OPG Power Ventures Plc
FY2021 Annual Report & Accounts
Continued focus on deleveraging and profitability
& positioning for sustainable growth
Contents
Page
Number
3
4-5
6-10
11-12
13
14
15-18
19-29
30-31
32-33
34-37
38-39
40-43
44
45-51
52-56
57-83
84
85-86
Strategic Report
Highlights
Chairman’s statement
Financial review
COO operational review
Business model
Group objectives and strategies
Market review
ESG report
Corporate Governance
Principal risks
Board of Directors
Corporate governance
Directors’ report
Directors’ remuneration report
Statement of Directors’ responsibilities
Financial Statements
Auditor’s report
Financial Statements
Notes to the Financial Statements
Corporate directory
Definitions & glossary
2
Revenue down 39.1% to £93.8m from
£154.0. m in FY20 decreased as a result of
COVID-19 induced nationwide lockdown
Total generation (including deemed) of 2.1
billion units (FY20: 2.7 billion units)
Adjusted EBITDA* of £33.7 million (36.0%
margin) compared with £31.2 million
(20.2% margin) in FY20
Profit before tax from continued operations
was £21.6m compared with £14.5 million in
FY20
Basic earnings per share increased from
to 3.52
in FY20
2.11 pence/share
pence/share in FY21
Net debt** reduced from £53.4m at 31
March 2020 to £16.2m at 31 March 2021
Net debt to Adjusted EBITDA ratio reduced
from 1.7 to 0.5 during FY21
* See definition of Adjusted EBITDA on page 7
** See definition of Net debt on page 9
Highlights
Revenue
(£m)
FY19
FY20
FY21
Operating profit
(£m)
FY19
FY20
FY21
Adjusted EBITDA*
(£m)
FY19
FY20
FY21
Basic EPS
(£ Pence)
FY19
FY20
FY21
Profit Before tax
(£m)
FY19
FY20
FY21
Net Debt/ Adjusted
EBITDA
(£m)
FY19
FY20
FY21
140.6
154.0
93.8
29.2
24.0
27.5
35.3
31.2
33.7
3.81
2.11
3.52
16.8
14.5
21.6
2.2
1.7
0.5
3
CHAIRMAN’S STATEMENT
Resilience, robust profitability and strong
cash generation
FY21 has been a year of extraordinary
challenges. The unprecedented health crisis,
caused by novel coronavirus, took an immense
economic and human toll globally. At OPG, we
responded immediately with a comprehensive
COVID-19 response plan – putting in place
health and safety measures to protect our
employees, running our plant operations
smoothly to ensure supply of electricity to our
consumers, and providing essential support
and assistance to our local communities in
need. Yet, even in such critical circumstances,
our Company has emerged stronger reporting
solid set of financial results and paving
pathways for accelerated and sustainable
future growth.
Despite the disruption caused by COVID-19,
OPG delivered very strong cash generation,
robust profitability and achieved a significant
reduction in net debt during the year.
is a 22.4 per cent reduction
The plants’ generation,
including deemed
generation, during FY21 was 2.1 billion units
in
which
generation in comparison with FY20 primarily
due to the COVID-19 induced nationwide
lockdown in India, with average Plant Load
Factor (“PLF”) at 58 per cent (FY20: 75 per
cent). During FY21 average realised tariff was
Rs5.52 (FY20: Rs5.67).
In FY21, the Group’s revenue was £93.8 million
(FY20: £154.0 million) and Adjusted EBITDA
was £33.7 million (FY20: £31.2 million). Profit
from continuing operations was £13.1 million
(FY20: £10.2 million) and profit for the year
was £14.1 million (FY20: 8.0 million).
We are proud to report that OPG was
comfortably
line with FY21 market
expectations despite unfavourable market
conditions.
in
value
through
shareholder
Creating
deleveraging
In 2018, the Board took the decision to focus
on our profitable, long-life assets in Chennai,
and to prioritise deleveraging as a method to
grow shareholders’ equity. This strategy, we
4
believe, will deliver value to shareholders with
free cash flows providing significant returns to
our shareholders and opportunities to grow
the business further.
Since the adoption of this strategy, additional
shareholder value of 17.6p per share was
accrued during last four years on account of
term loan repayments.
During FY21 net debt reduced from £53.4
million to £16.2 million and net debt to
Adjusted EBITDA ratio reduced from 1.7 to 0.5
demonstrating
robustness of OPG’s
financial position. The Company remains
amongst the least leveraged power companies
in India.
the
The Board remains convinced, especially in
light of COVID-19 challenges, that our strategy
of maintaining operational excellence and
paying down expensive borrowings was the
right one to pursue for all our stakeholders.
long-term value. In
Maximising stakeholders’ long-term value
It is OPG’s paramount objective to maximise
stakeholders’
light of
disruptions and uncertainty caused by COVID-
19 and extraordinary volatility in coal prices
and freight this year, the Board believes that it
is in the best interest of the Company and its
the
stakeholders
repayment of debt and growth ESG focused
projects and to maintain a strong and resilient
balance sheet to withstand turbulent times.
to conserve cash
for
Building sustainable future
in urbanisation, universal
Rapid growth
electrification, and a
renewable energy
transition driven by climate change, implies
that India’s incremental power needs will
largely be met by renewable energy. Our
business strategy is perfectly aligned with this,
offering us an opportunity to unlock value for
all our stakeholders in the years to come. OPG
has developed its ESG strategy which, among
other matters, includes objectives to reduce its
carbon footprint. As part of this strategy, the
Company is evaluating various options to
increase its renewable energy asset base and
to establish joint ventures to roll out various
These
energy
initiatives will ensure that OPG delivers year-
the
on-year
improvements
technologies.
transition
reach
to
remains exposed
to market
Company
fluctuations for the unhedged portion of coal
consumption and
the
Company is exploring various options including
sourcing the coal from other geographies
(including domestic sources) to reduce the per
unit cost of electricity.
freight. However,
Outlook
During the first six months of FY22 the prices
of thermal coal and freight have surged sharply
primarily due to increased imports of coal and
other goods by China and other Asian
countries on the back of post COVID-19
economic recovery. Coal prices may not
reduce significantly in the short term.
While challenges to the economy will continue
in FY22, the Company has strong foundations,
allowing us both to manage the ongoing
COVID-19 situation and to pursue growth
sustainably. The Company’s medium and long-
term fundamentals remain unchanged with
strong cash flows and a reduction in debt
enabling the long-term profitable business
model, responsible growth and sustainable
returns to shareholders. We will also continue
to focus on advancing our ESG agenda.
I would like to extend my gratitude to all our
employees who overcame challenges posed by
the pandemic, as well as vendors, banks and all
stakeholders for the incredible support we
have received during these unprecedented
and extraordinary times.
Arvind Gupta
Chairman
29 September 2021
Company’s emissions reduction targets in the
medium and longer-term.
We are happy to present our first-ever
standalone FY21 ESG report which summarises
the objectives, activities, and the performance
of the Company from an ESG perspective to its
stakeholders. This report includes examples of
how we have demonstrated our commitments
and applied our management approach on a
range of ESG topics, including environmental
stewardship, health & safety, relationship with
local community, and governance.
Indian Economy and Power Sector Update
In FY21, even amidst a relatively weaker
scenario, peak power
macro-economic
demand hit an all-time high of 190 GW. The
overall power demand in the country though
weaker in the first half of the fiscal year due to
COVID-19 induced disruption, saw a sharp
recovery in the second half. India is the third
largest producer and third largest consumer of
electricity in the world with installed power
capacity reaching 382.15 GW as of March
2021.
In June 2021, the World Bank’s Global
India’s FY22
Economic Outlook projected
economic growth forecast at 8.3 per cent,
supported by plans for higher spending on
infrastructure, rural development and health
services
stronger-than-expected
recovery in services. During FY23 GDP growth
is expected at a rate of 7.5 per cent.
and
a
During FY21, power consumption dipped by 1
per cent to 1,271.5 BU from 1,284.4 BU in
FY20. The ICRA rating agency has estimated
Indian electricity demand growth at 6.0 per
cent for FY22 on a year-on-year basis,
considering
favourable base effect,
relatively lesser impact of the second COVID-
19 wave on electricity demand and the pick-up
in the vaccination programme.
the
Over the last several months the prices of
thermal coal and freight have surged sharply
primarily due to increased imports of coal and
other goods by China and other Asian
countries on the back of post COVID-19
economic recovery. Whilst OPG is partially
covered from increases in prices with fixed
price agreements for coal and freight, the
5
FINANCIAL REVIEW
The following is a commentary on the Group’s financial performance for the year.
Income statement
Year ended 31 March
Revenue
Cost of revenue (excluding depreciation)
Gross profit
Other operating income
Other income
Distribution, general and administrative
Expenses, expected credit loss (excluding
depreciation)
Adjusted EBITDA
Share based compensation
Depreciation and amortisation
Net finance costs
Profit before tax from continuing operations
Taxation
Profit after tax from continuing operations
Profit/(loss) from discontinued operations,
incl. Non-Controlling Interest
Profit for the year
% of
revenue
39.4
36.0
23.0
14.0
2021
£m
93.8
(56.9)
36.9
9.4
1.9
(14.5)
33.7
(0.5)
(5.7)
(5.9)
21.6
(8.4)
13.1
1.0
14.1
% of
revenue
41.5
20.2
9.4
6.6
2020
£m
154.0
(90.1)
64.0
-
0.7
(33.5)
31.2
(0.8)
(6.3)
(9.5)
14.5
(4.3)
10.2
(2.1)
8.0
Note: Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and
percentages may not precisely reflect the absolute figures.
Revenue
Even though the Group’s revenue has decreased by £60.2 million (a 39.1% decline) year on year as a result
of COVID-19 induced nationwide lockdown imposed by the Indian Government, Adjusted EBITDA has
increased by £2.5 million (8.2% growth) primarily due to collection of contractual claims payments from
its customers under power purchase agreements amounting to £9.4 million. These contractual claims
were accumulated over several years and recognised in Other operating income.
The average tariff realised during FY21 was Rs5.72 per kWh. Generation exported to captive power
shareholders and other customers and billed for revenue, including deemed generation, was 2.1 billion
units during FY21. The reduction in generation in comparison with generation in FY20 is due to the impact
of fall in demand for power caused by COVID-19 induced nationwide lockdown.
Production and output levels from the Group’s operating power plant compared to the prior year were as
follows:
Total generation, incl. “deemed” generation (million units)
Plant Load Factor (PLF) (%)1
Average tariff (INR/unit) 2
1 Unit 3: “Deemed” PLF (%) has been included
2 Average tariff includes effect of deemed offtake tariff for Unit 3. Average FY21 tariff excluding effect
of deemed offtake was Rs5.52 (FY20: Rs5.67).
FY21
2,107
58
5.72
FY20
2,716
75
5.86
Gross profit
Gross profit (‘GP’) in FY21 was 39.4% of revenue (FY20: 41.5%). The decrease in GP is primarily on account
of disruption caused in the economy by the nationwide lockdown induced by COVID-19.
6
The cost of revenue represents fuel costs. The table below shows average price of coal consumed in FY21
and FY20.
Average price of coal consumed
Financial year
FY21
FY20
Change % FY20 to FY21
Average
factory gate
price
(INR/mt)
4,127
4,305
(4.1)
Average
factory gate
price
(INR / mKCal)
991
1,028
(3.6)
Adjusted EBITDA
Adjusted earnings before interest, taxation, depreciation and amortisation (‘Adjusted EBITDA’) is a
measure of a business’ cash generation from operations before depreciation, interest and exceptional and
non-standard or non-operational charges, e.g. share based compensation, etc. Adjusted EBITDA is useful
to analyse and compare profitability among periods and companies, as it eliminates the effects of
financing and capital expenditures.
Adjusted EBITDA was £33.7 million in FY21 compared with £31.2 million in FY20 and the adjusted EBITDA
margin was higher at 36.0% in FY21 against 20.2% in FY20 primarily as a result of collection of contractual
claims accumulated over several years as mentioned above.
Profit from continuing operations before tax was £21.6 million compared with £14.5 million in FY20.
Profit before tax reconciliation (‘PBT’) (£m)
PBT 2020-21
PBT 2019-20
Increase in PBT
Decrease in GP
Increase in Other Operating Income
Increase in Other Income
Decrease in Distribution, General & Administrative Expenses, Expected Credit Loss1
Decrease in Net Finance Costs
Decrease in Depreciation and Amortisation
Increase in PBT
1 PBT 2019-20 includes provision for expected credit loss of £17.0 million
FY 21
21.6
14.5
7.1
(27.0)
9.4
1.3
19.2
3.6
0.6
7.1
Taxation
The Company’s operating subsidiaries are under a tax holiday period but are subject to Minimum
Alternate Tax (‘MAT’) on their accounting profits. Any tax paid under MAT can be offset against future tax
liabilities arising after the tax holiday period.
The tax expense during the year was £8.4 million comprised of current tax expense of £0.4 million and
deferred tax expense of £8.0 million.
Profits after tax from continuing operations
Profits after tax from continuing operations have increased by 28.8% in FY21 to £13.1 million primarily
due to collection of contractual claims payments offset by a significant provision for expected credit loss
in FY20.
7
Assets held for sale and loss from discontinued operations
62MW Karnataka solar projects
In FY18, four Karnataka solar projects (62MW) were commissioned. The Group has a 31% equity interest
in these projects.
During FY19, the Company obtained a right to exercise an option to buy an additional 30% equity interest
in solar companies. Effective from FY20 this right was assigned to a third party and from FY21 the
remaining related obligations and the results of the operations of solar companies are not consolidated
in the Group’s consolidated financial statements due to loss of control. As previously reported, after
evaluation of all options, the Company decided that the most efficient way to maximise shareholders’
value from the solar operations was to dispose of these interests in the solar companies and it is
continuing the disposal process which met all conditions of IFRS 5 classifying the solar business as assets
held for sale as at 31 March 2021. The completion of the disposal process was impacted by COVID-19.
Accordingly, the Group’s funding of £16.4 million towards these projects is presented as assets held for
sale in the Consolidated Statement of Financial Position as at 31 March 2021 and the gain from operations
of £1.0 million is included in gain from discontinued operations in the Consolidated Statement of
Comprehensive Income.
Earnings per Share (EPS)
The Company’s total reported EPS in FY21 increased to 3.52 pence from 2.11 pence.
Dividend policy
It is OPG’s paramount objective to maximise stakeholders’ long-term value. In light of disruptions and
uncertainty caused by COVID-19 and extraordinary volatility in coal prices and freight this year, the Board
believes that it is in the best interests of the Company and its stakeholders to conserve cash for the
repayment of debt, to fund growth in relation to ESG focused projects and to maintain a strong and
resilient balance sheet to withstand the turbulent times. Therefore, the Board decided to not declare a
dividend for FY21. The Board will revisit the Company’s dividend policy once the impact of COVID-19
subsides and coal prices become less volatile.
Foreign exchange loss on translation
The British Pound-to-Indian Rupee exchange rate decreased to a closing rate on 31 March 2021 of £1=
INR 100.81 a rate of £1= INR 93.07 on 31 March 2020 thereby resulting in an exchange loss of £12.9 million
on translating foreign operations included in Other comprehensive loss.
Property, plant and equipment
The decrease in net book value of our property, plant and equipment of £19.8 million principally relates
to depreciation and foreign exchange impact on account of translation offset by additions during the year.
Other non‐current assets
Other non-current assets (excluding property, plant and equipment & intangible assets) have increased
by £7.7 million primarily due to increase in the non-current portion of restricted cash, representing
investments in mutual funds maturing after twelve months of £8.2 million (2020: nil) allocated to
debenture redemption fund earmarked towards redemption of non-convertible debentures scheduled
during FY24 of £19.8 million.
8
Current assets
Current assets have decreased by £28.8 million from £103.3 million to £74.5 million year on year primarily
as a result of the following:
Decrease in Assets held for sale by £29.9 million due to the presentation of a 31% investment in solar
companies as an equity investment held for sale versus gross presentation of assets and liabilities
held for sale in FY20;
Decrease in trade receivables by £12.1 million as a result of strong collections from the Group’s
captive power shareholders and customers, including old receivable balances;
Increase in other short-term assets by £11.5 million primarily due to increase in investments in mutual
funds to £13.3 million included in other short-term assets;
Increase in cash and bank balances (including restricted cash) by £5.5 million;
Increase in inventory holdings by £0.7 million.
Liabilities
Current liabilities have decreased by £60.7 million from £98.9 million to £38.2 million year on year
primarily due to liabilities relating to assets held of sales, borrowings, and trade and other payable.
Non-current liabilities have increased by £16.7 million from £39.0 million to £55.7 million year on year
primarily on account of the issuance of non-convertible debentures issued during the year to prepay term
loans.
Financial position, debt, gearing and finance costs
As of 31 March 2021, total borrowings were £46.6 million (31 March 2020: £56.8 million). The gearing
ratio, net debt (i.e. total borrowings minus cash and current and non-current investments in mutual
funds)/(equity plus net debt), was 9% (31 March 2020: 25%). The gearing ratio is a useful measure to
identify the financial risk of a company.
Despite COVID-19 related challenges, the Company has continued to pay down the debt from internal
accruals and issued Non-Convertible Debentures (“NCDs”) of £19.8 million (Rs2.0 billion) to finance
principal repayments of the Group’s existing term loans to June 2022. The Group’s NCDs are repayable in
June 2023 and have an interest coupon of 9.85%. The issue of the NCDs had a material positive impact
upon the Group’s cash flow during the uncertain COVID-19 impacted period, through a significant
deferment of principal payments and the NCDs’ interest coupon being lower by c.1 per cent in comparison
with the existing term loans interest rate.
During FY21 net debt (total borrowings minus cash and current and non-current investments in mutual
funds) reduced from £53.4 million to £16.2 million and net debt to Adjusted EBITDA ratio reduced from
1.7 to 0.5 as a result of the repayment of term loans and working capital loans, foreign exchange impact
of depreciation of INR against GBP and strong cash collections achieved during the year. This
demonstrates the robustness of OPG’s financial position. The Company remains amongst the least
leveraged power companies in India.
Based on the term loans repayment schedule the Company is expected to be term loan free by FY25.
Finance costs have decreased by £4.7 million from £11.5 million in FY20 to £6.8 million in FY21 primarily
due to the impact of decrease in foreign exchange losses and reduction in interest expenses following
scheduled repayments of the term loans and the issuance of the NCDs.
Finance income decreased from £2.0 million in FY20 to £0.9 million in FY21 and therefore net finance
costs in FY21 amounted to £5.9 million (FY20: £9.5 million).
Current restricted cash representing deposits maturing between three to twelve months amounted to
£3.2 million (31 March 2020: £7.5 million) which have been pledged as security for Letters of Credit.
9
Non-current restricted cash represents investments in mutual funds maturing after twelve months
amounting to £8.2 million (31 March 2020: £0.03 million) allocated to the debenture redemption fund
which is earmarked towards the redemption of non-convertible debentures scheduled during FY24 of
£19.8 million.
Cash flow
Cash flow from continuing operations before and after changes in working capital were £36.8 million
(FY20: £48.2 million) and £40.2 million (FY20: £30.6 million) respectively. Net cash flow from operating
activities increased from £30.6 million in FY20 to £40.2 million in FY21, an increase of £9.6 million,
primarily due to collections of receivables and contractual claims relating to previous periods.
Movements (£m)
Operating cash flows from continuing operations
before changes in working capital
Tax paid
Change in working capital assets and liabilities
Net cash generated by operating activities from
continuing operations
Purchase of property, plant and equipment (net of
disposals)
Investments (purchased)/sold, incl. in solar projects,
shipping JV, market securities, movement in
restricted cash and interest received1
Net cash (used in)/from continuing investing
activities
Finance costs paid, incl. foreign exchange losses
Dividend paid
Total cash change from continuing operations
before net borrowings
FY21
FY20
36.8
(0.7)
4.1
48.2
(0.8)
(16.8)
40.2
30.6
(0.5)
(0.6)
(29.0)
3.5
(29.5)
(5.8)
-
2.9
(9.9)
-
4.9
23.6
1 Includes purchase of investments in mutual funds and other market securities of £21.5 million included in restricted cash and
other short-term assets in the statement of financial position.
Dmitri Tsvetkov
Chief Financial Officer
29 September 2021
10
COO OPERATIONAL REVIEW
The following is a review of the Group’s operations for the year.
Plant availability and generation
Our operational performance is affected by our revenue generation model, plant availability, plant load
factors and auxiliary power consumption. During the COVID-19 lockdown, the Company honoured all its
commitments ensuring power generation and availability of the plant so that power supply to consumers
remained uninterrupted. We were able to achieve this while following all safety guidelines, strict social
distancing and minimising our workforce in our offices and plants. The credit for this goes to the
dedication of our team members and to the development of robust O&M practices coupled with fuel and
logistics management capabilities, which made this achievement possible.
Both coal availability and water consumption are two factors that have disrupted the availability and load
factors of other thermal power plants in India in recent years. OPG’s plants are designed to be able to use a
wide range of fuels, both domestic and international, and the Company further has the capability to
maintain adequate reserves of coal. This has been integral to coal availability and we have not faced any
interruptions on account of coal since commissioning each unit. In addition, the plants are designed to limit
the consumption of water as they are built with air cooled condenser technology rather than being water
cooled with the result that OPG’s plants use significantly less water than a typical water cooled thermal
power plant that is commonly installed around India and globally. This is a key feature as our units operate
in a region that is naturally water scarce.
Our load factors take account of plant availability as reduced by external factors like normal seasonal
demand adjustments to their offtake under the Long Term Variable Tariff Agreement (LTVT) (though the
customer still pays OPG as discussed further below), enforced system back downs and one-off disruptions
to demand.
As a part of our responsibility and with the welfare of our hardworking teams, we have been following
strict safety protocols, which were reinforced to address the challenges of the COVID-19 pandemic. The
sudden impact of the pandemic has been drastic, not just on the day to day life of our employees but also
on communities and society. We are confident that renewed lockdown measures and a greater
adherence to civic discipline across all layers of society, coupled with increasing implementation of the
vaccination programme, will gradually normalise the situation.
Total generation at our plant in FY21, including ‘deemed’ offtake, was 2.1 bn units (FY20: 2.7 bn units),
the reduction in generation primarily being due to the COVID -19 induced nationwide lockdown in India.
The plant load factor (‘PLF’) including ‘deemed’ offtake, in FY21 was 58% (FY20: 75%) versus a national
average for thermal plants of 53.4%. In FY 22, the Company expects a higher load factor compared to
FY21 after taking into account the second wave of the COVID-19 impact. Unlike the first wave where
lockdowns were applied nationwide for several months, the second wave “micro-containment zone"
measures are more localised, targeted and of shorter duration.
Auxiliary consumption levels are also a key measure of plant efficiency, and are typically between 7.5 –
8.5% for our units. The Company has instituted several measures and technical improvements to improve
efficiency of the units.
Sales contracts
During FY21, the Company continued supplying directly to captive power shareholders under short-term
and multi-year contracts. This has accelerated cash collections and improved visibility of earnings. The
capacity allocated for captive power plant was 334 MW, or 81% of the plant’s installed capacity. 74 MW
of capacity has remained available for supply on the LTVT to the Tamil Nadu State.
For FY22, due to post COVID-19 recovery, generation to captive power shareholders and the balance of
74 MW to the Tamil Nadu State under the LTVT is expected to be higher. As explained above, even after
the effect of the second wave COVID-19 pandemic, the actual power offtake is expected to be higher
than FY 21.
11
The plant realised an average tariff of Rs 5.52 in FY21 (FY20: Rs 5.67) and a ‘deemed’ offtake charge of
Rs 1.50 per unit for ‘deemed’ generation. The difference between tariff and cost of coal on a per unit
basis (‘the Clean Dark Spread’), was Rs 2.16 for FY21 (FY20: Rs 2.35), which we believe continues to be
amongst the best in the sector.
Coal supply and prices
The Company has consistently been able to import low sulphur coal from reputed Indonesian coal
producers and traders with whom we have developed long-standing relationships. The Company has
purchased coal primarily on short and medium-term contracts in FY21 and as such the Company benefited
as prices softened during the year.
The average coal price was Rs 4,127 per tonne in FY21 which is lower than the average price for FY20 of
Rs 4,305 per tonne. Independent forecasts predict international coal prices to increase substantially in FY
22 primarily due to increasing coal demand from China.
Current coal price and freight rates are increased significantly and volatile and international coal prices
and freight rates are expected to remain at these higher levels till the end of CY 2022. The Company has
implemented the different mix (high and low GCV) of coal for its use to minimise the increasing coal price.
The Company will continue to actively review its procurement and hedging practices to establish ways in
which to mitigate the volatility of the coal price.
Safety and environmental compliance
The Company made good progress with its safety programme, recording no fatalities and an industry
leading Total Recordable Incident Report (TRIR) in FY21.
The Company continues to minimise its consumption of water through air cooling and we operate with a
philosophy of continual improvement with regards to any effluent. On 1 April 2021, the Government of
India (GoI) further extended the timeline for meeting emission norms for a majority of coal-based power
plants in India, which are now allowed to comply with the emission norms by FY25. The revised timeline
for each power plant will vary as per its location and the GoI’s categorisation of their location. The
Company is well placed to comply with the new standards applicable for Sox, Nox and SPM by completing
some capital expenditure. The Company is evaluating various technologies with a view to being fully
compliant to the revised emission norms.
Solar projects - 62 MW Karnataka (31% equity interest)
In FY17, the Company signed long-term 25 year PPAs for 62 MW with Karnataka State at an average tariff
of Rs5.00 across the 4 sites. All the four plants are now operating and have achieved an annual average
PLF of 19.2% in FY20 (FY20: 18.5%. Currently the projects are being paid a tariff of Rs4.36 per kWh as
against the average PPA tariff of Rs 5.00.
Avantika Gupta
Chief Operating Officer
29 September 2021
12
Business Model
13
Group objectives and strategies
The Group’s objective is to build shareholder value through profitable growth by becoming the first choice provider of
reliable and uninterrupted power at competitive rates to its captive power shareholders
In addition, the Group’s aim is to be a sector leader by
reference to the quality of its earnings, the profitable growth
it delivers and its performance against its own stringent
safety and environment management standards.
To meet these objectives, the Group’s strategy includes:
(i) maximising the performance of its existing power
generation assets;
(ii) reducing its cost of capital and paying dividends;
(iii) pursuing responsible growth; and
(iv) delivering accretive growth projects within its
areas of expertise.
Maximising
performance of existing
power plants
The Group is committed to maximising the performance of its
existing power generation assets through plant availability and
providing a reliable and uninterrupted supply of electricity
directly to its captive power shareholders.
Reducing cost of
capital and paying
dividends
The flexible design of our plants allows us to procure a variety
of international and domestic coal and maintain an
uninterrupted supply of coal. Further, the Group seeks to
achieve competitive prices that are negotiated directly with
captive power shareholders. The Group’s use of the group
captive model means that it is well positioned to respond to
fluctuations in fuel costs through short- and medium-term
sales contracts.
The Group aims to maximise cash generation at its existing
power plants in order to provide liquidity support for its
operations and to repay debt, pay dividends and generate
equity for use in potential projects.
The Group continues to prioritise projects that can be funded
through a combination of debt financing and internal
resources, and that can be expected to generate revenues
which meet its target return levels without any direct
subsidies being made available. Furthermore, the Group seeks
to maintain manageable gearing levels and regular open
dialogue with its shareholders and financing partners.
Deleveraging
As of 31 March 2021, total borrowings were £46.6m. The
gearing ratio (net borrowings/(equity plus net borrowings) was
9% (31 March 2020: 25%). During FY21 net debt (total
borrowings minus cash and current and non-current
investments in mutual funds) reduced from £53.4m to £16.2m
and net debt to Adjusted EBITDA ratio reduced from 1.7 to 0.5
as a result of the repayment of term loans and working capital
loans and foreign exchange impact. Based on term loans
repayment schedule Chennai plant will be debt free by FY25.
Profitability
The Group’s strategy involves developing
and operating its power plants under the
group captive model enabling it to set its
own tariffs with captive users and thereby
providing the Group with the flexibility to
optimise tariffs and profitability.
The Group continuously seeks to improve
its operational performance and so
implements strategies for the optimisation
of its power generation assets.
Dividends
In light of disruptions and uncertainty
caused by COVID-19 and extraordinary
volatility in coal prices and freight this year,
the Board believes that it is in the best
interests of the Company and its
stakeholders to conserve cash for the
repayment of debt, to fund growth in
relation to ESG focused projects and to
maintain a strong and resilient balance
sheet to withstand the turbulent times.
Therefore, the Board decided to not declare
a dividend for FY21. The Board will revisit
the Company’s dividend policy once the
impact of COVID-19 subsides and coal prices
become less volatile.
14
MARKET REVIEW
Global Economy:
As per the World Bank, Global Economic Prospects (GEP) report, during CY2020, global GDP growth
contracted by 3.5% in comparison with increased growth of 2.5 per cent a year earlier. This
contraction was caused by the COVID-19 pandemic. COVID-19 caused a global recession whose depth
was surpassed only by the two World Wars and the Great Depression over the past century and a
half. Although global economic activity is growing again, it is not likely to return to business as usual
for the foreseeable future.
Following last year’s collapse, the global economy is experiencing an exceptionally strong but uneven
recovery. The global economy is set to expand 5.6 percent in CY2021—its strongest post-recession
pace in 80 years. This recovery is uneven and largely reflects sharp rebounds in some major
economies. In many emerging market and developing economies (EMDEs), obstacles to vaccination
continue to weigh on activity. In CY2022 global growth is projected at 4.3 percent.
5.5%
92
2.5%
160
140
120
100
80
60
40
20
-
7.4%
105
8.0%
114
6.4%
98
2.7%
2.8%
2.9%
2.6%
8.3%
123
131
140
146
135
6.8%
6.5%
3.3%
3.0%
4.0%
2.5%
-3.5%
12.0%
7.0%
2.0%
-3.0%
-8.0%
-7.3%
-13.0%
FY 13 / CY
12
FY 14 / CY
13
FY 15 / CY
14
FY 16 / CY
15
FY 17 / CY
16
FY 18 / CY
17
FY 19 / CY
18
FY 20 / CY
19
FY 21 / CY
20
India's GDP Rs. in Tn
India GDP growth (%)
World GDP growth (%)
Source: Central Statistics Office and World Bank
Indian Economy
Key macroeconomic indicators:
Gross Domestic Product (‘GDP’)
India’s GDP increased from around Rs92 trillion in fiscal year 2013 to about Rs135 trillion in fiscal year
2021, which represented a compound annual growth rate (‘CAGR’) of 4.9%. Since FY2018, the Indian
economy was negatively impacted. Declining growth of private consumption, minimal increase in
fixed investment, muted exports and stress in the financial sector are the major reasons for
slowdown.
As per World Bank GEP data, during FY21 Indian GDP growth contracted by 7.2% compared with FY20
GDP growth of 4.0%. This stress in GDP was primarily due to COVID-19 induced nationwide lockdown
imposed by the Indian Government.
Current Account Deficit/Surplus (‘CAD/CAS’)
There was a current account surplus for first time in 17 years in FY21. After reaching CAD 0.9% of GDP
during fiscal 2020, India’s CAS has reaching 0.9% of GDP in fiscal 2021. This is largely caused by a
contraction in India's trade deficit, which narrowed due to the COVID-19 pandemic and was also impacted
by a related drop in domestic economic activity.
15
(CAD)/CAS as a % of GDP
2.0
0.9
FY 12 FY 13
FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21
-1.3
-1.1
-1.7
-0.6
-0.9
-1.8
-2.1
-4.3
-4.8
1.0
0.0
-1.0
-2.0
-3.0
-4.0
-5.0
-6.0
Source: RBI
Inflation
Based on RBI macroeconomic indicators, June 2021, Inflation is expected to remain moderate and the
Wholesale Price Index (‘WPI’) based inflation rate is projected at mean 8% in 2021-22, with a
minimum and maximum range of 3.9% and 10.7%, respectively. While, the Consumer Price Index
(‘CPI’) based inflation has a mean forecast of 4.9% for 2021-22, with a minimum and maximum range
of 4.5% and 5.5%, respectively.
COVID-19 Pandemic Impact:
India faced a severe second wave of COVID-19 infections starting in February 2021 which has resulted
in economic slowdown. The number of infected cases peaked in the middle of May 2021. State
governments had imposed varied restrictions to bring the situation under control. Unlike the first
wave where lockdowns were applied nationwide for several months, in the second wave, “micro-
containment zone" measures are more localised, targeted and of shorter duration. As the overall
COVID-19 cases in India consistently decline, state governments are now unlocking and easing
restrictions, in phases.
In June 2021, the World Bank’s Global Economic Outlook projected FY22 economic growth forecast
of India for 8.3%, supported by plans for higher spending on infrastructure, rural development and
health and a stronger-than-expected recovery in services. During FY23, GDP growth is expected at
7.5%.
Government Initiatives:
Indian economy is showing signs of revival from the impact of the COVID-19 second wave on the back
of targeted fiscal relief, monetary policy measures, and a rapid vaccination drive.
Based on Monthly Economic Review, June 2021, a slew of measures to provide relief to diverse sectors
affected by the second wave of COVID-19 were announced on 28th June 2021 by the Indian
Government. A total of 17 measures amounting to $88 billion (Rs6.29 trillion) were announced to
prepare the health systems for emergency response and provide impetus for growth and
employment.
Overview of the Indian power sector:
Power is one of the most essential components of infrastructure crucial for economic growth and
welfare of a nation like India. To sustain the rapid economic growth that India has seen over the last
few years, the power sector will continue to play a pivotal role. India is the third largest producer and
16
consumer of electricity in the world behind China and the US with generation of 1,382 billion units in
FY21 (1,389 billion units during FY20). Decrease in power demand growth was primarily due to overall
weakness in economic activity induced by the impact of COVID-19 during FY21.
Electricity generation in BU during FY21
s
t
i
n
U
n
o
i
l
l
i
B
1,200
1,000
800
600
400
200
-
Source: CEA
1,032
159
43
147
Thermal
Hydro
Nuclear
Renewable Energy Sources
India’s per capita consumption however stands at about one-third of the world’s average per capita
electricity consumption. The per capita consumption in the UK is more than five times that of India.
With electricity being a critical enabler for the economic growth of the country, the Government of
India is committed to growth in power generation.
As at 31 March 2021, India total installed capacity was 382 GW. India’s power sector is dominated by
fossil fuels particularly coal producing almost two-third of the electricity (235 GW). Electricity demand
in the country has increased rapidly and is expected to rise further in the years to come. In order to
meet the increasing demand for electricity in the country, extensive additions to the installed
generation capacity have been implemented.
With regard to energy generation, coal is expected to remain a significant fuel source in the country’s
quest to provide power to every citizen but this segment will experience limited growth. As per CEA
data, against the target to add 10,591 MW of thermal power in 2020-21, only 4,926 MW was
achieved.
Renewable energy is fast emerging as a major source of power in India. As at 31 March 2021 total
installed Renewable Energy Source (RES) except large hydropower was 94 GW. New capacity addition
during the year was 7.8 GW. The Government of India has set a target to achieve 175 GW installed
capacity of renewable energy by FY22. Wind energy is estimated to contribute 60 GW, followed by
100 GW from solar power and 15 GW from biomass and hydropower.
17
Sector wise All India Installed
Capacity as on 31st Mar 2021
24.7%
1.8%
12.1%
Source: CEA
Thermal
Hydro
Nuclear
61.4%
Renewable Energy
Sources
Policy Initiatives:
In April 2021, the Ministry of Power (MoP) released the draft National Electricity Policy (NEP) 2021.
The MoP has created an expert committee including members from state governments, the Ministry
of New and Renewable Energy (MNRE), NITI Aayog and the Central Electricity Authority (CEA).
The Union Budget 2021-22 has allocated US$ 731.75 million (Rs53 billion) to the Integrated Power
Development Scheme (IDPS) and $ 497.03 million (Rs36 billion) towards the Deen Dayal Upadhyay
Gram Jyoti Yojana (DDUGJY).
Under the Union Budget 2020-21, the Government has set a target of installing smart electricity meters
in all households across the country by 2023.
Under the Union Budget 2021-22, the Government has allocated $41.4 million (Rs3 billion) to increase
capacity of the Green Energy Corridor Project, along with $151.9 million (Rs11 billion) for wind and
$327.2 million (Rs24 billion) for solar power projects.
In October 2020, the Government announced a plan to set up an inter-ministerial committee under
NITI Aayog to forefront research and study on energy modelling. This, along with a steering committee,
will serve the India Energy Modelling Forum (IEMF) jointly launched by NITI Aayog and the United
States Agency for International Development (USAID)
In the current decade (2020-2029), the Indian electricity sector is likely to witness a major transformation
with respect to demand growth, energy mix and market operations, considering the expected pick-up in
the GDP growth and the various macroeconomic reforms and measures taken by the Government –
steady operational improvement for DISCOMS under Ujwal DISCOM Assurance Yojana (UDAY) scheme
and electrification in the country is increasing with the help of schemes like The Pradhan Mantri Sahaj Bijli
Har Ghar Yojana (SAUBHAGYA) scheme, ‘Power for all’ initiatives, Deen Dayal Upadhyay Gram Jyoti Yojana
(DDUGJY) scheme and Integrated Power Development Scheme (IPDS).
Coal
India’s non-coking coal import in FY21 was 163.7 million tons (FY20: 196.7 million tons), this reduction is
primarily due to COVID-19 disruption in industrial activity.
The Cabinet Committee on Economic Affairs (CCEA) has approved commercial coal mining for the private
sector and the methodology of allocating coal mines via auction and allotment, thereby prioritising
transparency, ease of doing business and ensuring the use of natural resources for national development.
18
ESG Report 2020-21
(The below is an extract from our inaugural ESG Report. The full report is available on our website)
Sustainability at OPG
As a responsible organisation our goal is to meet the expectations of our stakeholders while continuing to
contribute towards the sustainability of the planet and the well-being of the society. At OPG, we believe
in efficient, sustainable, and responsible growth. Our objective is to comply with ever emerging emission
standards, maintain technological leadership by employing new technologies and collaborating with our
key stakeholder groups. In line with our vision, we regularly invest in supporting and developing local
communities through initiatives that create a long-term positive impact on their lives. The COVID-19
pandemic has also sparked a renewed interest to respond to both environmental and societal challenges.
Integrating sustainability in operations
ESG topics have been at the top of our corporate agenda even before the COVID-19 pandemic, but in the
current scenario the 2030 Agenda for Sustainable Development proposed by the United Nations seems
more relevant than ever before.
The success of our business requires a more focused and cautious approach to all sustainability
considerations, including our participation in the United Nations Sustainable Development Goals (SDGs),
to address these issues in an inclusive way.
We are working towards revisiting our present sustainability agenda, to make it more comprehensive and
aligned to the global targets. We believe the UN SDGs provide a tangible framework for us to align and
prioritize our business activities. The energy sector, and in particular, the private sector, has a pivotal role
to play in the achievement of sustainable development goals. Our approach is to utilise the expertise we
have achieved over the years to make the most of the opportunities identified. We monitor and report
our sustainability performance as part of our annual report. We refer to some of the global reporting
frameworks like the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB)
and Financial Times Stock Exchange (FTSE) to improve our overall report.
Our contribution to Sustainable Development Goals
Our ESG strategy- Creating long term impact by optimising resources
A strategy can be understood as a framework for channeling limited resources at our disposal such as
time, manpower and funding towards achieving certain prioritised set of goals. Our ESG strategy is no
different. We wish to direct our resources towards addressing issues where we can create the maximum
impact in the long term. We carried out a peer analysis to identify topics that are of the utmost importance
19
to our industry/ sector. These identified topics will assist us in shaping our overall ESG strategy.
Our ESG strategy will focus on the top-priority issues where we want to create the most impact over the
long term. It would be an effective framework that would explain how we as an organization plan on
addressing the identified issues. Our strategy would include goals/ targets/ ambitions around the
identified issues. These targets would be ambitious, measurable and time bound. Our aim would be to
provide longer-term stretch goals with interim targets embedded into them.
With a keen focus on the sustainability trends and based on the impacts that our activities have on our
stakeholders and the risks and opportunities presented by these trends, we will be formulating our ESG
strategy. Our approach to mitigating these impacts will be based on the Precautionary Principle. The
strategy would also cover activities/ initiative that we would be undertaking to achieve the set goals and
targets.
We realise that developing a future fit ESG strategy involves anticipating how the (material) issues might
change over time. New issues might come into focus while others may fade away. No business can predict
all the issues that it will be expected to address over the next decade. Owing to this constantly changing
environment we commit to reviewing, refreshing, and updating our ESG strategy periodically to remain
environmentally conscious and nimble.
Engaging with our Stakeholders
We engage with stakeholders frequently through various modes of engagement to understand their
concerns and use their inputs for decision-making in our business. Engaging with stakeholders and
responding to their expectations and concerns helps us identify the critical business issues. We have
identified stakeholder groups relevant to our business, based on their position in our value chain. We were
not able to carry out stakeholder engagement specifically for this ESG report due to COVID-19 related
constraints. The table below summarises the engagement modes, key concerns, our response, and
frequency of engagement during the reporting period.
20
Table 1: List of identified stakeholders and engagement details
Engagement methods
Concerns raised
OPG’s response
Engagement
frequency
Employees
Direct interaction, emails, and
correspondence, events,
employee grievance mechanisms
and management meetings
Health and safety, energy
efficiency, training &
development
Contractual workforce
Direct Interactions, Training
sessions, open forums, toolbox
talks, Events
Occupational health
and safety, training, and
skill development
Initiatives taken to improve
work environment, health
and safety, energy-efficiency,
and employee capacity
building measures
Actions taken to improve
Health and safety, work
environment, skill
development and training,
promotional events, and a
grievance redressal
mechanism
Regular
specific engagement
and
time
Regular and time
specific engagement
Local communities
Direct interaction with CSR
project beneficiaries and
community-based organizations
Government/ Regulators
Response to information sought,
Timely filing of reports,
Regulatory audits, and
inspections. Visits by regulatory
bodies and meeting with officials
Investors
Investor meets, AGMs, meeting
with bankers and other financial
institutions, and periodic
declaration of results
Customers
Direct communication with
existing and new customers
through binding agreements such
as PPAs.
Vendors (Suppliers & Contractors)
On-boarding process, annual
supplier meets, supplier site visits
Education, infrastructure,
community healthcare,
vocational skill
development, support
during natural calamities
Education programs support
through PTA; community
health programs; skill
development programs,
Provisions given during
natural calamities
Regular as well as
need-based
engagement
Compliance with
applicable laws, taxes,
Verification audits
and CSR implementation
Timely compliance of all
statutory requirements,
payment of taxes & levies,
submission of reports and
other related information,
and CSR initiatives
Regular as well as time
bound engagement
The Company’s
performance, growth
opportunities
Prudent financial
management system
and reporting
Bi-annual basis and
need-based
engagement
Plant availability,
transmission availability,
forced outages
Power generation planning
and scheduling
Regular and need
based engagement
Timelines for payments
Timely clearance of
payments due to supplier
Regular engagement
21
Prioritizing material ESG topics
For us, material issues are those that are of high concern to the business and stakeholders and can impact
our value drivers such as operational efficiency, and our brand. We adopt a structured approach and
methodology to identify and prioritize material issues.
This assessment led to the identification of specific issues in the short-, medium- and long-term strategic
areas, as well as site-specific operational challenges. The topics identified for our business are provided
below:
List of material topics with boundary classification:
Topics
Alignment with SDGs
Topic Boundary
GHG Emissions
Within and outside OPG
Non- GHG Emission
Within and outside OPG
Water management
Within and outside OPG
Waste management
bottom ash)
(fly ash,
Within and outside OPG
Biodiversity
Outside OPG
Occupational health & safety
Within OPG
Training & development
Within OPG
Community
development
engagement &
Within and outside OPG
Corporate Governance
The Company is committed to high standards of corporate governance and places good governance at the
heart of the business. In March 2020, the Board of the Company formally adopted the Quoted Companies
22
Alliance’s (“QCA”) Corporate Governance Code (“the Code”) in line with requirements of the AIM Rules
for Companies. The Board believes that the Code provides the Company with a rigorous Corporate
Governance framework to support the business and its success in the long-term. The Code sets out ten
Corporate Governance principles which are as listed below:
Our overall Corporate Governance structure (OPGPV) is as shown below:
Sustainability Governance
The overall responsibility for adopting and implementing sustainability measures across the Group lies
with the OPG Board. The ESG Committee was created in June 2021 and its primary duty is to establish
objectives and milestones to achieve short and long-term ESG goals and to lead the process of
development and implementation of Company’s ESG strategy. The Health, Safety and Environment (HSE)
committee develops, implements, and oversees the HSE performance of the Company and assists the
management in driving its HSE agenda and in implementing industry best practices. The ESG committee
is tasked with keeping track of strategic and operational issues and periodically reporting to the Board.
The ESG committee is also responsible for setting goals & targets and identifying key performance
indicators (to track and monitor set targets) and identifying emerging ESG related risks and issues that
could have an overall detrimental impact on our company.
A dedicated Steering Committee has also been put in place which reports to the HSE Committee on site
specific HSE performance and challenges if any. The responsibilities of the Steering Committee include
ensuring adherence to the HSE compliance, planning, training, and managing incidents. The Committee
23
monitors all the necessary actions on the ground such as incident and accident data reporting, corrective
and preventive measures implemented and adopting best practices.
Mitigating risks and capitalising on opportunities
The Company has adopted precautionary approaches through a risk identification, management, and
mitigation process. We realise that the purpose of risk management is not to eliminate risks but to
minimise the potential negative consequences arising out of risks. The risk management process we have
in place includes assessing the external and internal ESG as well as operational risks, along with their
likelihood, severity, and impacts. We are in the process of integrating the sustainability risk management
with our overall enterprise-wide risk management processes. Our stakeholders are increasingly becoming
aware about the impact of these ESG risks on our operations as well as on the environment and the nearby
community. We constantly identify the risks and opportunities to ensure our business strategy is aligned
to the internal and external business environment. We have identified the following risks & opportunities:
24
Mitigating Risks
Risk areas
Economic
Identified risks
Availability of quality coal at optimal cost
Forex variation
Credit risk & timely financial closure
Potential impact
Increased operational
Action plan
Due to the plant’s proximity to a port
cost
Business continuity risk
and design of the boilers, the
Company has flexibility of procuring
coal from various international and
domestics sources and blending
different types of coal
From time to time the Company
enters fixed price coal supply
contracts and/or uses financial
hedging instruments
When appropriate, forex exchange
forward contracts are used to mitigate
forex volatility and exposure
Negotiate with financial institutions to
get favorable credit terms &
conditions to reduce credit risks
Environmental
Compliance with new and current laws, rules,
Increased operational
A dedicated compliance monitoring
regulations, and government policies
regarding water use, reduced GHG and other
emissions.
Cyclones and other natural calamities
Epidemics and Pandemics
Irradiance and erratic weather conditions
Water Management
Real time monitoring of energy conversion
Continuous compliance of ESG regulations
Delay in land acquisition, forest clearance and
obtaining environmental clearances
Social
Social activism
Labor unrest
cost
Disruption in business
due to violation of
regulations/ norms
Business continuity risk
Project cost and time
team to monitor compliance with ESG
regulations as well
Anticipate changes in regulations
especially around GHG emissions and
set an emissions reduction target
Insurance of assets to cover extreme
overrun
weather-related events as well.
Inclusion of epidemics & pandemics in
the emergency response plan
Business disruption due
Regular engagement with
to labor unrest
stakeholders can be conducted to
understand and act upon their
concerns.
Capitalising on Opportunities
Identified opportunities
Increased focus on renewable capacity addition
Increase in energy demand due to improved living standard
Power demand for electric mobility in the future
Focus on enhancing energy efficiency and initiatives to
reduce GHG emissions
Potential impact
Increase in product portfolio
Alignment to changing global preferences (transition towards low
carbon economy)
Greener operations leading to reduced cost of operations
Increased social acceptance due to greener portfolio for power
generation
Enhanced overall ESG performance
25
Sustainability in our daily operations
Protecting our Environment
Power generation from fossil fuels is, by
nature, a resource and emission-intensive
activity. Coal and water are the primary
resources for thermal power generation.
The major impact that our operations have
on the environment include stack emissions
and waste generation. Major emissions
through stacks are of Particular Matter (PM),
Oxides of Sulphur (SOx) and Oxides of
Nitrogen (NOx). Besides, CO2 is also emitted
due to the use of fossil fuels. In activities
where coal is used as the primary fuel, the
solid waste generated is majorly fly ash. We
have been proactively working towards
achieving continuous improvements in our
environmental performance and to prevent,
mitigate, and reduce the environmental
impact of the operations.
Figure 1: ISO 14001:2015 certificate
Our focus on adherence to the highest
standards of environmental management is
applicable across all our sites. Towards this,
we have adopted various environmental protocols and adhere to leading certifications ensuring
compliance with applicable environmental legislation. Our EHS policy endorses our commitment to
improving our performance on various environmental aspects that go beyond regulatory compliances.
We adhere to the requirements of ISO 14001 – Environmental Management System.
Environmental compliance
Though electricity is a clean form of energy at the consumption stage, the process of generation usually
involves depletion of natural resources, environmental pollution, displacement of population, health
hazards, changes in land use pattern, and loss of forests among other things. These adverse impacts of
thermal power plants can be offset by correct technological control, judicious siting, necessary control
measures and effective environmental management of the operations.
It is embedded in our Group strategy to ensure compliance with standards set forth by the relevant
authorities and seek to exceed the norms laid down by the regulatory standards in practice where
possible. A legal compliance review of all the project sites is done in a systematic manner. Our plant
specific steering committee assesses the compliance of the project site against the conditions laid out in
the consents, permits and licenses, on regular basis. The steering committee of the plant submits the
disclosure on legal compliance to the Board-level HSE committee.
Energy & Emissions
In the reporting period, we utilised a total of 1,264,807 MT of coal which translated to 21,410,927 Million
KJ of energy consumed to generate 1,700,552,000 KWh of electricity, while in the previous fiscal year we
generated 2,468,467,000 KWh of electricity, against the consumption of 30,107,503 Million KJ of energy.
26
We are actively working towards optimizing
our energy intensity to mitigate energy and
emissions related risks. We have been
proactively taking steps towards installing
energy efficient equipment within our
processes. We are also investing in processes
and technologies that promote sustainable
growth – enhancing energy efficiency and
developing low-carbon technologies.
As a result of the energy conservation and
efficiency initiatives undertaken, we were able
to reduce our energy consumption by ~31,570
Million KJ in the reporting year. We are also
working
Energy
Management System – ISO 50001. In this fiscal
year, we also drafted our energy policy.
implementing
towards
We have recently conducted our first carbon footprint accounting study to understand our major sources
of GHG emissions and track changes over time. Information presented in the GHG inventory can help
inform corporate strategies and prioritize actions to reduce emissions. It can also provide benchmarks
against which the success of the mitigation activities can be measured. The study will help us in setting a
GHG emission reduction target in line with the requirements of the Paris Agreement goals.
The
table shows our
scope GHG emissions for
FY19-20 and FY20-21.
Table 2: Total GHG emissions by Scope
One of the key impacts of our operation on environment include stack emissions which include SOx, NOx,
and PMs. The norms are set to get stringent since the MOEFCC introduced new norms for coal-based
27
power stations to cut down emissions of particulate matters (both PM10 and PM2.5), Sulphur dioxide
(SO2) and oxides of nitrogen (NOx) on 7 December 2015 to improve air quality around power plants. The
new emission norms were supposed to be implemented by December 2017, but as per the latest
government notification the timeline for compliance has been staggered based on the location of the
plant. As per conditions defined, our plant falls under category C for which the deadline has been fixed as
31 December 2024.
Our plant is equipped with a Continuous Emission Monitoring System (CEMS) which is linked to the State
Pollution Control Board servers to relay real-time emissions data. We also have 2 dedicated stations within
our premises to carry out continuous monitoring of ambient air quality parameters including SOx, NOx,
and SPM. This is to ensure that the ambient air quality in the area surrounding the plant is within the
prescribed norms. To control dust emissions, we have installed Electrostatic Precipitators before the
stacks that work at 99.9% efficiency to ensure that the PM level is below 50 µg/ Nm3.
Table 3: Average Non-GHG emissions for FY20-21
The coal mix used in our plant comprises of imported Indonesian coal which has low Sulphur levels (a
maximum of 0.15%) and indigenous coal having maximum Sulphur of 0.4% which are well below the
prescribed limits of 1.2% provided by the MoEFCC. Due to this our SOx emissions are already well below
the new stack emission norms even without the installation of the Flue-gas desulfurization (FGD) unit.
To control our NOx emissions, we have already initiated the process of installation of a DeNOx retrofit
system to reduce NOx emissions further to meet the norms.
Water management
As per the Central Ground Water Authority block wise Groundwater Resource Assessment Report,2020,
Gummidipoondi block falls under the Safe category. Our primary source of water is ground water. We
have undertaken many initiatives in the 4R’s -Reduce, Reuse, Recycle and Regenerate water in our
operations to minimise our use of ground water. The ground water table is measured regularly at various
points inside the plant through piezometric wells. Further, water meters have been installed at our project
site to measure, monitor and manage our water consumption.
Due to the adoption of air-cooled condensers and prudent water management measures undertaken by
us, our specific water consumption stood at just 0.093 m3/ MWh (less than 5%) as compared to the
prescribed 2.5 m3/ MWh. The water cycle follows a closed loop system at OPG. The domestic water
treated in the Sewage Treatment Plant (‘STP’) is used for nurturing the green belt. No effluent is released
from the OPG premises which makes us a Zero Discharge Plant (ZLD).
During the reporting year, the total ground water withdrawal for our plant stood at 158.16 million liters.
We consumed a total of 157.33 million liters of water. The remaining 0.73 million liters was sent to the
elevated solar pond for slow rate evaporation. OPG has employed air cooled condensers which have
effectively reduced the water footprint per unit of electricity generated by 99% in comparison to
28
conventional water-cooled condensers. Our rainwater harvesting systems collects 90% of run-off.
In this fiscal year, we also formulated our water policy.
Waste management
Power plant operations generate non-hazardous as
well as hazardous waste. The utilisation and disposal
of this waste is governed by strict regulations. Ash is a
major non-hazardous waste and a material aspect for
us considering the quantity and challenges for
in certain geographical areas. The
utilisation
hazardous waste that we generate is small in quantity
and includes oil-soaked cotton waste, batteries etc.
We have engaged a State Pollution Control Board
Authorised Agency for responsible handling and disposal of this hazardous waste. We do not engage in
import or export of any hazardous waste or materials under the Basel Convention. In this fiscal year we
also drafted our waste management policy.
Table 4: Waste generation by type for FY20-21
Fly ash management
Fly ash is a solid waste arising from the process of coal-based power generation. During the reporting
period our plant generated a total of 67,307 MT of fly ash and 16,842 MT of bottom ash. The Central
Government is focused on utilizing the fly ash since its disposal in landfills presents a significant challenge.
Though utilization of fly ash is a challenge for the entire Power sector considering the total quantity of ash
generated, we have achieved 100% ash utilisation rate by engaging with cement and brick manufacturers
who use fly ash for sustainable purposes as a raw material.
Biodiversity
None of the operational sites owned, leased, or managed by us are in or adjacent to protected areas and
areas of high biodiversity value outside protected areas. We are taking every possible step to make our
premises an eco-friendly workplace. We recognize that our operations have a potential to impact
biodiversity, both directly and indirectly. We plant saplings annually across our project sites to protect
and restore natural habitats while sequestering carbon. We annually plant 2,000 saplings at each of our
project sites. With an aim to increase the overall green cover of our sites, we have dedicated 30% of the
area at our premises as green belt to promote local biodiversity. In this fiscal year, we also drafted our
biodiversity policy.
29
PRINCIPAL RISKS
The Group faces a number of risks to its business and strategy. Management of these risks is an integral part
of the management of the Group. The list of principal risks and uncertainties facing the Group’s business set
out below cannot be exhaustive because of the very nature of risk. New risks emerge and the severity and
probability associated with these will change over time.
Power sale
The Company’s power plants derive their revenue from the group captive model
supplying power on short-term, medium-term, or long-term sale basis and would,
for this purpose, enter into power purchase agreements with counterparties such as
industrial captive power shareholders, power trading companies and state utilities.
Contracts with captive power shareholders and other customers may impose
restrictions on the Company’s ability to, amongst other things, increase prices at short
notice and undertake expansion initiatives with other customers.
The Group’s power plants may not qualify or continue to be recognised as captive
power producers which may damage the Group’s business model or increase the
costs to the Group’s captive power shareholders. This could adversely affect the
revenues in the short-to medium-term and results of operations.
Review contracts periodically to obtain
best possible tariffs
Flexibility to supply to captive consumers or
in the open market
Benchmarking captive consumer prices to
state utility prices to benefit from any price
increases
Monitor ongoing customer performance,
maintaining a group of counterparties
The Group has coal linkages with domestic companies and agreements for imported
coal. The dependence on third parties for coal exposes the Group’s power plants to
vulnerabilities such as non-supply, price increases in the international market,
foreign exchange fluctuations and increases in shipping costs and any changes in
applicable taxes and duties. This could impact the operations and profitability of the
Group.
Reliable
transmission
infrastructure
The Group is dependent upon a reliable transmission and distribution
infrastructure so that the power generated at the Group’s power plants can
be evacuated and transmitted to consumers. The Group pays an open access
fee to access the transmission and distribution structure. If the transmission
infrastructure is inadequate or subject to approvals and unexpected fees then
this will adversely affect the Group’s ability to deliver electricity to its
customers and impact revenues and profitability.
Seeking long-term supplies
Maintaining adequate storage facilities to
keep appropriate levels of surplus stocks
Maintaining relationships with suppliers
and mitigating any potential disruption
Developing different sources for fuel supply
especially in the imports market
Assessing adequate availability of
transmission capacity and related fees
during project evaluation stage
Construction and/or upgrade of transmission
facilities near the Group’s existing or future
power plants
Maintaining a proactive relationship with local
Distribution Companies (‘Discoms’) and monitor
any changes
30
Government
policy and
regulations
The Group’s operations are subject to complex national and state laws and
regulations with respect to numerous matters, including
the following:
environmental factors (emissions, waste
disposal, storage and handling);
health and safety; and planning
and development.
The Group is required to obtain approvals, licences and permits issued by the
Indian government and other regulators and failure to obtain, comply with the terms
of or renew such approvals, licences and permits may restrict the Group’s operations
or development plans, or require their amendment, and may adversely affect the
Group’s profitability, or result in it being subject to fines, sanctions, revocation of
licences or other limitations.
Group’s business model of GCPPs is subject to rules and regulations, which can be
potentially interpreted by the authorities in a way different from Group’s
interpretations. The profitability of the Group will be in part dependent upon the
continuation of a favourable regulatory regime with respect to its projects.
Ability to retain
fiscal and tax
incentives
The Group’s existing and planned power plants benefit from various fiscal
and tax incentives that are available to the Company from the federal and
state governments.
A change in policy or the adoption of tax policies and incentives can have an
adverse impact on the profitability of the Group.
Exchange rate
fluctuations
As a consequence of the international nature of its business, the Company is exposed
to risks associated with changes in foreign currency exchange rates. The Group’s
operations are based in India and its functional currency is the Indian Rupee
although the presentational currency is Great Britain Pound.
Imported coal is purchased in US Dollars.
The Group’s financial results may be affected by appreciation or depreciation of the
value of the foreign exchange rates relative to the Indian Rupee.
Group monitors and reviews changes in the
regulatory environment and its commitments
under licences previously granted
It continually ensures compliance with the
conditions contained within individual licences
and is mindful of the importance of complying
with national and local legislation and standards
The Group maintains an open and proactive
relationship with the Indian government and its
various agencies
The Group is consulting with industry and legal
experts as required and, if necessary, is prepared
to defend its position in the courts.
The Group continues to monitor changes and
developments in respect of incentives
provided by the Indian federal and
state authorities
Project investment returns are evaluated
based on the expected incentives available to
the Company and are revised based on the
most up-to-date guidance available
Putting in place, where appropriate, forward
contracts or hedging mechanisms
Monitoring our risk on a regular basis where no
hedging mechanism is in place and taking steps
to minimise potential losses
Global
financial
instability
The Indian market and Indian economy are influenced by global economic and
market conditions, particularly emerging market countries in Asia.
Financial instability in recent years has inevitably affected the Indian economy.
The Group continues to monitor changes and
developments in the global markets to assess the
impact on its financing plans
Continuing uncertainty and concerns about contagion in the wake of the financial
crises could have a negative impact on the availability of funding.
COVID-19
pandemic
The spread of COVID-19 across the world has impacted businesses globally.
The pandemic has posed risks to human life, resulted in low power demand
due to national lockdown and disrupted supply chain.
The Group had adequate stock of coal and oil
for plant startup and critical spares at the time
of the COVID-19 lockdown. This has helped in
ensuring the functioning of the plant during the
lockdown.
31
BOARD OF DIRECTORS
Mr. Arvind Gupta, is the Chairman of the
Board of OPG Power Ventures Plc. A
Commerce graduate from the University of
Madras, Mr. Gupta joined the OPG family
business in 1979. An energetic self-starter,
visionary and a strategic leader, Mr. Gupta
set up a steel pipe unit in 1979 at the age
of 18 and pioneered the Group Captive
Power Producer concept in Tamil Nadu
state and developed and operationalised
the 18 MW gas fired plant of OPG Energy,
through to successful completion in 2004.
Since then, Mr. Gupta has been
responsible for the construction and
development of the power plants of the
OPG Group as well as its overall strategy,
growth and direction. Having gained
experience in various divisions of the
business including flour milling, steel
production and logistics, he went on to
become the President of Kanishk Steel
(listed on the Bombay Stock Exchange).
He identified opportunities in power
generation and developed this division
within Kanishk Steel with initial projects in
wind power generation in 1994. In addition,
he has interests in several industries
including cycle tyre tubes, energy - wind,
power & solar, NBFC and real estate.
Mr. Gupta is the Honorary Consul for North
Macedonia in India
Dmitri Tsvetkov
CFO, Executive Director
Member, Nomination
Committee
Member, Audit, Nomination &
Remuneration Committees
Member, ESG
Committee
32
MS. Avantika Gupta
COO, Executive Director
Ms. Avantika Gupta is a Post Graduate
from University College, London (UCL),
UK and a Barrister from Grays Inn,
London (recipient of the Outstanding
Student of the Year award). From
childhood she always excelled in her
scholastic journey. She started her
career in the Family Business, OPG
Group, in 2010 and moved on to
become the Chief Operations Officer
and Executive Director of OPG Power
Ventures Plc, UK. Ms. Gupta is a
competitive and aspirational young
leader. She is an energetic self-starter
with a progressive mindset and an
innate drive to achieve. Ms. Gupta has
significant experience in a spectrum of
disciplines relevant to the energy and
power sector. She was responsible for
the development & commissioning of a
714 MW Thermal Power Project and 62
MW Solar Power Project in India.
Mr P Michael Grasby, Non-Executive
Director was re-appointed as a non-
executive director to the Board of OPG
Power Ventures plc in February 2021. He
was a non-executive director of the
Company from admission to AIM in May
2008 until November 2019 and has
previously held a number of senior positions
in the UK and international power sector. Mr
Grasby was a non-executive director at
Drax Group plc from December 2003 to
April 2011. He retired from International
Power in 2002, where he held a senior vice
president position for global operations.
During his career he has held a number of
senior positions in the UK and international
power industry with the Central Electricity
Generating Board and National Power. He
was manager of Drax Power Station
between 1991 and 1995, and director of
operations for National Power's portfolio,
with responsibilities for over 16,000 MW of
generating capacity, until 1998. Following
the demerger of National Power in 1999, he
joined International Power as senior vice-
president, continuing with his international
directorships and leading a major
consortium in the Czech Republic. Mr
Grasby has experience of being a director of
power companies
in Portugal, Turkey and Pakistan. Mr Grasby
was a founder director of Strategic
Dimensions, an executive recruitment
business for technical, general and financial
management roles in the energy, process
and engineering sectors. He is a Chartered
Engineer, FIET and FIMechE.
Member, ESG
Committee
Member, Audit, Nomination &
Remuneration Committees
Member, Remuneration & ESG
Committees
33
CORPORATE GOVERNANCE REPORT
FINANCIAL YEAR ENDED 31 MARCH 2021
Compliance with the Code
Since admission to AIM, the Group has grown substantially against a background of difficult trading conditions within
the Indian electricity generation sector. The Company completed its development programme, paid dividend with
respect to years ended 31 March 2017, 2018 and 2019 and is poised for the next phase of its development. The key
objective is to build on these achievements and the Board has therefore adopted an approach to governance that is
proportionate with and appropriate to the current size and complexity of the Group.
The Company is committed to high standards of corporate governance and places good governance at the heart of
the business. In March 2020, the Board of the Company formally adopted the Quoted Companies Alliance’s (“QCA”)
corporate governance code (“the Code”) in line with requirements of the AIM Rules for Companies. The Board
believes that the QCA Code provides the Company with a rigorous corporate governance framework to support the
business and its success in the long-term. The Code sets out ten corporate governance principles. The ways in which
the Company meets the following principles are described on our website at www.opgpower.com/investors/aim-
rule-26/index.html:
Establish a strategy and business model which promotes long-term value for shareholders
Seek to understand and meet shareholder needs and expectations
Take into account wider stakeholder and social responsibilities and other implications for long-term success
Embed effective risk management, considering both opportunities and threats, throughout the organisation
1.
2.
3.
4.
5. Maintain the board as a well-functioning, balanced team led by the chair
6.
7.
8.
9. Maintain governance structures and processes that are fit for purpose and support good decision making by
Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
Promote a corporate culture that is based on ethical values and behaviour
the board
10. Communicate how the Group is governed and is performing by maintaining a dialogue with shareholders and
other relevant stakeholders.
The Board of Directors
The Board comprises the following individuals:
Executive
1. Arvind Gupta (Chairman);
2. Dmitri Tsvetkov (Chief Financial Officer); and
3. Avantika Gupta (Chief Operating Officer).
Non-executive
1. Jeremy Warner Allen (Deputy Chairman);
2. N Kumar, and
3. Michael Grasby (appointed on 19 February 2021).
The Board considers that, as at the date of this report, it complies with Code provision, which requires that, there
should be at least two independent Non-executive Directors. Mr Warner Allen, Mr Kumar and Mr Grasby are
considered to be independent under the Code. Biographical details of all the Directors at the date of this report are
set out on pages 39 and 40 together with details of their membership, as appropriate, of the Board Committees. The
Board is responsible for setting the Company’s objectives and policies and providing effective leadership and the
controls required for a publicly listed company. Directors receive papers for their consideration in advance of each
Board meeting, including reports on the Group’s operations to ensure that they remain briefed on the latest
developments and are able to make fully informed decisions. The Board met four times during the year under review.
In addition to that the Board had three monthly conference calls.
The Executive Committee (‘ExCo’) comprises of the three Executive Directors and four members of senior
management. All Directors have access to the advice and services of the Company Secretary, who is responsible for
ensuring that Board procedures are followed and that applicable rules and regulations are complied with.
Directors have the right to request that any concerns they have are recorded in the appropriate Committee or Board
minutes. Informal procedures are in place for Directors to take independent professional advice at the Company’s
expense although these are not currently set down in writing.
The Company maintains Directors’ and officers’ liability insurance and indemnity cover, the level of which is reviewed
annually.
34
Division of Responsibilities
Mr Arvind Gupta, the Company’s Chairman is responsible for the overall business, strategic decision and heads the
Executive Committee. Ms Avantika Gupta, Chief Operating Officer is responsible for the day-to-day running of the
operations. Jeremy Warner Allen is Deputy Chairman. In the Board’s view, these arrangements together ensure an
appropriately clear division of responsibilities between the running of the Board and the executive responsibility for
the running of the Company’s business.
Chairman and Deputy Chairman
The Chairman’s key responsibilities were the effective running of the Board, proposing and developing the Group’s
strategy and ensuring that the Board plays a full and constructive part in the development and determination of the
Group’s strategy and overseeing the Board’s decision-making process.
Jeremy Warner Allen, the Deputy Chairman, is available to shareholders who have concerns that cannot be resolved
through discussion with the Chairman. The role of the Deputy Chairman is to support and tender advice to the
Chairman on all governance matters.
Re-election of Directors
At every AGM, one-third of the Directors for the time being (excluding any Director appointed since the previous
AGM) or, if their number is not divisible by three, the number nearest to one-third, shall retire from office by
rotation. However, this year all Directors are up for re-election at the forthcoming AGM.
Information and professional development
All Directors received a briefing from the Company’s nominated adviser of their duties, responsibilities and liabilities
as a Director of an AIM company. In addition, all Directors receive a regular briefing on the AIM Rules for Companies
and the Market Abuse Regulations (MAR) from the Company’s Nominated Adviser. Directors are encouraged to keep
abreast of developments and attend training courses to assist them with their duties.
In addition to the formal meetings of the Board, the Chairman is available to the other Non-executive Directors to
discuss any issues of concern they may have relating to the Group or as regards to their area of responsibility and to
keep them fully briefed on ongoing matters relating to the Group’s operations.
Board performance and evaluation
The Chairman, as part of his responsibilities, informally assesses the performance of the Board and its Directors on
an ongoing basis and brings to the Board’s attention any areas for improvement. For the time being, the Board will
continue to evaluate in this way the balance of skills, experience, independence and knowledge required to ensure
that its composition is appropriate to the Group’s size and complexity. In 2019 the Board introduced a process of
self-evaluation of its performance and completed its first self-evaluation. It is still to implement a process of periodic
evaluation of its principal committees and the individual Directors.
Meetings of the Board and its Committees
The following table sets out the number of meetings of the Board and its Committees during the year under review
and individual attendance by the relevant members at these meetings:
Board meetings
Board Committee meetings
Audit
Remuneration
Nomination
Number Attended Number Attended Number Attended Number Attended
Arvind Gupta
Dmitri Tsvetkov
Avantika Gupta
Jeremy Warner Allen
N Kumar
Michael Grasby (from February 2021)
4
4
4
4
4
4
1
4
2
4
4
1
Number of meetings held during the year 4
NA
2
1
2
2
NA
2
2
2
2
2
NA
2
NA
NA
NA
1
1
2
NA
NA
NA
1
1
2
2
1
NA
NA
1
1
NA
1
NA
NA
1
1
NA
1
In the event that Directors are unable to attend a meeting, their comments on the business to be considered at the
meeting are discussed in advance so that their contribution can be included in the wider Board discussions.
35
Board Committees
Audit Committee
The members of the Audit Committee are Jeremy Warner Allen and N Kumar. Jeremy Warner Allen is considered to
have continuing, relevant financial experience. The Chairman, Chief Financial Officer and Chief Operating Officer and
also, as necessary, a representative of the auditors are normally invited to attend meetings of the Committee.
The primary duty of the Audit Committee is to oversee the accounting and financial reporting process of the Group,
the external audit arrangements, the internal accounting standards and practices, the independence of the external
auditor, the integrity of the Group’s external financial reports and the effectiveness of the Group’s risk management
and internal control system.
The Audit Committee met twice during the year and considered the following matters during the year under review:
the FY20 Annual Report and Accounts for the year ended 31 March 2020; and
the unaudited results for the half-year FY21 to 30 September 2020.
The Audit Committee considered relevant significant issues in relation to the financial statements taking into account
business developments during the year and risks and matters raised in the external auditors’ FY20 final and FY21
planning reports to the Audit Committee. These issues were addressed as part of preparation of the FY21 financial
statements.
Remuneration Committee
The Remuneration Committee currently consists of N Kumar and Jeremy Warner Allen.
The primary duty of the Remuneration Committee is to determine and agree with the Board the framework or broad
policy for the remuneration of the Executive Directors and such other members of the executive management team
of the Group as is deemed appropriate. The remuneration of the Non-executive Directors is a matter for the
executive members of the Board. No Director may be involved in any decisions as to his own remuneration.
Full details of the role and composition of the Remuneration Committee, the remuneration policy of the Company
and its compliance with the Code provisions relating to remuneration are set out in the Directors’ Remuneration
Report on pages 41 to 44.
Nomination Committee
The members of the Nomination Committee are Arvind Gupta, Jeremy Warner Allen and N Kumar. The primary duty
of the Nomination Committee is to lead the process for Board appointments and make recommendations to the
Board. The Nomination Committee regularly reviews the composition of the Board to ensure that the Board has an
appropriate and diverse mix of skills experience, independence and knowledge of the Group. We recognise the
benefits of gender diversity and in the FY19 the Company has appointed first female Executive Director, Ms Avantika
Gupta, COO, to the Board.
Environmental, Social, and Governance (“ESG”) Committee
The Company’s ESG Committee was created in June 2021 and Michael Grasby was appointed as Chairman of this
committee. The other members of the ESG committee are Avantika Gupta and Dmitri Tsvetkov. The primary duty of
the ESG Committee is to establish objectives and milestones to achieve short and long-term ESG goals and to lead
the process of development and implementation of Company’s ESG strategy.
Accountability and Audit
Risk management and internal control
The Board has overall responsibility for the Group’s system of internal control, which includes risk management. The
Board has delegated the responsibility for reviewing the effectiveness of its internal control systems to the Audit
Committee. The Audit Committee reviews these systems, policies and processes for tendering, authorisation of
expenditure, fraud and the internal audit plan.
The system of internal control is designed to manage, rather than eliminate, the risk of failure to achieve business
objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.
The Board has instructed the ExCo to be a leading part of its process to identify, evaluate and manage the significant
risks the Group faces, which is in accordance with the current guidance on internal control. The Audit Committee
will assist the Board in discharging its review responsibilities. The Board has carried out a robust assessment of the
principal risks faced by the Group, including those that would threaten its business model, future performance,
solvency or liquidity. A summary of the key risks facing the Group and mitigating actions is described on pages 30
and 31.
36
Assurance
BDO LLP was appointed as auditor for the Group for the financial years ended 31 March 2018, 31 March 2019 and
31 March 2020 following a tender process. The Audit Committee reviewed the effectiveness of the external auditor
and BDO LLP was reappointed in for the financial year ended 31 March 2021. The Audit Committee’s assessment
was based on inputs obtained in the course of monitoring the integrity of the financial statements and the significant
financial reporting issues and judgements underlying the financial statements, and on its direct interactions with the
external auditors. The Audit Committee’s principal interactions with the auditors were its discussions of the audit
work performed on areas of higher audit risk and the basis for the auditors’ conclusions on those areas. These
interactions were supplemented by others that enabled them, for example, to gauge the depth of the auditors’
understanding of the Company’s business. The Audit Committee’s review focused on the level of experience and
expertise of the audit team, their objectivity and professional scepticism, and their preparedness to challenge
management in a knowledgeable, informed and constructive manner. The Committee’s review also took account of
feedback from management on the effectiveness of the audit process.
The Audit Committee considers that, at this stage in the Group’s development, it is more efficient to use a single
audit firm to provide certain non-audit services for transactions and tax matters. However, to regulate the position,
the Committee will at the appropriate time establish a policy on the provision of non-audit services by the external
auditor. That policy will set out the external auditor’s permitted and prohibited non-audit services and a fee
threshold requiring prior approval by the Audit Committee for any new engagement. The external auditor did not
provide any non-audit services during the year.
Viability statement
A statement on the Directors’ position regarding the Company as going concern is contained in the Directors’ Report
on pages 39 and 40. As part of an annual strategy session, the Directors have assessed the prospects of the Group
over a period significantly longer than the 12 months required by the going concern. In this assessment, the Board
has considered the principal risks faced by the Group, relevant financial forecasts and the availability of adequate
funding. The Board conducted this assessment over a period to the end of calendar year 2024, primarily because
this is the remaining period of repayment of term loans. Based on its review, the Board is satisfied the viability of
the Group would be preserved and have a reasonable expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due over the four-year period of their assessment.
Shareholder Relations and the Annual General Meeting
The Board is committed to maintaining an ongoing dialogue with its shareholders. The Directors are keen to build a
mutual understanding of objectives with its principal shareholders. To this end, the Chairman and Chief Financial
Officer together with the Deputy Chairman met with a number of institutional shareholders during the year. The
Directors also encourage communications with private shareholders and encourages their participation in the AGM.
Mr. Arvind Gupta is primarily responsible for ensuring the effective communication of shareholders’ views to the
Board as a whole and updates the Board accordingly. Board members keep abreast of shareholder opinion and
discuss strategy and governance issues with them as appropriate.
Notice of the AGM will be sent to shareholders at least 21 clear days before the meeting. The voting results will be
made available on the Company’s website following the meeting.
The Company uses its corporate website (www.opgpower.com) to communicate with its institutional shareholders
and private investors and posts the latest announcements, press releases and published financial information
together with updates on current projects and other information about the Group.
37
DIRECTORS’ REPORT
The Directors present their report, together with the audited financial statements of the Group, for the year ended
31 March 2021.
Principal activity
OPG Power Ventures Plc (“the Company” or “OPG”) is a public limited company incorporated in the Isle of Man,
registered number 002198V, which is quoted on the AIM Market of the London Stock Exchange (“AIM”).
The Company and its subsidiaries (collectively referred to as ‘the Group’) are primarily engaged in the development,
owning, operation and maintenance of private sector power projects in India. The electricity generated from the
Group’s plants is sold principally to public sector undertakings and captive power shareholders in India or in the
short-term market. The business objective of the Group is to focus on the power generation business within India
and thereby provide reliable, cost-effective power under the ‘Group Captive’ provisions mandated by the
Government of India.
Results
The Group’s results for the year ended 31 March 2021 are set out in the Consolidated Statement of Comprehensive
Income. The Group profit for the year after tax was £14.1m (2020: £8.0m).
A review of the Group’s activities is set out in the Chairman’s statement.
Directors
The Directors of the Company during the year and up to the date of this report were as follows:
Arvind Gupta
Dmitri Tsvetkov
Avantika Gupta
Jeremy Warner Allen
N Kumar
Michael Grasby
Jeremy Beeton
Chairman
Chief Financial Officer, Executive Director
Chief Operating Officer, Executive Director (joined on 27 November 2018)
Deputy Chairman, Non-Executive Director and Audit and Nomination Committees
Chairman
Non-Executive Director, Remuneration Committee Chairman (joined on 25 November
2019)
Non-Executive Director, Remuneration Committee and Chairman of ESG Committees
(from June 2021) (appointed on 19 February 2021)
Non-Executive Director (resigned on 16 March 2020)
Directors’ liability insurance and indemnities
The Company maintains liability insurance for the Directors and officers of OPG.
Indemnities are in force under which the Company has agreed to indemnify the Directors to the extent permitted
by applicable law and the Company’s Articles of Association in respect of all losses arising out of, or in connection
with, the execution of their powers, duties and responsibilities as Directors of the Company.
Neither the Group’s liability insurance nor indemnities provides cover in the event that a Director or officer is proved
to have acted fraudulently or dishonestly.
Share capital
The issued share capital of the Company at 31 March 2021 was £58,909 comprising 400,733,511 ordinary shares of
£0.000147 each, of which there are no designated treasury shares.
Political donations
The Group has made no political donations during the year under review.
Going concern
As highlighted in the Consolidated Statement of Cash Flows and notes 5 (a) and 22 to the financial statements, the
Group meets its day-to-day working capital requirements through cash from operations and bank facilities.
The COVID-19 virus, a global pandemic has affected the world economy leading to a significant decline and increased
volatility in financial markets and a decline in economic activities. The Group has considered the possible effects that
may result from the pandemic on the carrying amounts of receivables and other financial assets and carried out a
Reverse Stress Test (“RST”). Based on the RST analysis, we can conclude that the Group is in strong position to
navigate the current situation caused by COVID-19 pandemic and going concern is not an issue.
38
Further information on the financial position of the Group, its cash flows, liquidity position and borrowing facilities
are described in the Financial Review. In addition, note 28 to the financial statements details the Group’s objectives,
policies and processes for managing its capital and its exposures to credit risk and liquidity risk.
The management’s forecasts and projections, taking account of possible changes in trading performance, show that
the Group should be able to operate within the level of its current facility.
After making enquiries, the Board has a reasonable expectation that the Company and the Group have adequate
resources to continue in operational existence over a period of at least 12 months from the date of approval of the
financial statements. Accordingly, the Board considers it appropriate to adopt the going concern basis of accounting
in preparing the financial statements.
Substantial shareholdings
Details of the Company’s substantial shareholdings are set out on the Company’s website at www.opgpower.com.
The Company has been notified, in accordance with the Disclosure and Transparency Rules of the Financial Conduct
Authority, of the following interests (whether directly or indirectly held) in 3% or more of the Company’s total voting
rights at 31 March 2021:
Gita Investments Limited and related parties and Directors
M&G Investment Management Limited
British Steel Pension Scheme
Percentage of voting rights
and issued
share capital
Number
ordinary shares
of
52.1%
13.0%
3.6%
208,694,770
52,051,647
14,227,222
Registered agent
The registered agent of the Company at 31 March 2021 was FIM Capital Limited who served throughout the year
and has continued to date.
Financial instruments
Information on the Group’s financial risk management objectives and policies and its exposure to credit risk, liquidity
risk, interest rate risk and foreign currency risk can be found in note 28.
Disclosure of information to the auditor
The Directors serving at the date of approval of the financial statements confirm that:
1. to the best of their knowledge and belief, there is no information relevant to the preparation of their report of
which the Company’s auditors are unaware; and
2. each Director has taken all the steps a Director might reasonably be expected to have taken to be aware of
relevant audit information and to establish that the Company’s auditors are aware of that information.
This report was approved by the Board of Directors on 29 September 2021 and signed on its behalf by:
Philip Scales
Company Secretary
OPG Power Ventures Plc
55 Athol Street
Douglas
Isle of Man
IM1 1LA
29 September 2021
39
DIRECTORS’ REMUNERATION REPORT 2021
Introduction
This report sets out information about the remuneration of the Directors of the Company for the year ended 31
March 2021. As a company admitted to AIM, OPG is not required to prepare a directors’ remuneration report.
However, the Board follows the principle of transparency and has prepared this report in order to provide
information to shareholders on executive remuneration arrangements. This report has been substantially prepared
in accordance with the Schedule 8 of the Large and Medium Sized Companies and Groups (Accounts and Reports)
(2008) (the ‘Regulations’).
Remuneration Committee
The members of the Remuneration Committee are N Kumar and Jeremy Warner Allen who are both independent
Non-Executive Directors.
Terms of reference have been approved for the Remuneration Committee the primary duty of which is to determine
and agree with the Board the framework or broad policy for the remuneration of the Executive Directors, senior
managers and such other members of the executive management team of the Group as is deemed appropriate. The
remuneration of the Non-Executive Directors is a matter for the executive members of the Board.
The principal responsibilities of the Committee include:
assessing and setting compensation levels for Directors and senior managers;
reviewing the ongoing appropriateness and relevance of the remuneration policy at regular intervals to ensure
that members of the executive team are provided with incentives that encourage enhanced performance;
reviewing the design of share incentive plans for the approval of the Board or shareholders, as appropriate; and
ensuring that contractual terms on termination are such that failure is not rewarded and that the duty to mitigate
losses is fully recognised in the drafting of Directors’ service agreements and letters of appointment.
In fulfilling these duties, the Committee shall be cognisant of remuneration trends across the Group and within the
sector in which the Group operates.
The Executive Directors and external advisers may be invited to attend meetings of the Remuneration Committee
but do not take part in the decision making.
Attendance at meetings of the Remuneration Committee by individual members is detailed in the Corporate
Governance Report on page 35.
Remuneration policy
The Remuneration Committee seeks to maintain a remuneration policy to ensure that the Company is able to attract,
retain and motivate its Executive Directors and senior management.
The retention of key management and the alignment of management incentives with the creation of shareholder
value are key objectives of this policy.
The Group therefore sets out to provide competitive remuneration for all its management and employees
appropriate to the business environment in the market in which it operates and in recognition of their contribution
to Group performance. To achieve this, the remuneration package is based upon the following principles:
total rewards should be set to provide a fair and attractive remuneration package;
appropriate elements of the remuneration package should be designed to reinforce the link between
performance and contribution to the Group’s success and reward; and
Executive Directors’ incentives should be aligned with the interests of shareholders.
The remuneration strategy is designed to be in line with the Group’s fundamental values of fairness, competitiveness
and equity, and also to support the Group’s corporate strategy. The Group seeks increasingly to align the interests
of shareholders with those of Directors and senior employees by giving the latter opportunities and encouragement
to build up a shareholding interest in the Company.
Long-term incentives
The Remuneration Committee believes that it is appropriate to operate share incentive schemes to encourage
Executive Directors and senior employees to meet the Group’s long-term strategic and financial objectives set by
the Board.
40
Voluntary reduction of Directors’ remuneration due to COVID-19
As part of the COVID-19 response, the Company has implemented various cost reduction and efficiency
improvement measures to conserve cash and improve liquidity, including voluntary 100 per cent salary reduction
for the Chairman and voluntary reductions up to 50 per cent in compensation for Executive and Non-Executive
Directors for FY21.
Long Term Incentive Plan (‘LTIP’)
In April 2019, the Remuneration Committee of the Board of Directors approved the introduction of an LTIP, which
was subsequently revised in July 2019, for a performance-related award of up to 14.0 million new ordinary shares
(representing approximately 3.6 per cent of the Company’s issued share capital) in order to incentivise further the
executives and senior management to deliver its planned strategy.
The LTIP Shares were awarded to certain members of the senior management team as Nominal Cost Shares and will
vest in three tranches subject to continued service with OPG until vesting and meeting the following share price
performance targets, plant load factor and term loan repayments of the Chennai thermal plant.
-
-
-
20% of the LTIP Shares shall vest upon meeting the target share price of 25.16p before the first anniversary
for the first tranche, i.e. 24 April 2020, achievement of PLF during the period April 2019 to March 2020 of
at least 70% at the Chennai thermal plant and repayment of all scheduled term loans;
40% of the LTIP Shares shall vest upon meeting the target share price of 30.07p before the second
anniversary for the second tranche, i.e. 24 April 2021, achievement of PLF during the period April 2020 to
March 2021 of at least 70% at the Chennai thermal plant and repayment of all scheduled term loans;
40% of the LTIP Shares shall vest upon meeting the target share price of 35.00p before the third anniversary
for the third tranche, i.e. 24 April 2022, achievement of PLF of at least 70% at the Chennai thermal plant
during the period April 2021 to March 2022 and repayment of all scheduled term loans.
The share price performance metric will be deemed achieved if the average share price over a fifteen day period
exceeds the applicable target price. In the event that the share price or other performance targets do not meet the
applicable target, the number of vesting shares would be reduced pro-rata, for that particular year. However, no
LTIP Shares will vest if actual performance is less than 80 per cent of any of the performance targets in any particular
year. The terms of the LTIP provide that the Company may elect to pay a cash award of an equivalent value of the
vesting LTIP Shares.
In April 2020, and upon meeting relevant performance targets, 2,190,519 LTIP shares vested (80% of the 1st tranche).
These shares will be issued later this year.
None of the LTIP Shares, once vested, can be sold until the third anniversary of the award, unless required to meet
personal taxation obligations in relation to the LTIP award.
Annual bonus
The Remuneration Committee considered bonuses for Executive Directors who were entitled performance bonuses
with respect to FY21. In light of COVID-19 it was decided that no bonuses will be awarded to Executive Directors in
FY21 due to COVID-19 challenges. Similarly, no bonuses were awarded to Executive Directors in FY20 due to COVID-
19.
Non-Executive Directors
The remuneration of the Non-executive Directors consists of fees that are paid quarterly in arrears. The Non-
executive Directors do not have a contract of employment with the Company. Each has instead entered into a
contract for services with the Company.
External appointments
It is the Board’s policy to allow the Executive Directors to accept directorships of other companies provided that
they have obtained the consent of the Board. Any such directorships must be formally notified to the Board.
41
Directors’ interests in ordinary shares
The interests of Directors in the ordinary share capital of the Company during the year were as follows:
Gita Investments Limited and related parties1
Jeremy Warner Allen
Dmitri Tsvetkov
N Kumar (joined on 25 November 2019)
Michael Grasby (re-appointed on 19 February 2021)
Total
1 Beneficial interest in these shareholdings vests with Gupta’s family.
31 March
2021
31 March
2020
206,432,166 206,492,166
1,124,680
1,124,680
1,126,691
1,126,691
-
11,233
-
n/a
208,694,770 208,743,537
There were no changes to Directors’ interests between 31 March 2021 and the date of this report. No Director had
any interest in any contract of significance with the Group during the year ended 31 March 2021 other than their
service contracts.
Directors’ remuneration for the period 31 March 2020 to 31 March 2021.
Salary, annual bonus and benefits
Chairman
Arvind Gupta (paid in INR equivalent)
Executive Directors
Dmitri Tsvetkov
Avantika Gupta
Non-executive Directors
Jeremy Warner Allen
N Kumar (joined on 25 November 2019)
Michael Grasby (from 19 February 2021)
Jeremy Beeton (until 16 March 2020)
Salary/fees
£
Annual
bonus
£
Total
FY21**
£
Total
FY20
£
–*
150,000
60,000
25,000
22,500
2,562
n/a
–
–
–
–
–
–
n/a
–
500,000
150,000
60,000
240,000
120,000
25,000
22,500
2,562
n/a
50,000
15,000
33,750
43,270
Total
260,062
–
260,062
1,002,020
No consideration was paid or received by third parties for making available the services of any Executive or Non-Executive Director.
* Arvind Gupta's INR equivalent of FY21 salary: nil (FY20: INR 45.8m). In FY21, as part of COVID-19 response, Arvind Gupta
voluntarily agreed to take 100 per cent salary reduction. In FY19 and FY20 Arvind Gupta voluntarily agreed to reduce his base
salary to £500,000 and to waive his FY19 bonus.
** As part of the COVID-19 response, the Company has implemented various cost reduction and efficiency improvement
measures to conserve cash and improve liquidity, including voluntary 100 per cent salary reduction for the Chairman and
voluntary reductions up to 50 per cent in compensation for Executive and Non-Executive Directors for FY21.
Under their service agreements, Mr Arvind Gupta, Mr. Dmitri Tsvetkov and Ms. Avantika Gupta are entitled to
medical, insurance and other allowances and received £144,896 (FY20: £662,923), nil (FY20: £21,000) and £352
(FY20: £1,316) respectively.
Directors’ LTIP
Movements during the period Options outstanding
LTIP granted
Options as at
1 April 2020
Granted
Expired/
Cancelled Exercised 31 March 2021
Latest vesting
date
Arvind Gupta
24 April 2019 7,407,407
Avantika Gupta
24 April 2019 1,777,778
Dmitri Tsvetkov
24 April 2019 3,555,556
Nil
Nil
Nil
42
Nil
Nil
Nil
Nil
Nil
Nil
7,111,111
24 April 2022
1,706,667
24 April 2022
3,413,334
24 April 2022
In April 2020, and upon meeting relevant performance targets, 80% of the first tranche of LTIP shares vested,
1,185,185 to Arvind Gupta, Chairman, 568,889 to Dmitri Tsvetkov, CFO and 284,445 to Avantika Gupta, COO. These
shares will be issued later this year.
At 31 March 2021, the closing mid-market price of the Company’s shares was 19.25 pence. During the year under
review, the Company’s closing mid-market share price ranged between a low of 9.60 pence and a high of 19.50
pence.
This report has been approved by the Board of Directors of the Company.
N Kumar
Chairman, Remuneration Committee
29 September 2021
43
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
Directors’ responsibilities
The Directors are responsible for preparing the Annual Report, the Directors’ Remuneration Report and the Group
financial statements. The Directors are required to prepare financial statements for the Group in accordance with
International Financial Reporting Standards (‘IFRS’) as issued by the International Accounting Standards Board.
Company law requires the Directors to prepare such financial statements in accordance with IFRS and the Companies
Act 2006.
International Accounting Standard 1 requires that financial statements present fairly for each financial year the
Group’s and Company’s financial position, financial performance and cash flows. This requires the fair presentation
of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria
for assets, liabilities, income and expenses set out in the International Accounting Standards Board’s ‘Framework for
the Preparation and Presentation of Financial Statements’. In virtually all circumstances, a fair presentation will be
achieved by compliance with all applicable International Financial Reporting Standards. In preparing these financial
statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether they have been prepared in accordance with IFRS as issued by the International Accounting
Standards Board, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and
enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They
are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Responsibility statement of the directors in respect of the annual financial report
We confirm that to the best of our knowledge:
– the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and
fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included
in the consolidation taken as a whole; and
– the strategic report includes a fair review of the development and performance of the business and the position
of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
We consider the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group’s position and performance, business model and
strategy.
Website publication
The directors are responsible for ensuring the annual report and the financial statements are made available on a
website. Financial statements are published on the company's website in accordance with legislation in the Isle of
Man governing the preparation and dissemination of financial statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the company's website is the responsibility of the directors. The
directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.
On behalf of the Board by:
Philip Scales
Company Secretary
OPG Power Ventures Plc
55 Athol Street
Douglas
Isle of Man
IM1 1LA
29 September 2021
44
Independent auditor’s report to the members of OPG Power Ventures plc
Opinion on the financial statements
In our opinion:
the financial statements give a true and fair view of the state of the Group’s affairs as at 31 March
2021 and of the Group’s profit for the year then ended;
the Group financial statements have been properly prepared in accordance with International
Financial Reporting Standards as issued by the International Accounting Standards Board;
We have audited the financial statements of OPG Power Ventures plc (the ‘Parent Company’) and its
subsidiaries (the ‘Group’) for the year ended 31 March 2021 which comprise the Consolidated statement
of financial position, the Consolidated statement of comprehensive income, the Consolidated statement
of changes in equity, the Consolidated statement of cash flows and notes to the financial statements,
including a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the Group financial
statements is applicable law and International Financial Reporting Standards as issued by the
International Accounting Standards Board.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remain independent of the Group in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities,
and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis
of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’
assessment of the Group’s ability to continue to adopt the going concern basis of accounting included:
Reviewing the Directors’ assessment of going concern through analysis of the Group’s cash flow
forecast through to September 2022 and beyond, including assessing and challenging the
assumptions underlying the forecasts through corroboration of key assumptions to external
information and a consideration of the key sensitivities as noted below.
Obtaining an understanding of the Group’s financing facilities, including the nature of facilities,
repayment terms and covenants. We then assessed the facility headroom calculations on both a
base case scenario, and the Directors’ downside scenarios as a result of the ongoing COVID-19
pandemic.
Taking account of the continuing COVID-19 pandemic, we have reviewed the reverse stress
testing of the forecasts as prepared by management and considered the results in the context of
the covenants and future cash flows.
Based on the work we have performed, we have not identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast significant doubt on the entity’s ability to continue
45
as a going concern for a period of at least twelve months from when the financial statements are
authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described
in the relevant sections of this report.
Overview
Coverage
Key audit matters
Materiality
100% (2020: 100%) of Group profit before tax
100% (2020: 100%) of Group revenue
100% (2020: 100%) of Group total assets
2021
2020
Carrying value of
the thermal
power station
Going concern
Accounting for
the investment
in associates
Going concern is no longer deemed to be a key audit matter
as a result of the diminishing influence of the COVID-19
pandemic on the Group’s financial position.
Group financial statements as a whole
£1,078k (2020: £1,077k) based on 5% of the profit before
tax (2020: 5% of profit before tax excluding non-recurring
specific loss allowances)
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including
the Group’s system of internal control, and assessing the risks of material misstatement in the financial
statements. We also addressed the risk of management override of internal controls, including assessing
whether there was evidence of bias by the Directors that may have represented a risk of material
misstatement.
At 31 March 2021 the group had 12 components whose transactions and balances are included in the
consolidated accounting records. Of these 12 components one has been subject to a full scope audit 5
have been subject to analytical review procedures and 6 have been audited to group materiality. with all
non-significant components having additional testing carried out on specific significant balances where
required for the purpose of issuing the opinion on the Group financial statements. The component, located
in India, which was considered to be a significant component was subject to a full scope audit undertaken
46
by BDO India. Each component’s financial information could be selected for the purpose of representative
sampling and key item testing.
Our involvement with component auditors
For the work performed by component auditors, we determined the level of involvement needed in order
to be able to conclude whether sufficient appropriate audit evidence has been obtained as a basis for our
opinion on the Group financial statements as a whole. Our involvement with component auditors included
the following:
Issuance of group instructions detailing the level of materiality, risk areas and other specific areas
of focus;
Regular correspondence during the audit process to monitor progress and ensure early warning
of any areas of concern, particularly in relation to risk areas;
A review of all audit work by the group audit team to ensure that the required assurance had been
obtained for the purposes of the group opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) that we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the
efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. We determined the following to be key audit matters:
Key audit matter
Carrying
value of
thermal
power
station
The Group’s thermal power
station represents its most
significant asset and totals
£173 million as at 31 March
2021.
Please refer
to note 15,
accounting
policies in
note 5, and
key sources of
estimation
uncertainty in
note 6.
Management is required to
assess whether they consider
there are any indications that
the Group’s assets may be
impaired as at 31 March 2021.
This assessment is undertaken
in line with IAS 36 Impairment
of Assets. Management
determined that the low
market capitalisation of the
Group when compared to the
carrying value of the power
station is an indicator of
impairment.
The future viability and
recoverability of the power
station is underpinned by the
How the scope of our audit addressed the
key audit matter
We reviewed management’s assessment
of indicators of impairment and evaluated
management’s impairment models for the
thermal power assets against historical
performance and our understanding of
the operations. We challenged the key
estimates and assumptions used by
management as set out below.
Our testing included comparison of the
tariffs used in the models to underlying
contracts, recalculation of discount rates
and critical review of the forecast
production and cost profiles against
empirical performance and forward coal
price data.
We have also compared the discount rate
used to that included in the previous year
and also recalculations made in the
previous year by our valuations experts.
We sensitised the models for reasonable
movements in key judgement areas to
47
results achieved to date and
the prediction of future value
based on the future cash
inflows generated from the
assets.
The assessment of the
recoverable amount of the
thermal power required
significant judgement and
estimation by management.
ascertain whether there remained a
reasonable expectation that there would
remain adequate headroom in excess of
the carrying values.
Key observations:
Based on the procedures above, we found
the Group’s assessment that its
impairment model supports the carrying
value of the thermal power station to be
appropriate.
Accounting
for
investments
in associates
and assets
held for sale
The group holds investments
in Solar projects which were
previously accounted for as
equity investments but are
now considered as
investments in associates.
We have confirmed to signed director
resignation forms that the Group ceased
to control the Solar projects during the
year and have correctly shown these as
investments in associates as defined by
IFRS 10.
Please refer
to note 7,
accounting
policies in
note 5, and
key sources of
estimation
uncertainty in
note 6.
IAS 28 Investments in
Associates and Joint Ventures
defines an associate by
reference to the concept of
"significant influence", which
requires power to participate
in financial and operating
policy decisions of an investee
(but not joint control or
control of those polices).
Additionally the investments
have been classified as held
for sale. Therefore under IFRS
5 Non-current Assets Held for
Sale and Discontinued
Operations these are required
to be measured at the lower
of cost or fair value. We also
note that these assets have
been held under IFRS 5 for a
number of years.
Given the judgement involved
around the determination of
whether OPG has control or
significant influence, and the
appropriateness of the
classification as held for sale,
there is a risk of material
misstatement.
We have considered the classification of
these assets as ‘held for sale’ against the
criteria set out in IFRS 5 and have
corroborated to correspondence from the
Group’s brokers and to board minutes
that they continue to actively pursue the
sale the companies.
We have evaluated management’s
discounted cash flow model used in
determining the fair value of the Solar
projects and checked that these assets
meet the criteria set out by IFRS 5 to be
classified as assets held for sale. We
confirmed to communications with the
Group’s broker and board minutes that
the Group continues to actively pursue a
sale of the investments. The evaluation of
the discounted cash flow model to
determine the fair value was carried out
using the same techniques as for the
carrying value of the thermal power
station above.
Key observations:
Based on the procedures above, we found
the Group’s assessment of the accounting
for the Solar projects to be appropriate.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect
of misstatements. We consider materiality to be the magnitude by which misstatements, including
omissions, could influence the economic decisions of reasonable users that are taken on the basis of the
48
financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality,
we use a lower materiality level, performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also
take account of the nature of identified misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole
and performance materiality as follows:
Materiality
Basis for
determining
materiality
Rationale for
the benchmark
applied
Performance
materiality
Basis for
determining
performance
materiality
Group financial statements
2021
£1,078k
5% of profit before tax
2020
£1,077k
5% of profit before tax excluding
non-recurring specific loss
allowances
We considered 5% of profit before tax to be a key performance
benchmark for the Group and the users of the financial statements in
assessing financial performance.
£809k
£808k
75% of Materiality
On the basis of our risk assessment, together with our assessment of the
Group’s control environment, a low expected level of errors, and
management’s accommodating attitude to proposed adjustments, our
judgement is that performance materiality for the financial statements
should be 75%.
Component materiality
We set materiality for the significant component of the Group based on a percentage of 72% of Group
materiality which was dependent on the size and our assessment of the risk of material misstatement of
the component. Component materiality in respect of the significant component was £850,000. In the audit
of the component we further applied a performance materiality level of 75% of the component materiality
to our testing to ensure that the risk of errors exceeding component materiality was appropriately
mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in
excess of £24k (2020: £22k). We also agreed to report differences below this threshold that, in our view,
warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information
included in the Consolidated Financial Statements other than the financial statements and our auditor’s
report thereon. Our opinion on the financial statements does not cover the other information and, except
to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in the
course of the audit, or otherwise appears to be materially misstated. If we identify such material
49
inconsistencies or apparent material misstatements, we are required to determine whether this gives rise
to a material misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact.
We have nothing to report in this regard.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view, and
for such internal control as the Directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the
Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to liquidate the
Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud.
Procedures performed by the group audit team included:
- We obtained an understanding of the legal and regulatory frameworks that are applicable to the
Group and determined that the most significant frameworks which are directly relevant to
specific assertions in the financial statements are those that relate to the reporting framework,
rules of the London Stock Exchange for companies trading securities on AIM, the Companies Act
2006 and relevant tax compliance regulations in local jurisdictions. We understood how the
Group is complying with those frameworks by making enquiries of management and those
responsible for legal and compliance procedures.
- Discussions with management regarding known or suspected instances of non-compliance with
laws and regulations, including gaining an understanding of where they considered there was a
susceptibility to fraud;
- Our audit planning identified fraud risks in relation to management override, the inappropriate
or incorrect recognition of revenue, and the accounting for the Solar projects (assessed as a Key
Audit Matter above). We carried out procedures to check that revenue was recognised in the
correct period. We obtained an understanding of the processes and controls that the Group has
established to address risks identified, or that otherwise prevent, deter and detect fraud; and
how management monitors those processes and controls;
50
- Assessing journals entries as part of our planned audit approach. We also performed an
assessment on the appropriateness of key judgements and estimates which are subject to
managements’ judgement and estimation, and could be subject to potential bias; and
- We discussed the risks of fraud at planning and communicated relevant identified laws and
regulations and potential fraud risks to all engagement team members and component auditors,
and remained alert to any indications of fraud or non-compliance with laws and regulations
throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial
statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than
the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for
example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit
procedures performed and the further removed non-compliance with laws and regulations is from the
events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with our
engagement letter dated 7 May 2021. Our audit work has been undertaken so that we might state to the
Parent Company’s members those matters we are required to state to them in an auditor’s report and for
no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the Parent Company and the Parent Company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.
BDO LLP
Chartered Accountants
Southampton
United Kingdom
Date: 29 September 2021
BDO LLP is a limited liability partnership registered in England and Wales (with registered number
OC305127).
51
Consolidated statement of financial position
As at 31 March 2021
(All amount in £, unless otherwise stated)
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Other long-term assets
Restricted cash
Current assets
Inventories
Trade and other receivables
Other short-term assets
Current tax assets (net)
Restricted cash
Cash and cash equivalents
Assets held for sale
Total assets
Equity and liabilities
Equity
Share capital
Share premium
Other components of equity
Retained earnings
Equity attributable to owners of the Company
Non-controlling interests
Total equity
Liabilities
Non-current liabilities
Borrowings
Non-Convertible Debentures
Trade and other payables
Deferred tax liabilities (net)
Current liabilities
Borrowings
Trade and other payables
Other liabilities
Liabilities classified as held for sale
Total liabilities
Notes
As at
31 March 2021
As at
31 March 2020
14
15
16
19
18
17
16
19(b)
19(a)
7(a), 7(b)
20
20
22
22
23
13
22
23
7(b)
2,394
172,716,040
69,853
8,194,412
180,982,699
12,186,644
14,829,989
17,805,554
1,131,342
3,219,356
8,920,952
16,425,368
74,519,205
9,045
192,469,395
509,628
26,645
193,014,713
11,480,099
26,901,986
6,316,735
1,330,684
7,497,967
3,438,830
46,356,680
103,322,981
255,501,904
296,337,694
58,909
131,451,482
(12,735,470)
41,910,280
160,685,201
881,869
161,567,070
58,909
131,451,482
(1,322,987)
27,818,474
158,005,878
497,955
158,503,833
22,260,206
19,840,089
607,702
12,994,371
55,702,368
4,510,358
32,495,799
1,226,309
-
38,232,466
33,081,456
-
169,373
5,723,791
38,974,620
23,746,229
41,663,989
582,241
32,866,783
98,859,241
93,934,834
137,833,861
Total equity and liabilities
The notes are an integral part of these consolidated financial statements
The financial statements were authorised for issue by the board of directors on 29 September 2021 and were signed on its
behalf by:
Arvind Gupta
Chairman
Dmitri Tsvetkov
Chief Financial Officer
255,501,904
296,337,694
52
Consolidated statement of Comprehensive Income
For the Year ended 31 March 2021
(All amount in £, unless otherwise stated)
Revenue
Cost of revenue
Gross profit
Other Operating income
Other income
Distribution cost
General and administrative expenses
Expected credit loss on trade receivables
Depreciation and amortisation
Operating profit
Finance costs
Finance income
Profit before tax
Tax expense
Profit for the year from continued operations
Gain/(Loss) from discontinued operations, including Non-
Controlling Interest
Profit for the year
Profit for the year attributable to:
Owners of the Company
Non – controlling interests
Earnings per share from continued operations
Basic earnings per share (in pence)
Diluted earnings per share (in pence)
Earnings/(Loss) per share from discontinued operations
Basic earnings/(loss) per share (in pence)
Diluted earnings/(loss) per share (in pence)
Earnings per share
-Basic (in pence)
-Diluted (in pence)
Notes
8
9
10(a)
10(b)
28
11
12
13
7
25
25
26
Other comprehensive income / (loss)
Items that will be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations
Items that will be not reclassified subsequently to profit or loss
Exchange differences on translating foreign operations, relating to non-
controlling interests
Total other comprehensive income / (loss)
Total comprehensive income
Total comprehensive income / (loss) attributable to:
Owners of the Company
Non-controlling interest
The notes are an integral part of these consolidated financial statements
53
Year ended
31 March 2021
93,823,933
(56,893,065)
36,930,868
9,420,712
1,921,546
(4,791,056)
(7,256,153)
(3,025,055)
(5,705,538)
27,495,324
(6,803,137)
868,439
21,560,626
(8,447,699)
13,112,927
Year ended
31 March 2020
154,040,283
(90,060,252)
63,980,031
-
668,037
(9,209,987)
(8,061,622)
(17,046,480)
(6,293,034)
24,036,945
(11,495,136)
1,962,692
14,504,501
(4,321,124)
10,183,377
999,398
(2,146,275)
14,112,325
8,037,102
14,091,806
20,518
14,112,325
8,229,504
(192,402)
8,037,102
3.27
3.25
0.30
0.30
3.52
3.50
2.60
2.59
(0.50)
(0.50)
2.11
2.09
(12,860,261)
(4,560,097)
(13,322)
(192,401)
(12,873,583)
(4,752,498)
1,238,741
3,284,604
1,231,546
7,196
1,238,741
3,669,407
(384,803)
3,284,604
Consolidated statement of changes in equity
For the Year ended 31 March 2021
(All amount in £, unless otherwise stated)
Issued capital
(No. of
shares)
Ordinary
shares
Share
premium
Other
reserves
Foreign
currency
translation
reserve
Total
attributable
to owners of
parent
Non-
controlling
interests
Retained
earnings
Total equity
387,910,200
57,024
129,125,915
6,650,305
(4,249,018)
21,916,422
153,500,648
882,759
154,383,407
-
12,823,311
12,823,311
-
1,885
1,885
-
835,822
2,325,567
2,325,567
-
835,822
-
-
-
-
(2,327,452)
(2,327,452)
835,822
-
835,822
-
-
-
835,822
-
835,822
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,560,096)
(4,560,096)
8,229,504
-
8,229,504
8,229,504
(4,560,096)
3,669,408
(192,402)
(192,402)
(384,804)
8,037,102
(4,752,497)
3,284,604
At 1 April 2019
Employee Share based payment
LTIP (Note 21)
Dividends (Note 20)
Transaction with owners
Profit for the year
Other comprehensive income
Total comprehensive income
At 31 March 2020
400,733,511
58,909
131,451,482
7,486,127
(8,809,114)
27,818,474
158,005,878
497,955
158,503,833
At 1 April 2020
400,733,511
58,909
131,451,482
7,486,127
(8,809,114)
27,818,474
158,005,878
497,955
158,503,833
Employee Share based payment
LTIP (Note 21)
Transaction with owners
Profit for the year
Deconsolidation (note 7b)
Other comprehensive income
Total comprehensive income
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
535,247
535,247
-
-
-
-
535,247
535,247
-
-
535,247
535,247
-
-
-
-
-
912,531
(12,860,261)
(11,947,730)
14,091,806
-
-
14,091,806
14,091,806
912,531
(12,860,261)
2,144,076
20,518
376,718
(13,322)
383,914
14,112,324
1,289,249
(12,873,583)
2,527,990
At 31 March 2021
400,733,511
58,909
131,451,482
8,021,374
(20,756,844)
41,910,280
160,685,201
881,869
161,567,070
During FY20 the Company has paid a scrip dividend of 12,823,311 shares (2019:31,601,503 shares)
The notes are an integral part of these consolidated financial statements.
54
Consolidated statement of cash flows
For the Year ended 31 March 2021
(All amount in £, unless otherwise stated)
Cash flows from operating activities
Profit before income tax including discontinued operations
Adjustments for:
(Profit)/Loss from discontinued operations, net
Unrealised foreign exchange loss
Financial costs
Financial income
Share based compensation costs
Depreciation and amortization
Expected credit loss on Trade receivables
Changes in working capital
Trade and other receivables
Inventories
Other assets
Trade and other payables
Other liabilities
Cash generated from continuing operations
Taxes paid
Cash provided by operating activities of continuing operations
Cash used for operating activities of discontinued operations
Net cash provided by operating activities
7
9(d)
11
12
21
28
Cash flows from investing activities
Purchase of property, plant and equipment (including capital advances)
Interest received
Movement in restricted cash
Purchase of investments
Cash (used in)/from investing activities of continuing operations
Cash (used in)/from investing activities of discontinued operations
Net cash (used in)/from investing activities
Cash flows from financing activities
Proceeds from borrowings (net of costs)
Repayment of borrowings
Dividend paid
Finance costs paid
Cash used in financing activities of continuing operations
Cash used in financing activities of discontinued operations
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents from continuing operations
Net (decrease)/increase in cash and cash equivalents from discontinued operations
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents on deconsolidation
Exchange differences on cash and cash equivalents
Cash and cash equivalents of the discontinued operations
Cash and cash equivalents at the end of the year
Year ended
31 March 2021
Year ended
31 March 2020
22,560,024
11,365,000
(999,398)
46,931
6,756,206
(864,156)
535,247
5,705,538
3,025,055
7,404,759
(1,654,539)
4,976,235
(7,106,516)
490,713
40,876,099
(709,277)
40,166,822
-
40,166,822
(506,222)
864,156
(4,655,096)
(25,250,994)
(29,548,156)
-
(29,548,156)
21,981,043
(27,938,844)
-
(5,812,498)
(11,770,299)
-
(11,770,299)
(1,151,633)
-
(1,151,633)
3,438,830
(28,560)
6,662,317
-
8,920,954
3,139,501
1,568,333
9,926,804
(1,962,692)
835,822
6,293,034
17,046,480
4,406,823
(4,699,650)
3,121,895
(19,421,286)
(217,194)
31,402,869
(767,865)
30,635,004
(2,062,318)
28,572,687
(573,668)
1,962,692
2,240,335
(725,418)
2,903,941
426,425
3,330,366
-
(21,620,516)
-
(9,927,750)
(31,548,266)
689,255
(30,859,011)
1,990,679
(946,638)
1,044,042
2,118,960
24,545
19,330
231,953
3,438,830
55
Consolidated statement of cash flows
For the Year ended 31 March 2021 (continued)
(All amount in £, unless otherwise stated)
Disclosure of Changes in financing liabilities:
Analysing of changes in Net debt
1 April 2020
Cash flows
Forex rate impact
31 March 2021
Working Capital loan
Secured loan due within one year
Borrowings grouped under Current liabilities
6,914,122
16,832,107
23,746,229
(2,704,726)
(15,443,674)
(18,148,399)
(421,082)
(666,390)
(1,087,471)
3,788,314
722,044
4,510,358
Secured loan due after one year
Borrowings grouped under Non-current liabilities
33,081,456
33,081,456
12,190,599
12,190,599
(3,171,760)
(3,171,760)
42,100,295
42,100,295
Analysing of changes in Net debt
1 April 2019
Cash flows
Other Changes
31 March 2020
Working Capital loan
Secured loan due within one year
Borrowings grouped under Current liabilities
10,433,893
18,435,829
28,869,722
(3,317,490)
(1,087,278)
(4,404,768)
(202,281)
(516,444)
(718,725)
6,914,122
16,832,107
23,746,229
Secured loan due after one year
Borrowings grouped under Non-current liabilities
51,495,208
51,495,208
(17,215,748)
(17,215,748)
(1,198,004)
(1,198,004)
33,081,456
33,081,456
56
Notes to the Consolidated Financial Statements
(All amount in £, unless otherwise stated)
1. Nature of operations
OPG Power Ventures Plc (‘the Company’ or ‘OPGPV’), and its subsidiaries (collectively referred to as ‘the Group’) are primarily
engaged in the development, owning, operation and maintenance of private sector power projects in India. The electricity
generated from the Group’s plants is sold principally to public sector undertakings and heavy industrial companies in India or
in the short term market. The business objective of the group is to focus on the power generation business within India and
thereby provide reliable, cost effective power to the industrial consumers and other users under the ‘open access’ provisions
mandated by the Government of India.
2. Statement of compliance
The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board and the provisions of the Isle of Man, Companies
Act 2006 applicable to companies reporting under IFRS.
3. General information
OPG Power Ventures Plc, a limited liability corporation, is the Group’s ultimate parent Company and is incorporated and
domiciled in the Isle of Man. The address of the Company’s registered Office, which is also the principal place of business, is
55 Athol street, Douglas, Isle of Man IM1 1LA. The Company’s ordinary shares are listed on the AIM Market of the London
Stock Exchange.
The Consolidated Financial Statements for the year ended 31 March 2021 were approved and authorised for issue by the
Board of Directors on 29 September 2021.
4. Recent accounting pronouncements
a. Standards, amendments and interpretations to existing standards that are not yet effective and have not been
adopted early by the Group
At the date of authorisation of these financial statements, certain new standards, and amendments to existing standards
have been published by the IASB that are not yet effective and have not been adopted early by the Group. Information on
those expected to be relevant to the Group’s financial statements is provided below.
Management anticipates that all relevant pronouncements will be adopted in the Group’s accounting policies for the first
period beginning after the effective date of the pronouncement. New standards, interpretations and amendments not either
adopted or listed below are not expected to have a material impact on the Group’s financial statements.
b. Changes in accounting Standards
The following standards and amendments to IFRSs became effective for the period beginning on 1 January 2020 and did not
have a material impact on the consolidated financial statements:
i) Amendments to IAS 1 and IAS 8, “Definition of Material”
In October 2018, the IASB published amendments to IAS 1, “Presentation of Financial Statements” and IAS 8, “Accounting
Policies, Changes in Accounting Estimates and Errors” regarding the definition of material. The amendments standardize and
clarify the definition of material and its application to disclosures in financial statements presented in the IFRSs. The
amendments have no impact on Group’s Consolidated Financial Statements.
ii) Amendments to IFRS 3, “Definition of a Business”
In October 2018, the IASB published amendments to IAS 3, “Definition of a Business.” The primary purpose of these
amendments is to help distinguish between a business and a group of assets. A business comprises a group of activities and
assets that involve at least one resource input and one substantive process that together contribute significantly to the ability
to generate outputs. The IASB has introduced a concentration test that permits a simplified assessment of whether a set of
activities and assets is a business. It is not a business if substantially all of the fair value of the gross assets acquired is
concentrated in a single identifiable asset or group of similar identifiable assets, in which case IFRS 3 does not apply. The
amendments have no impact on Group’s Consolidated Financial Statements.
iii) Amendments to References to the Conceptual Framework
In March 2018, the IASB published Amendments to References to the Conceptual Framework in IFRS. The amendments have
no impact on Group’s Consolidated Financial Statements.
iv) Amendments to IFRS 9, IAS 39 and IFRS 7, “Interest Rate Benchmark Reform”
In September 2019, the IASB published amendments to IFRS 9, IAS 39 and IFRS 7, “Interest Rate Benchmark Reform.” The
Phase 1 amendments of the IASB’s Interest Rate Benchmark Reform project (IBOR reform) provide for temporary exemption
from applying specific hedge accounting requirements to hedging relationships that are directly affected by IBOR reform. The
57
exemptions have the effect that IBOR reform should not generally cause hedge relationships to be terminated due to
uncertainty about when and how reference interest rates will be replaced. However, any hedge ineffectiveness should
continue to be recorded in the income statement under both IAS 39 and IFRS 9. Furthermore, the amendments set out
triggers for when the exemptions will end, which include the uncertainty arising from IBOR reform. The amendments have
no impact on Group’s Consolidated Financial Statements.
v) Amendments to IFRS 16, “Covid-19-Related Rent Concessions–Amendment to IFRS 16”
In May 2020, the IASB issued Covid-19-Related Rent Concessions (Amendment to IFRS 16) that provides practical relief to
lessees in accounting for rent concessions occurring as a direct consequence of Covid-19, by introducing a practical expedient
to IFRS 16. The practical expedient permits a lessee to elect not to assess whether a Covid-19-related rent concession is a
lease modification. A lessee that makes this election shall account for any change in lease payments resulting from the Covid-
19-related rent concession the same way it would account for the change applying IFRS 16 if the change were not a lease
modification. The practical expedient applies only to rent concessions occurring as a direct consequence of Covid-19 and only
if all of the prescribed conditions are met. The Group has not received any rent concessions and so has not early adopted the
amendment as it would have no impact on the presentation of these Financial Statements.
c). Standards and Interpretations Not Yet Applicable
The IASB and the IFRS IC have issued the following additional standards and interpretations. Group does not apply these rules
because their application is not yet mandatory. Currently, however, these adjustments are not expected to have a material
impact on the consolidated financial statements of the Group:
i) IFRS 17, “Insurance Contracts,” published in May 2017, expected first-time application in next fiscal year.
ii) Amendments to IFRS 4, “Insurance Contracts—Extension of the Temporary Exemption from IFRS 9,” published in June 2020,
first-time application in fiscal year 2021.
5. Summary of significant accounting policies
a) Basis of preparation
The consolidated financial statements of the Group have been prepared on a historical cost basis, except for financial assets
and liabilities at fair value through profit or loss and financial assets measured at FVPL.
The consolidated financial statements are presented in accordance with IAS 1 Presentation of Financial Statements and have
been presented in Great Britain Pounds (‘₤’), the functional and presentation currency of the Company.
During FY2019, the Company obtained a right to exercise an option to buy additional 30% equity interest in solar companies.
Effective from FY2021 this right was re-assigned to a third party along with the related obligations and the results of the
operations of solar companies Aavanti Solar Energy Private Limited, Mayfair Renewable Energy (I) Private Limited, Aavanti
Renewable Energy Private Limited and Brics Renewable Energy Private Limited are not consolidated in Group’s consolidated
financial statements due to loss of control. The Group continues owning a 31% equity interest in the solar companies. As it
was previously reported, after evaluation of all options, the Company decided that the most efficient way to maximise
shareholders’ value from solar operations is to dispose solar companies and it initiated process of disposition of solar
companies which met all conditions of IFRS 5 for classification of solar business as Assets held for sale at 31 March 2021 (Note
7(b)).
Going concern
As at 31 March 2021 the Group had £8.9m in cash and net current assets of £36.3m. The directors and management have
prepared a cash flow forecast to September 2022, 12 months from the date this report, which has been approved.
The Group experiences sensitivity in its cash flow forecasts due to the exposure to potential increase in USD denominated
coal prices and a decrease in the value of the Indian Rupee. The Directors and management are confident that the Group will
be trading in line with its forecast and that any exposure to a fluctuation in coal prices or the exchange rate INR/USD has
been taken into consideration and therefore prepared the financial statements on a going concern basis.
COVID-19 virus, a global pandemic has affected the world economy leading to significant decline and volatility in financial
markets and decline in economic activities. The Group has considered the possible effects that may result from the pandemic
on the carrying amounts of receivables and other financial assets and carried out a Reverse Stress Test (RST). In developing
the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the
Group, as at the date of approval of these financial statements has used internal and external sources of information. The
Group has performed sensitivity analysis on the assumptions used for business projections and based on current estimates
expects the carrying amount of these assets will be recovered and no material impact on the financial results inter-alia
including the carrying value of various current and non-current assets are expected to arise for the year ended 31 March
2021. The Group will continue to closely monitor any variation due to the changes in situation and these changes will be
58
taken into consideration, if necessary, as and when they crystalise. However, electricity being an essential commodity the
impact on industry has been comparatively lower. The operating assets of the Group primarily are located in India. The
Government of India with Reserve Bank of India (RBI) have announced various regulatory measures to help the industry. The
Group has opted for such measures for deferment of payment of principal and interest on term loans and also interest on
working capital loans. The Group raised approximately £19.8m (₹ 2000 million) during June 2020 through non-convertible
debentures (NCDs) issue with a three years term and coupon rate of 9.85%. The NCD’s proceeds were used to repay the FY21
and FY22 (i.e. to March 2022) principal term loans obligations. All debt covenants are met and have sufficient headroom. The
Group has also availed the Emergency Credit Line Guarantee Scheme (ECLGS) and COVID Emergency support loans during
the year aggregating to £2.7 million. The Group collected full amount of receivables from its principle customer of
approximately £16.4m and historical contractual claims payments from its customers under the power purchase agreements
amounting to £9.4m which were accumulated over several periods. These measures strengthened the Group's financial
position at this time of economic slowdown and also substantially eased the cash flow burden on account of the Group having
repaid the principal term loan obligation for FY21 and FY22 and major recoveries of overdues towards power supply from our
principal customer TANGEDCO. Based on the RST analysis, we can conclude that the Group is in strong position to navigate
the current situation caused by Covid-19 pandemic and going concern is not an issue.
b) Basis of consolidation
The consolidated financial statements include the assets, liabilities and results of the operation of the Company and all of its
subsidiaries as of 31 March 2021. All subsidiaries have a reporting date of 31 March.
A subsidiary is defined as an entity controlled by the Company. The parent controls a subsidiary if it is exposed, or has rights,
to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over
the subsidiary. Subsidiaries are fully consolidated from the date of acquisition, being the date on which effective control is
acquired by the Group, and continue to be consolidated until the date that such control ceases.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and
losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on
consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts reported in the financial
statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted
by the Group.
Non-controlling interest represents the portion of profit or loss and net assets that is not held by the Group and is presented
separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of
financial position, separately from parent shareholders’ equity. Acquisitions of additional stake or dilution of stake from/ to
non-controlling interests/ other venturer in the Group where there is no loss of control are accounted for as an equity
transaction, whereby, the difference between the consideration paid to or received from and the book value of the share of
the net assets is recognised in ‘other reserve’ within the statement of changes in equity.
c) Investments in associates and joint ventures
Investments in associates and joint ventures are accounted for using the equity method. The carrying amount of the
investment in associates and joint ventures is increased or decreased to recognise the Group’s share of the profit or loss and
other comprehensive income of the associate and joint venture, adjusted where necessary to ensure consistency with the
accounting policies of the Group.
Unrealised gains and losses on transactions between the Group and its associates and joint ventures are eliminated to the
extent of the Group’s interest in those entities. Where unrealised losses are eliminated, the underlying asset is also tested
for impairment.
59
d) List of subsidiaries, joint ventures, and associates
Details of the Group’s subsidiaries and joint ventures, which are consolidated into the Group’s consolidated financial
statements, are as follows:
i) Subsidiaries
Subsidiaries
Caromia Holdings limited
(‘CHL’)
Gita Power and Infrastructure
Private Limited, (‘GPIPL’)
OPG Power Generation Private
Limited (‘OPGPG’)
Samriddhi Solar Power LLP(*)
Samriddhi Surya Vidyut Private
Limited
OPG Surya Vidyut LLP(*)
Powergen Resources Pte Ltd
Avanti Solar Energy Private
Limited(**)
Mayfair Renewable Energy (I)
Private Limited(**)
Avanti Renewable Energy
Private Limited(**)
Brics Renewable Energy Private
Limited(**)
CHL
GPIPL
OPGPG
OPGPG
OPGPG
OPGPV
OPGPG
OPGPG
OPGPG
OPGPG
Immediate
parent
Country of
incorporation
OPGPV
Cyprus
% Voting Right
% Economic interest
March 2021
March 2020
March 2021 March 2020
India
India
India
India
India
Singapore
100
100
71.25
-
71.25
-
98.56
100
100
73.16
73.16
73.16
73.16
98.66
100
100
99.90
-
99.90
-
100
India
Associate 31%
31
Associate 31%
India
Associate 31%
31
Associate 31%
India
Associate 31%
31
Associate 31%
India
Associate 31%
31
Associate 31%
100
100
99.91
99.91
99.91
99.91
100
31
31
31
31
(*) During FY21 withdrawn as a partner from LLP
(**) Effective from FY21, the results of operations of Solar companies Aavanti Solar Energy Private Limited, Mayfair Renewable Energy (I)
Private Limited, Aavanti Renewable Energy Private Limited and Brics Renewable Energy Private Limited are not consolidated in Group’s
consolidated financial statements due to loss of control.
ii) Financial assets measured at FVPL (Assets Held for sale) - Joint ventures (Note 7(a))
Joint ventures
Venturer
Padma Shipping Limited ("PSL")
OPGPV /
OPGPG
Country of
incorporation
% Voting right
% Economic interest
March 2021
March 2020
March 2021
March 2020
Hong Kong
50
50
50
50
e) Foreign currency translation
The functional currency of the Company is the Great Britain Pound Sterling (£). The Cyprus entity is an extension of the parent
and pass through investment entity. Accordingly, the functional currency of the subsidiary in Cyprus is the Great Britain Pound
Sterling. The functional currency of the Company’s subsidiaries operating in India, determined based on evaluation of the
individual and collective economic factors is Indian Rupees (‘₹’ or 'INR'). The presentation currency of the Group is the Great
Britain Pound (£).
At the reporting date the assets and liabilities of the Group are translated into the presentation currency at the rate of
exchange prevailing at the reporting date and the income and expense for each statement of profit or loss are translated at
the average exchange rate (unless this average rate is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expense are translated at the rate on the date of the
transactions). Exchange differences are charged/ credited to other comprehensive income and recognized in the currency
translation reserve in equity.
Transactions in foreign currencies are translated at the foreign exchange rate prevailing at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the Statement of financial position date are translated
into functional currency at the foreign exchange rate ruling at that date. Aggregate gains and losses resulting from foreign
currencies are included in finance income or costs within the profit or loss.
60
INR exchange rates used to translate the INR financial information into the presentation currency of Great Britain Pound (£)
are the closing rate as at 31 March 2021: 100.81 (2020: 93.07) and the average rate for the year ended 31 March 2021: 96.72
(2020: 89.97).
f) Revenue recognition
In accordance with IFRS 15 - Revenue from contracts with customers, the Group recognises revenue to the extent that it
reflects the expected consideration for goods or services provided to the customer under contract, over the performance
obligations they are being provided. For each separable performance obligation identified, the Group determines whether it
is satisfied at a “point in time” or “over time” based upon an evaluation of the receipt and consumption of benefits, control
of assets and enforceable payment rights associated with that obligation. If the criteria required for “over time” recognition
are not met, the performance obligation is deemed to be satisfied at a “point in time”. Revenue principally arises as a result
of the Group’s activities in electricity generation and distribution. Supply of power and billing satisfies performance
obligations. The supply of power is invoiced in arrears on a monthly basis and generally the payment terms within the Group
are 10 to 45 days.
Revenue
Revenue from providing electricity to captive power shareholders and sales to other customers is recognised on the basis of
billing cycle under the contractual arrangement with the captive power shareholders and customers and reflects the value of
units of power supplied and the applicable tariff after deductions or discounts. Revenue is earned at a point in time of joint
meter reading by both buyer and seller for each billing month.
Interest and dividend
Revenue from interest is recognised as interest accrued (using the effective interest rate method). Revenue from dividends
is recognised when the right to receive the payment is established.
g) Operating expenses
Operating expenses are recognised in the statement of profit or loss upon utilisation of the service or as incurred.
h) Taxes
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other
comprehensive income or directly in equity.
Current income tax assets and/or liabilities comprise those obligations to, or claims from, taxation authorities relating to the
current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs
from profit or loss in the financial statements.
Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of
the reporting period.
Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of
assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill, nor on
the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or
accounting profit. Deferred tax on temporary differences associated with investments in subsidiaries is not provided if
reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the
foreseeable future.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their
respective period of realisation, provided they are enacted or substantively enacted by the end of the reporting period.
Deferred tax liabilities are always provided for in full.
Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against future taxable
income. Deferred tax assets and liabilities are offset only when the Group has a right and the intention to set off current tax
assets and liabilities from the same taxation authority. Changes in deferred tax assets or liabilities are recognised as a
component of tax income or expense in profit or loss, except where they relate to items that are recognised in other
comprehensive income or directly in equity, in which case the related deferred tax is also recognised in other comprehensive
income or equity, respectively.
61
i) Financial assets
IFRS 9 Financial Instruments contains regulations on measurement categories for financial assets and financial liabilities. It
also contains regulations on impairments, which are based on expected losses.
Financial assets are classified as financial assets measured at amortized cost, financial assets measured at fair value through
other comprehensive income (FVOCI) and financial assets measured at fair value through profit and loss (FVPL) based on the
business model and the characteristics of the cash flows. If a financial asset is held for the purpose of collecting contractual
cash flows and the cash flows of the financial asset represent exclusively interest and principal payments, then the financial
asset is measured at amortized cost. A financial asset is measured at fair value through other comprehensive income (FVOCI)
if it is used both to collect contractual cash flows and for sales purposes and the cash flows of the financial asset consist
exclusively of interest and principal payments. Unrealized gains and losses from financial assets measured at fair value
through other comprehensive income (FVOCI), net of related deferred taxes, are reported as a component of equity (other
comprehensive income) until realized. Realized gains and losses are determined by analyzing each transaction individually.
Debt instruments that do not exclusively serve to collect contractual cash flows or to both generate contractual cash flows
and sales revenue, or whose cash flows do not exclusively consist of interest and principal payments are measured at fair
value through profit and loss (FVPL). For equity instruments that are held for trading purposes the group has uniformly
exercised the option of recognizing changes in fair value through profit or loss (FVPL). Refer to note 29 "Summary of financial
assets and liabilities by category and their fair values".
Impairments of financial assets are both recognized for losses already incurred and for expected future credit defaults. The
amount of the impairment loss calculated in the determination of expected credit losses is recognized on the income
statement. Impairment provisions for current and non-current trade receivables are recognised based on the simplified
approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process
the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of
the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. On
confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the
associated provision.
j) Financial liabilities
The Group's financial liabilities include borrowings and trade and other payables. Financial liabilities are measured
subsequently at amortised cost using the effective interest method. All interest-related charges and, if applicable, changes in
an instrument's fair value that are reported in profit or loss are included within 'finance costs' or 'finance income'.
k) Fair value of financial instruments
The fair value of financial instruments that are actively traded in organised financial markets is determined by reference to
quoted market prices at the close of business on the Statement of financial position date. For financial instruments where
there is no active market, fair value is determined using valuation techniques. Such techniques may include using recent arm’s
length market transactions; reference to the current fair value of another instrument that is substantially the same;
discounted cash flow analysis or other valuation models.
l) Property, plant and equipment
Property, plant and equipment are stated at historical cost, less accumulated depreciation and any impairment in value.
Historical cost includes expenditure that is directly attributable to property plant & equipment such as employee cost,
borrowing costs for long-term construction projects etc, if recognition criteria are met. Likewise, when a major inspection is
performed, its costs are recognised in the carrying amount of the plant and equipment as a replacement if the recognition
criteria are satisfied. All other repairs and maintenance costs are recognised in the profit or loss as incurred.
Land is not depreciated. Depreciation on all other assets is computed on straight-line basis over the useful life of the asset
based on management’s estimate as follows:
Nature of asset
Buildings
Power stations
Other plant and equipment
Vehicles
Useful life (years)
40
40
3-10
5-11
Assets in the course of construction are stated at cost and not depreciated until commissioned.
62
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in the profit or loss in the year the asset is derecognised.
The assets residual values, useful lives and methods of depreciation of the assets are reviewed at each financial year end, and
adjusted prospectively if appropriate.
Intangible assets
m)
Acquired software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and install the specific
software.
Subsequent measurement
All intangible assets, including software are accounted for using the cost model whereby capitalised costs are amortised on
a straight-line basis over their estimated useful lives, as these assets are considered finite. Residual values and useful lives
are reviewed at each reporting date. The useful life of software is estimated as 4 years.
n) Leases
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:
• Leases of low value assets; and
• Leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with
the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily
determinable, in which case the group’s incremental borrowing rate on commencement of the lease is used. Variable lease
payments are only included in the measurement of the lease liability if they depend on an index or rate. In such cases, the
initial measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term.
Other variable lease payments are expensed in the period to which they relate. On initial recognition, the carrying value of
the lease liability also includes:
• amounts expected to be payable under any residual value guarantee;
• the exercise price of any purchase option granted in favour of the group if it is reasonable certain to assess that option;
• any penalties payable for terminating the lease, if the term of the lease has been estimated in the basis of termination
option being exercised.
Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and
increased for:
• lease payments made at or before commencement of the lease;
• initial direct costs incurred; and
• the amount of any provision recognised where the group is contractually required to dismantle, remove or restore the
leased asset (typically leasehold dilapidations)
Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance
outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the
remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the
lease term. When the Group revises its estimate of the term of any lease (because, for example, it re-assesses the probability
of a lessee extension or termination option being exercised), it adjusts the carrying amount of the lease liability to reflect the
payments to make over the revised term, which are discounted using a revised discount rate. The carrying value of lease
liabilities is similarly revised when the variable element of future lease payments dependent on a rate or index is revised,
except the discount rate remains unchanged. In both cases an equivalent adjustment is made to the carrying value of the
right-of-use asset, with the revised carrying amount being amortised over the remaining (revised) lease term. If the carrying
amount of the right-of-use asset is adjusted to zero, any further reduction is recognised in profit or loss.
o) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, that necessarily take
a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets. Interest income
earned on the temporary investment of specific borrowing pending its expenditure on qualifying assets is deducted from the
costs of these assets.
63
Gains and losses on extinguishment of liability, including those arising from substantial modification from terms of loans are
not treated as borrowing costs and are charged to profit or loss.
All other borrowing costs including transaction costs are recognized in the statement of profit or loss in the period in which
they are incurred, the amount being determined using the effective interest rate method.
p) Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An
asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs to sell and its value
in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent
of those from other assets or Groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount,
the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate
valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded
subsidiaries or other available fair value indicators.
For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group
estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognised impairment loss is reversed only
if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment
loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount,
nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been
recognised for the asset in prior years. Such reversal is recognised in the profit or loss.
q) Non-current assets Held for Sale and Discontinued Operations
Non-current assets and any corresponding liabilities held for sale and any directly attributable liabilities are recognized
separately from other assets and liabilities in the balance sheet in the line items “Assets held for sale” and “Liabilities
associated with assets held for sale” if they can be disposed of in their current condition and if there is sufficient probability
of their disposal actually taking place. Discontinued operations are components of an entity that are either held for sale or
have already been sold and can be clearly distinguished from other corporate operations, both operationally and for financial
reporting purposes. Additionally, the component classified as a discontinued operation must represent a major business line
or a specific geographic business segment of the Group. Non-current assets that are held for sale either individually or
collectively as part of a disposal group, or that belong to a discontinued operation, are no longer depreciated. They are instead
accounted for at the lower of the carrying amount and the fair value less any remaining costs to sell. If this value is less than
the carrying amount, an impairment loss is recognized. The income and losses resulting from the measurement of
components held for sale as well as the gains and losses arising from the disposal of discontinued operations, are reported
separately on the face of the income statement under income/loss from discontinued operations, net, as is the income from
the ordinary operating activities of these divisions. Prior-year income statement figures are adjusted accordingly. However,
there is no reclassification of prior-year balance sheet line items attributable to discontinued operations.
r) Cash and cash equivalents
Cash and cash equivalents in the Statement of financial position includes cash in hand and at bank and short-term deposits
with original maturity period of 3 months or less.
For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash in hand and at bank and
short-term deposits. Restricted cash represents deposits which are subject to a fixed charge and held as security for specific
borrowings and are not included in cash and cash equivalents.
s) Inventories
Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing each product to its present
location and condition is accounted based on weighted average price. Net realisable value is the estimated selling price in the
ordinary course of business, less estimated selling expenses.
t) Earnings per share
The earnings considered in ascertaining the Group’s earnings per share (EPS) comprise the net profit for the year attributable
to ordinary equity holders of the parent. The number of shares used for computing the basic EPS is the weighted average
number of shares outstanding during the year. For the purpose of calculating diluted earnings per share the net profit or loss
64
for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period
are adjusted for the effects of all dilutive potential equity share.
u) Other provisions and contingent liabilities
Provisions are recognised when present obligations as a result of a past event will probably lead to an outflow of economic
resources from the Group and amounts can be estimated reliably. Timing or amount of the outflow may still be uncertain. A
present obligation arises from the presence of a legal or constructive obligation that has resulted from past events.
Restructuring provisions are recognised only if a detailed formal plan for the restructuring has been developed and
implemented, or management has at least announced the plan's main features to those affected by it. Provisions are not
recognised for future operating losses.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable
evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where
there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. Provisions are discounted to their present values, where the time value of
money is material.
Any reimbursement that the Group can be virtually certain to collect from a third party with respect to the obligation is
recognised as a separate asset. However, this asset may not exceed the amount of the related provision. All provisions are
reviewed at each reporting date and adjusted to reflect the current best estimate.
In those cases where the possible outflow of economic resources as a result of present obligations is considered improbable
or remote, no liability is recognised, unless it was assumed in the course of a business combination. In a business combination,
contingent liabilities are recognised on the acquisition date when there is a present obligation that arises from past events
and the fair value can be measured reliably, even if the outflow of economic resources is not probable. They are subsequently
measured at the higher amount of a comparable provision as described above and the amount recognised on the acquisition
date, less any amortisation.
v) Share based payments
The Group operates equity-settled share-based remuneration plans for its employees. None of the Group's plans feature any
options for a cash settlement.
All goods and services received in exchange for the grant of any share-based payment are measured at their fair values.
Where employees are rewarded using share-based payments, the fair values of employees' services is determined indirectly
by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date and excludes
the impact of non-market vesting conditions (for example profitability and sales growth targets and performance conditions).
All share-based remuneration is ultimately recognised as an expense in profit or loss with a corresponding credit to 'Other
Reserves'.
If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best
available estimate of the number of share options expected to vest. Non-market vesting conditions are included in
assumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised if
there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative
adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior
periods if share options ultimately exercised are different to that estimated on vesting.
Upon exercise of share options, the proceeds received net of any directly attributable transaction costs up to the nominal
value of the shares issued are allocated to share capital with any excess being recorded as share premium.
w) Employee benefits
Gratuity
In accordance with applicable Indian laws, the Group provides for gratuity, a defined benefit retirement plan (“the Gratuity
Plan”) covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of
employment.
Liabilities with regard to the gratuity plan are determined by actuarial valuation, performed by an independent actuary, at
each Statement of financial position date using the projected unit credit method.
65
The Group recognises the net obligation of a defined benefit plan in its statement of financial position as an asset or liability,
respectively in accordance with IAS 19, Employee benefits. The discount rate is based on the Government securities yield.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited
to profit or loss in the statement of comprehensive income in the period in which they arise.
x) Business combinations
Business combinations arising from transfers of interests in entities that are under the control of the shareholder that controls
the Group are accounted for as if the acquisition had occurred at the beginning of the earliest comparative period presented
or, if later, at the date that common control was established using pooling of interest method. The assets and liabilities
acquired are recognised at the carrying amounts recognised previously in the Group controlling shareholder’s consolidated
financial statements. The components of equity of the acquired entities are added to the same components within Group
equity. Any excess consideration paid is directly recognised in equity.
y) Segment Reporting
The Group has adopted the “management approach” in identifying the operating segments as outlined in IFRS 8 - Operating
segments. Segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The Board of Directors being the chief operating decision maker evaluate the Group’s performance and allocates
resources based on an analysis of various performance indicators at operating segment level. During the current year 2021
the Group has deconsolidated solar entities and are classified as associates (note 7(b)). Accordingly, during FY 21 there is only
one operating segment thermal power. The solar power business is classified as held for sale. There are no geographical
segments as all revenues arise from India. All the non current assets are located in India.
6. Significant accounting judgements, estimates and assumptions
The preparation of financial statements in conformity with IFRS requires management to make certain critical accounting
estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period.
The principal accounting policies adopted by the Group in the consolidated financial statements are as set out above. The
application of a number of these policies requires the Group to use a variety of estimation techniques and apply judgment to
best reflect the substance of underlying transactions.
The Group has determined that a number of its accounting policies can be considered significant, in terms of the management
judgment that has been required to determine the various assumptions underpinning their application in the consolidated
financial statements presented which, under different conditions, could lead to material differences in these statements. The
actual results may differ from the judgments, estimates and assumptions made by the management and will seldom equal
the estimated results.
Judgements
a.
The following are significant management judgments in applying the accounting policies of the Group that have the most
significant effect on the financial statements.
Assessing control of subsidiaries, associates, joint ventures
During FY21, the Group has reclassified the 31% equity interest in the solar entities from Subsidiaries to Associates due to
loss of control. The interest in the solar entities (Avanti Solar Energy Private Limited, Mayfair Renewable Energy (I) Private
Limited, Avanti Renewable Energy Private Limited and Brics Renewable Energy Private Limited) are disclosed as assets held
for sale.
Non-current assets held for sale and discontinued operations
The Group exercises judgement in whether assets are held for sale. After evaluation of all options, the Company decided that
the most efficient way to maximise shareholders’ value from solar operations is to dispose of the solar companies and it
initiated the process of disposition of the solar companies. Under IFRS 5, such a transaction meets the 'Asset held for sale'
when the transaction is considered sufficiently probable and other relevant criteria are met. Management consider that all
the conditions under IFRS 5 for classification of the solar business as held for sale have been met as at 31 March 2021 and
expects the interest in the solar companies to be sold within the next 12 months.
The investment in the joint venture Padma Shipping Limited and associated advance has been presented as an asset held for
sale following the process of sale of the second vessel as mentioned in note 7(a).
66
Recoverability of deferred tax assets:
The recognition of deferred tax assets requires assessment of future taxable profit (see note 5(h)).
b. Estimates and uncertainties
The key assumptions concerning the future and other key sources of estimation uncertainty at the Statement of financial
position date, that have a significant risk of causing material adjustments to the carrying amounts of assets and liabilities
within the next financial year are discussed below:
i. Estimation of fair value of financial assets and financial liabilities: While preparing the financial statements the Group
makes estimates and assumptions that affect the reported amount of financial assets and financial liabilities.
Trade Receivables
The Group ascertains the expected credit losses (ECL) for all receivables and adequate impairment provision are made. At
the end of each reporting period a review of the allowance for impairment of trade receivables is performed. Trade
receivables do not contain a significant financing element, and therefore expected credit losses are measured using the
simplified approach permitted by IFRS 9, which requires lifetime expected credit losses to be recognised on initial recognition.
A provision matrix is utilised to estimate the lifetime expected credit losses based on the age, status and risk of each class of
receivable, which is periodically updated to include changes to both forward-looking and historical inputs.
Assets held for sale - Financial assets measured at FVPL
Valuation of Investment in joint venture Padma Shipping is based on estimates and subject to uncertainties (Note 7(a)).
Financial assets measured at FVPL
Management applies valuation techniques to determine the fair value of financial assets measured at FVPL where active
market quotes are not available. This requires management to develop estimates and assumptions based on market inputs,
using observable data that market participants would use in pricing the asset. Where such data is not observable,
management uses its best estimate. Estimated fair values of the asset may vary from the actual prices that would be achieved
in an arm’s length transaction at the reporting date.
ii.
Impairment tests: In assessing impairment, management estimates the recoverable amount of each asset or cash-
generating units based on expected future cash flows and use an interest rate for discounting them. Estimation
uncertainty relates to assumptions about future operating results including fuel prices, foreign currency exchange rates
etc. and the determination of a suitable discount rate;
iii. Useful life of depreciable assets: Management reviews its estimate of the useful lives of depreciable assets at each
reporting date, based on the expected utility of the assets.
Profit/(Loss) from discontinued operations
7.
Non-current assets held for sale and Profit/(Loss) from discontinued operations consists of:
Assets held for sale
Liabilities classified as held
for sale
Profit/(Loss) from
discontinued operations
At 31 March
2021
At 31 March
2020
At 31 March
2021
At 31 March
2020
For FY 21
For FY 20
i
ii
iii
iv
v
Impairment of investments in joint
venture
Interest in Solar entities Note (7(b))
Share of Profit from Solar entities
Note 7(b)
Gain on deconsolidation of Solar
entities
Impairment of deposits pledged for
lenders of BVP
-
-
16,425,368
46,356,680
-
-
-
-
-
-
Total
16,425,368
46,356,680
-
-
-
-
-
-
-
32,866,783
-
-
(918,432)
(293,942)
-
-
-
117,710
881,688
-
-
-
(933,901)
32,866,783
999,398
(2,146,275)
67
a) Investment in joint venture Padma Shipping Limited - classified as held for sale
In 2014 the Company entered into a Joint Venture agreement with Noble Chartering Ltd (“Noble”), to secure competitive
long term rates for international freight for its imported coal requirements. Under the Arrangement, the company and Noble
agreed to jointly purchase and operate two 64,000 MT cargo vessels through a Joint venture company Padma Shipping Ltd,
Hong Kong (‘Padma’).
OPG has invested approximately £3,484,178 in equity and £1,727,418 to date as advance and accordingly the joint venture
has been reported using equity method as per the requirements of IFRS 11. During FY2020 the Company recognised an
impairment provision of £918,432 resulting in impairment of entire investment of £5,211,596 in joint venture (note 16) on
account of the impending dissolution of the JV.
b) Assets held for sale and discontinued operations of solar subsidiaries
During FY19, the results of the operations of solar entities Avanti Solar Energy Private Limited, Mayfair Renewable Energy (I)
Private Limited, Avanti Renewable Energy Private Limited and Brics Renewable Energy Private Limited were classified as
Assets held for sale. After evaluation of all the options, the Company decided that the most efficient way to maximise
shareholders’ value from the solar operations is to dispose of the solar entities and the process of disposition of the solar
entities was initiated. The process of sale could not be implemented during FY21 due to pandemic Covid-19 and expectation
of comparatively better valuation for sale. However, the Management expects the interest in the solar entities to be sold
within the next 12 months and continues to locate a buyer.
During FY19, the Company obtained a right to exercise an option to buy additional 30% equity interest in solar companies.
Effective from FY20 this right was assigned to a third party and from FY21 the remaining related obligations and the results
of the operations of solar companies Aavanti Solar Energy Private Limited, Mayfair Renewable Energy (I) Private Limited,
Aavanti Renewable Energy Private Limited and Brics Renewable Energy Private Limited are not consolidated in Group’s
consolidated financial statements due to loss of control. The Group continues owning a 31% equity interest in the solar
companies.
Non-current Assets held-for-sale and discontinued operations
(a) Assets of disposal group classified as held-for-sale
Property, plant and equipment
Trade and other receivables
Other short-term assets
Restricted cash
Cash and cash equivalents
Investment in Joint venture classified as held for sale
Total
(b) Liabilities of disposal group classified as held-for-sale
Non Current liabilities
Borrowings
Trade and other payables
Deferred tax liability
Current liabilities
Trade and other payables
Other liabilities
Total
As at 31 March 2021
As at 31 March 2020
-
-
-
-
-
16,425,368
16,425,368
42,098,498
3,489,633
256,209
487,795
24,545
-
46,356,680
As at 31 March 2021
As at 31 March 2020
-
-
-
-
-
-
28,262,288
-
1,014,031
901,474
2,688,990
32,866,783
68
(c) Analysis of the results of discontinued operations is as follows:
For FY 21
Revenue
Operating profit before impairments
Finance income
Finance cost
Current Tax
Deferred tax
Share of Profit from Solar entities
Gain on deconsolidation of Solar entities
Profit/(Loss) from Solar operations
-
-
-
-
-
-
117,710
881,688
999,398
For FY 20
5,884,401
2,160,974
92,096
(3,540,239)
-
993,226
-
-
(293,942)
8 Segment Reporting
The Group has adopted the “management approach” in identifying the operating segments as outlined in IFRS 8 - Operating
segments. Segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The Board of Directors being the chief operating decision maker evaluate the Group’s performance and allocates
resources based on an analysis of various performance indicators at operating segment level. During the current year 2021
the Group has deconsolidated the solar entities which are classified as associates (note 7(b)). Accordingly, during FY 21 there
is only one operating segment thermal power. The solar power business is classified as held for sale. There are no geographical
segments as all revenues arise from India. All the non current assets are located in India.
Revenue on account of sale of power to one customer exceeding 10% of total sales revenue amounts to £28,720,575 (2020:
£27,152,241).
Segmental information disclosure
Segment Revenue
Sales
Total
Other operating income
Depreciation, impairment
Profit from operation
Finance income
Finance cost
Tax expenses
Gain on deconsolidation of Solar entities
Share of Profit in Solar entities
Profit / (loss) for the year
Assets
Liabilities
Continuing operations
Thermal
Discontinued operations
Solar
FY21
93,823,933
93,823,933
9,420,712
(5,705,538)
27,495,324
868,439
(6,803,137)
(8,447,699)
-
-
13,112,927
239,076,536
93,934,834
FY20
154,040,283
154,040,283
-
(6,293,034)
24,036,945
1,962,692
(11,495,136)
(4,321,124)
-
-
10,183,377
249,981,014
104,967,078
FY21
-
-
-
-
-
-
-
-
881,688
117,710
999,398
16,425,368
-
FY20
5,884,401
5,884,401
-
(3,516,527)
2,160,974
92,096
(3,540,239)
993,226
-
-
(293,942)
49,579,232
35,267,786
9 Costs of inventories and employee benefit expenses included in the consolidated statements of comprehensive income
a)
Cost of fuel
Included in cost of revenue:
Cost of fuel consumed
Other direct costs
Total
Employee benefit expenses forming part of general and administrative expenses are as follows:
56,893,065
b)
Salaries and wages
Employee benefit costs *
Long Term Incentive Plan (Note 21)
Total
31 March 2021
2,139,303
228,112
535,247
2,902,662
* includes £31,885 (2020: 21,860) being expenses towards gratuity which is a defined benefit plan (Note 5(w))
69
31 March 2021
31 March 2020
54,095,390
2,797,675
83,133,530
6,926,722
90,060,252
31 March 2020
2,756,438
760,914
835,822
4,353,174
c)
d)
Auditor’s remuneration for audit services amounting to £60,000 (2020: £65,000) is included in general and administrative
expenses.
Foreign exchange movements (realised and unrealised) included in the Finance costs is as follows:
Foreign exchange realised – loss/(gain)
Foreign exchange unrealised- loss/(gain)
Total
10 Other operating income and expenses
a) Other operating income
Contractual claims payments
Total
31 March 2021
213,524
31 March 2020
(420,842)
46,931
260,455
1,568,333
1,147,491
31 March 2021
9,420,712
9,420,712
31 March 2020
-
-
Other operating income represents contractual claims payments from company's customers under the power purchase agreements
which were accumulated over several periods.
Other income
Sale of coal
Sale of fly ash
Power trading commission and other services
Others
Total
11 Finance costs
Finance costs are comprised of:
Interest expenses on borrowings
Net foreign exchange loss (Note 9)
Other finance costs
Total
31 March 2021
616,708
31 March 2020
462,718
16,271
147,166
1,141,401
1,921,546
26,611
161,053
17,655
668,037
31 March 2021
5,848,895
31 March 2020
9,289,625
260,455
693,787
1,147,491
1,058,020
6,803,137
11,495,136
Other finance costs include charges and cost related to LC's for import of coal and other charges levied by banks on transactions
12 Finance income
Finance income is comprised of:
Interest income on bank deposits and advances
Profit on disposal of financial instruments*
Total
*Financial instruments represent the mutual funds held during the year.
31 March 2021
401,194
467,245
868,439
31 March 2020
1,943,132
19,560
1,962,692
70
13 Tax expense
Tax Reconciliation
Reconciliation between tax expense and the product of accounting profit multiplied by India’s domestic tax rate for the years
ended 31 March 2021 and 2020 is as follows:
Accounting profit before taxes
Enacted tax rates
Tax expense / (benefit) on profit / (loss) at enacted tax rate
Exempt Income due to tax holiday
Foreign tax rate differential
Unused tax losses brought forward and carried forward
Non-taxable items
MAT credit entitlement
Actual tax for the period
Current tax
Deferred tax
Total tax expenses on income from continued operations
Add: tax on income from discontinuing operations
Tax reported in the statement of comprehensive income
31 March 2021
21,560,626
34.94%
7,534,145
(161,808)
487,920
1,216,052
(216,590)
(412,019)
8,447,699
31 March 2020
14,504,501
34.94%
5,068,453
(22,896)
(327,343)
(993,226)
-
(397,088)
3,327,899
31 March 2021
412,513
31 March 2020
788,430
8,035,186
8,447,699
-
8,447,699
3,532,694
4,321,124
(993,226)
3,327,899
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, the Isle of Man does not levy tax on capital gains. However, considering that the Group’s operations are
primarily based in India, the effective tax rate of the Group has been computed based on the current tax rates prevailing in
India. Further, a substantial portion of the profits of the Group’s India operations are exempt from Indian income taxes being
profits attributable to generation of power in India. Under the tax holiday the taxpayer can utilize an exemption from income
taxes for a period of any ten consecutive years out of a total of fifteen consecutive years from the date of commencement of
the operations. However, the entities in India are still liable for Minimum Alternate Tax (MAT) which is calculated on the book
profits of the respective entities currently at a rate of 17.47% (31 March 2020: 17.47%).
The Group has carried forward credit in respect of MAT tax liability paid to the extent it is probable that future taxable profit
will be available against which such tax credit can be utilised.
Deferred income tax for the Group at 31 March 2021 and 2020 relates to the following:
Deferred income tax assets
Unused tax losses brought forward and carried forward
MAT credit entitlement
Deferred income tax liabilities
Property, plant and equipment
Deferred income tax liabilities, net
31 March 2021
31 March 2020
-
12,374,534
12,374,534
25,368,905
25,368,905
12,994,371
1,216,052
11,962,515
13,178,567
18,902,358
18,902,358
5,723,791
71
Movement in temporary differences during the year
Particulars
Property, plant and equipment
Unused tax losses brought forward and
carried forward
MAT credit entitlement
Deferred income tax (liabilities) / assets, net
As at 01 April
2020
(18,902,358)
1,216,052
11,962,515
(5,723,791)
Deferred tax
Asset/(Liability) for
the year
-
Classified as
(Asset) / Liability
held for sale
(6,466,547)
Translation
adjustment
As at 31 Mar
2021
- (25,368,905)
-
(1,216,052)
-
-
412,019
412,019
-
(7,682,599)
- 12,374,534
- (12,994,371)
Particulars
Property, plant and equipment
Unused tax losses brought forward and
carried forward
MAT credit entitlement
Deferred income tax (liabilities) / assets, net
Deferred tax
Asset/(Liability) for
the year
(2,936,557)
Classified as
(Asset) /
(Liability) held for
sale
(993,226)
Translation
adjustment
As at 31 Mar
2020
189,018 (18,902,358)
-
-
-
1,216,052
As at 01 April
2019
(15,161,594)
1,216,052
11,565,427
(2,380,115)
397,088
(2,539,468)
-
(993,226)
- 11,962,515
(5,723,791)
189,018
In assessing the recoverability of deferred income tax assets, management considers whether it is more likely than not that
some portion or all of the deferred income tax assets will be realized. The ultimate realization of deferred income tax assets
is dependent upon the generation of future taxable income during the periods in which the temporary differences become
deductible. The amount of the deferred income tax assets considered realizable, however, could be reduced in the near term
if estimates of future taxable income during the carry forward period are reduced.
Shareholders resident outside the Isle of Man will not suffer any income tax in the Isle of Man on any income distributions to
them. Further, dividends are not taxable in India in the hands of the recipient up to 31 March 2021. However, the Group will
be subject to a “dividend distribution tax” currently at the rate of 15% to be grossed up (plus applicable surcharge and
education cess) on the total amount distributed as dividend.
There is no unrecognised deferred tax assets and liabilities. As at 31 March 2021 and 2020, there was no recognised deferred
tax liability for taxes that would be payable on the unremitted earnings of certain of the Group's subsidiaries, as the Group
has determined that undistributed profits of its subsidiaries will not be distributed in the foreseeable future.
14 Intangible assets
Cost
At 31 March 2019
Additions
Exchange adjustments
At 31 March 2020
At 31 March 2020
Additions
Exchange adjustments
At 31 March 2021
Accumulated depreciation and impairment
At 31 March 2019
Charge for the year
Exchange adjustments
At 31 March 2020
At 31 March 2020
Charge for the year
Exchange adjustments
At 31 March 2021
Net book value
At 31 March 2021
At 31 March 2020
72
Acquired software licences
852,624
-
(25,559)
827,065
827,065
-
(63,470)
763,595
829,021
14,327
(25,329)
818,020
818,020
6,209
(63,028)
761,201
2,394
9,045
15 Property, plant and equipment
The property, plant and equipment comprises of:
Land &
Buildings
Power
stations
Other plant
&
equipment
Vehicles
Solar assets
Asset under
construction
Total
Cost
At 1 April 2019
Additions
Transfer on capitalisation
Exchange adjustments
At 31 March 2020
At 1st April 2020
Additions
Transfers on capitalisation
Sale/disposals
Exchange adjustments
At 31 March 2021
5,007,901
222,961,054
1,773,269
2,417,413
-
294,954
165,831
10,958
3,903,256
(145,667)
8,765,490
56,168
(6,689,809)
216,622,367
-
(52,848)
1,886,252
-
(72,290)
2,356,081
8,765,490
216,622,367
1,886,252
2,356,081
271,158
318,038
24,375
134,659
13,598
-
(661,265)
8,388,982
159,120
-
(16,639,299)
200,460,226
-
-
(143,908)
1,766,719
-
(1,561,762)
(180,354)
748,624
Accumulated depreciation and impairment
At 1 April 2019
Charge for the year
Exchange adjustments
At 31 March 2020
At 1 April 2020
Charge for the year
Sale/disposals
Exchange adjustments
At 31 March 2021
Net book value
At 31 March 2021
At 31 March 2020
45,030
12,981
(2,410)
55,601
55,601
12,081
-
30,171,648
634,011
1,491,921
5,603,791
272,110
389,825
(1,091,777)
34,683,662
(28,050)
878,072
(57,509)
1,824,237
34,683,662
878,072
1,824,237
5,230,238
262,333
194,677
-
-
(1,263,537)
(6,363)
(2,874,452)
(77,955)
(147,367)
61,319
37,039,448
1,062,450
608,010
8,327,663
163,420,778
704,269
8,709,889
181,938,705
1,008,180
140,614
531,845
The net book value of land and buildings block comprises of:
Freehold land
Buildings
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,285,864
236,445,501
82,815
554,559
(3,959,424)
(128,479)
280,776
-
(7,089,093)
229,910,967
280,776
229,910,967
36,206
784,436
(172,718)
-
(21,547)
122,717
-
(1,561,762)
(17,646,373)
211,487,267
-
-
-
-
-
-
-
-
-
32,342,610
6,278,707
(1,179,746)
37,441,572
37,441,572
5,699,329
(1,263,537)
(3,106,137)
38,771,227
122,717
172,716,040
280,776
192,469,395
31 March 2021
31 March 2020
7,917,345
410,318
8,327,663
8,134,867
405,387
8,540,254
Property, plant and equipment with a carrying amount of £169,111,804 (2020: £187,757,094) is subject to security
restrictions (refer note 22).
73
16 Other Assets
A. Short-term
Capital advances
Financial instruments measured at fair value through P&L
Advances and other receivables
Total
B. Long-term
Lease deposits
Bank deposits
Other advances
Total
31 March 2021
31 March 2020
124,601
13,253,663
4,427,290
17,805,554
-
57,713
12,140
69,853
114,084
741,425
5,461,226
6,316,735
492,973
16,655
509,628
The financial instruments of £13,253,663 represent investments in mutual funds and their fair value is determined by
reference to published data.
17 Trade and other receivables
Current
Trade receivables
31 March 2021
31 March 2020
14,829,989
26,901,986
14,829,989
26,901,986
The Group’s trade receivables are classified at amortised cost unless stated otherwise and are measured after allowances for
future expected credit losses, see “Credit risk analysis” in note 28 “Financial risk management objectives and policies” for
more information on credit risk. The carrying amounts of trade and other receivables, which are measured at amortised cost,
approximate their fair value and are predominantly non-interest bearing.
18 Inventories
Coal and fuel
Stores and spares
Total
31 March 2021
11,228,377
958,267
12,186,644
31 March 2020
10,505,138
974,961
11,480,099
The entire amount of above inventories has been pledged as security for borrowings (refer note 22)
19 Cash and cash equivalents and Restricted cash
a. Cash and short term deposits comprise of the following:
Investment in Mutual funds
Cash at banks and on hand
Total
31 March 2021
1,815,629
7,105,324
8,920,952
31 March 2020
-
3,438,830
3,438,830
Short-term deposits are placed for varying periods, depending on the immediate cash requirements of the Group. They are recoverable on
demand.
b. Restricted cash
Current restricted cash represents deposits maturing between three to twelve months amounting to £3,219,356 (2020: £7,497,967) which
have been pledged by the Group in order to secure borrowing limits with the banks.
Non-current restricted represents investments in mutual funds maturing after twelve months amounting to £8,194,412 (2020: £26,645).
Investments of £8,182,445 (2020: nil) are allocated to debenture redemption fund earmarked towards redemption of non-convertible
debentures scheduled during FY2024 of £19,840,089
74
20 Issued share capital
Share Capital
The Company presently has only one class of ordinary shares. For all matters submitted to vote in the shareholders meeting, every holder
of ordinary shares, as reflected in the records of the Group on the date of the shareholders’ meeting, has one vote in respect of each share
held. All shares are equally eligible to receive dividends and the repayment of capital in the event of liquidation of the Group.
The Company has issued nil (2020:12,823,311) shares during the year with respect to scrip dividend at par value of £ nil (2020: £0.000147)
per share amounting to £ nil (2020: £1,885). During FY20 the difference between fair value of shares issued above par value of £2,325,567
with respect to scrip dividend was credited to share premium.
As at 31 March 2021, the Company has an authorised and issued share capital of 400,733,511 (2020: 400,733,511) equity shares at par
value of £ 0.000147 (2020: £ 0.000147) per share amounting to £58,909 (2020: £58,909) in total.
Reserves
Share premium represents the amount received by the Group over and above the par value of shares issued. Any transaction costs
associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.
Foreign currency translation reserve is used to record the exchange differences arising from the translation of the financial statements of
the foreign subsidiaries.
Other reserve represents the difference between the consideration paid and the adjustment to net assets on change of controlling interest,
without change in control, other reserves also includes any costs related with share options granted and gain/losses on re-measurement
of financial assets measured at fair value through other comprehensive income.
Retained earnings include all current and prior period results as disclosed in the consolidated statement of comprehensive income less
dividend distribution.
21 Share based payments
Long Term Incentive Plan
In April 2019, the Board of Directors approved the introduction of Long Term Incentive Plan ("LTIP"). The key terms of the LTIP are:
The number of performance-related awards is 14 million ordinary shares (the "LTIP Shares") (representing approximately 3.6 per cent of
the Company's issued share capital). In addition to three executive directors, additional members of the senior management team will be
included within the LTIP. The grant date is 24 April 2019.
The LTIP Shares were awarded to certain members of the senior management team as Nominal Cost Shares and will vest in three tranches
subject to continued service with Group until vesting and meeting the following share price performance targets, plant load factor ("PLF")
and term loan repayments of the Chennai thermal plant.
- 20% of the LTIP Shares shall vest upon meeting the target share price of 25.16p before the first anniversary for the first tranche, i.e. 24
April 2020, achievement of PLF during the period April 2019 to March 2020 of at least 70% at the Chennai thermal plant and repayment of
all scheduled term loans;
- 40% of the LTIP Shares shall vest upon meeting the target share price of 30.07p before the second anniversary for the second tranche,
i.e. 24 April 2021, achievement of PLF during the period April 2020 to March 2021 of at least 70% at the Chennai thermal plant and
repayment of all scheduled term loans;
- 40% of the LTIP Shares shall vest upon meeting the target share price of 35.00p before the third anniversary for the third tranche, i.e.
24 April 2022, achievement of PLF of at least 70% at the Chennai thermal plant during the period April 2021 to March 2022 and repayment
of all scheduled term loans.
The nominal cost of performance share, i.e. upon the exercise of awards, individuals will be required to pay up 0.0147p per share to exercise
their awards
The share price performance metric will be deemed achieved if the average share price over a fifteen day period exceeds the applicable
target price. In the event that the share price or other performance targets do not meet the applicable target, the number of vesting shares
would be reduced pro-rata, for that particular year. However, no LTIP Shares will vest if actual performance is less than 80 per cent of any
of the performance targets in any particular year. The terms of the LTIP provide that the Company may elect to pay a cash award of an
equivalent value of the vesting LTIP Shares.
In April 2020, and upon meeting relevant performance targets, 2,190,519 LTIP shares vested (80% of the 1st tranche). These shares will be
issued later this year.
None of the LTIP Shares, once vested, can be sold until the third anniversary of the award, unless required to meet personal taxation
obligations in relation to the LTIP award.
75
For LTIP Shares awards, £535,247 (FY20: 835,822) has been recognised in General and administrative expenses.
Grant date
Vesting date
Method of Settlement
Vesting of shares (%)
Number of LTIP Shares granted
Exercise Price (pence per share)
Fair Value of LTIP Shares granted (pence per share)
Expected Volatility (%)
22 Borrowings
The borrowings comprise of the following:
24-Apr-19
24-Apr-20
Equity/ Cash
20%
2,800,000
0.0147
0.1075
68.00%
24-Apr-19
24-Apr-21
Equity/ Cash
40%
5,600,000
0.0147
0.1217
64.18%
24-Apr-19
24-Apr-22
Equity/ Cash
40%
5,600,000
0.0147
0.1045
55.97%
Borrowings at amortised cost
Non-Convertible Debentures at amortised cost
Total
Interest rate
(range %)
10.35-11.40
9.85
Final maturity
June 2024
31 March 2021
26,770,564
19,840,089
46,610,653
31 March 2020
56,827,685
-
56,827,685
The term loans of £20.3m, non-convertible debentures of £19.8m and working capital loans of £6.5m taken by the Group are fully secured
by the property, plant, assets under construction and other current assets of subsidiaries which have availed such loans. All term loans and
working capital loans are personally guaranteed by a director.
Term loans contain certain covenants stipulated by the facility providers and primarily require the Group to maintain specified levels of
certain financial metrics and operating results. As of 31 March 2021, the Group has met all the relevant covenants. Further, the Group
raised approximately GBP 19.8 million (₹2000 million) during June 2020 through non-convertible debentures (NCDs) issue with a three
years term and coupon rate of 9.85%. NCD’s proceeds was used to repay the FY21 and FY22 (i.e. to March 2022) principal term loans
obligations. This will substantially release the cash flow burden for next two financial years on account of loan repayment obligations (Note
5(a)).
The fair value of borrowings at 31 March 2021 was £46,610,653 (2020: £56,827,685). The fair values have been calculated by discounting
cash flows at prevailing interest rates.
The borrowings are reconciled to the statement of financial position as follows:
Current liabilities
Amounts falling due within one year
Non-current liabilities
Amounts falling due after 1 year but not more than 5 years
Total
23 Trade and other payables
Current
Trade payables
Creditors for capital goods
Total
Non-current
Other payables
Total
31 March 2021
31 March 2020
4,510,358
23,746,229
42,100,295
46,610,653
33,081,456
56,827,685
31 March 2021
31 March 2020
32,368,058
128,777
32,496,835
607,702
607,702
41,455,004
208,985
41,663,989
169,373
169,373
Trade payables include credit availed from banks under letters of credit for payments in USD to suppliers for coal purchased by the Group.
Other trade payables are normally settled on 45 days terms credit. The arrangements are interest bearing and are payable within one year.
With the exception of certain other trade payables, all amounts are short term. Creditors for capital goods are non-interest bearing and
are usually settled within a year. Other payables include accruals for gratuity and other accruals for expenses.
76
24 Related party transactions
Key Management Personnel:
Name of the party
Nature of relationship
Arvind Gupta
Avantika Gupta
Dmitri Tsvetkov
Jeremy Warner Allen
Mike Grasby (from February 2021)
Jeremy Beeton (resigned in March 2020)
N Kumar (from November 2019)
Chairman
Chief Operating Officer & Director
Chief Financial Officer & Director
Deputy Chairman
Director
Director
Director
Related parties with whom the Group had transactions during the period
Name of the party
Padma Shipping Limited
Avanti Solar Energy Private Limited
Mayfair Renewable Energy (I) Private Limited
Avanti Renewable Energy Private Limited
Brics Renewable Energy Private Limited
Samriddhi Bubna
Nature of relationship
The company has joint control of the entity
Associates
Associates
Associates
Associates
Relative of Key Management Personnel
Summary of transactions with related parties
Name of the party
Remuneration to Samriddhi Bubna (from June 2020)
Sale of solar modules:
a) Avanti Solar Energy Private Limited
b) Mayfair Renewable Energy (I) Private Limited
31 March 2021
25,847
31 March 2020
-
198,299
79,496
-
-
During the year Samriddhi Solar Power LLP and OPG Surya Vidyut LLP have been deconsolidated consequent to the Group withdrawing
from the LLP.
Summary of balance with related parties
Name of the party
Padma Shipping Limited
Padma Shipping Limited
Padma Shipping Limited
Ravi Gupta
Avanti Solar Energy Private Limited
Avanti Solar Energy Private Limited
Avanti Solar Energy Private Limited
Mayfair Renewable Energy (I)Private Limited
Mayfair Renewable Energy (I) Private Limited
Mayfair Renewable Energy (I) Private Limited
Avanti Renewable Energy Private Limited
Avanti Renewable Energy Private Limited
Avanti Renewable Energy Private Limited
Brics Renewable Energy Private Limited
Brics Renewable Energy Private Limited
Nature of balance
31 March 2021
Investment
Advances
Impairment provision
Land Lease Deposit
Investment
Trade payable
Advance
Investment
Trade payable
Advance
Investment
Trade payable
Advance
Investment
Advance
3,448,882
1,727,418
(5,176,300)
-
4,766,864
(67,391)
6,022
5,352,890
(51,294)
7,242
5,895,541
(147,583)
9,047
410,073
298
31 March 2020
3,448,882
1,727,418
(5,176,300)
492,973
-
-
-
-
-
-
-
-
-
-
-
Outstanding balances at the year-end are unsecured. Related party transaction are on an arms length basis. There have been no guarantees
provided or received for any related party receivables or payables except for corporate guarantees issued to lenders of its solar entities
classified as Asset Held for Sale (loans outstanding £23,300,131 (2020: £28,261,524)) and corporate guarantee to a director for his personal
guarantees with respect to the Group’s and associate solar entities’ loans. For the year ended 31 March 2021, the Group has made
77
impairment provision for investments in joint venture £Nil (2020: £918,432) (Note 7(a)). This assessment is undertaken each financial year
through examining the financial position of the related party and the market in which the related party operates.
A director personally guaranteed loans of an associate solar entity (loan outstanding £7,412,554 (2020: £9,372,074)) which is classified as
Asset Held for Sale. Group’s loans of £25,368,634 (2020: £56,817,858) are personally guaranteed by a director.
25 Earnings per share
Both the basic and diluted earnings per share have been calculated using the profit attributable to shareholders of the parent company as
the numerator (no adjustments to profit were necessary for the year ended March 2021 or 2020).
The Company has issued LTIP over ordinary shares which could potentially dilute basic earnings per share in the future.
The weighted average number of shares for the purposes of diluted earnings per share can be reconciled to the weighted average number
of ordinary shares used in the calculation of basic earnings per share (for the Group and the Company) as follows:
Particulars
Weighted average number of shares used in basic earnings per share
31 March 2021
400,733,511
Shares deemed to be issued for no consideration in respect of share based payments
2,190,519
Weighted average number of shares used in diluted earnings per share
402,924,030
26 Directors remuneration
Name of directors
Arvind Gupta
Avantika Gupta
Dmitri Tsvetkov
Jeremy Warner Allen
N Kumar (from November 2019)
Mike Grasby (till November 2019 in FY20 and from February 2021 in FY21)
Jeremy Beeton (resigned in March 2020)
Total
31 March 2021
-
60,000
150,000
25,000
22,500
2,562
-
260,062
31 March 2020
390,923,328
2,190,519
393,113,847
31 March 2020
500,000
120,000
240,000
50,000
15,000
33,750
43,270
1,002,020
As part of the COVID-19 response, the Company has implemented various cost reduction and efficiency improvement measures to conserve
cash and improve liquidity, including a voluntary 100 per cent salary reduction for the Chairman and voluntary reductions up to 50 per cent
in compensation for the Executive and Non-Executive Directors for FY21.
The above remuneration is in the nature of short-term employee benefits. As the future liability for gratuity and compensated absences is
provided on actuarial basis for the companies in the group, the amount pertaining to the directors is not individually ascertainable and
therefore not included above.
27 Commitments and contingencies
Operating lease commitments
The Group leases office premises under operating leases. The leases typically run for a period up to 5 years, with an option to renew the
lease after that date. None of the leases includes contingent rentals.
Non-cancellable operating lease rentals are payable as follows:
Not later than one year
Later than one year and not later than five years
Later than five years
Total
31 March 2021
-
-
-
-
31 March 2020
46,095
64,254
-
110,349
Recognition of a right of use asset and a lease liability is not material and instead charge of £ Nil (2020: £55,292) has been recognised as
an expense for leases.
Contingent liabilities
Disputed income net tax demand £816,358 (2020: £1,021,210).
Future cash flows in respect of the above matters are determinable only on receipt of judgements / decisions pending at various forums /
authorities.
78
Guarantees and Letter of credit
The Group has provided bank guarantees and letter of credits (LC) to customers and vendors in the normal course of business. The LC
provided as at 31 March 2021: £20,167,583 (2020: £30,912,751) and Bank Guarantee (BG) as at 31 March 2021: £2,575,878 (2020:
£3,167,066). LC are supporting accounts payables already recognised in the statement of financial position. There have been no guarantees
provided or received for any related party receivables or payables except for corporate guarantees issued to lenders of its solar entities
classified as Asset Held for Sale of £23,300,131(2020: £28,261,524). Working capital facilities limits, LCs and BGs are personally guaranteed
by a director. BG are treated as contingent liabilities until such time it becomes probable that the Company will be required to make a
payment under the guarantee. The Company provided a corporate guarantee to a director for his personal guarantees with respect to the
Group’s and associate solar entities’ loans.
28 Financial risk management objectives and policies
The Group's principal financial liabilities, comprises of loans and borrowings, trade and other payables, and other current liabilities. The
main purpose of these financial liabilities is to raise finance for the Group's operations. The Group has loans and receivables, trade and
other receivables, and cash and short-term deposits that arise directly from its operations. The Group also hold investments designated
financial assets measured at FVPL categories.
The Group is exposed to market risk, credit risk and liquidity risk.
The Group's senior management oversees the management of these risks. The Group's senior management advises on financial risks and
the appropriate financial risk governance framework for the Group.
The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below:
Market risk
Market risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because of changes in market prices.
Market prices comprise three types of risk: interest rate risk, currency risk and other price risk, such as equity risk. Financial instruments
affected by market risk include loans and borrowings, deposits, financial assets measured at FVPL.
The sensitivity analyses in the following sections relate to the position as at 31 March 2021 and 31 March 2020
The following assumptions have been made in calculating the sensitivity analyses:
(i) The sensitivity of the statement of comprehensive income is the effect of the assumed changes in interest rates on the net interest
income for one year, based on the average rate of borrowings held during the year ended 31 March 2021, all other variables being held
constant. These changes are considered to be reasonably possible based on observation of current market conditions.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. The Group's exposure to the risk of changes in market interest rates relates primarily to the Group's long-term debt
obligations with average interest rates.
At 31 March 2021 and 31 March 2020, the Group had no interest rate derivatives.
The calculations are based on a change in the average market interest rate for each period, and the financial instruments held at each
reporting date that are sensitive to changes in interest rates. All other variables are held constant. If interest rates increase or decrease by
100 basis points with all other variables being constant, the Group’s profit after tax for the year ended 31 March 2021 would decrease or
increase by £466,107 (2020: £568,277).
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign
exchange rate. The Group’s presentation currency is the Great Britain £. A majority of our assets are located in India where the Indian rupee
is the functional currency for our subsidiaries. Currency exposures also exist in the nature of capital expenditure and services denominated
in currencies other than the Indian rupee.
The Group’s exposure to foreign currency arises where a Group company holds monetary assets and liabilities denominated in a currency
different to the functional currency of that entity:
Currency
Financial assets
Financial liabilities
Financial assets
Financial liabilities
As at 31 March 2021
As at 31 March 2020
United States Dollar (USD)
60,158
27,733,983
4,275,436
30,575,559
79
Set out below is the impact of a 10% change in the US dollar on profit arising as a result of the revaluation of the Group’s foreign currency
financial instruments:
Currency
As at 31 March 2021
As at 31 March 2020
Closing Rate
(INR/USD)
Effect of 10%
strengthening in USD
against INR – Translated
to GBP
Closing Rate
(INR/USD)
Effect of 10%
strengthening in USD
against INR – Translated
to GBP
United States Dollar (USD)
73.37
2,012,662
75.10
2,122,208
The impact on total equity is the same as the impact on net earnings as disclosed above.
Credit risk analysis
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial
loss. The Group is exposed to credit risk from its operating activities (primarily for trade and other receivables) and from its financing
activities, including short-term deposits with banks and financial institutions, and other financial assets. Further, the global economy has
been severely impacted by the global pandemic Covid-19 (Note 5(a)).
The maximum exposure for credit risk at the reporting date is the carrying value of each class of financial assets amounting to £33,269,104
(2020: £33,986,093 ) and corporate guarantees issued to lenders of its solar entities classified as Asset Held for Sale of £23,300,131 (2020:
£28,261,524).
The Group has exposure to credit risk from accounts receivable balances on sale of electricity. The operating entities of the group has
entered into power purchase agreements with distribution companies incorporated by the Indian state government (TANGEDCO) to
provide the electricity generated therefore the group is committed to providing power to captive power shareholders and other customers
and the potential risk of default is considered low. For other customers, the Group ensures concentration of credit does not significantly
impair the financial assets since the captive power shareholders and customers to whom the exposure of credit is taken are well established
and reputed industries engaged in their respective field of business. It is Group policy to assess the credit risk of new captive power
shareholders and other customers before entering contracts and to obtain credit information during the power purchase agreement to
highlight potential credit risks. The Group have established a credit policy under which captive power shareholders and customers are
analysed for credit worthiness before power purchase agreement is signed. The Group’s review includes external ratings, when available,
and in some cases bank references. The credit worthiness of captive power shareholders and other customers to which the Group grants
credit in the normal course of the business is monitored regularly and incorporates forward looking information and data available. The
receivables outstanding at the year end are reviewed till the date of signing the financial statements in terms of recoveries made and
ascertain if any credit risk has increased for balance dues. Further, the macro economic factors and specific customer industry status are
also reviewed and if required the search and credit worthiness reports, financial statements are evaluated. The credit risk for liquid funds
is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.
To measure expected credit losses, trade and other receivables have been grouped together based on shared credit risk characteristics and
the days past due. The Group determined that some trade receivables were credit impaired as these were long past their due date and
there was an uncertainty about the recovery of such receivables. The expected loss rates are based on an ageing analysis performed on the
receivables as well as historical loss rates. The historical loss rates are adjusted to reflect current and forward looking information that
would impact the ability of the customer to pay.
Trade and other receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable
expectation of recovery include, amongst others, the failure of the debtor to engage in a repayment plan, the debtor is not operating
anymore and a failure to make contractual payments for a period of greater than 180 days.
31 March 2021
Expected General loss
allowance rate
Gross carrying amount - Trade
Receivables -TANGEDCO
Gross carrying amount - Trade
Receivables -Others
General loss allowance1
Specific loss allowance1
Total loss allowance
Within Credit
period
More than 30 days
0%
0%
More than 60
days
0%
More than 180
days
33.02%
Total
-
Days past due
1,651,140
1,686,225
2,218,844
15,097,765
20,653,974
7,862,837
-
15,309,103
7,163,081
13,970,007
21,133,088
1 There has been significant increase in loss allowance in FY20 £17 million (FY19: £0.8 million) primarily on account of contractual claim
made on customer towards change in law as per Power Purchase Agreement of £6.4 million, tariff discount dispute of £7.5 million and
change in credit risk of customer constituting general loss allowance of £3.1 million.
5,831,930
6,910,677
13,970,007
20,880,684
1,154,009
--
-
-
460,326
252,404
252,404
-
80
31 March 2020
Within Credit
period
Days past due
More than 30 days
More than 60
days
More than 180
days
Total
Expected General loss
allowance rate
Gross carrying amount - Trade
Receivables -TANGEDCO
Gross carrying amount - Trade
Receivables -Others
General loss allowance1
Specific loss allowance1
Total loss allowance
0%
0%
0%
17.21%
-
2,378,240
3,953,961
5,310,071
18,734,652
30,376,924
7,824,720
608,495
889,434
-
-
-
5,310,446
4,138,025
13,970,007
18,108,033
14,633,095
4,138,025
13,970,007
18,108,033
1 There has been significant increase in loss allowance in FY20 £17 million (FY19 £0.8 million) primarily on account of contractual claim
made on customer towards change in law as per Power Purchase Agreement of £6.4 million, tariff discount dispute of £7.5 million and
change in credit risk of customer constituting general loss allowance of £3.1 million.
The closing loss allowances for trade receivables as at 31 March 2021 reconcile to the opening loss allowances as follows:
Opening loss allowance as at 1 April
Increase in loss allowance recognised in profit or (loss) during the yearfor new
receivables recognised
Total
31 March 2021
(18,108,033)
31 March 2020
(1,061,553)
(3,025,055)
(21,133,088)
(17,046,480)
(18,108,033)
The Group’s management believes that all the financial assets, except as mentioned above are not impaired for each of the reporting dates
under review and are of good credit quality.
Liquidity risk analysis
The Group’s main source of liquidity is its operating businesses. The treasury department uses regular forecasts of operational cash flow,
investment and trading collateral requirements to ensure that sufficient liquid cash balances are available to service on-going business
requirements. The Group manages its liquidity needs by carefully monitoring scheduled debt servicing payments for long-term financial
liabilities as well as cash outflows due in day-to-day business. Liquidity needs are monitored in various time bands, on a day-to-day and
week-to-week basis, as well as on the basis of a rolling 90 day projection. Long-term liquidity needs for a 90 day and a 30 day lookout period
are identified monthly.
The Group maintains cash and marketable securities to meet its liquidity requirements for up to 60 day periods. Funding for long-term
liquidity needs is additionally secured by an adequate amount of committed credit facilities and the ability to sell long-term financial assets.
The following is an analysis of the group contractual undiscounted cash flows payable under financial liabilities at 31 March 2021 and 31
March 2020:
As at 31 March 2021
Borrowings
Non-Convertible Debentures
Interest on borrowings
Trade and other payables
Liabilities held for sale
Other current liabilities
Total
As at 31 March 2020
Borrowings
Interest on borrowings
Trade and other payables
Liabilities held for sale
Other current liabilities
Total
Current
Within 12 months
4,510,358
-
6,803,137
32,495,799
1,226,309
45,035,603
Current
Within 12 months
23,746,229
6,595,187
41,663,989
32,866,783
582,240
105,454,428
81
Non-Current
1-5 years
22,260,206
19,840,089
7,816,034
607,702
-
50,524,031
Later than 5 years
-
-
-
-
Non-Current
1-5 years
33,081,456
10,464,236
169,373
-
-
43,715,065
Later than 5 years
-
-
-
-
Total
26,770,564
19,840,089
14,619,171
33,103,501
1,226,309
95,559,634
Total
56,827,685
17,059,422
41,833,362
32,866,783
582,240
149,169,492
Capital management
Capital includes equity attributable to the equity holders of the parent and debt less cash and cash equivalents.
The Group's capital management objectives include, among others:
Ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value
Ensure the Group’s ability to meet both its long-term and short-term capital needs as a going concern;
To provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the
capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.
No changes were made in the objectives, policies or processes during the years end 31 March 2021 and 31 March 2020.
The Group maintains a mixture of cash and cash equivalents, long-term debt and short-term committed facilities that are designed to
ensure the Group has sufficient available funds for business requirements. There are no imposed capital requirements on Group or entities,
whether statutory or otherwise.
The Capital for the reporting periods under review is summarised as follows:
Total equity
Less: Cash and cash equivalents
Capital
Total equity
Add: Borrowings
Overall financing
Capital to overall financing ratio
31 March 2021
161,567,070
(8,920,952)
152,646,118
161,567,070
46,610,653
208,177,723
0.73
31 March 2020
158,503,833
(3,438,830)
155,065,003
158,503,833
56,827,685
215,331,518
0.72
29 Summary of financial assets and liabilities by category and their fair values
Financial assets
Debt instruments measured at amortised cost
Cash and cash equivalents 1
Restricted cash 1
Current trade receivables 1
Other long-term assets
Other short-term assets
Carrying amount
Fair value
March 2021
March 2020
March 2021
March 2020
8,920,952
11,413,768
14,829,989
69,853
2,736,262
3,438,830
7,524,612
26,901,986
509,628
5,575,310
8,920,952
11,413,768
14,829,989
69,853
2,736,262
3,438,830
7,524,612
26,901,986
509,628
5,575,310
Financial instruments measured at fair value through profit or loss
Other short term assets (Note (7)(c)) and
restricted cash (Note19)
15,069,292
53,040,116
741,425
44,691,791
15,069,292
53,040,116
741,425
44,691,791
Financial liabilities
Term loans2
Non-Convertible Debentures2
Current trade and other payables 1
Provision for pledged deposits
Non-current trade and other payables 2
26,770,564
19,840,089
32,495,799
-
607,702
79,714,154
80,364,930
-
45,474,814
12,627,381
14,235,485
152,702,610
26,770,564
19,840,089
32,495,799
-
607,702
79,714,154
80,364,930
-
45,474,814
12,627,381
14,235,485
152,702,610
The fair value of the financial assets and liabilities are included at the price that would be received to sell an asset or paid to transfer a
liability (i.e. an exit price) in an ordinary transaction between market participants at the measurement date. The following methods and
assumptions were used to estimate the fair values:
1. Cash and short-term deposits, trade receivables, trade payables, and other borrowings like short-term loans, current liabilities
approximate their carrying amounts largely due to the short-term maturities of these instruments.
2. The fair value of loans from banks and other financial indebtedness, obligations under finance leases, financial liabilities at fair value
through profit or loss as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently
available for debt or similar terms and remaining maturities.
82
3. Fair value of financial assets measured at FVPL held for trading purposes are derived from quoted market prices in active markets. Fair
value of financial assets measured at FVPL of unquoted equity instruments are derived from valuation performed at the year end. Fair
Valuation of retained investments in PS and BVP is on basis of the last transaction.
Fair value measurements recognised in the statement of financial position
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped
into Levels 1 to 3 based on the degree to which the fair value is observable.
•
•
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not
based on observable market data (unobservable inputs).
•
Financial instruments measured at fair value through profit or loss
Level 1
Level 2
Level 3
Total
2021
Quoted securities
Total
2020
Quoted securities
Total
15,069,292
15,059,292
700,972
700,972
-
-
-
-
-
-
15,069,292
15,069,292
40,453
40,453
741,425
741,425
There were no transfers between Level 1 and 2 in the period. Investments in mutual funds are valued at closing net asset value (NAV).
The Group’s finance team performs valuations of financial items for financial reporting purposes, including Level 3 fair values. Valuation
techniques are selected based on the characteristics of each instrument, with the overall objective of maximising the use of market-based
information. The finance team reports directly to the chief financial officer (CFO).
Valuation processes and fair value changes are discussed by the Board of Directors at least every year, in line with the Group’s reporting
dates.
83
Corporate Directory
Nominated Adviser and Broker
Cenkos Securities Plc
6-7-8 Tokenhouse Yard
London
EC2R 7AS
Financial PR
Tavistock Communications
1 Cornhill
London
EC3V 3ND
Administrators and Company Secretary
FIM Capital Limited
(Formerly IOMA Fund and Investment Management Limited)
55 Athol Street
Douglas
Isle of Man
IM1 1LA
Auditors
BDO LLP
Arcadia House
Maritime Walk
Ocean Village
Southampton
SO143TL
Registrars
Link Market Services (Isle of Man) Limited
Clinch's House
Lord Street
Douglas
Isle of Man
IM99 1R
Legal advisers
Dougherty Quinn
The Chambers
5 Mount Pleasant
Douglas
Isle of Man
IM1 2PU
84
Definitions & Glossary
Act: Isle of Man Companies Act 2006
Adjusted EBITDA: is a measure of a business’ cash generation from operations before depreciation, interest and
exceptional and non-standard or non-operational charges, e.g. share based compensation, etc.
AGM: Annual General Meeting
AIM: Alternative Investment Market of the London Stock Exchange
APC: Auxiliary Power Consumption
BG: Bank Guarantee
Board: Board of Directors of OPG Power Ventures Plc
bps: Basis points
BRICS: Brazil, Russia, India, China and South Africa
CAD: Current Account Deficit
CAGR: Compound Average Growth Rate
Captive power shareholders: Captive shareholders of OPG Power Generation Private Limited
CCR: Coal Combustion Residue
CEA: Central Electricity Authority
CFO: Chief Financial Officer
CO: Carbon Monoxide
COO: Chief Operating Officer
Company or OPG or OPGPV or parent: OPG Power Ventures Plc
CY: Calendar Year
DDUGJY: Deen Dayal Upadhyay Gram Jyoti Yojana scheme
Discom: Distribution Company (of the State Electricity Utility)
EHS: Environment, Health and Safety
Electricity Act: Indian Electricity Act 2003 as amended
EPS: Earnings per share
ESOP: Employee Stock Options Plan
FRC: Financial Reporting Council
FTSE: Financial Times Stock Exchange
ExCo: Executive Committee
FDI: Foreign Direct Investment
FVPL: Fair Value through Profit or Loss
FY: Financial year from 1 April to 31 March
GCPP: Group Captive Power Plant
GDP: Gross Domestic Product
GHG: Green House Gas
Government or GOI: Government of India
GP: Gross Profit
Great Britain Pound Sterling or £/pence: Pounds sterling or pence, the lawful currency of the UK
GRI: Global Reporting Initiative
Group Captive: Group Captive power plant as defined under Electricity Act 2003, India
Group or OPG: the Company and its subsidiaries
GW: Gigawatt is 1,000 megawatts
HIRA: Hazard Identification and Risk Assessment
HSE: Health, Safety and Environment
IAS: International Accounting Standards
IEA: International Energy Agency
IFRS: International Financial Reporting Standards as issued by the International Accounting Standards Board
Indian Companies Act: the Companies Act, 1956 and amendments thereto
IPDS: Integrated Power Development Scheme
ISAs (UK): International Standards on Auditing (UK)
JV: Joint Venture
85
kWh: Kilowatt hour is one unit of electricity
LC: Letter of Credits
LOI: Letter of Intent
LSE: London Stock Exchange plc
LTIP: Long Term Incentive Plan
LTOA: Long Term Open Access
LTVT: Long Term Variable Tariff
MAR: Market Abuse Regime regulation
MAT: Minimum Alternative Tax
MoU: Memorandum of Understanding
MSME: Micro, Small and Medium Enterprises
mt: Million tonnes
MW: Megawatt is 1,000 kilowatts
MWh: Megawatt hour
NCDs: Non-convertible debentures
Net Debt / Net Borrowings: Total borrowings minus cash & current & non-current investments in mutual funds
NITI Aayog: National Institution for Transforming India
Nox: Nitrogen Oxides
O&M: Operating and Management
PAT: Profit After Tax
PBT: Profit Before Tax
PLF: Plant Load Factor
PPA: Power Purchase Agreement
PSA: Power Supply Agreement
PTW: “Permit- To-Work” system
QCA: Quoted Companies Alliance
RES: Renewable Energy Source
RBI: Reserve Bank of India
ROE: Return on Equity
RST: Reverse Stress Test
Rupees/INR or Rs: Indian Rupee, the lawful currency of India
SASB: Sustainability Accounting Standards Board
SAUBHAGYA: The Pradhan Mantri Sahaj Bijli Har Ghar Yojana scheme
SEB: State Electricity Board
SEBI: Securities Exchange Board of India
Sox: Sulphur Oxides
SPM: Suspended Particulate Matter
SPV: Special Purpose Vehicle
State: State of India
STP: Sewage Treatment Plant
TANGEDCO: Tamil Nadu Generation and Distribution Corporation Limited
The Code: Quoted Companies Alliance’s code of corporate governance
TRIR: Total Recordable Incident Report
UDAY: Ujwal DISCOM Assurance Yojana, the financial turnaround and revival package for DISCOMs initiated by
the Government of India
UN SDGs: the United Nations Sustainable Development Goals
UK/United Kingdom: United Kingdom of Great Britain and Northern Ireland
US$/USD or $: US Dollars, the lawful currency of the US
WPI: Wholesale Price Index
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