretary to the Ministry of Industry, he was one of the functionaries
responsible for initiating and implementing the process of economic reforms which commenced in the
1990’s. He also served as Secretary Power, in the State of Haryana. He is also a Director of a number
of leading companies in India. Mr M.C. Gupta is not related to Mr Arvind Gupta and Mr Ravi Gupta.
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Mr Martin Gatto (age 60) is a senior finance professional who has held the position of Chief Financial
Officer with a number of leading UK companies such as Somerfield Plc, Hilton International, Midlands
Electricity Plc and British Energy Plc. He was until recently Chairman of Neutrahealth Plc, an AIM listed
company. Mr. Gatto is the Senior Independent Director.
Mr Patrick Michael Grasby (age 66) has been associated with the UK and international power industry
for a number of years. In the course of his career he has held a number of senior positions both in
the UK and internationally. He was Manager of the Drax power station, a 4000 MW thermal power
plant, between 1991 and 1995 and afterward Senior Vice President for global operations at International
Power. His international experience includes service in Portugal, Pakistan and Turkey. He is currently
a Non- Executive Director of Drax Power PIc. He is a Member of the Remuneration and Nomination
Committees and chairs the Company’s Health and Safety Committee.
Mr Ravi Gupta (age 53) is one of the founders and the Chairman of Kanishk Steel (listed on the Bombay
Stock Exchange since 1991). Mr Gupta has been associated with the Family flour milling industry for
many years. In 1988 he set up a new flour mill, Salem Food Products Limited, which he continues to
manage. Ravi Gupta is the brother of Arvind Gupta.
Mr Arvind Gupta (age 49) has a degree in Commerce from the University of Madras and has been
associated with the OPG family businesses since 1979. He gained experience in various divisions of the
business including flour milling, steel production and logistics, becoming President of Kanishk Steel.
Mr Gupta managed OPG Enterprise’s real estate division, completing residential, commercial and
logistics projects. Having identified the opportunities in power generation, Mr Gupta took responsibility
for developing this division of Kanishk Steel with initial projects in wind power generation in 1994. He
was a pioneer in the development of the Group Captive Power Producer concept in Tamil Nadu and
oversaw the development of the 18MW gas fired Plant of OPG Energy, a Group entity. He has been
responsible for the construction and development of the power plants of the Group.
Mr V.Narayan Swami (age 59) has over 30 year’s experience in a variety of finance and management
positions. He has worked alternate in banking and in industry over the years including positions with
Ashok Leyland Ltd, Standard Chartered Bank and then in investment banking in the Middle East. Mr
Swami later worked as CFO of Essar Telecom Group. He last spent a year as group CFO of Bombay
listed Best & Crompton Engineering before joining the Group in 2007.
Significant Shareholdings in the Company
The share register shows that the following shareholders held 3 % or more of the issued capital as at
the 31st of March, 2010.
Gita Investments Limited
Gita Power Inc
Audley Capital Advisors LLP
Artemis Investment Management Ltd
M & G Investment Management Ltd
53.33 %
5.93 %
6.48 %
3.58 %
3.17 %
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Directors’ Interests in the Shares of the Company
As at the date of this report the Directors had the following beneficial interests in the shares of the
Company.
Name of the Shareholder
Gita Investments Limited *
Gita Power lnc
Sri Hari Vallabha Enterprises & Investments Private Limited *
Dhanvarsha Enterprises & Investments Private Limited *
Goodfaith Vinimay Private Limited *
Mr. Patrick Michael Grasby
Mr.Martin Gatto
Total Directors' Interest
No of Shares
%
153,061,225
17,006,802
3,401,361
2,551,020
2,551,020
5,000
50,000
178,626,428
53.33
5.93
1.19
0.89
0.89
0.001
0.02
62.25
* Beneficial Interest in these holdings vest with Mr.Arvind Gupta, Director.
As at the date of this report the following Share Option have been granted:
Name
Number of Share Options Granted
Exercise Price
Gita Investments Limited
Mr Martin Gatto
21524234
1000000
0.60p
0.60p
The above awards were made under a stock option scheme which was approved by the directors at the
meeting held on the 16th July 2009. It is the intent of the company to make further award under this
scheme to other directors and senior employees.
Principal risks and uncertainties
The management of the business and the implementation of the Group’s plans are potentially exposed
to a variety of risks. A fuller listing of the risks factors that could potentially affect the Group is laid out
in the Group’s AIM Admission Document. The principal risks affecting the Group are discussed below.
Financial risk
The Group deals with a variety of financial instruments and bank loans as well as trade debtors and
trade creditors resulting from its operations. These financial instruments are used in the normal course
of business to support and conduct the Group’s ongoing operations and business plans. The principal
risks associated with such financial instruments are interest rate and credit risk as the Group conducts
its business operations exclusively within the Indian domain.
The Directors review these risks on an ongoing basis.
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The Regulatory Environment
The power industry in India is subject to regulation. Both pricing and access are, in general, regulated
by government agencies. Although the power sector in the country is increasingly being liberalized,
specific policies and regulatory pronouncements could result in potential changes likely to affect the
Group’s business operations. Whilst the Group operates in segments of the industry, namely the Group
Captive producer and short term market, which are relatively less regulated, the regulatory environment
and changes thereto are closely monitored so as to manage the Group’s operations in a pro-active and
efficient manner.
Fuel security
Fuel sourcing which is the basis of all power generation initiatives has a number of risks associated
with it such as sourcing, quality, freight and pricing risks. The Group seeks to counteract the effects of
these risks by spreading its sourcing among different suppliers to supply feedstock and to reduce third
country dependence by obtaining firm commitments for coal under the Government of India’s policy
from the public sector mines. Other risk mitigation measures such as flexibly designing the plant and
equipment to accept a wide range of coal, location of the plants near major ports or gas fields and so
on are also resorted to.
Completion Risk
The Group has one project under development and intends to build additional power generation assets
in the future. Any delays in construction could result in an adverse impact on the Group’s financial
results. The Group regularly reviews its pipeline and Projects under construction to mitigate any such
risks.
Competition
The Group faces competition from both state utilities as well as from other private producers of power.
Existing and potential competitors may have access to greater resources than the Group. This could
potentially give such players a competitive edge as compared to the Group’s market position and
capabilities. The Group regularly reviews the business environment to develop appropriate strategic
responses to present and emerging competition and to consolidate and position itself as a power
producer with sufficient capacity and critical mass.
Auditors
At the annual general meeting held on the 16th July, 2009, Deloitte & Touche, Douglas, Isle of Man were
appointed as auditors to the Company. Upon their resignation the Board appointed Deloitte, Haskins
& Sells, Chennai, another constituent member of the Deloitte partnership worldwide, as auditor to the
Company. A resolution to ratify the appointment of Deloitte Haskins & Sells as auditors, in place of
Deloitte & Touche, and to ratify the auditor’s remuneration agreed by the Board will be placed before
the shareholders at the forthcoming Annual General Meeting of the Company.
By Order of the Board
Philip Scales
Company Secretary
July 5, 2010
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Report on Corporate Governance
Policy Statement
In accordance with the statements made in the Admission Document at the time of the IPO in May
2008 the Board is creating a Corporate Governance framework commensurate with the emerging scale
of the Group. While full compliance with the Combined Code is not a formal obligation, the Board
has taken and will take steps to implement a growing framework that takes account of the Scale of
operations.
Board and Committees
The Board
The Board comprises two Executive Directors and four Non-executive Directors. The roles of the
Chairman and Chief Executive are separated. Of the four Non-executive Directors three are independent.
They are the Chairman who is based in Delhi and there are two UK based Non-executive Directors.
The Board meets at least four times a year, The Board papers include matters relating to strategy,
investments including both new and expansionary capital items, operating budgets and monthly
management accounts (including cash flows). Non-executive Directors have access to all information
and, if required, external advice at the expense of the Company.
Remuneration Committee
The Remuneration Committee comprises Mr M.C. Gupta, Mr Ravi Gupta, Mr Mike Grasby and Mr
Martin Gatto. Mr Ravi Gupta has not been present when any remuneration matter relating to the Chief
Executive has been discussed as he is related to Mr Arvind Gupta. The Committee operates under
Terms of Reference approved by the Board. The principal matters discussed in the period have been
the creation of the Share Option Scheme Rules and a recommendation on the issue of share options
which subsequently were approved by the Board.
Nominations Committee
A Nominations Committee has not been needed in the period.
Audit Committee
The Audit Committee comprises Mr MC Gupta, Mr Ravi Gupta, Mr Mike Grasby and Mr Martin
Gatto. The Chief Executive and Finance Director attend by invitation. The Committee operates under
Terms of Reference approved by the Board and there is provision for the Committee to meet with the
Auditors without management being present. The half-year and full-year financial announcements were
scrutinised by the Committee prior to their approval by the Board.
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Internal control and risk management
The Board is responsible for maintaining an appropriate system of internal control to provide reasonable
(but not absolute) assurance of the quality and reliability of financial and operating information used to
assess the business, safeguard assets and recognize liabilities in accordance with the relevant company
law and International Financial Reporting Standards (IFRS).
The Group faces financial risks such as currency risk, interest rate risk, credit risk, and liquidity risk. The
Group’s risk management programme aims to minimize potential adverse performance on the Group’s
financial performance. The Finance Director and Managing Director monitor and manage financial
risks. The Group does not enter into or trade in financial instruments or derivatives for speculative
purposes.
The Group is evaluating the new operating risks associated with the coal based power plants that has
been commissioned in order to develop of frame work for managing operating risks.
Going concern
The Directors have reviewed the financial position of the Group having regard to its cash needs in
completing the major projects which are in progress. Each project and operation is incorporated within
its specific special purpose vehicle, (SPV), and borrowings are specific to each SPV without cross
guarantees. The loan funds needed to complete projects in progress are committed and being drawn
under binding contracts. The IPO raised the equity portions needed for the various committed projects.
The Directors are satisfied that, having taken all these factors into account and given that trading
subsidiaries are cash generative, it is appropriate to prepare accounts on a going concern basis.
Investor relations
Management endeavours to maintain regular dialogue with institutions and the financial community,
particularly in relation to the half-year and full-year results. In the period, meetings with investors were
offered on at least three occasions and the UK based directors took an active part in those meetings. The
Group website has an investor section and all regulatory announcements, including these Accounts,
are posted therein, www.opgpower.com.
An electronic version of these Accounts is available from the Company Secretary on request.
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Report on Directors’ Remuneration
Introduction
As an AIM listed company the preparation of a Report on Directors’ Remuneration is not a requirement.
However, the Company provides below information appropriate to its size and organisation.
Remuneration policy
A Remuneration Committee has been established to make recommendations to the Board on Executive
and senior management remuneration including where appropriate the grant of Share Options. Matters
considered by the Committee include:
(cid:79)
(cid:79)
(cid:43)(cid:49)(cid:60)(cid:49)(cid:66)(cid:73) (cid:60)(cid:53)(cid:70)(cid:53)(cid:60)(cid:67) (cid:49)(cid:62)(cid:52) (cid:57)(cid:62)(cid:51)(cid:66)(cid:53)(cid:61)(cid:53)(cid:62)(cid:68)(cid:67) (cid:50)(cid:53)(cid:57)(cid:62)(cid:55) (cid:57)(cid:62) (cid:60)(cid:57)(cid:62)(cid:53) (cid:71)(cid:57)(cid:68)(cid:56) (cid:60)(cid:63)(cid:51)(cid:49)(cid:60) (cid:61)(cid:49)(cid:66)(cid:59)(cid:53)(cid:68) (cid:64)(cid:66)(cid:49)(cid:51)(cid:68)(cid:57)(cid:51)(cid:53)(cid:12)
(cid:44)(cid:56)(cid:53) (cid:51)(cid:63)(cid:62)(cid:67)(cid:57)(cid:52)(cid:53)(cid:66)(cid:49)(cid:68)(cid:57)(cid:63)(cid:62) (cid:63)(cid:54) (cid:49)(cid:62) (cid:45)(cid:62)(cid:49)(cid:64)(cid:64)(cid:66)(cid:63)(cid:70)(cid:53)(cid:52) (cid:43)(cid:56)(cid:49)(cid:66)(cid:53) (cid:40)(cid:64)(cid:68)(cid:57)(cid:63)(cid:62) (cid:43)(cid:51)(cid:56)(cid:53)(cid:61)(cid:53)(cid:10) (cid:77)(cid:68)(cid:56)(cid:53) (cid:43)(cid:51)(cid:56)(cid:53)(cid:61)(cid:53)(cid:78)(cid:10) (cid:68)(cid:56)(cid:53) (cid:42)(cid:69)(cid:60)(cid:53)(cid:67) (cid:63)(cid:54)
which have been approved by the Board
Executive Directors’ remuneration comprises the following elements:
(cid:79) (cid:26)(cid:62)(cid:62)(cid:69)(cid:49)(cid:60) (cid:67)(cid:49)(cid:60)(cid:49)(cid:66)(cid:73) (cid:64)(cid:49)(cid:73)(cid:49)(cid:50)(cid:60)(cid:53) (cid:57)(cid:62) (cid:68)(cid:56)(cid:53) (cid:51)(cid:63)(cid:69)(cid:62)(cid:68)(cid:66)(cid:73) (cid:63)(cid:54) (cid:53)(cid:61)(cid:64)(cid:60)(cid:63)(cid:73)(cid:61)(cid:53)(cid:62)(cid:68) (cid:57)(cid:62) (cid:34)(cid:62)(cid:52)(cid:57)(cid:49)(cid:62) (cid:42)(cid:69)(cid:64)(cid:53)(cid:53)(cid:67) (cid:49)(cid:62)(cid:52) (cid:67)(cid:69)(cid:50)(cid:58)(cid:53)(cid:51)(cid:68) (cid:68)(cid:63) (cid:49)(cid:62)(cid:73)
local taxes
(cid:79) (cid:26)(cid:62)(cid:62)(cid:69)(cid:49)(cid:60) (cid:50)(cid:63)(cid:62)(cid:69)(cid:67)(cid:12) (cid:39)(cid:63) (cid:50)(cid:63)(cid:62)(cid:69)(cid:67)(cid:53)(cid:67) (cid:71)(cid:53)(cid:66)(cid:53) (cid:52)(cid:53)(cid:51)(cid:60)(cid:49)(cid:66)(cid:53)(cid:52) (cid:54)(cid:63)(cid:66) (cid:68)(cid:56)(cid:53) (cid:64)(cid:53)(cid:66)(cid:57)(cid:63)(cid:52)(cid:12)
(cid:79) (cid:27)(cid:53)(cid:62)(cid:53)(cid:54)(cid:57)(cid:68)(cid:67) (cid:57)(cid:62) (cid:59)(cid:57)(cid:62)(cid:52)(cid:12) (cid:30)(cid:72)(cid:53)(cid:51)(cid:69)(cid:68)(cid:57)(cid:70)(cid:53) (cid:29)(cid:57)(cid:66)(cid:53)(cid:51)(cid:68)(cid:63)(cid:66)(cid:67) (cid:49)(cid:66)(cid:53) (cid:64)(cid:66)(cid:63)(cid:70)(cid:57)(cid:52)(cid:53)(cid:52) (cid:71)(cid:57)(cid:68)(cid:56) (cid:51)(cid:69)(cid:67)(cid:68)(cid:63)(cid:61)(cid:49)(cid:66)(cid:73) (cid:50)(cid:53)(cid:62)(cid:53)(cid:54)(cid:57)(cid:68)(cid:67)(cid:12)
Non-executive Directors’ remuneration is determined by the Board and was set at the time of the IPO
to independent directors with relevant experience. Their Remuneration has not been amended since
the IPO.
Aggregate Directors’ Remuneration
Details of Directors’ remuneration for the period ended 31 March 2010 are as follows:
Name
Remuneration Paid
For the year ended 31 March
2010
For the period ended 31 March
2009
Mr.Arvind Gupta
Mr.V Narayan Swami
Mr. M C Gupta
Mr. R Gupta
Mr.M Grasby
Mr. Martin Gatto
Total
155,136
46,353
22,517
22,517
20,833
45,833
313,189
157,484
47,245
25,000
25,000
25,000
25,000
304,729
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Mr Gatto received a one-off payment of £25,000, in the prior year ended 31 March 2009, for extra work
required during the IPO.
Stock Options Issued
On 16th July 2009, the Board granted share options. Once granted, the options must be exercised within
ten years of the date of grant otherwise they lapse.
Name
Number of Share Options
Granted
Exercise Price
Gita Investments Limited (a Company
in which Mr Arvind Gupta has Beneficial
interest)
Mr Martin Gatto
21524234
1000000
0.60p
0.60p
The Vesting of these options is based on following conditions:
1)
The power plant at Kutch (2x150MW) in the State of Gujarat must have been in commercial
operation for three months.
2)
The closing share price being at least £1.00 for 3 consecutive business days.
These awards were made under a Stock Option Scheme approved by the Board at its meeting held on
the 16th July, 2009. The total of such options to be granted under the scheme is limited to 10% of the
Company’s Share Capital (28,698,979) and it remains the intent of the Board to make awards of options
to other Directors and senior employees in due course.
This report was approved by the Board of Directors on 1 July 2010 and signed on its behalf by:
Mr M C Gupta
Remuneration Committee Chairman
4th July, 2010
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STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2010
Notes
Year ended 31 March
2010
Period ended 31 March 2009 (As
restated*)
Group
£
Company
£
Group
£
Company
£
REVENUES
Operating Revenue
Cost of power generation
Gross Profit
EXPENSES
Other gains and losses
Employee costs
Distribution Cost
Other expenses
Depreciation
Financial income
Financial Expenses
Release of negative goodwill
Pre Operative Expenses (Relating to proj-
ects under construction)
3.2
3.3
3.20
3.8
3.5
3.6
3.4
12,872,597
(5,358,089)
7,514,508
-
-
-
7,310,559
(2,534,696)
4,775,863
1,028,559
(102,531)
1,298,249
(1,373,055)
(1,329,683)
(113,792)
(172,582)
-
-
-
-
694,240
(86,701)
-
(501,021)
(495,104)
(195,461)
1,297,504
(654,461)
-
(1,171,626)
(259,443)
(496,602)
(326,127)
-
145,399
(1,230)
-
-
(54,951)
2,718,568
(2,206,738)
1,493,760
(911,559)
-
989,110
-
-
-
Pre-tax Income / (Loss)
5,449,843
(1,547,488)
6,330,216
1,270,522
Income Tax Expense
3.7
(1,432,338)
-
Net Income / (Loss) after taxes
4,017,505
(1,547,488)
(997,407)
5,332,809
-
1,270,522
Other Comprehensive Income
Exchange differences on translating foreign
operations
Net value gain on available for sale finan-
cial assets, net of taxes
Other comprehensive income / (loss) for
the year / period, net of tax
Total comprehensive income / (loss) for
the year / period
Profit / (loss) attributable to
Equity holders of parent
Non controlling interest
Total comprehensive income / (loss) at-
tributable to
Equity holders of parent
Non controlling interest
6,497,808
(2,594,435)
3,010,783
(3,192,552)
56,041
-
(231,685)
-
6,553,849
(2,594,435)
2,779,098
(3,192,552)
10,571,354
(4,141,923)
8,111,907
(1,922,030)
926,473
(1,54,7488)
3,091,032
-
4,017,505
(1,547,488)
6,750,867
(4,141,923)
3,820,487
-
10,571,354
(4,141,923)
3,309,434
2,023,375
5,332,809
5,825,573
2,286,334
8,111,907
1,270,522
-
1,270,522
(1,922,030)
-
(1,922,030)
Basic and diluted earnings per share for profit attributable to the equity holders of the company during the year (expressed as Pence per
share)
Basic earnings per share
Diluted earnings per share
3.17
3.17
0.32
0.32
(0.54)
(0.54)
1.24
1.24
0.47
0.47
* Certain items in the previous year (2009) financial statements have been restated as detailed in Note 3.24
15
1619_TEXT:Layout 1 7/9/10 10:25 Page 16
STATEMENT OF FINANCIAL POSITION
As at 31 March 2010
Notes
As at 31 March 2010
As at 31 March 2009
(As restated*)
Group
£
Company
£
Group
£
Company
£
ASSETS
Non current assets
Property, plant and equipment
Capital Work in Progress
Capital advances
Other Assets
Deferred Tax Asset
Investment in subsidiaries
Total non current assets
Current Assets
Inventories
Trade and other receivables
Current tax assets
Financial Assets
Other Assets
Cash and Cash Equivalents
Restricted Cash
Total current assets
Total assets
EQUITY AND LIABILITIES
Capital and Reserves
Issued Capital
Reserves
Retained earnings
Equity attributable to owners of the Com-
pany
Non-Controlling Interest
Total Equity
Non current liabilities
Interest-bearing loans and borrowings
Other Liabilities
Deferred tax liabilities
Total non current liabilities
Current liabilities
Trade and other payables
3.8
3.9
3.10
3.11
3.7.1
3.13
3.12
3.14
3.12
3.15
3.18
3.7.1
Interest-bearing loans and borrowings
3.18
Provision for Taxation
Other liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
15,169,634
49,847,157
21,160,152
5,470,257
51,505
-
91,698,705
1,867,915
3,089,084
2,003,214
12,977,604
-
-
-
7,8 87
2,410
10,297
13,556,906
29,174,655
6,705,770
4,316,518
60,909
-
53,814,758
-
41,711
274,265
1,400,329
-
-
751,308
8,478,766
5,230,748
7,113,514
61,145,096
14,168,453
7,072,048
32,319,842
1,481,894
-
1,403,126
42,701,678
68,491,409
49,625,830
134,400,383
68,501,706
103,440,588
-
-
-
5,000
2,410
7,410
-
13,213
-
-
67,386,189
4,039,991
-
71,439,393
71,446,803
3.16
42,187
42,187
42,187
42,187
76,490,815
68,691,738
69,459,462
70,079,213
4,235,907
(276,966)
3,309,434
80,768,909
68,456,959
72,811,083
1,270,522
71,391,922
7,816,771
-
3,996,285
-
88,585,680
68,456,959
76,807,368
71,391,922
30,800,245
2,261,141
514,235
33,575,621
6,567,099
3,882,815
1,599,168
190,000
12,239,082
45,814,703
-
-
-
-
44,747
-
-
-
44,747
44,747
19,967,353
1,935,743
446,451
22,349,547
799,498
2,481,114
942,826
60,235
4,283,673
26,633,220
-
-
-
-
54,881
-
-
-
54,881
54,881
134,400,383
68,501,706
103,440,588
71,446,803
* Certain items in the previous year (2009) financial statements have been restated as detailed in Note 3.24
16
1619_TEXT:Layout 1 7/9/10 10:25 Page 17
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1619_TEXT:Layout 1 7/9/10 10:26 Page 19
STATEMENT OF CASH FLOWS
For the year ended 31 March 2010
Cash fl ows from operating activities
Profit / Loss for the year / period
Income tax expense
Financial Expenses
Financial Income
Other gains and losses
Release of negative goodwill
Share based compensation costs
Depreciation
Movements in Working Capital
Year to 31 March 2010
Period to 31 March 2009
(As restated*)
Notes
Group
Company
Group
Company
£
£
£
£
4,017,505
(1,547,488)
4,638,569
1,270,522
1,432,338
373,359
-
-
997,407
2,206,738
-
-
(1,251,252)
(145,399)
(2,718,568)
(989,110)
(730,329)
-
-
-
(604,009)
(1,493,760)
1,206,959
1,206,959
-
625,324
-
398,830
-
-
-
-
5,673,904
(485,928)
3,425,207
281,412
(Increase) / Decrease in trade and other receivables
(1,418,191)
(261,052)
(805,564)
(13,212)
(Increase) / Decrease in inventories
(Increase) / Decrease in other current assets
Increase / (Decrease) in trade and other payables
Increase / (Decrease) in Other liabilities
Cash (used in) / generated from operations
Interest paid
Income Taxes paid, net of refunds
Net Cash Generated by / (used in) Operating activities
Cash fl ow from investing activities
Acquisition of property, plant and equipment
Sale of property, plant and equipment
Advances Net
Finance Income
Dividend income
Movement in restricted cash
Net cash outflow on acquisition of subsidiaries
Purchase of Investments (Net of sales)
Increase / Decrease in land lease Deposits
(1,636,191)
988,313
5,139,417
-
18,319
(4,346)
(2,070,063)
(10,135)
23,741
(10,087,192)
-
(620,314)
-
(5,000)
54,881
-
(1,339,940)
(761,461)
(28,674)
318,081
(372,025)
(1,913,470)
(3,625,434)
(29,017,680)
2,493
-
-
(2,206,738)
(418,584)
-
-
(761,461)
(2,653,996)
318,081
-
-
(32,452,626)
-
-
-
17,759,978
6,242,553
(6,225,204)
(67,386,189)
1,165,040
145,399
2,614,831
986,700
944,839
385,765
(10,582,408)
(3,222,067)
1,260
-
-
-
-
-
604,009
(970,388)
(8,052,207)
-
(2,866,112)
-
-
-
-
-
Net cash (used) / generated by investing activities
(22,562,780)
6,387,952
(47,347,697)
(66,399,489)
Cash fl ows from financing activities
Proceeds from issue of Ordinary Shares
Proceeds from borrowings
Repayment of borrowings
Payment for share issue costs
Net cash provided by financing activities
-
14,249,387
5,205,136
-
9,044,251
-
-
-
-
-
70,348,035
70,178,060
14,330,099
(3,290,759)
-
-
(3,192,552)
(3,192,552)
78,194,823
66,985,508
Net increase / (decrease) in cash and cash equivalents
(17,143,963)
5,626,491
28,193,130
904,100
Cash and cash equivalents at the beginning of the year / period
32,319,842
4,039,991
1,358,882
-
Effect of Exchange rate changes on the balance of cash held in
foreign currencies
(1,007,425)
(2,594,434)
2,767,830
3,135,891
Cash and cash equivalents at the end of the year / period
3.15
14,168,454
7,072,048
32,319,842
4,039,991
19
1619_TEXT:Layout 1 7/9/10 10:26 Page 20
* Certain items in the previous year (2009) financial statements have been restated as detailed in Note 3.24
Notes to the Accounts
Note 1 : Basis of Preparation
1.1
General Information
OPG Power Ventures Plc. (the “Company” or “OPGPV”) is a company domiciled and incorporated
in the Isle of Man on 17 January 2008 and was admitted to the Alternative Investment Market (AIM)
of London Stock Exchange on 30 May 2008. The Company had raised approximately £ 65.10 Million
(before admission costs) through a public offering in the previous period.
The Consolidated financial statements for OPG Power Ventures Plc (the “Group”) and financial
statements for the Company have been prepared for the year ended 31 March 2010
As on 31 March 2010 the following entities forms part of the Group:
Company *
Immediate Parent
Country of
Incorporation
Voting Rights
(%)
Economic
Interest (%)
Gita Energy Private Lim-
ited (“GE Cyprus”)
OPG Power Ventures
Plc
Gita Holdings Private
Limited (“GH Cyprus”)
OPG Power Ventures
Plc
OPG Power Generation
Private Limited (“OP-
GPG”)
Gita Energy Private Lim-
ited and Gita Holdings
Private Limited
OPG Power Gujarat Pri-
vate Limited (“OPGG”)
Gita Energy Private Lim-
ited and Gita Holdings
Private Limited
*OPG Renewable
Energy Private Limited
(“OPGRE”)
Gita Energy Private Lim-
ited and Gita Holdings
Private Limited
*OPG Energy Private
Limited (“OPGE”)
OPG Power Generation
Private Limited
Gita Power & Infrastruc-
ture Private Limited
(“GPIL”)
Gita Holdings Private
Limited
Note:
Cyprus
Cyprus
India
India
India
India
India
100
100
35.86
35.90
29.19
36.71
11
11
29.78
100
100
100
49.5
49.5
43.85
55.15
16.5
16.5
43.78
100
* The ownership structure results in a “Non Controlling” voting and economic stake in OPGE and
OPGRE, with captive customers holding the majority of shares. However, voting agreements have
been entered into with key shareholders - Tamil Nadu Property Developers and Salem Food Products by
which there is a commitment that these shareholders will exercise all voting rights in accordance with
the directions of OPGPG (in the case of OPGE) and G E Cyprus (in the case of OPGRE). This gives
the Group effective voting control about 66% of OPGRE shares and 67% of OPGE shares. As such, the
results of OPGE and OPGRE will be consolidated in producing group accounts for OPGPV.
The activities of the various entities listed above are as detailed below:
20
1619_TEXT:Layout 1 7/9/10 10:26 Page 21
Company
OPGPV
GE Cyprus
GH Cyprus
OPGE
OPGRE
OPGPG
OPGG
GPIL
Activity
“The Company”. Invests in and controls the develop-
ment and operation of power generation businesses in
India.
Subsidiary Of The Company
Subsidiary Of The Company
19.4 MW Power Plant
10MW Power Plant
77MW Power Plant(in construction)
2*150 MW Power Plant(in construction)
80MW Power Plant( in construction)
Investments into one of the entities GPIL, was made during the year. The consideration paid was £ 3.13
million, being the net worth of the Company as on the date of acquisition and there was no goodwill
arising on this investment.
The Company’s registered office is at IOMA House, Hope Street, Douglas, Isle of Man.
The Group is primarily engaged in the business of development, construction and operation of
Power generation plants for the supply of power directly to the State Electricity Boards, Public Sector
Undertakings and Industrial consumers. The business objective of the Group is to focus on the power
generation business within India and thereby to provide reliable, cost effective power to industrial
consumers and other users under the ‘Open Access’ provisions mandated by the Government of India
and applicable to all producers of power.
Note 2 : Significant accounting policies
2.1
2.1.1
Adoption of New and Revised Standards
Standards and Interpretations effective in the Reporting Period
The following new and revised Standards and interpretations have been adopted in these consolidated
financial statements. Their adoption has not had any significant impact on the amounts reported
in these consolidated financial statements but may affect the accounting for future transactions or
arrangements.
IFRS 8: Operating Results
Amendments to IFRS 2: Share-based Pay-
ment – the Vesting Conditions and Can-
cellations
IFRS 8 is a disclosure Standard that requires re-
designation of the Group’s reportable segments
based on the segments. The Managing Director of
the Group is the Chief Operating Decision Maker
(CODM) to allocate resources and assess perfor-
mance.
The amendments clarify the definition of vesting
conditions for the purposes of IFRS 2, introduce
concept of ‘non- vesting’ conditions, and clarify the
accounting treatment for cancellations.
21
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IAS 23 (as revised in 2007) - Borrowing
Costs
Amendments to IAS 32:
Financial Instruments: Presentation and
IAS 1 Presentation of Financial
State-
instruments
ments - Puttable Financial
and Obligations Arising on Liquidation
IFRIC 13: Customer Loyalty Programmes
IFRIC 16: Hedges of Net Investment in a
Foreign operation.
IFRIC 9
IFRS 1
The principal change to the Standard was to elimi-
nate the option to expense all borrowing costs
when incurred. This change has had no impact on
these consolidated financial statements because it
has always been the Group’s accounting policy to
capitalize borrowing costs incurred on qualifying
assets
The revisions to IAS 32 amend the criteria for debt/
equity classification by permitting certain puttable
financial instruments and instruments (or compo-
nents of instruments) that impose on an entity
an obligation to deliver to another party a pro-rata
share of the net assets of the entity only on liquida-
tion, to be classified as equity, subject to specified
criteria being met.
The Interpretation provides guidance on how en-
tities should account for customer loyalty pro-
grammes by allocating revenue on sale to possible
future award attached to the sale.
The Interpretation provides guidance on the de-
tailed requirements for net investment hedging for
certain hedge accounting designations
Amendment to IFRIC 9 (revised): Reassessment of
Embedded Derivatives relating to assessment of
embedded derivatives in case of reclassification of
financial assets out of the FVTPL category;
(Revised) First time Adoption of IFRS - Amend-
ment relating to cost of an Investment in a
Subsidiary, Jointly Controlled Entity or Associ-
ate;
2.1.2
Standards and Interpretations in issue but not yet eff ective
At the date of authorization of these consolidated financial statements, the following Standards and
Interpretations were in issue but not yet effective:
IFRS 1
IFRS 1
IFRS 2
IFRS 9
(Revised) First time Adoption of IFRS - Amendment on additional exemp-
tions for first-time adopter (effective for annual periods beginning on or
after January 1,2010);
(Revised) Limited exemption from comparatives IFRS 7 disclosure for first
time adopters – effective for annual periods beginning on or after July 1,
2010
(Revised) Share-based Payment- Amendment relating to Group cash- set-
tled share based payment (effective for annual periods beginning on or
after January 1, 2010);
Financial Instruments: Classification and Measurement (intended as
complete replacement for IAS 39 and IFRS 7) (effective for annual periods
beginning on or after January 1, 2013);
22
1619_TEXT:Layout 1 7/9/10 10:26 Page 23
IAS 24
IAS 27
IAS 32
IAS 39
Others
IFRIC 14
IFRIC 17
IFRIC 19
(Revised) Related Party Disclosures - Amendment on disclosure require-
ments for entities that are controlled, jointly controlled or significantly in-
fluenced by a Government (effective for annual periods beginning on or
after January 1,2011)
(Revised) Consolidated and Separate Financial Statements - Amendment
relating to Cost of an Investment in a Subsidiary (effective for annual peri-
ods beginning on or after July 1, 2009);
(Revised) Financial Instruments: Presentation - Amendments relating to
classification of Rights Issue (effective for annual periods beginning on or
after February 1,2010);
(Revised) Financial Instruments: Recognition and Measurement - Amend-
ments relating to Eligible Hedged Items (such as hedging inflation risk
and Hedging with options) (effective for annual periods beginning on or
after July 1, 2009);
Amendments to IFRS 2, IFRS 5, IFRS 8, IAS I, IAS 7, IAS 17, IAS 36, IAS 38
and IAS 39 resulting from April 2009 Annual Improvements to IFRSs (Ma-
jority effective for annual periods beginning on or after January 1,2010);
Amendment to IFRIC 14: IAS 19 The limit on a defined Benefit Asset -
Minimum Funding Requirement and their interaction (effective for annual
periods beginning on or after January 1, 2011);
Distributions of Non-cash Assets to Owners (effective for annual periods
beginning on or after July 1, 2009); and
Extinguishing Financial Liabilities with Equity Instruments (effective for
annual periods beginning on or after July 1, 2010).
The management anticipates that the adoption of these Standards and Interpretations will have no
material financial impact on the consolidated financial statements of the Group.
2.2
Basis of Preparation and Statement of Compliance with International Financial
Reporting standards
The consolidated and separate financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) and its interpretations issued by the International Accounting
Standard Board.
The Group and Company financial statements cover the financial year from 1 April 2009 to 31 March
2010.The comparatives represents the period 17 January 2008, being the date of incorporation of OPG
Power Ventures Plc., to 31 March 2009 and incorporate the financial year from 1 April 2008 to 31 March
2009 in respect of the Indian subsidiaries.
2.3
The Basis of Presentation and Accounting Policies used in preparing the historical
financial information
These accounting policies have been consistently applied to the results, gains and losses, assets,
liabilities and cash flows of all entities included in the consolidated financial statements for all the
periods presented unless otherwise stated. The financial statements are presented in Great Britain
Pounds (GBP/£)
23
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The financial information has been prepared on an historical cost basis. In the process of applying the
Group’s accounting policies, management is required to make judgments, estimates and assumptions
that may affect the financial statements. Management believes that the judgments made in the
preparation of the historical financial information are reasonable. Actual results could materially differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimate is revised if the revision affects only that
period or in the period of the revision and future periods if the revision affects both current and future
periods. Judgments made by management in the application of IFRS that have significant effect on the
historical financial information and estimates with a significant risk of material adjustment in the next
year are discussed in note 3.20. Also refer Policy 2.2.
2.4
Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the company and entities
controlled by the Company made up to 31st March each year.
Intra-group balances and transactions and any resulting unrealised gains arising from intra-group
transactions are eliminated on consolidation. Unrealised losses resulting from intra-group transactions
are also eliminated unless cost cannot be recovered. Amounts reported in the financial statements of
the subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies
adopted by the Group.
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company (its subsidiaries) made up to 31 March each year. Control is achieved where
the Company has the power to govern the financial and operating policies of an investee entity so as to
obtain benefits from its activities. The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing whether the Group controls another entity.
Controlled entities are fully consolidated from the date on which control is transferred to the Group.
They are deconsolidated from the date that control ceases.
The excess of cost of acquisition over the group’s interest in the net value of the identifiable assets,
liabilities and contingent liabilities of the subsidiaries on the date of acquisition is accounted as Goodwill
arising on consolidation. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s
identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination,
the excess is recognised immediately in profit. Goodwill is initially recognized as an asset at Cost and
subsequently measured at cost less any accumulated impairment losses.
Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. The
interests of non controlling shareholders may be initially measured either at fair value or at the non-
controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets. The
choice of measurement basis is made on an acquisition by-acquisition basis. Subsequent to acquisition,
the carrying amount of non-controlling interests is the amount of those interests at initial recognition
plus the non-controlling interests’ share of subsequent changes in equity. Total comprehensive income
is attributed to non-controlling interests even if this results in the non-controlling interests having a
deficit balance.
Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for
as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests
24
1619_TEXT:Layout 1 7/9/10 10:26 Page 25
are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between
the amount by which the non-controlling interests are adjusted and the fair value of the consideration
paid or received is recognised directly in equity and attributed to owners of the Company.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference
between (i) the aggregate of the fair value of the consideration received and the fair value of any retained
interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the
subsidiary and any non-controlling interests. Amounts previously recognised in other comprehensive
income in relation to the subsidiary are accounted for (i.e. reclassified to profit or loss or transferred
directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities
were disposed of. The fair value of any investment retained in the former subsidiary at the date when
control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39
Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition
of an investment in an associate or jointly controlled entity.
2.5
Foreign Currency
2.5.1 Translation to Presentation Currency
The functional currency of the Indian subsidiaries in Indian Rupee (INR) and Cyprus and IOM Company
is Great British Pound (GBP).
Functional and presentation currency: Items included in the financial statements in each of the Group’s
entities are measured using the currency of the primary economic environment in which the entity
operates (‘the functional currency’). The consolidated financial statements are presented in Great Britain
Pound (£), which is the Company’s functional and presentation currency.
At the reporting date the assets and liabilities of the Indian entities are translated into the presentation
currency, which is the Great Britain Pound (£) at the rate of exchange ruling at the balance sheet date
and the income statement is translated at the average exchange rate for that year. Exchange differences
arising, if any, are classified as equity and recognised in the Group’s foreign currency translation reserve.
Such exchange differences are recognized in profit or loss in the period in which the foreign operation
is disposed of.
2.5.2 Foreign currency transactions
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 balance sheet date
are translated into functional currency at the foreign exchange rate ruling at that date. Foreign exchange
differences arising on translation are recognized in the Income statement. 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.
Goodwill and fair value adjustments, arising on consolidation of financial statements and presentation
of financial instruments acquired other than by subscription of subsidiaries, are treated as assets of the
purchasing entity.
Goodwill is measured at cost less any accumulated impairment losses. Impairment review is performed
at least annually. Any impairment is recognized immediately in the income statement and is not
subsequently reversed.
25
1619_TEXT:Layout 1 7/9/10 10:26 Page 26
On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation,
or a disposal involving loss of control over a subsidiary that includes a foreign operation, loss of joint
control over a jointly controlled entity that includes a foreign operation, or loss of significant influence
over an associate that includes a foreign operation),all of the accumulated exchange differences in
respect of that operation attributable to the Group are reclassified to profit or loss. Any exchange
differences that have previously been attributed to non-controlling interests are derecognised, but they
are not reclassified to profit or loss.
In the case of a partial disposal (i.e. no loss of control) of a subsidiary that includes a foreign operation,
the proportionate share of accumulated exchange differences are re-attributed to non-controlling
interests and are not recognised in profit or loss. For all other partial disposals (i.e. of associates or
jointly controlled entities not involving a change of accounting basis), the proportionate share of the
accumulated exchange differences is reclassified to profit or loss.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as
assets and liabilities of the foreign operation and translated at the closing rate.
2.6
Property, Plant and Equipment
2.6.1 Owned assets
Property, Plant and Equipment are stated at cost of acquisition less accumulated depreciation. Direct
cost is capitalized until the asset is ready for use and includes inward freight, duties and expenses
incidental to acquisition and installation.
The cost of self constructed assets includes the cost of material and direct labour, any other costs
directly attributable to bringing the asset to a working condition for its intended use, and the cost of
dismantling and removing any items on and restoring the site on which they are located.
Parts of some items of property, plant and equipment require replacement at regular intervals. OPG
recognizes in the carrying amount of an item of property, plant and equipment the cost of replacing part
of such an item when that cost is incurred and correspondingly, any carrying amount of those parts that
are replaced is derecognized.
Certain items of plant and equipment require the performance of regular major inspections for faults
regardless of whether parts of the item are replaced. When each major inspection is performed, its cost
is recognized in the carrying amount of the item of property, plant and equipment as a replacement and
any remaining carrying amount of the previous inspection is derecognized. This occurs regardless of
whether the cost of previous inspection was identified in the transaction in which the item was acquired
or constructed. Where necessary, the estimated cost of a future similar inspection is be used as an
indication of what the cost of the existing inspection component was when the item was acquired or
constructed.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing
the proceeds from disposal with the carrying amount of property, plant and equipment and are recognized
within “other gains and losses” for gains and “other operating expenses” for losses in the statement of
income.
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2.6.2 Depreciation
Depreciation on property, plant and equipment is provided based on the straight line method over the
economic useful life of assets as estimated by the management, on a pro-rata basis. The economic
useful lives estimated by the management for depreciation of the assets are as under:
Asset
Building
Plant and Machinery
Furniture and Fixtures
Office Equipments
Vehicles
Computers
Estimated
useful life
(years)
30
4-30
5-15
3-10
5-11
3
The useful life of property, plant and equipment is reviewed annually and, wherever a change is made to
the estimates of useful life of an asset, the depreciation charge is adjusted.
Leasehold improvements are depreciated over the primary period of the lease or estimated useful lives
of the assets whichever is less. Assets under construction are not depreciated, as they are not ready for
use.
2.6.3 Borrowing cost
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
which are 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, until such time as the assets are substantially ready for their
intended use or sale.
Transaction cost incurred on raising long term borrowings are deferred in the year of payment and are
capitalized as part of costs of the qualifying asset and depreciated over the useful life on straight line
method.
Borrowing cost, including amortization of transaction cost directly attributable to the acquisition or
construction of qualifying property, plant and equipment are capitalized as part of the cost of asset when
it is probable they will result in future economic benefit and the cost can be measured reliably.
2.6.4 Impairment of Property, Plant and Equipment
The Group’s property, plant and equipment are subject to impairment testing.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash-generating units). As a result, some assets are tested individually
for impairment and some are tested at cash-generating unit level.
All individual assets or cash-generating units are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
27
1619_TEXT:Layout 1 7/9/10 10:26 Page 28
An impairment loss is recognized for the amount by which the assets or cash-generating unit’s carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of fair value, reflecting
market conditions less costs to sell and value in use, based on an internal discounted cash flow
evaluation. The impairment loss is charged pro rata to the assets in the cash-generating unit. All assets
are subsequently reassessed for indications that an impairment loss previously recognized may no
longer exist.
Impairment losses recognized in prior periods are assessed at each reporting date for any indications
that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a
change in the estimate used to determine the recoverable amount. An impairment loss is reversed only
to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortization, if no impairment loss had been recognized.
2.7
Financial Assets
Investments are recognized and derecognized on the date of trade where the purchase or sale of an
investment is under a contract whose terms require delivery of the investment within the timeframe
established by the market concerned, and are initially measured at fair value, plus transaction costs,
except for those financial assets classified as at fair value through profit or loss, which are initially
measured at fair value.
Financial assets are classified into the following specified categories: financial assets ‘at fair value
through profit or loss’ (FVTPL), ‘held-to-maturity’ investments, ‘available-for-sale’ (AFS) financial assets
and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets
and is determined at the time of initial recognition.
2.7.1 Held to Maturity Investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments
and fixed maturity. Investments are classified as held-to-maturity if it is the intention of Group’s
management to hold them until maturity. Held-to-maturity investments are subsequently measured at
amortized cost using the effective interest method. In addition, if there is objective evidence that the
investment has been impaired, the financial asset is measured at the present value of estimated cash
flows. Any changes to the carrying amount of the investment are recognized in income statement.
2.7.2 Available for Sale Financial Assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not
classified in any of the other categories. They are included in non-current assets unless management
intends to dispose of the investment within 12 months of the balance sheet date.
Regular purchases and sales of financial assets are recognized on the trade-date – the date on which
the Group commits to purchase or sell the asset. Investments are initially recognized at fair value plus
transaction costs for all financial assets not carried at fair value through income statement. Financial
assets are derecognized when the rights to receive cash flows from the investments have expired or
have been transferred and the Group has transferred substantially all risks and rewards of ownership.
Available for sale financial assets are subsequently carried at fair value. Loans and receivables are carried
at amortized cost using the effective interest method.
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Changes in the fair value of monetary and non-monetary securities classified as available-for-sale are
recognized in equity. When securities classified as available for sale are sold or impaired, the accumulated
fair value adjustments recognized in equity are included in the income statement as ‘financial expenses
(gains and losses from investment securities)’.
Dividends on available-for-sale mutual fund units are recognized in the income statement as part of
other income.
2.7.3 Impairment of Financial Assets
A financial asset is assessed at each reporting date to determine whether there is any objective evidence
that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that
one or more events have had a negative effect on the estimated future cash flows of that asset. In case
of equity investments classified as available-for-sale, objective evidence would include a significant or
prolonged decline in the fair value of the investment below its cost.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the
difference between its carrying amount, and the present value of the estimated future cash flows
discounted at the original effective interest rate. An impairment loss in respect of an available-for sale
financial asset is calculated by reference to its fair value.
Individually significant financial assets are tested for impairment on an individual basis. The remaining
financial assets are assessed collectively in Groups that share similar credit risk characteristics.
All impairment losses are recognised in profit or loss. Any cumulative loss in respect of an available for-
sale financial asset recognised previously in equity is transferred to profit or loss.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the
impairment loss was recognised. For available-for-sale financial assets that are equity securities, the
reversal is recognised directly in equity.
2.8
Trade and other Receivables
Trade receivables are initially measured at fair value and subsequently measured at amortized cost
using the effective interest rate method. They are as reduced by appropriate allowances for estimated
irrecoverable amounts. A provision for impairment of trade receivables is established when there is
objective evidence that the Group will not be able to collect all amounts due according to the original
term of the receivable. The amount of the provision is the difference between the carrying amount and
the recoverable amount and this difference is recognized in the income statement. Interest income is
recognized by applying the effective interest rate, except for short-term receivables when the recognition
of interest would be immaterial.
2.9
Inventories
Inventories are stated at lower of cost and net realizable value. The cost is based on the first-in-first-
out principle and includes duties and taxes (other than those subsequently recoverable from taxing
authorities), freight inward, handling and other costs directly attributable to the acquisition.
29
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2.10 Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly
liquid investments that are readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value.
2.11
Share Capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax, from the proceeds. Equity instruments,
convertible into fixed number of ordinary shares at a fixed pre-determined price, and which are exercisable
after a specific period, are accounted for as and when such instruments are exercised. The transaction
costs pertaining to such instruments are adjusted against equity.
2.12
Employee Benefits
Short term employee benefits obligations, including salary, are measured on an undiscounted basis
and are expensed as the related service is provided. A liability is recognized for the amount expected
to be paid under short term cash bonus or profit sharing plans if the company has a present legal
or constructive obligation to pay this amount as a result of the past service of the employee and the
obligation can be estimated reliably.
The Group’s net obligation in respect of gratuity includes amounts payable to employees on termination,
resignation or retirement on completion of a minimum service period with the Group. The discount rate
is the yield at the balance sheet date on government bonds that have maturity dates approximating
to the terms of the Group’s obligations. The calculation is performed by a qualified actuary using the
projected unit credit method. When the benefits of a plan are improved, the portion of the increased
benefit relating to past service by employees is recognised as an expense in the income statement on
a straight-line basis over the average period until the benefits become vested. To the extent that the
benefits vest immediately, the expense is recognised immediately in the income statement.
2.12.1 Share based payments
Equity-settled share-based payments to employees and others providing similar services are measured
at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair
value of equity-settled share-based transactions are set out in note No. 3.17.1. The fair value determined
at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the
vesting period, based on the Group’s estimate of equity instruments that will eventually vest. At the end
of each reporting period, the Group revises its estimate of the number of equity instruments expected to
vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that
the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-
settled employee benefits reserve.
.
2.13
Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of
a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation.
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The amount recognized as a provision is the best estimate of the consideration required to settle the
present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding
the obligation. Where a provision is measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered
from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will
be received and the amount of the receivable can be measured reliably.
2.14
Trade Payables
Trade payables are recognized initially at fair value and subsequently measured at amortized cost using
the effective interest method.
2.15
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 power
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 period end.
Financial Income
Interest income is accrued on a time basis, by reference to the principal outstanding and at the interest
rate applicable. Dividend income from investments is recognized when the shareholders’ / units holders’
rights to receive payment have been established. Foreign currency gains and losses are reported on a
net basis
2.16 Operating lease payments
Payments made under non-cancellable operating leases are recognized in the income statement on a
straight-line basis over the term of the lease. Payments made under cancellable operating leases are
recognized as expense in the period in which they are incurred.
2.17
Pre Operative Expenses
Adminsitration expenses, salaries, travels rents, rates, taxes and other professional fees incurred in
respect in the plants under construction and not directly attributable to cost of assets constructed are
expensed in the period in which they were incurred and has been included as Pre Operative expenses in
the income statement.
2.18
Income Tax
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognized
in the income statement except to the extent that it relates to items recognized directly in equity, in
which case it is recognized in equity.
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Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous
years.
Deferred tax is provided using the balance sheet liability method, on temporary differences between
the carrying amount of assets and liabilities for financial reporting purposes and their tax base.
The amount of deferred tax provided is based on the expected manner of realization or settlement of the
carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance
sheet date. Deferred tax is measured at the tax rates that are expected to be applied to the temporary
differences when they reverse, based on the laws that have been enacted or substantively enacted by the
reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset
current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the
same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets
on a net basis or their tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be
available against which the asset can be utilized. Deferred tax assets are reduced to the extent that it is
no longer probable that the related tax benefit will be realized.
2.19
Earnings per Share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS
is calculated by dividing the profit or loss attributable to ordinary shareholders of the Group by the
weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined
by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number
of ordinary shares outstanding for the effects of all dilutive potential ordinary shares. Refer Note 3.17 for
the calculation of EPS.
2.20 Significant Estimates in the financial statements
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 required the Group to use a variety of
estimation techniques and apply judgement 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 judgement 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 policies where significant estimates have been made are as follows:
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the
balance sheet 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:
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(cid:75) (cid:40)(cid:51)(cid:49)(cid:61)(cid:68)(cid:51)(cid:64)(cid:47)(cid:48)(cid:55)(cid:58)(cid:55)(cid:66)(cid:71) (cid:61)(cid:52) (cid:50)(cid:51)(cid:52)(cid:51)(cid:64)(cid:64)(cid:51)(cid:50) (cid:66)(cid:47)(cid:70) (cid:47)(cid:65)(cid:65)(cid:51)(cid:66)(cid:65)(cid:22) The recognition of deferred tax assets requires assessment of
sufficient future taxable profit and consequent tax payments to realize the values stated
(cid:75) (cid:37)(cid:66)(cid:54)(cid:51)(cid:64) (cid:73)(cid:60)(cid:47)(cid:60)(cid:49)(cid:55)(cid:47)(cid:58) (cid:58)(cid:55)(cid:47)(cid:48)(cid:55)(cid:58)(cid:55)(cid:66)(cid:55)(cid:51)(cid:65)(cid:22) Interest-bearing loans and borrowings held by the Group are measured at
amortised cost except where designated at fair value through profit and loss account.
(cid:75) (cid:43)(cid:60)(cid:49)(cid:61)(cid:58)(cid:58)(cid:51)(cid:49)(cid:66)(cid:47)(cid:48)(cid:55)(cid:58)(cid:55)(cid:66)(cid:71) (cid:61)(cid:52) (cid:66)(cid:64)(cid:47)(cid:50)(cid:51) (cid:64)(cid:51)(cid:49)(cid:51)(cid:55)(cid:68)(cid:47)(cid:48)(cid:58)(cid:51)(cid:65)(cid:22) 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.
(cid:75)
(cid:31)(cid:59)(cid:62)(cid:47)(cid:55)(cid:64)(cid:59)(cid:51)(cid:60)(cid:66) (cid:66)(cid:51)(cid:65)(cid:66)(cid:65)(cid:22) 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.
Share based payments – In determining the fair value of the share based payments and the related
charge to the statement of comprehensive income, certain assumptions have to be made about future
events and market conditions. In particular, judgments were made about the likely number of options
that would vest, and the fair value of the option granted, which si again dependent on other assumptions
like market volatility, dividend policy, prevailing interest rates etc.
(cid:36)(cid:61)(cid:66)(cid:51) (cid:15)(cid:22) (cid:36)(cid:61)(cid:66)(cid:51)(cid:65) (cid:61)(cid:60) (cid:23)(cid:49)(cid:49)(cid:61)(cid:67)(cid:60)(cid:66)(cid:65) (cid:52)(cid:61)(cid:64)(cid:59)(cid:55)(cid:60)(cid:53) (cid:62)(cid:47)(cid:64)(cid:66) (cid:61)(cid:52) (cid:66)(cid:54)(cid:51) (cid:49)(cid:61)(cid:60)(cid:65)(cid:61)(cid:58)(cid:55)(cid:50)(cid:47)(cid:66)(cid:51)(cid:50) (cid:73)(cid:60)(cid:47)(cid:60)(cid:49)(cid:55)(cid:47)(cid:58) (cid:65)(cid:66)(cid:47)(cid:66)(cid:51)(cid:59)(cid:51)(cid:60)(cid:66)(cid:65)
(cid:15)(cid:10)(cid:13)
(cid:41)(cid:51)(cid:53)(cid:59)(cid:51)(cid:60)(cid:66) (cid:40)(cid:51)(cid:62)(cid:61)(cid:64)(cid:66)(cid:55)(cid:60)(cid:53)
The Group has adopted IFRS 8 Operating Segments with effect from 1 April 2009. IFRS 8 requires
operating segments to be identified on the basis of internal reports about components of the Group
that are regularly reviewed by the chief operating decision maker in order to allocate resources to the
segments and to assess their performance. In contrast, the predecessor Standard (IAS 14 Segment
Reporting) required an entity to identify two sets of segments (business and geographical), using a
risks and returns approach, with the entity’s ‘system of internal financial reporting to key management
personnel’ serving only as the starting point for the identification of such segments.
Based upon the risks and returns of the Group and reviews done regularly by the chief operating decision
maker, the Group has concluded that there is only one business segment, this being the generation and
sale of electricity to customers. There are no segments classified based on other risks and rewards and
the power plants are all only in India.
(cid:15)(cid:10)(cid:14) (cid:40)(cid:51)(cid:68)(cid:51)(cid:60)(cid:67)(cid:51)
Sale of Power
Sale of Service
Trading and Other Sales
(cid:42)(cid:61)(cid:66)(cid:47)(cid:58)
(cid:46)(cid:51)(cid:47)(cid:64) (cid:51)(cid:60)(cid:50)(cid:51)(cid:50) (cid:15)(cid:13) (cid:35)(cid:47)(cid:64)(cid:49)(cid:54) (cid:14)(cid:12)(cid:13)(cid:12)
(cid:38)(cid:51)(cid:64)(cid:55)(cid:61)(cid:50) (cid:51)(cid:60)(cid:50)(cid:51)(cid:50) (cid:15)(cid:13) (cid:35)(cid:47)(cid:64)(cid:49)(cid:54) (cid:14)(cid:12)(cid:12)(cid:21)
(cid:25)(cid:61)(cid:59)(cid:62)(cid:47)(cid:60)(cid:71) (cid:72)
(cid:29)(cid:64)(cid:61)(cid:67)(cid:62)
(cid:72)
7,072,984
237,575
-
(cid:19)(cid:8)(cid:15)(cid:13)(cid:12)(cid:8)(cid:17)(cid:17)(cid:21)
-
-
-
(cid:9)
(cid:25)(cid:61)(cid:59)(cid:62)(cid:47)(cid:60)(cid:71) (cid:72)
-
-
-
(cid:9)
(cid:29)(cid:64)(cid:61)(cid:67)(cid:62)
(cid:72)
11,279,182
236,226
1,357,189
(cid:13)(cid:14)(cid:8)(cid:20)(cid:19)(cid:14)(cid:8)(cid:17)(cid:21)(cid:19)
33
1619_TEXT:Layout 1 7/9/10 10:26 Page 34
The revenue from sale of power is derived from government undertakings (65.61%) (Previous year
14.37%) and private sector customers (34.39%) (Previous year 85.63%). There is no individual customer
who accounts for 10% or more of the total revenue except for two government undertakings which are
considered sovereign risk free from default.
3.3 Other Gains and Losses
Year ended 31 March 2010
Period ended 31 March 2009
Group
£
944,524
-
99,668
-114,430
98,797
1,028,559
Company £
Group
£
Company £
-
-
-
(200,657)
98,126
(102,531)
208,723
394,492
-
694,240
794
1,298,249
-
-
-
694,240
-
694,240
Dividend Income
Provision for Tax no longer required, writ-
ten back
Unclaimed amount written back
Unrealised Forex (loss) / Gain (Net)
Others
3.4
Release of negative goodwill
During 2009, the Group acquired controlling interests in the Indian subsidiaries. On consolidation of the
financial statements of the said subsidiaries with the parent company, the amounts of the identifiable
net assets of the latter attributable to the group exceeded the consideration transferred by the way
of equity and resulted in a surplus which was been recognized as release of negative goodwill in the
Income statement.
3.5
Financial Income
Bank Interest
Interest on Bank Deposits
Interest on loan
Interest on Lease Deposits
Profit on sale of Mutual Funds
Other income
Financial Income
Year ended 31 March 2010
Period ended 31 March 2009
Company £
Group
£
1,840
8,820
-
-
134,739
145,399
1,031,518
1,593,356
83,688
10,006
-
-
Company £
989,110
-
-
-
-
-
2,718,568
989,110
Group
£
3,361
1,017,756
8,820
86,576
46,252
134,739
1,297,504
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3.6
Financial Expenses
Interest on short term borrowings and
Other financing costs
Interest on bank borrowings
Loss on sale of Mutual Funds
Financial Expenses
3.7
Tax Expense
Year ended 31 March 2010
Period ended 31 March 2009
Group
£
(186,753)
(362,302)
(105,406)
(654,461)
Company £
Group
£
Company £
(1,230)
(1,355,020 )
-
-
(851,718)
-
(1,230)
(2,206,738)
Year ended 31 March 2010
Period ended 31 March 2009
Group
£
Company £
Group
£
Company £
Current tax expense
Current tax
Deferred tax expense
Origination and reversal of temporary dif-
ferences
(1,416,412)
(15,926)
Total tax expense of the year / period
(1,432,338)
Reconciliation of Tax rates:
-
-
-
(870,849)
(126,558)
(997,407)
-
-
-
-
-
-
-
Profit before tax
Indian corporate income tax rate
Income tax at standard rate
Differences on account of items taxed at zero/lower rates
Tax charge
Year ended 31 March
2010
Group
£
Period ended 31 March
2009
Group
£
5,449,843
33.99%
(1,852,402)
420,064
1,432,338
6,330,216
33.99%
(2,151,640)
1,154,233
997,407
The item “Differences on account of items taxed at zero/lower rates” in the above table represents the
difference between notional Indian income tax at standard rate (not applicable to the Company and
the Cyprus subsidiaries) on the consolidated profits before tax and the actual tax liability of the Indian
subsidiaries.
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
35
1619_TEXT:Layout 1 7/9/10 10:26 Page 36
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 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 2010 and 2009. Accordingly, the Group calculated the
tax liability for current taxes in India after considering MAT. The MAT Credit as at March 31, 2010 is £
1.67 million and a 100% valuation allowance has been considered on a prudent basis. However, the
Indian entities can avail credit of the MAT paid against future tax liabilities and can carry forward and set
off within ten years from the end of the financial year in which MAT is paid.
3.7.1 Deferred Tax Assets and Liabilities
Recognized deferred tax assets and liabilities of the Group
Deferred tax assets and liabilities of the Group are attributable to the following:
Assets
Liabilities
As at
31 March
2010 (£)
As at
31 March
2009 (£)
As at
31 March
2010 (£)
As at
31 March
2009 (£)
Property, plant and equipment
Fair valuation of AVS securities
Net tax assets/(liabilities)
-
51,505
51,505
-
60,909
60,909
(514,235)
-
(514,235)
(446,451)
-
(446,451)
Movement in temporary differences during the year
As at 1 April
2009
Recognised
in Income
Statement
Recognised
in equity
Translation
adjustment
As at 31
March 2010
Property, plant and equipment
(446,451)
(15,927)
-
MTM gain / (loss) on AVS
60,909
-
(7,482)
(51,857)
(1,922)
(514,235)
51,505
Deferred tax assets/(liabilities)
(385,542)
(15,927)
(7,482)
(53,779)
(462,730)
As at 1 April
2008
Recognised
in income
statement
Recognised
in equity
Translation
adjustment
As at 31
March 2009
Property, plant and equipment
(290,095)
(126,558)
-
(29,798)
(446,451)
MTM gain / (loss) on AVS
-
-
(5,702)
66,611
60,909
Deferred tax assets/(liabilities)
(290,095)
(126,558)
(5,702)
36,813
(385,542)
36
1619_TEXT:Layout 1 7/9/10 10:26 Page 37
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3.8.2 Assets pledged as Security
At 31 March 2010, properties with a carrying amount of £ 15.16 Million are secured against the Group’s
immoveable assets, present and future, including the property, plant and equipment. These loans are
further secured by a floating charge on the movable assets and by the personal guarantee of a Director.
In addition OPG Energy has availed a bank facility against its receivables which is secured by a first
floating charge on its receivables and current assets and by a second charge on the immovable assets
of the Company. In addition, this facility is guaranteed by two Directors of OPG Energy and by Mr. Ravi
Gupta, relative of a Key Managerial Person.
3.9 Capital Work In Progress
As at 31 March 2010
As at 31 March 2009
Group
£
Company
£
Group
£
Company
£
Plant & Machinery
Civil & Foundation
Interest Paid on bank bor-
rowings
Electrical Installation
Others
TOTAL
3.10 Capital Advances
31,045,394
10,078,070
4,189,400
4,059,549
474,744
49,847,157
-
-
-
-
-
-
17,111,103
7,519,000
1,016,905
2,967,444
560,203
29,174,655
-
-
-
-
-
-
3.10. Capital advances of £21,160,152 (£6,705,770) include advance for capital goods amounting to
£20,486,837 (£6,632,416) and other advances.
3.11 Other Non-Current Assets
Prepaid Expenses
Lease Deposit
Others
TOTAL
As at 31 March 2010
As at 31 March 2009
Group
£
Company
£
Group
£
Company
£
3,618,405
961,213
890,639
5,470,257
7,887
-
-
7,887
3,525,784
790,734
-
4,316,518
5,000
-
-
5,000
3.12 Trade and Other Receivables / Other Current Assets
Other Current Assets includes prepaid expenses, staff advances, advance to suppliers etc. The carrying
amounts detailed above are the maximum potential credit exposure in relation to these assets.
39
1619_TEXT:Layout 1 7/9/10 10:26 Page 40
As at 31 March 2010
As at 31 March 2009
Group
£
Company
£
Group
£
Company
£
3,089,084
274,265
1,400,329
13,213
3,452,529
3,002,282
151,052
209,237
298,414
7,113,514
61,143,636
882,938
67,386,189
-
-
-
1,459
61,145,095
-
835,151
2,551,888
960,771
5,230,748
-
-
-
-
67,386,189
Trade receivables
Other Current Assets
Short term loans
Mutual Funds redemption
receivable
Dividend & Interest receiv-
able
Other receivables
Other Current Assets
TOTAL
3.13
Inventories
As at 31 March 2010
As at 31 March 2009
Group
£
Company
£
Group
£
Company
£
Stock of Coal
Stock of Stores and Spares
TOTAL
3.14 Financial Assets
1,726,409
414,506
1,867,915
As at 31 March 2010
Group
£
Company
£
Available for Sale Financial
Assets
TOTAL
12,977,604
12,977,604
Available for Sale Financial Assets
-
-
-
-
-
-
41,711
41,711
As at 31 March 2009
Group
£
Company
£
8,478,766
8,478,766
-
-
-
-
-
Available for Sale financial assets, represents investments that present the Group with the opportunity
for return through dividend income and gains.
Funds raised in the Initial Public Offer and contributed as equity in three of the subsidiaries - OPG Power
Generation Pvt Ltd and OPG Power Gujarat Pvt Ltd and Gita Power and Infrastructure Pvt Ltd were, to
the extent not immediately required for the project, deployed in deposits with banks and (in) units of
(Regulated, supervised) mutual funds.
40
1619_TEXT:Layout 1 7/9/10 10:26 Page 41
3.15 Cash and Cash Equivalents
As at 31 March 2010
As at 31 March 2009
Group
£
Company
£
Group
£
Company
£
Cash
Cash at Bank
Cheques on hand
Fixed Deposits
Cash and cash equivalents
Restricted Cash
3,786
7,355,871
-
6,808,796
14,168,453
7,072,048
1,481,894
-
44,669
-
7,072,048
10,290,078
4,039,991
-
-
-
157,891
21,827,204
32,319,842
1,403,126
-
-
4,039,991
-
Restricted cash of £ 1,481,894 (£1,403,126) represents bank deposits, including accrued interest, of
varying maturities extending beyond two years, all of which are under lien to the Group’s bankers.
3.16 Share Capital
The Company is incorporated under the Isle of Man Companies Act 2006 (CA 2006) which does not
prescribe that a company shall have an authorized share capital. Rather, subject to CA 2006 and to the
Memorandum and Articles of Association, shares in a company may be issued at such times and to
such persons, for such consideration and on such terms as its directors may determine.
Certain companies had invested in the Company prior to Admission at the Placing Price (the “Pre IPO
Monies”).
The issue price at listing was Pence 60 per Ordinary share for the issue of 108,418,367 new Ordinary
Shares raising £ 65.10 Million before issue expenses.
286,989,795 shares are outstanding as at March 31, 2010 and 2009 which includes 170,068,027 shares
to Promoters, 8,503,401 for cash pre IPO and 108,418,367 shares for cash as initial public offering.
Issued capital as at March 31, 2010 and 2009 amounts to £42,187.
3.17 Earnings per share
Weighted average number of ordinary
shares
Shares deemed to be issued for no con-
sideration in respect of stock options
Weighted average number of ordinary
shares(diluted)
Year ended 31
March 2010
Year ended 31
March 2010
Period ended
31 March 2009
Period ended
31 March 2009
286,989,795
286,989,795
267,502,834
267,502,834
4,383,911
4,383,911
-
-
291,373,706
291,373,706
267,502,834
267,502,834
Diluted EPS ( In Pence)
Diluted EPS ( In Pence)
0.323
0.318
(0.539)
(0.539)*
1.237
1.237
0.475
0.475
* Anti dilutive, hence Basic EPS to be considered as Diluted EPS.
41
1619_TEXT:Layout 1 7/9/10 10:26 Page 42
3.17.1 Employee Stock Option Issued to Directors - On 16 July 2009, Board has granted share options
which are limited to 10% of the Group’s Share Capital(Presently 28,698,979 shares). Once granted,
options must be exercised within ten years of the date of grant otherwise the options lapse.
The Vesting of these options is based on following conditions:
1)
The power plant at Kutch (2x150MW) in the State of Gujarat must have been in commercial
operation for three months.
2)
The closing share price being at least £1.00 for 3 consecutive business days.
Under IFRS 2 – Share Based Payments, these outstanding options being in the nature of share based
payment, are amortized over the estimated vesting period of 3.71 years (expected completion of Kutch
Plant - Gujarat by April 2013).
Accordingly, the attributable expense for the period was GBP 1,206,959.
3.17.2 Fair value of share options granted in the year
The weighted average fair value of the share options granted during the financial year is £0.28. Options
were priced using a Black Scholes Model – European Option. Where relevant, the expected life used in
the model has been adjusted based on management’s best estimate for the effects of non-transferability,
exercise restrictions (including the probability of meeting market conditions attached to the option),
and behavioral considerations. Expected volatility is based on the historical share price volatility.
Assumptions
Grant date share price
Exercise price
Expected volatility
Option life
Dividend yield
Risk-free interest rate
Option Fair Value
£0.66
£0.60
31.34%
6.86years
0%
3.04%
£0.28
3.17.3 Movements in shares options during the year
The following reconciles the share options outstanding at the beginning and end of the year
Balance at beginning of year
Number of
Options
-
Granted during the year(at an exercise price of £0.60)
22,524,234
Forfeited during the year
Exercised during the year
Expired during the year
Balance at end of year
-
-
-
22,524,234
42
1619_TEXT:Layout 1 7/9/10 10:26 Page 43
3.18
Interest Bearing Loans and Bank Borrowings
As at 31
March 2010
Group
£
As at 31 March
2010
Company
£
As at
March 2009
Group
£
As at March
2009
Company
£
Non -Current liabilities
Bank borrowings
Current liabilities
Current portion of bank borrowings
Total Borrowings
The borrowings are repayable as follows:
On demand or within one year
In the second year
In the third to fifth years inclusive
After five years
3.19 Financial Instruments
3.19.1 Financial risk factors
30,800,245
30,800,245
3,882,815
3,882,815
34,683,060
3,882,815
10,677,786
19,058,181
1,064,278
34,683,060
-
-
-
-
-
-
-
-
-
-
19,967,353
19,967,353
2,481,114
2,481,114
22,448,467
2,481,114
5,798,783
14,168,570
-
22,448,467
-
-
-
-
-
-
-
-
-
-
(a)
The Group’s activities expose it to a variety of financial risks; market risk (for example, currency
risk) interest rate risk and liquidity risk. The Group’s overall risk management programme places
stress on the unpredictability of financial markets and seeks to minimize potential adverse effects
on the Group’s financial performance. The financial instruments of the Group, other than
derivatives, comprise loans from banks and financial institutions, nonconvertible bonds, demand
deposits and short-term bank deposits.
(b)
Financial risk management objectives
The Finance Director and Managing Director of the Group, co-ordinate access to domestic and
international financial markets, monitor and manage the financial risks relating to the operations
of the Company through internal risk reports which analyse exposures by degree and magnitude
of risks. These risks include fair value interest rate risk component of market risk, credit risk,
liquidity risk and cash flow interest rate risk.
The Company does not seek to manage fair value interest rate risk and cash flow interest rate
risk on its fixed and floating borrowings, as these risks are managed at the Group level. The
company does not enter into any financial derivative contracts. The Company follows Group’s
policies approved by the board of directors, which provide written principles on, interest rate
risk, credit risk, the use of non-derivative financial instruments, and the investment of excess
liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on
a continuous basis. The Company does not enter into or trade financial instruments, including
derivative financial instruments, for speculative purposes.
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3.19.2 Market risk
(a)
Foreign Exchange Risk
The Group prepares consolidated financial statements in UK Pounds and conducts substantially all its
business in Indian rupees (‘INR’). As a result, it is subject to foreign currency exchange risk arising from
exchange rate movements which will affect the Group’s translation of the results and underlying net
assets of its foreign Subsidiaries.
(b)
Cash fl ow and fair value interest rate risk
As the Group has no significant interest-bearing assets other than investment in bank deposits, the
Group’s income and operating cash flows are substantially independent of changes in market interest
rates. The Company considers that the impact of fair value interest rate risk on investment in bank
deposits is not material. The Group’s interest rate risk arises from long-term borrowings. Borrowings
issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates
expose the Group to fair value interest rate risk. During the period, the Group’s borrowings at variable
or fixed rates were entirely denominated in the functional currency of its Indian entities, being INR.
Financial assets
Cash and bank balances
Trade and other receivables
Financial Liabilities
Rupee floating rate loan
Trade and other payables
Financial assets
Cash and bank balances
Trade and other receivables
Financial Liabilities
Bank Borrowings:
As at 31 March 2010 (£)
On demand
Less than
1 year
1 -5 years
More than 5
years
Effective
interest rate
Total
14,168,453
10,202,598
24,371,051
-
-
-
-
-
-
-
-
-
14,168,453
10,202,598
24,371,051
3,882,815
14,639,829
16,160,416
12.00% 34,683,060
6,757,099
-
-
10,639,914
14,639,829
16,160,416
6,757,099
41,440,159
As at 31 March 2009 (£)
On demand
Less than 1
year
1 -5 years
More than 5
years
Effective
interest rate
Total
33,722,968
6,631,077
40,354,045
-
-
-
-
-
-
-
-
33,722,968
6,631,077
-
40,354,045
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Rupee floating rate loan
Trade and other payables
2,481,114
10,741,938
9,225,415
12.04% 22,448,467
859,733
-
-
3,340,847
10,741,938
9,225,415
859,733
23,308,200
The carrying amount reflected above represents the Company’s maximum exposure to credit risk for
such loans and receivables.
(c)
Credit risk
The Group’s credit risk arises from accounts receivable balances on sale of electricity. The Indian entities
have entered into exclusive Power Purchase Agreements (PPA’s) with industrial buyers to export the
entire electricity generated. The Group is therefore committed to sell power to these customers and
regards any potential risk of default as being a commercial one. The Group is paid monthly by the buyers
for the electricity it supplies.
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in
financial loss to the Company. For cash and cash equivalents the Company only transacts with entities
that are rated the equivalent to investment grade and above. Other financial assets consist of amounts
receivable from related parties. The company’s exposure to significant concentration of credit risk on
receivables from related parties is detailed in note 3.24.
The group has not entered into any derivative financial instruments during the year and hence there is
no credit risk exposure on derivatives
The table below shows the credit limit set by the group for and outstanding deposits there against in
respect of 2 major bank counterparties at the balance sheet date using the Standard and Poor’s credit
rating symbols.
Counterparty
Location
Rating
Punjab National Bank
India
Not
As at 31 March 2010
As at 31 March 2009
Maximum
amount
that can be
deposited
Deposits
as at year
end
£
£
Maximum
amount
that
can be
deposited
£
Deposits
as at year
end
£
Indian Overseas Bank
Indian Bank
(d)
Liquidity risk
Available 6,000,000
5,334,814 4,500,000
2,836,435
India
India
Not
Available
Not
Available
-
- 3,500,000
2,148,289
3,500,000 1,473,982
-
-
Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents and
maintaining adequate credit facilities. In respect of its existing operations the Group funds itself
primarily through bank borrowings secured against each power plant. The Group’s objective in relation
to its existing operating business is to maintain sufficient funding to allow the plants to operate at an
optimal level and in particular purchase the necessary raw materials required.
In respect of each plant under development, the Group prepares a model to evaluate the necessary
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funding required. The Group’s strategy is to primarily fund such acquisitions by assuming debt in the
development companies secured on the power plant to be built. In relation to the payment towards
equity component of companies to be developed, the Group ordinarily seeks to fund this by the injection
of external funds by debt or equity.
The Group has identified a large range of development opportunities which it is continually evaluating
and which are subject to constant change. In respect of its overall business the Group therefore does
not, at the current time, maintain any overall liquidity forecasts. The table below analyses the Group’s
financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet
to the contractual maturity date.
(e)
Capital risk management
The Group’s objective when managing capital is to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for stakeholders. The Group also
proposes to maintain an optimal capital structure to reduce the cost of capital. Hence, the Group may
adjust any dividend payments, return capital to shareholders or issue new shares. Total capital is the
equity as shown in the consolidated balance sheet. Currently, the Group primarily monitors its capital
structure in terms of evaluating the funding of potential developments. It plans to strike a balance
between risks and returns. Management is continuously evolving strategies to optimize the returns and
reduce the risks. It includes plans to optimize the financial leverage of the Group.
The Group’s debt of £ 19,032,713 (net of Cash & Cash Equivalents of £ 14,168,453 and restricted cash of
£ 1,481,894) represents a gearing of 23.56% on a net debt basis.
(f )
Interest rate risk management
The Company is exposed to interest rate risk as it borrows funds at both fixed and floating interest rates.
The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate
borrowings.
The Company’s exposures to interest rates on financial assets and financial liabilities are detailed in the
liquidity risk management section of this note.
Interest rate sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates for non-
derivative instruments at the balance sheet date. For floating rate liabilities, the analysis is prepared
assuming the amount of liability outstanding at balance sheet date was outstanding for the whole
year. A 0.5 per cent increase or decrease is used when reporting interest rate risk internally to key
management personnel and represents management’s assessment of the reasonably possible change
in interest rates.
Year ended 31 March 2010
Period ended 31 March 2009
As Reported
+0.5%
-0.5%
As Reported
+0.50%
-0.50%
Net result for the year
4,017,505
3,874,141
4,160,870
5,332,809
5,302,525
5,363,095
Shareholder's Equity
80,768,909
80,625,545
80,912,273
72,811,083
72,798,479
72,825,129
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(g)
Fair value of fi nancial instruments
Details of the methods of the determination of the fair values of the Company’s financial assets and
financial liabilities are discussed in the note 2.7. The carrying amount of financial assets and financial
liabilities are recorded in these financial statements at amortised cost which approximate their fair
values.
3.20 Employee Benefits
3.20. 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 for a lump
sum payment to vested employees on retirement (subject to completion of five years of continuous
employment), death, incapacitation or termination of employment of amounts that are based on
salary and tenure of employment Liabilities with regard to the Gratuity Plan are determined by actuarial
valuation on the reporting date. The following tables summarises the components of net benefit expense
recognised in the income statement and the funded status and amounts recognised in the balance
sheet for the plan:
As at 31 March 2010
As at 31 March 2009
Group
£
Group
£
Present value of unfunded obligations
Recognised liability for defined benefit obligations
Total employee benefi t liability
15,338
15,338
15,338
1,443
1,443
1,443
3.20.2 Movements in the net liability for defined benefit obligations recognised in the balance sheet
As at 31 March 2010
As at 31 March 2009
Group
£
Group
£
Net liability for defined benefit obligations at 1 April
Expense recognised in the income statement (see below)
Actuarial gains
Translation adjustment
Net liability for defined benefit obligations
1,443
16,142
(3,885)
1,638
15,338
1,570
746
(973)
100
1,443
3.20.3 Employee benefits recognised in the balance sheet are as follows:
Non-current employee benefits
As at 31 March 2010
As at 31 March 2009
Group
Group
15,338
15,338
1,443
1,443
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3.20.4 Employee benefits recognised in the income statement
Current service costs
Interest on obligation
Actuarial gains
Year ended 31 March
2010
Group
£
Period ended 31
March 2009
Group
£
15,643
499
(3,885)
12,257
645
101
(973)
(227)
3.20.5 The above expense is recognised in the following line items in the income statement:
Employee Cost
Pre-operative expenses(Relating to projects under construc-
tion)
3.20.6 Liability for defined benefit obligations
Principal actuarial assumptions at the balance sheet date:
Discount rate at 31 March
Future salary increases
Withdrawal rate
3.20.7 Personnel costs
Wages and salaries
Increase in liability for defined
benefit plans
Share based compensation Costs
Year ended 31 March
2010
Group
Period ended 31
March 2009
Group
486
11,771
12,257
(227)
-
(227)
As at 31 March 2010
As at 31 March 2009
Group
£
Group
£
8%
15%
10%
8%
15%
10%
Year ended
31 March
2010
Group
£
Year ended
31 March
2010
Company
£
Period ended
31 March
2009
Group
£
Period ended
31 March
2009
Company
£
165,610
122,724
114,019
86,701
486
1,206,959
1,373,055
-
(227)
1,206,959
1,329,683
-
113,792
-
-
86,701
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3.21 Leases and Licences
One of the subsidiaries has taken land on lease for 30 years from 4 September 2006.
Plant and equipment of the 10 MW waste heat plant operated by OPG Renewable Energy has been taken
on a license agreement dated 26 April 2008, with effect from 23 September 2008, for fifteen years (with
an option to renew it for 15 more years), from Kanishk Steels, a related party. As a compensation for this
arrangement, the entity has committed to supply 9 Million units of power per annum to Kanishk and
only the power generated in excess of this commitment is available for sale to external customers. The
quantum of rental has been reduced to 4.5 Million units per annum from 1 April 2009. An interest free
refundable lease deposit of INR 200 Million (equivalent to £ 2.7 Million) has been paid at the end of
March 2009 by the entity to Kanishk as security deposit to compensate for this reduction in rental. An
amount of £ 236,537 has been charged to the Income statement being the rent for the period. For further
details, please refer to Note 2.17.
The total of future minimum lease payments under these non cancelable operating leases for each of
the following periods:
Not later than one year
One to five years
Greater than five years
As at 31 March 2010
(Group)
As at 31 March 2009
(Group)
Amount (£)
Amount (£)
236,537
946,149
2,427,833
79,053
818,105
2,623,626
3.22 Capital Commitments and Contingent liabilities
3.22.1 Bank Guarantees and Letters of credit
PARTICULARS
Towards outstanding Letter of Credit
Towards Counter guarantees furnished to the bank out-
standing Bank Guarantees
Company – Nil for both years
As at 31 March 2010
Group
£
As at 31 March 2009
Group
£
5,674,858
7,814,483
190,134
812,891
3.22.2 Estimated amount of contracts remaining to be executed on capital contracts : (net of advances)
PARTICULARS
As at 31 March 2010
Group
£
As at 31 March 2009
Group
£
Estimated amount of contracts remaining to be executed
on capital contracts
142,629,414
127,332,911
Company – Nil for both years
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3.22.3 Claims against the group not acknowledged as debts
a.
Towards additional demand of income tax for the assessment year 2007-08 £ 428,514 against
which appeal has been filed before appellate authorities. No provision is considered necessary for these
disputed demands, as the Company has been legally advised of success in the appeal. Costs expected
to be incurred is also not material.
3.23 Related Parties
3.23.1 Key Management Personnel (KMP)
Arvind Gupta – Managing Director
V. Narayan Swami –Finance Director
3.23.2 List of Related Parties
Name of the Related Party
Nature of Relationship
Gita Investments Limited
Holding Company of the entity
Arvind Gupta
V. Narayan Swami
Gita Energy Pvt Ltd
Gita Holdings Pvt Ltd
OPG Energy private Limited
OPG Power Generation Private Limited
OPG Renewable Energy Private Limited
OPG Power Gujarat Private Limited
Key Management Personnel of the entity
Key Management Personnel of the entity
Controlled entity
Controlled entity
Step down Controlled entity
Step down Controlled entity
Step down Controlled entity
Step down Controlled entity
Gita Power and Infrastructure Private Limited
Step down Controlled entity
Other Related Parties with whom there were transactions during the period:
Sri Hari Vallabhaa Enterprises & Investments
(P) Limited
Entity in which Key management personnel has
Control / Significant Influence
Dhanvarsha Enterprises & Investments Private
Limited
Entity in which Key management personnel has
Control / Significant Influence
Goodfaith Vinimay (P) Ltd
Salem Food Products Limited
Kanishk Steel Industries Limited
Gita Energy and Generation Private Limited
Gita Devi
Rajesh Gupta
Ravi Gupta
Entity over which KMP exercises Control / Significant
Influence through relatives
Entity in which Key management personnel has
Control / Significant Influence
Entity in which Key management personnel has
Control / Significant Influence
Entity in which Key management personnel has
Control / Significant Influence
Relative of Key Management Personnel
Relative of Key Management Personnel
Relative of Key Management Personnel
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3.23.3 Transactions with related parties
Transactions / Names of Party
Relationship
2010
2009
Entity over which relative of KMP
exercises Control / Significant
Influence
Entity over which KMP exercises
Control / Significant Influence
through relatives
Amount(£)
Amount(£)
790,753
381,128
-
790,753
16,400
397,528
Sharing of Power
Kanishk Steel Industries Limited
Salem Food Products Limited
Cost of Power Generated
Kanishk Steel Industries Limited
Loan Outstanding
Salem Food Products Limited
Interest Received
Salem Food Products Limited
Loans Repaid
Salem Food Products Limited
Receivables
Salem Food Products Limited
Kanishk Steel Industries Limited
Entity over which relative
of KMP exercises Control /
Significant Influence
Entity over which KMP exercises
Control / Significant Influence
through relatives
Entity over which KMP exercises
Control / Significant Influence
through relatives
Entity over which KMP exercises
Control / Significant Influence
through relatives
Entity over which KMP exercises
Control / Significant Influence
through relatives
Entity over which relative
of KMP exercises Control /
Significant Influence
8,946
283,515
890,639
844,669
89,660
89,300
-
67,422
970
887
632,955
633,925
-
-
-
-
13,409
14,296
22,500
2,040,817
1,530,612
1,530,612
5,124,541
Investments in share capital
Gita Investments Limited
Holding Company
Sri Hari Vallabhaa Enterprises &
Investments (P) Ltd
Entity in which KMP is a
Director
Dhanvarsha Enterprises & Investments
(P) Ltd
Entity in which KMP is a
Director
Goodfaith Vinimay (P) Ltd
Entity over which KMP exercises
Control / Significant Influence
through relatives
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Rent paid
Gita Devi
Remuneration Paid
Rajesh Gupta
Ravi Gupta
Further lease deposit made
Kanishk Steel Industries Limited
Lease Rent paid
Kanishk Steel Industries Limited
Lease Deposit outstanding
Kanishk Steel Industries Limited
(difference is only due to change in
exchange rates)
Reimbursement of Expenses
Kanishk Steel Industries Limited
Close relative of KMP
2,100
3,033
Close relative of KMP
Remuneration as director of
OPG Energy Pvt Ltd
Close relative of KMP
Remuneration as director of the
company
Entity over which relative
of KMP exercises Control /
Significant Influence
Entity over which relative
of KMP exercises Control /
Significant Influence
Entity over which relative
of KMP exercises Control /
Significant Influence
Entity over which relative
of KMP exercises Control /
Significant Influence
-
5,308
25,000
22517
-
3,233,145
236,226
237,584
3,532,783
3,233,144
16,015
23,948
1,719,051
3,394,260
-
-
Advance Paid
Gita Energy and Generation Private Limited Entity over which relative
of KMP exercises Control /
Significant Influence
Gita Power and Infrastructure Private
Limited
Entity over which relative
of KMP exercises Control /
Significant Influence
3.23.4 Director’s Remuneration
The remuneration of Directors for the period was as follows:
Salaries, Allowances and Perquisites
Share based payments
TOTAL
3.24 Restatement relating to 2008-09
2010
2009
Amount(£)
Amount(£)
304,729
1,206,959
1,511,688
313,189
-
313,189
Foreign currency translation movements (a net gain of GBP 694,240) on US Dollar bank deposits
outstanding as at March 31 2009 were carried in reserves instead of being recognised in income for
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the period ended March 31, 2009 as required by IAS 21. Consequently profits of the previous period
was understated to this extent. This item has been restated by release to the Income Statement for the
relative reporting period under Other gains & losses (Note 3.3). The basic and diluted Earnings per
Share for the relative period have also been correspondingly restated. (Refer Note 3.17)
3.25 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 following items
which does not have any impact upon the income statement, cash flows, equity and financial position
and performance of the Group.
Depreciation relating to plant and machinery (GBP 343,879) which was included as part of Depreciation
costs has now been reclassified to Cost of power Generation.
Current Tax Assets (GBP 751,308) and Provision for Taxation (GBP 942,826) which were shown on a net
basis have been restated in their respective carrying amounts.
Deferred Tax Asset (GBP 60,909) and Deferred Tax Liability (GBP 446,451) which were shown on a net
basis have been restated in their respective carrying amounts (Note 3.7.1).
The above reclassifications have no impact on the separate financial statements. These reclassifications
also have no impact on the profits and earnings per share of the periods presented.
3.26 Events After Balance Sheet Date
The 80 MW power plant (OPG Power Generation Private Limited) has been commissioned on 14th
April’ 2010 near Chennai (India). There are no other material events after the reporting period, which
have a bearing on the understanding of the financial statements.
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