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Powere d b
OPG Power Ventures Plc
FY2023 Annual Report & Accounts
Contents
01-33
34-50
51-98
Strategic Report
Corporate Governance
Financial Statements
02 Climate Reporting
04 Measuring our progress
06 Our Business Operations
07 Chairman’s Statement
09 CEO’s Operational Review
11 CFO’s Financial Review
16 Group’s Objectives
and Strategies
18 Market Review
22 ESG Report
34 Risk Management
37 Board of Directors
40 Corporate Governance
Report
51 Independent Auditor’s Report
58 Financial Statements
63 Notes to the Consolidated
FInancial Statements
45 Directors’ Report
47 Directors’ Remuneration
97 Corporate Directory
98 Definitions & Glossary
report
50 Statement of Directors’
Responsibilities
Who we are
At OPG Power Ventures Plc (OPG), we
operate and develop power generation
assets in India. Currently, we have 414
MW of thermal power in operation, and
an additional 62 MW of solar assets.
Since our listing on the AIM Market of the
London Stock Exchange in May 2008, we
have demonstrated impressive growth,
increasing our generating capacity from
20 MW to 476 MW. Throughout our
journey, we have delivered strong results.
We see India as an exciting and dynamic
market with significant opportunities in
the power sector. India’s low and rising
per capita consumption of electricity,
coupled with its overall economic
growth estimates, creates a favourable
environment for companies operating in
this space.
With a strong track record in engineering,
operations, and financial management,
we are well-positioned to play a key role in
this growing sector. We are committed to
leveraging our expertise and experience
to continue delivering sustainable growth
while contributing to the development of
India’s power sector.
Climate Reporting:
Driving responsible progress
OPG Power Ventures Plc (OPG),
which has its operating assets
in India, is on a path to meet
the country’s “Net Zero” target
by 2070, as declared in COP 26.
The Paris Climate Agreement
(COP21) calls for limiting this
century’s global temperature
rise to below 2°C above pre-
industrial levels and pursuing
efforts to limit the temperature
increase even further to 1.5°C.
To achieve the Net Zero target,
adopting sustainable practices
that limit the carbon footprint
across the entire value chain is
essential.
OPG’s plan of action, both
current and in the future, will
be to adopt best practices in the
climate action pathway and to
comply with the prevailing Indian
government’s regulations.
Measures taken to prevent emissions and impact on
climate change
1
2
In D e c e mb e r 2015, t h e
Government of India issued
a notification stating that all
thermal power plants installed
in the country must adhere to
emission norms for Particulate
Matter (PM), Sulphur Dioxide
(SO2), Oxides of Nitrogen
(NOx), and water usage.
In accordance with these new
emission norms, OPG made a
significant capital expenditure
(CAPEX) at its Chennai facility
to install abatement technology
in its boilers, ensuring that NOx
emissions are maintained below
the limit of 450 mg/Nm3.
3
4
According to current guidelines,
the Chennai facility is required
to meet SO2 emission limits
by December 2026. It is
worth noting that, historically,
the facility has consistently
achieved SO2 emission values
well below the prescribed limit
by using low-sulphur coal.
OP G’s Chennai f ac ilit y is
equipped with Air Cooled
C o n de n s e r s (ACC), whic h
operate without the need for
water. This results in a water
requirement of less than 10
percent compared to regulatory
norms. Additionally, the facility
employs rainwater harvesting
techniques on-site, promoting
groundwater recharge and
e n s ur in g t h e s u s t ai n a b l e
availability of groundwater.
Development of a
New Energy Portfolio
We intend to develop a new
energy portfolio in line with India’s
proposed energy mix. In the
second half of 2017, we invested in
62 MW of solar power in the state of
Karnataka, India. This investment
has resulted in a carbon emission
offset of 545,474 tons for the total
units of 520 million renewable
energy generated up to FY23.
power consumption by 4.51 million
units, further contributing to our
carbon offset by 4,798 tons.
In the upcoming year, 2024, we
are evaluating to install 2.5 MW of
solar power within the premises of
the Chennai Thermal Plant. This
installation is estimated to help
reduce emissions and our auxiliary
Additionally, we have initiated the
installation of solar lighting across
our facilities.
2
Annual Report 2022-23 Reduction of Carbon footprint by growing Bamboo
To align with the Climate Action
Plan for achieving Net Zero
emissions, OPG has identified
bamboo cultivation as a highly
e f f e c t i v e d e c a r b o n i s a t i o n
strategy.
Incorporating sustainable bamboo
biomass as a substitute fuel for
coal in its primary operations will
further diminish greenhouse gas
emissions, contributing to OPG’s
commitment to environmental
sustainability.
Bamboo grass is renowned as
amongst the fastest-growing
plant on Earth. Throughout its’
growth, it efficiently absorbs
substantial quantities of CO2 from
the atmosphere, storing it within
its culms, leaves, and roots. By
facilitating bamboo plantation
and ef fec tive management,
OPG accelerates the absorption
and storage of atmospheric CO2
emissions.
3
Strategic ReportCorporate GovernanceFinancial Statements Measuring
our progress
Revenue
FY 21
FY 22
FY 23
(£ m)
£93.8
£80.1
£58.7
Operating Profit
(£ m)
FY 21
FY 22
FY 23
£27.5
£16.1
£10.4
Adjusted EBITDA
(£ m)
FY 21
FY 22
FY 23
£33.7
£21.6
£16.1
4
Annual Report 2022-23 Basic EPS
(Pence)
Net Debt/ Adjusted EBITDA
(X)
FY 21
FY 22
FY 23
3.5
1.5
1.8
FY 21
FY 22
FY 23
Profit Before Tax
(£ m)
Net Debt
FY 21
FY 22
FY 23
£21.6
£13.0
£10.4
FY 21
FY 22
FY 23
0.48x
0.32x
1.00x
(£ m)
£16.2
£6.9
£16.1
5
Strategic ReportCorporate GovernanceFinancial Statements Our Business
operations
Thermal Plant, Chennai, TN
Solar Plants, Karnataka
6
Plants and Power
Generation
OPG Power
Generation Pvt. Ltd.
414MW
Thermal Tamil Nadu
Aavanti Renewable
Energy Pvt. Ltd.
(AREPL)
20MW
Solar Karnataka
Aavanti Solar
Energy Pvt.
Ltd. (ASEPL)
20MW
Solar Karnataka
Brics Renewable
Energy Pvt. Ltd.
(BREPL)
02MW
Solar Karnataka
Mayfair Renewable
Energy (I) Pvt. Ltd.
(MREPL)
20MW
Solar Karnataka
Annual Report 2022-23 Chairman’s
Statement
Despite ongoing uncertainties and
emerging challenges, such as the Russia-
Ukraine conflict and geopolitical tensions,
India is well-positioned to achieve robust
GDP growth rates.
Proof of Resilient Business
We are glad that in FY 23, OPG Power has achieved
robust financial results across its key segments.
This outcome serves as a testament to the agility
and resilience of our business model to adapt to
macroeconomic turbulence.
Just as the world was recovering from the after
effects of COVID–19, it was shocked by Russia’s
invasion of Ukraine, which left lasting economic and
political impacts, along with tragic humanitarian
casualties. Supply bottlenecks, surges in commodity
prices, disrupted trade relations, and elevated energy
costs have contributed to a severe energy shortage,
disrupting the otherwise recovering world economy
post-COVID. Inflation in many developed countries has
experienced a sudden and historic increase, surpassing
8 percent.
Numerous countries have found themselves in
precarious positions, reliant on others for crucial
resources. Consequently, there has been a global
reassessment of supply chain strategies. The “China
plus One” policy is gaining momentum as companies
and nations seek to diversify their reliance away
from China to alternative destinations. India, with its
emphasis on local indigenous manufacturing, finds
itself in a favourable position. Energy security and top-
tier infrastructure will be pivotal to the success of this
journey. The trifecta of manufacturing, infrastructure,
and energy, combined with a focus on digitalisation,
has the potential to drive India’s economic growth
further, unlock fresh business prospects, and generate
employment opportunities. It is anticipated that
India’s GDP will double to US$7.5 trillion by 2031,
with a significant increase in contribution from the
manufacturing sector.
Despite ongoing uncertainties and emerging challenges,
such as the Russia-Ukraine conflict and geopolitical
tensions, India is well-positioned to achieve robust
GDP growth rates. The Indian government’s focus on
initiatives like Aatma Nirbhar Bharat, Make in India,
and the Performance Linked Incentive (PLI) schemes
bode well for the industry’s future.
Delivering Performance
In the current fiscal year, we operated in a challenging
and uncertain macro-environment marked by prolonged
geopolitical conflicts, subsequent energy shortages,
and assertive monetary policies implemented by
Central Banks. Our team delivered strong performance
despite the challenges presented by volatile commodity
markets and supply chain realignments. The Group
reported revenue of £58.7 Million and an EBITDA of
£16.1 Million. The Board has deemed it prudent to
conserve cash in the best interests of the Group and
its stakeholders. The conserved cash will be allocated
towards debt repayment, the growth of ESG-focused
projects, and maintaining a robust and resilient Balance
Sheet to weather turbulent times.
Despite the challenges faced throughout the year,
OPG has consistently generated strong cash flow and
reduced its gross debt. The Group remains one of the
least leveraged power generating companies in India.
Building a Sustainable Future
With a GDP growth rate of 6.8 percent (Source: IMF
World Economic Outlook Projections, April 2023),
India also witnessed a surge in power demand of
approximately 10 percent during FY 23, reaching 132
Billion Units (Bus). This increased demand is driven
not only by the Government of India’s commitment
to “Power for all” but also by factors like population
growth, rapid urbanisation, industrialisation, the rising
demand for air conditioning, and sustained economic
expansion. In the fourth quarter of FY 22, energy prices
soared to ₹20 per unit due to a peak in demand caused
by an intense heatwave and coal shortages, prompting
the invocation of Section 11 of the Electricity Act, 2003,
urging thermal power plants to operate at full capacity.
Our investment in a strong culture of skill development,
learning, and empowerment has made our business
more agile. The relentless efforts of our teams, our
resilient business model, and strategic leadership
have collectively supported our performance. The
achievements in FY 23 serve as a remarkable example
of a company dedicated to sustainable growth on a
significant scale.
7
Strategic ReportCorporate GovernanceFinancial Statements Chairman’s
Statement (Contd.)
We are delighted to present our third standalone
ESG report for FY 23, summarising our objectives,
activities, and performance from an ESG perspective.
This report showcases instances of how we have
upheld our commitments and implemented our
management approach across various ESG areas,
including environmental stewardship, health and safety,
community engagement, and corporate governance.
Indian government’s “Power to All” initiative, the aim
is to ensure reliable and continuous access to sufficient
electricity while accelerating the transition to cleaner,
renewable energy sources, and reducing reliance on
fossil fuels. Future investments in the power sector
will benefit from robust demand fundamentals, policy
support, and increasing government emphasis on
infrastructural development.
The government has ambitious plans to establish
a renewable energy capacity of 500 GW by FY 30.
The Central Electricity Authority (CEA) forecasts
India’s power requirement to reach 817 GW by FY 30.
Additionally, by FY 30, CEA anticipates an increase in
the share of renewable energy generation while the
share of generation from thermal energy will decrease.
We anticipate substantial opportunities unfolding in
the coming years. Our focus remains on profitable
operations, value creation through growth projects,
scaling innovation and digitalisation, and advancing
towards ESG targets. We are committed to enhancing
our financial profile and maintaining disciplined
capital allocation. The Group’s medium and long-term
fundamentals remain steadfast, supported by robust
cash flows that enable OPG to continue its journey
of responsible growth and sustainable returns to
shareholders.
On this positive note, we extend our gratitude to all our
stakeholders for believing in our growth story. We seek
your continued support as we strive to create value for
all and contribute to India’s remarkable economic rise.
N. Kumar
Non-Executive Chairman
3 November 2023
In the current volatile environment with high coal prices,
company faced challenges and hence operated at low
plant load factor with focus on profitable generation.
Due to higher coal prices, OPG reduced its generation
volumes. The performance of the company is discussed
in detail in the CEO’s and the CFO’s review.
Indian Economy and Power Sector Update
To implement the Hon’ble Prime Minister’s vision to
propel India into a US$5 trillion economy by FY 25,
the Government of India is undertaking numerous
initiatives such as “Make In India,” “Vocal to Local,”
rapid and widespread strides in digitisation, reforms in
the labour market, improvements in logistics and ease
of doing business initiatives. These initiatives position
India as a viable alternative to move manufacturing
from China.
India holds the distinction of being the third-largest
power consumer globally, historically correlating
power demand growth with GDP growth. Peak power
demand in India reached a historic high of 240 GW on
September 1 2023, with expectations of further growth
in future.
In the face of limited expansion in thermal projects
in the last eight years and the substantial challenges
associated with expanding nuclear and renewable
energy storage projects, the outlook for thermal power
generation in India remains optimistic.
Outlook
The current decade (2020-2029) is set to witness a
profound transformation in India’s power sector,
spanning demand growth, energy sources, market
dynamics, innovation, and an expanded power supply
network to reach all corners of the nation. Under the
8
Annual Report 2022-23 CEO’s
Operational
Review
The Group’s objective is to enhance
shareholder value through profitable
growth by becoming the preferred
provider of reliable and uninterrupted
power to fuel India’s inclusive growth.
The challenging environment of FY23 demonstrated
the adaptability of OPG’s business model allowing us to
benefit from a blend of profitable short term contracts
and stable long term contracts. Our readiness for an
ever-evolving and dynamic business environment is
the result of the enterprising and bold decisions made
by our team.
In the past year, we have reinforced our commitment
to sustainable business stewardship and reaffirmed
our determination to prove that our purpose-driven,
impact-focused business can deliver sustainable
performance today and well into the future. The
Group continues to honour all its commitments to all
stakeholders.
A review of the Group’s operations is as follows:
Plant Availability and Generation
OPG’s operational performance depends on its sales
model, which includes a mix of power purchase
agreements with various state utilities and captive
power shareholders, plant availability, plant load
factors, and auxiliary power consumption.
Integration into the global economy has brought
challenges, such as the impact of the COVID lockdown
and the Russia-Ukraine conflict, resulting in a sharp
increase in coal prices. During FY 23, we strategically
focused on short term contracts, bilateral contracts,
and the Day Ahead Markets (DAM) on the Indian
Energy Exchange Limited (IEX), where profit margins
were substantially higher. These strategic measures
and timely actions ensured profitability and cash flow.
OPG’s plants are designed to use a wide range of fuels
from various sources and are equipped with world-
class air-cooled condenser technology to minimise
water consumption. This flexibility, though initially
capital-intensive, paid dividends during challenging
times, allowing us to use cheaper coal from various
sources, including Indian coal.
Total generation at our plant in FY 23, including
‘deemed’ offtake, was 1.53 billion units (FY 22: 1.87
billion units), with the reduction attributed to our focus
on profitable short-term contracts and contractual
obligations under the Long Term Supply Agreement.
The plant load factor (‘PLF’), including ‘deemed’ offtake,
in FY 23 was 42.1 percent (FY 22: 51.5 percent).
Auxiliary consumption levels are a key measure of
plant efficiency, typically ranging from 7.5 percent
to 8.5 percent for our units. OPG has implemented
several measures and technical improvements to
enhance plant efficiency by optimising auxiliary power
consumption.
9
Strategic ReportCorporate GovernanceFinancial Statements CEO’s Operational
Review (Contd.)
T h e G r o u p h a s m a d e
excellent progress with its
safety program, recording
zero fatalities and Total
Recordable Incident Reports
(TRIR) in FY 23.
Power Offtake
In F Y 23, considering the steep increase in
international coal prices, the Group focused on
profitable operations, supplying power under short-
term bilateral contracts and IEX. This strategic move
accelerated cash collections and improved earnings,
despite high coal prices. In FY 23, owing to various
measures taken by OPG, the plant realised an average
tariff of 8.6p (FY 22: 5.5p).
Additionally, the tariff under the LTSA was revised
upward due to abnormal increases in coal prices
following the directives of Government of India. This
pass-through, which was initially valid until December
2022, is now extended till 30 June 2024, providing
significant support and insulation from coal price
volatility.
We continue to minimise
water consumption using
air-cooled condensers and
the Groups’ philosophy of
continual improvement to
remain ‘zero discharge unit’
Coal and Freight
The Group has consistently imported low-sulphur
coal from reputable coal producers and traders with
established longstanding relationships. In FY 23,
we purchased coal through short and medium-term
contracts to mitigate the risk of coal price volatility
in the market. We have entered into medium-term
Fuel Supply Agreements (FSA) allowing us to procure
up to 153,000 metric tons of Indian coal per annum.
These contracts are signed with Mahanadi Coalfields
Ltd (a subsidiary of Coal India Ltd.).
The average coal price was £76.6 per ton in FY 23,
representing a 43 percent increase from FY 22’s
average of £53.7 per ton.
Current coal prices and sea freight rates are returning
to normal levels and the Group continues to actively
review its procurement policy to mitigate the impact
of coal price volatility.
Safety and Environmental Compliance
The Group has made excellent progress with its
safety programs, recording zero fatalities and Total
Recordable Incident Rate (TRIR) in FY 23. We continue
to minimise water consumption using air-cooled
condensers and the Groups’ philosophy of continual
improvement to remain ‘zero discharge unit’
Investment in Atsuya Technologies
OPG invested in Atsuya Technologies Private Limited
(Atsuya) as part of its strategy to diversify into energy
savings/ESG-compliant opportunities. Atsuya utilises
artificial intelligence, deep tech, and the internet
of things (IOT) to monitor energy consumption and
provide solutions to save the same. Atsuya’s clients
include new-age Unicorns as well as a Fortune 500
Indian energy company.
Avantika Gupta
Chief Executive Officer
3 November 2023
10
Annual Report 2022-23 CFO’s
Financial
Review
The following is a commentary on the Group’s financial performance for the year ending 31 March 2023.
Revenue
In the face of challenging circumstances, FY 23 proved to be a year where resilience and adaptability were
key. The Group’s revenues saw a decrease of £21.4 million, representing a decline of 26.7 percent in FY 23.
This strategic shift was driven by the Group’s sharp focus on profitable operations, especially in light of soaring
coal prices. With a higher cost of production, OPG narrowed its focus only on profitable generation leading to
lower generation volumes.
Adjusted EBITDA for FY 23 amounted to £16.1 million, equivalent to 27.5 percent of revenues, compared to
the previous year’s figure of £21.6 million, which constituted 27 percent of previous year’s revenue.
Income statement
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, Expenditure during the period on expansion
projects (if any))
Adjusted EBITDA
Share Based Compensation
Depreciation
Net Finance Costs
Income from continuing operations (before Tax,
Non-Operational and / or Exceptional Items)
Reversal of Impairment provision and Share of Profits
from Associates.
FY 23
£m
Percent of
revenue
FY 22
£m
Percent of
revenue
£58.7
(£42.3)
£16.4
£1.5
£5.5
(£7.3)
£16.1
£0.0
(£5.7)
(£4.3)
£6.1
£4.3
£80.1
(£56.5)
28.0
£23.6
29.4
£0.0
£8.1
(£10.0)
£21.6
(£0.2)
(£5.3)
(£3.1)
£13.0
£0.0
27.5
10.4
27.0
16.2
11
Strategic ReportCorporate GovernanceFinancial Statements
CFO’s Financial
Review (Contd.)
Year ended 31 March
Profit Before Tax
Taxes
Profit After Tax
Profit/(Loss) from Discontinued Operations, including
Non-Controlling Interest(s)
Profit for the Year
FY 23
£m
Percent of
revenue
FY 22
£m
Percent of
revenue
£10.4
(£3.2)
£7.3
£0.0
£7.3
17.8
12.4
£13.0
(£4.1)
£8.9
(£2.9)
16.2
11.1
12.4
£6.0
7.5
Note: Please note that 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.
In FY 23, the average tariff realised was 8.6p/kWh,
marking a substantial 50 percent increase compared
to the previous year’s 5.5p/kWh. However, the total
generation (including deemed generation), amounted
to 1,528 million units, which represented a decrease
of 18.2 percent when compared to the previous year’s
1,868 million units. This reduction can be primarily
attributed to the elevated cost of coal and reduced
generation during FY 23, with a focus on profitable
operations.
The surge in coal prices was driven by heightened
global demand for coal, with China, Europe, and the
Ukraine-Russia conflict exacerbating the challenges.
Operational Overview
FY 23
FY 22
Total generation, incl. “deemed”
generation (million units)
1,528
1,868
Plant Load Factor (PLF)
(percent)
42.1
51.5
Average tariff (pence/unit)
8.6
5.5
Gross Profit
In the fiscal year, Gross Profit (GP) amounted to £16.4
million, equivalent to 28 percent of revenue. When
compared to the previous year (FY 22 - £23.6 million,
representing 29.4 percent of revenue), the GP declined
by £7.1 Million representing a 30.3 percent fall. This
decline can be attributed to the substantial impact of
high international coal prices and reduced generation
and supply.
The cost of revenue primarily comprises fuel costs.
The table below provides insight into the average
prices of coal consumed in FY 23 and FY 22.
Average price of coal
consumed
Average price of coal consumed
(per MT)
Average price of coal consumed
(per mKCal)
Change in Average price of coal
consumed (per MT) (percent)
Change in Average price of
coal consumed (per mKCal)
(percent)
FY 23
FY 22
£76.6
£53.7
£20.9
£13.1
42.6
25.9
60.1
27.6
Adjusted EBITDA
Adjusted Earnings before Interest, Depreciation,
Taxes and Amortisation (‘Adjusted EBITDA’) serves
as a measure of a business’s cash generation from
operations before accounting for depreciation,
interests, exceptional charges, and non-standard
or non-operational expenses, such as share-based
compensation, amongst others. Adjusted EBITDA is a
valuable tool for analysing and comparing profitability
over different periods and amongst companies,
as it removes the impact of financing and capital
expenditure.
In FY 23, Adjusted EBITDA amounted to £16.1 million,
in contrast to £21.6 million in FY 22, reflecting a
decrease of £5.5 million or 25.3 percent. This decline
can primarily be attributed to steep increase in
international coal prices, reduction in other income
and decrease in coal sales as well.
Profit from continuing operations before tax was £6.1
million , equivalent to 10.4 percent of revenue, as
compared to £13 million, representing 16.2 percent
of revenue, in FY 22.
12
Annual Report 2022-23
Profit Before Tax (PBT) reconciliation for
FY 23 (£m)
PBT (£m)
PBT FY 23
PBT FY 22
Decrease in PBT
Decrease in GP
Increase in Other Operating Income
Decrease in Other Income
Decrease in Distribution, General &
Administrative Expenses, Expected
Credit Loss
Increase in Net Finance Costs
Increase in Depreciation and
Amortisation
Reversal of Impairment and 31
percent share of Net Profit from
Associates
Decrease in PBT
FY 23
£10.4
£13.0
(£2.6)
(£7.1)
£1.5
(£2.5)
£2.9
(£1.3)
(£0.4)
£4.3
(£2.6)
Taxation
The Group’s operating subsidiary continues to benefit
from a tax holiday period. However, the subsidiary
is subject to Minimum Alternate Tax (MAT) on its
accounting profits. The taxes paid under MAT can
be used to offset future tax liabilities that may arise
after the conclusion of the tax holiday period.
Owing to the lower level of operations and the high
cost of coal during the year, the tax expense for the
year amounted to £3.2 million.
Profit After Tax from continuing operations
Profit After Tax from continuing operations decreased
by £1.6 million (18.5 percent) from £8.9 million to £7.3
million in FY 23.
Assets - Karnataka Solar Projects as part
of Associate Entities
In FY 18, four solar projects under different Special
Purpose Vehicles (SPV’s) totalling to 62 MW were
commissioned in the state of Karnataka. OPG
continues to hold a 31 percent equity interest in these
projects, which it intends to divest. The management
is yet to identify a suitable buyer who can provide the
right valuation for the sale of these assets. However,
in compliance with IFRS 5, the solar assets are being
reclassified from “Assets Held for Sale” to being
“Associate Entities” and for FY 23. Profits from these
solar entities have been accounted to the extent of 31
percent of its shareholding in the financial statements.
The Group continues to evaluate options to divest its
31 percent holding in these solar entities.
Earnings per Share (EPS)
The Group’s total reported EPS increased from 1.5
Pence in FY 22 to 1.8 Pence in FY 23.
Dividend policy
One of the OPG’s paramount objectives is to
maximise stakeholders’ long-term value. Keeping
in mind, the disruptions and uncertainty caused by
the extraordinary volatility in coal prices and related
freight, the management, in consonance with 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 maintain a strong
and resilient balance sheet to withstand turbulent
times. Therefore, the Board decided not to declare a
dividend for FY 23. The Board will revisit the Group’s
dividend policy in due course.
The Foreign Exchange Gain / Loss on
Translation
The British Pound to Indian Rupee appreciated to a
closing rate of £1= INR 101.44 as at 31 March 2023
from a rate of £1= INR 99.37 as at 31 March 2022
resulting in an exchange loss of £5.7 million. The same
has been recognised under “Exchange differences on
translating foreign operations”.
Property, Plant and Equipment
The decrease in net book value of our Property,
Plant and Equipment to £165.61 million principally
relates to additions/deletions during the year offset
by depreciation and foreign exchange impact as at
the end of FY 23.
Other Non-Current Assets
Other Non-Current Assets (excluding Property, Plant
and Equipment & Intangible Assets) have increased
by £11.1 million. The major components of this
increase was a £13.1 million increase in “Non Current
Investments” comprising the transfer of “Assets
Held for Sale” to “Associated Entities”. Non-current
restricted cash decreased by £2.0 million from £10.4
million in FY22 to £8.4 million in FY23.
13
Strategic ReportCorporate GovernanceFinancial Statements CFO’s Financial
Review (Contd.)
Current Assets
Current Assets in total decreased by £5.6 million from
£70.1 million to £64.5 million. However for a like for
like comparison, ‘Assets Held for Sale’ are excluded.
Current Assets (excl. Assets held for Sale) increased
by 14 per cent or £7.9 million from £56. 6 million to
£64.5 million year on year. Some of the components
of the change are as follows:
•
•
•
•
•
•
increase in trade receivables by £23.3 million,
decrease in inventories by £2.7 million,
decrease in other short-term assets by £12.54
million from £26.18 million in FY22 to £13.64
million in FY23,
decrease in Current Tax Assets (Net) by £0.1
million from £1.25 million in FY22 to £1.15 million
in FY23,
increase in current restricted cash by £4.4 million
and
decrease in cash and cash equivalents by £4.4
million.
Liabilities
Current liabilities have increased by £17.1 million from
£38.4 million to £55.5 million year on year.
•
•
•
Borrowings which includes current maturities of
long term debt increased by £12.1 million from
£13.4 million to £25.5 million. This includes the
repayment of £22.18 million Non-Convertible
Debentures (NCDs).
Trade and other payables increased by £5.1
million from £24.4 million to £29.5 million.
Other current liabilities decreased by 12 percent
from £0.57 million to £0.50 million.
Non-current liabilities have decreased by £21 million
(44 percent) from £47.6 million last year to £26.6
million this year.
•
•
•
Non Current portion of Long term debt decreased
by 76 percent or £22.8 million from £29.9 million
to £7.1 million on account of the net effect of
repayments, new debt as well as movements to
current liabilities.
Trade and other payables decreased by £0.32
million from £0.63 million to £0.31 million.
Net Deferred Tax Liabilities increased by £2.2
million from £17.0 million to £19.2 million.
Financial position, debt, gearing and
finance costs
As at 31st March 2023, total borrowings were £32.6
million (31 March 2022: £43.3 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 8.6 percent (31
March 2022: 3.9 percent). The gearing ratio is a useful
measure to identify the financial risk of a company.
OPG’s NCDs which were repayable in June 2023 were
repaid on time. During FY 23, the Group has raised
additional debt of £6.9 million for repayment of old
NCDs.
During FY 23 net debt (total borrowings minus cash
and current and non-current investments in mutual
funds) increased from £6.9 million in FY 22 to £16.1
million in FY 23 and net debt to Adjusted EBITDA
ratio increased from 0.32x to 1.00x as a result of
the repayment of term loans, fresh borrowings for
repayment of old NCDs and working capital loans as
well as cash collections achieved during the year. The
net debt position demonstrates the robustness of
OPG’s financial position. The Group remains amongst
the least leveraged power companies in India.
Finance costs have increased by 11 percent or £0.57
million to £5.9 million in FY23 from £5.4 million in FY
22. This was primarily due to the impact of increase
in foreign exchange losses. Finance income decreased
by 30 percent or £0.7 million from £2.3 million in FY
22 to £1.6 million in FY 23.
14
Annual Report 2022-23 Movements (£m)
FY 23
FY 22
Net cash (used in)/from
continuing investing
activities
£13.4
(£9.2)
Finance costs paid, incl. foreign
exchange losses
(£5.9)
(£4.5)
Dividend paid
Total cash change from
continuing operations
before net borrowings
£6.2
£2.6
The Company is required under AIM Rule 19 to publish
its FY 23 Accounts by 30 September 2023. There has
been a delay in the financial reporting close process
resulting in suspension of the Company’s ordinary
shares from trading on AIM and trading will be
reinstated upon the publication of these FY 23 audited
accounts.
Ajit Pratap Singh
Chief Financial Officer
3 November 2023
Overall, this resulted in an increase of £1.26 million
(40 percent increase) in Net Finance Costs from £3.1
million in FY 22 to £4.3 million in FY 23.
Current restricted cash representing deposits
maturing up to twelve months amounted to £6.8
million ( FY 22: £2.4 million) an increase of 183.7
percent which have been pledged as security for
Letters of Credit and Bank Guarantees.
Non-current restricted cash represents investments
in mutual funds of £8.4 million (FY 22: £10.4 million).
Non-current restricted cash decreased by 20 percent.
Cash flow
Cash flow from continuing operations; before, and
after, the changes in working capital was £16.0 million
(FY 22: £21.6 million) and negative £1.2 million (FY
22: £16.3 million) respectively.
Movements (£m)
FY 23
FY 22
Operating cash flows from
continuing operations before
changes in working capital
Tax paid
Change in working capital
assets and liabilities
Net cash generated
by (used in) operating
activities from continuing
operations
£16.0
£21.6
£0.4
(£0.0)
(£16.8)
(£5.2)
(£1.2)
£16.3
Purchase of property, plant and
equipment (net of disposals)
(£1.1)
(£3.5)
Investments (purchased)/
sold, incl. in solar projects,
shipping JV, market securities,
movement in restricted cash
and interest received
(£14.5)
(£5.7)
15
Strategic ReportCorporate GovernanceFinancial Statements
Group’s
objectives and
strategies
The Group’s aim is to be a sector leader based on
the quality of its earnings, the profitable growth it
achieves, and its performance against its stringent
safety and environmental management standards.
Air Cooled Condenser reduces water consumption.
The Group’s objective is to enhance shareholder value
through profitable growth by becoming the preferred
provider of reliable and uninterrupted power to fuel
India’s inclusive growth.
To meet these objectives, the Group’s strategy
includes maximising the performance of its existing
power generation assets, deleveraging the balance
sheet, reducing its cost of capital, delivering returns
through responsible growth, and executing accretive
growth projects within its areas of expertise.
Maximising performance of the power plant
The Group is commit ted to maximising the
performance of its existing power generation assets by
ensuring plant availability and providing a reliable and
uninterrupted supply of electricity to its customers.
The flexible design of our plants enables us to
procure and consume various types of coal from
different sources while maintaining an uninterrupted
coal supply. Furthermore, the Group aims to secure
competitive prices through direct negotiations with
customers. The Group’s strategic approach includes
a mix of long-term supplies, short-term supplies, and
16
the Group captive model, positioning it effectively to
respond to fuel cost fluctuations through short- and
medium-term sales contracts.
Reducing cost of capital and delivering
returns
The Group’s aim is to maximise cash generation at its
existing power plants. This approach serves multiple
purposes, including providing liquidity support for its
operations, facilitating debt repayment, delivering
returns, and generating equity for potential new
projects.
The Group maintains a focus on prioritising projects
that can be financed through a combination of debt
and internal accruals. These projects are expected to
generate revenues meeting the target return levels
without the need for direct subsidies. Additionally, the
Group strives to maintain manageable gearing levels
and maintains open and regular communication with
its shareholders and financing partners.
Annual Report 2022-23 Leverage
As of 31 March 2023, the total borrowings amounted
to £32.6 million. The gearing ratio, calculated as net
borrowings divided by equity plus net borrowings,
stood at 8.6 percent (compared to 3.9 percent as at
31 March 2022).
During FY 23, net debt (total borrowings minus cash
and current and non-current investments in mutual
funds) increased to £16.1 million from £6.9 million.
The Net Debt to Adjusted EBITDA ratio also increased
to 1.00x from 0.32x. This increase was a result of
utilising cash and investments net of refinancing the
repayment of Non-Convertible Debentures (NCDs).
These NCDs, amounting to £22.18 million were repaid
in May 2023.
Profitability
The Group’s strategy involves operating its power
plants under a mix of long-term, short-term, and
captive models, providing the flexibility to optimise
tariffs and profitability.
The Group consistently seeks to enhance its operational
performance, with a strong focus on profitability. It
implements strategies aimed at optimising its power
generation assets to achieve this goal.
Dividends
Due to the disruptions caused by the extraordinary
volatility in coal prices and freight, the Board has made
the decision in the best interests of the Group and its
stakeholders to conserve cash. This cash conservation
will be allocated for debt repayment, funding growth
in ESG-focused projects, and ensuring a strong
and resilient balance sheet capable of withstanding
turbulent times. Consequently, the Board has chosen
not to declare a dividend for FY 23.
The Board plans to review the Company’s dividend
policy at a later date, once coal prices and electricity
tariffs stabilise.
17
Strategic ReportCorporate GovernanceFinancial Statements Market
Review
India is poised to remain a bright spot in CY 2023, potentially
contributing 15% to global GDP growth, according to the IMF.
This growth was driven by robust domestic demand, with
strong investment activity supported by government capital
expenditures and buoyant private consumption, particularly
among higher-income groups.
Overview of power sector
Global Power Sector
The past year witnessed a global energy crisis, largely
triggered by the Russia-Ukraine conflict. This crisis
has sparked a remarkable surge in renewable energy
worldwide, with a strong emphasis on energy security.
Disruptions in natural gas supplies underscored the
importance of domestically generated electricity.
Many countries refired their coal power plants to
safeguard their energy security. For the long term,
many countries have reinforced their policies to
support generation from renewable energy sources.
Higher fossil fuel prices on a global scale have also
improved the competitiveness of solar photovoltaic
(PV) and wind generation in comparison to other
conventional fuels.
Indian Power Sector
India stands out as one of the largest producers and
consumers of electricity globally, boasting a total
installed electricity capacity exceeding 416 GW as of
the end of FY 23. The growth in electricity demand
is driven by factors such as population growth,
urbanisation, industrialisation, and an improved
standard of living with increased access to electricity.
The rising energy demand in India is fuelled by ongoing
urbanisation and rapid growth in the manufacturing
sector. A diverse array of energy sources is tapped
to meet this growing demand, with coal being the
primary supply source.
In FY 23, the total power demand in India surged by 9.6
percent to reach 1,512 billion units (BUs), significantly
exceeding the average annual growth rate of 5.3
18
Annual Report 2022-23 percent observed during the period of 2015-2019.
This robust growth can be attributed to a combination
of a vigorous post-pandemic economic recovery
and exceptionally high summer temperatures. The
Central Electricity Authority (CEA) has projected a
peak power demand of 256 GW in FY24 and up to 335
GW by FY30. As of the end of FY 2023, India’s installed
capacity stood at 416 GW, comprising 237 GW from
fossil-fired power plants (coal, gas, and oil), 47 GW
from hydroelectric plants, 125 GW from renewable
energy sources like solar and wind, and the remainder
from nuclear power plants. The share of coal-based
capacity in the total capacity mix in India stands at 51
percent. Interestingly, despite the lower percentage,
coal-based power plants contributed to approximately
73 percent of the country’s total electricity generation
during FY 23.
The CEA has envisaged an installed capacity of 817 GW
by FY30 of which fossil fuels will contribute 292 GW (36
percent) and the balance from Renewables, Nuclear,
Hydro and other sources. With increasing natural gas
prices, coal will continue to remain the bulk of the
fossil fuel capacities with 267 GW (33 percent) of the
capacity. The share of coal in the installed capacity
mix is low. However, the same is high in the generation
mix as renewable energy sources are exposed to the
vagaries of nature. Even in FY30, the coal is expected
to contribute nearly 58 percent of the total generation
mix.
With modest growth of only 1.2 GW during FY 23
and the continual retirement of old power plants,
the outlook for thermal power continues to remain
optimistic.
.
Total
(Including Renewable Sources)
Generation
Installed Capacity - March 2023 (%)
(In Billion Units)
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
805.4
850.4
928.1
969.5
1020.2
1110.4
1173.6
1241.7
1308.1
1376.1
1389.1
1381.9
1491.9
1624.2
Gas 6%
Coal
Lignite 51%
Solar PV 16%
Wind 10%
Hydro 10%
Biomas 3%
Nuclear 2%
Small Hydro 1%
PSP 1%
19
Strategic ReportCorporate GovernanceFinancial Statements Market
Review (Contd.)
Gross Generation 2022-23 (BU)
Gas 1.53%
Hydro 9.99%
Thermal 72.73%
Nuclear 2.82%
Solar PV 2%
Wind 4.40%
Other-RE 1.91%
Government Initiatives
During the year, the Indian government has taken
several noteworthy initiatives to address issues in the
power sector and foster its growth. Here are some key
actions taken:
1. Emergency Coal-Based Power Generation: In
response to a critical power crisis where energy
demand surged by almost 20 percent, the Ministry
of Power invoked Section 11 of the Electricity Act
2003 twice in the year (May 2022 and February
2023). This directive mandated all imported coal-
based power plants to operate at their full capacity
to generate power.
2. Price Caps on Power Exchanges: The Central
Electricity Regulatory Commission took significant
steps by capping power prices on exchanges across
all market segments, including DAM, RTM, Intra-
day, Day Ahead Contingency, and Term-Ahead
contracts. These caps initially set the price at ₹12
per unit, which was further reduced to ₹10 per unit
in April 2023.
3. Late Payment Surcharge Rules: The Ministry
of Power (MoP) introduced the Electricity (Late
Payment Surcharge and Related Matters) Rules,
2022. These rules allow state utilities to pay
their total dues to generation and transmission
companies in equated monthly instalments (EMIs).
Additionally, total dues, including late payment
20
Annual Report 2022-23 surcharges, up to the date of rule notification, were
rescheduled with revised due dates for payment by
state utilities in EMIs.
4. Pass-Through of Coal Prices: In response
to soaring coal prices, the Ministry of Power
authorised the pass-through of coal price increases
to imported coal-based power plants with long-
term power purchase agreements (PPAs) with
State Utilities.
5. 24x7 Power Supply Commitments: All States
and Union Territories (UTs) signed Memorandums
of Understanding (MoUs) with the Central
Government to ensure round-the-clock power
supply to all households, industrial and commercial
consumers, and sufficient power for agricultural
consumers. This commitment aims to boost power
offtake by state utilities, such as TANGEDCO.
6. Commercial Coal Mining for Private Sector:
The Government of India approved commercial
coal mining for the private sector and introduced
transparent methods for allocating coalmines
through auctions and allotments. OPG is actively
participating in these auctions and allotments.
7. Bidding Guidelines for RE Procurement: The
Ministry of Power issued bidding guidelines for
thermal/hydro generators to procure renewable
energy (RE) and supply bundled power to state
utilities under existing power purchase agreements
(PPAs). The scheme creates new business
opportunities for power sector and may reduce
overall costs for end consumers.
21
Strategic ReportCorporate GovernanceFinancial Statements ESG
report
Sustainability highlights
Natural
• 0.472 MT/MWh specific coal
consumption (Normalised for
6000 NAR)
• 0.20 m3/MWh Specific Water
consumption
• 1.09 kg CO 2/kWh, G HG
emissions intensity
Human
• 363 Company employees
• 255 Contractual workforce
• Total 1.43 man days of training per
manpower.
• Zero TR IR (Total Recordable
Incident Rate)
Operations
• 414 MW Thermal Plant
• 62 MW Solar power plant
• Best in class – NOx emission
control
• Improving Heat rate
• Advanced air cooled technology
for lowest water consumption
• A w a r d e d C E E N a t i o n a l
Environment Excellence Award
for better fly ash utilization and
management.
Financial
• Revenue: £ 58.68 million
• Operating Cost: £42.26 million
• Taxes: £3.16 million
• Employee Wages & Benefits:
£2.84 million
Intellectual
• ISO 14001:2015
• ISO 45001:2018
• NABL accredited in accordance
wi t h I S O/ IE C 17025:20 05
Standard
*Average Conversion rate of GBP for the year is £1 = ₹96.79
Social
• CSR Spending: £103,054*
22
Annual Report 2022-23 Sustainability Pillars
Bird’s eye view of the rainwater storage pond
Efficient growth
Production efficiency directly translates into
optimisation of resources and maximising
financial capital value.
• Maintaining technological leadership
• Continuous optimization of Heat Rate
• Sustainable automation for operational efficiencies.
Sustainable growth
Sustainable Power Generation through a mix of
thermal and renewable generation.
• Power generation with a mix of thermal and
renewable generation capacity
• Providing reliable power to captive users and state
utilities.
• Compliance with emission standards
• Optimal auxiliary power consumption
• Zero Liquid Discharge
• Lowest water consumption per unit of electricity
generation
Responsible growth
Responsibility towards all stakeholders
• Consultations and collaborations with stakeholders
• Developing human resource through training and
skill development
• Inclusive work environment
• Commitment to Zero Harm-maintaining health and
safety within and around our power units.
• Community service
• Inculcating values of Sustainability in staff and
workers
23
Strategic ReportCorporate GovernanceFinancial Statements ESG report (Contd.)
Disclosures on management approach
Business
strategy
We are focused on creating positive impacts on society, environment,
and human rights through our operations. We prioritise employee
welfare, local job creation, and overall development opportunities for
our employees and the community. We diligently measure and monitor
the emissions and endeavour to bring them down continuously.
We aim to improve returns for shareholders through efficient capital
management, technology, and operational management while committing
to sustainability practices for long-term success.
Occupational
health & safety
Our activities have a positive impact as they foster a safety-
conscious culture and prioritise the well-being of everyone involved.
We are fully committed to ensuring utmost safety and have well-
established protocols in place to address these concerns.
Our core principle is ‘Zero Harm’, supported by ISO 45001:2018
and a proactive mind-set. We are committed to creating a
culture with no incidents through a comprehensive strategy and
continuous improvement. Involving staff in setting EHS goals and
their active participation is vital for the successful implementation
of our Health & Safety framework.
Energy &
emissions
Our approach to energy and emissions centres on optimising
energy use and minimising wastage. Through the adoption of
efficient and eco-friendly technologies, our aim is to minimise the
environmental impact of our operations. By focusing on emission
reduction, we actively contribute to climate change mitigation
and improved air quality, fostering public health, community
engagement, and job creation. Furthermore, we are dedicated
to upholding the right to a clean environment and better health.
24
Annual Report 2022-23 Water
Waste
We adopt air cooled condenser technology for minimal water consumption,
specifically chosen and implemented to reduce the water consumption
up to 1/10th of the water consumption of conventional power plants. In
addition we have implemented rain water harvesting, recharge initiatives
and green belt development.
Our main goal is to minimise freshwater usage and maintain a Zero Liquid
Discharge Unit, ensuring sustainability and responsible water practices.
Through regular monitoring, we contribute to sustainable water use,
protect water resources, and support nearby communities’ access to
clean water. Our approach reduces water-related risks and promotes
community well-being.
Our waste management approach involves adhering to statutory
requirements for waste handling, collection, and disposal. We
prioritise recycling to reduce waste and use energy resources
responsibly. Efficient and clean technologies are deployed to
minimise environmental impact. The company aims to minimise
pollution, conserve natural resources, and protect nearby
communities and ecosystems. We promote public health, uphold
the right to a clean environment, and educate employees on
waste management. The approach leads to positive impacts
such as zero waste goals, regulatory compliance, increased
recycling, responsible energy use, eco-friendly technologies, and
environmental awareness.
Environmental
compliance
We ensure responsible environmental compliance in the power sector has
both positive and negative implications. On the positive side, it ensures
responsible and sustainable energy generation, reduces air and water
pollution, and promotes the integration of renewable energy sources.
Compliance also protects biodiversity, conserves water resources, and
contributes to global climate change mitigation efforts. This is achieved
by substantial investments in pollution control technologies, waste
management, and transitioning to cleaner energy sources.
Community
development
(CSR)
OPG is determined to positively impact neighbouring communities.
In the first year of operations, the need analysis was carried out that
helped us with devising interventions; all CSR programmes were
implemented in consultation or direction of the District Collectorate or
Panchayat Presidents. A detailed proposal is sent by the team which
sets out the responsibilities, execution, timelines and liabilities of the
parties involved. The Management screens the project executors based
on internal screening criteria, credibility and ability to execute the
project. The projects that OPG funds are for community development,
education, healthcare and reducing inequalities.
25
Strategic ReportCorporate GovernanceFinancial Statements ESG report (Contd.)
Environmental stewardship
OPG Power Ventures understands the vital role
of environmental responsibility in ensuring the
sustainability of our operations and the well-being
of surrounding communities. We are wholeheartedly
dedicated to reducing our environmental impact,
championing the preservation of biodiversity and
supporting our stakeholders. By continually taking
proactive steps, we aim to improve our environmental
track record.
In FY23, we spent £345,461 towards environmental
conser vation measures. These expenditures
covered projects such as the emission control ESP
system filter, silo bag filters, initiatives for rainwater
harvesting, wind shields for dust management, as well
as specialists engagements and certifications.
Environmental highlights
REDUCED
Water consumption
through Air Cooling
36.9%
Green belt
100%
Compliance on SOx,
NOx and PM Emissions
CLOSED
Loop Water System
INCREASED
BIODIVERSITY
64 floral and 102 faunal
species at the plant
112.95 MU
Solar power generated
and exported
LOW
AUXILIARY
CONSUMPTION
Despite Low PLF
BAMBOO
PLANTATION
in 18 acres and 15,000
saplings planted
26
Annual Report 2022-23 Social: Employees
Thermal power plant relies heavily on its employees.
At present, we employ a total of 363 full-time
personnel, comprising 331 males and 32 females,
who are distributed between our headquarters and
plant locations in Tamil Nadu and Karnataka. We also
employ contractual workforce of 255 individuals.
OPG is committed to fostering an inclusive and fair
approach to growth, emphasising pay equity, non-
discriminatory recruitment policies, and the absence
of bias based on gender, caste, age, or religion. We
actively promote opportunities for disabled individuals
to apply for suitable positions, aiming to cultivate an
inclusive and diverse workplace environment.
Total employees by gender (All locations)
Percentage gender distribution
(%)
Male
Female
Total
331
32
363
9
91
Female
Male
Training
Training plays a crucial role in any organisation as
it enhances employees’ skills, fosters consistent
standards, and promotes employee satisfaction and
growth. In FY 23, a total of 1,139 hours of training
exclusive of 5,929 hours of OHS related trainings
were conducted.
Occupational Health & Safety
Health and safety are of utmost importance at OPG,
where our goal is to achieve ‘Zero Harm’ by continually
reducing incidents and preventing recurring incidents
through our safety program. Our comprehensive
health and safety policy applies to all permanent and
contractual employees, ensuring their well-being.
For the past seven years, we have successfully
maintained a record of zero a record of zero
Total Recordable Incident Rate (TRIR).
Inspection work on relay panel
27
Strategic ReportCorporate GovernanceFinancial Statements
ESG report (Contd.)
Occupational Safety Report - TN Plant (2022-23)
Safety Parameters
Number of Fatalities
Fatality Rate
Number of high consequence injury
Rate of high consequence injury
Number of work related First aid Injuries
TRIR
Number of hours worked
Permanent
Workforce
Contractual
Workforce
0
0
0
0
13
0
0
0
0
3
0
816823
Health & Safety Process
The Board has appointed a Health, Safety and Environmental Committee, chaired by a
Non-Executive director, to oversee all Health, Safety and Environmental activities
Assisting staff in reporting
job-related hazards
• Encourage staff to participate in
the program.
• Encourage staff to report safety
and health concerns.
• Give staff access to safety and
health information.
• Involve staff in all aspects of the
program.
• Remove barriers to participation.
The process of identifying
hazards and risks related to
incidents
• Collect existing information
about workplace hazards.
• Inspect the workplace for safety
hazards.
• Identify health hazards.
• Conduct incident investigations.
• Identify hazards associated with
emergency and non-routine
situations.
Real time communication for
effective execution
28
Annual Report 2022-23 Strong emphasis on training and reskilling
Corrective actions are taken
using a hierarchy of control
to improve the OHS system
• List the hazards needing control
in order of priority.
• A s s i g n r e s p o n s i b i l i t y
f o r
installing or implementing the
controls to a specific department
or safety department with the
power or ability to implement
the controls.
• Establish a target completion
date, plan how to track progress
towards completion.
• P l a n h o w
t o ve r i f y
t h e
e f f e c t i ve n e s s o f c o n t r o l s
af ter they are installed or
implemented.
Staff participation,
consultation, and
communication on
occupational health and
safety
• Monthly safety training calendar
is circulated to all departments.
• As per the schedule, appropriate
safety training is conducted for
all staff.
Responsibilities of
the Health and Safety
Committee
• The main objective of this
committee is to resolve EHS
issues.
• To help OPG meet its strategic
objec tive s by c ontr ibuting
experience and perspective to
a plant.
• Staf f communicate through
walky-talkies or Mobile.
• Review of the various measures
and initiatives taken.
• OPG has a safety committee
in place, conducting quarterly
meetings.
• The decision-making authority is
governed by the Board through
Plant Head.
29
Strategic ReportCorporate GovernanceFinancial Statements ESG report (Contd.)
Social: Community engagements
Throughout our journey, we have strived to make a
meaningful and lasting impact on the communities we
serve. Guided by our corporate social responsibility
(CSR) commitment, we have undertaken numerous
initiatives to address pressing social needs. Our
dedicated efforts have focused on improving education,
improving ecological balance, enhancing healthcare
access, and eradicating hunger. Additionally, we
provided critical relief during times of disaster.
This year recognising the importance of vaccinations
in safeguarding public health, we organised a
comprehensive medical camp in our plant, distributed
food supplies to nearby flood-struck villages,
organised social service events for women and
organised engaging learning activities for children at
local schools.
Dur ing F Y23 we have also completed the
infrastructural facilities required for commencing free
food distribution to local people towards eradication
of hunger in nearby villages.
The total CSR expenditure for FY 2022-23 is £103,054.
Promoting
Education
Environmental
sustainability,
ecological balance
Promoting
Healthcare
Eradicating
Hunger
CSR Activities
Project details
Environment projects
Desilting of pond - S R Kandigai
Deepening of Lake - Periya Obulapuram
Social projects
PTA Teachers Salary
College Scholarship
TV for Anganwadi (Periya Obulapuram)
Food for Cyclone affected area
30
£71,761
£27,654
£2,066
£1,572
Beneficiaries
1000 to 1200 persons
800 to 1000 persons
7 Teachers
1 Beneficiary
100 to 200 persons
500 to 700 persons
Annual Report 2022-23 Corporate Governance
Standards of Conduct
Environmentally
responsible
behaviours
Ethical
conduct
Honesty
Respect
Legal
compliance
Honesty
We hold the view that transparency, accountability, and
compliance form the bedrock of sound governance.
In alignment with the AIM rules for companies, our
organisation has adopted the Quoted Companies
Alliance (QCA) Corporate Governance Code. This code
lays out a framework of ten corporate governance
principles, all of which are geared towards ensuring
long-term business success. A tri-level governance
structure facilitates accurate and timely oversight
of crucial affairs. In accordance with AIM Rule 26,
the Directors review 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.
Understanding and addressing the needs and
expectations of our shareholders is crucial to us.
The AGM notices are dispatched a minimum of 21
clear days prior to the meeting, with voting results
subsequently published on our website. Both annual
and half-yearly financial reports can be accessed on
our website. All concerns brought up by stakeholders
are integrated into our overarching strategy.
Principles of Good Corporate Governance
Establish a strategy and business model which
promotes long-term value for shareholders
Ensure that between them the Directors have
the necessary up-to-date experience, skills
and capabilities
Seek to understand and meet shareholder
needs and expectations
Evaluate Board performance based on clear
relevant objectives, seeking continuous
improvement
Consider wider stakeholder and social
responsibilities and other implications for
long-term success
Promote a corporate culture that is based on
ethical values and behaviour
Embed effective risk management, considering
both opportunities and threats, throughout
the organisation
Maintain governance structures and processes
that are fit for purpose and support good
decision making by the Board
Maintain the Board as a well-functioning,
balanced team led by the Non-Executive
Chairman
Communicate how the Group is governed to all
stakeholders
31
Strategic ReportCorporate GovernanceFinancial Statements ESG report (Contd.)
At the forefront of the operational team is the Chief
Executive Officer, overseeing all operational facets.
OPG’s Board of Directors shoulders the responsibility of
exemplifying best practices in Corporate Governance
and establishing elevated standards, primarily for the
shareholders and all other stakeholders. The OPG
Board convenes a minimum of four times annually.
Both Executive and Non-Executive Directors are privy
to identical information. If needed, Non-Executive
Directors can seek external advice, with costs borne
by the Group. Strategic matters, encompassing new
and expanding capital items, operational budgets,
committee management, and the proceedings of all
other committees, fall under the Board’s purview
during these sessions.
Designation
Non-Executive Chairman
Non-Executive Deputy Chairman
Chief Executive Officer (Executive Director)
Chief Financial Officer (Executive Director)
Non-Executive Director
+ with effect from 4 April 2022 | *upto 31 May 2022 |**with effect from 31 May 2022
Board Members
Indian
British
Male
Female
Name
Mr. N Kumar+
Mr. Jeremy Warner Allen
Ms. Avantika Gupta
Mr. Dmitri Tsvetkov*
Mr Ajit Pratap Singh**
Mr. P Michael Grasby
Number
3
2
4
1
Health, Safety and Environment review meeting
32
Annual Report 2022-23 Corporate Governance Structure: ESG
Nomination
Remuneration
Board
Committees
Environmental,
Social and
Governance (ESG)
Audit
OPG Board
Overall responsibility for
adopting and implementing
sust ainabilit y measures
encompassing the entire
company
ESG Committee
Develops, implements and oversees the ESG
performance in the company and assists the
management in driving industry, leading
practices. Sets wide targets and KPIs and
identifies the sustainability related risks and
emerging issues that could affect the company
33
Strategic ReportCorporate GovernanceFinancial Statements Risk
Management
The Group faces a number of risks to its business and strategy.
The management of these risks is key to successful growth and
is an integral part of the management of the Group. The list of
principal risks and uncertainties associated with the Group’s
business as set out below cannot be exhaustive because of
the very nature of risk. New risks emerge and the severity
and probability associated with these will change over time.
Power Sale Risk
Description
The Company’s power plants derive their revenue
from the group captive model and supply power on
a 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 have fixed tariffs for a period which
might lead to shrinkage of margin due to fluctuations
in coal price and other open access charges.
Any adverse change in the Government Policy for
supplying power to captive power consumers (by the
power generation companies like OPG) may negatively
impact the revenue and profitability.
Monitoring & Mitigation
Incorporating a contractual provision to revisit the
tariff in case of a significant increase in coal price in
the market.
Having a clause to completely offset or pass on any
increase in open access charges to the customers to
protect our margin under the contracts.
Flexibility to supply to captive consumers or in the
open market.
Benchmarking the tariff of captive consumer with
state utility prices in such a way that the tariff with
the consumers is subjected to increase in line with any
price revision by the state utility.
Company is regularly and actively monitoring the
captive rules and ensuring the compliances.
Reliable transmission infrastructure
Description
The Group is dependent upon a reliable transmission
and distribution infrastructure so that the power
generated at the Group’s power plants can be
evacuated and transmitted to consumers. The Group
pays an open access fee to access the transmission
and distribution structure. If the transmission
infrastructure is inadequate or subject to approvals
and unexpected fees then this will adversely affect the
Group’s ability to deliver electricity to its customers
and impact revenues and profitability.
Monitoring & Mitigation
Assessment done for adequate availability of
transmission capacity and related fees during the
project evaluation stage.
Construction and/or upgrade of transmission facilities
near the Group’s existing or future power plants.
Maintaining a proactive relationship with local state
utilities and monitoring any changes and acting upon
them immediately in case any need arises.
34
Annual Report 2022-23
Ability of fuel supply and costs
Description
The Group has coal linkages with domestic coal-
producing companies and agreements for imported
coal. The dependence on third parties for coal exposes
the Group’s power plants to vulnerabilities such as
non-supply, price increases in the international
market, foreign exchange fluctuations, increases in
shipping costs and any changes in applicable taxes
and duties. This could impact the operations and
profitability of the Group.
Monitoring & Mitigation
Maintaining adequate storage facilities to throttle
inventory levels in line with market price fluctuation
strategically.
Government policy and regulations
Timely fixation of price under the coal purchase
contracts by enhancing market intelligence by
constant touch with the various market developments,
enrolling & participating in coal-related international
conferences and subscribing to various market
intelligence reports/magazines.
Maintaining relationships with suppliers and mitigating
any potential disruption.
Enhancing the flexibility of the plants to consume
various qualities of coal to optimise the coal cost.
To revise the tariff to captive consumers in case of
steep increase in coal prices.
Description
The Group’s operations are subject to complex
national and state laws and regulations with respect
to numerous matters, including the following:
•
•
•
environmental factors (emissions, waste disposal,
storage and handling);
health and safety; and planning and;
development.
The Group is required to obtain approvals, licenses and
permits issued by the Indian government and other
regulators and failure to obtain, comply with the terms
of or renew such approvals, licenses and permits may
restrict the Group’s operations or development plans,
or require their amendment, and may adversely affect
the Group’s profitability, or result in it being subject
to fines, sanctions, revocation of licenses or other
limitations.
The Group’s business model of GCPPs is subject to rules
and regulations, which can potentially be interpreted
by the authorities in a way different from the Group’s
interpretations. The profitability of the Group will be in
part dependent upon the continuation of a favourable
regulatory regime with respect to its projects.
Monitoring & Mitigation
The group monitors and reviews changes in the
regulatory environment and its commitments under
licenses previously granted.
It continually ensures compliance with the conditions
contained within individual licenses and is mindful of
the importance of complying with national and local
legislation and standards.
The Group reviews all the compliance mechanisms
regularly and takes immediate steps to maintain
compliances without any violations.
Ability to retain flscal and tax incentives
Description
The Group’s existing and planned power plants benefit
from various fiscal and tax incentives to the Company
from the Indian government continues to be available
till FY26.
A change in policy or the adoption of tax policies
and incentives can have an adverse impact on the
profitability of the Group.
Monitoring & Mitigation
The Group continues to monitor changes and
developments in respect of incentives provided by the
Indian federal and state authorities
Project investment returns are evaluated based on
the expected incentives available to the Company and
are revised based on the most up-to-date guidance
available. The tariff is also determined and adjusted
accordingly considering the tax incentives.
35
Strategic ReportCorporate GovernanceFinancial Statements
Exchange Risks
Description
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
presentation currency is Great Britain Pound.
Imported coal is purchased in US Dollars and the
company has replaced rupee-denominated term loans
with dollar-denominated term loans.
The Group’s financial results may be affected by the
appreciation or depreciation of the value of the foreign
exchange rates relative to the Indian Rupee.
Monitoring & Mitigation
Putting in place, wherever feasible, forward contracts
or hedging mechanisms.
Monitoring our risk on a regular basis where no
hedging mechanism is in place and taking steps to
minimise potential losses.
The Company has prepaid the entire foreign currency
term loan during the year.
Geopolitical Risks
Description
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.
Monitoring & Mitigation
The Group continues to monitor changes and
developments in the global markets to assess the
impact on its procurement plans and accordingly
and proactively adjust sourcing of coal from various
geographies. Based on the coal prices, the Group
determines the sales volume and the tariff.
The Group also participates in local coal auctions
and secured partial requirements for long-term
from domestic Government-owned public sector
undertaking.
Global financial instability and the possibility of a recession
Description
The Indian market and Indian economy are influenced
by global economic and market conditions, particularly
emerging market countries in Asia.
Financial instability in recent years has inevitably
affected the Indian economy.
Continuing uncertainty and concerns about contagion
in the wake of the financial crises could have a negative
impact on the availability of funding.
Climate Change Legislation
Description
The Government of India has asked the thermal power
producer to comply with the SOx and NOx regulations.
Though coal-based power continues to be in demand,
stringent regulations against thermal power may lead
to increased cost of generation.
Monitoring & Mitigation
The company has already changed the burners and
is compliant with the NOx emissions. The company
36
Monitoring & Mitigation
The Group continues to monitor changes and
developments in the global markets to assess the
impact on its financing plans. Additionally, the Group is
optimistic that India, driven by domestic consumption,
to a certain extent may be insulated from the recession.
Further, the Group has reduced its debt to a significantly
low level and is one of the lowest-geared company in
the Indian power sector.
prefers to use low sulphur coal sourced from Indonesia
and is already compliant with SOx emissions.
Coal based thermal power plants are expected to
remain a significant contributor to India’s energy mix
and the climate change risk seems to be very low for
thermal power plants in India due to current low per
capita consumption of electricity, increasing demand,
no significant new capacity addition in thermal power
plants, retirement of old plants and mandatory base
load requirement from thermal plants.
Annual Report 2022-23
Board
of Directors
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. N. Kumar
Non-Executive Chairman
(with effect from 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 sector s including elec tronics,
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 the Institute
of Electronics and 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.
37
Strategic ReportCorporate GovernanceFinancial Statements
Board
of Directors (Contd.)
Ms. Avantika Gupta
Mr. P. Michael Grasby
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 Group’s litigations, commercial arbitrations
and regulatory compliances. During this period, she
was also jointly responsible for 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 new sustainability
strategy and implementing these measures across
all locations.
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 4 April 2022. She
is a member of the ESG Committee since June 2021.
38
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 technical, general
and financial management roles in the energy, process
and engineering sectors. He is a Chartered Engineer,
FIET and FIMechE.
Mr. Grasby is the Chairman of the ESG Committee
of the Company and a member of the Remuneration
Committee. He became a member of the Nomination
Committee with effect from 29 April 2022 and member
of the Audit Committee with effect from 31 May 2022.
Annual Report 2022-23 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.
He is associated with OPG Group since February 2019
and leads the finance function of the Group.
39
Strategic ReportCorporate GovernanceFinancial Statements Corporate Governance Report
Financial Year Ended 31 March 2023
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.
7. Evaluate board performance based on clear
and relevant objectives, seeking continuous
improvement.
8. Promote a corporate culture that is based on
ethical values and behaviour.
Over the past few years, the company faced a
challenging business environment on account of
the Covid-19 pandemic and then the spike in coal
prices on account of the Russia and Ukraine conflict.
With rationalization in coal prices, and growth in the
power demand in India, the company 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:
1. Establish a strategy and business model which
promotes long-term value for shareholders.
2. Seek to understand and meet shareholder needs
and expectations.
3. Take into account wider stakeholder and social
responsibilities and other implications for long-
term success.
4. Embed effective risk management, considering
both opportunities and threats, throughout the
organisation.
5. Maintain the board as a well-functioning, balanced
team led by the chair.
6. Ensure that between them the directors have
the necessary up-to-date experience, skills and
capabilities.
40
9. Maintain governance structures and processes
that are fit for purpose and support good decision
making by 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 2023
The Board of the Directors of the Company comprised
of the following individuals as at 31.03.2023:
1. Mr. N. Kumar (Non-Executive Chairman);
2. Ms. Avantika Gupta (Chief Executive Officer); and
3. Mr. Ajit Pratap Singh (Chief Financial Officer).
Non-executive Directors as at 31 March 2023
1. Mr. Jeremy Warner Allen (Deputy Chairman); and
2. Mr. P. Michael Grasby (Non-Executive Director)
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.
Changes in constitution of the Committees
Mr. Ajit Pratap Singh became a member of the ESG
Committee in place of Mr. Dmitri Tsvetkov with effect
from 31 May 2022.
Mr. P. Michael Grasby became member of the
Nomination Committee and Audit Committee with
effect from 29 April 2022 and 31 May 2022 respectively.
Annual Report 2022-23 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, 37 to 39 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 three times during the year under review.
All the board meetings during the year were held by
Video Conference.
During the beginning of F Y 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
four 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.
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. N. Kumar and Mr. P.
Michael Grasby, Non-Executive Directors shall retire
from office by rotation and are up for re-election at
the forthcoming AGM.
Information and professional development
All Directors received a briefing from the Company’s
nominated adviser of their duties, responsibilities
and liabilities as a Director of an AIM company. In
addition, all Directors receive a regular briefing on
the AIM Rules for Companies and the Market Abuse
Regulations (MAR) from the Company’s Nominated
Adviser. Directors are encouraged to keep abreast of
developments and attend training courses to assist
them with their duties.
In addition to the formal meetings of the Board, the
Chairman is available to the other Non-executive
Directors to discuss any issues of concern they may
have relating to the Group or as regards to their area
of responsibility and to keep them fully briefed on
ongoing matters relating to the Group’s operations.
Board performance and evaluation
The Chairman, as part of his responsibilities,
informally assesses the performance of the Board
and its Directors on an ongoing basis and brings to
the Board’s attention any areas for improvement.
For the time being, the Board will continue to
evaluate in this way the balance of skills, experience,
independence and knowledge required to ensure that
its composition is appropriate to the Group’s size and
complexity. In 2019 the Board introduced a process
of self- evaluation of its performance and completed
its first self-evaluation.
41
Strategic ReportCorporate GovernanceFinancial Statements 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
Committee
Nomination
Committee
ESG
Committee
Number Attended Number Attended Number Attended Number Attended
N. Kumar*
Avantika Gupta
Ajit Pratap Singh**
Dmitri Tsvetkov***
Jeremy Warner Allen
P.Michael Grasby
Number of meetings
held during the year
4
4
4
4
4
4
4
4
3
1
3
4
3
NA
NA
NA
3
3
3
NA
NA
NA
2
3
2
NA
NA
NA
2
2
2
NA
NA
NA
2
1
NA
1
1
1
NA
1
NA
1
1
0
NA
1
4
3
2
1
*Mr. N. Kumar became the Non-Executive Chairman with effect from 4 April 2022.
**Mr. Ajit Pratap Singh was appointed as Chief Financial Officer, Executive Director with effect from 31 May 2022
***Mr. Dmitri Tsvetkov resigned as Chief Financial Officer, Executive Director from the Board with effect from 31 May 2022.
Notes:-
1. Mr. Arvind Gupta resigned from the Board of
Directors of the Company with effect from 4 April
2022.
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
3. Mr. P. Michael Grasby became member of the
Nomination Committee and Audit Committee
with effect from 29 April 2022 and 31 May 2022
respectively.
4. There were no meetings of Remuneration
Committee held during the FY23.
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
As on 31 March 2023, the members of the Audit
Commit tee were Mr. Jeremy Warner Allen,
Mr. N Kumar and Mr. P. Michael Grasby. Mr. P. Michael
Grasby became member of the Audit Committee with
effect from 31 May 2022. 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.
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 thrice during the year
and considered the following matters during the year
under review:
• Committee at its meeting held on 28 September
2022 approved the FY22 Annual Report and
Financial Statements for the year ended 31 March
2022; and
• Committee at its meeting held on 7 December
2022 approved the Financial Statements for the
H1 FY23.
• Committee at its meeting held on 29th March
2023, approved the appointment of BDO LLP as
its Statutory Auditors for the Audit of year ending
31 03 2023.
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’
FY22 final and FY23 planning reports to the Audit
Committee. These issues were addressed as part of
preparation of the FY23 financial statements.
Remuneration Committee
The Remuneration Committee currently consists of
Mr. N Kumar, Mr. Jeremy Warner Allen and Mr. Michael
Grasby.
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
42
Annual Report 2022-23 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 47 to 49.
Nomination Committee
As on 31 March 2023, the members of the Nomination
Committee were Mr.Jeremy Warner Allen, Mr. N
Kumar and Mr. P. Michael Grasby. 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. P.
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. P. Michael Grasby was appointed as
Chairman of this committee with effect from 28 June
2021. The other members of the ESG committee were
Ms. Avantika Gupta and Mr.Dmitri Tsvetkov.
Consequent to the changes in the Board of Directors,
effective from 31 May 2022, the Company’s ESG
Committee comprises of Mr. P. Michael Grasby,
Ms.Avantika Gupta and Mr.Ajit Pratap Singh. 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 34 to 36.
Assurance
BDO LLP were appointed as auditor for the Group for
the financial years ended 31 March 2020, 31 March
2021 and 31 March 2022 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 2023. 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.
43
Strategic ReportCorporate GovernanceFinancial Statements Viability statement
A statement on the Directors’ position regarding
the Company as going concern is contained in the
Directors’ Report on pages 45 and 46. 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 was 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.
44
Annual Report 2022-23 Directors’ Report
The Directors present their report, together with the
audited financial statements of the Group, for the
year ended 31 March 2023.
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
2023 are set out in the Consolidated Statement of
Comprehensive Income. The Group’s profit for the
year after tax was £7.26 million (2022: £5.98 million).
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 2023 :
Name of the Directors
Sl.
No.
1. Mr. N. Kumar
Profile
2. Ms. Avantika Gupta
3. Mr. Ajit Pratap Singh
4. Mr. Jeremy Warner Allen Deputy Chairman, Non-Executive Director, Chairman of Audit Committee and
Non-Executive Chairman, Member of Audit Committee and Nomination
Committee, Chairman of Remuneration Committee
Chief Executive Officer, Executive Director and Member of ESG Committee
Chief Financial Officer, Executive Director and Member of ESG Committee
5. Mr. P. Michael Grasby
Nomination Committee and Member of Remuneration Committee
Non-Executive Director, Member of Audit Committee, Nomination
Committee, Remuneration Committee and Chairman of ESG Committee.
Directors’ liability insurance and indemnities
Going concern
The Company maintains liability insurance for the
Directors and officers of OPG.
Indemnities are in force under which the Company
has agreed to indemnify the Directors to the extent
permitted by applicable law and the Company’s
Articles of Association in respect of all losses arising
out of, or in connection with, the execution of their
powers, duties and responsibilities as Directors of
the Company.
Neither the Group’s liability insurance nor indemnities
provides cover in the event that a Director or officer
is proved to have acted fraudulently or dishonestly.
Share capital
The issued share capital of the Company at 31 March
2023 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.
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 and
consequently inflation. Our key commodity including
coal was also impacted by the surge in prices. .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
45
Strategic ReportCorporate GovernanceFinancial Statements addition, note 30 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 2023:
Percentage
of voting
rights and
issued share
capital
Number of
ordinary
shares
Registered agent
The registered agent of the Company at 31 March
2023 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 30.
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 3 November 2023 and signed on its
behalf by:
Philip Scales
Company Secretary
Gita Investments
Limited and related
parties and Directors
Prana GP Limited
(held in Forest
Nominees Limited)
Talisman 37 Limited
(held in Forest
Nominees Limited)
British Steel Pension
Scheme
51.8%
207,568,079
OPG Power Ventures Plc
5.0%
20,000,000
55 Athol Street
Douglas
Isle of Man
IM1 1LA
5.0%
20,000,000
3 November 2023
3.3%
13,177,222
46
Annual Report 2022-23
Directors’ Remuneration Report 2023
Introduction
This report sets out information about the remuneration
of the Directors of the Company for the year ended
31 March 2023. 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 2023
comprises of Mr. N Kumar, Mr. Jeremy Warner Allen
and Mr. P. Michael Grasby, who are independent Non-
Executive Directors. Mr. N.Kumar is the Chairman of
the Remuneration Committee.
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.
Committee but do not take part in the decision
making.
There were no meetings of Remuneration Committee
held during the FY23.
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
The principal
Committee include:
responsibilities of
the
•
Executive Directors’ incentives should be aligned
with the interests of shareholders.
•
•
•
•
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
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 (representing approximately 3.6
per cent of the Company’s issued share capital) in
47
Strategic ReportCorporate GovernanceFinancial Statements 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
FY23 and no shares were issued during FY 23 . The
Carry forward shares under LTIP reserves will be
issued in the year 23-24.
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 FY23. In light of current
market conditions, it was decided that no bonuses
would be awarded to Executive Directors in FY23. No
bonuses were awarded to Executive Directors in Fthe
previous year due to market conditions.
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:
31 March
2023
31 March
2022
206,432,166
206,432,166
Gita Investments
Limited and related
parties1
Jeremy Warner Allen
1,124,680
1,124,680
Dmitri Tsvetkov*
N Kumar
Michael Grasby
Total
NA
-
1,126,691
-
11,233
11,233
207,568,079 208,694,770
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.
Changes in Directors’ interests between 31 March
2023 and the date of this report :
31 March
2023
31 March
2022
206,507,166
206,432,166
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
Gita Investments
Limited and related
parties- (Purchase of
Shares)
48
Annual Report 2022-23 No Director had any interest in any contract of significance with the Group during the year ended 31 March
2023 other than their service contracts.
Directors’ remuneration for the period 1April 2022 to 31 March 2023. Salary, annual bonus and benefits.
Non-Executive Chairman
N Kumar*
Executive Directors
Dmitri Tsvetkov**
Ajit Pratap Singh***
Avantika Gupta
Non-executive Directors
Jeremy Warner Allen
Michael Grasby
Total
Salary/fees
£
Annual bonus
£
Total FY23
£
Total FY22
£
45,000
25,000
186,620
229,861
42,920
45,000
574,401
–
–
–
–
–
–
45,000
22,500
25,000
186,620
229,861
42,920
45,000
574,401
150,000
-
59,043
25,000
22,500
279,043
*N.Kumar became the Non-Executive Chairman 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.
***Ajit Pratap Singh was appointed as Chief Financial Officer, Executive Director with effect from 31 May 2022.
As part of the COVID-19 response, the Company had implemented various cost reduction and efficiency
improvement measures to conserve cash and improve liquidity, including voluntary 100 per cent salary
reduction for the Chairman and voluntary reductions up to 50 per cent in compensation for Executive and
Non-Executive Directors for FY21. With effect from 1 April 2022, it was decided to reinstate the remuneration
payable to the Non-Executive Directors of the Company.
No consideration was paid or received by third parties for making available the services of any Executive or
Non- Executive Director.
Under her service agreement, Ms. Avantika Gupta is entitled to medical, insurance and other allowances. During
the year 2022-23, Ms. Avantika Gupta received medical and insurance aggregating to £105,881. During the
year 2021-22, Ms. Avantika Gupta received medical, insurance and other allowances aggregating to £7,085
respectively.
Directors’ LTIP
Directors’ LTIP LTIP granted
LTIP as at
1 April
2022
Granted
Movements
during the
period Expired
/Cancelled
Exercised
LTIP
Outstanding
31 March
2023
Latest
vesting date
Arvind Gupta
Dmitri Tsvetkov 24 April 2019
Avantika Gupta 24 April 2019
24 April 2019 1,185,185
568,889
284,445
Nil
Nil
Nil
0
0
0
Nil
Nil
Nil
1,185,185 24 April 2020
24 April 2020
568,889
24 April 2020
284,445
At 31 March 2023, 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
3 November 2023
49
Strategic ReportCorporate GovernanceFinancial Statements
Statement Of Directors’ Responsibilities
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
3 November 2023
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 St andards 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.
50
Annual Report 2022-23 Independent auditor’s report
To the members of OPG Power Ventures Plc
Opinion on the financial statements
In our opinion the financial statements:
•
•
•
give a true and fair view of the state of the
Group’s affairs as at 31 March 2023 and of the
Group’s profit for the year then ended;
have been properly prepared in accordance with
IFRSs as issued by the IASB; and
have been prepared in accordance with the
requirements of the Companies Act 2006 (Isle of
Man).
We have audited the financial statements of OPG
Power Ventures plc (the ‘Parent Company’) and its
subsidiaries (the ‘Group’) for the year ended 31 March
2023 which comprise the Consolidated statement
of financial position, the Consolidated statement of
comprehensive income, the Consolidated statement
of changes in equity, the Consolidated statement of
cash flows and notes to the financial statements,
including a summary of significant accounting policies.
The financial reporting framework that has been
applied in their preparation is applicable law and
IFRSs as issued by the International Accounting
Standards Board (IASB), as applied in accordance
with the provisions of the Companies Act 2006 (Isle
of Man).
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities
under those standards are further described in the
Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remain independent of the Group in accordance
with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including
the FRC’s Ethical Standard as applied to listed entities,
and we have fulfilled our other ethical responsibilities
in accordance with these requirements.
Conclusions relating to going concern
In auditing the financial statements, we have
concluded that the Directors’ use of the going
concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation
of the Directors’ assessment of the Group’s ability
to continue to adopt the going concern basis of
accounting is included in the Key audit matters
section of our report.
Based on the work we have performed, we have
not identified any material uncertainties relating to
events or conditions that, individually or collectively,
may cast significant doubt on the Group’s ability to
continue as a going concern for a period of at least
twelve months from when the financial statements
are authorised for issue.
Our responsibilities and the responsibilities of the
Directors with respect to going concern are described
in the relevant sections of this report.
Overview
Coverage
Key audit matters
Materiality
100% (2022: 100%) of Group profit before tax
100% (2022: 100%) of Group revenue
100% (2022: 100%) of Group total assets
Carrying value of the thermal power station
Going concern
Accounting for assets held for sale
Group financial statements as a whole
£720K (2022:£650K) based on 5.5% of average profit before tax over three
year period (2022: 5%) of Profit before tax
2023
2022
51
Strategic ReportCorporate GovernanceFinancial Statements An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the
Group’s system of internal control, and assessing the risks of material misstatement in the financial statements.
We also addressed the risk of management override of internal controls, including assessing whether there
was evidence of bias by the Directors that may have represented a risk of material misstatement.
At 31 March 2023 the Group had 11 components whose transactions and balances are included in the consolidated
accounting records. Of these 11 components, 1 was identified as a significant component and has been subject
to a full scope audit. The remaining components were considered to be non-significant; 5 have been subject to
analytical review procedures and 5 have been audited to Group materiality, with all non-significant components
having additional testing carried out on specific significant balances where required for the purpose of issuing
the opinion on the Group financial statements. The significant component, located in India, was subject to a
full scope audit undertaken by BDO India. The procedures on the non-significant components were carried
out by the Group audit team. Each component’s financial information could be selected for the purpose of
representative sampling and key item testing.
Our involvement with component auditors
For the work performed by component auditors, we determined the level of involvement needed in order to be
able to conclude whether sufficient appropriate audit evidence has been obtained as a basis for our opinion on
the Group financial statements as a whole. Our involvement with component auditors included the following:
•
Issuance of Group instructions detailing the level of materiality, risk areas and other specific areas of
focus;
• Regular correspondence during the audit process to monitor progress and ensure early warning of any
areas of concern, particularly in relation to risk areas;
• A review of all audit work by the Group audit team to ensure that the required assurance had been obtained
for the purposes of the Group opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on:
the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement
team. These matters were addressed in the context of our audit of the financial statements as a whole, and
in forming our opinion thereon, and we do not provide a separate opinion on these matters.
How the scope of our audit addressed
the key audit matter
We reviewed management’s assessment of indicators of
impairment and evaluated management’s impairment
models for the thermal power assets against historical
performance and our understanding of the operations.
We challenged the key estimates and assumptions
used by management as set out below:
Our testing included comparison of the tariffs used
in the models to underlying contracts, recalculation
of discount rates and a critical review of the forecast
production and cost profiles against empirical
performance and forward coal price data which has
been corroborated to evidence from third parties.
We involved internal valuation team to provide comfort
on discount rates used.
We sensitised the models for reasonable movements
in all key judgement areas to ascertain whether there
remained a reasonable expectation that there would
remain adequate headroom in excess of the carrying
values.
Key audit matter
Carrying value
of thermal
power station
Please refer
to note 15,
accounting
policies in
note 5(l), and
key sources
of estimation
uncertainty in
note 6(b)(ii).
52
The Group’s thermal power station
represents its most significant asset
and totals £165.6 million as at 31
March 2023.
Management is required to assess
whether they consider there are
any indications that the Group’s
assets may be impaired as at 31
March 2023. This assessment is
undertaken in line with IAS 36
Impairment of Assets. Management
determined that the indicators
of impairment were the market
capitalisation of the Group being
lower compared to the carrying
value of the power station and the
group not performing in the financial
year 2023 as per forecasted results.
The future viability and recoverability
of the power station is underpinned
by the results achieved to date and
the prediction of future value based
on the future cash inflows generated
from the assets. There has been no
impairment charge recognised in
the year.
Annual Report 2022-23 Key audit matter
Going concern
Please refer
to accounting
policies in note
5(a).
Accounting for
assets held for
sale
Please refer
to note 7(b),
accounting
policies in
note 5(q), and
key sources
of estimation
uncertainty in
note 6(a).
The assessment of the recoverable
amount of the thermal power
required significant judgement and
estimation by management and was
therefore considered to be a key
audit matter.
The Directors are required to make
an assessment on the Group’s ability
to continue as a going concern.
As part of this the Directors have
considered a number of scenarios
as further described in note 5(a).
In light of the sharp fluctuations in
coal prices primarily due to Russia-
Ukraine war, industry-wide supply
issues and the resultant economic
uncertainty, we considered the
ability of the Group to operate within
its facilities (including meeting the
required covenants), continue as a
going concern in this environment,
and ensure appropriate disclosure
of key areas of subjectivity within
the financial statement disclosures
to be a key audit matter.
The Group holds investments in
associates relating to their solar
projects which were previously
accounted for as held for sale under
IFRS 5 Non-current Assets Held for
Sale.
In current year as these assets
are no longer classified as it was
determined there was no longer
a realistic expectation of a sale
within 12 months. As a result, the
impact of impairment provided
during previous years while these
investments were categorised as
Assets held for sale were reversed
and the current year’s result,
together with carried for ward
reserves, were recognised as Share
of Profits to the extent of 31%
shareholding, from the Associate
Entities.
Given the judgement involved
around the appropriateness of the
classification as held for sale, and
the determination of the reversal
of previous impairments, the
accounting for the assets held for
sale was considered to be a key
audit matter.
How the scope of our audit addressed
the key audit matter
Key observations:
Based on the procedures above, we found the Group’s
impairment assessment to be appropriate and
confirmed that its impairment model supports the
carrying value of the thermal power station.
Our procedures included the following:
We reviewed the Directors’ assessment of going
concern through analysis of the Group’s cash flow
forecast through to 31 March 2025, including assessing
and challenging the assumptions underlying the
forecasts through corroboration of key assumptions
to external information and a consideration of the key
sensitivities as noted below.
We obtained and understood the Group’s financing
facilities, including the nature of facilities, repayment
terms and covenants. We then assessed the facility
headroom calculations on both a base case scenario,
and the Directors’ downside scenarios as a result of
the economic uncertainty.
We have corroborated the movement on sensitivities
such as coal prices and foreign exchange rates to third
party data and forecasts.
We have assessed the adequacy and appropriateness
of disclosures in the financial statements regarding the
going concern assessment.
Key observations:
Our key observations are noted in the conclusions
relating to going concern section.
Our procedures included the following:
We have considered the classification of these assets
as ‘held for sale’ against the criteria set out in IFRS 5.
As these assets where classified as investments in
associates, we reviewed management’s assessment of
indicators of impairment and evaluated management’s
impairment models.
We challenged the key estimates and assumptions
used by management as set out below:
Our testing included comparison of the tariffs used
in the models to underlying contracts, recalculation
of discount rates and a critical review of the forecast
production.
We involved internal valuation team to provide comfort
on discount rates used.
We sensitised the models for reasonable movements
in all key judgement areas to ascertain whether there
remained a reasonable expectation that there would
remain adequate headroom in excess of the carrying
values.
Key observations:
Based on the procedures above, we found the Group’s
assessment of classification of such assets to be
appropriate and its impairment model supports the
carrying value of the investments to be appropriate.
53
Strategic ReportCorporate GovernanceFinancial Statements Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could
influence the economic decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we
use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly,
misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of
the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating
their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and
performance materiality as follows:
Materiality
Group financial statements
2023
£m
£720k
2022
£m
£650k
Basis for determining
materiality
5.5% of average profit before tax
over three year period
5% of profit before tax
Rationale for the benchmark
applied
We considered 5.5% of average
profit before tax over three years to
be a key performance benchmark
for the Group and the users of the
financial statements in assessing
financial performance. Due to profit
before tax fluctuating significantly
from one year to another we
considered an average of pre-tax
profit over a period of three years.
We considered 5% of profit before
tax to be a key performance
benchmark for the Group and the
users of the financial statements in
assessing financial performance.
Performance materiality
Basis for determining
performance materiality
Rationale for the percentage
applied for performance
materiality
Component materiality
£540k
£488k
75% of Materiality
Based on the considerations there are relatively few financial statement
areas to be tested and few with significant levels of judgement required;
we do not expect the population to include a high value of misstatements
and there are none brought forward; and management is conducive to
adjusting any found misstatements.
As per our risk assessment, together with our assessment of the Group’s
control environment, a low expected level of errors, and management’s
accommodating attitude to proposed adjustments, our judgement is that
performance materiality for the financial statements should be 75% of
materiality.
We set materiality for the significant component of the Group , based on a percentage of 35% (2022: 77%)
of Group materiality dependent on the size and our assessment of the risk of material misstatement of that
component. Component materiality in respect of the significant component was £250k (2022: £500k). In the
audit of the significant component, we further applied performance materiality level of 75% (2022: 75%) of
the component materiality to our testing to ensure that the risk of errors exceeding component materiality
was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess
of £21k (2022: £20k). We also agreed to report differences below this threshold that, in our view, warranted
reporting on qualitative grounds.
54
Annual Report 2022-23 Other information
The Directors are responsible for the other information. The other information comprises the information
included in the FY23 Annual Report & Accounts other than the financial statements and our auditor’s report
thereon. Our opinion on the financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit,
or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this gives rise to a material misstatement in
the financial statements themselves. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ responsibilities, the Directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the Directors determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or
the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is
detailed below:
Non-compliance with laws and regulations
Based on:
• Our understanding of the Group and the industry in which it operates;
• Discussion with management and those charged with governance; and
• Obtaining and understanding of the Group’s policies and procedures regarding compliance with laws and
regulations.
We considered the significant laws and regulations to be the applicable accounting framework, AIM Listing
Rules, Income Tax Act 1961,The Electricity Act 2003, Sharing of Transformation Charges Regulation 2019 and
Power Market Regulations 2010.
The Group is also subject to laws and regulations where the consequence of non-compliance could have a
material effect on the amount or disclosures in the financial statements, for example through the imposition
of fines or litigations. We identified such laws and regulations to be local health and safety legislation.
55
Strategic ReportCorporate GovernanceFinancial Statements Our procedures in respect of the above included:
• Review of minutes of meeting of those charged with governance for any instances of non-compliance with
laws and regulations;
• Review of correspondence with regulatory and tax authorities for any instances of non-compliance with
laws and regulations;
• Review of financial statement disclosures and agreeing to supporting documentation;
•
Involvement of component auditor tax specialists in the audit; and
• Review of legal expenditure accounts to understand the nature of expenditure incurred.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk
assessment procedures included:
•
Enquiry with management and those charged with governance regarding any known or suspected instances
of fraud;
• Review of minutes of meeting of those charged with governance for any known or suspected instances of
fraud;
• Discussion amongst the engagement team as to how and where fraud might occur in the financial
statements; and
•
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate
risks of material misstatement due to fraud.
Based on our risk assessment, we considered the area’s most susceptible to fraud to be in relation to
management override of controls, the inappropriate or incorrect recognition of revenue, the carrying value
of the thermal power station and the accounting for the assets held for sale (the latter two were assessed as
Key audit matters above).
Our procedures in respect of the above included:
- Discussions with the Directors, Group and local management, and the Audit Committee regarding known
or suspected instances of fraud, including gaining an understanding of where they considered there was
a susceptibility to fraud;
- We obtained an understanding of the processes that the Group has established to address risks identified,
or that otherwise prevent, deter and detect fraud; and how management monitors those processes;
- We carried out procedures to check that revenue was recognised in the correct period;
- Work on key areas of judgement are detailed above in the key audit matters section; and
-
Assessing journal entries as part of our planned audit approach. We also performed an assessment on the
appropriateness of key judgements, including the key audit matters detailed above, and estimates which
are subject to managements’ judgement and estimation, and could be subject to potential bias.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement
team members including component engagement teams who were all deemed to have appropriate competence
and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations
throughout the audit. For component engagement teams, we also reviewed the result of their work performed
in this regard.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements,
recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and
the further removed non-compliance with laws and regulations is from the events and transactions reflected
in the financial statements, the less likely we are to become aware of it.
56
Annual Report 2022-23 A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with our engagement
letter dated 31 August 2023. Our audit work has been undertaken so that we might state to the Parent
Company’s members those matters we are required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the Parent Company and the Parent Company’s members as a body, for our audit work, for this report,
or for the opinions we have formed.
BDO LLP
Chartered Accountants
Southampton
United Kingdom
3 November 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
57
Strategic ReportCorporate GovernanceFinancial Statements Consolidated Statement of Financial Position
As at 31 March 2023
(All amount in £, unless otherwise stated)
Notes
As at
31 March 2023
As at
31 March 2022
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
14
15
16
17
17
19
18
17
20(b)
20(a)
7
21
23
23
24
13
23
24
13,401
165,607,650
-
15,245,563
9,734
8,379,292
189,255,640
7,719,396
31,914,606
13,637,196
1,147,062
6,786,497
3,319,148
-
64,523,905
253,779,545
58,909
131,451,482
(15,910,806)
55,157,211
170,756,796
875,541
171,632,337
7,098,242
-
306,402
37,720
19,188,361
26,630,725
25,498,900
29,514,723
502,860
-
55,516,483
82,147,208
253,779,545
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
256,058,067
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
256,058,067
The notes are an integral part of these consolidated financial statements.
The financial statements were authorised for issue by the board of directors on 3 November 2023 and were
signed on its behalf by:
N Kumar
Non-Executive Chairman1
Ajit Pratap Singh
Chief Financial Officer2
1Effective 4 April 2022. Mr Arvind Gupta step down from the Board and Mr N. Kumar appointed as Non-executive Chairman
2Effective 31 May 2022. Mr Dmitri Tsvetkov step down from the Board and Mr Ajit Pratap Singh appointed as Chief Financial Officer
58
Annual Report 2022-23 Consolidated statement of Comprehensive Income
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
Notes
8
9
10(a)
10(b)
11
12
13
7(a)
26
26
26
Revenue
Cost of revenue
Gross profit
Other Operating income
Other income
Distribution cost
General and administrative expenses
Depreciation and amortisation
Operating profit
Finance costs
Finance income
Share of net profit from associates
Reversal of FV Impairment of associates made in 21-22
Profit before tax
Tax expense
Profit for the year from continued operations
Gain/(Loss) from discontinued operations, including
Non-Controlling Interest
Profit for the year
Profit for the year attributable to:
Owners of the Company
Non – controlling interests
Earnings per share from continued operations
Basic earnings per share (in pence)
Diluted earnings per share (in pence)
Earnings/(Loss) per share from discontinued
operations
Basic earnings/(loss) per share (in pence)
Diluted earnings/(loss) per share (in pence)
Earnings per share
-Basic (in pence)
-Diluted (in pence)
Other comprehensive (loss) / income
Items that will be reclassified subsequently to
profit or loss
Exchange differences on translating foreign operations
Items that will be not reclassified subsequently
to profit or loss
Exchange differences on translating foreign
operations, relating to non-controlling interests
Total other comprehensive (loss) / income
Total comprehensive income
Total comprehensive income / (loss)
attributable to:
Owners of the Company
Non-controlling interest
Year ended
31 March 2023
58,683,036
(42,263,205)
16,419,831
1,455,039
5,530,988
(1,225,949)
(6,040,826)
(5,696,860)
10,442,223
(5,925,076)
1,599,860
1,355,413
2,950,958
10,423,378
(3,163,596)
7,259,782
-
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)
7,259,782
5,980,105
7,252,763
7,019
7,259,782
5,994,168
(14,063)
5,980,105
1.80
1.80
-
-
1.80
1.80
2.23
2.23
(0.73)
(0.73)
1.50
1.50
(5,689,558)
2,319,444
(4,140)
4,857
(5,693,698)
2,324,301
1,566,084
8,304,406
1,563,205
2,879
1,566,084
8,313,612
(9,206)
8,304,406
The notes are an integral part of these consolidated financial statements
The financial statements were authorised for issue by the board of directors on 3 November 2023 and were
signed on its behalf by:
N Kumar
Non-Executive Chairman1
Ajit Pratap Singh
Chief Financial Officer2
59
Strategic ReportCorporate GovernanceFinancial Statements 8
7
7
,
4
9
1
8
7
7
,
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-
-
8
7
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,
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60
Annual Report 2022-23
Consolidated statement of cash flows
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
Cash flows from operating activities
Profit before income tax including discontinued
operations and income from associates
Adjustments for:
(Profit) / Loss from discontinued operations, net /
Reversal of Impairment
(Profit) / Loss from associate companies
Unrealised foreign exchange (gain)/loss
Provisions created during the year
Financial costs
Financial income
Share based compensation costs
Depreciation and amortisation
Impairment of Investment/PPE
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)
Proceeds from Disposal of property, plant and
equipment
Interest received
Movement in restricted cash
Purchase of investments
Sale of Investments
Redemption of Investments
Cash from / (used in) investing activities of
continuing operations
Cash from investing activities of discontinued
operations
Net cash from / (used in) investing activities
Notes
Year ended
31 March 2023
Year ended
31 March 2022
10,423,378
10,077,289
(2,950,958)
2,928,341
9(c)
21
(1,355,413)
(121,677)
-
5,925,076
(1,599,860)
-
5,696,860
-
(23,306,671)
2,746,424
(924,487)
4,750,443
(64,847)
(781,732)
(436,692)
(1,218,424)
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
-
-
(1,218,424)
16,331,552
(1,112,976)
(3,534,707)
1,072
-
1,218,405
(2,345,838)
(68,534,422)
81,471,026
2,673,310
13,370,577
2,285,364
(1,213,769)
(6,760,520)
-
-
(9,223,632)
-
-
13,370,577
(9,223,632)
61
Strategic ReportCorporate GovernanceFinancial Statements Consolidated statement of cash flows
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
Notes
Year ended
31 March 2023
Year ended
31 March 2022
Cash flows from financing activities
Proceeds from borrowings (net of costs)
Proceeds/(Investments) from equity
Repayment of borrowings
Dividend paid
Finance costs paid
Cash used in financing activities of continuing
operations
Cash used in financing activities of discontinued
operations
Net cash used in financing activities
Net (decrease) in cash and cash equivalents from
continuing 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
6,842,271
(91)
(17,530,906)
-
(5,925,076)
(16,613,802)
-
-
(3,909,695)
-
(4,528,565)
(8,438,260)
-
-
(16,613,802)
(4,461,649)
(8,438,260)
(1,330,340)
(4,461,649)
7,691,392
(1,330,340)
8,920,952
-
89,405
-
-
100,780
-
3,319,148
7,691,392
Disclosure of Changes in financing liabilities :
Analysing of changes in Net debt
1 April 2022
Cash flows
Working Capital loan
Secured loan due within one year
Borrowings grouped under Current
liabilities
Secured loan due after one year
Borrowings grouped under
Non-current liabilities
1,641,791
11,757,638
13,399,429
360,042
12,554,455
12,914,497
Forex rate
impact
(50,002)
(815,388)
(865,390)
31 March 2023
1,951,831
23,496,705
25,448,536
29,886,348
(23,197,596)
29,886,348 (23,197,596)
341,546
341,546
7,030,298
7,030,298
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
Secured loan due after one year
Borrowings grouped under Non-
current liabilities
3,788,314
722,044
4,510,358
(2,152,472)
10,780,822
8,628,350
5,949
254,772
260,721
1,641,791
11,757,638
13,399,429
42,100,295
(12,538,045)
42,100,295 (12,538,045)
324,098
324,098
29,886,348
29,886,348
62
Annual Report 2022-23 Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(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.
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 2022 and did not have a material impact on the consolidated financial statements:
•
•
•
IFRS 1, ‘First time adoption of IFRS’ has been amended for a subsidiary that becomes a first-time
adopter after its parent. The subsidiary may elect to measure cumulative translation differences
for foreign operations using the amounts reported by the parent at the date of the parent’s
transition to IFRS.
IFRS 9, ‘Financial Instruments’ has been amended to include only those costs or fees paid between
the borrower and the lender in the calculation of “the 10% test” for derecognition of a financial
liability. Fees paid to third parties are excluded from this calculation.
IFRS 16, ‘Leases’, amendment to the Illustrative Example 13 that accompanies IFRS 16 to remove
the illustration of payments from the lessor relating to leasehold improvements. The amendment
intends to remove any potential confusion about the treatment of lease incentives.
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-1 pandemic are lease modifications
and instead, to account for those rent concessions as they were not in lease modifications.
Initially, these amendments were to apply until June 30, 2021."
63
Strategic ReportCorporate GovernanceFinancial Statements
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
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 LASB 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, IFRS 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,
A l l o w c h a n g e s
t h e d e s i g n a t i o n a n d d o c u m e n t a t i o n o f a h e d g i n g
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.
t o
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
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.
64
Annual Report 2022-23
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
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 profits for the purpose of consolidation generated by the Solar entities
Aavanti Solar Energy Private Limited, Mayfair Renewable Energy (I) Private Limited, Aavanti Renewable
Energy Private Limited and Brics Renewable Energy Private Limited were considered in the books for
finalizing the group level financials. These Assets could not be continued to be held for sale as the
process of sale could not get completed within a reasonable time frame. The Effect of Impairment
provided during the earlier years when these were categorised as Assets held for sale were reversed
and the current years profits / loss together with earlier years carried forward reserves were
recognised as Share of Profits to the extent of 31% share holding, from the Associate Entities.
Going Concern
As at 31 March 2023 the Group had £3.3m in cash and cumulative net current assets of £15.8 m. 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,
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 2023.
The 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 for 24 months and this report has been approved.
Based on the RST analysis on PLF Cost of Coal (Dollar per Ton) Common Tariff (INR per UNIT) and
FX Rate (INR / USD), we can conclude that the Group is in strong position to go through the current
situation and continuing as a going concern is not an issue.
65
Strategic ReportCorporate GovernanceFinancial Statements
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
The highly volatile Coal Prices during the year under review 22-23, primarily due to Russia-Ukraine war,
had impact on the group businesses resulting in reduced level of operations with focus on profitability.
This has resulted in lesser generation and export of power. Further the higher coal prices reduced
the net margins as well. Though demand for electricity continued to increase during the year, the
government power distribution companies could not adequately increase the tariff to their consumers
consequent to which the group also could not adequately pass through the increase in coal prices to
its captive consumers. The group received no materially significant public support measures such as
tax relief or compensatory mechanisms except for pass through of coal prices from TANGEDCO under
long term power purchase agreement.
As explained, the surge in global coal price during second half of the previous year 21-22 and continued
increase in the first 8 months of FY 22-23 deterred import of coal, putting further pressure on demand
for domestic (Indian) coal. The export embargo from Indonesia and the war between Russia and
Ukraine 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, continued surge in
power demand 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. To mitigate the risk of abnormal coal
price increase in international markets, the Government of India decided to reduce dependency on
imported coal and increased domestic production as well as initiated allotment of coal mines to private
sector for commercial mining. The Government of India has kept an ambitious target to become net
exporter of coal and to start export of coal by FY 2025-26. Over the later half of the year 22-23 and the
recent downward trend in coal prices have raised hopes of the International prices getting stabilised
at Precovid levels. The Group continues to take commercial and technical measures to reduce the
impact of any adverse development including blending comparatively cheaper coal, modifications to
boilers to facilitate different quality coal firing and continues to engage in meaningful 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 2023. 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.
66
Annual Report 2022-23
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
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:
i) Subsidiaries
Subsidiaries
Immediate
parent
Country of
incorporation
% Voting Right
% Economic interest
March 2023 March 2022 March 2023 March 2022
Caromia Holdings
limited (‘CHL’)
Gita Power and
Infrastructure Private
Limited, (‘GPIPL’)
Saan Renewable
Private Limited Private
Limited
Saman Renewable
Private Limited
Mark Renewables
Private Limited
Mark Solar Private
Limited
Saman Solar Private
Limited
OPG Power Generation
Private Limited
(‘OPGPG’)
Samriddhi Surya
Vidyut Private Limited
Powergen Resources
Pte Ltd
OPGPV
Cyprus
100
100
100
100
CHL
India
97.73
97.73
97.73
97.73
OPGPG
India
OPGPG
India
OPGPG
India
OPGPG
India
OPGPG
India
100
100
100
100
100
100
100
100
100
100
GPIPL
India
81.42
75.38
99.92
99.90
OPGPG
India
100.00
100.00
100.00
100.00
OPGPV
Singapore
95.00
95.00
95
95
ii) Investments in Joint ventures
Joint ventures
Venturer
Country of
incorporation
% Voting Right
% Economic interest
March 2023 March 2022 March 2023 March 2022
Padma Shipping
Limited (“PSL”)
OPGPV /
OPGPG
Hong Kong
50
50
50
50
67
Strategic ReportCorporate GovernanceFinancial Statements
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
iii) Investments in Associates
Associates
Aavanti Solar Energy Private
Limited
Mayfair Renewable Energy (I)
Private Limited
Aavanti Renewable Energy Private
Limited
Brics Renewable Energy Private
Limited
e) Foreign currency translation
Country of
incorporation
% Voting Right
% Economic interest
March 2023 March 2022 March 2023 March 2022
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.
INR exchange rates used to translate the INR financial information into the presentation currency
of Great Britain Pound (£) are the closing rate as at 31 March 2023: 101.44 (2022: 99.37) and the
average rate for the year ended 31 March 2023: 96.79 (2022: 101.62).
f) Revenue recognition
In accordance with IFRS 15 - Revenue from contracts with customers, the group recognises revenue
to the extent that it reflects the expected consideration for goods or services provided to the customer
under contract, over the performance obligations they are being provided. For each separable
performance obligation identified, the Group determines whether it is satisfied at a “point in time” or
“over time” based upon an evaluation of the receipt and consumption of benefits, control of assets
and enforceable payment rights associated with that obligation. If the criteria required for “over time”
recognition are not met, the performance obligation is deemed to be satisfied at a “point in time”.
Revenue principally arises as a result of the Group’s activities in electricity generation and distribution.
Supply of power and billing satisfies performance obligations. The supply of power is invoiced in arrears
on a monthly basis and generally the payment terms within the Group are 10 to 45 days.
Revenue
Revenue from providing electricity to captive power shareholders and sales to other customers is
recognised on the basis of billing cycle under the contractual arrangement with the captive power
shareholders & 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.
68
Annual Report 2022-23
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
For STOA, revenue is earned at a point in time of joint meter reading by both buyer and seller for
each billing month.
For IEX, revenue is earned on daily basis of supply based on the bid and allotted quantum which
gets reconciled at a point in time of meter reading 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)
69
Strategic ReportCorporate GovernanceFinancial Statements
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
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 30""Summary of financial assets and liabilities
by category and their fair values".
Impairments of financial assets are both recognized for losses already incurred and for expected future
credit defaults. The amount of the impairment loss calculated in the determination of expected credit
losses is recognized on the income statement. Impairment provisions for current and non-current
trade receivables are recognised based on the simplified approach within IFRS 9 using a provision
matrix in the determination of the lifetime expected credit losses. During this process the probability
of the non-payment of the trade receivables is assessed. This probability is then multiplied by the
amount of the expected loss arising from default to determine the lifetime expected credit loss for the
trade receivables. On confirmation that the trade receivable will not be collectable, the gross carrying
value of the asset is written off against the associated provision.
j) Financial liabilities
The Group’s financial liabilities include borrowings and trade and other payables. Financial liabilities
are measured subsequently at amortised cost using the effective interest method. All interest-related
charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are
included within ‘finance costs’ or ‘finance income’.
k) Fair value of financial instruments
The fair value of financial instruments that are actively traded in organised financial markets is
determined by reference to quoted market prices at the close of business on the Statement of financial
position date. For financial instruments where there is no active market, fair value is determined using
valuation techniques. Such techniques may include using recent arm’s length market transactions;
reference to the current fair value of another instrument that is substantially the same; discounted
cash flow analysis or other valuation models.
l) Property, plant and equipment
Property, plant and equipment are stated at historical cost, less accumulated depreciation and any
impairment in value. Historical cost includes expenditure that is directly attributable to property
plant & equipment such as employee cost, borrowing costs for long-term construction projects etc., if
recognition criteria are met. Likewise, when a major inspection is performed, its costs are recognised
in the carrying amount of the plant and equipment as a replacement if the recognition criteria are
satisfied. All other repairs and maintenance costs are recognised in the profit or loss as incurred.
Land is not depreciated. Depreciation on all other assets is computed on straight-line basis over the
useful life of the asset based on management’s estimate as follows:
Nature of asset
Buildings
Power stations
Other plant and equipment
Vehicles
Useful life (years)
40
40
3-10
5-11
Assets in the course of construction are stated at cost and not depreciated until commissioned.
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.
70
Annual Report 2022-23 Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
m) 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.
n) Leases
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:
• Leases of low value assets; and
• Leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the contractual payments due to the lessor
over the lease term, with the discount rate determined by reference to the rate inherent in the
lease unless (as is typically the case) this is not readily determinable, in which case the group’s
incremental borrowing rate on commencement of the lease is used. Variable lease payments are
only included in the measurement of the lease liability if they depend on an index or rate. In such
cases, the initial measurement of the lease liability assumes the variable element will remain
unchanged throughout the lease term. Other variable lease payments are expensed in the period
to which they relate. On initial recognition, the carrying value of the lease liability also includes:
• amounts expected to be payable under any residual value guarantee;
•
the exercise price of any purchase option granted in favour of the group if it is reasonable certain
to assess that option;
• any penalties payable for terminating the lease, if the term of the lease has been estimated in
the basis of termination option being exercised.
Right of use assets are initially measured at the amount of the lease liability, reduced for any
lease incentives received, and increased for:
•
lease payments made at or before commencement of the lease;
•
initial direct costs incurred; and
•
the amount of any provision recognised where the group is contractually required to dismantle,
remove or restore the leased asset (typically leasehold dilapidations)”
Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant
rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets
are amortised on a straight-line basis over the remaining term of the lease or over the remaining
economic life of the asset if, rarely, this is judged to be shorter than the lease term. When the group
revises its estimate of the term of any lease (because, for example, it re-assesses the probability of
a lessee extension or termination option being exercised), it adjusts the carrying amount of the lease
liability to reflect the payments to make over the revised term, which are discounted using a revised
discount rate. The carrying value of lease liabilities is similarly revised when the variable element
of future lease payments dependent on a rate or index is revised, except the discount rate remains
unchanged. In both cases an equivalent adjustment is made to the carrying value of the right-of-use
asset, with the revised carrying amount being amortised over the remaining (revised) lease term. If
the carrying amount of the right-of-use asset is adjusted to zero, any further reduction is recognised
in profit or loss.
71
Strategic ReportCorporate GovernanceFinancial Statements
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
o) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
that necessarily take a substantial period of time to get ready for their intended use or sale, are added
to the cost of those assets. Interest income earned on the temporary investment of specific borrowing
pending its expenditure on qualifying assets is deducted from the costs of these assets.
Gains and losses on extinguishment of liability, including those arising from substantial modification
from terms of loans are not treated as borrowing costs and are charged to profit or loss.
All other borrowing costs including transaction costs are recognized in the statement of profit or loss
in the period in which they are incurred, the amount being determined using the effective interest
rate method.
p) Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be
impaired. If any such indication exists, or when annual impairment testing for an asset is required,
the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher
of an asset’s or cash-generating unit’s (CGU) fair value less costs to sell and its value in use and is
determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or Groups of assets. Where the carrying amount of an asset
or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. In determining fair value less costs to sell,
an appropriate valuation model is used. These calculations are corroborated by valuation multiples,
quoted share prices for publicly traded subsidiaries or other available fair value indicators.
For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any
indication that previously recognised impairment losses may no longer exist or may have decreased.
If such indication exists, the Group estimates the asset’s or cash-generating unit’s recoverable
amount. A previously recognised impairment loss is reversed only if there has been a change in
the assumptions used to determine the asset’s recoverable amount since the last impairment loss
was recognised. The reversal is limited so that the carrying amount of the asset does not exceed
its recoverable amount, nor exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is
recognised in the profit or loss.
q) Non-current Assets Held for Sale and Discontinued Operations
Non-current assets and any corresponding liabilities held for sale and any directly attributable liabilities
are recognized separately from other assets and liabilities in the balance sheet in the line items
“Assets held for sale” and “Liabilities associated with assets held for sale” if they can be disposed of
in their current condition and if there is sufficient probability of their disposal actually taking place.
Discontinued operations are components of an entity that are either held for sale or have already
been sold and can be clearly distinguished from other corporate operations, both operationally and
for financial reporting purposes. Additionally, the component classified as a discontinued operation
must represent a major business line or a specific geographic business segment of the Group. Non-
current assets that are held for sale either individually or collectively as part of a disposal group, or
that belong to a discontinued operation, are no longer depreciated. They are instead accounted for
at the lower of the carrying amount and the fair value less any remaining costs to sell. If this value
is less than the carrying amount, an impairment loss is recognized. The income and losses resulting
from the measurement of components held for sale as well as the gains and losses arising from the
disposal of discontinued operations, are reported separately on the face of the income statement under
income/loss from discontinued operations, net, as is the income from the ordinary operating activities
of these divisions. Prior-year income statement figures are adjusted accordingly. However, there is
no reclassification of prior-year balance sheet line items attributable to discontinued operations.
72
Annual Report 2022-23 Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
In case of reclassification, previously recognised impairment loss is reversed only if there has been
a change in the assumptions used to determine the investment’s recoverable amount since the last
impairment loss was recognised. The reversal is limited so that the carrying amount of the investment
does not exceed its recoverable amount, nor exceed the carrying amount that would have been
determined, had no impairment loss been recognised for the investments in prior years. Such reversal
is recognised in the profit or loss. Once the Company ceases to classify a component as assets held for
sale, the results of that component previously presented in discontinued operations will be reclassified
and included in income from continuing operation for the period presented.
r) Cash and cash equivalents
Cash and cash equivalents in the Statement of financial position includes cash in hand and at bank
and short-term deposits with original maturity period of 3 months or less.
For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash
in hand and at bank and short-term deposits. Restricted cash represents deposits which are subject
to a fixed charge and held as security for specific borrowings and are not included in cash and cash
equivalents.
s) Inventories
Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing each
product to its present location and condition is accounted based on weighted average price. Net
realisable value is the estimated selling price in the ordinary course of business, less estimated selling
expenses.
t) Earnings per share
The earnings considered in ascertaining the Group’s earnings per share (EPS) comprise the net profit
for the year attributable to ordinary equity holders of the parent. The number of shares used for
computing the basic EPS is the weighted average number of shares outstanding during the year. For
the purpose of calculating diluted earnings per share the net profit or loss 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.
u)
Other provisions and contingent liabilities
Provisions are recognised when present obligations as a result of a past event will probably lead to
an outflow of economic resources from the Group and amounts can be estimated reliably. Timing
or amount of the outflow may still be uncertain. A present obligation arises from the presence of
a legal or constructive obligation that has resulted from past events. Restructuring provisions are
recognised only if a detailed formal plan for the restructuring has been developed and implemented,
or management has at least announced the plan’s main features to those affected by it. Provisions
are not recognised for future operating losses.
Provisions are measured at the estimated expenditure required to settle the present obligation, based
on the most reliable evidence available at the reporting date, including the risks and uncertainties
associated with the present obligation. Where there are a number of similar obligations, the likelihood
that an outflow will be required in settlement is determined by considering the class of obligations as
a whole. Provisions are discounted to their present values, where the time value of money is material.
Any reimbursement that the Group can be virtually certain to collect from a third party with respect
to the obligation is recognised as a separate asset. However, this asset may not exceed the amount
of the related provision. All provisions are reviewed at each reporting date and adjusted to reflect
the current best estimate.
In those cases where the possible outflow of economic resources as a result of present obligations
is considered improbable or remote, no liability is recognised, unless it was assumed in the course
of a business combination. In a business combination, contingent liabilities are recognised on the
73
Strategic ReportCorporate GovernanceFinancial Statements Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
acquisition date when there is a present obligation that arises from past events and the fair value can
be measured reliably, even if the outflow of economic resources is not probable. They are subsequently
measured at the higher amount of a comparable provision as described above and the amount
recognised on the acquisition date, less any amortisation.
v) Share based payments
The Group operates equity-settled share-based remuneration plans for its employees. None of the
Group’s plans feature any options for a cash settlement.
All goods and services received in exchange for the grant of any share-based payment are measured
at their fair values. Where employees are rewarded using share-based payments, the fair values of
employees’ services is determined indirectly by reference to the fair value of the equity instruments
granted. This fair value is appraised at the grant date and excludes the impact of non-market vesting
conditions (for example profitability and sales growth targets and performance conditions).
All share-based remuneration is ultimately recognised as an expense in profit or loss with a
corresponding credit to ‘Other Reserves’.
If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period,
based on the best available estimate of the number of share options expected to vest. Non-market
vesting conditions are included in assumptions about the number of options that are expected to
become exercisable. Estimates are subsequently revised if there is any indication that the number of
share options expected to vest differs from previous estimates. Any cumulative adjustment prior to
vesting is recognised in the current period. No adjustment is made to any expense recognised in prior
periods if share options ultimately exercised are different to that estimated on vesting.
Upon exercise of share options, the proceeds received net of any directly attributable transaction
costs up to the nominal value of the shares issued are allocated to share capital with any excess being
recorded as share premium.
w) Employee benefits
Gratuity
In accordance with applicable Indian laws, the Group provides for gratuity, a defined benefit retirement
plan (“the Gratuity Plan”) covering eligible employees. The Gratuity Plan provides a lump-sum payment
to vested employees at retirement, death, incapacitation or termination of employment, of an amount
based on the respective employee’s salary and the tenure of employment.
Liabilities with regard to the gratuity plan are determined by actuarial valuation, performed by an
independent actuary, at each Statement of financial position date using the projected unit credit
method.
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.
Employees Benefit Trust
The Group has established an Employees Benefit Trust (hereinafter ‘the EBT’) for investments in
the Company’s shares for employee benefit schemes. IOMA Fiduciary in the Isle of Man have been
appointed as Trustees of the EBT with full discretion invested in the Trustee, independent of the
company, in the matter of share purchases. As at present, no investments have been made by the
Trustee nor any funds advanced by the Company to the EBT. The Company is yet to formulate any
employee benefit schemes or to make awards thereunder.
74
Annual Report 2022-23
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
x) Business combinations
Business combinations arising from transfers of interests in entities that are under the control of
the shareholder that controls the Group are accounted for as if the acquisition had occurred at the
beginning of the earliest comparative period presented or, if later, at the date that common control was
established using pooling of interest method. The assets and liabilities acquired are recognised at the
carrying amounts recognised previously in the Group controlling shareholder’s consolidated financial
statements. The components of equity of the acquired entities are added to the same components
within Group equity. Any excess consideration paid is directly recognised in equity.
y) Segment reporting
The Group has adopted the “management approach” in identifying the operating segments as outlined
in IFRS 8 - Operating segments. Segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker. The Board of Directors being the chief
operating decision maker evaluate the Group’s performance and allocates resources based on an
analysis of various performance indicators at operating segment level. During the year 2021 the
Group has deconsolidated solar entities and are classified as associates (note 7(b)). Accordingly, during
FY23 there is only one operating segment thermal power. 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
During the current year, the profits for the purpose of consolidation generated by the Solar entities
Aavanti Solar Energy Private Limited, Mayfair Renewable Energy (I) Private Limited, Aavanti Renewable
Energy Private Limited and Brics Renewable Energy Private Limited were considered in the books
for finalizing the group level financials. The Assets could not be continued to be held for sale as the
process of sale could not get completed within a reasonable time frame. Consequently, the effect of
Impairment provided during the earlier years when these were categorised as Assets held for sale
were reversed and the current years profits together with earlier years carried forward reserves were
recognised as Share of Profits to the extent of 31% share holding, from the Associate Entities.
The decision to reversal of impairment was undertaken based on the impairment workings carried out
for solar assets using the Discounted Cash Flow method (refer Note 15 & 16).
Recoverability of deferred tax assets
The recognition of deferred tax assets requires assessment of future taxable profit (see note 5(h)).
Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised
against future taxable income.
75
Strategic ReportCorporate GovernanceFinancial Statements
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
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.
Financial assets measured at FVPL
Management applies valuation techniques to determine the fair value of financial assets measured
at FVPL where active market quotes are not available. This requires management to develop
estimates and assumptions based on market inputs, using observable data that market participants
would use in pricing the asset. Where such data is not observable, management uses its best
estimate. Estimated fair values of the asset may vary from the actual prices that would be
achieved in an arm’s length transaction at the reporting date.
ii)
Impairment tests: In assessing impairment, management estimates the recoverable amount of
each asset or cash-generating units based on expected future cash flows and use an interest
rate for discounting them. Estimation uncertainty relates to assumptions about future operating
results including fuel prices, foreign currency exchange rates etc. and the determination of a
suitable discount rate. 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.
76
Annual Report 2022-23
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
7 Profit from discontinued operations
Non-current assets held for sale and Profit from discontinued operations consists of:
Assets Held for Sale
At 31
March 2023
-
At 31
March 2022
13,497,027
Liabilities classified as
held for sale
At 31
March 2023
-
At 31
March 2022
-
-
-
-
-
-
13,497,027
-
-
-
-
-
-
Profit from discontinued
operations
For FY 23
For FY 22
-
-
-
-
(2,928,341)
-
-
(2,928,341)
i
Interest in Solar
entities Note 7(b)
ii Share of Profit on fair
value of investments,
in Solar entities Note
7(b)
iii Gain on
deconsolidation of
Solar entities
Total
(a) Assets held for sale and discontinued operations of solar entities
As explained above, during the current year, the profits for the purpose of consolidation generated
by the Solar entities Aavanti Solar Energy Private Limited, Mayfair Renewable Energy (I) Private
Limited, Aavanti Renewable Energy Private Limited and Brics Renewable Energy Private Limited were
considered in the books for finalizing the group level financials. The Assets could not be continued to
be held for sale as the process of sale could not get completed within a reasonable time frame. The
Effect of Impairment provided during the earlier years when these were categorised as Assets held for
sale were reversed and the current years profits together with earlier years carried forward reserves
were recognised as Share of Profits to the extent of 31% share holding, from the Associate Entities.
The Solar Assets were tested for Impairment and the variables like PPA Tariff, PLF and other reasonable
O & M costs were evaluated. Future Cash flows were determined under the DCF method. The PV of
earnings were found to be higher than the carrying cost these assets and no impairment was found
to be existent. The Solar Assets have been evaluated as Associate entities and the Previous Year's
impairment of £2,950,958 has been reversed in the current year 22-23 and 31% share of Profits of
£1,355,413 has been considered in the books of current year 22-23.
Non-current Assets held-for-sale and discontinued operations
(a) Assets of disposal group classified as held-for-sale
Property, plant and equipment
Trade and other receivables
Other short-term assets
Restricted cash
Cash and cash equivalents
Investment in associates classified as held for sale
Total
(b) Analysis of the results of discontinued operations is as
follows:
Revenue
Operating profit before impairments
Finance income
Finance cost
Current Tax
Deferred tax
Share of Profit/ (Loss) on fair value of investments, in Solar
entities
Gain on deconsolidation of Solar entities
Profit / (Loss) from Solar operations
As at
31st March 2023
-
-
-
-
-
-
-
As at
31st March 2022
-
-
-
-
-
13,497,027
13,497,027
For FY 23
For FY 22
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,928,341)
-
(2,928,341)
77
Strategic ReportCorporate GovernanceFinancial Statements
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
8 Segment Reporting
The Group has adopted the “management approach” in identifying the operating segments as outlined in
IFRS 8 - Operating segments. Segments are reported in a manner consistent with the internal reporting
provided to the chief operating decision maker. The Board of Directors being the chief operating decision
maker evaluate the Group’s performance and allocates resources based on an analysis of various
performance indicators at operating segment level. During FY23 there is only one operating segment
thermal power. The solar power business has been considered as an Associate Entity which was earlier
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 customer exceeding 10% of total sales revenue amounts to
£42,358,711 from TANGEDCO & £8,888,909 from IEX (2022: £11,465,934).
Segmental information disclosure
Segment Revenue
Sales
Total
Other Operating income
Depreciation, impairment
Profit from operation
Finance Income
Finance Cost
Tax expenses
Reversal of FV Impairment of
associates
Share of Profit, (Loss) on fair
value of investments, in Solar
entities
Profit / (loss) for the year
Assets
Liabilities
Continuing operations Thermal
Discontinued operations Solar
FY23
58,683,036
58,683,036
1,455,039
(5,696,860)
FY22
80,067,032
80,067,032
-
(5,333,531)
10,442,223
1,599,860
(5,925,076)
(3,163,596)
2,950,958
16,076,355
2,285,364
(5,356,089)
(4,097,184)
-
1,355,413
-
7,259,782
253,779,545
82,147,208
8,908,446
242,561,040
85,991,813
FY23
-
-
-
-
-
-
-
-
-
-
-
-
-
-
FY22
-
-
-
-
-
-
-
-
-
-
(2,928,341)
(2,928,341)
13,497,027
-
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
Depreciation
Other direct costs
Total
31 March 2023
31 March 2022
39,021,545
-
3,241,660
42,263,205
53,886,250
-
2,614,714
56,500,964
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 22)
Total
31 March 2023
2,651,267
186,396
-
2,837,663
31 March 2022
2,247,996
217,715
194,779
2,660,490
Auditor’s remuneration for audit services amounting to £74,000 (2022: £59,000) is included in general
and administrative expenses and excludes travel reimbursements.
78
Annual Report 2022-23
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
9
Costs of inventories and employee benefit expenses included in the consolidated
statements of comprehensive income (Contd.)
c) Foreign exchange movements (realised and unrealised) included in the Finance costs is as
follows:
Foreign exchange realised - loss / (gain)
Foreign exchange unrealised- loss / (gain)
Total
10 Other operating income and expenses
a) Other operating income
Surcharge TANGEDCO
Contractual claims payments
Total
31 March 2023
31 March 2022
1,278,303
(121,677)
1,156,626
214,048
184,880
398,928
31 March 2023
31 March 2022
1,455,039
-
1,455,039
-
-
-
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
Provisions no longer required written back
Sale of coal
Sale of fly ash
Power trading commission and other services
Others*
Total
31 March 2023
31 March 2022
-
2,240,486
117,399
-
3,173,104
5,530,988
-
7,338,941
77,586
169,183
469,155
8,054,865
*Others include Insurance Claim of £2,211,883 received during the year
11 Finance costs
Finance costs are comprised of:
Interest expenses on borrowings
Net foreign exchange loss (Note 9)
Other finance costs
Total
31 March 2023
31 March 2022
4,242,700
1,156,626
525,750
5,925,076
4,277,158
398,928
680,003
5,356,089
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 2023
31 March 2022
1,218,405
891,467
381,455
1,393,897
1,599,860
2,285,364
*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.
79
Strategic ReportCorporate GovernanceFinancial Statements Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
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 2023 and 2022 is as follows:
Accounting profit before taxes
Enacted tax rates
Tax expense / profit at enacted tax rate
Exempt Income due to tax holiday
Foreign tax rate differential
Unused tax losses brought forward and carried forward
Non deductible / (Non-taxable) items
MAT credit
Others
Actual tax for the period
Current tax
Deferred tax
Total tax expenses on income from continued operations
31 March 2023
31 March 2022
10,423,378
13,005,630
34.94%
34.94%
3,642,345
4,544,687
-
-
(135,973)
(13,847)
-
198,000
(540,777)
-
-
(916,046)
482,390
-
3,163,596
4,097,184
31 March 2023
31 March 2022
(539,716)
(2,623,880)
(3,163,596)
334,646
3,762,538
4,097,184
Tax reported in the statement of comprehensive income
(3,163,596)
4,097,184
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 2022:
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 2023 and 2022 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
Mark to market on available-for-sale financial assets
Deferred income tax liabilities, net
31 March 2023
31 March 2022
-
11,741,110
11,741,110
-
11,985,655
11,985,655
30,929,471
-
30,929,471
19,188,361
29,015,582
-
29,015,582
17,029,927
80
Annual Report 2022-23
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
13 Tax expenses (Contd.)
Movement in temporary differences during the year
Particulars
As at
01 April 2022
Deferred
tax asset /
(liability)
for the year
Classified
as (Asset)
/ Liability
held for sale
Translation
adjustment
As at
31 Mar 2023
Property, plant and equipment
(29,015,582)
(2,505,899)
Unused tax losses brought
forward and carried forward
-
MAT credit entitlement
11,985,655
-
Mark to market gain / (loss)
on financial assets measured
at FVPL
Deferred income tax
(liabilities) / assets, net
(17,029,927)
(2,505,899)
-
-
-
-
-
-
-
-
592,011
(30,929,471)
-
-
(244,545)
11,741,110
-
-
347,466 (19,188,361)
Particulars
As at
01 April 2021
Deferred
tax asset /
(liability)
for the year
Classified
as (Asset)
/ Liability
held for sale
Translation
adjustment
As at
31 Mar 2022
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)
-
-
-
-
-
-
(366,529)
(29,015,582)
-
-
93,511
11,985,655
-
-
Mark to market gain / (loss)
on financial assets measured
at FVPL
Deferred income tax
(liabilities) / assets, net
(12,994,371) (3,762,538)
-
(273,018) (17,029,927)
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 2023 and 2022, 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.
81
Strategic ReportCorporate GovernanceFinancial Statements Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
14 Intangible assets
Intangible assets
Cost
At 31 March 2021
Additions
Exchange adjustments
At 31 March 2022
At 31 March 2022
Additions
Exchange adjustments
At 31 March 2023
Accumulated depreciation and impairment
At 31 March 2021
Charge for the year
Exchange adjustments
At 31 March 2022
At 31 March 2022
Charge for the year
Exchange adjustments
At 31 March 2023
Net book value
At 31 March 2023
At 31 March 2022
15 Property, plant and equipment
The property, plant and equipment comprises of:
Acquired
software licences
763,595
11,875
11,032
786,502
786,502
5,174
(14,577)
777,099
761,201
2,438
11,054
774,692
774,692
3,255
(14,250)
763,697
13,401
11,810
Cost
At 1st April 2021
Additions
Land &
Buildings
Power
stations
Other
plant &
equipment
Vehicles Right-of-
use
Asset under
construction
Total
8,388,982 200,460,226 1,766,719
748,624
–
122,717 211,487,268
Transfers on capitalisation
Sale / Disposals
–
–
267,007
1,584,477
25,229
38,134
0
–
–
(52,794)
Exchange adjustments
119,437
2,905,807
25,366
10,731
23,745
43,843
3,265,722
3,639,464
–
–
–
(1,622,611)
–
0
(52,794)
1,391
3,062,732
At 31 March 2022
8,522,338 205,217,517 1,855,448
730,306
43,843
1,767,219 218,136,670
At 1st April 2022
Additions
Transfers on capitalisation
Sale / Disposals
8,522,338 205,217,517 1,855,448
730,306
43,843
1,767,219 218,136,670
385,220
14,028
–
–
–
1,148,303
(42,436)
–
–
–
676,736
1,107,802
(1,148,303)
–
–
(103,081)
(813)
(32,754)
(4,043,014)
(60,645)
(13,536)
Exchange adjustments
(157,956)
(3,803,566)
(34,389)
At 31 March 2023
8,396,200 202,905,038 1,835,087
656,125
43,030
1,262,898 215,098,377
Accumulated depreciation
and impairment
At 1 April 2021
Charge for the year
Sale / Disposals
Exchange adjustments
At 31 March 2022
82
61,319
37,039,448 1,062,450
608,010
–
10,801
5,033,811
257,196
22,135
7,149
–
–
–
(52,794)
1,433
649,528
21,170
9,190
–
146
–
–
–
–
38,771,227
5,331,093
(52,794)
681,467
73,553
42,722,787 1,340,816
586,541
7,295
– 44,730,993
Annual Report 2022-23
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
15 Property, plant and equipment (Contd.)
The property, plant and equipment comprises of:
At 1 April 2022
Charge for the year
Sale / Disposals
Exchange adjustment
At 31 March 2023
Net book value
At 31 March 2023
At 31 March 2022
Land &
Buildings
Power
stations
Other
plant &
equipment
Vehicles Right-of-
use
Asset under
construction
Total
73,553
42,722,787 1,340,816
586,541
7,295
13,813
5,361,890
281,236
36,666
0
0
(15,949)
0
(60,645)
(7,157)
(1,393)
(812,100)
(25,385)
(11,104)
(138)
85,973
47,256,628 1,596,667
551,458
–
–
–
–
–
–
44,730,993
5,693,605
(83,751)
(850,120)
49,490,728
155,991,497
8,310,226 155,648,411
238,420
104,666
43,030
1,262,898 165,607,650
8,448,784 162,494,730
514,632
143,765
36,548
1,767,219 173,405,677
The net book value of land and buildings block comprises of:
Freehold land
Buildings
31 March 2023
31 March 2022
7,904,853
405,372
8,310,225
7,904,853
419,119
8,448,784
Property, plant and equipment with a carrying amount of £ 164,159,294 (2022 £167,962,534) is subject
to security restrictions (refer note 22).
a)
The Group considered both qualitative and quantitative factors when determining whether an Asset
or CGU may be impaired. Assets related to each segment (Thermal & Solar) and the cash inflows
generated by each are separately identifiable and independent of other assets or groups of assets.
No impairment loss was recognized for the consulting segment during the year 22-23.
The recoverable amount of segment was determined based on value-in-use calculations, covering a
detailed 18 year period forecast for Thermal Assets and 20 Year period for the Solar Assets using DCF
methodology by the Management. The present value of the expected cash flows of each segment is
determined by applying a suitable discount rate reflecting current market assessments of the time value
of money and risks specific to the segment.
The Present Value of Cash Flows thus determined were compared with the Carrying Cost of PPE and it was
found that the PV Values were on the Higher side of the Carrying cost of Property Plant and Equipment.
Year ended 31 March 2023
Present Value of Cash Flows
Carrying Cost of PPE
Thermal £ Mn
Solar £ Mn
309.1
169.5
56.4
35.1
Appropriate sensitivities to understand impact on key estimates and under all scenarios were tested and
no impairment was triggered. Group has also considered the impact of climate change and global energy
transition. Coal fired power generation will remain key to the energy mix for India over the life of the
Power Station. With the above calculations, it was concluded that there is no impairment in Thermal and
Solar Assets. The Impairment provided for in earlier years for Solar Assets was accordingly reversed
amounting to £2.9 Million.
Management’s key assumptions included:
Cash flow projections reflect stable Profit Margins and Cash Flows on both Thermal & Solar Assets. No
expected efficiency improvements have been taken into account and expenses were considered based on
forecasts of inflation and our current actual expenses and the Revenue forecasts were based on the Rates
at which the PPA with Utility companies were entered or are prevalent in the market.
Current exchange rate of 1USD to INR 84.24 has been considered and is depreciated by 2 % Year on Year
over the forecast period. The exchange rate is estimated to be consistent with the average market forward
exchange rate over the budget period.
83
Strategic ReportCorporate GovernanceFinancial Statements
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
15 Property, plant and equipment (Contd.)
The discount rate was derived based on weighted average cost of capital (WACC) for comparable entities in
the industry, based on market data. The discount rates reflect appropriate adjustments relating to market
risk and specific risk factors of each segment. Further, management considered the maturity and stability
of the both the segments when determining the appropriate adjustments to this rate.
b) Cash flow projections
Cash flow projections are based on the Management’s approved estimates, followed by an extrapolation
of expected cash flows for the remaining useful lives using the various variables as outlined below
Thermal
Parameters
Deemed Plant Load Factors (%)
Realisable Tariff (Pence)
Price of Coal (USD/Ton)
WACC (%)
Cost of Debt (%)
Solar
Parameters
Plant Load Factors (%)
Applicable Tariff (Pence)
Annual Degradation of Solar Modules (%)
WACC (%)
Cost of Debt (%)
Values
65 to 73
4.9 to 7.7
60 to 50
13.58
10.5
Values
21%
5.1
0.50%
8.2 to 9.1
8.9
c)
From the results of the Reverse Stress Test as under, it may be observed that Significant Issues would
be required to Impact the Cash flows of the entity, only in extreme cases in the Year 24 where PLF
drops from 68 % to 16 % and Cost of Coal Increases from $ 61 to $ 143 and Tariff per Unit Drops
from INR 7.5 to INR 4.7 and Forex Rate of INR to $ increases from 84 to 199 and no consequential
impact in the ability of generating Revenue and Profits were found.
Variables
PLF %
Cost of Coal
Tariff (INR/Unit)
F/X Rate (INR/$)
Base Case
Reverse Stress Test
FY 24
FY 25
FY 24
FY 25
68
61
7.5
84
68
59
7.7
86
16
143
4.7
199
16
150
4.8
202
16 Investments accounted for using the equity method
The carrying amount of investments accounted for using the equity method is as follows:
Investments in joint venture
Impairment provision for investments in joint venture (Note 7(a))
Investments in Associates
Balance value of Investments in Associates classified as Assets
held for sale
Investments accounted for using the equity method
31 March 2023
31 March 2022
-
-
16,159,133
-
-
-
-
13,497,027
16,159,133
13,497,027
84
Annual Report 2022-23
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
16 Investments accounted for using the equity method (Contd.)
a) Investment in associates (Note 5(d) 7(b))
Summarised aggregated financial information of the Group’s share in the associates.
Profit from continuing operations
Other comprehensive income
Total comprehensive Income
31 March 2023
31 March 2022
1,355,413
-
1,355,413
-
-
-
Future Cash flows were determined under the DCF method for the PPA period. The Present Value of
cash flows were found to be higher than the carrying cost of these assets and no impairment was
found to be existent. The details of impairment analysis are provided in Note 15 above. The Solar
Assets have been evaluated as Associate entities and the Previous Year's impairment of £2,950,958 has
been reversed in the current year 22-23 and 31% share of Profits of £1,355,413 has been considered
in the books of current year 22-23.
Aggregate carrying amount of the Group’s interests in these associates & other entities
Associates & Other Entities
Total carrying Amount
17 Other Assets
A. Short-term
Capital advances
Financial instruments measured at fair value through P&L
Advances and other receivables
Total
B. Long-term
Advances to related parties
Classified as asset held for sale (note 7(a))
Lease deposits
Bank deposits
Other advances
Restricted Cash
Total
31 March 2023
31 March 2022
15,245,563
15,245,563
2,113,307
2,113,307
31 March 2023
31 March 2022
-
4,792,732
8,844,464
13,637,196
-
18,265,352
7,917,571
26,182,923
-
-
-
9,734
-
8,379,292
8,389,026
-
-
-
12,140
-
10,427,847
10,439,987
The financial instruments of £ 4,792,732 (FY22: £18,265,352) represent investments in mutual funds and
Bonds- their fair value is determined by reference to published data.
18 Trade and other receivables
Current
Trade receivables
Other receivables
Total
31 March 2023
31 March 2022
31,914,606
-
31,914,606
8,607,935
-
8,607,935
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 30 “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.
85
Strategic ReportCorporate GovernanceFinancial Statements
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
19 Inventories
Coal and fuel
Stores and spares
Total
31 March 2023
31 March 2022
6,706,467
1,012,929
7,719,396
9,499,510
966,310
10,465,820
The entire amount of above inventories has been pledged as security for borrowings (refer note 22)
20 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
Short-term deposits
Total
31 March 2023
31 March 2022
-
3,319,148
3,319,148
5,193,275
2,498,117
-
7,691,392
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 and mutual funds with the maturity up to twelve months
amounting to £6,786,497 (2022 - £2,392,104) which have been lien marked by the Group in order
to establish Letters of Credits, Bank Guarantees from the bankers and debenture redemption fund.
21 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 2023, the Company has an authorised and issued share capital of 400,733,511 (2022:
400,733,511) equity shares at par value of £ 0.000147 (2022: £ 0.000147) per share amounting to £58,909
(2022: £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.
86
Annual Report 2022-23
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
22 Share based payments
Long Term Incentive Plan
In 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.
- 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.
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 FY23 and no shares were issued during FY 23. The Carry forward shares under LTIP reserves
will be issued in the year 23-24. The shares have not been issued because that was the time of COVID lock
downs and related disruptions including Administrative and Logistics issues, thus delaying the process of
allocation of shares to the Executives over the three year period from 2020.
LTIP as at
Movements during the period
Expired/
LTIP
Outstanding
Latest
vesting
LTIP
granted
1-Apr-22
Granted
Cancelled Exercised
31-Mar-23
date
Arvind Gupta
Dmitri Tsvetkov
Avantika Gupta
24-Apr-19 1,185,185
568,889
24-Apr-19
284,445
24-Apr-19
Nil
Nil
Nil
0
0
0
Nil
Nil
Nil
1,185,185
568,889
284,445
24-Apr-20
24-Apr-20
24-Apr-20
87
Strategic ReportCorporate GovernanceFinancial Statements Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
23 Borrowings
The borrowings comprise of the following:
Borrowings at amortised cost
Non-Convertible Debentures at
amortised cost
Total
Interest rate
(range %)
9.9-10.851
9.85-12.75
Final maturity 31 March 2023 31 March 2022
June 2024
June 2023
10,416,543
22,180,599
23,159,039
20,126,738
32,597,142
43,285,777
1Interest rate range for Project term loans and Working Capital
The term loans, working capital loans and non-convertible debentures 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.
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 2023, the
Group has met all the relevant covenants.
The fair value of borrowings at 31 March 2023 was £3,25,97,142 (2022: £43,285,777). 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
24 Trade and other payables
Current
Trade payables
Creditors for capital goods
Bank Overdraft
Other payables
Total
Non-current
Other payables
Total
31 March 2023
31 March 2022
25,498,900
13,399,429
7,098,242
32,597,142
29,886,348
43,285,777
31 March 2023
31 March 2022
29,251,178
263,545
-
-
29,514,723
24,402,850
37,474
-
-
24,440,324
306,402
306,402
630,358
630,358
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.
88
Annual Report 2022-23
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
25 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 (from February 2021)
Nature of relationship
Non-executive Chairman (from 4th April 2022)
Chairman (till 4th April 2022)
Chief Executive Officer (from 4th April 2022)
Chief Financial Officer & Director (till 31st May 2022)
Chief Financial Officer (from 31st May 2022)
Deputy Chairman
Director
Related parties with whom the group had transactions during the period
Name of the party
Nature of relationship
Powergen Resources PTE Ltd
Aavanti Solar Energy Private Limited
Mayfair Renewable Energy (I) Private Limited
Aavanti Renewable Energy Private Limited
Brics Renewable Energy Private Limited
Subsidiary
Associates
Associates
Associates
Associates
Summary of transactions with related parties
Name of the party
Remuneration to Samriddhi Bubna
Sale of solar modules :
a) Aavanti Solar Energy Private Limited
b) Mayfair Renewable Energy (I) Private Limited
Summary of balance with related parties
31 March 2023
31 March 2022
61,990
24,601
-
-
188,741
75,664
Name of the party
Padma Shipping Limited
Padma Shipping Limited
Padma Shipping Limited
Aavanti Solar Energy Private Limited
Aavanti Solar Energy Private Limited
Aavanti Solar Energy Private Limited
Mayfair Renewable Energy (I) Private Limited
Mayfair Renewable Energy (I) Private Limited
Mayfair Renewable Energy (I) Private Limited
Aavanti Renewable Energy Private Limited
Aavanti Renewable Energy Private Limited
Aavanti Renewable Energy Private Limited
Brics Renewable Energy Private Limited
Brics Renewable Energy Private Limited
Nature of
balance
Investment
Advances
Impairment
provision
Investment
Trade payable
Advance
Investment
Trade payable
Advance
Investment
Trade payable
Advance
Investment
Advance
31 March 2023
31 March 2022
-
-
-
3,448,882
1,727,418
(5,176,300)
4,875,473
-
871,983
5,295,192
-
101,273
4,270,391
-
115,979
362,664
2,447
4,863,575
-
538,038
5,277,364
(52,035)
-
5,804,055
-
298,745
362,664
-
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. 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.
89
Strategic ReportCorporate GovernanceFinancial Statements
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
26 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 2023 or 2022).
The company has issued LTIP over ordinary shares which could potentially dilute basic earnings per share
in the future.
The weighted average number of shares for the purposes of diluted earnings per share can be reconciled
to the weighted average number of ordinary shares used in the calculation of basic earnings per share
(for the group and the company) as follows:
Particulars
Weighted average number of shares used in basic
earnings per share
Shares deemed to be issued for no consideration in
respect of share based payments
Weighted average number of shares used in diluted
earnings per share
31 March 2023
31 March 2022
402,924,030
402,924,030
-
-
402,924,030
402,924,030
27 Directors remuneration
Name of directors
Ajit Pratap Singh
Avantika Gupta
Dmitri Tsvetkov
Jeremy Warner Allen
N Kumar
Mike Grasby (from February 2021)
Total
31 March 2023
31 March 2022
186,620
229,861
25,000
42,920
45,000
45,000
574,401
-
59,043
150,000
25,000
22,500
22,500
279,043
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.
28 Business combination within the group without loss of control
As per the original structure of the group, two Cypriot subsidiaries of OPGPV, namely Gita Energy Private
Limited (‘GEPL’) and Gita Holdings Private Limited (‘GHPL’), held the investments in the equity of the Group’s
Special Purpose Vehicles (SPV) in India. During the year ended 31 March 2013, the management decided
to interpose an Indian holding Company, GPIPL in the structure and warehouse the SPV investments in
GPIPL. Accordingly, the shareholders of GEPL, GHPL and GPIPL had entered into a scheme of arrangement
to effect the above restructuring of the group. As part of the regulatory requirements in India, the group
had applied and obtained approval from the High court of Madras on 28 October 2011 subject to fulfilment
of certain conditions including approval of relevant regulatory authorities, allotment of shares etc. The
scheme had been consummated with effect from 25 January 2013 upon issue of shares to the shareholders
of GEPL and GHPL, namely CHL and the assets and liabilities of GEPL and GHPL have been taken over by
GPIPL. Consequent to the scheme of arrangement, the group also has gained 100% economic interest over
GPIPL by virtue of an agreement entered into with the minority shareholders of GPIPL dated 01 April 2012.
The above arrangement has been considered as a business combination involving companies under the
group since then and has been accounted at the date that common control was established using pooling of
interest method. The assets and liabilities transferred are recognised at the carrying amounts recognised
previously in the Group controlling shareholder’s consolidated financial statements. The components of
equity of the acquired entities are added to the same components within Group equity. There was no
excess consideration paid in this transaction.
90
Annual Report 2022-23 Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
29 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
Recognition of a right of use asset NIL (2022: 36548).
Contingent liabilities
Disputed income tax demands £341,841(2022:£3,715,194).
31 March 2023
31 March 2022
-
-
-
-
15,337
23,005
-
38,342
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 2023: £27,109,682(2022: £12,233,195) and
Bank Guarantee (BG) as at 31 March 2023: £5,481,828(2022: £4,039,969). 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 £ 20,228,371 (2022: £21,760,986). 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.
30 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 2023 and 31 March
2022
91
Strategic ReportCorporate GovernanceFinancial Statements
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
30 Financial risk management objectives and policies (Contd.)
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 2023, 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 2023 and 31 March 2022, 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 2023 would decrease
or increase by £944,115 (2022: £432,858).
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in foreign exchange rate. The Group’s presentation currency is the Great
Britain £. A majority of our assets are located in India where the Indian rupee is the functional currency
for our subsidiaries. Currency exposures also exist in the nature of capital expenditure and services
denominated in currencies other than the Indian rupee.
The Group’s exposure to foreign currency arises where a Group company holds monetary assets and
liabilities denominated in a currency different to the functional currency of that entity:
Currency
Financial
assets
Financial
liabilities
United States Dollar (USD)
-
33,651,568
Financial
assets
133,577
Financial
liabilities
16,067,891
As at 31 March 2023
As at 31 March 2022
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 2023
As at 31 March 2022
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)
81.72
2,710,968
75.66
1,223,320
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 £11,922,073 (2022: £33,269,104) and corporate guarantees issued to lenders of its
associates solar entities of £20,228,371 (2022: £21,760,986).
92
Annual Report 2022-23
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
30 Financial risk management objectives and policies (Contd.)
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.
31 March 2023
Within Credit
period
Days past due
More than
30 days
More than
60 days
More than
180 days
Total
Expected general loss
allowance rate
Gross carrying amount - Trade
Receivables -TANGEDCO
Gross carrying amount - Trade
Receivables -Others
General loss allowance
Total Loss allowance
0%
0%
0%
117.55%
14,536,783
2,305,759
134,789
5,337,057
22,314,388
12,289,965
2,572,888
1,567,981
3,174,717
19,605,551
-
-
-
-
10,005,333
-
10,005,333
- 10,005,333 10,005,333
31 March 2022
Within Credit
period
Days past due
More than
30 days
More than
60 days
More than
180 days
Total
Expected loss rate
Gross carrying amount - Trade
Receivables -TANGEDCO
Gross carrying amount - Trade
Receivables -Others
General loss allowance
Specific loss allowance
Total Loss allowance
0%
727,191
0%
656,818
0%
2,158,116
82.00%
7,199,394
10,741,520
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
93
Strategic ReportCorporate GovernanceFinancial Statements Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
30 Financial risk management objectives and policies (Contd.)
The closing loss allowances for trade receivables as at 31 March 2023 reconciles to the opening loss
allowances as follows:
Particulars
Opening loss allowance as at 1 April
(Reversal) in loss allowance
Total
31 March 2023
31 March 2022
10,385,677
(380,344)
10,005,333
21,133,088
(10,747,411)
10,385,677
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 2023 and 31 March 2022.
As at 31 March 2023
Borrowings
Non-Convertible Debentures
Trade and other payables
Provision for pledged deposits
Other liabilities
Other current liabilities
Total
As at 31 March 2022
Borrowings
Non-Convertible Debentures
Trade and other payables
Other liabilities
Other current liabilities
Other current liabilities
Capital management
Current
Within 12
months
3,318,301
22,180,599
29,514,723
-
37,720
502,860
55,554,203
Current
Within 12
Months
13,399,429
-
24,440,324
-
569,199
38,408,952
Non-Current
1-5 years
Later than 5
years
Total
7,098,242
-
306,402
-
-
-
7,404,644
Non-Current
Later than
5 years
1-5 Years
9,759,610
20,126,738
630,358
36,228
-
30,552,934
-
-
-
-
-
-
-
-
-
-
-
-
-
10,416,543
22,180,599
29,821,125
-
37,720
502,860
62,958,847
Total
23,159,039
20,126,738
25,070,682
36,228
569,199
68,961,886
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
94
Annual Report 2022-23
Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
30 Financial risk management objectives and policies (Contd.)
•
•
ensure Group’s ability to meet both its long-term and short-term capital needs as a going concern
and
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 2023.
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:
Particulars
Total equity
Less: Cash and cash equivalents
Capital
Total equity
Add: Borrowings
Overall financing
Capital to overall financing ratio
31 March 2023
31 March 2022
171,632,337
(3,319,148)
168,313,189
170,066,254
(7,691,392)
162,374,862
171,632,337
32,597,142
204,229,479
0.82
170,066,254
43,285,777
213,352,031
0.76
31 Summary of financial assets and liabilities by category and their fair values
Financial assets measured at
amortised cost
• Cash and cash equivalents1
• Restricted cash1
• Current trade receivables1
• Other long-term assets
• Other short-term assets
Financial instruments measured at
fair value through profit or loss
• Other short term assets - (Note 17)
Financial liabilities measured at
amortised cost
Term loans2
LC Bill discounting & buyers’ credit facility1
Non-Convertible Debentures2
Current trade and other payables1
Provision for pledged deposits
Non-current trade and other payables2
Carrying amount
Fair value
March 2023
March 2022
March 2023
March 2022
3,319,148
15,165,789
31,914,606
9,734
8,844,464
7,691,392
12,819,951
8,607,935
12,140
2,724,296
3,319,148
15,165,789
31,914,606
9,734
8,844,464
7,691,392
12,819,951
8,607,935
12,140
2,724,296
4,792,732
64,046,473
23,458,627
55,314,341
4,792,732
64,046,473
23,458,627
55,314,341
10,416,543
-
22,180,599
29,514,723
37,720
306,402
62,455,987
23,159,039
-
20,126,738
24,440,324
36,228
630,358
68,392,687
10,416,543
-
22,180,599
29,514,723
37,720
306,402
62,455,987
23,159,039
-
20,126,738
24,440,324
36,228
630,358
68,392,687
95
Strategic ReportCorporate GovernanceFinancial Statements Notes to the Consolidated Financial Statements
For the Year ended 31 March 2023
(All amount in £, unless otherwise stated)
31 Summary of financial assets and liabilities by category and their fair values (Contd.)
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
2023
Quoted securities
Total
2022
Quoted securities
Total
4,792,732
4,792,732
23,458,627
23,458,627
-
-
-
-
-
-
4,792,732
4,792,732
-
23,458,627
- 23,458,627
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.
The fair value of contingent consideration related to the level 3 investments is estimated using a present
value technique. The Nil (2022: Nil) fair value is estimated by discounting the estimated future cash
outflows, adjusting for risk at 17%.
Approved by the Board of Directors on 3 November 2023 and signed on its behalf by:
N Kumar
Non-Executive Chairman
Ajit Pratap Singh
Chief Financial Officer
96
Annual Report 2022-23
Corporate Directory
Nominated Adviser and Broker
Cavendish 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
SO14 3TL
Registrars
Link Market Services (Isle of Man) Limited
Clinch’s House
Lord Street
Douglas
Isle of Man
IM99 1R
97
Strategic ReportCorporate GovernanceFinancial Statements Definitions & Glossary
Act: Isle of Man Companies Act 2006
FY: Financial year from 1 April to 31 March
Adjusted EBITDA: is a measure of a business’ cash
generation from operations before depreciation,
interest and exceptional and non-standard or non-
operational charges, e.g. share based compensation,
etc.
AGM: Annual General Meeting
AIM: Alternative Investment Market of the London
Stock Exchange
APC: Auxiliary Power Consumption
BG: Bank Guarantee
GCPP: Group Captive Power Plant GDP: Gross
Domestic Product GHG: Green House Gas
Government or GOI: Government of India
GP: Gross Profit
Great Britain Pound Sterling or £/pence: Pounds
sterling or pence, the lawful currency of the UK
GRI: Global Reporting Initiative
Group Captive: Group Captive power plant as
defined under Electricity Act 2003, India
Board: Board of Directors of OPG Power Ventures Plc
Group or OPG: the Company and its subsidiaries
bps: Basis points
GSDP: Gross State Domestic Product
BRICS: Brazil, Russia, India, China and South Africa
GW: Gigawatt is 1,000 megawatts
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
Company or OPG or OPGPV or parent: OPG Power
Ventures Plc
CY: Calendar Year
DDUGJY: Deen Dayal Upadhyay Gram Jyoti Yojana
scheme
Discom: Distribution Company (of the State
Electricity Utility)
EHS: Environment, Health and Safety
Electricity Act: Indian Electricity Act 2003 as
amended
EPS: Earnings per share
HIRA: Hazard Identification and Risk Assessment
HSE: Health, Safet y 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)
JV: Joint Venture
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
ESOP: Employee Stock Options Plan FRC: Financial
Reporting Council F TSE: Financial Times Stock
Exchange ExCo: Executive Committee
MAR: Market Abuse Regime regulation
MAT: Minimum Alternative Tax
FDI: Foreign Direct Investment
FVPL: Fair Value through Profit or Loss
MoU: Memorandum of Understanding MSME: Micro,
Small and Medium Enterprises mt: Million tonnes
MW: Megawatt is 1,000 kilowatts
98
Annual Report 2022-23 Definitions & Glossary
MWh: Megawatt hour
SEBI: Securities and Exchange Board of India
NCDs: Non-convertible debentures
Sox: Sulphur Oxides
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
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 Rate
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
Rupees/INR or `: Indian Rupee, the lawful currency
of India
US$/USD or $: US Dollars, the lawful currency of
the US
SASB: Sustainability Accounting Standards Board
SAUBHAGYA: The Pradhan Mantri Sahaj Bijli Har
Ghar Yojana scheme
SEB: State Electricity Board
UT or UTs: Union Territory or Union Territories of
India
WPI: Wholesale Price Index
99
Strategic ReportCorporate GovernanceFinancial Statements 40