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TIDMMYT
RNS Number : 0885O
Mytrah Energy Ltd
13 September 2011
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN
Press Release 13 September 2011
Mytrah Energy Limited (formerly Caparo Energy Limited)
("Mytrah Energy" or the "Company")
Final Results for year- end 31 March 2011
The Board of Directors of Mytrah Energy Limited (the "Board") is pleased to announce the Company's annual financial results for the year ended 31 March 2011.
Highlights:
-- Raised USD79.24 million before issue expenses of USD6.4 million on the
London Stock Exchange's AIM market ("AIM").
-- Signed long term supply agreements with two of the largest global wind
farm vendors for delivery of 5,000 mega watts ("MW") of wind farm assets
by 2017.
-- Secured senior debt in India during the year.
-- Subsequent to year- end, raised an additional USD111.5 million of
mezzanine financing.
-- Subsequent to year- end, commissioned 60.9 MW wind farm assets.
-- Placed purchase orders for 100.8 MW during the period and, subsequent to
year- end, placed orders for a further 261.2 MW.
-- The Group remains on track to have 500 MW operational by March 2012.
-- In advanced discussions with a leading lender in India to receive senior
debt of USD189.3 million needed to fund the purchase orders placed
subsequent to the year end.
Ravi Kailas, Mytrah Energy's Chairman and Chief Executive Officer, commented:
"This has been a very successful first year for Mytrah Energy Limited. In the period, the Company made significant strides in preparing its finances and purchase agreements for rapid and large- scale expansion. The Company successfully raised USD79.2million before issue expenses of USD6.4 million at the time of its admission to AIM. We renegotiated our contract with Suzlon to offer Mytrah Energy shareholders increased visibility on the delivery of turbines. We closed USD111.5million of innovative non- dilutive mezzanine financing. Assuming a 70:30 debt to project equity split the Group considers it has now obtained enough project equity funding for 700 MW of wind power generation capacity. For the 700MW, the Group had by year end obtained enough senior debt financing for 100.8 MW, and subsequent to the year end was in advanced discussions with a leading lender in India to fund the senior debt requirement for a further 261.2 MW.
"The Group expects to continue to accelerate its expansion rate as cash flow is generated and additional financing options become available. We are committed to growing into a large- scale renewable energy business in India, seeking to have installed capacity of 5,000 MW of wind power by 2017. Through our agreements with Suzlon and Gamesa we are confident in our ability to realize the scale of growth and offer significant value creation for our shareholders."
Further information on the Company can be found at www.mytrah.com.
- Ends -
For further information please contact:
Mytrah Energy Limited
Ravi Kailas, Chairman and Chief Executive
Officer +44 (0) 20 7166 6440
Strand Hanson Limited
Angela Peace / Paul Cocker / James Harris +44 (0) 20 7409 3494
Mirabaud Securities LLP
Peter Krens / Rory Scott +44 (0) 20 7878 3360
Pelham Bell Pottinger
Charles Vivian / Philippe Polman +44 (0) 20 7861 3232
Chairman and CEO's Statement
I am pleased to report that Mytrah Energy Limited (formerly Caparo Energy Limited) and its subsidiaries (together the "Group") made good progress in executing our business plan as an Independent Power Producer ("IPP").
During the year and subsequent to year- end, we have made strong progress toward meeting our objective of developing 5,000 Mega Watts ("MW") generating capacity by 2017. We have secured two strategic partnerships with industry leaders in the wind energy sector, Suzlon Energy Limited ("Suzlon") and Gamesa Wind Turbines Pvt Ltd ("Gamesa"). Subsequent to year- end our first projects, with production capacity of 60.9 MW, are fully commissioned and connected to the grid and the Group is now generating electricity and cash flow.
In October 2010, the Group successfully raised USD79.2 million before issue expenses of USD6.4 million through the issue of equity shares on the London Stock Exchange's AIM. Our listing and corresponding fund raising will enable the Group to pursue its strategy of becoming a leading IPP in India through the establishment and commissioning of wind farms, with a targeted generating capacity of up to 5,000 MW by 2017.
Further, subsequent to year- end, the Group secured innovative mezzanine financing, totalling USD111.5 million, leaving us well capitalised to fund our development and project pipeline and build the necessary land bank. We are also in advanced discussions with a leading senior lender in India to receive additional finance to fund the purchase orders for the wind farm assets placed subsequent to the year end. We feel ideally positioned to take advantage of the significant opportunity offered by the rapidly expanding Indian energy market.
Indian Energy Market
As one of the world's fastest growing economies, India is an exciting country in which to operate. The Indian economy experienced a solid rebound from the global financial crisis of 2008, with growth almost recovering to pre- recession levels. Looking ahead, GDP growth is forecast to return to around 8.5- 9% and we believe that this provides the Group with a fertile environment in which to grow. In tandem, the Indian energy market is experiencing an increasing deficit as the gap between supply and demand continues to widen. This gap becomes remarkably apparent when comparing India's population and energy generation capacity with those of China. As of March 2011, India's population was approximately 1.1 billion and had an energy generation capacity of only 175 GW. This falls short of China's capacity to generate 860 GW of energy for its population of 1.3 billion.
To address this shortfall, the Indian government opened the electricity market to the private sector through the Indian Electricity Act, 2003 and has outlined its intention to increase total generation capacity to 342 GW by 2017. The government is also increasing the contribution made by renewable energy sources by mandating States, through the Renewable Purchase Obligation ("RPO") mechanism, to purchase up to a minimum of 10% of their annual energy requirements from renewable sources by 2012 increasing to 20% by 2020. An estimated 54 GW of renewable energy will be needed by 2017, creating a large market opportunity for company such as ours.
India is currently the 5th largest wind energy producer worldwide with 13GW of installed capacity. Wind energy accounts for 72% of total renewable energy capacity in India. As India's wind energy market matures, we will continue to see regulatory incentives move away from tax based depreciation toward IPP production. There is already a Generation Based Incentive ("GBI") scheme that offers Rs. 0.50 per unit of electricity fed into the grid by wind power producers and, over the next year, we expect to see an increase in the volumes in the newly created Renewable Energy Certificate ("REC") market. The country's familiarity with favourable legislation towards wind energy makes India extremely receptive to our offering.
Strategy and Development
With these market dynamics in mind, the Group's strategy is centred on generating reliable and long- term cash flow through developing a portfolio of wind farms with a total generating capacity of up to 5,000 MW by 2017. We intend to achieve this goal in two concurrent phases and have already put many of the foundations in place.
Phase I of our concurrent expansion strategy is focused on developing 3,000 MW by 2017 through our business partnership agreement ("BPA") with Suzlon Energy Limited ("Suzlon"). By securing fixed terms for 1,000 MW of capacity under this agreement, the Directors believe that the Group becomes the largest and lowest cost venture in the Indian wind energy sector.
In January 2011 we announced that under the BPA with Suzlon we had agreed on a delivery schedule for the first 1,000 MW of wind power projects. It is our intention to commission 500 MW progressively by March 2012 and a further 500 MW by March 2013. We believe we can meet this target, and have already placed orders for 100.8 MW during the year ended 31 March 2011 and 261.16 MW subsequent to year- end.
Further, subsequent to year end we completed and commissioned part of our first two projects, in Rajasthan and Gujarat, totalling 60.9 MW. These projects provide the Group's first revenue from electricity sales and demonstrate our ability to implement from concept to commissioning.
In addition, we have agreed with Suzlon on the locations of the next 750 MW of projects to be delivered under our current BPA. The 750 MW generation capacity will span sites located in Gujarat (300 MW), Andhra Pradesh (100 MW), Maharashtra (100 MW), Rajasthan (75 MW), Karnataka (100MW) and Tamil Nadu (75 MW). Preliminary wind assessment studies undertaken by an internationally recognised firm on behalf of the Group indicate that these five sites, once developed, represent attractive wind resources. We look forward to updating shareholders on the progress made at these sites.
Phase II of our concurrent expansion strategy is focused on securing land for the installation of wind power generation farms. Subsequent to year end iIn May 2011, we announced the securing of land across various wind rich states in India. This land has received the relevant leases and sanctions for the installation of 3,000 MW of wind power generation farms. Based on preliminary analysis, the Group believes these sites to have indicative Plant Load Factors ("PLFs") of more than 28%. Expanding our land position in wind rich regions is imperative to advancing our business plan to create significant value uplift for shareholders and we will continue seeking to increase our land position going forward.
Subsequent to year- end in May 2011, as part of our Phase II, we further increased our scale by entering into an agreement with Gamesa Wind Turbines Pvt Ltd ("Gamesa"), a subsidiary of Gamesa Corporaci- n Tecnol- gica, Spain, a global leader in wind turbine erection and commissioning, for the delivery of 2,000 MW of turbine capacity by 2016. The first 150 MW under this agreement are expected to be delivered in Q4 2012.
To fuel its growth, subsequent to year end, the Company obtained USD78.5 million in June 2011 as the first tranche of mezzanine financing from The India Infrastructure Fund, managed by IDFC Project Equity Company Limited, in the form of preference shares with a six year term. Soon thereafter, a second tranche of USD33.0 million was secured. The Board believes this is the first instance of an IPP in the Indian wind sector having arranged financing of this kind, highlighting our first mover status in the arena and the credibility of our development schedule. The Group is also in the process of finalising the senior debt of USD189.3 and is in advanced discussions with a lender to receive the senior debt financing needed to fund the purchase orders placed subsequent to the year- end. The Directors are confident that this will be finalised ahead of when the further payments for the purchase orders crystallise.
Financial Overview
In October 2010, the Company raised USD79.2 million before expenses of USD6.4 million, by way of a placing of 43,636,000 ordinary shares at 115p as part of the Company's admission to AIM.
For the year ended 31 March 2011, the Group, in its first year of operations, did not generate revenue and reported an after tax loss of USD2.5 million. The cash used in operations during the year was USD3.0 million. At 31 March 2011 the Group had cash and bank balances of USD16.9 million. The Group has made progress in developing wind farm assets, and at the year end had wind farms assets under the course of construction of USD28.1 million. Further, the Group had made advance payments of USD29.9 million toward development of further wind farm assets.
Change of Name and Board Composition
As the Company's transformative growth continues, its identity has also evolved. The Company proposed and received authority to change its name from Caparo Energy Limited to Mytrah Energy Limited at its recent EGM on 5 September 2011 and will now be called Mytrah Energy Limited. We are grateful to have begun as Caparo Energy Limited and would like to thank the Caparo Group for their ongoing support.
Following the year- end, Angad Paul stepped down as Non- Executive Chairman. Additionally, Charles Wilkinson, an independent Non- Executive Director based in Guernsey, is not offering himself for re- election at the forthcoming AGM. On behalf of the Board, I would like to thank them both for their services and contributions. We intend to add two independent Non- Executive Directors to the Board as soon as practicable.
Conclusion
We have made good progress in implementing our business plan in the Group's first year of operations and subsequent to year- end, had confirmed production capacity of 60.9 MW. We expect the forthcoming period to be equally productive as we focus on continuing to meet our commitments and to build value. Being a large scale but low cost venture, we have an advantage in the wind energy sector. As the power deficit and the resulting increasing role of renewables persists in India, we plan to press our advantage to cement our business model and strengthen our leadership position in the industry.
Integral to the Group's success will be its partnerships with key manufacturers in the wind energy sector. We have forged strong relationships with two world- class manufacturers, Suzlon and Gamesa, and we look forward to working closely with them in the years ahead.
By the end of financial year ending 31 March 2012 I am confident that we will have 500 MW of generation capacity on line, catapulting us to one of the largest clean power producer in India after just 18 months of incorporation. Our position will be further strengthened by March 2013 when we will have the capacity to generate 1,150 MW of power through our agreements with Suzlon and Gamesa. The revenue opportunities and the value uplift potential for the Company are considerable, and as a cash generative business with a relatively short payback period, we believe that the Company is an exciting opportunity for investors.
I would like to welcome our new shareholders to the Group. I look forward to collaborating with them as we leverage our scale and cost advantages in the Indian renewable sector to establish ourselves as the country's premier renewable IPP during 2012. We eagerly anticipate the coming year and, having already met a number of key milestones ahead of schedule, we are confident that we can hit all our short and long term targets.
Finally, on behalf of the Board, I would like to express my greatest thanks to all our business partners, strategic partners, employees, management and our shareholders for the dedication, hard work and support you have shown for the Company throughout the year under review.
Ravi Shankar Kailas
Chairman and CEO
11 September 2011
Consolidated statement of comprehensive income
for the year ended 31 March 2011
Period from
12 November
Year ended 2009 to
31 March 31 March
Notes 2011 2010
USD USD
Continuing operations
Administrative expenses 2 (2,301,376) (175,770)
Operating loss (2,301,376) (175,770)
Investment income 4 999,830 708
Other gains 5 141,648 -
Finance costs 6 (37,082) -
Loss before tax (1,196,980) (175,062)
Taxation 16 (378,423) -
Loss for the year/period from continuing
operations attributable to the equity
holder of the Company (1,575,403) (175,062)
Other comprehensive loss
Exchange differences on translating foreign
operations (929,328) (3,752)
Other comprehensive loss for the year/period (929,328) (3,752)
Total comprehensive loss for the year/period
attributable to the equity holders of
the Company (2,504,731) (178,814)
Basic and diluted loss per share 21 (0.0096) (0.0011)
Consolidated statement of financial position
as at 31 March 2011
31 March 31 March
Notes 2011 2010
USD USD
Non- current assets
Property, plant and equipment 7 28,283,068 32,399
Other non- current assets 8 1,645,436 36,427
Total non- current assets 29,928,504 68,826
Current assets
Advances and other current assets 9 31,010,598 11,658
Cash and bank balances 10 16,861,883 229,394
Total current assets 47,872,481 241,052
Total assets 77,800,985 309,878
Liabilities
Current liabilities
Trade and other payables 15 7,115,519 488,459
Tax liabilities 340,961 -
Total liabilities 7,456,480 488,459
Net assets/(liabilities) 70,344,505 (178,581)
Equity
Invested capital 11 - 233
Share capital 12 72,858,278 -
Retained earnings 14 (1,750,465) (175,062)
Other reserves 13 (763,308) (3,752)
Total equity 70,344,505 (178,581)
Consolidated statement of changes in equity
for the year ended 31 March 2011
Equity
settled
Re- employee
Invested Share translation benefits Retained
capital capital reserve reserve Earnings Total
USD USD USD USD USD USD
Balance as at
12 November
2009 - - - - - -
Loss for the
period - - - - (175,062) (175,062)
Other
comprehensive
loss for the
period - - (3,752) - - (3,752)
Total
comprehensive
loss for the
period - - (3,752) - (175,062) (178,814)
Issue of
shares 233 - - - - 233
Balance as at
31 March
2010 233 - (3,752) - (175,062) (178,581)
Loss for the
year - - - - (1,575,403) (1,575,403)
Other
comprehensive
loss for the
year - - (929,328) - - (929,328)
Total
comprehensive
loss for the
year - - (929,328) - (1,575,403) (2,504,731)
Issue of
shares to
shareholders
of Bindu Vayu
(Mauritius)
Limited 39,767 - - - - 39,767
Transfer of
shares to
Mytrah Energy
Limited
shareholders (40,000) 40,000 - - - -
Issue of
shares on
IPO - 79,241,910 - - - 79,241,910
Share issue
costs on IPO - (6,423,632) - - - (6,423,632)
Equity settled
share based
payments - - - 169,772 - 169,772
Balance as at
31 March
2011 - 72,858,278 (933,080) 169,772 (1,750,465) 70,344,505
Consolidated statement of cash flow
for the year ended 31 March 2011
Period from
12 November
Year ended 2009 to
31 March 31 March
Notes 2011 2010
USD USD
Cash flows from operating activities
Loss from operations (2,301,376) (175,770)
Adjustments:
Equity settled employee benefits 22 169,772 -
Depreciation 7 18,291 1,761
Operating cash flows before working
capital changes (2,113,363) (174,009)
Movements in working capital:
Increase in other current assets (1,087,974) (48,085)
Increase in trade and other payables 233,000 484,937
Taxes paid (37,462) -
Net cash (used in)/generated by
operating activities (3,005,799) 262,843
Purchase of property, plant and
equipment (21,874,900) (34,160)
Investment in mutual funds 5 (106,630,452) -
Redemption of mutual funds units 5 106,772,100 -
Investment income 836,387 708
Cash used in investing activities (20,896,865) (33,452)
Cash flows from financing activities
Proceeds from the issue of ordinary
share capital 12 79,241,910 233
Costs of equity issuance (6,423,632) -
Capital advances (29,916,446) -
Loan facility fees (1,440,086) -
Term loans received 220,822 -
Term loans paid (220,822) -
Finance costs (37,082) -
Cash generated by finance activities 41,424,664 233
Net increase in cash and cash
equivalents 17,522,050 229,624
Cash and cash equivalents at beginning
of the year/period 229,394 -
Net effect of foreign currency
translation to presentation currency (889,561) (230)
Cash and cash equivalents at end of the
year/period 10 16,861,883 229,394
Notes to the consolidated financial statements for the year ended 31 March 2011
1. Notes to Financial Information
1.1 Background information
Mytrah Energy Limited (formely Caparo Energy Limited) ("MEL" or the "Company") is a non- cellular company liability limited by shares incorporated on 13 August 2010 under The Companies (Guernsey) Law, 2008. The address of the registered office is Anson Place, Mill Court, La Charroterie, St. Peter Port, Guernsey, GY1 1EJ.
Mytrah Energy Limited has the following subsidiary undertakings, (together the "Group"), all of which are directly or indirectly held by the Company, for which consolidated financial statements are being prepared, as set out below:
Proportion Proportion
Country of of ownership of voting
incorporation interest power (per
Subsidiary or residence (per cent.) cent.) Activity
Caparo Energy
(India)
Limited Operating
("CEIL") (1) India 99.88 99.88 company
Bindu Vayu
(Mauritius)
Limited Holding
("BVML") (2) Mauritius 100 100 company
(1) Under Indian law a public company must have at least seven members. The remaining sixty shares are held by the following shareholders: Ravi Kailas, Angad Paul, Vikram Kailas, Sree Ramulu Kailas, Uma Thondepu and Vasudevi Kailas.
(2) Formerly known as Caparo Energy Investments (Mauritius) Limited ("CEILM").
The principal activity of the Company is to operate wind energy farms as a leading independent power producer, and to engage in the sale of energy to the Indian market through its Indian subsidiary, CEIL.
1.2 Adoption of new and revised standards and interpretations
In the current year, the following new and revised standards and interpretations have been adopted by the Group, none of which had a material impact on the current year or prior period reported results or financial position:
Standard Or Interpretation Effective For Reporting
Periods Starting
On Or After
------------------------------------------------- ------------------------
IFRS Amendment to group cash- settled share- Beginning on or after
2 based payment transactions 1 Jan 2010
------- ---------------------------------------- ------------------------
IFRS Revised IFRS 3 Business combinations Beginning on or after
3 1 July 2009
------- ---------------------------------------- ------------------------
IAS 27 Amendment to IAS 27 Consolidated and Beginning on or after
Separate Financial Statements 1 July 2009
------- ---------------------------------------- ------------------------
IFRIC Service concession arrangements Beginning on or after
12 1 January 2010 -
(as endorsed by the
EU in Nov 2009)
------- ---------------------------------------- ------------------------
At the date of authorisation of the financial statements, the following standards and interpretations, have not been applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been endorsed by the EU).
1.2 Adoption of new and revised standards and interpretations (continued)
Standard Or Interpretation Effective For Reporting
Periods Starting
On Or After
--------------------------------------------------- -------------------------
IFRS Financial Instruments Annual periods beginning
9 on or after 1 January
2013
------- ------------------------------------------ -------------------------
IFRS Financial Instruments disclosure- Annual periods beginning
7 Amendments resulting from May 2010 annual on or after 1 January
improvements to IFRS 2011
------- ------------------------------------------ -------------------------
IFRS Financial Instruments: Disclosures Annual periods beginning
7 Amendments enhancing disclosures about on or after 1 July
transfers of financial assets 2011
------- ------------------------------------------ -------------------------
IFRS Consolidated Financial Statements Annual periods beginning
10 on or after 1 January
2013
------- ------------------------------------------ -------------------------
IFRS Joint Arrangements Annual periods beginning
11 on or after 1 January
2013
------- ------------------------------------------ -------------------------
IFRS Disclosure of Interests in Other Entities Annual periods beginning
12 on or after 1 January
2013
------- ------------------------------------------ -------------------------
IFRS Fair Value Measurement Annual periods beginning
13 on or after 1 January
2013
------- ------------------------------------------ -------------------------
IAS 1 Presentation of Financial Statements Annual periods beginning
Amendments resulting from May 2010 Annual on or after 1 July
Improvements to IFRSs 2012
------- ------------------------------------------ -------------------------
IAS 1 Presentation of Financial Statements Annual periods beginning
Amendments to revise the way other on or after 1 January
comprehensive income is presented 2012
------- ------------------------------------------ -------------------------
IAS 12 Income Taxes Limited scope amendment Annual periods beginning
(recovery of underlying assets) on or after 1 January
2012
------- ------------------------------------------ -------------------------
IAS 19 Employee Benefits- Amended Standard Annual periods beginning
resulting from the Post- Employment on or after 1 January
Benefits and Termination Benefits 2013
projects
------- ------------------------------------------ -------------------------
IAS 24 Related Party Disclosures - Revised Annual periods beginning
Definition Of Related Parties on or after 1 January
2011
------- ------------------------------------------ -------------------------
IAS 27 Consolidated and Separate Financial Annual periods beginning
Statements Amendments resulting from May on or after 1 July
2010 Annual Improvements to IFRSs 2010
------- ------------------------------------------ -------------------------
IAS 27 Consolidated and Separate Financial Annual periods beginning
Statements - Reissued as IAS 27 Separate on or after 1 January
Financial Statements (as amended in 2013
2011)
------- ------------------------------------------ -------------------------
IAS 28 Investments in Associates - Reissued Annual periods beginning
as IAS 28 Investments in Associates and on or after 1 January
Joint Ventures (as amended in 2011) 2013
------- ------------------------------------------ -------------------------
IAS 34 Interim Financial Reporting- Amendments Annual periods beginning
resulting from May 2010 annual on or after 1 January
improvements to IFRSs 2011
------- ------------------------------------------ -------------------------
Based on the Company's current business model and accounting policies, management does not expect that the adoption of these standards or interpretations will have a material impact on the financial statements of the Company. The Company does not intend to apply any of these pronouncements early.
1.3 Significant accounting policies
1.3.1 Basis of accounting
These consolidated financial statements have been prepared in accordance with and comply with International Financial Reporting Standards ("IFRS") as adopted by the European Union.
The consolidated financial statements have been prepared on the historical cost basis. Historical cost is generally based on the fair value of the consideration given in exchange for assets.
The Directors have taken advantage of the exemption offered by Section 244 (5) of the Companies (Guernsey) Law, 2008 from preparation of individual financial statements of the Company as the Company is preparing and presenting consolidated financial statements for the financial year ended 31 March 2011 and the comparative period.
The financial information in this announcement, which was approved by the Board of Directors on 11 September 2011 does not constitute the Group's statutory accounts for the periods ended 31 March 2011 or 2010, but is derived from those accounts. The auditor has reported on those accounts; their report is unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under sections 263(2) and 263(3) of The Companies (Guernsey) Law, 2008.
Whilst the financial information included in this preliminary announcement has been computed in accordance with IFRS, this announcement does not itself contain sufficient information to comply with IFRS. The Company expects to publish full financial statements for the Group that comply with IFRS later in September 2011.
1.3.2 Basis of consolidation
The Company was incorporated for the purpose of acquiring a controlling interest in its directly held, wholly owned subsidiary BVML, which was acquired by the Company in September 2010. BVML itself had acquired a controlling interest in its directly held, wholly owned, subsidiary, CEIL in September 2010. These transactions are considered to be common control transaction as defined in IFRS 3 Business Combinations ("IFRS 3"), as the companies were controlled by the same shareholders. The Directors note that transactions under common control are outside the scope of IFRS 3 and that there is no guidance elsewhere in IFRS covering such transactions.
The Group's policy is to apply merger accounting principles, such that the consolidated financial statements of MEL incorporate the combined group entities' results and cash flows as if the entities have been combined since the beginning of the comparative period, with the assets and liabilities of the purchased businesses incorporated at the consolidated book value, and transactions and balances between entities being eliminated.
The comparative information which reflects the results of CEIL has been extracted from the Alternative Investment Market ("AIM") Admissions document and its equity adjusted, as if the Company had existed from the beginning of the comparative period. Invested capital within equity reflects the aggregated equity of BVLM and CEIL, prior to the formation of the Group. At the point at which the Company became the parent company of the Group, this was transferred to the share capital of the Company. Please also refer to statement of changes in equity and note 11.
1.3.3 Going concern
Subsequent to year end, the Company's subsidiary CEIL, made further capital commitments of USD337.4 million. The capital commitments are in relation to the supply of additional wind farm assets, the supply of which the Director's consider are an integral part of their business plan. The Group forecast shows that it has USD148.1 million of available financing to fund these projects, including the USD111.5 million of mezzanine financing raised subsequent to the year end.
In respect of the remaining financing requirement of USD189.3 million the Director's are in discussions with a number of lenders and have received broad agreement to finance the supply of additional wind farm assets referred to above from a leading lender in India. The Directors are confident that the financing will be in place in advance of when the commitments crystallise. The Director's are confident that if the financing was not finalised, they would be able re- negotiate the timing for the supply of wind farm assets that have been committed to with the supplier of the assets. Further, if this was not possible, the Company believes that the Group's maximum liability under the agreements is capped at a level within available resources.
Therefore, after making enquiries and assessing the Group's financial position, anticipated future performance, its available and planned bank facilities and capital expenditure plans, together with other risks facing the Group, the Directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
1.3.4 Foreign currencies
The consolidated financial statements are presented in USD, which is the presentational currency of the Company, as the financial statements will be used by international investors and other stakeholders because the Company's shares have been listed on AIM. The functional currency of the parent company is sterling ("GBP"). The functional currency of the main operating subsidiary of the Group is Indian Rupees ("INR").
In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non- monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non- monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognised in profit or loss in the period. For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated into US dollars (USD) using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive loss and accumulated in equity.
The USD: INR exchange rates used to translate the INR financial information into the presentation currency of USD were as follows:
2011 2010
Closing rate at 31 March 45.2854 45.14
Average rate for the year ended
31 March 45.6164 46.17
The GBP: USD exchange rates used to translate the GBP financial information into the presentation currency of USD were as follows:
2011 2010
Closing rate at 31 March 1.5834 N/A
Average rate for the year ended 1.6032 N/A
31 March
1.3.5 Financial instruments
Financial instruments
Financial assets and financial liabilities are recognised in the consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument.
Financial assets
All financial assets are recognised and derecognised on trade date where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned, and are initially measured at fair value, plus transaction costs.
Financial assets are classified into the following specified categories: 'available- for- sale' (AFS) financial assets and 'loans and receivables'. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
The effective interest method is a method of calculating the amortised cost of a financial asset held at amortised cost and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
Investment income is recognised on an effective interest basis for debt instruments.
Available for sale financial assets
Listed shares and listed redeemable notes held by the Group that are traded in an active market are classified as being AFS and are stated at fair value. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the investments revaluation reserve with the exception of impairment losses, interest calculated using the effective interest method and foreign exchange gains and losses on monetary assets, which are recognised directly in profit or loss.
The fair value of AFS monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the balance sheet date. The foreign exchange gains and losses that are recognised in profit or loss are determined based on the amortised cost of the monetary asset. Other foreign exchange gains and losses are recognised in other comprehensive income.
Loans and receivables (including cash and bank balances)
Cash and bank balances and trade and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short- term receivables when the recognition of interest would be immaterial.
Cash and bank balances comprise cash in hand and cash at bank or deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of change in value.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.
For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the financial asset's original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
Financial liabilities and equity
Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.
Financial liabilities
Financial liabilities are initially measured at fair value, net of transaction costs and subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
1.3.6 Property, plant and equipment
(i) Initial recognition
Property, plant and equipment are recognised as assets in the statement of financial position if it is probable that the Group will derive future economic benefits from them and the cost of the asset can be reliability estimated.
Items of property, plant and equipment are stated at cost less accumulated depreciation. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self- constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Advances paid in respect of work that is yet to be performed is classified as an advanced payment within other assets in the consolidated statement of financial position.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised within "other Income" for gains and "other operating expenses" for losses in the statement of comprehensive income.
(ii) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction and production of qualifying assets are capitalised as part of the costs of those assets. Qualifying assets are those that necessarily take a substantial period of time to prepare for their intended use. Capitalisation of borrowing costs continues up to the date when the assets are substantially ready for their use. All other borrowing costs are expensed in the period in which they are incurred.
(iii) Depreciation
Depreciation is provided to write off the cost of property, plant and equipment over their estimated useful lives after taking into account their estimated residual value, using the straight- line method as stated below:
Furniture and Fittings: 5 years
Office Equipment 4- 5 years
Computers: 4 years
Vehicles 5 years
Lease acquisition cost and leasehold improvements are depreciated over the primary period of the lease or estimated useful lives of the assets, whichever is less. Assets under construction are not depreciated, as they are not ready for use.
The depreciation methods, useful lives and residual value, are reassessed annually.
(iv) Impairment
At each reporting date, the Company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.
1.3.7 Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in future years and it further excludes items that are permanently exempt from tax or allowable as a tax deduction. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.
1.3.8 Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Operating lease payments are recognised as an expense on a straight- line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
1.3.9 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation, as a result of past events, and it is probable that an outflow of resources, that can reliably be required to settle such an obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre- tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognised in the consolidated statement of comprehensive income as a finance cost. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimate.
A contingent liability is disclosed where the existence of an obligation will only be confirmed by future events or where the amount of the obligation cannot be measured reliably. Contingent assets are not recognised, but are disclosed where an inflow of economic benefits is probable.
1.3.10 Critical accounting judgements and estimates
The Directors do not consider there to have been any critical accounting judgements made in determining the carrying amounts of assets and liabilities within the financial statements.
2 Operating loss for the period
The operating loss for the period has been arrived at after charging:
Period from
12 November
Year ended 2009 to
31 March 31 March
2011 2010
USD USD
Depreciation of property, plant and equipment 18,291 1,761
Staff costs 126,737 47,585
Director and key management remuneration
(see note 20) 665,632 -
3 Auditor's remuneration
The analysis of auditor's remuneration is as follows:
Period from
12 November
Year ended 2009 to
31 March 31 March
2011 2010
USD USD
Audit fees
Audit of the Company's annual accounts 56,800 14,200
Audit of the Company's subsidiaries pursuant
to legislation 18,400 4,600
Total audit fees 75,200 18,800
Other services
Other services pursuant to legislation
(Reporting accountant services as part
of IPO) 128,000 -
4. Investment income
Period from
12 November
Year ended 2009 to
31 March 31 March
2011 2010
USD USD
Loans and receivables (including cash
and bank balances):
Interest on deposits 999,830 708
Total investment income 999,830 708
5. Other gains
Period from
12 November
Year ended 2009 to
31 March 31 March
2011 2010
USD USD
Available for sale financial assets
Gain on disposal of available for sale
investments 141,648 -
Total other gains 141,648 -
During the year ended 31 March 2011, the Group invested in available for sale investments in the amount of
USD106,630,452. These available for sale investments were sold prior to the period end for USD106,772,100, resulting in a gain of USD141,648, which is recognised as other gains on the consolidated statement of comprehensive income.
6. Finance cost
Period from
12 November
Year ended 2009 to
31 March 31 March
2011 2010
USD USD
Interest on loans from related parties (26,642) -
Bank charges (10,440) -
Total finance cost (37,082) -
7. Property, plant and equipment
Wind farm
Furniture assets under
and Office Leasehold course of
fittings equipment Computers Vehicles improvements construction Total
USD USD USD USD USD USD USD
Opening cost
as at 12
November
2009 - - - - - - -
Cost
Additions 4,165 10,884 19,111 - - - 34,160
Balance at 31
March 2010 4,165 10,884 19,111 - - - 34,160
Accumulated
depreciation
as at 12
November
2009 - - - - - - -
Depreciation
expense 147 617 997 - - - 1,761
Balance as at
31 March
2010 147 617 997 - - - 1,761
Net book
value as at
31 March
2010 4,018 10,267 18,114 - - - 32,399
Opening cost
as at 1 April
2010
Additions - 6,057 9,800 59,688 51,335 28,142,189 28,269,069
Effect of
foreign
currency
exchange
difference (14) (34) (61) - - - (109)
Balance at
31 March 2011 4,151 16,907 28,850 59,688 51,335 28,142,189 28,303,120
Accumulated
depreciation
as at 1 April
2010 147 617 997 - - - 1,761
Depreciation
expense 1,703 3,331 5,559 4,564 3,134 - 18,291
Balance as at
31 March 2011 1,850 3,948 6,556 4,564 3,134 - 20,052
Net book value
as at
31 March 2011 2,301 12,959 22,294 55,124 48,201 28,142,189 28,283,068
8. Other non- current assets
As at As at
31 March 31 March
2011 2010
USD USD
Deposits 205,350 36,427
Prepayments 1,440,086 -
Total other non- current assets 1,645,436 36,427
9. Advances and other current assets
As at As at
31 March 31 March
2011 2010
USD USD
Capital advances 29,916,446 -
Other advances 854,725 11,658
Deposits 75,984 -
Interest accrued 163,443 -
Total advances and other current assets 31,010,598 11,658
Capital advances represent advance payments made to Suzlon Energy Limited for the construction of wind farm assets, as part of a long term construction service contract.
10. Cash and bank balances
As at As at
31 March 31 March
2011 2010
USD USD
Cash in hand
Bank balances 126 232
Bank deposits 1,311,491 229,162
15,550,266 -
Total cash and bank balances 16,861,883 229,394
Bank deposits have a maturity period of less than 90 days.
11. Invested Capital
As at As at
31 March 31 March
2011 2010
USD USD
Balance at beginning of period 233 233
Issue of shares for BVML 39,767 -
Transfer of shares to MEL (40,000) -
Total invested capital - 233
Invested capital within equity reflects the share capital of BVML and CEIL, prior to the formation of the Group. At the point at which the Company became the parent company of the Group, this was transferred to the share capital of the Company. See note 12.
12. Share capital
Allotted and fully paid up share capital of the Company
As at As at
31 March 31 March
2011 2010
USD USD
163,636,000 ordinary shares with a no par
value 72,858,278 -
Number of
shares
Issue of share on incorporation of USD1.53
per share at 13 August 2010 1
Issue of shares to shareholders of BVML 119,999,999
Issue of shares on IPO 43,636,000
Total number of shares at 31 March 2011 163,636,000
After its incorporation on 13 August 2010 MEL acquired 119,999,999 shares in BVML, from its existing shareholders namely, Esrano Overseas Ltd, Bindu Urja Investments Inc (formerly Caparo Energy Investments Inc), Bindu Urja Holding Inc (formerly Caparo Energy Holdings Inc), Bindu Urja Capital Inc (Caparo Energy Capital Inc), and Sila Energy Inc. In consideration of the said transfer the Company allotted shares of the Company at no par value in its capital. Subsequently the Company raised USD79,241,910 before share issue costs of USD6,423,632 and allotted 43,636,000 shares of no par value through listing of its shares on AIM.
The issued share capital refers to ordinary share capital, which carries voting rights with entitlement to an equal share in dividends authorised by the Board and in the distribution of the surplus assets of the Company.
13. Other reserves
(a) Equity settled employee benefits reserve:
The equity settled employee benefits reserve relates to the share options granted to employees under the employee share option plan. Further information about share- based payments is set out in note 22.
As at As at
31 March 31 March
2011 2010
USD USD
Balance at beginning of the year - -
Arising on share based payments 169,772 -
Balance at end of year 169,772 -
Exchange differences relate to the translation of the net assets of the Group's foreign operations which relate to subsidiaries, from their functional currency into the Group's presentational currency being USD.
(b) Foreign currency translation reserve
As at As at
31 March 31 March
2011 2010
USD USD
Balance at beginning of the year (3,752) -
Exchange differences arising on translating
the net assets of foreign operations (929,328) (3,752)
Balance at end of year (933,080) (3,752)
14. Retained earnings
As at As at
31 March 31 March
2011 2010
USD USD
Balance at beginning of the year (175,062) -
Loss for the period from continuing operations (1,575,403) (175,062)
Balance at end of year (1,750,465) (175,062)
15. Trade and other payables
As at As at
31 March 31 March
2011 2010
USD USD
Trade payables 7,061,540 488,459
Other payables 53,979 -
Total trade and other payables 7,115,519 488,459
16. Tax
As at As at
31 March 31 March
2011 2010
USD USD
Income tax 378,423 -
Income tax expense 378,423 -
A reconciliation of the income tax expense applicable to the loss before income tax at the standard statutory income tax rate in India to the income tax expense at the Group's effective income tax rate for the period ended 31 March 2011 and 2010 is as follows:
Period from
Year ended 12 November
31 March to 31 March
2011 2010
USD USD
Loss before tax (1,196,980) (175,062)
Tax at the standard rate of corporation income
tax of 33.22% (2010: 33.99%) 397,637 69,885
Tax effect of losses that cannot be carried
forward (see below) (776,060) (69,885)
Income taxes recognised in the consolidated
statement of comprehensive income (378,423) -
The Company is exempt from Guernsey income tax under the Income Tax (Exempt bodies) (Guernsey) Ordinance, 1989 and is subject to an annual fee of USD962.
The applicable tax rate is the standard effective corporate income tax rate in India. The Indian tax rate decreased from 33.99% to 33.22% with effect from 1 April 2010. Indian companies are subject to corporate income tax or Minimum Alternate Tax ("MAT"). If MAT is greater than corporate income tax then MAT is levied. The Company is not liable for MAT as the Company is currently loss making.
Current Indian tax law does not allow losses incurred before trading commences to be carried forward, which results in a permanent difference between tax losses and book losses. Accordingly, there is no deferred tax asset recorded on the 31 March 2011 or 2010 consolidated statement of financial position.
17. Commitments
(a) Capital commitments
As at As at
31 March 31 March
2011 2010
USD USD
Capital commitments 82,879,765 -
The capital expenditures authorised and contracted relate to the provision of wind farm assets, which have not been provided for in the accounts. This is net of advances paid of USD29,916,446 (see note 9)
(b) Operating leases
The Group leases office premises under non- cancellable operating lease agreements with a term of three years.
The leasing arrangement contains a renewal clause providing the Company with the option of extending the lease for further periods of three years and four years at the prevailing market rate.
Total operating lease expense recognised in the consolidated statement of comprehensive income as administrative expenses was USD172,972 (2010: USD 22,503).
Minimum lease payments
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non- cancellable operating leases, which fall due as follows:
As at As at
31 March 31 March
2011 2010
USD USD
Within 1 year 86,869 84,361
Later than 1 year and within 5 years 92,081 159,462
Total future minimum lease payments 178,950 243,823
18. Financial instruments
Details of the significant accounting policies and methods adopted (including the criteria for recognition, the basis of measurement and the basis for recognition of income and expenses) for each class of financial asset, financial liability and equity instrument are disclosed in note 1.
Categories of financial instruments
The accounting classification of each category of financial instruments and their carrying amounts has been tabulated below:
Carrying Fair values Carrying Fair values
amount as at amount as as at
as at 31 31 March at 31 March 31 March
March 2011 2011 2010 2010
USD USD USD USD
Financial assets
Loans and receivables
(including cash and bank
balances)
Other current assets
(deposits) 75,984 75,984 - -
Other current assets
(interest accrued) 163,443 163,443 163,443 163,443
Other non- current assets
(deposits) 205,350 195,493 36,427 34,679
Cash and bank balances 16,861,883 16,861,883 229,394 229,394
Total financial assets 17,306,660 17,296,803 429,264 427,516
Financial liabilities
Amortised costs
Trade and other payables
(trade payables) (7,061,540) (7,061,540) (488,459) (488,459)
Trade and other payables
(other payables) (53,979) (53,979) - -
Total financial
liabilities (7,115,519) (7,115,519) (488,459) (488,459)
The fair value of the financial assets and liabilities are estimated at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The fair value of the financial instruments approximate their carrying amounts largely due to the short term maturities or nature of these instruments.
Currency risk
The Group also has transactional currency exposures. Such exposure arises from sales or purchases by an operating unit in currencies other than the unit's functional currency.
The Group's exposure to foreign currency arises in part when the Group Company holds financial assets and liabilities denominated in a currency different from the functional currency of the entity with USD being the major non- functional currency of the Group's main operating subsidiaries. The Group did not hold any financial assets and liabilities denominated in a currency different from the functional currency of the entity as at 31 March 2011, or 2010.
Interest rate risk
Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. The Group is exposed to interest rate risk on its cash and bank balances. Under the Group's interest rate management policy, interest rates on monetary assets are non- interest bearing or maintained on a floating rate basis. The average interest rate on short term bank deposits during the year was 7.10% (2010: nil).
Interest rate risk management
The primary goal of the Group's investment strategy is to ensure risk free returns are earned on surplus funds. Market price risk arises from cash and bank balances held by the Group. The Group monitors its investment portfolio based on market expectations and credit worthiness. Material investments within the portfolio are managed on an individual basis.
The Group's exposure to interest rates on financial instruments is detailed below:
As at As at
31 March 31 March
2011 2010
Variable interest rate financial assets USD USD
Cash and bank balances (maturities of less than
one month) 16,861,883 229,394
Total variable interest rate financial assets 16,861,883 229,394
The amounts included above for variable interest rate financial assets are subject to change if changes in variable interest rates differ from those estimates of interest rates determined at the reporting date.
If interest rates had been 100 basis points higher/lower and all other variables were held constant, the Group's total comprehensive loss for the year would increase/decrease by USD 9,998. (2010: nil).
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the Group's short- , medium- and long- term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. Details of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk are set out below.
The following table details the Group's remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay
Less than Over
1 year 1 year Total
USD USD USD
Financial liabilities - amortised cost
Trade and other payables 7,115,519 - 7,115,519
Total financial liabilities - amortised
cost 7,115,519 - 7,115,519
The Group has access to financing facilities as described below, of which USD100,000,000 were unused at the balance sheet date (2010: USD nil). The Group expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.
As at As at
31 March 31 March
2011 2010
USD USD
Unsecured bank facility - maturing 15 September
2024
Amount used - -
Amount unused 100,000,000 -
Total unsecured bank facility 100,000,000 -
In respect of the facilities held by the Group, fees of USD1, 440,086 were paid which have been classified as prepayments within non- current assets as at 31 March 2011 (see note 8) and will be reflected in the carrying value of the loan when it is drawn down.
Credit risk
The Company is exposed to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due.
Financial assets that potentially expose the Company to credit risk consist principally of cash and bank balances, which are held with institutions with a minimum credit rating of AA.
The fair valueof financial assets represents the maximum credit exposure.
19. Capital management policies
The Company's objective when managing capital is to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
20. Related party transactions
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.
The Directors of the Company who are also considered to be the key management personnel are:
1. Hon Angad Paul - Chairman
2. Mr. Ravi Kailas - CEO and Managing Director
3. Mr.Vikram Kailas - Chief Financial Officer
4. Mr. Rohit Phansalkar - Non- Executive Director
5. Mr. Alastair Cade - Executive Director
6. Mr. Charles Edmund Wilkinson - Non- Executive Director
7. Mr. Philip Swatman - Non- Executive Director
The entitieswhere certain key management personnel havesignificant influence are:
1. Caparo Engineering (India) - Hon Angad Paul
Limited
2. Zip Reality Private - Mr. Ravi Kailas
Limited
3. Bindu Urja Holding Inc - Mr. Ravi Kailas
4. Bindu Urja Investments - Mr. Ravi Kailas
Inc
5. Bindu Urja Inc - Mr. Ravi Kailas
6. Esrano Overseas Limited - Hon Angad Paul
7. RKP Capital Inc - Mr. Rohit Phansalkar
8. Chakas Investments UK - Mr. Alastair Cade
Limited
9. Sila Energy Inc - Mr Ravi Kailas
20. Related party transactions (continued)
Related party transactions:
Year ended Year ended
31 March 31 March
2011 2010
USD USD
Advisory services fees to RKP Capital
Inc. 55,318 -
Reimbursement of expenses to Chakas Investments
UK Limited 71,458 -
Reimbursement of expenses to Sila Energy
Inc 12,090 -
During the year the Company hasallotted 58,200,000, 24,000,000, 12,000,000 ,24,000,000 and 1,800,000 equity shares to Bindu Urja Capital Inc, Bindu Urja Investments Inc., Bindu Urja Capital Inc., Esrano Overseas Limited and Sila Energy Inc respectively.
During the year the Company's subsidiary CEILhas taken and repaid short term working capital loan from Zip Reality Private Limited amounting to USD 220,821. The Company alsorepaid a short term working capital loan taken from Caparo Engineering (India) Limited during the previous period amounting to USD 441,643 and paid interest of USD 26,425.
The following balances were outstanding at the end of the reporting period:
Year ended Year ended
31 March 31 March
2011 2010
USD USD
Payable to Chakas Investments 13,486 -
Payable to Sila Energy 11,940 -
Remuneration of key management personnel:
The remuneration of Directors, who are the key management personnel of the Group is set out below for each of the categories specified in IAS 24 Related Party Disclosures. Further information about the remuneration of the individual Directors is provided in the audited part of the Director's report..
Period from
1 November
Year ended 2009 to
31 March 31 March
2011 2010
USD USD
Short term employee benefits 551,178 -
Share based payments 169,772 -
Total remuneration of key management personnel 720,950 -
The Directors do not consider that there were any other related party transactions that have not been disclosed in these financial statements.
21. Earnings per share
Basic earnings per share is calculated by dividing loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period.
Options to purchase ordinary shares that were not included in the computation of diluted earnings per share, because they are anti dilutive were 4,877,400 at 31 March 2011, and nil at 31 March 2010.
Period from
1 November
Year ended 2009 to
31 March 31 March
2011 2010
USD USD
Loss attributable to the equity holders
of the Company 1,575,403 175,062
Weighted average number of ordinary shares
outstanding during the period 163,636,000 163,636,000
Basic and diluted earnings per share (0.0096) (0.0011)
As noted in the basis of preparation in note 1.3.2, the financial statements combine the results, assets and liabilities of the Group businesses acquired by the Company under the reorganisation prior to IPO.
To reflect this in the earnings per share calculation for the year and period ending 31 March 2011 and 2010, the weighted average number of shares has been calculated on the basis that the number of shares outstanding in the current and comparative period was the number of shares outstanding after the completion of the IPO.
22. Share- based payments
The Company has an equity- settled share option scheme for certain Directors of the Company. All options have a vesting period of three years. Each share option converts into one ordinary share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of the expiry. Options lapse if the employee leaves the Company before the options vest. Detailsof the share options outstandingduring the period are as follows.
Number of
Period ended 31 March 2011 share options
Outstanding at beginning of period -
Granted during the period 4,877,400
Outstanding at the end of the period 4,877,400
There were no share options forfeited, exercised, or expired during the periods ended 31 March 2011 or 2010. There were no share options exercisable at 31 March 2011, or 2010. The options outstanding at 31 March 2011 had a weighted average exercise price of GBP 1.15, and a weighted average remaining contractual life of 9.52 years. Details of the share options granted during the period are as follows:
Shares granted Exercise Fair value
during the Expiry Price at grant
Director name period Grant date date (GBP) date (GBP)
Alastair Cade 2,400,000 04.10.2010 04.10.2020 1.15 1.175
Vikram Kailas 2,400,000 04.10.2010 04.10.2020 1.15 1.175
Rohit
Phansalkar 38,700 04.10.2010 04.10.2020 1.15 1.175
Philip Swatman 38,700 04.10.2010 04.10.2020 1.15 1.175
The aggregate fair value of the share options granted during the period was USD1,097,145.
22. Share- based payments (continued)
Weighted average share price (GBP) 1.175
Weighted average exercise price (GBP) 1.15
Expected volatility 12.32%
Expected life 3 years
Risk- free interest rate 0.78%
Expected volatility was determined by calculating the historical volatility of the Group's share price from the date of listing on 12 October 2010 to the reporting date of 31 March 2011. The expected life use in the model has been adjusted, based on management's best estimate, for the effects of non- transferability, exercise restrictions, and behavioural considerations.
The Group recognised total expenses of USD169,772 related to equity- settled share- based payment transactions in the current year.
23. Contingent liabilities
The Group has provided bank guarantees. Where there are such arrangements they are considered to be insurance arrangements and accounts for them as such. Guarantees are treated as contingent liabilities until such a time as it becomes probable that the company will be required to make a payment under the guarantee.
24. Segmental information
In view of its very specific activity (investing in wind farms in India) the Group only has one operating and reportable segment and only one geographical area. It is managed, operates and reports internally and externally as a single segment in both the current and prior period. The Group has not yet begun to trade and substantially all of the Group's non- current assets are located in India.
25. Subsidiaries
A list of the investments in subsidiaries is provided in note 1.1.
26. Ultimate controlling party
The Directors do not consider there to be an ultimate controlling party as there is a relationship agreement between the Company and the Controlling Shareholders (namely Bindu Urja Investments Inc, Bindu Urja Holdings Inc, Bindu Urja Capital Inc, Ravi Kailas, Sila Energy Limited and Esrano Overseas Limited and Angad Paul) whereby those shareholders undertake to the Company not to exercise their voting rights to take control of the board of the Company and to conduct all transactions and relationships between them (and any of their associates or certain parties) and the Company on terms which allow the Company to carry on its business independently, at arm's length and on a normal commercial basis.
27. Events after the reporting period
a) On 4 May 2011 CEIL, a wholly owned subsidiary of the Company entered into a Multiannual agreement with Gamesa Wind Turbines Private Limited ("Gamesa") for the supply, erection and commissioning, operation and maintenance of wind turbine generators for wind farms in India up to 2000 MW capacity.
b) In respect to the loan facilities referred to in Note 18 whilst no drawdown had been made as at 31 March 2011, subsequent to year end, an amount of USD29,501,119 was drawn down. In compliance with the terms of the loan agreement CEIL has created a charge on all project movable, immovable properties, cash flows, receivables and revenues in favour of The Infrastructure Development Finance Company Limited ("IDFC").
c) On 20 June 2011 CEIL, a wholly owned subsidiary of the Company, entered into an investment agreement, with the IDFC Project Equity Company Limited ("India Fund"). As per the agreement the India Fund would invest in CEIL an amount of USD78, 500,000 in the form of convertible preference shares. On 4 August 2011 an agreement was reached to fund a further amount of USD33, 000,000 in form of convertible preference shares.
d) Subsequent to year end, the Company's subsidiary CEIL, has made further capital commitments of USD337,431,048. The capital commitments are in relation to the supply of additional wind farm capacity, the supply of which the Director's consider are an integral part of their business plan. The Group currently has USD148,050,000 of financing available to fund these projects, including the USD111,500,000 of mezzanine financing raised subsequent to the year end as explained in Note 27 (c). In respect of the remaining senior debt financing of USD189,381,048 the the Director's are in discussions with a number of lenders and have received broad agreement to finance the supply of additional wind farm assets referred to above from a leading lender in India. The Directors are confident thatthe financing will be in place in advance of when the commitments crystallise.
This information is provided by RNS
The company news service from the London Stock Exchange
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