Powering. Prospering.
Innovating.
OPG Power Ventures Plc
FY2022 Annual Report & Accounts
Index
Strategic Report
Highlights
Chairman’s Statement
Financial Review
CEO 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
Auditors’ report
Financial Statements
Notes to Financial Statements
Corporate directory
Definitions & glossary
Page Number
3-4
5-6
7-10
11-12
13
14
15-17
Enclosed
33-34
35-37
38-42
43-44
45-47
48
49-55
56-60
61-84
85
86-87
3
Highlights
Revenue
Unit
FY20
FY21
FY22
Operating Profit
Unit
FY20
FY21
FY22
Adjusted EBITDA
Unit
FY20
FY21
FY22
Basic EPS
Unit
FY20
FY21
FY22
Profit before Tax
Unit
FY20
FY21
FY22
Net Debt to Adjusted EBITDA
Ratio
FY20
FY21
FY22
£ m
£154.0
£93.8
£80.1
£ m
£24.0
£27.5
£16.1
£ m
£31.2
£33.7
£21.6
Pence
2.1
3.5
1.5
£ m
£14.5
£21.6
£13.0
x
1.7 x
0.5 x
0.3 x
4
•
•
•
•
•
•
•
Revenue decreased by 14.66 per cent to £80.1
million in FY 22 from £93.8 million in FY21
because of Covid-19 and increased coal prices in
second half of FY22.
Total generation (including deemed) in FY22 was
nearly 1.9 billion kWh, 11.0 per cent lower than
last year’s generation of nearly 2.1 billion kWh.
1
Adjusted EBITDA of £21.6 million (27.0 per cent
margin) as compared with £33.7 million (36.0 per
cent margin) in FY21.
Profit before tax from continued operations was
£13.0 million (16.2 per cent) as compared to
£21.6 million (23.0 per cent) in FY21.
Basic earnings per share 1.5 pence in FY22 as
compared to 3.5 pence in FY21.
2
Net Debt reduced from £16.24 million in FY21 to
£6.9 million in FY22.
Net Debt to Adjusted EBITDA ratio further
improved from 0.5x to 0.3x.
1 See definition of Adjusted EBITDA on page 6
2 See definition of Net Debt on page 8
Chairman’s Statement
Resilience, robust profitability and strong cash
generation
FY22 has been a challenging year. As the world and the
global economy was recovering from Covid-19, the war
in Ukraine dented sentiment with a sharp increase in
global energy prices. Despite a challenging year, OPG
has continued to deliver strong cash generation, robust
profitability and achieve a significant reduction in net
debt.
The unprecedented health crisis, caused by Covid-19,
took an immense human and economic 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, continuing to
run 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
Group has emerged strong, reporting solid set of
financial results and paving pathways for accelerated
and sustainable future growth.
The plants’ generation, including deemed generation,
during FY22 was 1.9 billion units which is an 11.0 per
cent reduction in generation in comparison with FY21
primarily due to the increase in coal prices. The average
Plant Load Factor (“PLF”) in FY22 (including deemed)
was at 52 per cent (FY21: 58 per cent) and the average
realised tariff was ? 5.60 (FY21: ? 5.52) per kilowatt hour.
In FY22, the Group’s revenue was £80.1 million (FY21:
£93.8 million) and Adjusted EBITDA was £21.6 million
(FY21: £33.7 million) and profit for the year was £6.0
million (FY21: £14.1 million).
We are glad to report that OPG was comfortably in line
with FY22 market expectations despite the difficult
market conditions.
Creating shareholder value through 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.
to
This strategy, we believe, will deliver value
shareholders with free cash flows providing significant
returns to our shareholders and further opportunities to
grow the business.
During the period FY20 - FY22 net debt reduced
significantly from £53.4 million to £16.2 million and then
to £6.9 million. Net debt to Adjusted EBITDA ratio
reduced from 1.7x to 0.5x and further to 0.3x
demonstrating the robustness of OPG’s financial
position. The Group remains amongst the least
leveraged power companies in India.
The Board remains convinced, especially in light of the
Covid-19 challenges, that our strategy of maintaining
operational excellence and paying down expensive
borrowings is the right one to pursue for all our
stakeholders.
Maximising stakeholders’ long-term value
One of OPG’s paramount objective is to maximise
stakeholders’ long-term value. In light of disruptions and
uncertainty caused by Covid-19 and extraordinary
volatility in coal prices and freight over the past year and
a half, the Board believes that it is in the best interest of
the Group and its stakeholders to conserve cash. The
cash thus conserved will be utilized for repaying debt,
growing ESG focused projects and maintaining a strong
and resilient balance sheet to withstand the turbulent
times.
Building sustainable future
Rapid growth in urbanisation, universal electrification,
and a renewable energy transition driven by climate
change, means that India’s incremental power needs is
targeted to largely be met by renewable energy. Our
business strategy is 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
Group is evaluating various options to increase its
renewable energy asset base and to establish joint
ventures to roll out various energy transition
technologies. These initiatives will ensure that OPG
delivers year-on-year improvements to reach the
Group’s emissions reduction targets in the medium and
longer-term.
We are pleased to present our second standalone ESG
report which pertains to FY22 and summarises the
objectives, activities, and the performance of the Group
from an ESG perspective. 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.
5
Indian Economy and Power Sector Update
India is the third largest producer and third largest
consumer of electricity in the world with installed power
capacity reaching 400 GW as at March 2022. In FY22,
even amidst a relatively weaker macroeconomic
scenario, peak power demand hit an all-time high of
200.5 GW. On account of a record breaking heat wave in
North India, the peak power demand has already
touched 210.8 GW in the current financial year.
In June 2022, the World Bank’s Global Economic
Outlook projected India’s FY23 (CY22) economic
growth forecast at 7.5 per cent, supported by plans for
higher spending on infrastructure, rural development
and health services as well as stronger-than-expected
recovery in services. FY24 (CY23) is forecasted at 7.1
per cent, amongst the highest growth rates.
During FY22, power consumption increased by 9.5 per
cent to 1,392.1 BU from 1,271.5 BU. ICRA, which is a
leading ratings agency in India estimates that India’s
electricity demand is expected to grow up to 6.5 per cent
in FY23 on a year-on-year basis.
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 Group remains exposed to market
fluctuations for the unhedged portion of coal
consumption and freight. The Group continues to
explore various options including sourcing the coal from
other geographies (including domestic sources) to
reduce the per unit cost of electricity.
Outlook
Since April 2022, the prices of thermal coal and freight
have increased significantly due
to geo-political
tensions. Coal prices may not reduce significantly in the
short term.
While challenges to the economy will continue in FY23;
the Group has strong foundations, allowing us both to
manage the ongoing Covid-19 situation and to pursue
growth sustainably. The Group’s medium and long-term
fundamentals remain unchanged. We have strong cash
flows which will enable OPG to continue to reduce and
deliver our long-term profitable business model of
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, especially
our shareholders, for the incredible support we have
received during these unprecedented and extraordinary
times.
N. Kumar
Chairman
29 September 2022
6
Financial Review
The following is a commentary on the Group’s ?nancial performance for the year.
Revenue
FY22 has been a tough year for OPG. The Group’s revenues decreased by £13.8 million (a 14.7 per cent decline) in
FY22 primarily driven by the impact of Covid-19 in the first half and high coal prices in the second half of FY22. The
Group decreased generation and consequently sales to captive power users because of the unprecedented increase in
costs. Adjusted EBITDA in FY22 at £21.6 million was 27.0 per cent of revenues as compared to 36 per cent last year.
Income statement
3
Year ended 31 March
Revenue
Cost of revenue (excluding depreciation)
Gross profit
Other operating income
Other income
Distribution, General and Administrative expenses,
ECL (excluding depreciation, employee stock
option charge)
Adjusted EBITDA
Share based compensation
Depreciation
Net finance costs
Profit before tax from continuing operations
Taxation
Profit after tax from continuing operations
(Loss)/Profit from discontinued operations, including
Non-Controlling Interest
Profit for the year
2022
£m
£80.1
(£56.5)
£23.6
£0.0
£8.1
(£10.0)
£21.6
(£0.2)
(£5.3)
(£3.1)
£13.0
(£4.1)
£8.9
(£2.9)
£6.0
% of revenue
% of revenue
2021
£m
£93.8
(£56.9)
29.4
£36.9
39.4
£9.4
£1.9
(£14.5)
£33.7
(£0.5)
(£5.7)
(£5.9)
£21.6
(£8.4)
£13.1
£1.0
£14.1
27.0
16.2
11.1
7.5
36.0
23.0
14.0
15.0
The average tariff realized in FY22 was `5.60/kWh, marginally higher than previous year’s 5.52/kWh. Total generation
including deemed was 1.87 Bn units, a decline of 11.3 per cent over last year’s 2.1 Bn units. This reduction was primarily
because of the second Covid-19 wave that affected India and the high coal prices in the second half. The increase in
coal prices was due to higher demand for coal from China, Europe, excessive rains in the Q3FY22 and later on, the
export ban on coal in Q4FY22 in Indonesia.
`
The production and output levels from the Group’s operating power plants compared to the prior years were as follows:
Total generation, incl. “deemed” generation (million units)
Plant Load Factor (PLF) (%)
4
Average tariff (INR/unit)
FY22
1,868
52
5.60
FY21
2,107
58
5.52
3
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.
4 Unit 3: “Deemed” PLF (%) has been included.
7
Gross Profit
The Gross Profit (GP) for the year was £23.6 million (29.4 per cent of revenue). On y-o-y basis (FY21 - £36.9 million
(39.4 per cent of revenue)), the gross profit declined by 36 per cent reflecting the impact of high Indonesian coal prices.
The cost of revenue represents fuel costs. The table below shows average price of coal consumed in FY22 and FY21.
Average price of coal consumed
Average price of coal consumed (`/mt)
Average price of coal consumed (` / mKCal)
Per cent change in average price of coal consumed (`/mt)
Per cent change in the average price of coal consumed (` / mKCal)
Adjusted EBITDA
FY22
? 5,460
? 1,328
32.3
34.0
FY21
? 4,127
? 991
(4.1)
(3.6)
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 for FY22 was £21.6 million, a decrease of 36 per cent from £33.7 million in FY21 primarily because of
increase in international coal prices.
Profit from continuing operations before tax was £13.0 million (16.2 per cent of revenue) as compared to £21.6 million
(23.0 per cent of revenue) in FY21 primarily because of increase in international coal prices.
Profit before Tax (PBT) reconciliation for FY22 (£m)
PBT FY22
PBT FY21
Increase /(Decrease) in PBT
Decrease in Gross Profit
Decrease in Other Operating Income
Increase in Other Income
Decrease in Distribution, General & Administrative Expenses, Expected Credit Loss
Decrease in Net Finance Costs
Decrease in Depreciation and Amortisation
Increase/(Decrease) in PBT
Taxation
£13.0
£21.6
(£8.6)
(£13.4)
(£9.4)
£6.1
£4.9
£2.9
£0.4
(£8.6)
The Company’s operating subsidiaries are under a tax holiday period but are subject to Minimum Alternate Tax (‘MAT’)
on their accounting profits. Taxes paid under MAT can be offset against future tax liabilities arising after the tax holiday
period. The tax expense during the year was £4.1 million.
Profits after tax from continuing operations
Profits after tax from continuing operations has decreased by 32.1 per cent or £4.2 million from £13.1 million to £8.9
million. The decrease was in line with H1FY22 forecasts.
Assets held for sale and loss from discontinued operations – 62 MW Karnataka solar projects
In FY18, four Karnataka solar projects (62 MW) were commissioned. OPG has a 31 per cent equity interest in these
projects.
During FY19, the Group obtained a right to exercise an option to buy an additional 30 per cent 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 the 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 Group decided that the most
efficient way to maximise shareholders’ value from the solar operations was to divest its’ stake in the solar companies.
8
The process of disposing the assets satisfy all conditions of IFRS 5. Therefore, the solar assets have been classified as
”Assets held for sale” as on 31 March 2022. The completion of the disposal process was impacted by Covid-19.
OPG in its endeavour to sell the solar assets continues to identify potential buyers. Based on the term sheet received
from potential buyer, the Group’s investment in the solar companies was valued at £13.5 million as compared to OPG’s
initial investment of £16.4 million. This loss of £2.9 million is recognized as loss from discontinued operations on
account of the diminution in the value of investment. The management is evaluating and actively considering the offer
received from the potential buyer.
Earnings per Share (EPS)
The group’s total reported EPS decreased from 3.5 pence in FY21 to 1.5 pence in FY22.
Dividend policy
One of OPG’s paramount objectives is to maximise stakeholders’ long-term value. Keeping in mind, the disruptions and
uncertainty caused by Covid-19 and extraordinary volatility in coal prices and freight, the Board believes that it is in the
best interests of the Group and its stakeholders to conserve cash. The cash thus accumulated will be used to repay
debt, to fund growth in relation to ESG focused projects and to maintain a strong and resilient balance sheet to
withstand turbulent times. Therefore, the Board decided not to declare a dividend for FY22. The Board will revisit the
Group’s dividend policy in due course.
Foreign exchange gain/loss on translation
The British Pound to Indian Rupee exchange rate appreciated to a closing rate of £1= `99.37 on 31 March 2022 from a
rate of £1= `100.81 on 31 March 2021 thereby resulting in a gain of £2.3 million. The same has been recognized under
“Exchange differences on translating foreign operations”.
Property, plant and equipment
The increase in net book value of our property, plant and equipment to £173.4 million principally relates to additions
during the year offset by depreciation and foreign exchange impact during the year.
Other non-current assets
Other non-current assets (excluding property, plant and equipment & intangible assets) have increased by £4.3 million.
The major components of this increase was in the non-current portion of restricted cash (up £2.2 million) represented by
investments in mutual funds and fixed deposits maturing after twelve months of £10.4 million (2021: £8.2 million)
allocated to debenture redemption fund and OPG’s strategic investment in Atsuya Technologies Private Limited
totalling to £2.1 million (`210.0 million). The debenture redemption fund was created to repay the non-convertible
debentures of £20.1 million (`2.0 billion) which are repayable in FY24.
Current assets
Current assets have decreased by £4.4 million from £74.5 million to £70.1 million year on year primarily as a result of the
following:
•
•
•
•
•
decrease in Assets held for sale by £2.9 million due to diminution in the value of investments in the solar
companies.
decrease in trade receivables by £6.2 million as a result of strong collections from the Group’s captive power users
and customers, including old receivable balances.
decrease in inventories by £1.7 million on account of consumption and sale of coal.
increase in other short-term assets by £8.4 million primarily due to increase in investments in mutual funds to £18.2
million (2021: £13.3 million) and advances to vendors of £6.2 million (2021: £2.4 million).
decrease in cash balances (including restricted cash) by £2.1 million.
Liabilities
Current liabilities have marginally increased by £0.2 million from £38.2 million to £38.4 million year on year. Bank
borrowings increased by £8.9 million from £4.5 million to £13.4 million. Trade payables decreased by £8.1 million from
£32.5 to £24.4 million.
Non-current liabilities have decreased by £8.1 million primarily due to decrease in the non-current portion of borrowings
by £12.5 million from £22.3 million to £9.8 million. Deferred Tax liabilities have increased from £13.0 million to £17.0
million.
9
Financial position, debt, gearing and ?nance costs
As at 31 March 2022, total borrowings were £43.3 million (31 March 2021: £46.6 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 3.9
per cent (31 March 2021: 9.1 per cent). The gearing ratio is a useful measure to identify the financial risk of a company.
OPG’s NCDs are repayable in June 2023 and have an interest coupon of 9.85 per cent. 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 FY22 net debt (total borrowings minus cash and current and non-current investments in mutual funds) reduced
from £16.3 million to £6.9 million and net debt to Adjusted EBITDA ratio reduced from 0.5x to 0.3x as a result of the
repayment of term loans and working capital loans as well as strong cash collections achieved during the year. This
demonstrates the robustness of OPG’s financial position. The Group remains amongst the least leveraged power
companies in India.
Based on the present term loans repayment schedule, the Group is expected to be term loan free by June 2024.
Finance costs have decreased by £1.4 million from £6.8 million in FY21 to £5.4 million in FY22. This was 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 increased from £0.9 million in FY21 to £2.3 million in FY22. This has resulted in a decrease of £2.8
million in Net Finance Costs from £5.9 million in FY21 to £3.1 million in FY22.
Current restricted cash representing deposits maturing between three to twelve months amounted to £2.4 million
(FY21: £3.2 million) which have been pledged as security for Letters of Credit.
Non-current restricted cash represents investments in mutual funds of £8.8 million (31 March 2021: £8.2 million) and
fixed deposits of £1.6 million (31 March 2021: £0.01 million). These non-current investments have a maturity period in
excess of twelve months and are allocated to the debenture redemption fund which is earmarked towards the
redemption of non-convertible debentures scheduled during FY24 of £20.1 million (`2.0 billion).
Cash ?ow
Cash flow from continuing operations before and after changes in working capital were £21.6 million (FY21: £36.8
million) and £16.3 million (FY21: £40.2 million) respectively. Net cash flow from operating activities decreased from
£40.2 million in FY21 to £16.3 million in FY22, a decrease of £23.8 million, primarily due to decrease in trade payables
and other liabilities.
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 received
5
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
FY22
£21.6
(£0.0)
(£5.2)
£16.3
(£3.5)
(£5.7)
(£9.2)
(£4.5)
-
£2.6
FY21
£36.8
(£0.7)
£4.1
£40.2
(£0.5)
(£29.0)
(£29.5)
(£5.8)
-
£4.9
Ajit Pratap Singh
Chief Financial Officer,
29 September 2022
5
Includes purchase of investments in mutual funds and other market securities of £10 million included in restricted cash and other short term assets
in the statement of financial position.
10
CEO Operational Review
The following is a review of the Group’s operations for
the year.
Plant availability and generation
OPG’s operational performance depends upon its’ sales
model, plant availability, plant load factors and auxiliary
power consumption. As an organization, in FY22,
despite a challenging environment, the Group honoured
all its commitments. The credit for this achievement
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 use wide range of
fuels, both domestic and international, and built with the
air-cooled condenser technology to minimize water
consumption. However, just like other thermal power
plants OPG was also impacted by the macro
environment that led to sharp increase in coal prices and
the Group’s restriction in increasing prices beyond the
state utility tariff to its core captive users other than
TANGEDCO.
The whole industry in India, deferred their coal
purchases in absence of clarity from the government.
This resulted in coal shortages which was further
aggravated by the early onset of summer. The
Government of India has responded positively with
increasing domestic coal production and allowing the
high costs of imported coal to be passed on. The timely
and positive intervention by the government has helped
avert a power crisis in India.
The plant’s 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.
Total generation at our plant in FY22, including ‘deemed’
offtake, was 1.87 bn units (FY21: 2.1 bn units) with the
reduction in generation primarily being due to the spike
in coal prices in the second half of FY22. The plant load
factor (‘PLF’) including ‘deemed’ offtake, in FY22 was 52
per cent (FY21: 58 per cent). In the latter half of FY 23,
the Group expects a higher load factor compared to
FY22 after the expected stabilization in coal prices.
11
Auxiliary consumption levels are also a key measure of
plant efficiency, and are usually in the range of 7.5 per
cent to 8.5 per cent for our units. The Group has
instituted several measures and technical
improvements to improve efficiency of the units.
Sales contracts
During FY22, the Group continued supplying directly to
captive power users 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 per cent of
the plant’s installed capacity. 74 MW of capacity has
remained available for supply on the LTVT to the
TANGEDCO, Tamil Nadu State Utility.
For FY23, offtake by TANGEDCO under the long term
contract is expected to be higher than FY22.
TANGEDCO also awarded a short term open access
contract of supply of 250 MW of electricity in the month
of April and May 2022.
TANGEDCO, following the directions of Ministry of
Power of the Government of India, allowed the pass
through of high coal costs for the Group’s thermal plants
os one time measure, by deviating the provisions of
PPA. The pass through is valid until December 2022.
The Group was also able to negotiate an increase in
tariff from its captive users during FY 22 under the
existing contracts, minimizing to a certain extent the
impact of higher coal prices.
In FY22, the plant realised an average tariff of ? 5.60
(FY21: ? 5.52) and a ‘deemed’ offtake charge of ? 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 ? 1.05/unit for FY22 (FY21:
? 2.16/unit), which was impacted on account of coal
prices.
Coal supply and prices
The Group has consistently been able to import low
sulphur coal from reputed Indonesian coal producers
and traders with whom OPG have developed long-
standing relationships. The Group has purchased coal
primarily on short and medium-term contracts in FY22
and as such the Group bene?tted as prices have been
on the upward trajectory. The Group has also increased
the offtake of Indian coal and was awarded a contract of
372,000 Tonnes in an auction by MSTC Ltd. The Group
has also entered into a long term Fuel Supply
Agreement with Mahanadi Coalfields Ltd. for
procurement of nearly 130,000 Tonnes per annum for a
period of five years.
The average coal price was ? 5,460 per tonne in FY22,
which is 32.3 per cent higher than last year’s average
price of ? 4,127 per tonne. Current coal price and freight
rates have increased significantly on account of
geopolitical factors. However, independent forecasts
predict international coal prices will stabilize in the last
quarter of FY23 once China and Europe stocks up
winter. Apart from diversifying the sources of coal, the
Group has also implemented utilising a different mix
(high and low GCV) of coal to minimise the impact of the
increasing coal price. The Group continues 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 Group made xcellent progress with its safety
programme, recording no fatalities and an industry
leading Total Recordable Incident Report (TRIR) in
FY22.
The Group 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 December 2026. The revised timeline for each
power plant will vary as per its location and the GoI’s
categorisation of their location. The Group is well placed
to comply with the new standards applicable for SOx,
NOx and SPM. The Group is evaluating various
technologies with a view to being fully compliant to the
revised emission norms.
Investment in Atsuya Technologies
As part of the group’s strategy to diversify into energy
savings/ESG compliant opportunities, OPG acquired an
equity stake in Chennai-based sustainability solutions
provider, Atsuya Technologies Private Limited (Atsuya).
Atsuya provides a suite of innovative engineering
solutions to a wide variety of industries and helps its’
clients scale up organically while meeting
their
sustainability goals. Atsuya’s solutions, which cover
eight of the seventeen Sustainable Development Goals
(SDGs), leverage state-of-the-art technologies such as
artificial intelligence, deep tech and the internet of
things. Atsuya’s existing clients
include new-age
Unicorns as well as a Fortune 500 Indian energy
company.
Avantika Gupta
Chief Executive Officer
29 September 2022
12
13
Group objectives and strategies
The Group’s objective is to build shareholder value through pro?table growth by becoming the ?rst choice provider of
reliable and uninterrupted power to its' captive power users
In addition, the Group’s aim is to be a sector leader by
reference to the quality of its earnings, the pro?table
growth it delivers and its performance against its own
stringent safety and environment management
standards.
To meet these objectives, the Group’s strategy includes
maximising the performance of its existing power
generation assets; reducing its cost of capital and
delivering returns pursuing responsible growth; and
delivering accretive growth projects within its areas of
expertise.
Pro?tability
The Group’s strategy involves developing
and operating its power plants under the
captive model enabling it to set its own tariffs
with captive users and thereby providing the
Group with the ?exibility to optimise tariffs
and pro?tability.
The Group continuously seeks to improve its
operational performance and accordingly
implements strategies for the optimisation of
its power generation assets.
Dividends
In light of disruptions caused by the
extraordinary volatility in coal prices and
freight this year, the Board believes that it is in
the best interests of the Group and its
for the
stakeholders to conserve cash
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
FY22. The Board will revisit the Company’s
dividend policy once the coal prices stabilize.
Maximising
performance of
the power plant
Reducing cost of
capital and
delivering returns
Deleveraging
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
users.
The ?exible 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 users.
The Group’s use of the group captive model
means that it is well positioned to respond to
?uctuations 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, to deliver returns and to generate
equity for use in potential projects.
The Group continues to prioritise projects
that can be funded through a combination of
debt ?nancing 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 ?nancing
partners.
As of 31 March 2022, total borrowings were
£43.3m. The gearing ratio (net borrowings /
(equity plus net borrowings) was 4 per cent
(31 March 2021: 9 per cent). During FY22 net
debt (total borrowings minus cash and
in
current and non-current
mutual funds) reduced to £6.9 million from
£16.2 million and Net Debt to Adjusted
EBITDA ratio reduced to 0.3x from 0.5x 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
June 2024.
investments
14
Market Review
Global and Indian Economy
The two years of global pandemic and spill overs from the Russian Federation’s invasion of Ukraine, have led to a sharp
increase in global commodity prices and resultantly, is leading to muted economic activity. With varying duration,
magnitude and economic impact, the Global Economy witnessed re-emergence of Covid-19 in different parts of the
world. In many countries, inflation has become a central concern. The global growth is projected to decline from 6.1 per
cent in FY21 to 2.6 per cent in FY23 mainly attributable to the Russia-Ukraine conflict, continued Covid-19 flare-ups,
frequent and wider ranging of lockdowns in China including the key manufacturing hubs, diminished fiscal support and
lingering supply bottlenecks. Further escalation in conflict, may deteriorate global-supply demand imbalances, and a
further increase in commodity prices. Central Banks have started the interest rate hike and are expected to remain
aggressive throughout CY22 and the first half of CY23.
India, on the other hand will continue to shine and provide a ray of hope in this otherwise dismal scenario. Indiais
expected to remain one of the fastest growing major economies in the world. Despite witnessing contraction in
economy during the Covid-19 induced lockdowns, the size of the Indian economy is at US$ 3.1 trillion in FY22 against
US$2.69 trillion in FY21. Even though the Indian economy contracted by 7.3 per cent in FY21 due to pandemic related
disruptions, the economic rebound has been sharp and despite turbulences, the GDP crossed the pre-pandemic levels
in the second quarter of FY22.
According to the World Economic Report, the Indian Economy is expected to grow by 8.2 per cent in FY23 supported by
strong projected performance of major sectors including services, agriculture, manufacturing, mining, construction and
energy. The Reserve Bank of India, even while maintaining a conservative outlook, has projected a growth rate of 7.2
per cent due to the volatile geopolitical situation, surge in international energy and commodity prices, supply-side
disruptions, tightening of global financial conditions and weak external demand pose risks.
India and the World – Gross Domestic Product
In continuation of the vision to make India a US$5 trillion economy by FY25, various initiatives such as “Make in India”,
“Local to be Vocal”, digitization at every level of functioning, labour reforms, betterment of infrastructure and
augmenting logistic facilities, have been undertaken by the Government of India, so as to make Indiaa hub of global
manufacturing activities.
India is on the path to a sustained economic recovery led by the vigorous countrywide vaccination drive, which helped
to reduce the severity of the third wave with minimal disruptions to mobility and economic activity. The government’s
capital spending is increasing while the revenue expenditure is on a decreasing trend.
15
Overview of the Indian power sector:
Power being one of the most essential components of infrastructure, is crucial for the economic growth and welfare of a
nation like India. To sustain the rapid economic growth that India has seen over the last few decades, the power sector
will continue to play a pivotal role. India has the fourth largest electricity market in the world, after China, the US and the
European Union, with generation of 1,484 billion units (BU) (FY21: 1,382 BU). It is the world’s third largest energy
consuming country led by population growth, urbanization, industrialization, commercialization, growing air-
conditioning units and digitisation. Increase in electricity demand has further been led by improved standards of living
and gains in electrification access.
Generation breakup in billion units
India's per capita consumption however stands abysmally low 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.
The power demand in the country is expected to grow at 6.5 per cent between FY22 and FY24 according to the Central
Electricity Authority, Government of India (GOI), driven by rising industrial and commercial demand. Further, demand
revival will be facilitated by various reforms undertaken by the GOI.
India's power sector is one of the most diversified in the world with sources of power generation ranging from
conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources
such as wind, solar, and agricultural and domestic waste. As at 31 March 2022, India total installed capacity was 400
GW out of this 60% was through fossil fuels.
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 GOI. Further, power demand revival in the country will be
driven by various reforms undertaken by the Government of India, viz., Ujwal DISCOM Assurance Yojana (UDAY)
scheme, 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). Under the
UDAY scheme, DISCOMs need to modernize their networks and lower their distribution losses.
As at 31 March 2022 total installed Renewable Energy Source (RES) except large hydropower was 109.9 GW. New
capacity addition during the year was 15.5 GW. At the UN Climate Change Conference in Glasgow (COP26), India
committed to cut its emissions to net zero by 2070 and generate 50 per cent of its energy from renewable resources by
2030, and by the same year to reduce total projected carbon emissions by one billion tons.
Despite India's commitment at the COP26,coal will remain a significant fuel source in the country's quest to provide
power to every citizen. According to CEA, at the beginning of the FY22, 48 thermal power units aggregating to 32.3GW
were under construction in the country. Nearly 10.3 GW of thermal capacity was expected to be commissioned in FY22.
However, only 43.6 per cent of this scheduled capacity was commissioned in FY22.
16
Policy Initiatives that will positively impact OPG
•
•
•
The Central Electricity Regulatory Commission (CERC) in June 2022 has issued the Draft Central Electricity
Regulatory Commission (Indian Electricity Grid Code) Regulations, 2022 for stable, reliable and secure grid
operation and to achieve maximum economy and efficiency of the power system. A stable and reliable grid will help
OPG in exporting power to captive users in other states.
All States and Union Territories (UTs) have signed MoUs with the Central Government to ensure 24x7 power
supply to all households, industrial & commercial consumers and adequate supply of power to agricultural
consumers. This may translate into increased offtake by the state utility, TANGEDCO.
The Government of India approved commercial coal mining for the private sector and the methodology of
allocating coalmines via auction and allotment, thus introducing transparency in the process. OPG is actively
participating in these auctions and allotments.
17
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PRINCIPAL RISKS
The Group faces a number of risks to its business and strategy. The 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.
SECTOR
RELATEDRISK
Power sale
DESCRIPTION
MONITORING AND
MITIGATION
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 users,
power trading companies and state utilities. Contracts
with captive power users 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 users. This could
adversely affect the revenues in the short-to medium-term
and results of operations.
(cid:225)
Review contracts periodically to obtain best
possible tariffs.
(cid:225)Flexibility to supply to captive consumers or
in the open market.
(cid:225)Bench marking captive consumer prices to
state utility prices to bene?t from any price
increases.
(cid:225)Monitor ongoing customer performance,
maintaining a group of counterparties.
Availability of
fuel supply and
costs
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 ?uctuations and
increases in shipping costs and any changes in applicable
taxes and duties. This could impact the operations and
pro?tability of the Group.
(cid:225)
Seeking long-term supplies
(cid:225)Maintaining adequate storage facilities to
keep appropriate levels of surplus stocks
(cid:225)Maintaining relationships with suppliers and
mitigating any potential disruption
(cid:225)Developing different sources for fuel supply
especially in the imports market
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 in adequate
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 pro?tability.
(cid:225)
Assessing adequate availability of
transmission capacity and related
fees
during project evaluation stage
(cid:225)Construction and/or upgrade of transmission
facilities near the Group’s existing or future
powerplants
(cid:225)Maintaining a proactive relationship with
local Distribution Companies (‘Discoms’) and
monitor any changes
Geopolitical
Risks
Russia’s invasion of Ukraine has led to increased demand
for coal from Europe.
The Group is dependent upon imported coal which is
mostly procured from Indonesia. Global disruptions
caused by unforeseen events such as Russia’s invasion
of Ukraine can adversely impact the demand for coal.
(cid:225)
The Group continues to monitor changes and
developments in the global markets to
assess the impact on its procurement plans
33
SECTOR
RELATEDRISK
Exchange rate
?uctuations
Government policy
and regulations
DESCRIPTION
MONITORING AND
MITIGATION
(cid:225)
Putting in place, where appropriate, forward
contracts or hedging mechanisms
(cid:225)Monitoring our risk on a regular basis where
no hedging mechanism is in place and taking
steps to minimise potential losses
(cid:225)
Group monitors and reviews changes in the
r e g u l a t o r y e n v i r o n m e n t a n d i t s
commitments under
licences previously
granted
(cid:225)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
(cid:225)The Group maintains an open and proactive
relationship with the Indian government and
its various agencies.
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 and the
company has replaced rupee denominated term loans to
dollar denominated term loans.
The Group’s ?nancial results may be affected by
appreciation or depreciation of the value of the foreign
exchange rates relative to the Indian Rupee.
The Group’s operations are subject to complex national
and state laws and regulations with respect to numerous
matters, including the following:
(cid:225)environmental factors (emissions, waste disposal,
storage and handling);
(cid:225)health and safety; and planning and;
(cid:225)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 pro?tability, or result in it being subject to ?nes,
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 pro?tability of the Group will be in part dependent
upon the continuation of a favourable regulatory regime
with respect to its projects.
Ability to retain
?scal and tax
incentives
The Group’s existing and planned power plants bene?t
from various ?scal 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 pro?tability
of the Group.
(cid:225)
The Group continues to monitor changes
and developments in respect of incentives
provided by the Indian federal and state
authorities
(cid:225)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
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.
(cid:225)
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.
Global ?nancial
instability
The Indian market and Indian economy are in?uenced by
global economic and market conditions, particularly
emerging market countries in Asia.
(cid:225)
The Group continues to monitor changes
and developments in the global markets to
assess the impact on its ?nancing plans
Financial instability in recent years has in evitably affected
the Indian economy.
Continuing uncertainty and concerns about contagion in
the wake of the ?nancial crises could have a negative
impact on the availability of funding.
34
BOARD OF DIRECTORS
Mr. Arvind Gupta, Chairman
(until 4 April 2022)
Mr. N. Kumar, Non-Executive Chairman
(with effect from 4 April 2022)
Mr. Jeremy Warner Allen,
Non-Executive Deputy Chairman
Mr. Warner Allen has over 25 years’
experience in capital markets. He is
currently a Non-Executive Director of
TP Group Plc. Prior to that he was an
Executive Director, Board Member and
Head of the Growth Companies Team at
Cenkos Securities Plc., where he advised
a number of AIM companies over a period
of 11 years. Prior to joining Cenkos, he was
a founding member of Beeson Gregory
Limited and responsible for the UK sales
desk, a role he retained when Beeson
Gregory merged with Evolution Securities
in 2002.
Mr. Jeremy Warner Allen is the Chairman
of the Audit Committee and a member of
the Remuneration Committee. He became
Chairman of the Nomination Committee
with effect from 4 April 2022.
Mr. Arvind Gupta, a Commerce graduate
from the University of Madras, 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
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.
including
Mr. Arvind Gupta stepped down from the
Board of OPG Power Ventures Plc,
effective from 4 April 2022 and
Mr. N. Kumar became the Non-Executive
Chairman, effective from 4 April 2022. Mr.
Gupta was the Chairman of the
Nomination Committee till 4 April 2022.
Mr. Kumar is Vice-Chairman of The
Sanmar Group, a multinational group,
headquartered in Chennai, India, with
activities spanning chemical production,
engineering and shipping. He serves on
the boards of various public bodies and a
number of companies across various
s e c t o r s i n c l u d i n g e l e c t r o n i c s ,
telecommunications, engineering,
technology, management and finance. He
is a former President of the Confederation
of Indian Industry and is currently
Chairman of the Indo-Japan Chamber of
Commerce & Industry. He is the Honorary
Consul General of Greece in Chennai.
Mr.Kumar has a wide range of public
interests in the areas of health, social
welfare, sports and education, which
include his role as President of Bala
Mandir Kamaraj Trust and Managing
Trustee of The Indian Education Trust. He
is also a trustee of the World Wildlife Fund
for Nature, India and is a former member of
the Institute for Financial Management and
Research. Mr Kumar has a degree in
Electronics Engineering from Anna
University, Chennai and is a fellow
member of the Indian National Academy of
Engineering. He is also a life member of
t h e I n s t i t u t e o f E l e c t r o n i c s a n d
Telecommunications Engineers.
Mr. N. Kumar became the Non-Executive
Chairman of the Company with effect from
4 April 2022. He is the Chairman of the
Remuneration Committee and a member
of the Nomination Committee and Audit
Committee of the Board.
35
Dmitri Tsvetkov, Chief Financial Officer,
Executive Director (until 31 May 2022)
Mr Tsvetkov has over 23 years of financial,
accounting and operational experience
,including significant experience of
working with promoter/founder led energy
sector listed companies in London, Africa,
Asia and Canada. Mr Tsvetkov was Chief
Financial Officer of OPG Power
Generation Pvt Ltd, the Chennai
subsidiary of OPG from July 2017 to
October 2017.Prior to that he was Chief
Financial Officer of Advance International
Exploration, Inc., Interim Chief Executive
Officer and Chief Financial Officer of Mart
Resources, Inc., a TSX listed oil and gas
company, and Chief Financial Controller of
Heritage Oil Plc, a FTSE 250 oil and gas
company. Mr Tsvetkov was with Price
water house coopers in Calgary, Canada
and Moscow ,Russia from 1994 to
2006.He has a Chartered Accountant (CA)
designation from the Canadian Institute of
Chartered Accountants, an FCCA
designation from the Association of
Chartered and Certified Accountants in the
UK and Chartered Financial Analyst (CFA)
designation from the CFA Institute in the
US.
Mr. Dmitri Tsvetkov, Chief Financial Officer
stepped down and retired from the Board
of Directors of the Company and Mr. Ajit
Pratap Singh was appointed as
the
Executive Director and Chief Financial
Officer of the Company with effect from 31
May 2022.
Ms. Avantika Gupta,
Chief Operating Officer, Executive
Director (until 4 April 2022)
Chief Executive Officer, Executive
Director (with effect from 4 April 2022)
Ms.Gupta is a Barrister-at-law, England
and Wales from Grays Inn, London. She
completed her LLB, Bachelor of Laws from
University College London and Bar
Vocational Course from Inns of Court
School of Law.
Ms.Gupta is a visionary thought leader and
an energetic self-starter with a progressive
mindset. She joined the Company in 2010
and headed the Legal function, driving the
G r o u p ’ s l i t i g a t i o n s , c o m m e r c i a l
arbitrations and regulatory compliances.
During this period, she was also jointly
responsible
the development and
commissioning of the Group’s thermal and
solar power projects in India. After
transitioning to the role of Chief Operating
Officer of OPG in 2018, she was
instrumental in formulating the company’s
n e w s u s t a i n a b i l i t y s t r a t e g y a n d
implementing these measures across all
locations.
for
Ms. Gupta has vast experience in a
spectrum of disciplines relevant to the
Energy and Power sector. She is
committed to building OPG and its world-
class team, as a leader in the energy
transition space in
India. Continuous
stakeholder engagement and strategic
collaborations are her core philosophy.
She firmly believes that sustainable growth
will be achieved by leveraging new age
technology. She is a creative problem
solver by nature who envisages out-of-the-
box solutions to manage risks. She drives
the company’s endeavor at meeting and
exceeding the performance metrics of top
global companies in this sector by
prioritizing an objective capital allocation
process.
Currently, Ms. Gupta serves as the
Group’s Chief Executive Officer with effect
from April 2022. She is a member of the
ESG Committee since June 2021.
Mr. P. Michael Grasby,
Non-Executive Director
Mr.Grasby 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
t e c h n i c a l , g e n e r a l a n d f i n a n c i a l
management roles in the energy, process
and engineering sectors. He is a Chartered
Engineer, FIET and FIMechE.
Mr.Grasby became the Chairman of the
ESG Committee of the Company and a
member of the Remuneration Committee
with effect from 28 June 2021. He became
a member of the Nomination Committee
with effect from 29 April 2022.
36
Mr. Ajit Pratap Singh,
Chief Financial Officer, Executive
Director (with effect from 31 May 2022)
Mr. Ajit Pratap Singh is a management and
finance professional currently associated
with OPG Group as Executive Director of
Indian operating subsidiary since February
2019. He has over 24 years of experience
across mergers& acquisitions, structured
finance, corporate finance, corporate
commercial, corporate governance,
treasury management and investor
relations. Prior to joining OPG Power, Ajit
has worked with leading corporate houses
in India and internationally like JSW,
Vedanta, Jaypee, Lohia and Ghazanfar
Group in leadership roles. He has also
worked with USAID, ADB and IFC(World
Bank). Ajit is Fellow Member of the Institute
of Company Secretaries of India, Fellow
Member of the Institute of Cost
Accountants of India, Chartered Financial
Analyst (CFA),Certified Management
Accountant (USA), Member of Chartered
Institute of Public Finance& Accountancy
(UK), Member of the Chartered Institute of
Securities & Investments (UK).He is also
law graduate, Post Graduate Diploma in
Business Administration (Fin), Master of
Science (MS - Fin) and Certificate holder in
Strategic Management from Indian
Institute of Management (IIM). He is
associated with OPG Group since
February 2019.
Mr. Ajit Pratap Singh was appointed as the
Executive Director and Chief Financial
Officer of the Company with effect from
31 May 2022. He is a member of the ESG
Committee.
37
CORPORATE GOVERNANCE REPORT
FINANCIAL YEAR ENDED 31 MARCH 2022
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 a dividend with
respect to the years ended 31 March 2018, 2019 and 2020 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. In accordance with
AIM Rule 26, the Directors review the compliance with the Code on an annual basis. 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.
Board of Directors as at 31 March 2022
The Board of the Directors of the Company comprised of the following individuals as at 31.03.2022:
Executive Directors as at 31 March 2022
1. Mr. Arvind Gupta (Chairman);
2. Mr. Dmitri Tsvetkov (Chief Financial Officer); and
3. Ms. Avantika Gupta (Chief Operating Officer).
Non-executive Directors as at 31 March 2022
1. Mr. Jeremy Warner Allen (Deputy Chairman);
2. Mr. N. Kumar, Non-Executive Director and;
3. Mr. Michael Grasby (appointed on 19 February 2021).
Changes in the Board of Directors
Mr. Arvind Gupta resigned from the Board of the Company and was replaced by Mr. N. Kumar as Non-Executive
Chairman of the Company with effect from 4 April 2022. Ms. Avantika Gupta was appointed as the Chief Executive
Officer of the Company with effect from 4 April 2022.
Mr. Dmitri Tsvetkov, Chief Financial Officer stepped down and retired from the Board of Directors of the Company with
effect from 31 May 2022 and Mr. Ajit Pratap Singh was appointed as the Executive Director and Chief Financial Officer
of the Company with effect from 31 May 2022.
The Board of Directors of the Company placed on record its sincere appreciation for the valuable services rendered by
Mr. Arvind Gupta and Mr.Dmitri Tsvetkov during their respective tenures.
Therefore, as at the date of this Report, the Board of Directors of the Company comprises of the following Executive and
Non-Executive Directors :
38
EXECUTIVE DIRECTORS
1. Ms. Avantika Gupta (Chief Executive Officer, Director).
2. Mr. Ajit Pratap Singh (Chief Financial Officer, Executive Director).
NON-EXECUTIVE DIRECTORS
1.Mr. N. Kumar (Non-Executive Chairman).
2. Mr. Jeremy Warner Allen (Non-Executive Deputy Chairman).
3. Mr. P. Michael Grasby (Non-Executive Director).
Changes in constitution of the Committees
The ESG Committee was established on 28 June 2021 and Mr. Michael Grasby became the Chairman of the ESG
Committee with effect from 28 June 2021.Mr. Dmitri Tsvetkov and Ms.Avantika Gupta are the other members of the
Committee.
Mr.Ajit Pratap Singh became a member of the ESG Committee in place of Mr. Dmitri Tsvetkov with effect from 31 May
2022.
Mr. Michael Grasby became a member of the Remuneration Committee and Nomination Committee with effect from
28 June 2021 and 29 April 2022 respectively.
Mr. Jeremy Warner Allen became Chairman of the Nomination Committee with effect from 4 April 2022.
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. Jeremy Warner Allen, Mr, N. Kumar and Mr. P.Michael 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 33 to 35 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 six times during the year under review. All
the board meetings during the year were held by Video Conference.
During the FY 22, the Executive Committee (‘ExCo’) comprised 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. Consequent to the changes in the Board of Directors, effective from 4 April 2022 and 31 May 2022 as indicated
above, the Executive Committee as at the date of this Report comprises of Ms. Avantika Gupta, Chief Executive Officer,
Director and Mr. Ajit Pratap Singh, Chief Financial Officer, Executive Director and five members of senior management.
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.
Division of Responsibilities
Mr. N. Kumar, the Company’s Non-Executive Chairman is responsible for the matters relating to strategic decisions and
functioning of the Board. Ms.Avantika Gupta, Chief Executive Officer is responsible for the day-to-day running of the
operations of the Company and heads the Executive Committee. Mr. Jeremy Warner Allen is the 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.
Mr. 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.
39
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.Mr. Jeremy Warner
Allen, Non-Executive Director shall retire from office by rotation and is 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.
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
ESG*
Number Attended Number Attended Number Attended Number Attended Number Attended
Arvind Gupta**
Dmitri Tsvetkov**
Avantika Gupta
Jeremy Warner Allen
N Kumar
Michael Grasby
Number of meetings
held during the year
6
6
6
6
6
6
6
4
6
5
6
6
5
NA
NA
NA
2
2
NA
NA
NA
2
2
NA
NA
2
NA
NA
NA
1
1
1
1
NA
NA
NA
1
1
1
1
NA
NA
1
1
1
NA
NA
1
1
NA
NA
1
NA
NA
3
2
NA
NA
3
3
2
NA
NA
3
3
*ESG Committee was established on 28 June 2021.
**Mr. Arvind Gupta resigned from the Board of Directors of the Company and Mr. N. Kumar became the Non-Executive
Chairman with effect from 4 April 2022. Mr. Dmitri Tsvetkov resigned as CFO, Executive Director from the Board and Mr.
Ajit Pratap Singh was appointed as CFO, Executive Director with effect from 31 May 2022.
Notes:-
1. Mr. Michael Grasby became member of the Nomination Committee wef 29 April 2021 and Remuneration
Committee w.e.f. 28 June 2021. He was appointed as the Chairman of the ESG Committee w.e.f 28 June 2021.
2. Mr. Arvind Gupta was the Chairman of the Nomination Committee till 04 April 2022 and Mr. Jeremy Warner Allen
became the Chairman of the Nomination Committee wef 04 April 2022
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.
Board Committees
Audit Committee
The members of the Audit Committee are Mr. Jeremy Warner Allen and Mr. N Kumar. Mr. Jeremy Warner Allen,
Chairman of the Committee is considered to have continuing, relevant financial experience. The Chief Executive
Officer and Chief Financial Officer and also, as necessary, a representative of the auditors are normally invited to
attend meetings of the Committee.
40
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:
•
•
Committee at its meeting held on 24 September 2021 approved the FY21 Annual Report and Financial Statements
for the year ended 31 March 2021; and
Committee at its meeting held on 06.12.2021 approved the Financial Statements for the H1 FY22.
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’ FY21 final and FY22
planning reports to the Audit Committee. These issues were addressed as part of preparation of the FY22 financial
statements.
Remuneration Committee
The Remuneration Committee currently consists of Mr. N Kumar, Mr. Jeremy Warner Allen and Mr. Michael Grasby.
Mr. Michael Grasby became a member of the Remuneration Committee with effect from 28 June 2021.
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 43 to 45.
Nomination Committee
As on 31 March 2022, the members of the Nomination Committee were Arvind Gupta, Jeremy Warner Allen and N
Kumar. Mr.Arvind Gupta was the Chairman of the Committee till 4 April 2022. Mr. Jeremy Warner Allen became the
Chairman of the Committee with effect from 4 April 2022. Mr. Michael Grasby became a member of the Committee with
effect from 29 April 2022.
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. Ms.
Avantika Gupta’s presence in the Board is a testament to the gender diversity in the Board.
Environmental, Social, and Governance (“ESG”) Committee
The Company’s ESG Committee was created on 28 June 2021 and Mr. Michael Grasby was appointed as Chairman of
this committee with effect from 28 June 2021. The other members of the ESG committee are Ms. Avantika Gupta and
Mr.Dmitri Tsvetkov as on 31 March 2022.
Consequent to the changes in the Board of Directors, effective from 31 May 2022, the Company’s ESG Committee
comprises of Mr. Michael Grasby, Ms.Avantika Gupta and Mr.Ajit Pratap Singh as at date of this Report. The primary
duty of the ESG Committee is to establish objectives and the 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
31 and 32.
41
Assurance
BDO LLP was appointed as auditor for the Group for the financial years ended 31 March 2019, 31 March 2020 and
31 March 2021 following a tender process. The Audit Committee reviewed the effectiveness of the external auditor and
BDO LLP was reappointed for the financial year ended 31 March 2022. 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 41 and 42. 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 two-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. N. Kumar 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.
42
DIRECTORS’ REPORT
The Directors present their report, together with the audited financial statements of the Group, for the year ended 31
March 2022.
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 users 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 ‘Captive’ provisions mandated by the Government of India.
Results
The Group’s results for the year ended 31 March 2022 are set out in the Consolidated Statement of Comprehensive
Income. The Group’s profit for the year after tax was £8.9million (2021: £13.1million).
A review of the Group’s activities is set out in the Chairman’s statement.
Directors
The Board of Directors of the Company comprised of the following Directors as at 31 March 2022 :
Sl.No.
Name of the Directors
Profile
1.
2.
3.
4.,
5.
6.
Mr. Arvind Gupta
Chairman
Mr. Dmitri Tsvetkov
Chief Financial Officer, Executive Director
Ms. Avantika Gupta
Chief Operating Officer, Executive Director
Mr. Jeremy Warner Allen
Deputy Chairman, Non-Executive Director and Audit and Nomination
Committees Chairman
Mr. N. Kumar
Non-Executive Director, Chairman of Remuneration Committee
Mr. P. Michael Grasby
Non-Executive Director, Member of Remuneration Committee and
Chairman of ESG Committees
Consequent to the changes in the Board of Directors as mentioned on Page 36, Board of Directors of the Company
comprises of the following individuals as at the date of this Report:-
Sl.No.
Name of the Directors
Profile
1.
2.
3.
4.,
5.
Mr. N. Kumar
Non-Executive Chairman
Chairman of the Remuneration Committee and a member of the Nomination
Committee and Audit Committee
Ms. Avantika Gupta
Mr. Ajit Pratap Singh
Mr. Jeremy Warner Allen
Mr. P. Michael Grasby
Chief Executive Officer, Director
Member of ESG Committee
Chief Financial Officer, Executive Director
Member of ESG Committee
Non-Executive Deputy Chairman
Chairman of the Audit Committee and Nomination Committee and a
member of the Remuneration Committee.
Non-Executive Director
Chairman of the ESG Committee and a member of the Remuneration
Committee and Nomination Committee.
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.
43
Share capital
The issued share capital of the Company at 31 March 2022 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 world economy and the Indian economy have been facing tumultuous times. First, ravaged by the Covid-19 virus,
and later on by the war in Ukraine that has led to a sharp increase in commodity prices, including coal. The Group has
considered the possible effects that may result from the pandemic and the abnormal increase in coal prices 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 the
Covid-19 pandemic and the war in Ukraine and going concern is not an issue.
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 2022:
Gita Investments Limited and related parties and Directors
M&G Investment Management Limited
British Steel Pension Scheme
Registered agent
Percentage of voting rights Number of
and issued share capital
ordinary shares
52.1%
11.9%
3.3%
208,694,770
47,699,617
13,177,222
The registered agent of the Company at 31 March 2022 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 2022 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 2022
44
DIRECTORS’ REMUNERATION REPORT 2022
Introduction
This report sets out information about the remuneration of the Directors of the Company for the year ended 31 March
2022. As a company admitted to trading on 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 Remuneration Committee as at 31 March 2022 comprises of Mr. N Kumar, Mr. Jeremy Warner Allen and Mr.
Michael Grasby, who are independent Non-Executive Directors. Mr. N.Kumar is the Chairman of the Remuneration
Committee. Mr. Michael Grasby became a member of the Remuneration Committee with effect from 28 June 2021.
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 38.
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.
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
45
(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 per cent 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 per cent at the Chennai thermal plant and repayment of all scheduled term loans;
40 per cent 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 per cent at the Chennai thermal plant and repayment of all scheduled term loans;
40 per cent 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 per cent 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.
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.
No changes/revisions were made to LTIP during the FY22 and no shares were issued during FY 22.
In April 2020, and upon meeting relevant performance targets, 80 per cent 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. The share price performance and other performance targets for the second and
third tranches of LTIP shares were not achieved primarily due to the COVID-19 impact and therefore 10,192,593 LTIP
shares outstanding under these tranches to three executive directors didn’t vest and expired.
Annual bonus
The Remuneration Committee considered bonuses for Executive Directors who were entitled performance bonuses
with respect to FY22. In light of current market conditions, it was decided that no bonuses would be awarded to
Executive Directors in FY22. No bonuses were awarded to Executive Directors in FY21 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.
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 parties
1
Jeremy Warner Allen
Dmitri Tsvetkov*
N Kumar
Michael Grasby
Total
31 March 2022
31 March 2021
206,432,166
206,432,166
1,124,680
1,126,691
-
11,233
1,124,680
1,126,691
-
11,233
208,694,770
208,694,770
1Beneficial interest in these shareholdings vests with Gupta’s family.
*Mr. Dmitri Tsvetkov, Chief Financial Officer stepped down and retired from the Board of Directors of the Company with
effect from 31 May 2022.
46
There were no changes to Directors’ interests between 31 March 2022 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 2022 other than their service
contracts.
Directors’ remuneration for the period 1April 2021 to 31 March 2022.
Salary, annual bonus and benefits
Chairman
Arvind Gupta*
Executive Directors
Dmitri Tsvetkov
Avantika Gupta
Non-executive Directors
Jeremy Warner Allen
N Kumar
Michael Grasby (from 19 February 2021)
Total
Salary/fees
£
–*
150,000
59,043
25,000
22,500
22,500
2,79,043
Annual bonus Total FY22** Total FY21
£
£
£
–
–
–
–
–
–
–
–
-
150,000
150,000
59,043
60,000
25,000
22,500
22,500
25,000
22,500
2,562
2,79,043
260,062
No consideration was paid or received by third parties for making available the services of any Executive or Non-
Executive Director.
*In FY21 and FY 22, as part of COVID-19 response, Arvind Gupta voluntarily agreed to take 100 per cent salary
reduction.
Under their service agreements, Mr. Arvind Gupta, Mr. Dmitri Tsvetkov and Ms. Avantika Gupta are entitled to medical,
insurance and other allowances. During the year 2021-22, Mr. Arvind Gupta and Ms. Avantika Gupta received medical,
insurance and other allowances aggregating to £56,941 and £7,085 respectively. During the year 2020-21, Mr. Arvind
Gupta and Ms. Avantika Gupta received £144,896 and £352 respectively.
Directors’ LTIP
Movements during the period
LTIP granted
LTIP as at
Expired/
1 April 2021 Granted Cancelled
LTIP
Outstanding
Latest
vesting
date
Exercised 31 March 2022
Arvind Gupta
24 April 2019
7,111,111
Dmitri Tsvetkov
24 April 2019
3,413,334
Avantika Gupta
24 April 2019
1,706,667
Nil
Nil
Nil
5,925,926
2,844,445
1,422,222
Nil
Nil
Nil
1,185,185
24 April 2020
568,889
24 April 2020
284,445
24 April 2020
At 31 March 2022, the closing mid-market price of the Company’s shares was 7.15 pence. During the year under
review, the Company’s closing mid-market share price ranged between a high of 20.25 pence and a low of 7.15 pence.
This report has been approved by the Board of Directors of the Company.
N. Kumar
Chairman, Remuneration Committee
29 September 2022
47
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 2022
48
49
50
51
52
53
54
55
Consolidated statement of financial position
As at 31 March 2022
(All amount in £, unless otherwise stated)
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Right-of-use assets
Investments
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
Other liabilities
Deferred tax liabilities (net)
Current liabilities
Borrowings
Trade and other payables
Other liabilities
Liabilities classified as held for sale
Total liabilities
Total equity and liabilities
Notes
As at
31 March 2022
As at
31 March 2021
14
15
15
16
19
18
17
16
19(b)
19(a)
7(a), 7(b)
20
20
22
22
23
13
22
23
7
11,810
173,369,128
36,548
2,113,307
12,140
10,427,847
185,970,780
10,465,820
8,607,935
26,182,923
1,250,086
2,392,104
7,691,392
13,497,027
70,087,287
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
256,058,067
255,501,904
58,909
131,451,482
(10,221,248)
47,904,448
169,193,591
872,663
170,066,254
9,759,610
20,126,738
630,358
36,228
17,029,927
47,582,861
13,399,429
24,440,324
569,199
-
38,408,952
85,991,813
58,909
131,451,482
(12,735,470)
41,910,280
160,685,201
881,869
161,567,070
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
93,934,834
256,058,067
255,501,904
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 2022 and were signed on its behalf by:
N Kumar
1
Non-Executive Chairman
Arvind Gupta
1
Chairman
Dmitri Tsvetkov
2
Chief Financial Officer
Ajit Pratap Singh
2
Chief Financial Officer
1 Effective 4 April 2022. Mr Arvind Gupta step down from the Board and Mr N. Kumar appointed as Non-executive Chairman
2 Effective 31 May 2022. Mr Dmitri Tsvetkov step down from the Board and Mr Ajit Pratap Singh appointed as Chief Financial Officer
56
Consolidated statement of Comprehensive Income
For the Year ended 31 March 2022
(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 amortization
Operating profit
Finance costs
Finance income
Profit before tax
Tax expense
Profit for the year from continued operations
(Loss)/Gain 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 (Loss)/Earnings per share (in pence)
Diluted (Loss)/Earnings per share (in pence)
Earnings per share
-Basic (in pence)
-Diluted (in pence)
Other comprehensive income / (loss)
Items that will be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations
Notes
8
9
10(a)
10(b)
28
11
12
13
7
25
25
25
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
Year ended
31 March 2022
80,067,032
(56,500,964)
23,566,068
-
8,054,865
(3,894,563)
(6,316,484)
-
(5,333,531)
16,076,355
(5,356,089)
2,285,364
13,005,630
(4,097,184)
8,908,446
(2,928,341)
5,980,105
5,994,168
(14,063)
5,980,105
2.23
2.23
(0.73)
(0.73)
1.50
1.50
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
999,398
14,112,325
14,091,807
20,518
14,112,325
3.27
3.25
0.25
0.25
3.52
3.50
2,319,444
(12,860,261)
4,857
2,324,301
8,304,406
8,313,612
(9,206)
8,304,406
(13,322)
(12,873,583)
1,238,741
1,231,546
7,196
1,238,741
57
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For the Year ended 31 March 2022
(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
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 investing activities of continuing operations
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings (net of costs)
Repayment of borrowings
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 in cash and cash equivalents from continuing operations
Net decrease in cash and cash equivalents from discontinued operations
Net decrease 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
59
Notes
Year ended
31 March 2022
Year ended
31 March 2021
10,077,289
22,560,024
7
9(d)
11
12
21
28
2,928,341
184,880
5,171,209
(2,285,364)
194,778
5,333,531
-
6,294,982
1,854,857
(3,283,261)
(9,121,460)
(969,676)
16,380,106
(48,554)
16,331,552
-
16,331,552
(3,534,707)
2,285,364
(1,213,769)
(6,760,520)
(9,223,632)
(9,223,632)
-
(3,909,695)
(4,528,565)
(8,438,260)
-
(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)
-
(8,438,260)
(11,770,299)
(1,330,340)
(1,151,633)
-
-
(1,330,340)
(1,151,633)
8,920,954
-
100,781
-
7,691,395
3,438,830
(28,560)
6,662,317
-
8,920,954
Consolidated statement of cash flows
For the Year ended 31 March 2022 (continued)
(All amount in £, unless otherwise stated)
Disclosure of Changes in financing liabilities :
Analysing of changes in Net debt
1 April 2021
Cash flows
Other Changes
31 March 2022
Working Capital loan
Secured loan due within one year
Borrowings grouped under Current liabilities
3,788,314
722,044
4,510,358
(2,152,472)
10,780,822
8,628,350
Secured loan due after one year
Borrowings grouped under Non-current liabilities
42,100,295
42,100,295
(12,538,045)
(12,538,045)
5,949
254,772
260,721
324,098
324,098
1,641,791
11,757,638
13,399,429
29,886,348
29,886,348
Analysing of changes in Net debt
1 April 2020
Cash flows
Other Changes
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)
Secured loan due after one year
Borrowings grouped under Non-current liabilities
33,081,456
33,081,456
12,190,599
12,190,599
(421,082)
(666,390)
(1,087,471)
(3,171,760)
(3,171,760)
3,788,314
722,044
4,510,358
42,100,295
42,100,295
60
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 equity shares are listed on the Alternative Investment Market (AIM) of the London Stock Exchange.
The Consolidated Financial statements for the year ended 31 March 2022 were approved and authorised for issue by the Board of Directors
on 29 September 2022.
4
Recent accounting pronouncements
a)
Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by
the Group
At the date of authorisation of these financial statements, certain new standards, and amendments to existing standards have been
published by the IASB that are not yet effective, and have not been adopted early by the Group. Information on those expected to be
relevant to the Group’s financial statements is provided below.
Management anticipates that all relevant pronouncements will be adopted in the Group’s accounting policies for the first period
beginning after the effective date of the pronouncement. New standards, interpretations and amendments not either adopted or
listed below are not expected to have a material impact on the Group’s financial statements.
b)
Changes in accounting Standards
The following standards and amendments to IFRSs became effective for the period beginning on 1 January 2021 and did not have a
material impact on the consolidated financial statements:
i
Amendments to IFRS 16, Covid 19 "related rent concessions"
"The amendments permit lessees, as a practical expedient, not to assess whether particular rent concessions occurring as a direct
consequence of the Covid-19 pandemic are lease modifications and instead, to account for those rent concessions as they were not
lease modifications. Initially, these amendments were to apply until June 30, 2021.”
ii
Amendments to IFRS 16, Covid 19 "related rent concessions beyond 30 June 2021”
"In light of the fact that the Covid-19 pandemic is continuing, the IASB extended the application period of the practical expenditure
with respect to accounting for Covid-19-related rent concessions through June 30, 2022”
iii
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4, and IFRS 16 "Interest rate benchmark reform (phase 2)”
"IFRS9. IAS 39, BRS 7, The amendments provide temporary relief to adopters regarding the financial reporting impact that will result
from replacing Interbank Offered Rates (IBOR) with alternative risk-free rates (RFRS). The amendments provide for the following
practical expedients:Treatment of contract modifications or changes in contractual cash flows due directly to the Reform-such as
fluctuations in a market interest rate-as changes in a floating rate, allow changes to the designation and documentation of a hedging
relationship required by IBOR reform without discontinuing hedge accounting. Temporary relief from having to meet the separately
identifiable requirement when an RFR instrument is designated as a hedge of a risk comes in connection with the IBOR Reform."
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 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 4, “Extension of the temporary exemption from IFRS 9”
"Deferral of initial application of IFRS 9 for insurers”
61
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
Amendments to IAS 16-proceeds before intended use
The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling
items produced while the Company is preparing the asset for its intended use. Instead, a company will recognize such sales proceeds
and related cost in profit or loss.
ii
Amendments to IAS 37-Onerous contracts-cost of Fulfilling a contract
"Clarification that all costs directly attributable to a contract must be considered when determining the cost of fulfilling the contract."
iii
Amendments to IFRS 3-Reference to the Conceptual Framework
Reference to the revised 2018 IFRS Conceptual Framework. Priority application of LAS 37 or IFRIC 21 by the acquirer to identify
acquired liabilities. No recognition of contingent assets acquired allowed.
iv
Annual Improvements Project-Annual Improvements to IFRSs 2018-2020 Cycle
Minor amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41.
v
IFRS 17 "Insurance contracts including Amendments to IFRS 17”
The new IFRS 17 standard governs the accounting for insurance contracts and supersedes IFRS 4.
vi
Amendment to IFRS 17-Initial Application of IFRS 17 and IFRS 9-Comparative Information
The amendment concerns the transitional provisions for the initial joint application of IFRS 17 and IFRS 9.
vii Amendments to IAS 1-Classification of Liabilities as Current or Non-current Amendments to IAS 1-Classification of Liabilities as
Current or Non-current-Deferral of Effective Date
Clarification that the classification of liabilities as current or non-current is based on the rights the entity has at the end of the
reporting period.
viii Amendments to IAS 1 and IFRS Practice Statement 2-Disclosure of Accounting Policies
"Clarification that an entity must disclose all material (formerly ""significant"") accounting policies. The main characteristic of these
items is that, together with other information included in the financial statements, they can influence the decisions of primary users
of the financial statements”
ix
Amendments to IAS 8-Definition of Accounting Estimates
Clarification with regard to the distinction between changes in accounting policies (retrospective application) and changes in
accounting estimates (prospective application).
x
Amendments to IAS 12-Deferred Tax related to Assets and Liabilities arising from a Single transaction.
Clarification that the initial recognition exemption of IAS 12 does not apply to leases and decommissioning obligations. Deferred tax is
recognized on the initial recognition of assets and liabilities arising from such transactions.
5
Summary of significant accounting policies
a) Basis of preparation
The consolidated financial statements of the Group have been prepared on a historical cost basis, except for financial assets and
liabilities at fair value through profit or loss and financial assets measured at FVPL.
The consolidated financial statements are presented in accordance with IAS 1 Presentation of Financial Statements and have been
presented in Great Britain Pounds (‘£’), the functional and presentation currency of the Company.
During the current year, the results of the operations of solar entities Avanti Solar Energy Private Limited, Mayfair Renewable Energy
Private Limited, Avanti Renewable Energy Private Limited and Brics Renewable Energy Private Limited continued to be classified as
Assets held for sale as the process of disposition of the solar entities could not be implemented during FY22 due to pandemic Covid-19
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. The Group continues owning a 31% equity interest in the solar entities.
Going Concern
"As at 31 March 2022 the Group had £7.7m in cash and net current assets of £31.7m. 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 2022. The
62
Group will continue to closely monitor any variation due to the changes in situation and these changes will be taken into
consideration, if necessary, as and when they crystalise. The directors and management have prepared a cash flow forecast to
September 2023, 12 months from the date this report has been approved. Based on the RST analysis, we can conclude that the Group
is in strong position to go through the current situation caused by Covid-19 pandemic and going concern is not an issue.The Group
experiences sensitivity in its cash flow forecasts due to the exposure to potential increase in USD denominated coal prices and a
decrease in the value of the Indian Rupee. The Directors and management are confident that the Group will be trading in line with its
forecast and that any exposure to a fluctuation in coal prices or the exchange rate INR/USD has been taken into consideration and
therefore prepared the financial statements on a going concern basis.”
"The consequences of the Covid-19 pandemic continued to impact the Group businesses. However, the economic consequences of
the Covid-19 pandemic, which had a marginally negative effect on the Group activities in the FY21, have to a large extent dissipated in
FY22, although the economic impediments that still persist vary from region to region and from segment to segment.The Group
received no materially significant public support measures such as tax relief or compensatory mechanisms except for certain debt
drawn as part of COVID-19 related credit measures extended by the Reserve Bank of India. In addition, there were no material effects
on the employment situation in the Group. Overall, the Covid-19 pandemic did not have very significant impact for the Group during
the year."
Sharp rise in global coal price during second half of the year deterred import of coal, putting further pressure on demand for domestic
(Indian) coal. The war between Russia and Ukraine from February 2022 has further aggravated the situation, with a sharp upward
movement in global coal prices. As power demand in India continues to be met mainly through thermal generation, a surge in power
demand during second half of the year put pressure on fuel supply. The unanticipated rise in demand for electricity with pickup in
economic activities was not met by proportional growth in coal supplies (also in part due to sharp jump in global coal price), resulting
in severe coal shortages. If global coal prices do not correct to normal levels there can be a material adverse effect on the group’s
results of operations and financial condition. The Group has taken certain commercial and technical measures to reduce the impact of
this adverse development including blending comparatively cheaper coal, modifications to boilers to facilitate different quality coal
firing and also renegotiation of the tariff and commercial terms of the power sale arrangement with the power consumers.
b) Basis of consolidation
The consolidated financial statements include the assets, liabilities and results of the operation of the Company and all of its
subsidiaries as of 31 March 2022. 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 statement of changes in equity.
c)
Investments in associates and joint ventures
Investments in associates and joint ventures are accounted for using the equity method. The carrying amount of the investment in
associates and joint ventures is increased or decreased to recognise the Group’s share of the profit or loss and other comprehensive
income of the associate and joint venture, adjusted where necessary to ensure consistency with the accounting policies of the Group.
Unrealised gains and losses on transactions between the Group and its associates and joint ventures are eliminated to the extent of
the Group’s interest in those entities. Where unrealised losses are eliminated, the underlying asset is also tested for impairment.
d)
List of subsidiaries, joint ventures, and associates
Details of the Group’s subsidiaries and joint ventures, which are consolidated into the Group’s consolidated financial statements, are
as follows:
63
i)
Subsidiaries
Subsidiaries
% Voting Right % Economic interest
Immediate
parent
Country of
incorporation
March 2022 March 2021 March 2022
March 2021
Caromia Holdings limited (‘CHL’)
OPGPV
Cyprus
100.00
100.00
100.00
100.00
Gita Power and Infrastructure
Private Limited, (‘GPIPL’)
OPG Power Generation
Private Limited (‘OPGPG’)
CHL
GPIPL
Samriddhi Surya Vidyut Private Limited
OPGPG
India
India
India
100.00
100.00
100.00
100.00
75.38
75.38
71.25
71.25
99.92
100.00
100.00
99.90
100.00
100.00
Powergen Resources Pte Ltd
OPGPV
Singapore
100.00
100.00
ii)
Joint ventures - Assets Held for sale
Joint ventures
% Voting Right % Economic interest
Venture
Country of March 2022 March 2021 March 2022
March 2021
incorporation
Padma Shipping Limited ("PSL")
OPGPV /
OPGPG
Hong Kong
50
50
50
50
iii) Associates- Assets Held for sale
Associates
Avanti Solar Energy Private Limited
Mayfair Renewable Energy (I) Private Limited
Avanti Renewable Energy Private Limited
Brics Renewable Energy Private Limited
e)
Foreign currency translation
% Voting Right % Economic interest
Country of March 2022 March 2021 March 2022
March 2021
incorporation
India
India
India
India
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
31
The functional currency of the Company is the Great Britain Pound Sterling (£). The Cyprus entity is an extension of the parent and
pass through investment entity. Accordingly the functional currency of the subsidiary in Cyprus is the Great Britain Pound Sterling. The
functional currency of the Company’s subsidiaries operating in India, determined based on evaluation of the individual and collective
economic factors is Indian Rupees (‘? ’ or 'INR'). The presentation currency of the Group is the Great Britain Pound (£) as submitted to
the AIM counter of the London Stock Exchange where the shares of the Company are listed.
At the reporting date the assets and liabilities of the Group are translated into the presentation currency at the rate of exchange
prevailing at the reporting date and the income and expense for each statement of profit or loss are translated at the average
exchange rate (unless this average rate is not a reasonable approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expense are translated at the rate on the date of the transactions). Exchange differences
are charged/ credited to other comprehensive income and recognized in the currency translation reserve in equity.
Transactions in foreign currencies are translated at the foreign exchange rate prevailing at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the Statement of financial position date are translated into functional
currency at the foreign exchange rate ruling at that date. Aggregate gains and losses resulting from foreign currencies are included in
finance income or costs within the profit or loss.
` exchange rates used to translate the Indian Rupee financial information into the presentation currency of Great Britain Pound (£) are
the closing rate as at 31 March 2022: 99.37 (2021: 100.81) and the average rate for the year ended 31 March 2022: 101.62
(2021: 96.72).
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.
64
Revenue
Revenue from providing electricity to captive power users and sales to other customers is recognised on the basis of billing cycle
under the contractual arrangement with the captive power users & customers respectively and reflects the value of units of power
supplied and the applicable tariff after deductions or discounts. Revenue is earned at a point in time of joint meter reading by both
buyer and seller for each billing month.
Interest and dividend
Revenue from interest is recognised as interest accrued (using the effective interest rate method). Revenue from dividends is
recognised when the right to receive the payment is established.
g) Operating expenses
Operating expenses are recognised in the statement of profit or loss upon utilisation of the service or as incurred.
h)
Taxes
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other comprehensive
income or directly in equity.
Current income tax assets and/or liabilities comprise those obligations to, or claims from, taxation authorities relating to the current
or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or
loss in the financial statements.
Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the
reporting period.
Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of assets
and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial
recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred
tax on temporary differences associated with investments in subsidiaries is not provided if reversal of these temporary differences
can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period
of realisation, provided they are enacted or substantively enacted by the end of the reporting period. Deferred tax liabilities are
always provided for in full.
Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against future taxable income.
Deferred tax assets and liabilities are offset only when the Group has a right and the intention to set off current tax assets and liabilities
from the same taxation authority. Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense
in profit or loss, except where they relate to items that are recognised in other comprehensive income or directly in equity, in which
case the related deferred tax is also recognised in other comprehensive income or equity, respectively.
i)
Financial assets
IFRS 9 Financial Instruments contains regulations on measurement categories for financial assets and financial liabilities. It also
contains regulations on impairments, which are based on expected losses.
"Financial assets are classified as financial assets measured at amortized cost, financial assets measured at fair value through other
comprehensive income (FVOCI) and financial assets measured at fair value through profit and loss (FVPL) based on the business
model and the characteristics of the cash flows. If a financial asset is held for the purpose of collecting contractual cash flows and the
cash flows of the financial asset represent exclusively interest and principal payments, then the financial asset is measured at
amortized cost. A financial asset is measured at fair value through other comprehensive income (FVOCI) if it is used both to collect
contractual cash flows and for sales purposes and the cash flows of the financial asset consist exclusively of interest and principal
payments. Unrealized gains and losses from financial assets measured at fair value through other comprehensive income (FVOCI), net
of related deferred taxes, are reported as a component of equity (other comprehensive income) until realized. Realized gains and
losses are determined by analyzing each transaction individually. Debt instruments that do not exclusively serve to collect contractual
cash flows or to both generate contractual cash flows and sales revenue, or whose cash flows do not exclusively consist of interest and
principal payments are measured at fair value through profit and loss (FVPL). For equity instruments that are held for trading purposes
the Group has uniformly exercised the option of recognizing changes in fair value through profit or loss (FVPL). Refer to note
29""Summary of financial assets and liabilities by category and their fair values"".”
Impairments of financial assets are both recognized for losses already incurred and for expected future credit defaults. The amount of
the impairment loss calculated in the determination of expected credit losses is recognized on the income statement. Impairment
provisions for current and non-current trade receivables are recognised based on the simplified approach within IFRS 9 using a
provision matrix in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of
the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to
determine the lifetime expected credit loss for the trade receivables. On confirmation that the trade receivable will not be collectable,
the gross carrying value of the asset is written off against the associated provision.
j)
Financial liabilities
The Group's financial liabilities include borrowings and trade and other payables. Financial liabilities are measured subsequently at
amortised cost using the effective interest method. All interest-related charges and, if applicable, changes in an instrument's fair value
that are reported in profit or loss are included within 'finance costs' or 'finance income'.
65
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.
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
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.
m) 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 and
• 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)”
66
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.
n) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, that necessarily take a
substantial period of time to get ready for their intended use or sale, are added to the cost of those assets. Interest income earned on
the temporary investment of specific borrowing pending its expenditure on qualifying assets is deducted from the costs of these
assets.
Gains and losses on extinguishment of liability, including those arising from substantial modification from terms of loans are not
treated as borrowing costs and are charged to profit or loss.
All other borrowing costs including transaction costs are recognized in the statement of profit or loss in the period in which they are
incurred, the amount being determined using the effective interest rate method.
o)
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.
p) 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.
q)
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.
r)
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.
67
s)
Earnings per share
The earnings considered in ascertaining the Group’s earnings per share (EPS) comprise the net profit for the year attributable to
ordinary equity holders of the parent. The number of shares used for computing the basic EPS is the weighted average number of
shares outstanding during the year. For the purpose of calculating diluted earnings per share the net profit or loss for the period
attributable to equity share holders and the weighted average number of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity share.
t) 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.
u)
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.
v)
Employee benefits
Gratuity
In accordance with applicable Indian laws, the Group provides for gratuity, a defined benefit retirement plan (“the Gratuity Plan”)
covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of
employment.
Liabilities with regard to the gratuity plan are determined by actuarial valuation, performed by an independent actuary, at each
Statement of financial position date using the projected unit credit method.
The Group recognises the net obligation of a defined benefit plan in its statement of financial position as an asset or liability,
respectively in accordance with IAS 19, Employee benefits. The discount rate is based on the Government securities yield. Actuarial
gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to profit or loss in
the statement of comprehensive income in the period in which they arise.
w) 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
68
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.
x)
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 year 2021 the Group has deconsolidated solar
entities and are classified as associates (note 7(b)). Accordingly, during FY22 there is only 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.
a)
Judgements
The following are significant management judgments in applying the accounting policies of the Group that have the most significant
effect on the financial statements.
Non-current assets held for sale and discontinued operations
"The Group exercises judgement in whether assets are held for sale. After evaluation of all options, the Company decided that the
most efficient way to maximise shareholders’ value from solar operations is to dispose of the solar companies and it initiated the
process of disposition of the solar companies. Under IFRS 5, such a transaction meets the 'Asset held for sale' when the transaction is
considered sufficiently probable and other relevant criteria are met. Management consider that all the conditions under IFRS 5 for
classification of the solar business as held for sale have been met as at 31 March 2022 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 net of impairments has been presented as asset
held for sale following the process of sale of the second vessel as mentioned in note 7(a).
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 Limited 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.
69
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. The management considers impairment upon there being evidence that there might be an impairment, such as a lower market
capitalization of the group or a downturn in results.
iii) Useful life of depreciable assets: Management reviews its estimate of the useful lives of depreciable assets at each reporting date,
based on the expected utility of the assets.
7
(Loss)/Profit from discontinued operations
Non-current assets held for sale and (Loss)/Profit from discontinued operations consists of:
Assets Held for Sale
Liabilities classified
as held for sale
(Loss)/Profit from
discontinued operations
At 31 March 2022 At 31 March 2021 At 31 March 2022 At 31 March 2021
For FY 22
For FY 21
Interest in Solar entities Note 7(b)
13,497,027
16,425,368
i
ii
Share of (Loss)/Profit on fair
value of investments, in Solar
entities Note 7(b)
iii Gain on deconsolidation of
Solar entities
Total
-
-
-
-
13,497,027
16,425,368
-
-
-
-
-
-
-
-
-
-
(2,928,341)
117,710
-
881,688
(2,928,341)
999,398
(a)
Investment in joint venture Padma Shipping Limited - classified as held for sale
In 2014 the Company entered into a Joint Venture agreement with Noble Chartering Ltd (“Noble”), to secure competitive long term
rates for international freight for its imported coal requirements. Under the Arrangement, the company and Noble agreed to jointly
purchase and operate two 64,000 MT cargo vessels through a Joint venture company Padma Shipping Ltd, Hong Kong (‘Padma’).
The Group has invested approximately £3,484,178 in equity and £1,727,418 to date as advance. The Group impaired entire
investment in earlier years of £5,211,596 in joint venture on account of the impending dissolution of the JV.
(b) Assets held for sale and discontinued operations of solar entities
During the year, the results of the operations of solar entities Avanti Solar Energy Private Limited, Mayfair Renewable Energy Private
Limited, Avanti Renewable Energy Private Limited and Brics Renewable Energy Private Limited continued to be classified as Assets
held for sale as the process of disposition of the solar entities could not be implemented during FY22 due to pandemic Covid-19 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. The Group continues owning a 31% equity interest in the solar companies.
Based on the term sheet available the Group’s investment in the solar companies was valued at £13.5 million as compared to OPG’s
initial investment of £16.4 million. This loss of £2.9 million is recognized as loss from discontinued operations on account of the
diminution in the value of investment.
Non-current Assets held-for-sale and discontinued operations
(a) Assets of disposal group classified as held-for-sale
As at 31 March 2022
As at 31 March 2021
Property, plant and equipment
Trade and other receivables
Other short-term assets
Restricted cash
Cash and cash equivalents
-
-
-
-
-
-
-
-
-
-
Investment in associates classsified as held for sale
Total
(b) Analysis of the results of discontinued operations is as follows
13,497,027
13,497,027
For FY 22
16,425,368
16,425,368
For FY 21
Revenue
Operating profit before impairments
Finance income
Finance cost
Current Tax
Deferred tax
-
-
-
-
-
-
-
-
-
-
-
-
Share of (Loss)/Profit on fair value of investments, in Solar entities
Gain on deconsolidation of Solar entities
(Loss)/Profit from Solar operations
(2,928,341)
-
(2,928,341)
117,710
881,688
999,398
70
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 C534performance and allocates resources based on an analysis of
various performance indicators at operating segment level. During the year 2021 the Group has deconsolidated solar entities and are
classified as associates (note 7(b)). Accordingly, during FY22 there is only 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 £16,282,629 (2021: £28,720,575 ).
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, (Loss) on fair value of investments, in Solar entities
Continuing operations
Thermal
Discontinued operations
Solar
FY22
FY21
FY22
FY21
80,067,032
93,823,933
80,067,032
93,823,933
-
9,420,712
(5,333,531)
(5,705,538)
16,076,355
27,495,324
2,285,364
868,439
(5,356,089)
(6,803,137)
(4,097,184)
(8,447,699)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
881,688
(2,928,341)
117,710
Profit / (loss) for the year
8,908,446
13,112,927
(2,928,341)
999,398
Assets
Liabilities
242,561,040
239,076,536
13,497,027
16,425,368
85,991,813
93,934,834
-
-
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
31 March 2022
31 March 2021
53,886,250
54,095,390
2,614,714
2,797,675
56,500,964
56,893,065
b)
Employee benefit expenses forming part of general and administrative expenses are as follows:
Salaries and wages
Employee benefit costs *
Long Tern Incentive Plan (Note 21)
Total
31 March 2022
31 March 2021
2,247,996
2,139,303
217,715
194,778
228,112
535,247
2,660,589
2,902,662
* includes £22,925 (2021 £31,885) being expenses towards gratuity which is a defined benefit plan (Note 5(v))
Auditor’s remuneration for audit services amounting to £59,000 (2021: £60,000) is included in general and administrative expenses.
Foreign exchange movements (realised and unrealised) included in the Finance costs is as follows:
c)
d)
Foreign exchange realised - loss
Foreign exchange unrealised- loss
Total
31 March 2022
31 March 2021
214,048
184,880
398,928
213,524
46,931
260,455
71
10 Other operating income and expenses
a) Other operating income
Contractual claims payments
Total
31 March 2022
31 March 2021
-
-
9,420,712
9,420,712
Other operating income represents contractual claims payments from company's customers under the power purchase agreements
which were accumulated over several periods.
b) 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 2022
31 March 2021
7,338,941
77,586
169,183
469,155
8,054,865
616,708
16,271
147,166
1,141,401
1,921,546
31 March 2022
31 March 2021
4,277,158
5,848,895
398,928
680,003
260,455
693,787
5,356,089
6,803,137
Other finance costs include charges and cost related to LC's for import of coal and other charges levied by bank on transactions
12
Finance income
Finance income is comprised of:
Interest income on bank deposits and advances
Profit on disposal of financial instruments*
Total
31 March 2022
31 March 2021
891,467
1,393,897
2,285,364
401,194
467,245
868,439
*Financial instruments represent the mutual funds held during the year and profits include £465,297 unrealised gain on mark to market
rate as on reporting date.
13
Tax expenses
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 2022 and 2021 is as follows:
Accounting profit before taxes
Enacted tax rates
Tax expense on profit 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) / reversed
Actual tax for the period
Current tax
Deferred tax
Tax reported in the statement of comprehensive income
72
31 March 2022
31 March 2021
13,005,630
21,560,626
34.94%
4,544,687
-
(13,847)
34.94%
7,534,145
(161,808)
487,920
-
1,216,052
(916,046)
482,390
4,097,184
(216,590)
(412,019)
8,447,699
31 March 2022
31 March 2021
334,646
3,762,538
4,097,184
412,513
8,035,186
8,447,699
The Company is subject to Isle of Man corporate tax at the standard rate of zero percent. As such, the Company’s tax liability is zero.
Additionally, Isle of Man does not levy tax on capital gains. However, considering that the group’s operations are primarily based in India,
the effective tax rate of the Group has been computed based on the current tax rates prevailing in India. Further, a 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 2021: 17.47%).
The Group has carried forward credit in respect of MAT tax liability paid to the extent it is probable that future taxable profit will be
available against which such tax credit can be utilized.
Deferred income tax for the Group at 31 March 2022 and 2021 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
Movement in temporary differences during the year
31 March 2022
31 March 2021
-
-
11,985,655
12,374,534
11,985,655
12,374,534
29,015,582
25,368,905
29,015,582
25,368,905
17,029,927
12,994,371
Particulars
As at
01 April 2021
Deferred tax
liability
for the year
Classified as
Liability
held for sale
Translation
adjustment
As at
31 March 22
Property, plant and equipment
(25,368,905)
(3,280,148)
Unused tax losses brought forward
and carried forward
-
-
MAT credit entitlement
12,374,534
(482,390)
Deferred income tax liabilities net
(12,994,371)
(3,762,538)
-
-
-
-
Particulars
As at
01 April 2020
Deferred tax
asset
for the year
Property, plant and equipment
(18,902,358)
Unused tax losses brought forward and
carried forward
1,216,052
-
-
Classified as
Liability
held for sale
(6,466,547)
(1,216,052)
MAT credit entitlement
11,962,515
412,019
-
Deferred income tax (liabilities) / assets, net
(5,723,791)
412,019
(7,682,599)
(366,529)
(29,015,582)
-
-
93,511
11,985,655
(273,018)
(17,029,927)
Translation
adjustment
As at
31 March 21
-
-
-
-
(25,368,905)
-
12,374,534
(12,994,371)
In assessing the recoverability of deferred income tax assets, management considers whether it is more likely than not that some portion
or all of the deferred income tax assets will be realized. The ultimate realization of deferred income tax assets is dependent upon the
generation of future taxable income during the periods in which the temporary differences become deductible. The amount of the
deferred income tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during
the carry forward period are reduced.
Shareholders resident outside the Isle of Man will not suffer any income tax in the Isle of Man on any income distributions to them.
However, dividends are taxable in India in the hands of the recipient.
There is no unrecognised deferred tax assets and liabilities. As at 31 March 2022 and 2021, 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.
73
14
Intangible assets
Acquired software licences
Cost
At 31 March 2020
Additions
Exchange adjustments
At 31 March 2021
At 31 March 2021
Additions
Exchange adjustments
At 31 March 2022
Accumulated depreciation and impairment
At 31 March 2020
Charge for the year
Exchange adjustments
At 31 March 2021
At 31 March 2021
Charge for the year
Exchange adjustments
At 31 March 2022
Net book value
At 31 March 2022
At 31 March 2021
827,065
(63,470)
763,595
763,595
11,875
11,032
786,502
818,020
6,209
(63,028)
761,201
761,201
2,438
11,054
774,692
11,810
2,394
15
Property, plant and equipment
The property, plant and equipment comprises of:
Land &
Buildings
Power Other plant &
equipment
stations
Vehicles
Right-
of-use
Asset under
construction
Total
Cost
At 1st April 2020
8,765,490
216,622,367
1,886,252
2,356,081
Additions
271,158
318,038
24,375
134,659
Transfers on capitalisation
13,598
159,120
-
-
Sale / Disposals
-
-
- (1,561,762)
Exchange adjustments
(661,265)
(16,639,299)
(143,908)
(180,354)
8,388,982
200,460,226
1,766,719
748,624
8,388,982
200,460,226
1,766,719
748,624
At 31 March 2021
At 1st April 2021
Additions
-
-
-
-
-
-
-
280,776
229,910,967
36,206
784,436
(172,718)
-
-
(1,561,762)
(21,547)
(17,646,373)
122,717
211,487,267
122,717
211,487,267
13,919
267,007
25,229
23,745
43,843
3,265,722
3,639,464
Transfers on capitalisation
Sale / Disposals
-
-
1,584,477
38,134
-
-
-
(52,794)
Exchange adjustments
119,437
2,905,807
25,366
10,730
-
-
-
(1,622,611)
-
-
(52,794)
1,392
3,062,732
At 31 March 2022
8,522,337
205,217,516
1,855,448
730,306
43,843
1,767,219
218,136,670
74
Land &
Buildings
Power Other plant &
equipment
stations
Vehicles
Right-
of-use
Asset under
construction
Total
Accumulated depreciation
and impairment
At 1 April 2020
55,601
34,683,662
878,072
1,824,237
Charge for the year
12,081
5,230,238
262,333
194,677
Sale / Disposals
-
-
-
(1,263,537)
Exchange adjustments
(6,363)
(2,874,452)
(77,955)
(147,367)
At 31 March 2021
61,319
37,039,448
1,062,450
608,010
At 1 April 2021
61,319
37,039,448
1,062,450
608,010
-
-
-
-
-
-
Charge for the year
10,801
5,033,811
257,197
22,135
7,149
Sale / Disposals
-
-
-
(52,794)
Exchange adjustments
1,433
649,528
21,170
9,190
-
146
73,553
42,722,787
1,340,816
586,542
7,295
-
-
-
-
-
-
-
-
-
-
37,441,572
5,699,329
(1,263,537)
(3,106,137)
38,771,227
38,771,227
5,331,093
(52,794)
681,467
44,730,994
At 31 March 2022
Net book value
At 31 March 2022
At 31 March 2021
8,448,784
162,494,730
514,631
143,764
36,548
1,767,219
173,405,676
8,327,663
163,420,778
704,269
140,614
-
122,717
172,716,040
The net book value of land and buildings block comprises of:
Freehold land
Buildings
31 March 2022
31 March 2021
8,029,665
419,119
8,448,784
7,917,345
410,318
8,327,663
Property, plant and equipment with a carrying amount of £167,788,550 (2021: £169,111,804) is subject to security restrictions
(refer note 22).
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
Bank deposits
Other advances
Total
31 March 2022
31 March 2021
-
124,601
18,265,352
13,253,663
7,917,571
4,427,290
26,182,923
17,805,554
12,140
-
12,140
57,713
12,140
69,853
The financial instruments of £18,265,352 (FY2021: £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
Total
31 March 2022
31 March 2021
8,607,935
8,607,935
14,829,989
14,829,989
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.
75
18
Inventories
Coal and fuel
Stores and spares
Total
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 2022
31 March 2021
9,499,510
11,228,377
966,310
958,267
10,465,820
12,186,644
31 March 2022
31 March 2021
5,193,275
2,498,117
7,691,392
1,815,629
7,105,324
8,920,952
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 £2,392,104 (2021: £3,219,356)
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 £10,427,847 (2021: £8,194,412). Investments of
£8,300,665 (2021: £8,182,445) are allocated to debenture redemption fund earmarked towards redemption of non-convertible
debentures of £20,126,738 scheduled during FY 2024.
20
Issued share capital
Share Capital
The Company presently has only one class of ordinary shares. For all matters submitted to vote in the shareholders meeting, every holder
of ordinary shares, as reflected in the records of the Group on the date of the shareholders’ meeting, has one vote in respect of each share
held. All shares are equally eligible to receive dividends and the repayment of capital in the event of liquidation of the Group.
As at 31 March 2022, the Company has an authorised and issued share capital of 400,733,511 (2021: 400,733,511) equity shares at par
value of £ 0.000147 (2021: £ 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 PlanIn April 2019, the Board of Directors has approved the introduction of Long Term Incentive Plan (""LTIP""). The key
terms of the LTIP are:
The number of performance-related awards is 14 million ordinary shares (the "LTIP Shares") (representing approximately 3.6 per cent of
the Company's issued share capital). The grant date is 24 April 2019.
The LTIP Shares were awarded to certain members of the senior management team as Nominal Cost Shares and will vest in three tranches
subject to continued service with Group until vesting and meeting the following share price performance targets, plant load factor ("PLF")
and term loan repayments of the Chennai thermal plant.
- 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;
76
-
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.
Second and third tranches of LTIP grant didn't meet relevant performance targets and expired in April 2022.
For LTIP Shares awards, £194,778 (FY2021: 535,247) 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
24-Apr-19
24-Apr-21
24-Apr-19
24-Apr-22
Equity/ Cash
Equity/ Cash
Equity/ Cash
20%
40%
40%
2,800,000
5,600,000
5,600,000
0.0147
0.1075
68.00%
0.0147
0.1217
64.18%
0.0147
0.1045
55.97%
Interest rate (range %)
Final maturity
31 March 2022
31 March 2021
Borrowings at amortised cost
Non-Convertible Debentures at amortised cost
1
9.9-10.85
9.85
June 2024
June 2023
Total
1 Interest rate range for Project term loans and Working Capital
23,159,039
26,770,564
20,126,738
19,840,089
43,285,777
46,610,653
The term loans of £21.6m, working capital loans of £1.6m and non-convertible debentures of £20.1m are 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 2022, the Group has met all the relevant covenants.
The fair value of borrowings at 31 March 2022 was £43,285,777 (2021: £46,610,653). 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
31 March 2022
31 March 2021
13,399,429
4,510,358
29,886,348
42,100,295
43,285,777
46,610,653
77
23
Trade and other payables
Current
Trade payables
Creditors for capital goods
Total
Non-current
Other payables
Total
31 March 2022
31 March 2021
24,402,850
32,368,058
37,474
128,777
24,440,324
32,496,835
630,358
630,358
607,702
607,702
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.
24
Related party transactions
Key Management Personnel:
Name of the party
N Kumar
Arvind Gupta
Avantika Gupta
Dmitri Tsvetkov
Ajit Pratap Singh
Jeremy Warner Allen
Mike Grasby
Nature of relationship
Non-executive Chairman ( from 4 April 2022)
Chairman ( till 4 April 2022)
Chief Executive Officer ( from 4 April 2022)
Chief Financial Officer & Director ( till 31 May 2022)
Chief Financial Officer, Executive Director ( from 31 May 2022)
Deputy Chairman
Director (from February 2021)
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
Nature of relationship
The Company has joint control of the entity
Associates
Associates
Associates
Associates
Samriddhi Bubna
Relative of Key Management Personnel
Summary of transactions with related parties
Name of the party
Remuneration to Samriddhi Bubna
Sale of solar modules :
a) Avanti Solar Energy Private Limited
b) Mayfair Renewable Energy (I) Private Limited
31 March 2022
31 March 2021
24,601
25,847
188,741
75,664
198,299
79,496
78
Summary of balance with related parties
Name of the party
Padma Shipping Limited
Padma Shipping Limited
Padma Shipping Limited
Avanti Solar Energy Private Limited
Avanti Solar Energy Private Limited
Avanti Solar Energy Private Limited
Mayfair Renewable Energy Private Limited
Mayfair Renewable Energy Private Limited
Mayfair Renewable Energy Private Limited
Avanti Renewable Energy Private Limited
Avanti Renewable Energy Private Limited
Avanti Renewable Energy Private Limited
Brics Renewable Energy Private Limited
Nature of balance
31 March 2022
31 March 2021
Investment
Advances
3,448,882
1,727,418
3,448,882
1,727,418
Impairment provision
(5,176,300)
(5,176,300)
4,863,575
4,766,864
Investment
Trade payable
Advance
Investment
Trade payable
Advance
Investment
Trade payable
Advance
Investment
-
538,038
5,277,364
(52,035)
-
5,804,055
-
298,745
362,664
(67,391)
6,022
5,352,890
(51,294)
7,242
5,895,541
(147,583)
9,047
410,073
-
Impairment provisions - Investments in Solar (Associates)
Investment
(2,810,631)
Outstanding balances at the year-end are unsecured. Related party transaction are on 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 Assets held for sale (loans outstanding £21,760,989 (2021: £23,300,131)) and corporate guarantee to a director for his
personal guarantees with respect to the Group. The assessment of impairment 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 Nil (2021: £7,412,554)) which is classified as Asset Held for Sale. Group’s
loans of £23,044,653 (2021: £25,368,634) 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 2022 or 2021).
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
31 March 2022
31 March 2021
Weighted average number of shares used in basic earnings per share
402,924,030
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
402,924,030
26 Directors remuneration
Name of directors
Arvind Gupta
Avantika Gupta
Dmitri Tsvetkov
Jeremy Warner Allen
N Kumar
Mike Grasby (from February 2021)
Total
31 March 2022
31 March 2021
-
-
59,043
150,000
25,000
22,500
22,500
279,043
60,000
150,000
25,000
22,500
2,562
260,062
As part of 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 Chairman and voluntary reductions up to 50 per cent in
compensation for Executive and Non-Executive Directors for FY22 and 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.
79
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 2022
31 March 2021
15,337
23,005
-
38,342
-
-
-
-
Recognition of a right of use asset £36,548 (2021: NIL) and a lease liability £36,228 (2021: NIL).
Contingent liabilities
Disputed income tax demands £3,715,194 (2021: £816,358).
Future cash flows in respect of the above matters are determinable only on receipt of judgements / decisions pending at various forums /
authorities.
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 2022: £13,964,728 (2021: £20,167,583) and Bank Guarantee (BG) as at 31 March 2022: £4,039,969 (2021:
£2,575,878). LC are supporting accounts payables already recognised in 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 associate solar
entities of £21,760,986 (2021: £23,300,131). 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.
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 2022 and 31 March 2021
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 2022, 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 2022 and 31 March 2021, 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 2022 would decrease or
increase by £432,858 (2021: £466,107).
80
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
United States Dollar (USD)
As at 31 March 2022
As at 31 March 2021
Financial
assets
133,577
Financial
liabilities
Financial
assets
Financial
liabilities
16,067,891
60,158
27,733,983
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 2022
As at 31 March 2021
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)
75.66
1,223,320
73.37
2,012,662
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 £34,802,998
(2021: £33,269,104) and corporate guarantees issued to lenders of its associates solar entities of £21,760,986 (2021: £23,300,131).
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 sell
the electricity generated therefore the Group is committed to sell power to these 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 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 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 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 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.
81
31 March 2022
Within Credit
period
Days past due
More than
60 days
More than
30 days
More than
180 days
Total
Expected general loss allowance rate
0%
0%
0%
73.19%
54.68%
Gross carrying amount - Trade Receivables
-TANGEDCO
727,191
656,818
2,158,116
7,199,394
10,741,520
Gross carrying amount
- Trade Receivables -Others
General loss allowance
Total Loss allowance
31 March 2021
1,760,732
939,318
86,005
5,466,037
8,252,092
-
-
-
-
-
-
10,385,677
10,385,677
10,385,677
10,385,677
Within Credit
period
Days past due
More than
60 days
More than
30 days
More than
180 days
Total
Expected loss rate
0%
0%
0%
33.02%
58.76%
Gross carrying amount
- Trade Receivables -TANGEDCO
Gross carrying amount
- Trade Receivables -Others
General loss allowance
Specific loss allowance
Total Loss allowance
1,651,140
1,686,225
2,218,844
15,097,765
20,653,974
7,862,837
1,154,009
460,326
5,831,930
15,309,103
-
-
-
-
252,404
6,910,677
7,163,081
13,970,007
13,970,007
252,404
20,880,684
21,133,088
The closing loss allowances for trade receivables as at 31 March 2022 reconciles to the opening loss allowances as follows:
Opening loss allowance as at 1 April
(Reversal)/Increase in loss allowance
Total
31 March 2022
31 March 2021
21,133,088
(10,747,411)*
10,385,677
18,108,033
3,025,055
21,133,088
*Out of this amount, (3,228,971) was adjusted in revenue and the balance (7,518,440) was adjusted in individual accounts of the
receivables.
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 2022 and 31
March 2021.
As at 31 March 2022
Borrowings
Non-Convertible Debentures
Trade and other payables
Other liabilities
Other current liabilities
Total
Current Non-Current
Total
Within 12 months
1-5 years
Later than 5 years
13,399,429
9,759,610
-
20,126,738
24,440,324
630,358
-
36,228
569,199
-
38,408,952
30,552,934
82
-
-
-
-
-
-
23,159,039
20,126,738
25,070,682
36,228
569,199
68,961,886
As at 31 March 2021
Borrowings
Non-Convertible Debentures
Interest on Borrowings
Trade and other payables
Other current liabilities
Total
Capital management
Current Non-Current
Total
Within 12 Months
1-5 Years
Later than 5 years
4,510,358
22,260,206
-
19,840,089
6,803,137
7,816,034
32,495,799
607,702
1,226,309
-
-
-
-
-
-
26,770,564
19,840,089
14,619,171
33,103,501
1,226,309
45,035,603
50,524,031
-
95,559,634
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 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 2022.
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:
31 March 2022
31 March 2021
Total equity
Less: Cash and cash equivalent
Capital
Total equity
Add: Borrowings
Overall financing
Capital to overall financing ratio
170,066,254
161,567,070
(7,691,392)
(8,920,952)
162,374,862
152,646,118
170,066,254
161,567,070
43,285,777
46,610,653
213,352,031
208,177,723
0.76
0.73
29
Summary of financial assets and liabilities by category and their fair values
Financial assets measured at amortised cost
1
Cash and cash equivalents
1
Restricted cash
1
Current trade receivables
Other long-term assets
Other short-term assets
Carrying amount
Fair value
31 March 2022
31 March 2021
31 March 2022
31 March 2021
7,691,392
8,920,952
7,691,392
8,920,952
12,819,951
11,413,768
12,819,951
11,413,768
8,607,935
14,829,989
8,607,935
14,829,989
12,140
69,853
12,140
69,853
2,724,296
2,736,262
2,724,296
2,736,262
Financial instruments measured at fair value through profit or loss
Other short term assets - (Note 16 & 19)
Investments in Mutual funds
Financial liabilities measured at amortised cost
Term loans
2
2
Non-Convertible Debentures
1
Current trade and other payables
Provision for pledged deposits
2
Non-current trade and other payables
83
23,458,627
15,069,292
23,458,627
15,069,292
55,314,341
53,040,116
55,314,341
53,040,116
23,159,039
26,770,564
23,159,039
26,770,564
20,126,738
19,840,089
20,126,738
19,840,089
24,440,324
32,495,799
24,440,324
32,495,799
36,228
630,358
-
607,702
36,228
630,358
-
607,702
68,392,687
79,714,154
68,392,687
79,714,154
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. a 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.
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 BV 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).
Level 1
Level 2
Level 3
Total
Financial instruments measured at fair
value through profit or loss
2022
Quoted securities
Total
2021
Quoted securities
Total
23,458,627
23,458,627
15,069,292
15,069,292
-
-
-
-
-
-
-
-
23,458,627
23,458,627
15,069,292
15,069,292
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.
30 Ultimate controlling party
As disclosed in the Directors’ Report the ultimate controlling party is considered to be the Gupta family by virtue of their majority
shareholding in the Group.
84
Corporate Directory
Nominated Adviser and Broker
Cenkos Securities Plc
6-7-8 Tokenhouse Yard
London
EC2R 7AS
Financial PR
Tavistock Communications
18 St. Swithin's Lane
EC4N 8AD
Administrators and Company Secretary
FIM Capital 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
85
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.
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
AGM: Annual General Meeting
GRI: Global Reporting Initiative
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 users: 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
Group Captive: Group Captive power plant as
defined under Electricity Act 2003, India
Group or OPG: the Company and its subsidiaries
GSDP: Gross State Domestic Product
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
INR or `: Indian Rupee, the lawful currency of the
Republic of India
IPDS: Integrated Power Development Scheme
ISAs (UK): International Standards on Auditing (UK)
Company or OPG or OPGPV or parent: OPG Power
Ventures Plc
JV: Joint Venture
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
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
86
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 and 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
UT or UTs: Union Territory or Union Territories of India
WPI: Wholesale Price Index
87