OPG POWER VENTURES PLC

Earnings Release • Dec 1, 2015

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RNS Number : 4713H

OPG Power Ventures plc

01 December 2015

1 December 2015

OPG Power Ventures plc

("OPG", the "Group" or the "Company")

Unaudited results for the six months ended 30th September 2015

Powering Forward With Momentum

EPS up 52%

Run-rate revenues building strongly

OPG (AIM: OPG), the developer and operator of power generation assets in India, announces its unaudited results for the six months ended 30 September 2015 ("H1 FY16").

Operating capacity increased by 122% from 270 MW to 600 MW

·   First 150 MW Gujarat unit started operation in Apr 2015 and ramped up to 85% in Oct 15

·   180 MW Chennai unit commenced operation and continuing to ramp up

Operating capacity to increase to 750 MW imminently

·   Second 150 MW Gujarat unit - transmission line connected and synchronised; on track for commercial operation to commence in Jan 2016

Additional Highlights for the period

·   EBITDA margin of 41% up from 36% compared with H1 FY15

·   Profit before tax of £15.0 million up by 46%  compared with H1 FY15

·   EPS of 3.41 pence up by 52% compared with H1 FY15

·   Gearing of 56% down from 59% at year-end; loan repayments of over £13 million made in the period

·   Run-rate revenues growing: Oct 2015 billings approximately £11 million for Chennai plant (Oct. PLF 70%)

·   Gujarat revenues and expenses being capitalised until Jan 2016 (as previously reported)

·   New 257 MW of three year captive sales agreements at Chennai plant, transforms our sales mix

·   Non-binding MoUs for pipeline projects

Summary financial information (including historic financial data)

	£ million
	Half year 30/9/15	Half year 30/9/14	Half year 30/9/13	Half year 30/9/12	Full year 31/3/15
Revenue	56.6	46.5	47.7	17.8	100.0
EBITDA	23.3	16.6	13.7	4.6	33.4
PBT	15.0	10.3	7.6	2.5	21.7
EPS (pence)	3.41	2.24	1.56	0.44	4.91
£:INR ex-rate	98.7	99.8	90.9	86.2	98.4

As the functional currency of our operating businesses is INR, we have presented below our underlying INR financial performance for the same period.

	INR million
	Half year 30/9/15	Half year 30/9/14	Half year 30/9/13	Half year 30/9/12	Full year 31/3/15
Revenue	5,584	4,646	4,334	1,532	9,840
EBITDA	2,395	1,671	1,254	407	3,287
PBT	1,538	1,038	666	225	2,135
Total units (million kWh)	1,399*	902	843	293	1,861

*includes 338m units from Gujarat for which results are being capitalised

Net Debt (Million)

	30/9/15	30/9/14	30/9/13	30/9/12	31/3/15
GBP	242.7	219.6	104.8	61.7	254.0
INR	24,340	22,117	10,598	5,234	23,559

For further information, please visit www.opgpower.com or contact:

OPG Power Ventures PLC	+91 (0) 44 429 11 211
Arvind Gupta / V Narayan Swami / Ajay Paliwal
Cenkos Securities (Nominated Adviser & Broker)
Stephen Keys / Camilla Hume	+44 (0) 20 7397 8900
Tavistock
Simon Hudson / James Collins	+44 (0) 20 7920 3150

About OPG

OPG operates and develops power generation related assets in India, principally under the group captive model, and currently has 600 MW of assets in operation.  In the six months ended 30th September 2015, according to its unaudited results for the period, the Company generated revenues of approximately £56 million, EBITDA of £23.25 million and earnings per share of 3.41 pence.  OPG expects to commission an additional 150 MW of capacity shortly and is in the process of evaluating projects within a potential pipeline of 4,200 MW.

Chief Executive's Review

I am pleased to report on a period that was characterised by a doubling of our operating capacity and the first revenues from this growth that translated into strong increases in our earnings during the half year. 

Illustrating the journey that we have been on, our earnings to 30th September 2015 were around seven times higher than the equivalent period just three years ago, in 2012.  In addition new revenues from the capacity that we have now fully built have only just started to come through.   We are dedicating our efforts to realise the full potential of 600 MW in operation together with the further 150 MW that is now being stabilised and expected to commence commercial operations in Gujarat next month.  We can then progress on our commitment to introduce a dividend policy as well as pursue new projects.  Our strategy remains focused on sustainable returns.

Sales mix has changed, underlying revenues are higher and run-rates building strongly

In Chennai, as we've previously reported, average load factors were affected by the gradual and continuing ramp up of the new 180 MW unit since commissioning and from temporary limitations in the availability of transmission grid capacity in Tamil Nadu.  Whilst we estimate that the grid related issues affected our revenues by cINR 700 million (£7 million) underlying rupee revenues at INR5.6 billion were 20% higher than the same period in 2014. The grid capacity constraint, referred to above, affected both thermal and renewable generators in Tamil Nadu during the recent wind season but is not expected to be a feature of our operations where we supply industrial customers directly (now around 62% of our Chennai customer base).

From October 2015 the sales mix at the Chennai plant is as follows:

Capacity (Gross)	Customers Type	As % of sales	Duration from contract start	As % of  sales
257 MW	Industrial customers	62%	3 years (to 2018)	62%
80 MW	TANGEDCO	38%	15 years (to 2029)	19%
77 MW	TANGEDCO	Short term	19%

This sales mix enhances the visibility of OPG's revenues at Chennai.  Whilst our receivables from TANGEDCO increased during the period on account of higher supplies, our history of full recovery from TANGEDCO remains intact.

In October 2015 our total billings, for the Chennai plant, were INR 1,122 million (£ 11.4 million) based on an average plant load factor of 70% for the month.  Average tariff was INR 5.56.

In relation to the 300 MW Gujarat plant, as previously reported, the construction of the multi-circuit transmission line established by GETCO for evacuation of the plant was completed during the period and is now connected to the plant and synchronised.  As a result the second 150 MW unit of the plant is expected to commence commercial operations next month.  As previously stated, until then, the results of the Gujarat plant are being capitalised in pre-operative project costs.  This accounting treatment resulted in a net cost of approximately £1 million being capitalised in the period under review since commissioning of the first unit.

Margins improved

We have continued to keep operating costs under control.  Although the Indian Rupee has moved in the range of 62 to 66 to the USD during the same period, the delivered unit cost of imported coal during H1 FY16 fell more or less in line with the relevant coal index.  Distribution and administrative costs rose by £2 million versus the comparable period of the prior year principally on account of foreign exchange and standard transmission and distribution costs incurred on sales to captive industrial consumers. 

Effective management of gearing aided by translation effect

During the period we invested £13.6 million in completing our asset build out in Gujarat in addition to c.£13 million in working capital in a period that witnessed the start-up of a new 180 MW unit at Chennai.  Notwithstanding these investments we made debt servicing payments (principal + interest) of just under £20 million.  At INR 24.3 billion, our net debt was just INR 0.8 billion higher than at 31st March 2015.  Our gearing at 30th September was 56% versus 59% at 31st March 2015. 

Increasing our focus on the pipeline

In June 2015, we outlined to shareholders a long term goal of replicating the power generation mix of the nation as the direction of our growth strategy.  Consistent with this direction-setting, we've recently signed two separate non-binding Memoranda of Understanding (MoUs) to develop 1,500 MW of renewable projects along-with two specific high efficiency thermal projects with an aggregate capacity of 2,700 MW. 

These could be potentially exciting developments. The Company will evaluate these potential projects and will update the market should any of the projects proceed. Part of the analysis of any project will include ensuring that the optimum funding structure for OPG is implemented, given the Company's forecast cash generation alongside the Board's intention to initiate a dividend.  Shareholders will be kept abreast of our plans as they develop but in the meantime further details of each MoU are set out below.   

Co-development of solar projects

An MoU has been signed with IBC Germany ("IBC"), to set up 1,000 MW of solar power projects in India over 7 years.  IBC Germany is a leading company in Engineering, Procurement and Construction ("EPC") for solar photovoltaic projects with over 30 years' experience and 2,500 MW capacity installed worldwide, including India.  IBC would potentially contribute to EPC, operations and towards approximately a third of the equity capital of co-developed projects. 

New thermal and renewables projects in Tamil Nadu

An MoU has also been signed with the Government of Tamil Nadu ("GoTN"), to establish 2,700 MW of specific thermal energy projects and 500 MW of renewables projects in the state.  One project of 720 MW would be a brownfield expansion at our Chennai site and projects are being evaluated for the potential to deploy supercritical or other high efficiency technologies.  Under the MoU the state is to provide its assistance with approvals and clearances required for these projects.

Outlook

Newly added capacity is transforming our performance.  We are at 600 MW and we should be operating 750 MW very shortly and despite the more gradual growth in contribution that we will see from the Gujarat plant, we continue to expect earnings for the current year to be in line with expectations.  And so I believe we remain on track to introduce a dividend policy in the next few months when we expect the Gujarat plant to be fully operational.  We remain committed to being a preferred developer and operator in the exciting Indian energy sector.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the period ended 30 September 2015

(All amount in £, unless otherwise stated)

	Note	30-Sep-2015	30-Sep-2014	31-Mar-2015
Revenue		56,574,181	46,530,712	99,974,648
Cost of revenue		(31,161,354)	(28,681,798)	(61,228,358)
Gross profit		25,412,827	17,848,914	38,746,290
Other income	6	28,684	61,900	127,268
Distribution cost		(1,291,884)	(382,481)	(1,863,441)
General and administrative expenses		(3,648,980)	(2,490,806)	(6,767,553)
Operating profit		20,500,647	15,037,527	30,242,564
Financial costs	7	(5,904,582)	(4,781,123)	(9,410,037)
Financial income	8	715,421	441,332	1,437,763
Income from continuing operations (before tax, non-operational and/ or exceptional items)		15,311,486	10,697,736	22,270,290
Employee Share Option expenses		-	(242,888)	(242,888)
Pre-operative expenses (relating to project under construction)		(281,923)	(172,828)	(377,951)
Profit/(loss) before tax		15,029,563	10,282,020	21,649,651
Tax expense		(3,017,797)	(2,412,680)	(4,360,769)
Profit for the year		12,011,766	7,869,340	17,288,682
Attributable to:
- Owners of the parent		11,999,228	7,860,470	17,270,192
- Non-controlling interest		12,538	8,870	18,490
		12,011,766	7,869,340	17,288,682
Earnings per share
Basic earnings per share (in Pence)		3.414	2.236	4.913
Diluted earnings per share (in Pence)		3.333	2.185	4.799
Other Comprehensive Income
Items that will be reclassified subsequently to profit or loss
Available-for- Sale financial Assets
- Reclassification to profit or loss		-	(32,633)	(32,633)
- Current year gains / (losses)		-	(5,133)	(5,133)
Currency translation differences on translation of foreign operations		(12,373,571)	(1,829,802)	10,481,124
Items that will not be reclassified subsequently to profit or loss
Currency translation differences on translation of foreign operations		(11,553)	(1,577)	9,875
Other comprehensive income/(loss)		(12,385,124)	(1,869,145)	10,453,233
Total comprehensive income/(loss) for the year		(373,358)	6,000,195	27,741,915
Attributable to:
- Owners of the parent		(374,343)	5,992,905	27,713,554
- Non-controlling interest		985	7,290	28,361
		(373,358)	6,000,195	27,741,915

The financial statements were authorised for issue by the Board of Directors on 30 November 2015 and were signed by:

Arvind Gupta	V. Narayan Swami
Chief Executive Officer	Chief Financial Officer

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 September 2015

(All amount in £, unless otherwise stated)

	Note	30-Sep-2015	30-Sep-2014	31-Mar-2015
Assets
Non-Current
Intangible assets	11	592,204	403,295	665,673
Property, plant and equipment	12	393,616,041	335,817,064	414,552,876
Investments and other assets		1,787,369	2,330,149	2,754,393
Restricted cash		2,595,316	360,851	2,784,990
Total Non-Current assets		398,590,930	338,911,359	420,757,932
Current
Trade and other receivables	9	38,866,648	19,888,006	28,628,701
Inventories		4,871,628	7,715,681	7,889,661
Cash and cash equivalents	10	2,816,872	4,555,205	6,805,449
Restricted cash		5,470,902	8,656,762	5,303,217
Current tax assets		292,718	138,495	574,834
Investments and other assets		25,019,058	63,401,603	23,907,952
Total Current assets		77,337,826	104,355,752	73,109,814
Total Assets		475,928,756	443,267,111	493,867,746
Equity and Liabilities
Equity:
Equity attributable to owners of the parent:
Share capital		51,671	51,671	51,671
Share premium		124,316,522	124,316,524	124,316,524
Other components of Equity		(23,509,216)	(23,446,572)	(11,135,645)
Retained earnings		63,125,670	41,716,719	51,126,441
Total		163,984,647	142,638,342	164,358,991
Non-controlling interest		255,064	233,007	254,079
Total Equity		164,239,711	142,871,349	164,613,070
Liabilities
Non-current
Borrowings	13	217,798,621	215,590,088	237,936,689
Trade and other payables		6,951,512	26,850,937	16,795,079
Deferred tax liability		3,705,921	2,419,532	3,205,851
Total Non-Current liabilities		228,456,054	244,860,557	257,937,619
Current
Borrowings	13	32,601,254	8,593,775	22,851,498
Trade and other payables		50,413,833	46,857,093	47,839,604
Other liabilities		217,900	84,337	625,955
Total Current liabilities		83,232,987	55,535,205	71,317,057
Total Liabilities		311,689,041	300,395,762	329,254,676
Total Equity and Liabilities		475,928,756	443,267,111	493,867,746

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(All amount in £, unless otherwise stated)

GROUP	Issued Capital (No. of Shares)	Share capital	Share Premium	Other Reserves	Foreign Currency Translation reserve	Retained earnings	Total of Parent equity	Non-Controlling Interest	Total Equity
Balance at 1 April, 2015	351,504,795	51,671	124,316,524	7,167,520	(18,303,165)	51,126,441	164,358,991	254,079	164,613,070
Employee Share based payment options				-			-		-
Transactions with owners	351,504,795	51,671	124,316,524	7,167,520	(18,303,165)	51,126,441	164,358,991	254,079	164,613,070
Profit for the year from Operating Activities						11,999,228	11,999,228	12,538	12,011,766
Currency translation differences					(12,373,571)		(12,373,571)	(11,553)	(12,385,124)
Gains on sale / re-measurement of available-for-sale financial assets
Total comprehensive income for the year					(12,373,571)	11,999,228	(374,342)	985	(373,358)
Balance at 30 September, 2015	351,504,795	51,671	124,316,524	7,167,520	(30,676,736)	63,125,669	163,984,647	255,064	164,239,711
Balance at 1 April, 2014	351,504,795	51,671	124,316,524	6,962,395	(28,784,289)	33,856,249	136,402,550	225,717	136,628,266
Employee Share based payment options				242,888			242,888		242,888
Transactions with owners		51,671	124,316,524	7,205,283	(28,784,289)	33,856,249	136,645,438	225,717	136,871,154
Profit for the year from Operating Activities						17,270,192	17,270,192	18,490	17,288,682
Currency translation differences					10,481,124		10,481,124	9,875	10,490,999
Gains on sale / re-measurement of available-for-sale financial assets				(37,763)			(37,763)	(3)	(37,766)
Total comprehensive income for the year				(37,763)	10,481,124	17,270,192	27,713,553	28,362	27,741,915
Balance at 31 March, 2015	351,504,795	51,671	124,316,524	7,167,520	(18,303,165)	51,126,441	164,358,991	254,079	164,613,070
Balance at 1 April, 2014	351,504,795	51,671	124,316,524	6,962,395	(28,784,289)	33,856,249	136,402,549	225,717	136,628,266
Employee Share based payment options				242,888			242,888		242,888
Transactions with owners	351,504,795	51,671	124,316,524	7,205,283	(28,784,289)	33,856,249	136,645,437	225,717	136,871,154
Profit for the year from Operating Activities						7,860,470	7,860,470	8,870	7,869,340
Currency translation differences					(1,829,802)		(1,829,802)	(1,577)	(1,831,379)
Gains on sale / re-measurement of available-for-sale financial assets				(37,763)			(37,763)	(3)	(37,766)
Total comprehensive income for the year	-	-	-	(37,763)	(1,829,802)	7,860,470	5,992,905	7,290	6,000,195
Balance at 30 September 2014	351,504,795	51,671	124,316,524	7,167,520	(30,614,091)	41,716,719	142,638,342	233,007	142,871,349

CONSOLIDATED STATEMENT OF CASH FLOWS

For the period ended 30 September 2015

(All amount in £, unless otherwise stated)

Particulars	30-Sep-2015	30-Sep-2014	31-Mar-2015
Cash flows from operating activities
Profit for the year before Tax	15,029,563	10,282,020	21,649,451
Unrealised Foreign Exchange Loss	(433,649)	(273,002)	(131,219)
Financial Expenses	5,904,582	4,781,123	9,410,037
Financial Income	(715,421)	(441,332)	(1,437,763)
Share based compensation costs		242,888	242,888
Depreciation	1,598,121	1,589,026	3,145,119
Changes in Working Capital
Trade and other receivables	(12,586,064)	823,513	(5,835,530)
Inventories	2,464,804	5,062,803	5,595,078
Other current assets	(1,976,215)	(8,709,258)	(1,025,573)
Trade and other payables	(552,659)	11,519,817	(6,002,207)
Other liabilities	(366,891)	(99,680)	(2,474,534)
Cash generated from operations	8,366,171	24,777,918	23,135,747
Income Taxes paid	(2,001,661)	(1,434,847)	(3,218,221)
Net Cash Generated by Operating activities	6,364,510	23,343,071	19,917,526
Cash flow from investing activities
Acquisition of property, plant and equipment	(10,318,234)	(60,057,795)	(77,111,796)
Interest received	709,053	390,562	1,375,174
Dividend income	-	46,300	53,543
Movement in restricted cash	(594,549)	(1,480,376)	101,759
Sale / (Purchase) of Investments, net	(5,292,943)	7,310,001	9,038,245
Net cash used in investing activities	(15,496,673)	(53,791,308)	(66,543,075)
Cash flows from financing activities
Proceeds from borrowings	26,585,872	32,161,141	59,998,942
Repayment of borrowings	(13,594,090)	-	(5,026,019)
Interest paid	(5,904,582)	(4,781,123)	(9,410,037)
Net cash provided by financing activities	7,087,200	27,380,018	45,562,886
Net decrease in cash and cash equivalents	(2,044,963)	(3,068,219)	(1,062,663)
Cash and cash equivalents at the beginning of the year	6,805,449	6,636,577	6,636,577
Effect of Exchange rate changes on the balance of cash held in foreign currencies	(1,943,614)	986,847	1,231,535
Cash and cash equivalents at the end of the year	2,816,872	4,555,205	6,805,449

NOTES TO THE CONSOLIDATED AND FINANCIAL STATEMENTS

For the period ended 30September 2015

(All amount in ₤, unless otherwise stated)

1.    Corporate information

1.1.     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.

1.2.     Statement of compliance

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretations as adopted by the European Union (EU) and the provisions of the Isle of  Man, Companies Act 2006 applicable to companies reporting under IFRS.

1.3.     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  IOMA House, Hope Street, Douglas, Isle of Man 1M1 1JA.  The Company's equity shares are listed on the Alternative Investment Market (AIM) of the London Stock Exchange.

The Consolidated Financial statement for the period ended 30 September 2015 were approved and authorised for issue by Board of Directors on 30th November 2015

2.    New and revised standards that are effective for annual periods beginning on or after 1 January 2013

IFRS 10 'Consolidated Financial Statements' (IFRS 10)

IFRS 10 supersedes IAS 27 'Consolidated and Separate Financial Statements' (IAS 27) and SIC 12 'Consolidation-Special Purpose Entities'. IFRS 10 revises the definition of control and provides extensive new guidance on its application. These new requirements have the potential to affect which of the Group's investees are considered to be subsidiaries and therefore to change the scope of consolidation. The requirements on consolidation procedures, accounting for changes in non-controlling interests and accounting for loss of control of a subsidiary are unchanged.

Management has reviewed its control assessments in accordance with IFRS 10 and has concluded that there is no effect on the classification (as subsidiaries or otherwise) of any of the Group's investees held during the period or comparative periods covered by these financial statements.

IFRS 11 'Joint Arrangements' (IFRS 11)

IFRS 11 supersedes IAS 31 'Interests in Joint Ventures' (IAS 31) and SIC 13 'Jointly Controlled Entities- Non-Monetary-Contributions by Venturers'. IFRS 11 revises the categories of joint arrangement, and the criteria for classification into the categories, with the objective of more closely aligning the accounting with the investor's rights and obligations relating to the arrangement. In addition, IAS 31's option of using proportionate consolidation for arrangements classified as jointly controlled entities under that Standard has been eliminated. IFRS 11 now requires the use of the equity method for arrangements classified as joint ventures.

Management has reviewed its control assessments in accordance with IFRS 11 and has concluded that there is no effect on the classification of any of the Group's investees held during the period or comparative periods covered by these financial statements.

IFRS 12 'Disclosure of Interests in Other Entities' (IFRS 12)

IFRS 12 integrates and makes consistent the disclosure requirements for various types of investments, including unconsolidated structured entities. It introduces new disclosure requirements about the risks to which an entity is exposed from its involvement with structured entities.

Management has reviewed the impact of IFRS 12 and has concluded that there is no effect on any of the Group's investees held during the period or comparative periods covered by these financial statements.

IFRS 13 'Fair Value Measurement' (IFRS 13)

IFRS 13 clarifies the definition of fair value and provides related guidance and enhanced disclosures about fair value measurements. It does not affect which items are required to be fair-valued. The scope of IFRS 13 is broad and it applies for both financial and non-financial items for which other IFRSs require or permit fair value measurements or disclosures about fair value measurements except in certain circumstances. IFRS 13 applies prospectively for annual periods beginning on or after 1 January 2013. Its disclosure requirements need not be applied to comparative information in the first year of application. The Group has however included as comparative information the IFRS 13 disclosures that were required previously by IFRS 7 'Financial Instruments: Disclosures'. 

2.2    Standards, amendments and Interpretations to existing standards that are not effective and have not been early adopted by the group. 

At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been adopted early by the Group.

Management anticipates that all of the relevant pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Group's financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Group's financial statements.

Standards and Interpretations adopted by the European Union as at 30 September 2015

Standard or Interpretation	Effective for in reporting periods starting on or after
IAS 28 Investments in Associates and Joint Ventures	1 January 2014
Offsetting Financial Assets and Financial Liabilities	1 January 2014
IFRS 9 Financial Instruments	1 January 2015

The management is yet to assess the impact of IFRS 9 on the group's consolidated financial statements. However they do not expect to implement IFRS 9 until all of its chapters have been published and they can comprehensively assess the impact of all changes.

The management does not expect the application of the other standards to have any material impact on its financial statements when those Standards become effective. The Group does not intend to apply any of these pronouncements early.

3.    Summary of significant accounting policies

3.1      Basis of preparation

The consolidated financial statements have been prepared on a historical cost basis, except for financial assets and liabilities at fair value through profit or loss and available-for-sale financial assets measured at fair value.

The financial statements have been prepared on going concern basis which assumes the Group will have sufficient funds to continue its operational existence for the foreseeable future covering atleast 12 months. As the Group has forecast it will be able to meet its debt facility interest and repayment obligations, and that sufficient funds will be available to continue with the projects development the assumption that these financials statements are prepared on a going concern basis is appropriate.

The consolidated financial statements are presented in accordance with IAS 1 Presentation of Financial Statements (Revised 2007) and have been presented in Great Britain Pound ('£'), which is the functional and presentation currency of the Company.

3.2.     Basis of consolidation

The consolidated financial statements incorporate the financial information of OPG Power Ventures Plc and its subsidiaries for the six months ended 30 September 2015

A subsidiary is defined as an entity controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Subsidiaries are fully consolidated from the date of acquisition, being the date on which control is acquired by the Group, and continue to be consolidated until the date that such control ceases. All subsidiaries have a reporting date of 30th September and use consistent accounting policies adopted by the group.

All intra-group balances, income and expenses and any resulting unrealized gains arising from intra-group transactions are eliminated in full on consolidation.

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 minority 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 or received and the book value of the share of the net assets is recognised in 'other reserve' within statement of changes in equity.

3.3.     List of subsidiaries

Details of the Group's subsidiaries which are consolidated into the Group's consolidated financial statement are as follows:

Subsidiaries	Immediate Parent 2014	Country of incorporation	% Voting Right 2014	% Economic Interest 2014
Caromia Holdings limited ('CHL')	OPGPV	Cyprus	100	-
Gita Power and Infrastructure Private Limited, ('GPIPL')	CHL	India	100	100
OPG Power Generation Private Limited ('OPGPG')	GPIPL	India	76.03	99
OPGS Power Gujarat Private Limited ('OPGG')	GPIPL	India	74	99
OPGS Industrial Infrastructure Developers Private Ltd ('OPIID')	OPGG	India	100	100
OPGS Infrastructure Private Limited ('OPGIPL')	OPGG	India	100	100

3.4.      Foreign currency translation

The functional currency of the Company is the Great Britain Pound Sterling (£). The Cyprus entity is an extension of the parent and pass through investment entity. Accordingly the functional currency of the subsidiary in Cyprus is the Great Britain Pound Sterling. The functional currency of the Company's subsidiaries operating in India, determined based on evaluation of the individual and collective economic factors is Indian Rupees ('₹'). The presentation currency of the Group is the Great Britain Pound (£) as submitted to the AIM counter of the London Stock Exchange where the shares of the Company are listed.

At the reporting date the assets and liabilities of the Group are translated into the presentation currency which is Great Britain Pound Sterling (£) at the rate of exchange ruling at the Statement of financial position date and the statement of comprehensive income is translated at the average exchange rate for the period. 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 ruling 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. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to functional currency at foreign exchange rates ruling at the dates the fair value was determined.

Particulars	30-Sep-2015	30-Sep-2014	31-Mar-2015
Closing Rate	100.28	100.70	92.76
Average Rate	98.70	99.84	98.41

3.5.      Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction will flow to the Group, and revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable in accordance with the relevant agreements, net of discounts, rebates and other applicable taxes and duties.

Sale of electricity

Revenue comprises revenue from sale of electricity. Revenue from the sale of electricity is recognised when earned on the basis of contractual arrangement with the customers and reflects the value of units supplied including an estimated value of units supplied to the customers between the date of their last meter reading and the reporting date.

Interest and dividend

Revenue from interest is recognised as interest accrues (using the effective interest rate method). Revenue from dividends is recognised when the right to receive the payment is established.

3.6.      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.

3.7.      Financial assets

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value through profit or loss which are measured initially at fair value.

Financial assets are de-recognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is de-recognised when it is extinguished, discharged, cancelled or expires.

The category determines subsequent measurement and whether any resulting income and expense is recognised in profit or loss or in other comprehensive income.

Loans and receivables:

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables fall into this category of financial instruments.

Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default. Receivables that are not considered to be individually impaired are reviewed for impairment in groups, which are determined by reference to the industry and region of a counterparty and other shared credit risk characteristics. The impairment loss estimate is then based on recent historical counterparty default rates for each identified group.

Available-for-sale financial assets:

Available-for-sale financial assets are non-derivative financial assets that are either designated to this category or do not qualify for inclusion in any of the other categories of financial assets. The Group's available-for-sale financial assets include Mutual funds and equity instruments. Available-for-sale financial assets are measured at fair value. Gains and losses are recognised in other comprehensive income and reported within the available-for-sale reserve within equity, except for impairment losses and foreign exchange differences on monetary assets, which are recognised in profit or loss. When the asset is disposed of or is determined to be impaired the cumulative gain or loss recognised in other comprehensive income is reclassified from the equity reserve to profit or loss and presented as a reclassification adjustment within other comprehensive income.

Reversals of impairment losses are recognized in other comprehensive income, except for financial assets that are debt securities which are recognised in profit or loss only if the reversal can be objectively related to an event occurring after the impairment loss was recognised.

4.    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.

The following are significant management judgments in applying the accounting policies of the Group that have the most significant effect on the financial statements.

· Deferred tax assets:

The assessment of the probability of future taxable income in which deferred tax assets can be utilised is based on the Group's latest approved budget forecast, which is adjusted for significant non-taxable income and expenses and specific limits to the use of any unused tax loss or credit. The tax rules in India in which the Group operates are also carefully taken into consideration. If a positive forecast of taxable income indicates the probable use of a deferred tax asset, especially when it can be utilised without a time limit, that deferred tax asset is usually recognised in full. The recognition of deferred tax assets that are subject to certain legal or economic limits or uncertainties is assessed individually by management based on the specific facts and circumstances.

· Application of lease accounting

Significant judgment is required to apply lease accounting rules under IFRIC 4 Determining whether an arrangement contains a Lease and IAS 17 Leases. In assessing the applicability to arrangements entered into by the Group, management has exercised judgment to evaluate customer's right to use the underlying assets, substance of the transaction including legally enforced arrangements and other significant terms and conditions of the arrangement to conclude whether the arrangements meet the criteria under IFRIC 4.

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 a material adjustments to the carrying amounts of assets and liabilities within the next financial year are discussed below:

§ Recoverability of deferred tax assets: The recognition of deferred tax assets requires assessment of future taxable profit.

§ Estimation of fair value of acquired 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.

o Available for sale financial assets: Management apply valuation techniques to determine the fair value of available for sale financial assets 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

o Other financial liabilities: Borrowings held by the Group are measured at amortised cost except where designated at fair value through profit or loss. Further, liabilities associated with financial guarantee contracts in the Company financial statements are initially measured at fair value and re-measured at each Statement of financial position date and

o 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 to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate;

§ 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.

5.    Segment information

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 chief operating decision maker evaluates the Group's performance and allocates resources based on an analysis of various performance indicators at operating segment level. Accordingly, there is only a single operating segment "generation and sale of electricity. The accounting policies used by the Group for segment reporting are the same as those used for consolidated financial statements. There are no geographical segments as all revenues arise from India.   

6.    Other income

Other income comprises of:

	30-Sep-2015	30-Sep-2014	31-Mar-2015
Sale of fly ash and coal	28,684	61,900	40,583
Others	-	-	86,685
Total	28,684	61,900	127,268

7.   Finance Cost

Finance cost comprises of:

	30-Sep-2015	30-Sep-2014	31-Mar-2015
Interest expense on borrowings	5,694,014	4,430,007	8,735,529
Other finance costs	210,568	351,116	674,508
Total	5,904,582	4,781,123	9,410,037

8.   Finance income

Finance income comprises of:

	30-Sep-2015	30-Sep-2014	31-Mar-2015
Interest income
- Bank deposits	662,529	94,444	634,619
-Loans and receivables		-	-
Dividend income		46,300	53,544
Profit on disposal of financial instruments	52,892	300,588	749,600
Total	715,421	441,332	1,437,763

9.   Trade and other receivables

	30-Sep-2015	30-Sep-2014	31-Mar-2015
Current
Receivables from sale of power (OPGPG)	38.54	19.88	28.28
Other receivables	0.33	0.01	0.35
Total	38.87	19.89	28.63

Ageing of receivables from sale of power

	30-Sep-2015	30-Sep-2014	31-Mar-2015
Due & Outstanding	29.31	12.28	21.89
Accrued, not due	9.23	7.60	6.39
Total	38.54	19.88	28.28
Since collected	5.16	11.23	9.41

10.    Cash and cash equivalents

Cash and short term deposits comprise of the following:

	30-Sep-2015	30-Sep-2014	31-Mar-2015
Cash at banks and on hand	1,602,820	4,031,514	6,200,830
Short-term deposits	1,214,052	523,691	604,619
Total	2,816,872	4,555,205	6,805,449

Short-term deposits are placed for varying periods, depending on the immediate cash requirements of the Group. They are recoverable on demand.

11.    Intangible Assets

	Acquired software licenses
Cost
At 1 April 2014	529,415
Additions	171,860
Exchange adjustments	48,493
At 31 March 2015	749,769
Additions	-
Exchange adjustments	(56,281)
At 30 September 2015	693,488
Accumulated depreciation and impairment
At 1 April 2014	54,756
Charge for the year	23,949
Exchange adjustments	5,391
At 31 March 2015	84,096
Charge for the year	23,879
Exchange adjustments	(6,690)
At 30 September 2015	101,284
Net book value
At 30 September 2015	592,204
At 31 March 2014	665,673

12.    Property, plant and equipment

The property, plant and equipment comprises of:

	Land and Buildings	Power Stations	Other plant and equipment	Vehicles	Assets under construction	Total
Cost
At 1 April 2014	12,140,751	109,110,905	588,065	660,699	162,573,007	285,073,427
Additions	283,011	304,404	124,166	45,759	122,319,301	123,076,641
Exchange adjustments	561,251	8,102,195	(716)	(5,140)	6,797,275	15,454,865
At 31 March 2015	12,985,013	117,517,504	711,515	701,318	291,689,583	423,604,933
Additions	124,107	194,381	19,228	59,181	12,557,669	12,954,566
Transfer on capitalisation	-	91,263,436	-	-	(91,263,436)	-
Exchange adjustments	(1,115,142)	(9,468,365)	(53,713)	(43,072)	(21,600,092)	(32,280,384)
At 30 September 2015	11,993,978	199,506,956	677,030	717,426	191,383,726	404,279,115
Accumulated depreciation and impairment
At 1 April 2014	55,950	4,949,021	228,542	218,631	-	5,452,144
Charge for the year	34,644	2,772,529	192,985	121,012	-	3,145,118
Exchange adjustments	5,582	426,874	25,124	21,164	-	484,135
At 31 March 2015	96,176	8,148,424	446,651	360,807	-	9,052,057
Charge for the year	21,775	2,535,476	97,770	74,454	-	2,729,475
Exchange adjustments	(7,564)	(1,047,558)	(35,074)	(28,262)	-	(1,118,458)
At 30 September 2015	110,387	9,636,341	509,346	407,000	-	10,663,074
Net book value
At 30 September 2015	11,883,591	189,870,614	167,684	310,426	191,383,726	393,616,041
At 31 March 2015	12,888,837	109,369,080	264,865	340,511	291,689,583	414,552,876

13.  Borrowings

The borrowings comprises of the following:

	Final Maturity	30-Sep-2015	30-Sep-2014	31-Mar-2015
Term loans at amortised cost	March - 25	250,273,012	224,068,704	258,694,310
Other borrowings	March - 15	126,863	115,160	2,093,877
Total		250,399,875	224,183,863	260,788,187

-ends-

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