TIDMOPG
RNS Number : 5154N
OPG Power Ventures plc
30 September 2021
30 September 2021
OPG Power Ventures plc
("OPG", the "Group" or the "Company")
Final results for the year ended 31 March 2021
OPG (AIM: OPG), the developer and operator of power generation
assets in India, announces its final results for the year ended 31
March 2021 ("FY21").
FY21 Highlights
-- Revenue decreased to GBP 93 . 8 million from GBP1 5 4. 0
million in FY 20 due to the COVID-19 disruption in the Indian
economy;
-- Total generation (including deemed) of 2.1 billion units (2.7 billion units in FY20);
-- Adjusted EBITDA of GBP3 3 . 7 million ( 36.0 % margin)
compared with GBP3 1 . 2 million (2 0 . 2 % margin) in FY 20;
-- Profit before tax from continued operations was GBP 2 1 .6
million compared with GBP1 4 . 5 million in FY 20;
-- GBP8.2 million (Rs.7.8 billion) term loan principal
repayments made during FY21; Borrowings reduced with gross debt of
GBP 46.6 million at 31 March 20 21 , compared to GBP 56. 8 million
at 31 March 20 20;
-- Net debt reduced from GBP53.4m at 31 March 2020 to GBP16.2m at 31 March 2021 ;
Summary financial information
GBP million
FY 21 FY20
Revenue 93.8 154.0
Other Operating Income 9.4 -
Adjusted EBITDA * 33.7 31.2
Profit before tax from continuing operations 21.6 14.5
Profit/(Loss) from discontinued operations,
incl. NCI 1.0 (2.1)
Profit for the year 14.1 8.0
Earnings per share (pence) 3.5 2.1
Net debt ** 16.2 53.4
N et debt to Adjusted EBITDA ratio 0.5 1.7
---------------------------------------------- ------ ------
Total generation (including deemed) (billion
kWh) 2.1 2.7
* See definition of Adjusted EBITDA on page 7
** See definition of Net debt on page 10
Post year end developments and highlights
-- Plant Load Factor ("PLF") for the f ive month period to 31
August 2021 was 72.8% (H1 FY20: 46%);
-- Average tariff for the five months period to 31 August 2021
was Rs5.42, down 4.4 per cent (FY21: Rs5.67) due to the impact of
COVID-19. Average Tariff was increased to c. Rs5.58 effective from
August 2021;
-- Subsequent to 31 March 2021, additional GBP5.7 million
(Rs.0.6 billion) collected from a customer in respect of historic
contractual claims;
-- International coal prices have steadily gained since April,
due to firmer Chinese demand and tighter supplies caused by
rain-related disruptions in Indonesia;
-- I n June 2021, Environmental, Social and Governance (" ESG")
Board Committee was created and Mr. Michael Grasby was appointed as
Chairman of this committee. F irst- ever standalone FY21 ESG report
was issued and is available on the Company's website.
COVID-19, Vaccination and the Indian Economy update
-- In June 2021, World Bank's Global Economic Outlook projected
FY22 economic growth forecast for India at 8.3%. IMF revised its
India growth forecast to 9.5% for FY22;
-- India faced a severe second wave of COVID-19 infections
starting February 2021 which resulted in economic slowdown. The
number of infected cases peaked in the middle of May 2021;
-- Since 16 January 2021, India administered the rollout of
vaccines to its citizens and at least 0.75 billion doses of COVID
vaccines have been administered. Based on recently reported data,
currently around over eight million doses are being administered
daily;
-- Currently COVID-19 cases are reducing and state governments
are now unlocking and easing restrictions, in phases;
-- On 1 April 2021, the deadline for meeting emission norms for
a majority of coal-based power plants in India, was extended from
2021 to December 2024.
Arvind Gupta, Chairman said: "We are proud to report that OPG
was comfortably in line with FY21 market expectations despite the
disruption caused by COVID-19 and unfavourable market conditions.
OPG delivered very strong cash generation and achieved a
significant reduction in debt during the year. We will also
continue to focus on advancing our ESG agenda."
Investor presentation
There will be a virtual presentation on the Investor Meet
Company platform for investors and analysts at 11 am on Monday, 4
October 2021. Those wishing to attend should register for the
presentation at:
https://www.investormeetcompany.com/opg-power-ventures-plc/register-investor
The presentation will be available for download at
http://www.opgpower.com/ A recording of the event will subsequently
be available on the Company's websites.
The Company's annual report and accounts for the year ended 31
March 2021 is available on the Company's website at
www.opgpower.com/and will be sent to shareholders shortly.
For further information, please visit www.opgpower.com or
contact:
+44 (0) 782 734
OPG Power Ventures PLC 1323
Dmitri Tsvetkov
Cenkos Securities plc (Nominated Adviser +44 (0) 20 7397
& Broker) 8900
Stephen Keys / Katy Birkin
+44 (0) 20 7920
Tavistock (Financial PR) 3150
Simon Hudson / Nick Elwes
Chairman's Statement
Resilience, robust profitability and strong cash generation
FY21 has been a year of extraordinary challenges. The
unprecedented health crisis, caused by novel coronavirus, took an
immense economic and human toll globally. At OPG, we responded
immediately with a comprehensive COVID-19 response plan - putting
in place health and safety measures to protect our employees,
running our plant operations smoothly to ensure supply of
electricity to our consumers, and providing essential support and
assistance to our local communities in need. Yet, even in such
critical circumstances, our Company has emerged stronger reporting
solid set of financial results and paving pathways for accelerated
and sustainable future growth.
Despite the disruption caused by COVID-19, OPG delivered very
strong cash generation, robust profitability and achieved a
significant reduction in net debt during the year.
The plants' generation, including deemed generation, during FY21
was 2.1 billion units which is a 22.4 per cent reduction in
generation in comparison with FY20 primarily due to the COVID-19
induced nationwide lockdown in India, with average Plant Load
Factor ("PLF") at 58 per cent (FY20: 75 per cent). During FY21
average realised tariff was Rs5.52 (FY20: Rs5.67).
In FY21, the Group's revenue was GBP93.8 million (FY20: GBP154.0
million) and Adjusted EBITDA was GBP33.7 million (FY20: GBP31.2
million). Profit from continuing operations was GBP13.1 million
(FY20: GBP10.2 million) and profit for the year was GBP14.1 million
(FY20: 8.0 million).
We are proud to report that OPG was comfortably in line with
FY21 market expectations despite unfavourable market
conditions.
Creating shareholder value through deleveraging
In 2018, the Board took the decision to focus on our profitable,
long-life assets in Chennai, and to prioritise deleveraging as a
method to grow shareholders' equity. This strategy, we believe,
will deliver value to shareholders with free cash flows providing
significant returns to our shareholders and opportunities to grow
the business further.
Since the adoption of this strategy, additional shareholder
value of 17.6p per share was accrued during last four years on
account of term loan repayments.
During FY21 net debt reduced from GBP53.4 million to GBP16.2
million and net debt to Adjusted EBITDA ratio reduced from 1.7 to
0.5 demonstrating the robustness of OPG's financial position. The
Company remains amongst the least leveraged power companies in
India.
The Board remains convinced, especially in light of COVID-19
challenges, that our strategy of maintaining operational excellence
and paying down expensive borrowings was the right one to pursue
for all our stakeholders.
Maximising stakeholders' long-term value
It is OPG's paramount objective to maximise stakeholders'
long-term value. In light of disruptions and uncertainty caused by
COVID-19 and extraordinary volatility in coal prices and freight
this year, the Board believes that it is in the best interest of
the Company and its stakeholders to conserve cash for the repayment
of debt and growth ESG focused projects and to maintain a strong
and resilient balance sheet to withstand turbulent times.
Building sustainable future
Rapid growth in urbanisation, universal electrification, and a
renewable energy transition driven by climate change, implies that
India's incremental power needs will largely be met by renewable
energy. Our business strategy is perfectly aligned with this,
offering us an opportunity to unlock value for all our stakeholders
in the years to come. OPG has developed its ESG strategy which,
among other matters, includes objectives to reduce its carbon
footprint. As part of this strategy, the Company is evaluating
various options to increase its renewable energy asset base and to
establish joint ventures to roll out various energy transition
technologies. These initiatives will ensure that OPG delivers
year-on-year improvements to reach the Company's emissions
reduction targets in the medium and longer-term.
We are happy to present our first-ever standalone FY21 ESG
report which summarises the objectives, activities, and the
performance of the Company from an ESG perspective to its
stakeholders. This report includes examples of how we have
demonstrated our commitments and applied our management approach on
a range of ESG topics, including environmental stewardship, health
& safety, relationship with local community, and
governance.
Indian Economy and Power Sector Update
In FY21, even amidst a relatively weaker macro-economic
scenario, peak power demand hit an all-time high of 190 GW. The
overall power demand in the country though weaker in the first half
of the fiscal year due to COVID-19 induced disruption, saw a sharp
recovery in the second half. India is the third largest producer
and third largest consumer of electricity in the world with
installed power capacity reaching 382.15 GW as of March 2021.
In June 2021, the World Bank's Global Economic Outlook projected
India's FY22 economic growth forecast at 8.3 per cent, supported by
plans for higher spending on infrastructure, rural development and
health services and a stronger-than-expected recovery in services.
During FY23 GDP growth is expected at a rate of 7.5 per cent.
During FY21, power consumption dipped by 1 per cent to 1,271.5
BU from 1,284.4 BU in FY20. The ICRA rating agency has estimated
Indian electricity demand growth at 6.0 per cent for FY22 on a
year-on-year basis, considering the favourable base effect,
relatively lesser impact of the second COVID-19 wave on electricity
demand and the pick-up in the vaccination programme.
Over the last several months the prices of thermal coal and
freight have surged sharply primarily due to increased imports of
coal and other goods by China and other Asian countries on the back
of post COVID-19 economic recovery. Whilst OPG is partially covered
from increases in prices with fixed price agreements for coal and
freight, the Company remains exposed to market fluctuations for the
unhedged portion of coal consumption and freight. However, the
Company is exploring various options including sourcing the coal
from other geographies (including domestic sources) to reduce the
per unit cost of electricity.
Outlook
During the first six months of FY22 the prices of thermal coal
and freight have surged sharply primarily due to increased imports
of coal and other goods by China and other Asian countries on the
back of post COVID-19 economic recovery. Coal prices may not reduce
significantly in the short term.
While challenges to the economy will continue in FY22, the
Company has strong foundations, allowing us both to manage the
ongoing COVID-19 situation and to pursue growth sustainably. The
Company's medium and long-term fundamentals remain unchanged with
strong cash flows and a reduction in debt enabling the long-term
profitable business model, responsible growth and sustainable
returns to shareholders. We will also continue to focus on
advancing our ESG agenda.
I would like to extend my gratitude to all our employees who
overcame challenges posed by the pandemic, as well as vendors,
banks and all stakeholders for the incredible support we have
received during these unprecedented and extraordinary times.
Arvind Gupta
Chairman
29 September 2021
FINANCIAL REVIEW
The following is a commentary on the Group's nancial performance
for the year.
Income statement
========================================== ======= ========= ======= =========
2021 % of 2020 % of
revenue revenue
========= =========
Year ended 31 March GBPm GBPm
========================================== ======= ========= ======= =========
Revenue 93.8 154.0
Cost of revenue (excluding
depreciation) (56.9) (90.1)
========================================== ======= ========= ======= =========
Gross profit 36.9 39.4 64.0 41.5
Other operating income 9.4 -
Other income 1.9 0.7
Distribution, general and administrative
Expenses, expected credit loss
(excluding depreciation) (14.5) (33.5)
========================================== ======= ========= ======= =========
Adjusted EBITDA 33.7 36.0 31.2 20.2
Share based compensation (0.5) (0.8)
Depreciation and amortisation (5.7) (6.3)
Net finance costs (5.9) (9.5)
------------------------------------------ ------- --------- ------- ---------
Profit before tax from continuing
operations 21.6 23.0 14.5 9.4
Taxation (8.4) (4.3)
========================================== ======= ========= ======= =========
Profit after tax from continuing
operations 13.1 14.0 10.2 6.6
Profit/(loss) from discontinued
operations, incl. Non-Controlling
Interest 1.0 (2.1)
Profit for the year 14.1 8.0
========================================== ======= ========= ======= =========
Note: Due to rounding, numbers presented throughout this
document may not add up precisely to the totals provided and
percentages may not precisely reflect the absolute figures.
Revenue
Even though the Group's revenue has decreased by GBP60.2 million
(a 39.1% decline) year on year as a result of COVID-19 induced
nationwide lockdown imposed by the Indian Government, Adjusted
EBITDA has increased by GBP2.5 million (8.2% growth) primarily due
to collection of contractual claims payments from its customers
under power purchase agreements amounting to GBP9.4 million. These
contractual claims were accumulated over several years and
recognised in Other operating income.
The average tariff realised during FY21 was Rs5.72 per kWh.
Generation exported to captive power shareholders and other
customers and billed for revenue, including deemed generation, was
2.1 billion units during FY21. The reduction in generation in
comparison with generation in FY20 is due to the impact of fall in
demand for power caused by COVID-19 induced nationwide
lockdown.
Production and output levels from the Group's operating power
plant compared to the prior year were as follows:
FY21 FY20
============================================ ===== =====
Total generation, incl. "deemed" generation
(million units) 2,107 2,716
============================================ ===== =====
Plant Load Factor (PLF) (%)(1) 58 75
============================================ ===== =====
Average tariff (INR/unit) (2) 5.72 5.86
============================================ ===== =====
(1) Unit 3: "Deemed" PLF (%) has been included
(2) Average tariff includes effect of deemed offtake tariff for
Unit 3. Average FY21 tariff excluding effect of deemed offtake was
Rs5.52 (FY20: Rs5.67).
Gross pro t
Gross pro t ('GP') in FY21 was 39.4% of revenue (FY20: 41.5%).
The decrease in GP is primarily on account of disruption caused in
the economy by the nationwide lockdown induced by COVID-19.
The cost of revenue represents fuel costs. The table below shows
average price of coal consumed in FY21 and FY20.
Average price of coal consumed
Average Average
factory factory
gate price gate price
Financial year (INR/mt) (INR / mKCal)
====================== =========== ==============
FY21 4,127 991
====================== =========== ==============
FY20 4,305 1,028
====================== =========== ==============
Change % FY20 to FY21 (4.1) (3.6)
====================== =========== ==============
Adjusted EBITDA
Adjusted earnings before interest, taxation, depreciation and
amortisation ('Adjusted EBITDA') is a measure of a business' cash
generation from operations before depreciation, interest and
exceptional and non-standard or non-operational charges, e.g. share
based compensation, etc. Adjusted EBITDA is useful to analyse and
compare profitability among periods and companies, as it eliminates
the effects of financing and capital expenditures.
Adjusted EBITDA was GBP33.7 million in FY21 compared with
GBP31.2 million in FY20 and the adjusted EBITDA margin was higher
at 36.0% in FY21 against 20.2% in FY20 primarily as a result of
collection of contractual claims accumulated over several years as
mentioned above.
Profit from continuing operations before tax was GBP21.6 million
compared with GBP14.5 million in FY20.
Profit before tax reconciliation ('PBT') (GBPm) FY 21
PBT 2020-21 21.6
PBT 2019-20 14.5
Increase in PBT 7.1
==================================================== =======
Decrease in GP (27.0)
Increase in Other Operating Income 9.4
Increase in Other Income 1.3
Decrease in Distribution, General & Administrative
Expenses, Expected Credit Loss (1) 19.2
Decrease in Net Finance Costs 3.6
Decrease in Depreciation and Amortisation 0.6
Increase in PBT 7.1
==================================================== =======
(1) PBT 2019-20 includes provision for expected credit loss of
GBP17.0 million
Taxation
The Company's operating subsidiaries are under a tax holiday
period but are subject to Minimum Alternate Tax ('MAT') on their
accounting profits. Any tax paid under MAT can be offset against
future tax liabilities arising after the tax holiday period.
The tax expense during the year was GBP8.4 million comprised of
current tax expense of GBP0.4 million and deferred tax expense of
GBP8.0 million.
Profits after tax from continuing operations
Profits after tax from continuing operations have increased by
28.8% in FY21 to GBP13.1 million primarily due to collection of
contractual claims payments offset by a significant provision for
expected credit loss in FY20.
Assets held for sale and loss from discontinued operations
62MW Karnataka solar projects
In FY18, four Karnataka solar projects (62MW) were commissioned.
The Group has a 31% equity interest in these projects.
During FY19, the Company obtained a right to exercise an option
to buy an additional 30% equity interest in solar companies.
Effective from FY20 this right was assigned to a third party and
from FY21 the remaining related obligations and the results of the
operations of solar companies are not consolidated in the Group's
consolidated financial statements due to loss of control. As
previously reported, after evaluation of all options, the Company
decided that the most efficient way to maximise shareholders' value
from the solar operations was to dispose of these interests in the
solar companies and it is continuing the disposal process which met
all conditions of IFRS 5 classifying the solar business as assets
held for sale as at 31 March 2021. The completion of the disposal
process was impacted by COVID-19.
Accordingly, the Group's funding of GBP16.4 million towards
these projects is presented as assets held for sale in the
Consolidated Statement of Financial Position as at 31 March 2021
and the gain from operations of GBP1.0 million is included in gain
from discontinued operations in the Consolidated Statement of
Comprehensive Income.
Earnings per Share (EPS)
The Company's total reported EPS in FY21 increased to 3.52 pence
from 2.11 pence.
Dividend policy
It is OPG's paramount objective to maximise stakeholders'
long-term value. In light of disruptions and uncertainty caused by
COVID-19 and extraordinary volatility in coal prices and freight
this year, the Board believes that it is in the best interests of
the Company and its stakeholders to conserve cash for the repayment
of debt, to fund growth in relation to ESG focused projects and to
maintain a strong and resilient balance sheet to withstand the
turbulent times. Therefore, the Board decided to not declare a
dividend for FY21. The Board will revisit the Company's dividend
policy once the impact of COVID-19 subsides and coal prices become
less volatile.
Foreign exchange loss on translation
The British Pound-to-Indian Rupee exchange rate decreased to a
closing rate on 31 March 2021 of GBP1= INR 100.81 a rate of GBP1=
INR 93.07 on 31 March 2020 thereby resulting in an exchange loss of
GBP12.9 million on translating foreign operations included in Other
comprehensive loss.
Property, plant and equipment
The decrease in net book value of our property, plant and
equipment of GBP19.8 million principally relates to depreciation
and foreign exchange impact on account of translation offset by
additions during the year.
Other non--current assets
Other non-current assets (excluding property, plant and
equipment & intangible assets) have increased by GBP7.7 million
primarily due to increase in the non-current portion of restricted
cash, representing investments in mutual funds maturing after
twelve months of GBP8.2 million (2020: nil) allocated to debenture
redemption fund earmarked towards redemption of non-convertible
debentures scheduled during FY24 of GBP19.8 million.
Current assets
Current assets have decreased by GBP28.8 million from GBP103.3
million to GBP74.5 million year on year primarily as a result of
the following:
-- Decrease in Assets held for sale by GBP29.9 million due to
the presentation of a 31% investment in solar companies as an
equity investment held for sale versus gross presentation of assets
and liabilities held for sale in FY20;
-- Decrease in trade receivables by GBP12.1 million as a result
of strong collections from the Group's captive power shareholders
and customers, including old receivable balances;
-- Increase in other short-term assets by GBP11.5 million
primarily due to increase in investments in mutual funds to GBP13.3
million included in other short-term assets;
-- Increase in cash and bank balances (including restricted cash) by GBP5.5 million;
-- Increase in inventory holdings by GBP0.7 million.
Liabilities
Current liabilities have decreased by GBP60.7 million from
GBP98.9 million to GBP38.2 million year on year primarily due to
liabilities relating to assets held of sales, borrowings, and trade
and other payable.
Non-current liabilities have increased by GBP16.7 million from
GBP39.0 million to GBP55.7 million year on year primarily on
account of the issuance of non-convertible debentures issued during
the year to prepay term loans.
Financial position, debt, gearing and nance costs
As of 31 March 2021, total borrowings were GBP46.6 million (31
March 2020: GBP56.8 million). The gearing ratio, net debt (i.e.
total borrowings minus cash and current and non-current investments
in mutual funds)/(equity plus net debt), was 9% (31 March 2020:
25%). The gearing ratio is a useful measure to identify the
financial risk of a company.
Despite COVID-19 related challenges, the Company has continued
to pay down the debt from internal accruals and issued
Non-Convertible Debentures ("NCDs") of GBP19.8 million (Rs2.0
billion) to finance principal repayments of the Group's existing
term loans to June 2022. The Group's NCDs are repayable in June
2023 and have an interest coupon of 9.85%. The issue of the NCDs
had a material positive impact upon the Group's cash flow during
the uncertain COVID-19 impacted period, through a significant
deferment of principal payments and the NCDs' interest coupon being
lower by c.1 per cent in comparison with the existing term loans
interest rate.
During FY21 net debt (total borrowings minus cash and current
and non-current investments in mutual funds) reduced from GBP53.4
million to GBP16.2 million and net debt to Adjusted EBITDA ratio
reduced from 1.7 to 0.5 as a result of the repayment of term loans
and working capital loans, foreign exchange impact of depreciation
of INR against GBP and strong cash collections achieved during the
year. This demonstrates the robustness of OPG's financial position.
The Company remains amongst the least leveraged power companies in
India.
Based on the term loans repayment schedule the Company is
expected to be term loan free by FY25.
Finance costs have decreased by GBP4.7 million from GBP11.5
million in FY20 to GBP6.8 million in FY21 primarily due to the
impact of decrease in foreign exchange losses and reduction in
interest expenses following scheduled repayments of the term loans
and the issuance of the NCDs.
Finance income decreased from GBP2.0 million in FY20 to GBP0.9
million in FY21 and therefore net finance costs in FY21 amounted to
GBP5.9 million (FY20: GBP9.5 million).
Current restricted cash representing deposits maturing between
three to twelve months amounted to GBP3.2 million (31 March 2020:
GBP7.5 million) which have been pledged as security for Letters of
Credit.
Non-current restricted cash represents investments in mutual
funds maturing after twelve months amounting to GBP8.2 million (31
March 2020: GBP0.03 million) allocated to the debenture redemption
fund which is earmarked towards the redemption of non-convertible
debentures scheduled during FY24 of GBP19.8 million.
Cash ow
Cash flow from continuing operations before and after changes in
working capital were GBP36.8 million (FY20: GBP48.2 million) and
GBP40.2 million (FY20: GBP30.6 million) respectively. Net cash flow
from operating activities increased from GBP30.6 million in FY20 to
GBP40.2 million in FY21, an increase of GBP9.6 million, primarily
due to collections of receivables and contractual claims relating
to previous periods.
Movements (GBPm) FY21 FY20
================================================== ======= =======
Operating cash flows from continuing operations
before changes in working capital 36.8 48.2
Tax paid (0.7) (0.8)
Change in working capital assets and liabilities 4.1 (16.8)
Net cash generated by operating activities
from continuing operations 40.2 30.6
Purchase of property, plant and equipment
(net of disposals) (0.5) (0.6)
Investments (purchased)/sold, incl. in
solar projects, shipping JV, market securities,
movement in restricted cash and interest
received (1) (29.0) 3.5
Net cash (used in)/from continuing investing
activities (29.5) 2.9
Finance costs paid, incl. foreign exchange
losses (5.8) (9.9)
Dividend paid - -
================================================== ======= =======
Total cash change from continuing operations
before net borrowings 4.9 23.6
-------------------------------------------------- ------- -------
(1) Includes purchase of investments in mutual funds and other
market securities of GBP21.5 million included in restricted cash
and other short-term assets in the statement of financial
position.
Dmitri Tsvetkov
Chief Financial Officer
29 September 2021
Consolidated statement of financial
position
As at 31 March 2021
(All amount in GBP, unless otherwise
stated)
As at As at
Notes 31 March 31 March
2021 2020
-------------------------------------- ------ ------------- ------------
Assets
Non-current assets
Intangible assets 14 2,394 9,045
Property, plant and equipment 15 172,716,040 192,469,395
Other long-term assets 16 69,853 509,628
Restricted cash 19 8,194,412 26,645
180,982,699 193,014,713
------------- ------------
Current assets
Inventories 18 12,186,644 11,480,099
Trade and other receivables 17 14,829,989 26,901,986
Other short-term assets 16 17,805,554 6,316,735
Current tax assets (net) 1,131,342 1,330,684
Restricted cash 19(b) 3,219,356 7,497,967
Cash and cash equivalents 19(a) 8,920,952 3,438,830
7(a),
Assets held for sale 7(b) 16,425,368 46,356,680
74,519,205 103,322,981
------------- ------------
Total assets 255,501,904 296,337,694
============= ============
Equity and liabilities
Equity
Share capital 20 58,909 58,909
Share premium 20 131,451,482 131,451,482
Other components of equity (12,735,470) (1,322,987)
Retained earnings 41,910,280 27,818,474
Equity attributable to owners of the
Company 160,685,201 158,005,878
Non-controlling interests 881,869 497,955
Total equity 161,567,070 158,503,833
------------- ------------
Liabilities
Non-current liabilities
Borrowings 22 22,260,206 33,081,456
Non-Convertible Debentures 22 19,840,089 -
Trade and other payables 23 607,702 169,373
Deferred tax liabilities (net) 13 12,994,371 5,723,791
55,702,368 38,974,620
------------- ------------
Current liabilities
Borrowings 22 4,510,358 23,746,229
Trade and other payables 23 32,495,799 41,663,989
Other liabilities 1,226,309 582,241
Liabilities classified as held for
sale 7(b) - 32,866,783
38,232,466 98,859,241
------------- ------------
Total liabilities 93,934,834 137,833,861
------------- ------------
Total equity and liabilities 255,501,904 296,337,694
============= ============
The notes are an integral part of these consolidated financial
statements
The financial statements were authorised for issue by the board
of directors on 29 September 2021 and were signed on its behalf
by:
Arvind Gupta Dmitri Tsvetkov
Chairman Chief Financial Officer
------------------------
Consolidated statement of Comprehensive
Income
For the Year ended 31 March 2021
(All amount in GBP, unless otherwise
stated)
Year ended Year ended
Notes 31 March 31 March
2021 2020
---------------------------------------------- ------ ------------- -------------
Revenue 8 93,823,933 154,040,283
Cost of revenue 9 (56,893,065) (90,060,252)
Gross profit 36,930,868 63,980,031
------------- -------------
Other Operating income 10(a) 9,420,712 -
Other income 10(b) 1,921,546 668,037
Distribution cost (4,791,056) (9,209,987)
General and administrative expenses (7,256,153) (8,061,622)
Expected credit loss on trade receivables 28 (3,025,055) (17,046,480)
Depreciation and amortisation (5,705,538) (6,293,034)
Operating profit 27,495,324 24,036,945
------------- -------------
Finance costs 11 (6,803,137) (11,495,136)
Finance income 12 868,439 1,962,692
------------- -------------
Profit before tax 21,560,626 14,504,501
Tax expense 13 (8,447,699) (4,321,124)
-------------
Profit for the year from continued
operations 13,112,927 10,183,377
------------- -------------
Gain/(Loss) from discontinued operations,
including Non-Controlling Interest 7 999,398 (2,146,275)
Profit for the year 14,112,325 8,037,102
============= =============
Profit for the year attributable to:
Owners of the Company 14,091,806 8,229,504
Non - controlling interests 20,518 (192,402)
14,112,325 8,037,102
============= =============
Earnings per share from continued operations
Basic earnings per share (in pence) 25 3.27 2.60
Diluted earnings per share (in pence) 3.25 2.59
Earnings/(Loss) per share from discontinued operations
Basic earnings/(loss) per share (in
pence) 25 0.30 (0.50)
Diluted earnings/(loss) per share (in
pence) 0.30 (0.50)
Earnings per share
-Basic (in pence) 26 3.52 2.11
-Diluted (in pence) 3.50 2.09
Other comprehensive income / (loss)
Items that will be reclassified subsequently to profit or loss
Exchange differences on translating
foreign operations (12,860,261) (4,560,097)
Items that will be not reclassified
subsequently to profit or loss
Exchange differences on translating foreign
operations, relating to non-controlling interests (13,322) (192,401)
Total other comprehensive income /
(loss) (12,873,583) (4,752,498)
------------- -------------
Total comprehensive income 1,238,741 3,284,604
============= =============
Total comprehensive income / (loss)
attributable to:
Owners of the Company 1,231,546 3,669,407
Non-controlling interest 7,196 (384,803)
1,238,741 3,284,604
============= =============
The notes are an integral part of these consolidated financial
statements
Consolidated statement of changes in equity
For the Year ended 31 March 2021
(All amount in GBP, unless otherwise stated)
Issued Foreign Total
capital currency attributable
(No. of Ordinary Share Other translation Retained to owners Non-controlling
shares) shares premium reserves reserve earnings of parent interests Total equity
At 1 April 2019 387,910,200 57,024 129,125,915 6,650,305 (4,249,018) 21,916,422 153,500,648 882,759 154,383,407
------------ --------- ------------ ---------- ------------- ------------ ------------- ---------------- -------------
Employee Share
based
payment LTIP
(Note
21) - - - 835,822 - - 835,822 - 835,822
Dividends (Note
20) 12,823,311 1,885 2,325,567 - - (2,327,452) - - -
Transaction with
owners 12,823,311 1,885 2,325,567 835,822 - (2,327,452) 835,822 - 835,822
------------ --------- ------------ ---------- ------------- ------------ ------------- ---------------- -------------
Profit for the
year - - - - - 8,229,504 8,229,504 (192,402) 8,037,102
Other
comprehensive
income - - - - (4,560,096) - (4,560,096) (192,402) (4,752,497)
Total
comprehensive
income - - - - (4,560,096) 8,229,504 3,669,408 (384,804) 3,284,604
------------ --------- ------------ ---------- ------------- ------------ ------------- ---------------- -------------
At 31 March 2020 400,733,511 58,909 131,451,482 7,486,127 (8,809,114) 27,818,474 158,005,878 497,955 158,503,833
------------ --------- ------------ ---------- ------------- ------------ ------------- ---------------- -------------
At 1 April 2020 400,733,511 58,909 131,451,482 7,486,127 (8,809,114) 27,818,474 158,005,878 497,955 158,503,833
Employee Share
based
payment LTIP
(Note
21) - - - 535,247 - - 535,247 - 535,247
Transaction
with
owners - - - 535,247 - - 535,247 - 535,247
------------ --------- ------------ ---------- ------------- ------------ ------------- ---------------- -------------
Profit for the
year - - - - - 14,091,806 14,091,806 20,518 14,112,324
Deconsolidation
(note
7b) - - - - 912,531 - 912,531 376,718 1,289,249
Other
comprehensive
income - - - - (12,860,261) - (12,860,261) (13,322) (12,873,583)
Total
comprehensive
income - - - - (11,947,730) 14,091,806 2,144,076 383,914 2,527,990
------------ --------- ------------ ---------- ------------- ------------ ------------- ---------------- -------------
At 31 March 2021 400,733,511 58,909 131,451,482 8,021,374 (20,756,844) 41,910,280 160,685,201 881,869 161,567,070
------------ --------- ------------ ---------- ------------- ------------ ------------- ---------------- -------------
During FY20 the Company has paid a scrip dividend of 12,823,311
shares (2019:31,601,503 shares)
The notes are an integral part of these consolidated financial
statements.
Consolidated statement of cash flows
For the Year ended 31 March 2021
(All amount in GBP, unless otherwise stated)
Year ended Year ended
31 March 31 March
2021 2020
------------------------------------------------- ----- ------------- -------------
Cash flows from operating activities
Profit before income tax including
discontinued operations 22,560,024 11,365,000
Adjustments for:
(Profit)/Loss from discontinued operations,
net 7 (999,398) 3,139,501
Unrealised foreign exchange loss 9(d) 46,931 1,568,333
Financial costs 11 6,756,206 9,926,804
Financial income 12 (864,156) (1,962,692)
Share based compensation costs 21 535,247 835,822
Depreciation and amortization 5,705,538 6,293,034
Expected credit loss on Trade receivables 28 3,025,055 17,046,480
Changes in working capital
Trade and other receivables 7,404,759 4,406,823
Inventories (1,654,539) (4,699,650)
Other assets 4,976,235 3,121,895
Trade and other payables (7,106,516) (19,421,286)
Other liabilities 490,713 (217,194)
Cash generated from continuing operations 40,876,099 31,402,869
Taxes paid (709,277) (767,865)
------------- ---------------
Cash provided by operating activities
of continuing operations 40,166,822 30,635,004
Cash used for operating activities of discontinued
operations - (2,062,318)
-------------
Net cash provided by operating activities 40,166,822 28,572,687
------------- ---------------
Cash flows from investing activities
Purchase of property, plant and equipment (including
capital advances) (506,222) (573,668)
Interest received 864,156 1,962,692
Movement in restricted cash (4,655,096) 2,240,335
Purchase of investments (25,250,994) (725,418)
Cash (used in)/from investing activities of
continuing operations (29,548,156) 2,903,941
Cash (used in)/from investing activities of
discontinued operations - 426,425
-------------
Net cash (used in)/from investing activities (29,548,156) 3,330,366
------------- ---------------
Cash flows from financing activities
Proceeds from borrowings (net of costs) 21,981,043 -
Repayment of borrowings (27,938,844) (21,620,516)
Dividend paid - -
Finance costs paid (5,812,498) (9,927,750)
------------- ---------------
Cash used in financing activities of
continuing operations (11,770,299) (31,548,266)
Cash used in financing activities of
discontinued operations - 689,255
Net cash used in financing activities (11,770,299) (30,859,011)
------------- ---------------
Net (decrease)/increase in cash and cash equivalents
from continuing operations (1,151,633) 1,990,679
Net (decrease)/increase in cash and cash equivalents
from discontinued operations - (946,638)
------------- ---------------
Net increase in cash and cash equivalents (1,151,633) 1,044,042
Cash and cash equivalents at the beginning
of the year 3,438,830 2,118,960
Cash and cash equivalents on deconsolidation (28,560) 24,545
Exchange differences on cash and cash
equivalents 6,662,317 19,330
Cash and cash equivalents of the discontinued
operations - 231,953
Cash and cash equivalents at the end
of the year 8,920,954 3,438,830
------------- ---------------
Disclosure of Changes in financing liabilities:
Analysing of changes in Net 1 April Cash flows Forex rate 31 March
debt 2020 impact 2021
Working Capital loan 6,914,122 (2,704,726) (421,082) 3,788,314
Secured loan due within one
year 16,832,107 (15,443,674) (666,390) 722,044
Borrowings grouped under Current
liabilities 23,746,229 (18,148,399) (1,087,471) 4,510,358
Secured loan due after one
year 33,081,456 12,190,599 (3,171,760) 42,100,295
Borrowings grouped under Non-current
liabilities 33,081,456 12,190,599 (3,171,760) 42,100,295
----------- ------------- -------------- -----------
Analysing of changes in Net 1 April Cash flows Other Changes 31 March
debt 2019 2020
Working Capital loan 10,433,893 (3,317,490) (202,281) 6,914,122
Secured loan due within one
year 18,435,829 (1,087,278) (516,444) 16,832,107
Borrowings grouped under Current
liabilities 28,869,722 (4,404,768) (718,725) 23,746,229
Secured loan due after one
year 51,495,208 (17,215,748) (1,198,004) 33,081,456
Borrowings grouped under Non-current
liabilities 51,495,208 (17,215,748) (1,198,004) 33,081,456
----------- ------------- -------------- -----------
Notes to the Consolidated Financial Statements
(All amount in GBP, unless otherwise stated)
1. Nature of operations
OPG Power Ventures Plc ('the Company' or 'OPGPV'), and its
subsidiaries (collectively referred to as 'the Group') are
primarily engaged in the development, owning, operation and
maintenance of private sector power projects in India. The
electricity generated from the Group's plants is sold principally
to public sector undertakings and heavy industrial companies in
India or in the short term market. The business objective of the
group is to focus on the power generation business within India and
thereby provide reliable, cost effective power to the industrial
consumers and other users under the 'open access' provisions
mandated by the Government of India.
2. Statement of compliance
The consolidated financial statements of the Group have been
prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting
Standards Board and the provisions of the Isle of Man, Companies
Act 2006 applicable to companies reporting under IFRS.
3. General information
OPG Power Ventures Plc, a limited liability corporation, is the
Group's ultimate parent Company and is incorporated and domiciled
in the Isle of Man. The address of the Company's registered Office,
which is also the principal place of business, is 55 Athol street,
Douglas, Isle of Man IM1 1LA. The Company's ordinary shares are
listed on the AIM Market of the London Stock Exchange.
The Consolidated Financial Statements for the year ended 31
March 2021 were approved and authorised for issue by the Board of
Directors on 29 September 2021.
4. Recent accounting pronouncements
a. Standards, amendments and interpretations to existing
standards that are not yet effective and have not been adopted
early by the Group
At the date of authorisation of these financial statements,
certain new standards, and amendments to existing standards have
been published by the IASB that are not yet effective and have not
been adopted early by the Group. Information on those expected to
be relevant to the Group's financial statements is provided
below.
Management anticipates that all relevant pronouncements will be
adopted in the Group's accounting policies for the first period
beginning after the effective date of the pronouncement. New
standards, interpretations and amendments not either adopted or
listed below are not expected to have a material impact on the
Group's financial statements.
b. Changes in accounting Standards
The following standards and amendments to IFRSs became effective
for the period beginning on 1 January 2020 and did not have a
material impact on the consolidated financial statements:
i) Amendments to IAS 1 and IAS 8, "Definition of Material"
In October 2018, the IASB published amendments to IAS 1,
"Presentation of Financial Statements" and IAS 8, "Accounting
Policies, Changes in Accounting Estimates and Errors" regarding the
definition of material. The amendments standardize and clarify the
definition of material and its application to disclosures in
financial statements presented in the IFRSs. The amendments have no
impact on Group's Consolidated Financial Statements.
ii) Amendments to IFRS 3, "Definition of a Business"
In October 2018, the IASB published amendments to IAS 3,
"Definition of a Business." The primary purpose of these amendments
is to help distinguish between a business and a group of assets. A
business comprises a group of activities and assets that involve at
least one resource input and one substantive process that together
contribute significantly to the ability to generate outputs. The
IASB has introduced a concentration test that permits a simplified
assessment of whether a set of activities and assets is a business.
It is not a business if substantially all of the fair value of the
gross assets acquired is concentrated in a single identifiable
asset or group of similar identifiable assets, in which case IFRS 3
does not apply. The amendments have no impact on Group's
Consolidated Financial Statements.
iii) Amendments to References to the Conceptual Framework
In March 2018, the IASB published Amendments to References to
the Conceptual Framework in IFRS. The amendments have no impact on
Group's Consolidated Financial Statements.
iv) Amendments to IFRS 9, IAS 39 and IFRS 7, "Interest Rate
Benchmark Reform"
In September 2019, the IASB published amendments to IFRS 9, IAS
39 and IFRS 7, "Interest Rate Benchmark Reform." The Phase 1
amendments of the IASB's Interest Rate Benchmark Reform project
(IBOR reform) provide for temporary exemption from applying
specific hedge accounting requirements to hedging relationships
that are directly affected by IBOR reform. The exemptions have the
effect that IBOR reform should not generally cause hedge
relationships to be terminated due to uncertainty about when and
how reference interest rates will be replaced. However, any hedge
ineffectiveness should continue to be recorded in the income
statement under both IAS 39 and IFRS 9. Furthermore, the amendments
set out triggers for when the exemptions will end, which include
the uncertainty arising from IBOR reform. The amendments have no
impact on Group's Consolidated Financial Statements.
v) Amendments to IFRS 16, "Covid-19-Related Rent
Concessions-Amendment to IFRS 16"
In May 2020, the IASB issued Covid-19-Related Rent Concessions
(Amendment to IFRS 16) that provides practical relief to lessees in
accounting for rent concessions occurring as a direct consequence
of Covid-19, by introducing a practical expedient to IFRS 16. The
practical expedient permits a lessee to elect not to assess whether
a Covid-19-related rent concession is a lease modification. A
lessee that makes this election shall account for any change in
lease payments resulting from the Covid-19-related rent concession
the same way it would account for the change applying IFRS 16 if
the change were not a lease modification. The practical expedient
applies only to rent concessions occurring as a direct consequence
of Covid-19 and only if all of the prescribed conditions are met.
The Group has not received any rent concessions and so has not
early adopted the amendment as it would have no impact on the
presentation of these Financial Statements.
c). Standards and Interpretations Not Yet Applicable
The IASB and the IFRS IC have issued the following additional
standards and interpretations. Group does not apply these rules
because their application is not yet mandatory. Currently, however,
these adjustments are not expected to have a material impact on the
consolidated financial statements of the Group:
i) IFRS 17, "Insurance Contracts," published in May 2017,
expected first-time application in next fiscal year.
ii) Amendments to IFRS 4, "Insurance Contracts-Extension of the
Temporary Exemption from IFRS 9," published in June 2020,
first-time application in fiscal year 2021.
5. Summary of significant accounting policies
a) Basis of preparation
The consolidated financial statements of the Group have been
prepared on a historical cost basis, except for financial assets
and liabilities at fair value through profit or loss and financial
assets measured at FVPL.
The consolidated financial statements are presented in
accordance with IAS 1 Presentation of Financial Statements and have
been presented in Great Britain Pounds ('LIR'), the functional and
presentation currency of the Company.
During FY2019, the Company obtained a right to exercise an
option to buy additional 30% equity interest in solar companies.
Effective from FY2021 this right was re-assigned to a third party
along with the related obligations and the results of the
operations of solar companies Aavanti Solar Energy Private Limited,
Mayfair Renewable Energy (I) Private Limited, Aavanti Renewable
Energy Private Limited and Brics Renewable Energy Private Limited
are not consolidated in Group's consolidated financial statements
due to loss of control. The Group continues owning a 31% equity
interest in the solar companies. As it was previously reported,
after evaluation of all options, the Company decided that the most
efficient way to maximise shareholders' value from solar operations
is to dispose solar companies and it initiated process of
disposition of solar companies which met all conditions of IFRS 5
for classification of solar business as Assets held for sale at 31
March 2021 (Note 7(b)).
Going concern
As at 31 March 2021 the Group had GBP8.9m in cash and net
current assets of GBP36.3m. The directors and management have
prepared a cash flow forecast to September 2022, 12 months from the
date this report, which has been approved.
The Group experiences sensitivity in its cash flow forecasts due
to the exposure to potential increase in USD denominated coal
prices and a decrease in the value of the Indian Rupee. The
Directors and management are confident that the Group will be
trading in line with its forecast and that any exposure to a
fluctuation in coal prices or the exchange rate INR/USD has been
taken into consideration and therefore prepared the financial
statements on a going concern basis.
COVID-19 virus, a global pandemic has affected the world economy
leading to significant decline and volatility in financial markets
and decline in economic activities. The Group has considered the
possible effects that may result from the pandemic on the carrying
amounts of receivables and other financial assets and carried out a
Reverse Stress Test (RST). In developing the assumptions relating
to the possible future uncertainties in the global economic
conditions because of this pandemic, the Group, as at the date of
approval of these financial statements has used internal and
external sources of information. The Group has performed
sensitivity analysis on the assumptions used for business
projections and based on current estimates expects the carrying
amount of these assets will be recovered and no material impact on
the financial results inter-alia including the carrying value of
various current and non-current assets are expected to arise for
the year ended 31 March 2021. The Group will continue to closely
monitor any variation due to the changes in situation and these
changes will be taken into consideration, if necessary, as and when
they crystalise. However, electricity being an essential commodity
the impact on industry has been comparatively lower. The operating
assets of the Group primarily are located in India. The Government
of India with Reserve Bank of India (RBI) have announced various
regulatory measures to help the industry. The Group has opted for
such measures for deferment of payment of principal and interest on
term loans and also interest on working capital loans. The Group
raised approximately GBP19.8m ( 2000 million) during June 2020
through non-convertible debentures (NCDs) issue with a three years
term and coupon rate of 9.85%. The NCD's proceeds were used to
repay the FY21 and FY22 (i.e. to March 2022) principal term loans
obligations. All debt covenants are met and have sufficient
headroom. The Group has also availed the Emergency Credit Line
Guarantee Scheme (ECLGS) and COVID Emergency support loans during
the year aggregating to GBP2.7 million. The Group collected full
amount of receivables from its principle customer of approximately
GBP16.4m and historical contractual claims payments from its
customers under the power purchase agreements amounting to GBP9.4m
which were accumulated over several periods. These measures
strengthened the Group's financial position at this time of
economic slowdown and also substantially eased the cash flow burden
on account of the Group having repaid the principal term loan
obligation for FY21 and FY22 and major recoveries of overdues
towards power supply from our principal customer TANGEDCO. Based on
the RST analysis, we can conclude that the Group is in strong
position to navigate the current situation caused by Covid-19
pandemic and going concern is not an issue.
b) Basis of consolidation
The consolidated financial statements include the assets,
liabilities and results of the operation of the Company and all of
its subsidiaries as of 31 March 2021. All subsidiaries have a
reporting date of 31 March.
A subsidiary is defined as an entity controlled by the Company.
The parent controls a subsidiary if it is exposed, or has rights,
to variable returns from its involvement with the subsidiary and
has the ability to affect those returns through its power over the
subsidiary. Subsidiaries are fully consolidated from the date of
acquisition, being the date on which effective control is acquired
by the Group, and continue to be consolidated until the date that
such control ceases.
All transactions and balances between Group companies are
eliminated on consolidation, including unrealised gains and losses
on transactions between Group companies. Where unrealised losses on
intra-group asset sales are reversed on consolidation, the
underlying asset is also tested for impairment from a group
perspective. Amounts reported in the financial statements of
subsidiaries have been adjusted where necessary to ensure
consistency with the accounting policies adopted by the Group.
Non-controlling interest represents the portion of profit or
loss and net assets that is not held by the Group and is presented
separately in the consolidated statement of comprehensive income
and within equity in the consolidated statement of financial
position, separately from parent shareholders' equity. Acquisitions
of additional stake or dilution of stake from/ to non-controlling
interests/ other venturer in the Group where there is no loss of
control are accounted for as an equity transaction, whereby, the
difference between the consideration paid to or received from and
the book value of the share of the net assets is recognised in
'other reserve' within the statement of changes in equity.
c) Investments in associates and joint ventures
Investments in associates and joint ventures are accounted for
using the equity method. The carrying amount of the investment in
associates and joint ventures is increased or decreased to
recognise the Group's share of the profit or loss and other
comprehensive income of the associate and joint venture, adjusted
where necessary to ensure consistency with the accounting policies
of the Group.
Unrealised gains and losses on transactions between the Group
and its associates and joint ventures are eliminated to the extent
of the Group's interest in those entities. Where unrealised losses
are eliminated, the underlying asset is also tested for
impairment.
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
% Voting Right % Economic interest
---------------------- ----------- -------------------
Immediate Country March
Subsidiaries parent of incorporation March 2021 March 2020 March 2021 2020
---------------------- ----------- ------------------- ----------- ----------- ------------- -------
Caromia Holdings
limited ('CHL') OPGPV Cyprus 100 100 100 100
Gita Power and
Infrastructure
Private Limited,
('GPIPL') CHL India 100 100 100 100
OPG Power Generation
Private Limited
('OPGPG') GPIPL India 71.25 73.16 99.90 99.91
Samriddhi Solar
Power LLP(*) OPGPG India - 73.16 - 99.91
Samriddhi Surya
Vidyut Private
Limited OPGPG India 71.25 73.16 99.90 99.91
OPG Surya Vidyut
LLP(*) OPGPG India - 73.16 - 99.91
Powergen Resources
Pte Ltd OPGPV Singapore 98.56 98.66 100 100
Avanti Solar Energy Associate Associate
Private Limited(**) OPGPG India 31% 31 31% 31
Mayfair Renewable
Energy (I) Private Associate Associate
Limited(**) OPGPG India 31% 31 31% 31
Avanti Renewable
Energy Private Associate Associate
Limited(**) OPGPG India 31% 31 31% 31
Brics Renewable
Energy Private Associate Associate
Limited(**) OPGPG India 31% 31 31% 31
(*) During FY21 withdrawn as a partner from LLP
(**) Effective from FY21, the results of operations of Solar
companies Aavanti Solar Energy Private Limited, Mayfair Renewable
Energy (I) Private Limited, Aavanti Renewable Energy Private
Limited and Brics Renewable Energy Private Limited are not
consolidated in Group's consolidated financial statements due to
loss of control.
ii) Financial assets measured at FVPL (Assets Held for sale) - Joint
ventures (Note 7(a))
Joint ventures Venturer Country % Voting right % Economic interest
of incorporation
-------------------- ---------- -------------------
March 2021 March March 2021 March
2020 2020
------------------ ---------- ------------------- ----------- ------ ------------- -------
Padma Shipping OPGPV
Limited ("PSL") / OPGPG Hong Kong 50 50 50 50
e) Foreign currency translation
The functional currency of the Company is the Great Britain
Pound Sterling (GBP). 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 (GBP).
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
(GBP) are the closing rate as at 31 March 2021: 100.81 (2020:
93.07) and the average rate for the year ended 31 March 2021: 96.72
(2020: 89.97).
f) Revenue recognition
In accordance with IFRS 15 - Revenue from contracts with
customers, the Group recognises revenue to the extent that it
reflects the expected consideration for goods or services provided
to the customer under contract, over the performance obligations
they are being provided. For each separable performance obligation
identified, the Group determines whether it is satisfied at a
"point in time" or "over time" based upon an evaluation of the
receipt and consumption of benefits, control of assets and
enforceable payment rights associated with that obligation. If the
criteria required for "over time" recognition are not met, the
performance obligation is deemed to be satisfied at a "point in
time". Revenue principally arises as a result of the Group's
activities in electricity generation and distribution. Supply of
power and billing satisfies performance obligations. The supply of
power is invoiced in arrears on a monthly basis and generally the
payment terms within the Group are 10 to 45 days.
Revenue
Revenue from providing electricity to captive power shareholders
and sales to other customers is recognised on the basis of billing
cycle under the contractual arrangement with the captive power
shareholders and customers and reflects the value of units of power
supplied and the applicable tariff after deductions or discounts.
Revenue is earned at a point in time of joint meter reading by both
buyer and seller for each billing month.
Interest and dividend
Revenue from interest is recognised as interest accrued (using
the effective interest rate method). Revenue from dividends is
recognised when the right to receive the payment is
established.
g) Operating expenses
Operating expenses are recognised in the statement of profit or
loss upon utilisation of the service or as incurred.
h) Taxes
Tax expense recognised in profit or loss comprises the sum of
deferred tax and current tax not recognised in other comprehensive
income or directly in equity.
Current income tax assets and/or liabilities comprise those
obligations to, or claims from, taxation authorities relating to
the current or prior reporting periods, that are unpaid at the
reporting date. Current tax is payable on taxable profit, which
differs from profit or loss in the financial statements.
Calculation of current tax is based on tax rates and tax laws
that have been enacted or substantively enacted by the end of the
reporting period.
Deferred income taxes are calculated using the liability method
on temporary differences between the carrying amounts of assets and
liabilities and their tax bases. However, deferred tax is not
provided on the initial recognition of goodwill, nor on the initial
recognition of an asset or liability unless the related transaction
is a business combination or affects tax or accounting profit.
Deferred tax on temporary differences associated with investments
in subsidiaries is not provided if reversal of these temporary
differences can be controlled by the Group and it is probable that
reversal will not occur in the foreseeable future.
Deferred tax assets and liabilities are calculated, without
discounting, at tax rates that are expected to apply to their
respective period of realisation, provided they are enacted or
substantively enacted by the end of the reporting period. Deferred
tax liabilities are always provided for in full.
Deferred tax assets are recognised to the extent that it is
probable that they will be able to be utilised against future
taxable income. Deferred tax assets and liabilities are offset only
when the Group has a right and the intention to set off current tax
assets and liabilities from the same taxation authority. Changes in
deferred tax assets or liabilities are recognised as a component of
tax income or expense in profit or loss, except where they relate
to items that are recognised in other comprehensive income or
directly in equity, in which case the related deferred tax is also
recognised in other comprehensive income or equity,
respectively.
i) Financial assets
IFRS 9 Financial Instruments contains regulations on measurement
categories for financial assets and financial liabilities. It also
contains regulations on impairments, which are based on expected
losses.
Financial assets are classified as financial assets measured at
amortized cost, financial assets measured at fair value through
other comprehensive income (FVOCI) and financial assets measured at
fair value through profit and loss (FVPL) based on the business
model and the characteristics of the cash flows. If a financial
asset is held for the purpose of collecting contractual cash flows
and the cash flows of the financial asset represent exclusively
interest and principal payments, then the financial asset is
measured at amortized cost. A financial asset is measured at fair
value through other comprehensive income (FVOCI) if it is used both
to collect contractual cash flows and for sales purposes and the
cash flows of the financial asset consist exclusively of interest
and principal payments. Unrealized gains and losses from financial
assets measured at fair value through other comprehensive income
(FVOCI), net of related deferred taxes, are reported as a component
of equity (other comprehensive income) until realized. Realized
gains and losses are determined by analyzing each transaction
individually. Debt instruments that do not exclusively serve to
collect contractual cash flows or to both generate contractual cash
flows and sales revenue, or whose cash flows do not exclusively
consist of interest and principal payments are measured at fair
value through profit and loss (FVPL). For equity instruments that
are held for trading purposes the group has uniformly exercised the
option of recognizing changes in fair value through profit or loss
(FVPL). Refer to note 29 "Summary of financial assets and
liabilities by category and their fair values".
Impairments of financial assets are both recognized for losses
already incurred and for expected future credit defaults. The
amount of the impairment loss calculated in the determination of
expected credit losses is recognized on the income statement.
Impairment provisions for current and non-current trade receivables
are recognised based on the simplified approach within IFRS 9 using
a provision matrix in the determination of the lifetime expected
credit losses. During this process the probability of the
non-payment of the trade receivables is assessed. This probability
is then multiplied by the amount of the expected loss arising from
default to determine the lifetime expected credit loss for the
trade receivables. On confirmation that the trade receivable will
not be collectable, the gross carrying value of the asset is
written off against the associated provision.
j) Financial liabilities
The Group's financial liabilities include borrowings and trade
and other payables. Financial liabilities are measured subsequently
at amortised cost using the effective interest method. All
interest-related charges and, if applicable, changes in an
instrument's fair value that are reported in profit or loss are
included within 'finance costs' or 'finance income'.
k) Fair value of financial instruments
The fair value of financial instruments that are actively traded
in organised financial markets is determined by reference to quoted
market prices at the close of business on the Statement of
financial position date. For financial instruments where there is
no active market, fair value is determined using valuation
techniques. Such techniques may include using recent arm's length
market transactions; reference to the current fair value of another
instrument that is substantially the same; discounted cash flow
analysis or other valuation models.
l) Property, plant and equipment
Property, plant and equipment are stated at historical cost,
less accumulated depreciation and any impairment in value.
Historical cost includes expenditure that is directly attributable
to property plant & equipment such as employee cost, borrowing
costs for long-term construction projects etc, if recognition
criteria are met. Likewise, when a major inspection is performed,
its costs are recognised in the carrying amount of the plant and
equipment as a replacement if the recognition criteria are
satisfied. All other repairs and maintenance costs are recognised
in the profit or loss as incurred.
Land is not depreciated. Depreciation on all other assets is
computed on straight-line basis over the useful life of the asset
based on management's estimate as follows:
Nature of asset Useful life (years)
----------------- --------------------
Buildings 40
Power stations 40
Other plant and
equipment 3-10
Vehicles 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.
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.
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.
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 shareholders and the weighted average number
of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity share.
u) Other provisions and contingent liabilities
Provisions are recognised when present obligations as a result
of a past event will probably lead to an outflow of economic
resources from the Group and amounts can be estimated reliably.
Timing or amount of the outflow may still be uncertain. A present
obligation arises from the presence of a legal or constructive
obligation that has resulted from past events. Restructuring
provisions are recognised only if a detailed formal plan for the
restructuring has been developed and implemented, or management has
at least announced the plan's main features to those affected by
it. Provisions are not recognised for future operating losses.
Provisions are measured at the estimated expenditure required to
settle the present obligation, based on the most reliable evidence
available at the reporting date, including the risks and
uncertainties associated with the present obligation. Where there
are a number of similar obligations, the likelihood that an outflow
will be required in settlement is determined by considering the
class of obligations as a whole. Provisions are discounted to their
present values, where the time value of money is material.
Any reimbursement that the Group can be virtually certain to
collect from a third party with respect to the obligation is
recognised as a separate asset. However, this asset may not exceed
the amount of the related provision. All provisions are reviewed at
each reporting date and adjusted to reflect the current best
estimate.
In those cases where the possible outflow of economic resources
as a result of present obligations is considered improbable or
remote, no liability is recognised, unless it was assumed in the
course of a business combination. In a business combination,
contingent liabilities are recognised on the acquisition date when
there is a present obligation that arises from past events and the
fair value can be measured reliably, even if the outflow of
economic resources is not probable. They are subsequently measured
at the higher amount of a comparable provision as described above
and the amount recognised on the acquisition date, less any
amortisation.
v) Share based payments
The Group operates equity-settled share-based remuneration plans
for its employees. None of the Group's plans feature any options
for a cash settlement.
All goods and services received in exchange for the grant of any
share-based payment are measured at their fair values. Where
employees are rewarded using share-based payments, the fair values
of employees' services is determined indirectly by reference to the
fair value of the equity instruments granted. This fair value is
appraised at the grant date and excludes the impact of non-market
vesting conditions (for example profitability and sales growth
targets and performance conditions).
All share-based remuneration is ultimately recognised as an
expense in profit or loss with a corresponding credit to 'Other
Reserves'.
If vesting periods or other vesting conditions apply, the
expense is allocated over the vesting period, based on the best
available estimate of the number of share options expected to vest.
Non-market vesting conditions are included in assumptions about the
number of options that are expected to become exercisable.
Estimates are subsequently revised if there is any indication that
the number of share options expected to vest differs from previous
estimates. Any cumulative adjustment prior to vesting is recognised
in the current period. No adjustment is made to any expense
recognised in prior periods if share options ultimately exercised
are different to that estimated on vesting.
Upon exercise of share options, the proceeds received net of any
directly attributable transaction costs up to the nominal value of
the shares issued are allocated to share capital with any excess
being recorded as share premium.
w) Employee benefits
Gratuity
In accordance with applicable Indian laws, the Group provides
for gratuity, a defined benefit retirement plan ("the Gratuity
Plan") covering eligible employees. The Gratuity Plan provides a
lump-sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on
the respective employee's salary and the tenure of employment.
Liabilities with regard to the gratuity plan are determined by
actuarial valuation, performed by an independent actuary, at each
Statement of financial position date using the projected unit
credit method.
The Group recognises the net obligation of a defined benefit
plan in its statement of financial position as an asset or
liability, respectively in accordance with IAS 19, Employee
benefits. The discount rate is based on the Government securities
yield. Actuarial gains and losses arising from experience
adjustments and changes in actuarial assumptions are charged or
credited to profit or loss in the statement of comprehensive income
in the period in which they arise.
x) Business combinations
Business combinations arising from transfers of interests in
entities that are under the control of the shareholder that
controls the Group are accounted for as if the acquisition had
occurred at the beginning of the earliest comparative period
presented or, if later, at the date that common control was
established using pooling of interest method. The assets and
liabilities acquired are recognised at the carrying amounts
recognised previously in the Group controlling shareholder's
consolidated financial statements. The components of equity of the
acquired entities are added to the same components within Group
equity. Any excess consideration paid is directly recognised in
equity.
y) Segment Reporting
The Group has adopted the "management approach" in identifying
the operating segments as outlined in IFRS 8 - Operating segments.
Segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker. The Board
of Directors being the chief operating decision maker evaluate the
Group's performance and allocates resources based on an analysis of
various performance indicators at operating segment level. During
the current year 2021 the Group has deconsolidated solar entities
and are classified as associates (note 7(b)). Accordingly, during
FY 21 there is only one operating segment thermal power. The solar
power business is classified as held for sale. There are no
geographical segments as all revenues arise from India. All the non
current assets are located in India.
6. Significant accounting judgements, estimates and assumptions
The preparation of financial statements in conformity with IFRS
requires management to make certain critical accounting estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period.
The principal accounting policies adopted by the Group in the
consolidated financial statements are as set out above. The
application of a number of these policies requires the Group to use
a variety of estimation techniques and apply judgment to best
reflect the substance of underlying transactions.
The Group has determined that a number of its accounting
policies can be considered significant, in terms of the management
judgment that has been required to determine the various
assumptions underpinning their application in the consolidated
financial statements presented which, under different conditions,
could lead to material differences in these statements. The actual
results may differ from the judgments, estimates and assumptions
made by the management and will seldom equal the estimated
results.
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.
Assessing control of subsidiaries, associates, joint
ventures
During FY21, the Group has reclassified the 31% equity interest
in the solar entities from Subsidiaries to Associates due to loss
of control. The interest in the solar entities (Avanti Solar Energy
Private Limited, Mayfair Renewable Energy (I) Private Limited,
Avanti Renewable Energy Private Limited and Brics Renewable Energy
Private Limited) are disclosed as assets held for sale.
Non-current assets held for sale and discontinued operations
The Group exercises judgement in whether assets are held for
sale. After evaluation of all options, the Company decided that the
most efficient way to maximise shareholders' value from solar
operations is to dispose of the solar companies and it initiated
the process of disposition of the solar companies. Under IFRS 5,
such a transaction meets the 'Asset held for sale' when the
transaction is considered sufficiently probable and other relevant
criteria are met. Management consider that all the conditions under
IFRS 5 for classification of the solar business as held for sale
have been met as at 31 March 2021 and expects the interest in the
solar companies to be sold within the next 12 months.
The investment in the joint venture Padma Shipping Limited and
associated advance has been presented as an asset held for sale
following the process of sale of the second vessel as mentioned in
note 7(a).
Recoverability of deferred tax assets:
The recognition of deferred tax assets requires assessment of
future taxable profit (see note 5(h)).
b. Estimates and uncertainties
The key assumptions concerning the future and other key sources
of estimation uncertainty at the Statement of financial position
date, that have a significant risk of causing material adjustments
to the carrying amounts of assets and liabilities within the next
financial year are discussed below:
i. Estimation of fair value of financial assets and financial
liabilities: While preparing the financial statements the Group
makes estimates and assumptions that affect the reported amount of
financial assets and financial liabilities.
Trade Receivables
The Group ascertains the expected credit losses (ECL) for all
receivables and adequate impairment provision are made. At the end
of each reporting period a review of the allowance for impairment
of trade receivables is performed. Trade receivables do not contain
a significant financing element, and therefore expected credit
losses are measured using the simplified approach permitted by IFRS
9, which requires lifetime expected credit losses to be recognised
on initial recognition. A provision matrix is utilised to estimate
the lifetime expected credit losses based on the age, status and
risk of each class of receivable, which is periodically updated to
include changes to both forward-looking and historical inputs.
Assets held for sale - Financial assets measured at FVPL
Valuation of Investment in joint venture Padma Shipping is based
on estimates and subject to uncertainties (Note 7(a)).
Financial assets measured at FVPL
Management applies valuation techniques to determine the fair
value of financial assets measured at FVPL where active market
quotes are not available. This requires management to develop
estimates and assumptions based on market inputs, using observable
data that market participants would use in pricing the asset. Where
such data is not observable, management uses its best estimate.
Estimated fair values of the asset may vary from the actual prices
that would be achieved in an arm's length transaction at the
reporting date.
ii. Impairment tests: In assessing impairment, management
estimates the recoverable amount of each asset or cash-generating
units based on expected future cash flows and use an interest rate
for discounting them. Estimation uncertainty relates to assumptions
about future operating results including fuel prices, foreign
currency exchange rates etc. and the determination of a suitable
discount rate;
iii. Useful life of depreciable assets: Management reviews its
estimate of the useful lives of depreciable assets at each
reporting date, based on the expected utility of the assets.
7. Profit/(Loss) from discontinued operations
Non-current assets held for sale and Profit/(Loss) from
discontinued operations consists of:
Profit/(Loss)
Assets held for Liabilities classified from discontinued
sale as held for sale operations
----------------------
At 31 At 31 At 31 At 31
March March March March For FY For FY
2021 2020 2021 2020 21 20
----------- --------- -------------- -------- ------------
Impairment of investments
i in joint venture - - - - - (918,432)
--------------------------- ----------- ----------- --------- -------------- -------- ------------
Interest in Solar
ii entities Note (7(b)) 16,425,368 46,356,680 - 32,866,783 - (293,942)
--------------------------- ----------- ----------- --------- -------------- -------- ------------
iii Share of Profit from
Solar entities Note
7(b) - - - - 117,710 -
--------------------------- ----------- ----------- --------- -------------- -------- ------------
iv Gain on deconsolidation
of Solar entities - - - - 881,688 -
--------------------------- ----------- ----------- --------- -------------- -------- ------------
Impairment of deposits
pledged for lenders
v of BVP - - - - - (933,901)
--------------------------- ----------- --------- -------------- -------- ------------
Total 16,425,368 46,356,680 - 32,866,783 999,398 (2,146,275)
--------------------------------- ----------- --------- -------------- -------- ------------
a) Investment in joint venture Padma Shipping Limited - classified as held for sale
In 2014 the Company entered into a Joint Venture agreement with
Noble Chartering Ltd ("Noble"), to secure competitive long term
rates for international freight for its imported coal requirements.
Under the Arrangement, the company and Noble agreed to jointly
purchase and operate two 64,000 MT cargo vessels through a Joint
venture company Padma Shipping Ltd, Hong Kong ('Padma').
OPG has invested approximately GBP3,484,178 in equity and
GBP1,727,418 to date as advance and accordingly the joint venture
has been reported using equity method as per the requirements of
IFRS 11. During FY2020 the Company recognised an impairment
provision of GBP918,432 resulting in impairment of entire
investment of GBP5,211,596 in joint venture (note 16) on account of
the impending dissolution of the JV.
b) Assets held for sale and discontinued operations of solar subsidiaries
During FY19, the results of the operations of solar entities
Avanti Solar Energy Private Limited, Mayfair Renewable Energy (I)
Private Limited, Avanti Renewable Energy Private Limited and Brics
Renewable Energy Private Limited were classified as Assets held for
sale. After evaluation of all the options, the Company decided that
the most efficient way to maximise shareholders' value from the
solar operations is to dispose of the solar entities and the
process of disposition of the solar entities was initiated. The
process of sale could not be implemented during FY21 due to
pandemic Covid-19 and expectation of comparatively better valuation
for sale. However, the Management expects the interest in the solar
entities to be sold within the next 12 months and continues to
locate a buyer.
During FY19, the Company obtained a right to exercise an option
to buy additional 30% equity interest in solar companies. Effective
from FY20 this right was assigned to a third party and from FY21
the remaining related obligations and the results of the operations
of solar companies Aavanti Solar Energy Private Limited, Mayfair
Renewable Energy (I) Private Limited, Aavanti Renewable Energy
Private Limited and Brics Renewable Energy Private Limited are not
consolidated in Group's consolidated financial statements due to
loss of control. The Group continues owning a 31% equity interest
in the solar companies.
Non-current Assets held-for-sale and discontinued
operations
(a) Assets of disposal group classified As at 31 March As at 31 March
as held-for-sale 2021 2020
Property, plant and equipment - 42,098,498
Trade and other receivables - 3,489,633
Other short-term assets - 256,209
Restricted cash - 487,795
Cash and cash equivalents - 24,545
Investment in Joint venture classified as
held for sale 16,425,368 -
--------------- ---------------
Total 16,425,368 46,356,680
--------------------------------------------------- --------------- ---------------
(b) Liabilities of disposal group classified As at 31 March As at 31 March
as held-for-sale 2021 2020
Non Current liabilities
Borrowings - 28,262,288
Trade and other payables - -
Deferred tax liability - 1,014,031
Current liabilities
Trade and other payables - 901,474
Other liabilities - 2,688,990
---------------------------------------------- ---------------- ----------------------
Total - 32,866,783
---------------------------------------------- ---------------- ----------------------
(c) Analysis of the results of discontinued
operations is as follows: For FY 21 For FY 20
Revenue - 5,884,401
Operating profit before impairments - 2,160,974
Finance income - 92,096
Finance cost - (3,540,239)
Current Tax - -
Deferred tax - 993,226
Share of Profit from Solar entities 117,710 -
Gain on deconsolidation of Solar entities 881,688 -
--------------------------------------------- ---------- ------------
Profit/(Loss) from Solar operations 999,398 (293,942)
--------------------------------------------- ---------- ------------
8 Segment Reporting
The Group has adopted the "management approach" in identifying
the operating segments as outlined in IFRS 8 - Operating segments.
Segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker. The Board
of Directors being the chief operating decision maker evaluate the
Group's performance and allocates resources based on an analysis of
various performance indicators at operating segment level. During
the current year 2021 the Group has deconsolidated the solar
entities which are classified as associates (note 7(b)).
Accordingly, during FY 21 there is only one operating segment
thermal power. The solar power business is classified as held for
sale. There are no geographical segments as all revenues arise from
India. All the non current assets are located in India.
Revenue on account of sale of power to one customer exceeding
10% of total sales revenue amounts to GBP28,720,575 (2020:
GBP27,152,241).
Segmental information disclosure
Continuing operations Discontinued operations
Thermal Solar
Segment Revenue FY21 FY20 FY21 FY20
Sales 93,823,933 154,040,283 - 5,884,401
------------ ------------- ------------ ------------
Total 93,823,933 154,040,283 - 5,884,401
------------ ------------- ------------ ------------
Other operating income 9,420,712 - - -
Depreciation, impairment (5,705,538) (6,293,034) - (3,516,527)
Profit from operation 27,495,324 24,036,945 - 2,160,974
Finance income 868,439 1,962,692 - 92,096
Finance cost (6,803,137) (11,495,136) - (3,540,239)
Tax expenses (8,447,699) (4,321,124) - 993,226
Gain on deconsolidation
of Solar entities - - 881,688 -
Share of Profit in Solar
entities - - 117,710 -
------------ ------------- ------------ ------------
Profit / (loss) for the
year 13,112,927 10,183,377 999,398 (293,942)
------------ ------------- ------------ ------------
Assets 239,076,536 249,981,014 16,425,368 49,579,232
Liabilities 93,934,834 104,967,078 - 35,267,786
9 Costs of inventories and employee benefit expenses included in
the consolidated statements of comprehensive income
a) Cost of fuel
31 March 2021 31 March 2020
---------------------------------------- --------------- ---------------
Included in cost of revenue:
Cost of fuel consumed 54,095,390 83,133,530
Other direct costs 2,797,675 6,926,722
---------------
Total 56,893,065 90,060,252
--------------------------------------------- --------------- ---------------
b) Employee benefit expenses forming part of general and administrative
expenses are as follows:
31 March 2021 31 March 2020
---------------------------------------- --------------- ---------------
Salaries and wages 2,139,303 2,756,438
Employee benefit costs * 228,112 760,914
Long Term Incentive Plan (Note 21) 535,247 835,822
---------------
Total 2,902,662 4,353,174
--------------------------------------------- --------------- ---------------
* includes GBP31,885 (2020: 21,860) being expenses towards
gratuity which is a defined benefit plan (Note 5(w))
c) Auditor's remuneration for audit services amounting to GBP60,000
(2020: GBP65,000) is included in general and administrative expenses.
d) Foreign exchange movements (realised and unrealised) included
in the Finance costs is as follows:
31 March 2021 31 March 2020
-------------------------------------------- -------------- --------------
Foreign exchange realised - loss/(gain) 213,524 (420,842)
Foreign exchange unrealised- loss/(gain) 46,931 1,568,333
-------------- --------------
Total 260,455 1,147,491
------------------------------------------------- -------------- --------------
10 Other operating income and expenses
a) Other operating income
--------------------------------------------- -------------- --------------
31 March 2021 31 March 2020
--------------------------------------------- -------------- --------------
Contractual claims payments 9,420,712 -
--------------------------------------------- -------------- --------------
Total 9,420,712 -
--------------------------------------------- -------------- --------------
Other operating income represents contractual claims payments from
company's customers under the power purchase agreements which were
accumulated over several periods.
Other income
31 March 2021 31 March 2020
--------------------------------------------- -------------- --------------
Sale of coal 616,708 462,718
Sale of fly ash 16,271 26,611
Power trading commission and other services 147,166 161,053
Others 1,141,401 17,655
--------------
Total 1,921,546 668,037
--------------------------------------------- -------------- --------------
11 Finance costs
Finance costs are comprised of:
---------------------------------------- --------------- ------------
31 March
31 March 2021 2020
---------------------------------------- --------------- ------------
Interest expenses on borrowings 5,848,895 9,289,625
Net foreign exchange loss (Note 9) 260,455 1,147,491
Other finance costs 693,787 1,058,020
--------------- ------------
Total 6,803,137 11,495,136
---------------------------------------- --------------- ------------
Other finance costs include charges and cost related to LC's for
import of coal and other charges levied by banks on transactions
12 Finance income
Finance income is comprised of:
----------------------------------------------- -------------- --------------
31 March 2021 31 March 2020
----------------------------------------------- -------------- --------------
Interest income on bank deposits and advances 401,194 1,943,132
Profit on disposal of financial instruments* 467,245 19,560
-------------- --------------
Total 868,439 1,962,692
----------------------------------------------- -------------- --------------
*Financial instruments represent the mutual
funds held during the year.
13 Tax expense
Tax Reconciliation
Reconciliation between tax expense and the product of accounting
profit multiplied by India's domestic tax rate for the years ended
31 March 2021 and 2020 is as follows:
31 March
2021 31 March 2020
----------------------------------------------- ----------- --------------
Accounting profit before taxes 21,560,626 14,504,501
Enacted tax rates 34.94% 34.94%
Tax expense / (benefit) on profit / (loss)
at enacted tax rate 7,534,145 5,068,453
Exempt Income due to tax holiday (161,808) (22,896)
Foreign tax rate differential 487,920 (327,343)
Unused tax losses brought forward and carried
forward 1,216,052 (993,226)
Non-taxable items (216,590) -
MAT credit entitlement (412,019) (397,088)
Actual tax for the period 8,447,699 3,327,899
----------------------------------------------- ----------- --------------
31 March
2021 31 March 2020
-------------------------------------------------- ---------- --------------
Current tax 412,513 788,430
Deferred tax 8,035,186 3,532,694
Total tax expenses on income from continued
operations 8,447,699 4,321,124
Add: tax on income from discontinuing operations - (993,226)
---------- --------------
Tax reported in the statement of comprehensive
income 8,447,699 3,327,899
-------------------------------------------------- ---------- --------------
The Company is subject to Isle of Man corporate tax at the
standard rate of zero percent. As such, the Company's tax liability
is zero. Additionally, the Isle of Man does not levy tax on capital
gains. However, considering that the Group's operations are
primarily based in India, the effective tax rate of the Group has
been computed based on the current tax rates prevailing in India.
Further, a substantial portion of the profits of the Group's India
operations are exempt from Indian income taxes being profits
attributable to generation of power in India. Under the tax holiday
the taxpayer can utilize an exemption from income taxes for a
period of any ten consecutive years out of a total of fifteen
consecutive years from the date of commencement of the operations.
However, the entities in India are still liable for Minimum
Alternate Tax (MAT) which is calculated on the book profits of the
respective entities currently at a rate of 17.47% (31 March 2020:
17.47%).
The Group has carried forward credit in respect of MAT tax
liability paid to the extent it is probable that future taxable
profit will be available against which such tax credit can be
utilised.
Deferred income tax for the Group at 31 March 2021 and 2020
relates to the following:
31 March 2021 31 March 2020
----------------------------------------------- -------------- --------------
Deferred income tax assets
Unused tax losses brought forward and carried
forward - 1,216,052
MAT credit entitlement 12,374,534 11,962,515
-------------- --------------
12,374,534 13,178,567
Deferred income tax liabilities
Property, plant and equipment 25,368,905 18,902,358
-------------- --------------
25,368,905 18,902,358
-------------- --------------
Deferred income tax liabilities, net 12,994,371 5,723,791
----------------------------------------------- -------------- --------------
Movement in temporary differences during the year
Particulars Classified
as (Asset)
Deferred / Liability As at
As at 01 tax Asset/(Liability) held for Translation 31 Mar
April 2020 for the year sale adjustment 2021
---------------------------------- ------------- ----------------------- ------------- ------------ -------------
Property, plant and equipment (18,902,358) - (6,466,547) - (25,368,905)
Unused tax losses brought
forward and carried forward 1,216,052 - (1,216,052) - -
MAT credit entitlement 11,962,515 412,019 - - 12,374,534
-------------
Deferred income tax (liabilities)
/ assets, net (5,723,791) 412,019 (7,682,599) - (12,994,371)
---------------------------------- ------------- ----------------------- ------------- ------------ -------------
Particulars Classified
as (Asset)
Deferred / (Liability) As at
As at 01 tax Asset/(Liability) held for Translation 31 Mar
April 2019 for the year sale adjustment 2020
------------- ----------------------- --------------- ------------ -------------
Property, plant and equipment (15,161,594) (2,936,557) (993,226) 189,018 (18,902,358)
Unused tax losses brought
forward and carried forward 1,216,052 - - - 1,216,052
MAT credit entitlement 11,565,427 397,088 - - 11,962,515
--------------------------------
Deferred income tax
(liabilities)
/ assets, net (2,380,115) (2,539,468) (993,226) 189,018 (5,723,791)
-------------------------------- ------------- ----------------------- --------------- ------------ -------------
In assessing the recoverability of deferred income tax assets,
management considers whether it is more likely than not that some
portion or all of the deferred income tax assets will be realized.
The ultimate realization of deferred income tax assets is dependent
upon the generation of future taxable income during the periods in
which the temporary differences become deductible. The amount of
the deferred income tax assets considered realizable, however,
could be reduced in the near term if estimates of future taxable
income during the carry forward period are reduced.
Shareholders resident outside the Isle of Man will not suffer
any income tax in the Isle of Man on any income distributions to
them. Further, dividends are not taxable in India in the hands of
the recipient up to 31 March 2021. However, the Group will be
subject to a "dividend distribution tax" currently at the rate of
15% to be grossed up (plus applicable surcharge and education cess)
on the total amount distributed as dividend.
There is no unrecognised deferred tax assets and liabilities. As
at 31 March 2021 and 2020, there was no recognised deferred tax
liability for taxes that would be payable on the unremitted
earnings of certain of the Group's subsidiaries, as the Group has
determined that undistributed profits of its subsidiaries will not
be distributed in the foreseeable future.
14 Intangible assets Acquired software
licences
Cost
At 31 March 2019 852,624
Additions -
Exchange adjustments (25,559)
At 31 March 2020 827,065
At 31 March 2020 827,065
Additions -
Exchange adjustments (63,470)
--------------------
At 31 March 2021 763,595
--------------------
Accumulated depreciation and impairment
At 31 March 2019 829,021
Charge for the year 14,327
Exchange adjustments (25,329)
At 31 March 2020 818,020
At 31 March 2020 818,020
--------------------
Charge for the year 6,209
Exchange adjustments (63,028)
------------------
At 31 March 2021 761,201
------------------
Net book value
At 31 March 2021 2,394
At 31 March 2020 9,045
15 Property, plant and equipment
The property, plant and equipment comprises of:
Other Asset
Land Power plant under
& Buildings stations & equipment Vehicles Solar assets construction Total
------------- ------------- ------------- ---------- ------------- -------------- ------------
Cost
At 1 April 2019 5,007,901 222,961,054 1,773,269 2,417,413 - 4,285,864 236,445,501
Additions - 294,954 165,831 10,958 - 82,815 554,559
Transfer on
capitalisation 3,903,256 56,168 - - - (3,959,424) -
Exchange
adjustments (145,667) (6,689,809) (52,848) (72,290) - (128,479) (7,089,093)
------------- ------------- ------------- ---------- ------------- -------------- ------------
At 31 March
2020 8,765,490 216,622,367 1,886,252 2,356,081 - 280,776 229,910,967
------------- ------------- ------------- ---------- ------------- -------------- ------------
At 1st April
2020 8,765,490 216,622,367 1,886,252 2,356,081 - 280,776 229,910,967
Additions 271,158 318,038 24,375 134,659 - 36,206 784,436
Transfers on
capitalisation 13,598 159,120 - - - (172,718) -
Sale/disposals - - - (1,561,762) - - (1,561,762)
Exchange adjustments (661,265) (16,639,299) (143,908) (180,354) - (21,547) (17,646,373)
At 31 March 2021 8,388,982 200,460,226 1,766,719 748,624 - 122,717 211,487,267
---------- ------------- ---------- ------------ ---------- -------------
Accumulated depreciation and
impairment
At 1 April 2019 45,030 30,171,648 634,011 1,491,921 - - 32,342,610
Charge for the
year 12,981 5,603,791 272,110 389,825 - - 6,278,707
Exchange adjustments (2,410) (1,091,777) (28,050) (57,509) - - (1,179,746)
At 31 March 2020 55,601 34,683,662 878,072 1,824,237 - - 37,441,572
At 1 April 2020 55,601 34,683,662 878,072 1,824,237 - - 37,441,572
Charge for the
year 12,081 5,230,238 262,333 194,677 - - 5,699,329
Sale/disposals - - - (1,263,537) - - (1,263,537)
Exchange adjustments (6,363) (2,874,452) (77,955) (147,367) - - (3,106,137)
At 31 March 2021 61,319 37,039,448 1,062,450 608,010 - - 38,771,227
-------- ------------ ---------- ------------ ------------
Net book value
At 31 March 2021 8,327,663 163,420,778 704,269 140,614 - 122,717 172,716,040
At 31 March 2020 8,709,889 181,938,705 1,008,180 531,845 - 280,776 192,469,395
---------- ------------ ---------- -------- -------- ------------
The net book value of land and buildings
block comprises of:
31 March 2021 31 March 2020
--------------------------------------------- -------------- --------------
Freehold land 7,917,345 8,134,867
Buildings 410,318 405,387
--------------
8,327,663 8,540,254
------------------------------------------ -------------- --------------
Property, plant and equipment with a carrying amount of
GBP169,111,804 (2020: GBP187,757,094) is subject to security
restrictions (refer note 22).
16 Other Assets
31 March 31 March 2020
2021
---------------------------------------------- ----------- --------------
A. Short-term
Capital advances 124,601 114,084
Financial instruments measured at fair value
through P&L 13,253,663 741,425
Advances and other receivables 4,427,290 5,461,226
Total 17,805,554 6,316,735
----------- --------------
B. Long-term
Lease deposits - 492,973
Bank deposits 57,713
Other advances 12,140 16,655
--------------
Total 69,853 509,628
---------------------------------------------- ----------- --------------
The financial instruments of GBP13,253,663 represent investments
in mutual funds and their fair value is determined by reference to
published data.
17 Trade and other receivables
31 March 2021 31 March 2020
-------------------- -------------- --------------
Current
Trade receivables 14,829,989 26,901,986
14,829,989 26,901,986
-------------------- -------------- --------------
The Group's trade receivables are classified at amortised cost
unless stated otherwise and are measured after allowances for
future expected credit losses, see "Credit risk analysis" in note
28 "Financial risk management objectives and policies" for more
information on credit risk. The carrying amounts of trade and other
receivables, which are measured at amortised cost, approximate
their fair value and are predominantly non-interest bearing.
18 Inventories
31 March 2021 31 March 2020
------------------- -------------- --------------
Coal and fuel 11,228,377 10,505,138
Stores and spares 958,267 974,961
--------------
Total 12,186,644 11,480,099
------------------- -------------- --------------
The entire amount of above inventories has been pledged as
security for borrowings (refer note 22)
19 Cash and cash equivalents and Restricted cash
a. Cash and short term deposits comprise of the following:
31 March 2021 31 March 2020
---------------------------- -------------- --------------
Investment in Mutual funds 1,815,629 -
Cash at banks and on hand 7,105,324 3,438,830
--------------
Total 8,920,952 3,438,830
---------------------------- -------------- --------------
Short-term deposits are placed for varying periods, depending on
the immediate cash requirements of the Group. They are recoverable
on demand.
b. Restricted cash
Current restricted cash represents deposits maturing between
three to twelve months amounting to GBP3,219,356 (2020:
GBP7,497,967) which have been pledged by the Group in order to
secure borrowing limits with the banks.
Non-current restricted represents investments in mutual funds
maturing after twelve months amounting to GBP8,194,412 (2020:
GBP26,645). Investments of GBP8,182,445 (2020: nil) are allocated
to debenture redemption fund earmarked towards redemption of
non-convertible debentures scheduled during FY2024 of
GBP19,840,089
20 Issued share capital
Share Capital
The Company presently has only one class of ordinary shares. For
all matters submitted to vote in the shareholders meeting, every
holder of ordinary shares, as reflected in the records of the Group
on the date of the shareholders' meeting, has one vote in respect
of each share held. All shares are equally eligible to receive
dividends and the repayment of capital in the event of liquidation
of the Group.
The Company has issued nil (2020:12,823,311) shares during the
year with respect to scrip dividend at par value of GBP nil (2020:
GBP0.000147) per share amounting to GBP nil (2020: GBP1,885).
During FY20 the difference between fair value of shares issued
above par value of GBP2,325,567 with respect to scrip dividend was
credited to share premium.
As at 31 March 2021, the Company has an authorised and issued
share capital of 400,733,511 (2020: 400,733,511) equity shares at
par value of GBP 0.000147 (2020: GBP 0.000147) per share amounting
to GBP58,909 (2020: GBP58,909) in total.
Reserves
Share premium represents the amount received by the Group over
and above the par value of shares issued. Any transaction costs
associated with the issuing of shares are deducted from share
premium, net of any related income tax benefits.
Foreign currency translation reserve is used to record the
exchange differences arising from the translation of the financial
statements of the foreign subsidiaries.
Other reserve represents the difference between the
consideration paid and the adjustment to net assets on change of
controlling interest, without change in control, other reserves
also includes any costs related with share options granted and
gain/losses on re-measurement of financial assets measured at fair
value through other comprehensive income.
Retained earnings include all current and prior period results
as disclosed in the consolidated statement of comprehensive income
less dividend distribution.
21 Share based payments
Long Term Incentive Plan
In April 2019, the Board of Directors approved the introduction
of Long Term Incentive Plan ("LTIP"). The key terms of the LTIP
are:
The number of performance-related awards is 14 million ordinary
shares (the "LTIP Shares") (representing approximately 3.6 per cent
of the Company's issued share capital). In addition to three
executive directors, additional members of the senior management
team will be included within the LTIP. The grant date is 24 April
2019.
The LTIP Shares were awarded to certain members of the senior
management team as Nominal Cost Shares and will vest in three
tranches subject to continued service with Group until vesting and
meeting the following share price performance targets, plant load
factor ("PLF") and term loan repayments of the Chennai thermal
plant.
- 20% of the LTIP Shares shall vest upon meeting the target
share price of 25.16p before the first anniversary for the first
tranche, i.e. 24 April 2020, achievement of PLF during the period
April 2019 to March 2020 of at least 70% at the Chennai thermal
plant and repayment of all scheduled term loans;
- 40% of the LTIP Shares shall vest upon meeting the target
share price of 30.07p before the second anniversary for the second
tranche, i.e. 24 April 2021, achievement of PLF during the period
April 2020 to March 2021 of at least 70% at the Chennai thermal
plant and repayment of all scheduled term loans;
- 40% of the LTIP Shares shall vest upon meeting the target
share price of 35.00p before the third anniversary for the third
tranche, i.e. 24 April 2022, achievement of PLF of at least 70% at
the Chennai thermal plant during the period April 2021 to March
2022 and repayment of all scheduled term loans.
The nominal cost of performance share, i.e. upon the exercise of
awards, individuals will be required to pay up 0.0147p per share to
exercise their awards
The share price performance metric will be deemed achieved if
the average share price over a fifteen day period exceeds the
applicable target price. In the event that the share price or other
performance targets do not meet the applicable target, the number
of vesting shares would be reduced pro-rata, for that particular
year. However, no LTIP Shares will vest if actual performance is
less than 80 per cent of any of the performance targets in any
particular year. The terms of the LTIP provide that the Company may
elect to pay a cash award of an equivalent value of the vesting
LTIP Shares.
In April 2020, and upon meeting relevant performance targets,
2,190,519 LTIP shares vested (80% of the 1st tranche). These shares
will be issued later this year.
None of the LTIP Shares, once vested, can be sold until the
third anniversary of the award, unless required to meet personal
taxation obligations in relation to the LTIP award.
For LTIP Shares awards, GBP535,247 (FY20: 835,822) has been
recognised in General and administrative expenses.
Grant date 24-Apr-19 24-Apr-19 24-Apr-19
Vesting date 24-Apr-20 24-Apr-21 24-Apr-22
Method of Settlement Equity/ Cash Equity/ Equity/ Cash
Cash
Vesting of shares (%) 20% 40% 40%
Number of LTIP Shares granted 2,800,000 5,600,000 5,600,000
Exercise Price (pence per share) 0.0147 0.0147 0.0147
Fair Value of LTIP Shares granted
(pence per share) 0.1075 0.1217 0.1045
Expected Volatility (%) 68.00% 64.18% 55.97%
22 Borrowings
The borrowings comprise of the
following:
-----------
Interest
rate (range 31 March 31 March
%) Final maturity 2021 2020
-------------------------------- ------------- --------------- ----------------- -----------
Borrowings at amortised
cost 10.35-11.40 June 2024 26,770,564 56,827,685
Non-Convertible Debentures
at amortised cost 9.85 19,840,089 -
-----------
Total 46,610,653 56,827,685
-------------------------------- ------------- --------------- ----------------- -----------
The term loans of GBP20.3m, non-convertible debentures of
GBP19.8m and working capital loans of GBP6.5m taken by the Group
are fully secured by the property, plant, assets under construction
and other current assets of subsidiaries which have availed such
loans. All term loans and working capital loans are personally
guaranteed by a director.
Term loans contain certain covenants stipulated by the facility
providers and primarily require the Group to maintain specified
levels of certain financial metrics and operating results. As of 31
March 2021, the Group has met all the relevant covenants. Further,
the Group raised approximately GBP 19.8 million ( 2000 million)
during June 2020 through non-convertible debentures (NCDs) issue
with a three years term and coupon rate of 9.85%. NCD's proceeds
was used to repay the FY21 and FY22 (i.e. to March 2022) principal
term loans obligations. This will substantially release the cash
flow burden for next two financial years on account of loan
repayment obligations (Note 5(a)).
The fair value of borrowings at 31 March 2021 was GBP46,610,653
(2020: GBP56,827,685). The fair values have been calculated by
discounting cash flows at prevailing interest rates.
The borrowings are reconciled to the statement of financial
position as follows:
31 March 31 March 2020
2021
--------------------------------------------- ----------- --------------
Current liabilities
Amounts falling due within
one year 4,510,358 23,746,229
Non-current liabilities
Amounts falling due after 1 year but not
more than 5 years 42,100,295 33,081,456
Total 46,610,653 56,827,685
--------------------------------------------- ----------- --------------
23 Trade and other payables
31 March 31 March 2020
2021
----------------------------- ----------- --------------
Current
Trade payables 32,368,058 41,455,004
Creditors for capital goods 128,777 208,985
Total 32,496,835 41,663,989
Non-current
Other payables 607,702 169,373
--------------
Total 607,702 169,373
----------------------------- ----------- --------------
Trade payables include credit availed from banks under letters
of credit for payments in USD to suppliers for coal purchased by
the Group. Other trade payables are normally settled on 45 days
terms credit. The arrangements are interest bearing and are payable
within one year. With the exception of certain other trade
payables, all amounts are short term. Creditors for capital goods
are non-interest bearing and are usually settled within a year.
Other payables include accruals for gratuity and other accruals for
expenses.
24 Related party transactions
Key Management Personnel:
Name of the party Nature of relationship
---------------------------- -----------------------------------
Arvind Gupta Chairman
Avantika Gupta Chief Operating Officer & Director
Dmitri Tsvetkov Chief Financial Officer & Director
Jeremy Warner Allen Deputy Chairman
Mike Grasby (from February Director
2021)
Jeremy Beeton (resigned Director
in March 2020)
N Kumar (from November Director
2019)
Related parties with whom the Group had transactions during the
period
Name of the party Nature of relationship
---------------------------- --------------------------------------------
Padma Shipping Limited The company has joint control of the entity
Avanti Solar Energy Private Associates
Limited
Mayfair Renewable Energy Associates
(I) Private Limited
Avanti Renewable Energy Associates
Private Limited
Brics Renewable Energy Associates
Private Limited
Samriddhi Bubna Relative of Key Management Personnel
Summary of transactions with related parties
Name of the party 31 March 2021 31 March 2020
-------------------------------- -------------- --------------
Remuneration to Samriddhi Bubna 25,847 -
(from June 2020)
Sale of solar modules:
a) Avanti Solar Energy Private 198,299 -
Limited
b) Mayfair Renewable Energy (I) 79,496 -
Private Limited
---------------------------------- -------------- --------------
During the year Samriddhi Solar Power LLP and OPG Surya Vidyut
LLP have been deconsolidated consequent to the Group withdrawing
from the LLP.
Summary of balance with
related parties
Name of the party Nature of balance 31 March 2021 31 March 2020
----------------------------- ---------------------- -------------- --------------
Padma Shipping Limited Investment 3,448,882 3,448,882
Padma Shipping Limited Advances 1,727,418 1,727,418
Padma Shipping Limited Impairment provision (5,176,300) (5,176,300)
Ravi Gupta Land Lease Deposit - 492,973
Avanti Solar Energy Private Investment 4,766,864 -
Limited
Avanti Solar Energy Private Trade payable (67,391) -
Limited
Avanti Solar Energy Private Advance 6,022 -
Limited
Mayfair Renewable Energy Investment 5,352,890 -
(I)Private Limited
Mayfair Renewable Energy Trade payable (51,294) -
(I) Private Limited
Mayfair Renewable Energy Advance 7,242 -
(I) Private Limited
Avanti Renewable Energy Investment 5,895,541 -
Private Limited
Avanti Renewable Energy Trade payable (147,583) -
Private Limited
Avanti Renewable Energy Advance 9,047 -
Private Limited
Brics Renewable Energy Investment 410,073 -
Private Limited
Brics Renewable Energy Advance 298 -
Private Limited
Outstanding balances at the year-end are unsecured. Related
party transaction are on an arms length basis. There have been no
guarantees provided or received for any related party receivables
or payables except for corporate guarantees issued to lenders of
its solar entities classified as Asset Held for Sale (loans
outstanding GBP23,300,131 (2020: GBP28,261,524)) and corporate
guarantee to a director for his personal guarantees with respect to
the Group's and associate solar entities' loans. For the year ended
31 March 2021, the Group has made impairment provision for
investments in joint venture GBPNil (2020: GBP918,432) (Note 7(a)).
This assessment is undertaken each financial year through examining
the financial position of the related party and the market in which
the related party operates.
A director personally guaranteed loans of an associate solar
entity (loan outstanding GBP7,412,554 (2020: GBP9,372,074)) which
is classified as Asset Held for Sale. Group's loans of
GBP25,368,634 (2020: GBP56,817,858) are personally guaranteed by a
director.
25 Earnings per share
Both the basic and diluted earnings per share have been
calculated using the profit attributable to shareholders of the
parent company as the numerator (no adjustments to profit were
necessary for the year ended March 2021 or 2020).
The Company has issued LTIP over ordinary shares which could
potentially dilute basic earnings per share in the future.
The weighted average number of shares for the purposes of
diluted earnings per share can be reconciled to the weighted
average number of ordinary shares used in the calculation of basic
earnings per share (for the Group and the Company) as follows:
Particulars 31 March 31 March 2020
2021
------------------------------------------------- ------------ --------------
Weighted average number of shares used in
basic earnings per share 400,733,511 390,923,328
Shares deemed to be issued for no consideration
in respect of share based payments 2,190,519 2,190,519
--------------
Weighted average number of shares used in
diluted earnings per share 402,924,030 393,113,847
------------------------------------------------- ------------ --------------
26 Directors remuneration 31 March
Name of directors 2021 31 March 2020
--------------------------------------------- --------- --------------
Arvind Gupta - 500,000
Avantika Gupta 60,000 120,000
Dmitri Tsvetkov 150,000 240,000
Jeremy Warner Allen 25,000 50,000
N Kumar (from November 2019) 22,500 15,000
Mike Grasby (till November 2019 in FY20 and
from February 2021 in FY21) 2,562 33,750
Jeremy Beeton (resigned in March 2020) - 43,270
--------- --------------
Total 260,062 1,002,020
--------------------------------------------- --------- --------------
As part of the COVID-19 response, the Company has implemented
various cost reduction and efficiency improvement measures to
conserve cash and improve liquidity, including a voluntary 100 per
cent salary reduction for the Chairman and voluntary reductions up
to 50 per cent in compensation for the Executive and Non-Executive
Directors for FY21.
The above remuneration is in the nature of short-term employee
benefits. As the future liability for gratuity and compensated
absences is provided on actuarial basis for the companies in the
group, the amount pertaining to the directors is not individually
ascertainable and therefore not included above.
27 Commitments and contingencies
Operating lease commitments
The Group leases office premises under operating leases. The
leases typically run for a period up to 5 years, with an option to
renew the lease after that date. None of the leases includes
contingent rentals.
Non-cancellable operating lease rentals are payable as
follows:
31 March 2021 31 March 2020
---------------------------------------- --------------- --------------
Not later than one year - 46,095
Later than one year and not later than
five years - 64,254
Later than five years - -
--------------
Total - 110,349
---------------------------------------- --------------- --------------
Recognition of a right of use asset and a lease liability is not
material and instead charge of GBP Nil (2020: GBP55,292) has been
recognised as an expense for leases.
Contingent liabilities
Disputed income net tax demand GBP816,358 (2020:
GBP1,021,210).
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 2021: GBP20,167,583 (2020:
GBP30,912,751) and Bank Guarantee (BG) as at 31 March 2021:
GBP2,575,878 (2020: GBP3,167,066). LC are supporting accounts
payables already recognised in the statement of financial position.
There have been no guarantees provided or received for any related
party receivables or payables except for corporate guarantees
issued to lenders of its solar entities classified as Asset Held
for Sale of GBP23,300,131(2020: GBP28,261,524). Working capital
facilities limits, LCs and BGs are personally guaranteed by a
director. BG are treated as contingent liabilities until such time
it becomes probable that the Company will be required to make a
payment under the guarantee. The Company provided a corporate
guarantee to a director for his personal guarantees with respect to
the Group's and associate solar entities' loans.
28 Financial risk management objectives and policies
The Group's principal financial liabilities, comprises of loans
and borrowings, trade and other payables, and other current
liabilities. The main purpose of these financial liabilities is to
raise finance for the Group's operations. The Group has loans and
receivables, trade and other receivables, and cash and short-term
deposits that arise directly from its operations. The Group also
hold investments designated financial assets measured at FVPL
categories.
The Group is exposed to market risk, credit risk and liquidity
risk.
The Group's senior management oversees the management of these
risks. The Group's senior management advises on financial risks and
the appropriate financial risk governance framework for the
Group.
The Board of Directors reviews and agrees policies for managing
each of these risks which are summarised below:
Market risk
Market risk is the risk that the fair values of future cash
flows of a financial instrument will fluctuate because of changes
in market prices. Market prices comprise three types of risk:
interest rate risk, currency risk and other price risk, such as
equity risk. Financial instruments affected by market risk include
loans and borrowings, deposits, financial assets measured at
FVPL.
The sensitivity analyses in the following sections relate to the
position as at 31 March 2021 and 31 March 2020
The following assumptions have been made in calculating the
sensitivity analyses:
(i) The sensitivity of the statement of comprehensive income is
the effect of the assumed changes in interest rates on the net
interest income for one year, based on the average rate of
borrowings held during the year ended 31 March 2021, all other
variables being held constant. These changes are considered to be
reasonably possible based on observation of current market
conditions.
Interest rate risk
Interest rate risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Group's exposure to the risk
of changes in market interest rates relates primarily to the
Group's long-term debt obligations with average interest rates.
At 31 March 2021 and 31 March 2020, the Group had no interest
rate derivatives.
The calculations are based on a change in the average market
interest rate for each period, and the financial instruments held
at each reporting date that are sensitive to changes in interest
rates. All other variables are held constant. If interest rates
increase or decrease by 100 basis points with all other variables
being constant, the Group's profit after tax for the year ended 31
March 2021 would decrease or increase by GBP466,107 (2020:
GBP568,277).
Foreign currency risk
Foreign currency risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rate. The Group's presentation currency
is the Great Britain GBP. 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:
As at 31 March 2021 As at 31 March 2020
---------------------- ---------------------------------- ----------------------------------
Currency Financial Financial liabilities Financial Financial liabilities
assets assets
---------------------- ---------- ---------------------- ---------- ----------------------
United States Dollar
(USD) 60,158 27,733,983 4,275,436 30,575,559
---------------------- ---------- ---------------------- ---------- ----------------------
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:
As at 31 March 2021 As at 31 March 2020
--------------------------------- ------------------------------
Currency Closing Rate Effect of 10% Closing Rate Effect of 10%
(INR/USD) strengthening (INR/USD) strengthening
in USD against in USD
INR - Translated against INR
to GBP - Translated
to GBP
--------------- ------------- ------------------ ------------- ---------------
United States
Dollar (USD) 73.37 2,012,662 75.10 2,122,208
--------------- ------------- ------------------ ------------- ---------------
The impact on total equity is the same as the impact on net
earnings as disclosed above.
Credit risk analysis
Credit risk is the risk that counterparty will not meet its
obligations under a financial instrument or customer contract,
leading to a financial loss. The Group is exposed to credit risk
from its operating activities (primarily for trade and other
receivables) and from its financing activities, including
short-term deposits with banks and financial institutions, and
other financial assets. Further, the global economy has been
severely impacted by the global pandemic Covid-19 (Note 5(a)).
The maximum exposure for credit risk at the reporting date is
the carrying value of each class of financial assets amounting to
GBP33,269,104 (2020: GBP33,986,093 ) and corporate guarantees
issued to lenders of its solar entities classified as Asset Held
for Sale of GBP23,300,131 (2020: GBP28,261,524).
The Group has exposure to credit risk from accounts receivable
balances on sale of electricity. The operating entities of the
group has entered into power purchase agreements with distribution
companies incorporated by the Indian state government (TANGEDCO) to
provide the electricity generated therefore the group is committed
to providing power to captive power shareholders and other
customers and the potential risk of default is considered low. For
other customers, the Group ensures concentration of credit does not
significantly impair the financial assets since the captive power
shareholders and customers to whom the exposure of credit is taken
are well established and reputed industries engaged in their
respective field of business. It is Group policy to assess the
credit risk of new captive power shareholders and other customers
before entering contracts and to obtain credit information during
the power purchase agreement to highlight potential credit risks.
The Group have established a credit policy under which captive
power shareholders and customers are analysed for credit worthiness
before power purchase agreement is signed. The Group's review
includes external ratings, when available, and in some cases bank
references. The credit worthiness of captive power shareholders and
other customers to which the Group grants credit in the normal
course of the business is monitored regularly and incorporates
forward looking information and data available. The receivables
outstanding at the year end are reviewed till the date of signing
the financial statements in terms of recoveries made and ascertain
if any credit risk has increased for balance dues. Further, the
macro economic factors and specific customer industry status are
also reviewed and if required the search and credit worthiness
reports, financial statements are evaluated. The credit risk for
liquid funds is considered negligible, since the counterparties are
reputable banks with high quality external credit ratings.
To measure expected credit losses, trade and other receivables
have been grouped together based on shared credit risk
characteristics and the days past due. The Group determined that
some trade receivables were credit impaired as these were long past
their due date and there was an uncertainty about the recovery of
such receivables. The expected loss rates are based on an ageing
analysis performed on the receivables as well as historical loss
rates. The historical loss rates are adjusted to reflect current
and forward looking information that would impact the ability of
the customer to pay.
Trade and other receivables are written off when there is no
reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the
failure of the debtor to engage in a repayment plan, the debtor is
not operating anymore and a failure to make contractual payments
for a period of greater than 180 days.
31 March 2021 Within Credit Days past due
period
--------------
More than More than More than Total
30 days 60 days 180 days
-------------- ---------- ---------- ----------- -----------
Expected General
loss allowance
rate 0% 0% 0% 33.02% -
---------------------------- ---------- ---------- ----------- -----------
Gross carrying
amount - Trade
Receivables -TANGEDCO 1,651,140 1,686,225 2,218,844 15,097,765 20,653,974
---------------------------- ---------- ---------- ----------- -----------
Gross carrying
amount - Trade
Receivables -Others 7,862,837 1,154,009 460,326 5,831,930 15,309,103
---------------------------- ---------- ---------- ----------- -----------
General loss allowance(1) - -- 252,404 6,910,677 7,163,081
---------------------------- ---------- ---------- ----------- -----------
Specific loss allowance(1) - 13,970,007 13,970,007
----------------------------
Total loss allowance - - 252,404 20,880,684 21,133,088
(1) There has been significant increase in loss allowance in
FY20 GBP17 million (FY19: GBP0.8 million) primarily on account of
contractual claim made on customer towards change in law as per
Power Purchase Agreement of GBP6.4 million, tariff discount dispute
of GBP7.5 million and change in credit risk of customer
constituting general loss allowance of GBP3.1 million.
31 March 2020 Within Credit Days past due
period
--------------
More than More than More than Total
30 days 60 days 180 days
-------------- ---------- ----------- -----------
Expected General
loss allowance
rate 0% 0% 0% 17.21% -
Gross carrying
amount - Trade
Receivables -TANGEDCO 2,378,240 3,953,961 5,310,071 18,734,652 30,376,924
--------------------------- ---------- ---------- ----------- -----------
Gross carrying
amount - Trade
Receivables -Others 7,824,720 608,495 889,434 5,310,446 14,633,095
--------------------------- ---------- ---------- ----------- -----------
General loss allowance(1) 4,138,025 4,138,025
Specific loss allowance(1) 13,970,007 13,970,007
Total loss allowance - - - 18,108,033 18,108,033
(1) There has been significant increase in loss allowance in
FY20 GBP17 million (FY19 GBP0.8 million) primarily on account of
contractual claim made on customer towards change in law as per
Power Purchase Agreement of GBP6.4 million, tariff discount dispute
of GBP7.5 million and change in credit risk of customer
constituting general loss allowance of GBP3.1 million.
The closing loss allowances for trade receivables as at 31 March
2021 reconcile to the opening loss allowances as follows:
31 March 2021 31 March 2020
Opening loss allowance as at 1 April (18,108,033) (1,061,553)
Increase in loss allowance recognised
in profit or (loss) during the year for
new receivables recognised (3,025,055) (17,046,480)
Total (21,133,088) (18,108,033)
The Group's management believes that all the financial assets,
except as mentioned above are not impaired for each of the
reporting dates under review and are of good credit quality.
Liquidity risk analysis
The Group's main source of liquidity is its operating
businesses. The treasury department uses regular forecasts of
operational cash flow, investment and trading collateral
requirements to ensure that sufficient liquid cash balances are
available to service on-going business requirements. The Group
manages its liquidity needs by carefully monitoring scheduled debt
servicing payments for long-term financial liabilities as well as
cash outflows due in day-to-day business. Liquidity needs are
monitored in various time bands, on a day-to-day and week-to-week
basis, as well as on the basis of a rolling 90 day projection.
Long-term liquidity needs for a 90 day and a 30 day lookout period
are identified monthly.
The Group maintains cash and marketable securities to meet its
liquidity requirements for up to 60 day periods. Funding for
long-term liquidity needs is additionally secured by an adequate
amount of committed credit facilities and the ability to sell
long-term financial assets.
The following is an analysis of the group contractual
undiscounted cash flows payable under financial liabilities at 31
March 2021 and 31 March 2020:
As at 31 March 2021
Current Non-Current Total
Later than
Within 12 months 1-5 years 5 years
Borrowings 4,510,358 22,260,206 - 26,770,564
Non-Convertible Debentures - 19,840,089 - 19,840,089
Interest on borrowings 6,803,137 7,816,034 - 14,619,171
Trade and other payables 32,495,799 607,702 33,103,501
Liabilities held for
sale
Other current liabilities 1,226,309 - 1,226,309
Total 45,035,603 50,524,031 - 95,559,634
As at 31 March 2020
Current Non-Current Total
Later than
Within 12 months 1-5 years 5 years
Borrowings 23,746,229 33,081,456 - 56,827,685
Interest on borrowings 6,595,187 10,464,236 - 17,059,422
Trade and other payables 41,663,989 169,373 - 41,833,362
Liabilities held for
sale 32,866,783 - 32,866,783
Other current liabilities 582,240 - 582,240
Total 105,454,428 43,715,065 - 149,169,492
----------- ----------
Capital management
Capital includes equity attributable to the equity holders of
the parent and debt less cash and cash equivalents.
The Group's capital management objectives include, among
others:
-- Ensure that it maintains a strong credit rating and healthy
capital ratios in order to support its business and maximise
shareholder value
-- Ensure the Group's ability to meet both its long-term and
short-term capital needs as a going concern;
-- To provide an adequate return to shareholders by pricing
products and services commensurately with the level of risk.
The Group manages its capital structure and makes adjustments to
it, in light of changes in economic conditions. To maintain or
adjust the capital structure, the Group may adjust the dividend
payment to shareholders, return capital to shareholders or issue
new shares.
No changes were made in the objectives, policies or processes
during the years end 31 March 2021 and 31 March 2020.
The Group maintains a mixture of cash and cash equivalents,
long-term debt and short-term committed facilities that are
designed to ensure the Group has sufficient available funds for
business requirements. There are no imposed capital requirements on
Group or entities, whether statutory or otherwise.
The Capital for the reporting periods under review is summarised
as follows:
31 March 31 March 2020
2021
Total equity 161,567,070 158,503,833
Less: Cash and cash equivalents (8,920,952) (3,438,830)
Capital 152,646,118 155,065,003
Total equity 161,567,070 158,503,833
Add: Borrowings 46,610,653 56,827,685
Overall financing 208,177,723 215,331,518
Capital to overall financing ratio 0.73 0.72
29 Summary of financial assets and liabilities by category and
their fair values
Carrying amount Fair value
March 2021 March 2020 March 2021 March 2020
Financial assets
Debt instruments measured
at amortised cost
Cash and cash equivalents
(1) 8,920,952 3,438,830 8,920,952 3,438,830
Restricted cash (1) 11,413,768 7,524,612 11,413,768 7,524,612
Current trade receivables
(1) 14,829,989 26,901,986 14,829,989 26,901,986
Other long-term assets 69,853 509,628 69,853 509,628
Other short-term assets 2,736,262 5,575,310 2,736,262 5,575,310
Financial instruments measured at fair value through profit or loss
Other short term assets
(Note (7)(c)) and restricted
cash (Note19) 15,069,292 741,425 15,069,292 741,425
53,040,116 44,691,791 53,040,116 44,691,791
Financial liabilities
Term loans 26,770,564 80,364,930 26,770,564 80,364,930
Non-Convertible Debentures(2) 19,840,089 - 19,840,089 -
Current trade and other
payables (1) 32,495,799 45,474,814 32,495,799 45,474,814
Provision for pledged deposits - 12,627,381 - 12,627,381
Non-current trade and other
payables (2) 607,702 14,235,485 607,702 14,235,485
79,714,154 152,702,610 79,714,154 152,702,610
The fair value of the financial assets and liabilities are
included at the price that would be received to sell an asset or
paid to transfer a liability (i.e. an exit price) in an ordinary
transaction between market participants at the measurement date.
The following methods and assumptions were used to estimate the
fair values:
1. Cash and short-term deposits, trade receivables, trade
payables, and other borrowings like short-term loans, current
liabilities approximate their carrying amounts largely due to the
short-term maturities of these instruments.
2. The fair value of loans from banks and other financial
indebtedness, obligations under finance leases, financial
liabilities at fair value through profit or loss as well as other
non-current financial liabilities is estimated by discounting
future cash flows using rates currently available for debt or
similar terms and remaining maturities.
3. Fair value of financial assets measured at FVPL held for
trading purposes are derived from quoted market prices in active
markets. Fair value of financial assets measured at FVPL of
unquoted equity instruments are derived from valuation performed at
the year end. Fair Valuation of retained investments in PS and BVP
is on basis of the last transaction.
Fair value measurements recognised in the statement of financial
position
The following table provides an analysis of financial
instruments that are measured subsequent to initial recognition at
fair value, grouped into Levels 1 to 3 based on the degree to which
the fair value is observable.
-- Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or
liabilities.
-- Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
-- Level 3 fair value measurements are those derived from
valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable
inputs).
Financial instruments measured at Level Level
fair value through profit or loss 1 Level 2 3 Total
-------
2021
Quoted securities 15,069,292 - - 15,069,292
Total 15,059,292 - - 15,069,292
-------
2020
Quoted securities 700,972 - 40,453 741,425
Total 700,972 - 40,453 741,425
-------
There were no transfers between Level 1 and 2 in the period.
Investments in mutual funds are valued at closing net asset value
(NAV).
The Group's finance team performs valuations of financial items
for financial reporting purposes, including Level 3 fair values.
Valuation techniques are selected based on the characteristics of
each instrument, with the overall objective of maximising the use
of market-based information. The finance team reports directly to
the chief financial officer (CFO).
Valuation processes and fair value changes are discussed by the
Board of Directors at least every year, in line with the Group's
reporting dates.
-ends-
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