2015A N N U A L R E P O R T
The story of how Mytrah Energy’s project implementation excellence has helped the Company emerge as one of the India’s fastest growing renewable energy companies in just five years
A Culture of Excellence
Corporate InformationRegistered officeMytrah Energy LimitedGround Floor, Dorey Court,
Admiral Park, St Peter Port,
Guernsey GY1 2HT
Nominated AdvisorInvestec Bank plc2 Gresham Street, London
EC2V 7QP
United Kingdom
Joint BrokersMirabaud Securities LLP33 Grosvenor Place,
London SW1X 7HY
United Kingdom
Investec Bank plc2 Gresham Street, London
EC2V 7QP
United Kingdom
Financial PR
Yellow Jersey PR Ltd76 Great Suffolk St, London
SE1 0BL
Tel: +44 (0) 7768 537 739
LegalKing & Spalding International LLP125 Old Broad Street
London EC2N 1AR
United Kingdom
RegistrarsComputershare Investor Services (Guernsey) LimitedP.O. Box 393
Kingsway House
Havilland Street
St. Peter Port, Guernsey
GY1 3FN
Channel Islands
AuditorsKPMG Audit LLCHeritage Court,
41 Athol Street, Douglas,
Isle of Man, IM99 1HN
Tel: +44 (0) 1624 681 000
Contents
Corporate structure 02
Consistent growth and financial
innovation 05
Natural hedging of risk through
diversification 08
2015 in retrospect 10
Robust performance 12
Operational projects 32
Projects under implementation 34
How we do business 39
Governance 40
Principal risks and uncertainities 48
Chairman’s overview 16
Performance review 24
Macro outlook – performance
and promise 30
Directors’ Report 50
Corporate Governance Report 53
Remuneration Report 58 Independent Auditor’s Report 62
Consolidated Income
Statement 63 Consolidated Statement
of Financial Position 64 Consolidated Statement of
Changes in Equity 65
Consolidated Statement of
Cash Flows 66
Notes to the Consolidated
Financial Statements 67
Notice to AGM 108
02
16
32
50
Mytrah Vayu Urja
Bindu Vayu Urja
Mytrah Vayu
Pennar
Mytrah Vayu
Krishna
Mytrah Vayu
Manjira
Mytrah Vayu
Indravati
Corporate structure
Mytrah Energy Limited, Guernsey (MEL)
100% Holding
100% Holding
Mytrah Energy (India) Limited (MEIL)
Bindu Vayu (Mauritius) Limited (BVML)
AIM Listed Company
Indian Operating Company
Company Holding our Wind Farms
Mytrah Energy Limited is an India based renewable energy developer and
producer, listed on the London Stock Exchange since 2010. Its portfolio
includes a blend of wind and solar assets.
Mytrah has a simple structure, where MEL shareholders own 100% of the
Company’s operating business. This means that if you own 1% of the shares of
MEL you also own 1% of the equity cash flow from our wind farms.
02 Mytrah Energy Limited Annual Report 2015
Mytrah is one of the fastest-growing renewable energy companies in the worldMytrah’s superior performance has been the result of
best-in-class practices, experienced personnel and
a cost-efficient approach. The Company maximises
electricity generation from wind farms by deploying
the complete range of capabilities and competencies.
Mytrah’s distinctive business model enables it to
identify, plan and execute projects on schedule and
within budget. The Company’s project team has
delivered 583 MW of renewable energy assets across
six states within five years.
Mytrah’s market knowledge, extensive relationships
and expertise enabled it to build strong positions in
the high-value, rapidly growing Indian energy market.
Mytrah has created a visible projects pipeline of 3,500
MW, which is likely to be progressively commissioned,
accelerating the Company towards its medium-term
objective of installing 5,000 MW of renewable energy
(wind and solar) assets.
Listed on the Alternate Investment Market (AIM) of
the London Stock Exchange, Mytrah has access to
international capital, expertise and industry partners;
it’s smart approach positions it as a progressive force
in the global renewable energy sector, delivering
sustainable growth.
583 MW
Wind power plants created in five years
Overview
Corporate Governance
Business Review
Financial Statements03Mytrah Energy Limited Annual Report 2015
616.5 MW
Operating Capacity as on 03 Mar 2016
11Wind farms in operation
211Wind masts
3Wind farms under
construction
04 Mytrah Energy Limited Annual Report 2015
USD 74.7 m
Revenue in 2015
7%Revenue growth in 2015
USD 66.4
m
Underlying EBITDA in 2015
3%EBITDA growth in 2015
Overview
Corporate Governance
Business Review
Financial Statements05Mytrah Energy Limited Annual Report 2015
OUR TRANSFORMATION JOURNEY
Consistent growth and financial innovation
2010
Operational capacity
Funds raised
USD 80m
equity through IPO
on the LSE
0 MW
2011
Operational capacity
Funds raised
USD 92m
Non-dilutive mezzanine
capital
82 MW
2012
Operational capacity
Diversification in Wind Turbine Selection
Gamesa and Regen
added to Suzlon portfolio
299 MW
Mytrah has established a solid platform for sustained development, through competitive and innovative financing and a strong asset base
Performance delivered Possess expertise in site selection, wind
data/assessment, land bank, operations and
management
Strong management expertise
Projects delivered on time and within budget
Improving machine availability and efficiency
Consistent growth and profitability
06 Mytrah Energy Limited Annual Report 2015
2013
Operational capacity
Funds raised
USD 18m
non-dilutive mezzanine
capital
310 MW
2014
Operational capacity
Funds raised
USD 70m bonds issued,
purchased by Merrill
Lynch International and
Apollo Funds
542 MW
2015
Operational capacity
Fund raised
USD 60m additional
bonds issued, bringing
total new finance raised
under this structure to
USD 130m
583 MW
Innovative financing Building projects without equity dilution
Strong support of institutional investors
USD 130m rupee bonds listed in India
Largest refinancing in renewables sector in India
Good relations with banks and multilateral
funding agencies
Diversification 11 operating assets across six states
Equipment sourced from multiple suppliers
of global repute
Diverse sales models (Government FIT/
private sale)
Varying PPA tenures (10Y, 13Y, 20Y and 25Y)
Overview
Corporate Governance
Business Review
Financial Statements07Mytrah Energy Limited Annual Report 2015
Natural hedging of risk through diversification
RAJASTHAN
Kaladonger 75.6 MW
Mokal 42.0 MW
Bhesada 39.9 MW
GUJARAT
Mahidad 25.2 MW
Jamanwada 52.5 MW
MAHARASHTRA
Sinnar 12.6 MW
Chakala 39.0 MW
ANDHRA PRADESH
Burgula 37.4 MW
Vajrakarur 63.0 MW
TAMIL NADU
Vagarai 100.5 MW
Operational Wind Power Plants as of Dec 2015
KARNATAKA
Savalsung 95.2 MW
11
2
3
4
5
6
7
89
10
1111
910
2 3
4
5
6
7
8
Plant State Capacity (MW)
1. Kaladonger Rajasthan 75.6
2. Mokal Rajasthan 42.0
3. Bhesada Rajasthan 39.9
4. Mahidad Gujarat 25.2
5. Jamanwada Gujarat 52.5
6. Sinnar Maharashtra 12.6
7. Chakala Maharashtra 39.0
8. Savalsung Karnataka 95.2
9 Burgula Andhra Pradesh 37.4
10. Vajrakarur Andhra Pradesh 63.0
11. Vagarai Tamil Nadu 100.5
08 Mytrah Energy Limited Annual Report 2015
State-wise capacity distribution
Gujarat 77.7 MW
Rajasthan 157.5 MW
Maharashtra 51.6 MW
Andhra Pradesh 100.4 MW
Karnataka 95.2 MW
Tamil Nadu 100.5 MW
13%
27%
10%17%
16%
17%
Technology supplier
Suzlon 349.8 MW
Gamesa 132.6 MW
ReGen 100.5 MW61%22%
17%
Pervasive presence Wind and solar energies are dependent on nature,
and the wind speeds and solar radiation vary from
location to location. To manage this natural variability,
we have diversified our activities from a geographical
perspective, by installing wind energy assets across
11 locations in 6 Indian states. Our wind presence will
continue to expand to new locations, and the addition
of solar to the portfolio provides further diversification
into the future.
The result is that Mytrah has rapidly acquired a pan-
Indian personality even while it is relatively young,
reducing reliance on any one location and greatly
increasing its options for further expansion.
PPA Duration
20 years 269.5 MW
25 years 161.3 MW
13 years 51.6 MW
< 10 years 100.5 MW
46%9%
28%
17%
Cutting-edge technologyMytrah augmented its operational flexibility by
sourcing wind turbines and other ancillary equipment
from large, dependable and diversified vendors,
ensuring adaptability across different downstream
needs, terrains and wind patterns on the one hand
and enhancing margins on the other. We managed to
optimise the mix of our diversified equipment supplies,
and ensure increased performance of our power
generation
Revenue visibility All of the electricity produced by Mytrah’s wind and
solar plants is sold under long-term contracts to stable
counter-parties. Again, to reduce the reliance on any
one system, Mytrah has a range of contract structures
and counterparties.
Overview
Corporate Governance
Business Review
Financial Statements09Mytrah Energy Limited Annual Report 2015
2015 in retrospectFinancial highlights, 2015
Revenue of USD 74.72m, an increase of 7% over the
previous year (2014: USD 69.55m)
Underlying EBITDA of USD 66.43m up 3% (2014:
64.34m); underlying EBITDA margin of 89%
In INR terms revenue increased by 13%, underlying
EBITDA increased by 9%
Post period end, signed a new Rupee Term Loan
Agreement of INR 25.8 billion (approx. USD 380m)
to refinance senior loans from 22 banks across
543 MW of operating wind farms; 140 basis points
interest savings
Secured USD 232.5m senior loans for 250 MW
projects under construction
Term sheet with DFI for USD 175m senior loan for
wind and solar projects
Operational highlights, 2015
616.5 MW of revenue generating wind assets
operating at present
240 MW assets in construction on track for the
upcoming wind season, of which Bhesada - 50.4 MW
- fully commissioned and connected to the grid post
period end
Construction underway on an additional 220 MW,
bringing total currently in construction to 460 MW
Began new wind turbine supply relationships with
General Electric and Inox
Signed EoI with Government of Karnataka for
developing 450 MW wind projects
Installed 317kW of rooftop solar projects
Signed power purchase agreements (PPAs) for
282 MW of solar projects; additional 95 MW PPAs are
expected to be signed shortly
Refinance of USD380m senior loans from 22 banks across 543 MW of operating wind farms
Interest savings of 140 bps
Average maturity of debt extended by approximately three years
Largest refinancing in India’s renewable energy sector
USD 380mRefinancing 3 large banks
(including two
existing banks)
Term Loan and Working Capital Lenders
10 Mytrah Energy Limited Annual Report 2015
Overview
Corporate Governance
Business Review
Financial Statements11Mytrah Energy Limited Annual Report 2015
2015
Total Assets
949.1
646.5
538.1
430.7
2014
2013
2012
USD 949.1m
0.92015
Revenue
28.1
45.3
62.9
67.6
2.7
5.5
6.1
6.3
8.0
0.0
0.4
2014
2013
2012
USD 74.7m
Sale of electricity (USD m)
Generation-based incentive (USD m)
Other Operating Income (USD m)
56.5
57.3
42.7
25.6
75%
83%
84%
83%
2015
Gross Profit
2014
2013
2012
USD 56.5m
Gross profit (USD m) Total Assets (USD m)
Gross margin
Underlying EBITDA
USD 66.4m2015
2014
2013
2012
48.8
64.3
66.4
35.5
95%
94%
89%
91%
Underlying EBITDA (USD m)
Underlying EBITDA margin
Robust performance
12 Mytrah Energy Limited Annual Report 2015
Overview
Corporate Governance
Business Review
Financial Statements13Mytrah Energy Limited Annual Report 2015
Focused on delivering superior and consistent growth
14 Mytrah Energy Limited Annual Report 2015
The Company has 211 wind masts installed
in eight states
Mytrah has an extensive pipeline of wind projects
exceeding
3,000 MW
Overview
Corporate Governance
Business Review
Financial Statements15Mytrah Energy Limited Annual Report 2015
On behalf of the Board, I am pleased
to present the consolidated annual
accounts for Mytrah Energy Limited
(“Mytrah” or the “Company”, and
with the subsidiary companies,
the “Group”) for the year ended 31
December 2015.
Mytrah, which listed in London
in October 2010, manages a
diversified renewable energy
portfolio and is one of India’s largest
renewable energy Independent
Power Producers (‘IPP’). During the
year to 31 December 2015, Mytrah
grew its generation capacity to
583 MW, a 10% increase over the
previous year. Additional capacity
of 25.2 MW was added post year-
end, taking the operational wind
portfolio to a total capacity of 616.5
MW at present, all of which was
created within a short time span of
Increasing our wind power generation capacity by 10% in 2015 to 583 MW was a significant feat and this expansion has continued since the year end, reaching 616.5 MW at present. The growth has been delivered on budget and is ahead of schedule so that we now expect to have a capacity of 783 MW at the start of wind season 2016; 40 MW ahead of our previous guidance.
of renewable electricity production capacity in
the next few years.
Mytrah has the ability to reach
1,380 MW
five years. When this operational
capacity is combined with projects
currently under construction, and
a successful entry into the solar
business, Mytrah has the ability to
reach 1,380 MW (c. 1.40 GW) of
renewable electricity production
capacity in the next few years.
The Board is delighted to report
a set of strong results, which
demonstrates the quality and
maturity of Mytrah’s business. The
Company continues to pursue a
strategy of diversification, and
this has allowed Mytrah to remain
resilient in a year characterised
by variable wind speeds which
were generally lower than the
historical long-term average.
The Company delivered robust
revenue growth of 13% YoY in
rupee terms (7% in USD) during
Chairman’s overview
16 Mytrah Energy Limited Annual Report 2015
Whilst the wind is outside the
Company’s control, continued
focus by the operations team
has delivered good availability,
with some plants exceeding 99%
mechanical availability in the year
to 31 December 2015. The depth of
capability in Mytrah’s operations
team is an increasingly important
competitive advantage as the
Company’s operating portfolio
expands.
Project constructionThe construction portfolio has
increased over the year from
300 MW to 460 MW. From
this portfolio, the wind project
at Bhesada (50.4 MW) is fully
commissioned and operational at
present and construction of other
new projects, including Vajrakarur
2 and Nazeerabad (approximately
150 MW combined), is progressing
as planned, targeting for
commissioning ahead of the wind
season. In addition, Mytrah is
pleased to state that construction
at the 90 MW Nidhi wind farm in
Rajasthan has progressed ahead of
plan, and c. 40 MW of this project
is also now expected to be on
stream ahead of the wind season.
This brings our expected capacity
to 783 MW going into the 2016
wind season. An additional 220
MW of projects are in construction
and expected to be commissioned
ahead of the 2017 wind season,
taking the Company past the
1 GW milestone in operational wind
capacity.
In an effort to assist Mytrah’s
shareholders in understanding
the most important stages of the
life cycle of a wind project during
its development, the Company
has provided below a quantified
assessment of the progress of its
current wind projects as at the
current date. This is based on the
management’s experience and not
verified by any third party.
the period. The Company has also
increased generating capacity and
has executed a transformational
refinancing deal post period-end,
which will underpin continued
strong capacity expansion.
The refinancing is a first of its
kind and the largest in the Indian
renewable/wind sector, bringing
together 10 operating wind plants
into one financial structure with
an A-rating, resulting in interest
rate reduction by 140 bps. The
new structure greatly simplifies
Mytrah’s business; replacing 22
separate senior lenders and six loan
facilities with just three lenders in a
single loan facility.
Operational performanceElectricity generation is influenced
by the quality of the wind resource
for the year, and the mechanical
availability of the wind plants.
During the period under review,
wind speeds have been variable
from month to month and
somewhat below expectations
over the entire period. However,
the Company’s current wind farms
are geographically spread across
six states, covering over 2000
km from the northern to southern
part of India. This has, to some
extent, mitigated the effects of
the low wind this year, as some
plants experienced slightly better
wind conditions than others. This
‘portfolio effect’ has enabled the
Company to deliver a profit even
in a poor wind year, and also
facilitated refinancing of the 543
MW operating portfolio.
An additional 220 MW of projects are in constructionand expected to be commissioned ahead of the 2017 wind season, taking the Company past the 1 GW milestone in operational wind capacity.
Overview
Corporate Governance
Business Review
Financial Statements17Mytrah Energy Limited Annual Report 2015
Project pipeline In addition to the projects under
construction, Mytrah has an
extensive pipeline of wind projects
exceeding 3000 MW. With 211
wind masts installed in 8 states,
the Company’s wind data base
continues to provide differentiated
access to new project sites. As
part of the ongoing pipeline
development work, the Company
signed a non-binding Expression of
Interest (EoI) with the Government
of Karnataka to develop 450 MW
of renewable projects in Karnataka
State during February 2016.
FinancingDuring the year 2015, the Group
has extended the existing bond
facility (including India-listed
non-convertible bonds issued by
Mytrah Energy (India) Limited)
by a further USD 60m (2014: USD
70m), bringing the total finance
raised under this structure to USD
130m. The Company has also raised
over USD 200m of senior debt for
new projects and, post period end,
secured a USD 380m refinancing
of all the senior debt in its 543 MW
operating wind portfolio. This new
facility will be used to refinance
22 existing senior lenders in
operating wind projects, reducing
the interest rate by an average of
140 basis points and extending
the average maturity of debt by
approximately three years. The
re-financing greatly simplifies the
Company’s debt structure and also
provides approximately USD 8m
of additional funds, which Mytrah
will use to finance further capacity
expansion within this group.
These transactions, conducted with
sophisticated financial institutions,
underline the growing maturity of
our business and the quality of our
operating asset portfolio.
Macro environmentWith a growth of over 7% in
the 9-month period ended 31
December 2015, India is considered
one of the world’s fastest-growing
economies. The International
Monetary Fund (IMF) predicted
that India would retain the status of
Generating capacity increased by
10%
wind masts installed in 8 states
211
Project Expected Capacity in 2016 Wind Season
Substation Progress
Export Line Progress
Wind Turbine Progress
Bhesada 50.4 MW Complete &
charged
Complete &
charged
All 24 turbines
commissioned
Vajrakarur 2 100 MW Complete &
charged
Complete &
charged
11 out of 50 turbines
commissioned.
Erection of another
30 turbines is
complete
Nazeerabad 50 MW 85% Complete 85% Complete Erection of all 24
turbines is complete.
Nidhi Wind Farms 40 MW 80% Complete 80% Complete Erection of all 24
turbines is complete.
Additional 220 MW
in construction
Target commissioning
ahead of 2017 wind
season
70% Complete 60% Complete Foundation
construction in
progress
Strong pipeline
18 Mytrah Energy Limited Annual Report 2015
senior debt in its 543 MW operating wind portfolio
Refinancing of
USD 380m
the fastest growing economy until
2020. Both manufacturing and
electricity outputs experienced
strong growth (3.1% and 4.5%
respectively) in the period, boosting
overall industry performance.
The renewable energy sector
continues to enjoy strong support
from the central Government, with
the Prime Minister creating a target
of 175 GW of renewable capacity
installed by 2022. Of this, 100 GW is
expected to be solar, 60 GW wind,
and 15 GW other technologies.
A key outcome of the
Government’s focus is the UDAY
(Ujwal DISCOM Assurance Yojana)
reform approved in November
2015. The scheme aims at
improving the financial health of
the state electricity boards (SEBs),
which purchase most of Mytrah’s
electricity under long-term
contracts. UDAY aims to reduce
the debt burden of the SEBs and
is expected to translate into faster
and more reliable payments from
some of the weaker SEBs.
Solar2015 has seen rapid development in
the solar sector of India. Over 15 GW
of capacity auctions have been run
across various states, and Mytrah
has acquired rights to 377 MW
of projects in Telangana (327 MW)
and Punjab (50 MW). These
projects have long-term power
purchase agreements with the
state electricity boards, and will
be constructed over the next 12 –
18 months, adding to the 1 GW of
wind capacity under construction.
At present, PPAs have been signed
for 282 MW of these projects, with
the remaining 95 MW expected to
follow shortly.
In addition to the success in large
project bids, Mytrah has also
installed 317kW of rooftop systems
for commercial customers. The
solar team has grown rapidly,
now numbering over 30 and more
details of the Company’s solar
plans will be released to the market
at the appropriate time.
Maturing businessMytrah is a pure-play renewable
power generation company
with a clear focus on maximising
performance of its operating
assets, delivering new capacity
on time and within budget, and
building a sustainable pipeline
of future opportunities. The
business is growing and maturing
in all aspects; setting visible and
achievable targets, leading to on-
time project delivery, continually
improving financial structures,
experienced management, high
quality technical staff, and strong
relationships with a diverse group
of wind turbine suppliers.
Mytrah will continue to make a
significant investment in people,
systems and processes to ensure
we have the foundation needed to
support sustained growth and an
ever-expanding footprint.
OutlookFollowing a solid performance
in 2015, the Company is focused
on continued growth in the
renewable energy sector within
the wind and solar markets. The
Company’s diversified portfolio has
demonstrated robustness in spite
of higher-than-expected seasonal
weather volatility during 2015 and
this is reinforced by the confidence
of lenders, which entered into a
new refinancing arrangement,
underpinning management’s belief
that the variable wind this year is
a temporary limitation and not a
routine pattern.
The portfolio exhibits strong
diversification benefits with 11
assets across six states. We expect
to continue to grow rapidly,
entering the 2016 wind season with
783 MW operating, and a further
220 MW in construction.
The GoI’s focus on the renewable
energy sector is set to continue
through 2016 and beyond. We
expect a significant number of
investment opportunities for the
Company as there is an increased
activity across the sector, and a
number of States taking positive
steps to support renewables. We
are currently evaluating a number
of potential opportunities for
further investment and will invest
selectively, providing the terms are
attractive for our shareholders. Safe
and efficient management of assets
in operation or under maintenance
or construction remains our top
priority. Mytrah intends to continue
to remain active and focused in
the renewables space and looks
forward to a further year of steady
portfolio performance and growth
and to further positive engagement
with our stakeholders.
Overview
Corporate Governance
Business Review
Financial Statements19Mytrah Energy Limited Annual Report 2015
Business reviewParticulars Year ended
31 December 2015
Year ended
31 December 2014Change
(USD m) (USD m) (USD m)
Revenue income 74.72 69.55 5.17
Other operating income 0.88 0.37 0.51
Employee benefits expenses (3.04) (4.45) 1.41
Other operating expenses (7.28) (9.35) 2.07
Earnings before interest, tax, depreciation and
amortisation (EBITDA)
65.28 56.12 9.16
Depreciation and amortisation expense (16.40) (11.36) (5.04)
Operating Profit 48.88 44.76 4.12
Finance income 3.35 1.05 2.30
Finance costs (51.22) (42.92) (8.30)
Other finance costs on refinancing (0.54) (0.61) 0.07
Profit Before Tax 0.47 2.28 (1.81)
Taxation expense (0.08) (0.40) 0.32
Profit after tax 0.39 1.88 (1.49)
Reported EBITDA as above 65.28 56.12 9.16
Non-recurring and non-cash adjustments:
Doubtful advances written-off - 2.15 (2.15)
Provision for trade receivables 0.23 - 0.23
Transaction costs incurred in relation to raising
of long-term finance
- 4.25 (4.25)
Share-based payments 0.64 0.92 (0.28)
Indirect-tax cost on inter-group transactions 0.28 0.90 (0.62)
Total adjustments 1.15 8.22 (7.07)
Underlying EBITDA 66.43 64.34 2.09
20 Mytrah Energy Limited Annual Report 2015
RevenueFor the year ended 31 December
2015, the Group’s revenue has
increased by USD 5.17m, reflecting
a 7% growth year-on-year, on
account of capacity additions. The
increase in revenues is primarily on
account of increase in electricity
generated during the year due
to an increase in the operating
capacity by 10% to 583 MW.
EBITDAUnderlying EBITDA for the year 2015
increased to USD 66.43m (2014:
USD 64.34m), an increase of USD
2.09m, approximately 3% increase
(9% in rupee terms), reflecting a
reduction in non-recurring and
non-cash adjustments of USD 1.15m
(2014: USD 8.22m). The increase in
EBITDA is due to the increase in
revenue partly offset by increase
in costs of generation as the free
O&M period came to an end in
some of the assets.
Finance costFinancing costs at USD 51.76m
were USD 8.23m higher than the
prior year due to the expensing
of interest on operating assets
commissioned during the
current year, which were under
construction during the previous
year and was capitalised, and fair
valuation of security deposits
(a non-cash impact of USD 1.27m).
Finance incomeHigher finance income of USD
3.35m (2014 : USD 1.05m) was
generated due to higher cash
balance in the system and a
resultant increase in Interest on
Bank deposits and investment in
AAA bonds.
Profit before taxProfit before tax (PBT) of USD
0.47m for the period 2015 (2014:
USD 2.28m). Lower PBT during
2015 is largely on account of higher
finance costs and O&M expenses
of USD 2.13m (2014: USD 0.72)
incurred during the year as the free
warranty period in some projects
was completed.
TaxationThe tax expense for the year
2015 was USD 0.08m (2014: USD
0.40m).
Earnings per share:Basic and diluted earnings per
share for the year 2015 was USD
0.71 cents (2014 USD: 1.14 cents)
and USD 0.71 cents (2014 USD: 1.14
cents) respectively.
Financial positionThe net book value of our Property,
plant and equipment has increased
by USD 270m (increase by 53%),
almost all of which relates to
investments made during the year
in the construction of our new
plants that will start generating
revenues in the year 2016. The
Company’s liquidity, as measured
by current ratio (current assets over
current liabilities) has improved to
1.67 compared to 0.73 last year.
Net book value of property plant and
equipment increased by
53%
Overview
Corporate Governance
Business Review
Financial Statements21Mytrah Energy Limited Annual Report 2015
Mytrah has a total asset value of
USD 949m
22 Mytrah Energy Limited Annual Report 2015
Capital structureStrong financial capital
management is an integral part of
the Directors’ strategy to achieve
the Group’s stated objectives. The
Directors review financial capital
reports on a quarterly basis and the
Group treasury function does the
review on a weekly basis, ensuring
that the Group has adequate
liquidity.
As on 31 December 2015, the Group
had gross debt of USD674.2m
(2014: USD 456.26m). During the
year ended 31 December 2015,
additional loans of USD 242.5m
(net of repayments) were drawn
for the construction of new assets
that will start generating revenue in
the period ending 2016. The Group
continues to borrow at competitive
rates and currently deems this to be
the most effective means of raising
finance. The Group has established
good relationships with banks
and financial institutions enabling
it to raise further financing on
competitive terms.
As the assets under construction
start generating revenues in 2016
and 2017, we expect that the
Leverage (expressed as Net Debt/
EBITDA) position of the Company
will improve substantially with the
increasing EBITDA.
Further information on the Group’s
capital structure is provided in
Note 1 to the consolidated financial
statements, including details of
how the Group manages risk in
respect of capital, interest rates,
foreign currencies and liquidity.
A debt maturity profile is also
included.
Cash flowThe cash generated from
operations during the year was
USD 74.64m (2014: inflow USD
50.08m). Investing activities for
the current year resulted in a cash
outflow of USD 236.62m (2014:
outflow of USD 94.69m). Net
financing cash inflows were USD
162.72m (2014: inflows of USD
42.04m). The increase in financing
cash inflows was mainly due to a
drawdown of loan facilities of USD
370.80m (2014: USD 176.23m)
during the current year. At
31 December 2015, the Group had
cash and bank balances of USD
55.58m (31 December 2014: USD
14.27m).
The Company has effectively
managed its receivables position
and, despite the increase in
revenues, the position is unchanged
compared to the previous period.
Liquidity and investmentsAt 31 December 2015, the Group
had a strong liquidity position
comprising liquid assets of USD
101.02m and undrawn/committed
credit facilities of USD 223.02m,
which will be used for financing
the projects under construction.
The Group’s net debt position at
31 December 2015 has increased to
USD 618.62m (31 December 2014:
USD 441.99m). The increase is
mainly on account of a drawdown
of loan facilities during the year.
Ravi Kailas
Chairman & CEO
Mytrah Energy Ltd
Assets2015 2014
(USD m) (USD m)
Property, plant and equipment 779.93 510.11
Intangible assets 0.20 0.33
Other investments 2.06 1.59
Other non-current assets 33.7 81.43
Cash and bank balances including liquid investments 98.96 25.23
Current assets 28.47 25.88
Current tax assets 0.00 1.46
Deferred tax assets 5.74 0.46
Total assets 949.06 646.49
Overview
Corporate Governance
Business Review
Financial Statements23Mytrah Energy Limited Annual Report 2015
In conversation with Vikram Kailas, CFO, Mytrah Energy Ltd.
Managing Director,
Mytrah Energy (India) Ltd.
Performance review
QA&
Q Were you pleased with the working of the Company during 2015?
A: Absolutely. Let me list out the reasons for this in a sequential order:
One, I must report at the outset that despite the Company encountering
possibly the lowest average wind year in 20 years, the Company
reported reasonable earnings. This is a powerful demonstration of the
robustness of our business model, where geographical diversification
helps mitigate the effects of poor wind, and rigorous financial
management ensures that debt payments are made on time.
Two, despite the relatively low wind, and some slowing of economic
activity in India as a whole, Mytrah executed its new project construction
on schedule and within budgeted costs.
The result is that we expect to have 783 MW commissioned in this
expansion phase by June 2016, 40 MW ahead of our previous guidance
to the market.
Revenues in Indian Rupees has increased by
13%
24 Mytrah Energy Limited Annual Report 2015
Q How did the Company emerge stronger in 2015?
A: When we began our business in 2010, we were
principally a wind energy company because the
economics of operations were largely in favour of
this form of energy generation. However, we always
insisted that we were a renewable energy company
with an eye on emerging opportunities in the renewable
energy landscape. By the virtue of this responsiveness
to emerging opportunities, we extended into the
business of solar energy generation.
Solar is a natural extension of our business, allowing us
to leverage many of the same skills and relationships
that have made us successful in wind to date, and I
look forward to building out our 377 MW of projects
over the coming months.
Q Readers would be curious to know the secret of the Company’s ability
to perform better than its operating plan. A: Mytrah’s outperformance in terms of project
implementation is the result of two things – a culture of
urgency and a culture of governance. These are well-
worded and well-prioritised imperatives. The culture
of urgency is compatible with the rapid growth of our
sector and the Company’s aggressive asset-building
programme. The culture of governance is a logical
extension of this urgency; when market realities are
transforming at a breakneck speed, companies need
to foster a culture of internal discipline that enhances
operational predictability. When you combine speed
and science, amazing things can happen, and I think it
is this that has enabled us to outperform .
Of course, there was a systematised methodology in
place, which let us evolve from reactive firefighters
to analytical planners. We built projects in line with
the established SOPs; we executed by the book; we
respected the process. The result was that we did not
need to revisit, redo or rework key operational aspects.
We were able to combine systemic predictability and
robustness with a highly entrepreneurial approach,
which is quite unusual for a company that has only
been half a decade in existence.
Q So what exactly differentiates the Mytrah DNA?
A: In just three words: ‘Do something unique’. We are
attractively placed to make this happen: we have no
sectoral benchmarks to fall back upon; we carry no
organisational baggage that forces us to do things
only in a specific way; we recruited and trained in the
Mytrah way of doing things, which made everything –
even the most challenging target – possible!
Q What is exciting within the global and Indian renewable sector?
A: The renewable energy space is abuzz with the
arrival of state-of-the-art technology.
One, hub heights are progressively increasing; what
used to be a standard height of 80 metres in the past
has now increased to 100 metres-plus, which makes
it possible for renewable energy companies to tap
into a larger number of locations that were earlier not
considered viable for wind energy.
Two, over the last few years, blades have got
progressively longer – from around 97 metres to around
116 metres (and a projected 150 metres over the coming
years) – increasing the sweep area and enhancing the
electricity produced from each wind turbine.
Interest saving from USD 380m refinancing
140 bps
Overview
Corporate Governance
Business Review
Financial Statements25Mytrah Energy Limited Annual Report 2015
Three, carbon is progressively replacing fibreglass
as the material of choice for making blades, allowing
rotation even at low wind speeds of 2-3 metres per
second, which again opens up a large number of
prospective geographies for setting up windmills.
Four, wind farms are getting progressively digitised.
Scores of algorithms are being written that make it
possible for blade direction to proactively change in
line with changing wind directions and speeds, thereby
boosting operating efficiencies.
The result is that increased plant load factors through
technological improvements could transform the face
of the sector.
Q The big question: how competitive is renewable energy compared to fossil fuels?
A: The cost of commissioning power through the
coal route is INR 4.50 to INR 5 per kilowatt-hour; the
cost of commissioning wind energy is practically the
same. So from a long-term perspective, wind energy
has already achieved the all-important point of grid
Cash & cash equivalents
USD 55.6m
26 Mytrah Energy Limited Annual Report 2015
parity. Solar PV tariffs have declined by more than
60% over last five years - from ~INR 7 per unit in FY
15 to ~INR 4.5 per unit in FY16 on account of a decline
in capital costs, innovative financing and availability of
long tenure loans. The latest tariffs in the solar energy
space are pegged at about INR 4.50 to INR 5 per kWh
(some projects in Rajasthan have been priced around
INR 4.30 per kWh), which makes the entire energy
generation sector vibrant and full of possibilities.
Q Does this mean then that wind/solar energy could replace conventional
energy sources? A: Obviously. This is only a matter of when. As we see
it, a keen emphasis should be laid on renewable energy
sources for the next few years until the world invents
more efficient storage capacity. Energy storage
(battery) costs are indeed declining; if they continue in
this direction then, combined with renewable energy
availability at INR 4.50 per kWh, we are likely to see a
dramatic transformation in the way people consume
energy across the world.
Q How is Mytrah prepared to make the most of this emerging reality?
A: Mytrah has amassed 616.5 MW in wind energy assets
during the past five years. We now intend to deliver
1,000 MW over the next two years, along with 377 MW
of solar, and an attractive annual increment thereafter.
We possess the experience, passion, knowledge and
funding to make this happen and in the process,
emerging as one of the fastest growing renewable
energy companies in the world.
We possess the experience, passion, knowledge and funding to make this happen and, in the process, emerging as one of the fastest growing renewable energy companies in the world.
Overview
Corporate Governance
Business Review
Financial Statements27Mytrah Energy Limited Annual Report 2015
Delivering new capacities on time and within budget, and building a sustainable pipeline of future opportunities
28 Mytrah Energy Limited Annual Report 2015
The Government of India has an ambitious target
of installing
of renewable power capacities by 2022
175 GW
Overview
Corporate Governance
Business Review
Financial Statements29Mytrah Energy Limited Annual Report 2015
Macro outlook – performance and promise
Positive policy actions, together with the decline in
oil prices, have helped make India one of the fastest-
growing large economies in the world. Growth of
Indian economy accelerated to 7.6% in FY 2015-16.
According to IMF, by 2019, India‘s output will exceed
the combined output of the three next largest emerging
market economies – Russia, Brazil and Indonesia.
India is the fourth largest energy consumer in the world
Electricity consumption growth has closely followed growth in per capita GDP in India.
India’s per-capita consumption of power is one of
the lowest at 1010 kWh (Source: Business Standard,
April 5, 2016).
WPI inflation YoY at -0.9% (in Jan 2016 ) is the lowest
in nine years.
RBI cuts repo rate by 125 bps in last two years on easing
inflation and to catalyse economic growth.
Source: IEA Statistics, 2016
50
40
30
20
10
0
1,000
800
600
400
200
01971 1978 1985 1991 1999 2006 2013
GD
P p
er C
apit
a, IN
R ’0
00
Ele
ctri
city
Co
nsum
pti
on
per
Cap
ita,
kW
h
GDP per Capita (INR)
Electricity Consumption per Capita (kWh)
Source: 1. Office of the Economic Adviser, Govt. of India,
Ministry of Commerce & Industry.
2. Reserve Bank of India
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%RBI Repo RatesInflation (year on year) %
Jan-11 Feb-12 Mar-13 Apr-14 May-15 Jun-16
China
U.S.
Russia
India
Japan
Rest of World
Source: BP Energy Outlook 2016 edition
India projected to continue growing at a robust pace
Controlled inflation propelled RBI to announce rate cuts
(Source: IMF World Economic Outlook, October 2015)
16%
14%
12%
10%
8%
6%
4%
2%
0%
-2%
-4%
2000 2005 2010 2015 2020
India China WorldUnited States
GDP Growth Rate - Year on Year (%)
30 Mytrah Energy Limited Annual Report 2015
Access to Electricity
An estimated 237 million people – 19% of India’s
population – did not have access to electricity in 2013.
Power supply demand gap
In India, the installed generating capacity of
over 272,000 MW cannot meet the peak load of
157,000 MW – due to leakages and losses.
India’s overall coal-fired plant load factor fell 3.2%
to 60%, and gas-fired utilisation remained flat at
about 22% in the first half of FY16 (Source: Live Mint,
November 15, 2015).
In India, the demand-supply gap has surpassed
capacity addition.
Source: The Central Electricity Authority of India (CEA)
160
140
120
100
80
60
40
20
0F
Y 0
3
FY
04
FY
05
FY
06
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
FY
14
FY
15
Dem
and
, GW
Peak Demand, GW Peak Met, GW
Renewable energy – Unprecedented growth potential
The Indian government has ambitious plans for the deployment of 175 GW renewable power capacities by 2022,
including 100 GW of solar and 60 GW of wind, which may require an investment of around USD150 billion in the
next seven years (Source: LiveMint, November 7, 2015).
Power supply-demand gap
Financing
State Policies
Green Transmission
corridor
COP21 Commitments – Reducing CO2
emissions by 33% by 2030
RPOs
Feed-in-Tariffs
Gas
India - 2016 India - 2022
Government of India, Renewable
Energy Targets (MW) 2022
Nuclear
Wind
Solar
Others
15,000
1,00,000
60,0009,0755,248
25,188
Hydro
Coal
Wind
Solar
Others
Small Hydro
Bio-power
Souce: The Central Electricity Authority of India (CEA)
& The Ministry of New and Renewable Energy (MNRE)
60.94%
8.52%2.01%
14.84%
13.7%
25,188
5,248
4,1884,761
Source: IEA World Energy Outlook, 2015
100% 100% 100%
81%
96%
74%
National
China India
Urban Rural
Overview
Corporate Governance
Business Review
Financial Statements31Mytrah Energy Limited Annual Report 2015
Operational projects
2015 2014
Site Installed
Capacity (MW)
Commissioning
Date
Turbine Make
and Capacity
Machine
Availability (%)
Machine
Availability (%)
Kaladonger 75.6 Sep 2012 Suzlon, 2.1 MW 93 96
Mokal 42 Sep 2011 Suzlon, 2.1 MW 96 97
Mahidad 25.2 Oct 2011 Suzlon, 2.1 MW 96 98
Jamanwada 52.5 Mar 2013 Suzlon, 2.1 MW 98 98
Chakala 39 Feb 2012 Suzlon, 1.5 MW 97 97
Sinnar 12.6 Sep 2012 Suzlon, 2.1 MW 93 96
Vagarai 100.5 Feb 2015 Regen, 1.5 MW 98 77
Burgula 37.4 Mar 2014 Gamesa, 0.85 MW 100 100
Vajrakarur 63 Dec 2012 Suzlon, 2.1 MW 97 98
Savalsung 95.2 Jan 2015 Gamesa, 0.85 MW 99 98
Average 97 95
32 Mytrah Energy Limited Annual Report 2015
Electricity production from our plants in 2015Mytrah’s portfolio diversification approach has a
smoothing effect on its electricity production, reducing
the impact of the naturally variable wind. In 2015, this
portfolio effect helped the Group deliver a reasonable
profit in the lowest wind year for 20 years.
The Group’s wind farms are planned using long-term
weather data, which provides 20 years of wind history
for each site. Based on this data, the chart below
approximates how the variations in wind pattern would
have affected the electricity generation of Mytrah’s
543 MW operating portfolio over the last 20 years,
using 2015 as the baseline.
As can be seen, 2015 represents the lowest average
portfolio wind of the last 21 years, and if, for example,
the same 543 MW portfolio had been operating in
2013, it would have produced a little over 20% more
than it did in 2015. The inter-year variation on a
portfolio basis is substantially lower than the individual
plant variation, and we expect this effect to continue
to reduce generation variability as we add more wind
farms as well as solar capacity to our portfolio.
90%
100%
110%
120%
130%
199
5
199
6
199
7
199
8
199
9
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
1 This chart represents changes in generation due to the wind only. The effects of machine availability and other variables are
not included.
Overview
Corporate Governance
Business Review
Financial Statements33Mytrah Energy Limited Annual Report 2015
Projects under implementation
Project management capabilityAt Mytrah, we managed 11 project locations by the close
of 2015, demonstrating our capability in the management
of challenging ground realities. The Company addressed
these challenges through various initiatives: enhanced
involvement of local residents by engagement of
residents proximate to projects in infrastructural and
civil assignments, and direct logistical control.
These realities made it possible for the Company to
manage diverse locations through robust centralised
control and systems-driven vigilance.
The result is that most of the Company’s projects were
delivered on schedule; a few events were completed
ahead of the estimated deadline..
Operation
Under Construction
Gujarat Rajasthan Andhra Pradesh
Maharashtra Karnataka Tamil Nadu
Pipeline
Madhya Pradesh
Rajasthan
Gujarat
Maharashtra
Tamil Nadu
Karnataka
Telangana
Andhra Pradesh Wind Studies7000 MW
Approval Stage2500 MW
Ready to Build1000 MW
34 Mytrah Energy Limited Annual Report 2015
Solar powerThe Group has made significant progress on its first multi megawatt, grid-connected solar photo voltaic power
projects in the states of Telangana and Punjab. This is an important development, which builds on its first
100%-owned solar power project to strengthen its presence in the Indian solar market.
327 MW TelanganaThe solar projects portfolio will be spread across six
different districts of Telangana state. Land acquisition
and governmental approvals continue to progress in
line with Mytrah’s project plan. The weighted average
tariff that was quoted by Mytrah and accepted
by the Telangana state utility was INR 5.65 per kWh.
50 MW PunjabThe Company has also been successful in bidding for
a project in the State of Punjab having won a capacity
of 50 MW at a tariff of INR 5.97 per kWh, the second
highest tariff under the RFS (Request for Selection).
In addition to the projects outlined, Mytrah is currently in discussion about a number of grid-connected solar PV
power projects in India with a combined potential capacity of up to 1,000 MW. Mytrah has demonstrated that it
has strong capabilities in solar power projects to complement established abilities in wind energy, enabling it to
provide robust energy solutions through either technology.
In addition to the success in large project bids, Mytrah has also installed 317 kW of rooftop systems for commercial
customers.
Mytrah has acquired rights to develop
solar projects in Telangana and Punjab
377 MW
Overview
Corporate Governance
Business Review
Financial Statements35Mytrah Energy Limited Annual Report 2015
Mytrah’s operations team is an increasingly important competitive advantage as the Company’s operating portfolio expands
36 Mytrah Energy Limited Annual Report 2015
across all wind power plants
Mytrah has achieved an average Machine
Availability of
97%
Overview
Corporate Governance
Business Review
Financial Statements37Mytrah Energy Limited Annual Report 2015
At Mytrah, the Wind Resource Department has enhanced competitiveness
Wind Resource Department
At Mytrah, we had two options when we started our
Company in 2010.
One, access wind data patterns and turbines from an
external vendor, liberate bandwidth, monetise assets
and reduce risk.
Two, integrate backwards into the proprietary
collection of wind data patterns that could empower
us with the knowledge of what to do, where to do it
and when to do it.
At Mytrah, we selected to pursue the latter option
because proprietary research would tell us where a
suitable combination of wind pattern, land availability
grid availability and land cost would translate into the
highest value for the Company. This research would
also create a rich pipeline of prospective sites that
could be prioritised and ranked based on their intrinsic
profitability, making it possible for the Company
to address highest prospective returns across the
foreseeable future.
At Mytrah, we have selected to engage in research
pertaining to site identification, technology selection
and performance monitoring, carving out a distinctive
identity from scratch in just five years.
Our competitive advantageMytrah’s wind resource department has carved
a niche for itself in the space of just five years,
liberating the Company from a dependence on turbine
manufacturers.
Mytrah’s geographic mix of wind masts extends
from the Southern tip of India to the Northern part in
Rajasthan. The wind masts cover most of the terrain in
India comprising sea shores, forests, sand dunes, hills,
plain lands and low mountain passes in the Western
Ghats.
Mytrah’s wind resource department – effectively
its research and development driver - has analysed
locations and created a potential 10,000 MW project
pipeline (2,500 MW of projects cleared with approvals
in hand and 1,000 MW projects ready for construction).
Mytrah has emerged as the only independent power
producer in India to possess an ISO certification for its
wind resource department, demonstrating its process
discipline .
Mytrah’s wind resource department was the only Indian
company to have participated in CREYAP 2013 (an
initiative by the European Wind Energy Association).
This prestigious event required participants to report
predictive results from a given set of wind data. Mytrah
reported predictive results within 2% of the mean,
which was among the best achieved across 37 global
companies. During the 2015 edition, the Company was
the only one from within Asia to report predictive results
within 2% of the mean, figuring within the highest quartile.
Mytrah’s 211 live masts in 160 locations across 8 Indian
states represents the wide extent of our terrain
understanding, strengthening our ability in optimal site
selection . This is also one of the largest live installations
in the global IPP space, with a data availability of nearly
99% (global average 94%), one of the highest in the
world.
Mytrah’s competent 17-member team (average age 27),
has exhibited the capability to monitor real-time wind
turbine performance; becoming the only domestic
company to do so thus far. Besides, the Company
has monitored turbine generation throughout in real-
time and monthly mast performance via smartphones,
enhancing responsiveness and evolving progressively.
Mytrah’s wind resource department is in the process
of commissioning the highest wind mast in the Asia-
Pacific at 200 metres in Tamil Nadu – demonstrating
sophistication in wind mast design and competence in
accessing land permissions.
Mytrah’s team entered into alliances for the exchange
of academic knowledge with prominent Indian Institute
of Technologies and management institutes entailing
student exchange programmes for working on live
projects. This exchange will enrich the Company’s
cutting-edge technology understanding, strengthening
its ability to select the right prospective locations for
wind energy generation.
38 Mytrah Energy Limited Annual Report 2015
How we do business
MissionMytrah will lead the world in seizing renewables
opportunities.
Core Values
IntegrityOur actions are ethical, honest and transparent.
CreativityWe foster a spirit of innovation and entrepreneurship.
ExcellenceWe deliver best-in-class results, as we excel in everything we do.
Respect for individualsWe treat others the way we expect to be treated – with respect.
Social responsibilityWe are a catalyst of positive change in society.
Overview
Corporate Governance
Business Review
Financial Statements39Mytrah Energy Limited Annual Report 2015
Our core philosophy
Governance
Mytrah Energy Limited & Mytrah Energy (India) Limited Board
L-R: Milind Joshi, Rohit Phansalkar, Vikram Kailas, Bob Smith, Ravi Kailas, Charandeep Kaur, Russell Walls, Shirish Navlekar
Mytrah adheres to the highest standards of Corporate Governance, driven by a strong and diverse Board of
Directors at both Mytrah Energy Ltd., which is listed in London, and Mytrah Energy (India) Ltd., which is the
wholly owned Indian operating company.
Under Indian Company Law, the Directors are required to declare that appropriate financial and compliance
processes are both in place and operating effectively. The Board ensures that processes are being effectively
followed through a rigorous internal audit programme, supported by external audits.
Chairman and Chief Executive Officer, Mytrah Energy Ltd.
Nominations Committee Chairman, Mytrah Energy Ltd.
Chairman, Mytrah Energy (India) Ltd.
Mr. Ravi Kailas has 25 years of entrepreneurial
experience in telecom, franchising, manufacturing,
software, infrastructure and financial options. He
was the founder of a number of start-up companies,
including Zip Global network, a telecom services
company, Xius Technologies, a telecom software
company, and Altius, a real estate options company.
Mr Kailas has a Bachelor’s degree in Electronics
and Communications Engineering from Osmania
University and a Master’s degree from the Graduate
School of Business, Stanford University.
Ravi Kailas
Non-Executive Director & Audit Committee Chairman,
Mytrah Energy Ltd.
Independent Director & Audit Committee Chairman,
Mytrah Energy (India) Ltd.
Mr Russell Walls has a strong financial background,
with extensive experience as a finance director,
and possesses a broad range of experience across
a number of sectors. Mr Walls is currently Non-
Executive Director of Biocon Limited (healthcare),
Signet Jewellers Ltd (retail) and the regulated holding
company for the UK General Insurance business
of Aviva (Insurance) plc. Mr Walls was formerly
independent Non-Executive Director and Chairman
of the Audit Committee of Aviva (Insurance) plc,
Group Finance Director of BAA plc (transport),
Wellcome plc (pharmaceuticals) and Coats Viyella
plc (textiles). In addition, Mr Walls was former senior
Independent Non-Executive Director and Chairman
of the audit committee of Stagecoach Group plc
(transport) and Hilton Group plc (leisure).
Russell Walls
40 Mytrah Energy Limited Annual Report 2015
Shirish Navlekar
CFO & Director, Mytrah Energy (India) Ltd.
Over 33 years of experience in the Infrastructure Sector. Previously, he was the CEO of the Power Business of
Cairn India Limited and CFO in the Delhi International Airport and Head of Project Finance at GMR. Has also
worked with leading multinational corporations including General Electric, Mirant Asia Pacific Ltd. and Coastal
Power Company.
Non-Executive Director & Remuneration Committee
Chairman, Mytrah Energy Ltd.
Independent Director, Mytrah Energy (India) Ltd.
Mr. Phansalkar is the Chairman and CEO of RKP
Capital Inc., a US based merchant banking boutique.
He was previously the Chairman and CEO of Osicom
Technologies, an optical networking company. He
was the co-founder, Vice Chairman and CEO of
Newbridge Capital, a private equity firm investing
in India, and formerly the Head of Energy Finance
Group at Oppenheimer & Co. Mr Phansalkar was
Co-head of the Energy Finance Group at Shearson
American Express, Managing Director of Bear
Stearns and Managing Director at Oppenheimer &
Co. Mr Phansalkar was the Founding Chairman of The
India Fund. Mr Phansalkar received an MBA from the
Graduate School of Business, Harvard University.
Director, Mytrah Energy (India) Ltd
25 years of experience in the Energy Industry,
including 17 years in Oil & Gas with BP, and 8 years
in Renewables, including Solar, Marine and Wind.
Currently leads Investor Relations for Mytrah Energy
Ltd.
Nominee Director, Mytrah Energy (India) Ltd.
Over 20 years of experience across operations
and investments, principally in the transportation
and energy sector and is on the Board of several
Infrastructure Companies. He is currently responsible
for origination and execution of transactions at IDFC
Alternatives.
Independent Director, Mytrah Energy (India) Ltd.
A partner in the Delhi office of Trilegal, specialises
in mergers and acquisitions, joint ventures, private
equity investments, entry strategies and foreign direct
investment. Currently Secretary of the International
Bar Association (IBA) Women’s Interest Group and
Vice Chair of the Inter Pacific Bar Association (IPBA)
Legal Practice Committee.
CFO, Mytrah Energy Ltd.
Managing Director, Mytrah Energy (India) Ltd.
Worked in the Energy & Utilities investment
banking group at Credit Suisse in New York, where
he was involved in a number of renewable energy
transactions. Prior to joining Credit Suisse, he was
associated with Deloitte Consulting in Hyderabad.
Rohit Phansalkar
Bob Smith
Milind Joshi
Charandeep Kaur
Vikram Kailas
Overview
Corporate Governance
Business Review
Financial Statements41Mytrah Energy Limited Annual Report 2015
ProactiveThe Board of Mytrah Energy Ltd. brings together
exceptional governance experience across multiple
countries. It is supported by the strong and highly
experienced Board of our Indian operating company,
Mytrah Energy (India) Ltd.
Mytrah invested in SAP before it installed any wind
turbines, convinced that process would precede profit.
All its payments are processed through this system
and checked by the internal audit team.
Mytrah appointed Big Four auditors (E&Y as the co-
sourced internal auditor and KPMG as the external
auditor) even before it had generated a rupee of
revenue.
More than mandatedMytrah believes that good corporate governance
emerges from the application of the best management
practices and upholding not only the letter of the law,
but also the spirit of it. Hence, apart from complying
with the mandatory requirements prescribed by AIM,
the Company has implemented a number of non-
mandatory policies and guidelines, aiming to capture
the best of both Indian and UK practices.
We have put into place farsighted and rigorous policies
pertaining to:
Code of conduct
Bribery and corruption
Business relationships (including business courtesy),
dealing with government officials and other corporates
Fraud detection and prevention
Selecting suppliers and fair dealings
Sexual harassment at the workplace
Corporate social responsibility
Conflict of interest and whistleblowing
Mytrah has established a mechanism of periodic
online self-declaration, wherein all employees need to
declare that they are familiar with and abide by the
governance policies, and report any deviations. There
is also an established online process to seek consent
before entering into a transaction which may carry a
risk of conflict with the Group’s policies and any such
transaction is declared to the Board on a quarterly
basis.
Mytrah has an internal audit team, the MAG (Management
Assurance Group) which is ISO 9001:2008 certified for
its quality compliance while conducting audits. The ISO
certification has been maintained and there were no
deviations noted during the surveillance audit conducted
by the certifying agency. The MAG team assists the Board
in implementation of the governance policies and in
strengthening and streamlining business processes.
42 Mytrah Energy Limited Annual Report 2015
Quality, Safety, Health and EnvironmentManagement of QSHE is a strategic focus area for
the Mytrah group. The Company has benchmarked
its Operation & Maintenance and Power Marketing
processes against the world’s best quality standards.
Mytrah Energy (India) Limited (MEIL) has certificated
for ISO 9001:2008, ISO 14001:2004 and OHSAS
18001:2007 standards for integrated quality,
environmental and occupational health and safety
management systems.
ISO 9001 Quality Management System Standard —
formalises our commitment towards quality of work
ISO 14001 Environmental Management Systems
Standard — formalises our commitment towards the
environment
OHSAS 18001 Occupational Health & Safety
Management System Standard — formalises our
commitment towards a safe and healthy workplace
Our belief
Overview
Corporate Governance
Business Review
Financial Statements43Mytrah Energy Limited Annual Report 2015
At Mytrah, our competitive advantage is derived from the passion and knowledge brought to the fore by our people.
Our people
On-time execution of our projects would not be
possible without the hard work and dedication of our
people across all our divisions.
In a rapidly growing renewable energy sector, we are
committed to attracting and retaining the best people,
and developing them to ensure they achieve their full
potential.
At Mytrah, we have created just such an organisational
culture. Over the years, we have grown virtually from
scratch in 2010 to around 200 professionals by the
close of 2015 .
Our competitive advantageMytrah is a company established around a culture of
maverick achievement, sustained outperformance and
the need to emerge as a respected global benchmark.
The Company’s average age is well below the age
group in peer sectors.
The Company selected to recruit a combination of
professionals from outside the utility or renewable
energy sector, infusing creative freshness, and
experienced industry professionals.
We aim to be consistently recognised as an employer
of choice with a competitive reward structure that
recognises performance and retention levels that are
above the industry norm. The Company demonstrated
a high retention of people that was higher than the
industry benchmark; the retention at the senior
manager level was nearly 100%.
Key initiatives undertaken during the yearThe Company embarked on the creation of a corporate
brand that would attract talent. The Company
strengthened its positioning around stability and
entrepreneurial vigour.
The Company enriched its talent pool through selective
recruitment from prominent management and
Engineering institutes. The ensuing Mytrah Leadership
Talent program, is a specific program launched recently
to identify budding young, entrepreneurial talent from
Management Institutes who will be business leaders
of the Company. This recruitment is followed by a
planned rotation across all the Company’s functions for
a year with the objective to fast-track the individual’s
growth towards business roles within the organisation.
The planned rotation would enable them to get a well-
rounded perspective of the various roles and functions
in the organisation, thus preparing for the rigour ahead
as they scale the corporate ladder.
The Company also embarked on the process of creating
a leadership pipeline, by shortlisting nearly a dozen of
employees for larger responsibilities. This was part of
the leadership development program of identifying
and strengthening the leadership pipeline from within
the organisation. The leadership development program
mapped the internal leaders against a set of leadership
competencies and clearly defined the development
programs for each one of them to be leader ready
Productivity (Employee per MW)
Dec 2011 - 0.67 Dec 2012 - 0.62 Dec 2013 - 0.68 Dec 2014 - 0.37 Dec 2015 - 0.44
The O&M and Projects team are highly skilled and efficient which helped the Company to achieve one of the highest productivities (employee per MW).
44 Mytrah Energy Limited Annual Report 2015
in a couple of years. This programme has a mix of
premier business school exposure coupled with action
learning methodology in key projects and coaching
interventions.
The Managerial Leadership Program was also launched
to fast track the junior level managers who exhibited
strong managerial traits. The leadership and managerial
programs will strengthen the middle and senior levels
of the organisation thus preparing the organisation for
accelerated growth and people readiness.
During the year, apart from strengthening the talent pool,
there was equal emphasis on rewards and recognition
of our valued employees. We have constantly strived
to reiterate the way we reward employees and
enhance our employee recognition experience. Our
reward and recognition experience are modelled
around constant feedback during the performance
management process and acknowledgement in forums
to reinforce positive affirmation. In order to retain top
talent and encourage high performance, the Company
announced an Employee Stock Option Plan and a
financial retention scheme for its high performers and
potential achievers.
The Company continued to invest in many initiatives
that build positive employee experiences ranging from
investment in learning programs, celebrating successes,
encouraging work life balance, health awareness
camps, encouraging employees to contribute ideas &
suggestions and fun at workplace.
Overview
Corporate Governance
Business Review
Financial Statements45Mytrah Energy Limited Annual Report 2015
At Mytrah, we invest in communities with as much passion as we invest in our core business.
Our responsibility
Mytrah is a responsible corporate citizen.
Over the last few years, the Company has extended
its distinctive business focus and passion to its CSR
engagement as well.
Towards achieving harmony between business
interests and our socioeconomic and environmental
responsibility, a conscious effort is being made to
align ourselves with the charitable activities defined
under Section 2 (15) of the Indian Income Tax Act
1961, activities specified in Schedule VII of the Indian
Companies Act 2013 and the UN agreed Sustainable
Development Goals (SDGs).
CSR approach Mytrah is committed to play the role of a catalyst in
promoting comprehensive development by facilitating
participatory community development with enduring
impact. We consider participation as a process of
empowerment and an effective means of collaboration.
CSR strategyMytrah considers the community as a priority
intervention area; it is committed to embark on
result-oriented projects/programmes guided by need
based-analyses and stakeholder consultations. Mytrah
undertakes and supports CSR initiatives beyond its
geography in addition to affirmative action on matters
of national importance based on community needs
and exigent circumstances (natural disasters).
The Company’s CSR engagement covers four
prominent areas:
Development skills and promoting entrepreneurship
Undertaking WASH (water, sanitation and hygiene)
initiatives
Promoting sports
Forging collaborations and partnerships
CSR initiatives Link Volunteers Project: The Link Volunteers is a
partnership project with Banerjee & Luke Foundation,
being implemented in Borabanda, a conglomeration of
slums in Hyderabad. The project has three objectives:
improve knowledge and skills of 100 Link Volunteers to
deliver better urban healthcare services in the selected
slums; establish early diagnosis methods, collect
epidemiological data from the slum area population
related to hypertension and diabetes to facilitate
early intervention services; to eventually create viable
associations in primary healthcare management,
through collaborative efforts between non-government
and government organisations; replicating/expanding
the project and influencing healthcare policies of the
state.
46 Mytrah Energy Limited Annual Report 2015
Skill building and Entrepreneurship Development
Project: This partnership project with BAIF
Development Research Foundation (national NGO
with over 48 years of community development
experience) is the outcome of a ‘Needs Assessment’
survey conducted at Nazeerabad in Ranga Reddy
district of Telangana State and Savalsang of Vijayapura
district of Karnataka. The purpose of this project is to
promote livelihood opportunities through skill building
and entrepreneurship development.
Swachh Bharat Sanitation Project: This partnership
project with the Government of Andhra Pradesh makes
it possible to contribute to the Individual House Hold
Sanitation initiative of SWACHH Bharat programme of
GoAP through the construction of 500 household toilets
in Guntur and Kurnool districts (Andhra Pradesh).
Art for Social Cause - Kala Mytrah Project: Driven
by Mytrah Energy’s recognition of the power and
contributory role of art and culture in consistently
employing imagination and creativity to espouse social
cause, enact human feelings and establish the message
for humanity and society, an Art for Social Cause
-Art Camp was conducted, with exclusive paintings
contributed by renowned artists from India. The sale
proceeds of which are directed towards the project
Kala Myth. The project (in collaboration with UNICEF)
provides technical support. Mahita, an NGO based at
Hyderabad with over 20 years of work experience in
social development, is executing the project.
The objectives of the project: Facilitating secondary
coaching and certification along with life-skills to
500 adolescent girls in the age-group of 14-19 years
in Borabanda (at least 75% to pass the Secondary
Education examination); formation and strengthening
adolescent girls collectives in four centres to help young
girls and children restore their rights through parents,
community involvement and participation; showcasing
project results to relevant government partners
and supporting them to develop comprehensive
programmes for the empowerment of adolescent girls
with a focus on their education.
Support to sports Mr. Indrajit Singh, shot putter and first athlete to
qualify for Rio 2016 Olympics, is being supported by
Mytrah.
Ms. Arunima Sinha’s (first Indian woman amputee to
climb Mount Everest) Sports Academy for disabled
children is being supported.
Mr. Abhishek Kumar Sharma, cyclist, who is on a
mission to complete 20,000 km of cycling across
India, while promoting the Swachh Bharat initiative,
has been supported by Mytrah to complete his journey
of 3900 kilometres from Hyderabad to New Delhi,
where he will meet the Honourable Prime Minister.
Mytrah is contemplating the possibility of establishing
a sports academy with a focus on supporting budding
sports persons.
Facilitating secondary coaching and certification along with life-skills to 500 adolescent girls in the age-group of 14-19 years in Borabanda
Overview
Corporate Governance
Business Review
Financial Statements47Mytrah Energy Limited Annual Report 2015
Principal risks and uncertainities
Operational RiskMitigation
Mytrah employs external and
internal specialists to estimate
the long-term energy yield from
its projects. These predictions are
based upon historical measured
weather patterns, which are used
to calculate energy yields over
a 20-year period. The analysis
provides the Group with a range
of possible forecasts, ranging from
50% (p50) certainty up to 90%
(p90) certainty for the long-term
energy yield from its projects.
Mytrah’s projects, in common
with other renewable energy in
India, enjoy a preferential right to
access the grid, displacing fossil
fuel generation when necessary.
The Group proactively engages
with the Government and utilities
to ensure that its projects are able
to export power into the grid as
required. To protect the Group
against technical performance risk,
we seek contractual protection by
warranty
Generation Performance
The amount of electricity
produced from wind and solar
technologies is dependent
on the prevailing weather
conditions, which are variable
in nature. External factors like
grid connectivity may affect
the performance of wind and
solar farms. New projects also
carry a risk that the technical
performance of the plant is not
as planned.
FundingMitigation
The Group has a finance team
with significant corporate finance
experience to proactively manage
the various funding activities. The
team has established long term
relationships across a diverse
range of finance providers in
India and has demonstrated its
ability to find innovative financing
approaches that reduce the cost
of debt.
The execution of the Group’s
growth pipeline will be dependent
on the ability to secure adequate
sources of project finance, at
an appropriate cost and time,
to finance the construction of
future projects.
Counterparty risk of suppliers and power off-takersMitigation
The Group manages this risk
through credit checks, bank
guarantees and the careful drafting
of contracts in consultation with
internal and external legal advisors
where appropriate.
The Group also continuously
monitors the credit ratings and
financial health of the State utilities,
which purchase its electricity, with
a focus on payment track records.
The Group has exposure to the
failure of contract performance
by its contractual counterparties
(EPC contractors, consultants,
banks and financial institutions,
and power off-takers). This could
affect the revenue in the short-
to medium-term.
Business interruption/critical service failureMitigation
Mytrah uses independent
consultants to evaluate wind
turbine generators supplied to our
wind farms on a periodic basis. We
ensure preventative maintenance
is undertaken as required and
closely monitor spares stocks
and the performance of our O&M
teams. The Group has built a highly
experienced asset management
team to assure, and where
possible enhance, standards of
asset management across all of
the Group’s wind and solar plants.
The Group’s current operations
and maintenance activities are
undertaken by third parties and
also by in-house teams. In the
event that a critical resource
was not available then this could
affect the operation of a wind
farm and have a knock-on effect
on our revenue.
48 Mytrah Energy Limited Annual Report 2015
TechnologyMitigation
The Group has relationships
with a variety of wind and solar
equipment suppliers, each using
its own technology. This diverse
supplier base, together with
the experience of the internal
team, gives the Group access to
extensive knowledge about current
and future technology trends and
enables informed decision making
when selecting the technology for
each project.
A rigorous technology selection
process and strong IT security
is enabled to mitigate the risk. IT
systems are constantly reviewed
and updated to meet the needs of
the Group. Procedures have been
established for the protection of
our technology assets.
The performance of the Group’s
wind farms is affected by
the choice, deployment and
subsequent development of
wind turbines, solar modules and
key operating technologies.
The Group must maintain,
develop and avoid interruption
to its turbines and key
information technology systems
and adequately protect key data.
Execution of projects on timeMitigation
The Group manages these risks
through selecting sites on which
it believes it can secure planning
and development consent,
employing suitably qualified and
significantly experienced staff to
manage the consenting process
and ensure compliance with
the latest legislation, as well as
ensuring maximum engagement
of local authorities and interested
stakeholders from a very early
stage. The Group has significant
experience of securing planning
consents for renewable energy
projects and knowledge of the
important stages involved. The
Group uses this experience when
selecting sites for development.
Key concerns are addressed
through periodic review meetings
of top management teams at site
and head offices.
The construction and
commissioning of the projects
may be delayed due to several
exogenous factors such as delays
in supply from various contractors,
accidents, unforeseen difficulties
with land procurement, changes
in Government policies, delays in
receipt of necessary regulatory
approvals and non-availability of
external infrastructure such as
transmission lines, leading to cost
and interest overruns.
Government, political and regulatory issuesMitigation
The Group continuously monitors
possible changes to legislation and
engages in consultation processes
to safeguard the Group’s interests.
The Group has embedded
operating policies and procedures
in all of our businesses to ensure
compliance with existing legislation
and regulation.
The Group actively engages with
the relevant government and
association and policy makers to
help ensure that we are properly
positioned to respond to any
proposed changes.
The Group’s business is subject
to laws and regulations covering
a wide range of matters including
health and safety, equipment,
employment, insurance coverage
and other operational issues,
which can change failure to
comply could have financial or
reputational implications, could
result in increased litigation and
claims and have a negative impact
on the Group’s ability to expand
and business profitability.
Interest ratesMitigation
The cost of debt is factored into
each project at the evaluation stage
to ensure it meets or exceeds our
minimum IRR requirements. The
Group maintains a diverse range of
financing structures in its projects
and has flexibility to adjust these
in response to changing interest
rates.
The largest operational cost of
the Group is the cost of debt. The
Group’s projects are financed
by project-based debt. Adverse
changes in interest rates could
have a material impact on cash
flows and profitability.
Overview
Corporate Governance
Business Review
Financial Statements49Mytrah Energy Limited Annual Report 2015
Directors’ Report
The Directors present their report, together with the
audited financial statements for the year ended 31
December 2015. The information in the Chairman and
Chief Executive’s Statement, the Business Review, the
Directors’ Profiles, the Corporate Governance Report
and the Directors’ Responsibilities Statement form
part of the Directors’ Report. These together contain
certain forward looking statements and forecasts with
respect to the financial condition, results, operations
and business of Mytrah Energy Limited which may
involve risk and uncertainty because they relate to
events and depend upon circumstances that will
occur in the future. There are a number of factors that
could cause actual results or developments to differ
materially from those expressed or implied by these
forward looking statements and forecasts. Nothing
in this Annual Report to shareholders should be
construed as a profit forecast.
Principal activities and review of businessThe principle activities of the Group are developing,
owning and operating renewable energy assets in
India. A detailed review of the business is set out in the
Chairman and Chief Executive’s Statement on page 16.
Business ReviewThe Company is required by the Companies (Guernsey)
Law 2008 to include a Business Review in this report.
The information that fulfils the requirements of the
Business Review can be found on pages 16 to 49, which
are incorporated in this report by reference.
Results and dividendsThe Group posted profit after tax of USD 0.39m for the
year ended 31 December 2015 (31 December 2014: USD
1.88m) on a turnover of USD 74.72m (31 December
2014: USD 69.55m) and EBITDA of USD 65.28m (31
December 2014: USD 56.12m). At 31 December 2015
the Group had cash and bank balances including liquid
investments of USD 98.96m (31 December 2014: USD
25.23m).
The Directors do not recommend the payment of a
dividend for the current year (31 December 2014: USD
nil).
Capital StructureAs at 31 December 2015 the Company had an issued
share capital of 163,636,000 ordinary shares with
no par value (refer note 29). The Company has one
class of ordinary shares, which carry no right to fixed
income. Each share carries the right to one vote
at general meetings of the Company. There are no
specific restrictions on the size of a holding nor on the
transfer of shares, which are both governed by the
general provisions of the Articles of Incorporation and
prevailing legislation. The directors are not aware of
any agreements between holders of the Company’s
shares that may result in restrictions on transfers or on
voting rights.
During the year the Company has replaced the warrants
issued in 2014 by issuing 11,439,762 new warrants to
non-convertible debenture investors (‘investors’).
These new warrants provide an option to the investors
to purchase an equivalent number of ordinary shares in
Mytrah Energy Limited at a fixed price of GBP 0.7729.
Details of employee share schemes are set out in note
38 of the consolidated financial statements.
No person has any special rights of control over the
Company’s share capital and all issued shares are fully
paid.
50 Mytrah Energy Limited Annual Report 2015
The Board has a breadth of experience relevant
to the Group at its current stage of development
and the Directors believe that any changes to the
Board’s composition can be managed without undue
disruption.
The biographical profiles of the Directors can be found
on page 40.
The Company’s Articles of Incorporation require that
all Directors are subject to re-election by shareholders
at the first Annual General Meeting following their initial
appointment, and at each Annual General Meeting
one-third of the Directors retire by rotation. The Board
has voluntarily adopted the relevant provisions of the
UK Corporate Governance Code regarding annual re-
election of directors and will all offer themselves for
re-election by shareholders at the 2016 Annual General
Meeting.
Directors’ InterestsDetails of the share interests of the Directors, their
service contracts and terms of appointment are shown
in the Remuneration Report.
Directors’ indemnity and insuranceThe Company provides an indemnity to all its Directors
with respect to liablilities arising from the fulfilment (or
lack thereof) of their duties as Directors. The Company
also has in place liability insurance covering the
Directors. Both the indemnity and insurance were in
force during the year ended 31 December 2015.
Name Age Position Date of Appointment
Ravi Kailas 49 Chairman and CEO 13 August 2010
Rohit Phansalkar 71 Non-Executive Director 13 August 2010
Russell Walls 72 Non-Executive Director 4 November 2011
DirectorsThe directors, who served throughout the year were as follows:
Substantial shareholdersOn 31 March 2016, the Company had been notified of the following holdings of 3% or more of the 163,636,000
Ordinary Shares:
Name Percentage of voting rights
and issued share capital
The Raksha Trust* 58.5
Esrano Overseas Ltd 14.6
Capital Research Global Investments 7.4
Henderson Global Investors 5.5
Moab Capital Partners LLC 3.4
*The Raksha Trust is a Jersey based discretionary trust settled by Ravi Kailas, the Chairman and CEO of the
Company, of which he and some of his family members and also a philanthropic trust are discretionary beneficiaries.
Acquisition of the Company’s own sharesThe Company did not acquire any of its shares during the year ended 31 December 2015 (year ended 31 December
2014: nil).
Overview
Corporate Governance
Business Review
Financial Statements51Mytrah Energy Limited Annual Report 2015
Statement of Directors’ responsibilities in respect of the Annual Report and the consolidated financial statementsThe Directors are responsible for preparing the Annual
Report and the financial statements in accordance
with applicable law and regulations.
The Directors have elected to prepare the consolidated
financial statements in accordance with International
Financial Reporting Standards (‘IFRS’) as adopted
by the European Union. The consolidated financial
statements are required to give a true and fair view of
the state of affairs of the Group and of the profit or loss
of the Group for the year.
In preparing those consolidated financial statements,
the Directors are required to:
Select suitable accounting policies and then apply
them consistently;
Make judgments and estimates that are reasonable
and prudent;
State whether applicable accounting standards have
been followed, subject to any material departures
being disclosed and explained in the consolidated
financial statements; and
Prepare the consolidated financial statements on
the going concern basis unless it is inappropriate to
presume that the Group will continue in business.
The Directors confirm that they have complied with
the above requirements in preparing the annual
consolidated financial statements.
The Directors are responsible for keeping proper
accounting records that disclose with reasonable
accuracy at any time the financial position of the Group
and enable them to ensure that the consolidated
financial statements comply with the Companies
(Guernsey) Law 2008. They are also responsible for
safeguarding the assets of the Group and hence for
taking steps to prevent and detect fraud and other
irregularities.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information
included in the Company’s website.
In addition, the Directors confirm, to the best of their
knowledge, that:
The Group financial statements prepared in
accordance with IFRS as adopted by the European
Union give a true and fair view of the assets, liabilities,
financial position and profit of the Group; and
The Business Review includes a fair review of the
development and performance of the business and the
position of the Group, together with a description of
the principle risks and uncertainties that it faces.
Disclosure of information to auditorsEach Director has responsibility for ensuring that, as
far as he is aware, there is no relevant audit information
of which the auditors are unaware, and that he has
taken all the steps that he ought to have taken to
make himself aware of any relevant information that is
relevant to the preparation of the auditors’ report and
to establish that the Group’s auditors are aware of that
information.
AuditorsThe Auditors, KPMG Audit LLC, were appointed at
the Annual General Meeting held on 6 August 2015.
A resolution concerning the re-appointment of KPMG
Audit LLC as Auditors will be proposed at the 2016
Annual General Meeting.
By order of the Board
Susan WallaceCompany Secretary
25 February 2016
Registered Office:Ground Floor
Dorey Court
Admiral Park
St Peter Port
Guernsey
GY1 2HT
52 Mytrah Energy Limited Annual Report 2015
Corporate Governance Report
The Board embraces the high standards of corporate
governance contained in the 2013 Quoted Companies
Alliance Corporate Governance Guidelines for Smaller
Quoted Companies (“QCA Guidelines”) and, where
relevant, the UK Corporate Governance Code issued
by the Financial Reporting Council.
In respect to the QCA Guidelines, as at the date of
this report the Group was compliant, save that the
Board does not have a Chairman deemed independent
on appointment as recommended under Guideline 9 of
the said QCA Guidelines. However, the Board believes
that Ravi Kailas’s appointment as Chairman and CEO
is appropriate for the business in its current stage of
development.
The Board continually reviews its governance arrangements. During the year: An annual Internal Audit Plan was approved and
adopted for the Group’s subsidiaries in India (where the
principle operations of the Group are undertaken). The
internal assurance group along with the external advisers
were appointed to conduct regular assessments on
internal and external regulatory and legislative issues
pertinent to the Group, such as compliance with Land
Procurement and Land Laws, EHS compliance, entity
level fraud risk management framework and balance of
plant operations. These assessments are reviewed by
the MEL Audit Committee on a quarterly basis;
As part of the Annual Internal Audit Plan, the Internal
Auditors conducted periodic fraud and corruption
and risk assessment audit reviews and reported their
findings on a quarterly basis to the Audit Committee
which, in turn, made recommendations to the Board
where appropriate;
The Board conducted an annual Board and
Committee effectiveness review;
The Board and its Committees reviewed and updated
their terms of references, to ensure they are in line with
best practice and corporate governance guidelines.
The Board maintained a responsibilities’ statement
setting out the roles and responsibilities of the Board,
Chairman and CEO and the Senior Independent
Director. In line with best practice, the Board made the
current terms of reference for each Board Committee
available on the Investor Relations’ section of the
corporate website.
The BoardComposition
The composition of the Board is shown on page 40. It
is considered that a smaller number of directors allow
the Board to work more effectively and increase the
speed and efficiency of decision making at MEL, given
that the majority of operational decisions are actually
made at the Board of the wholly owned subsidiary,
Mytrah Energy (India) Ltd (MEIL). The Directors of
MEL, along with a number of others, are also Directors
of MEIL.
The Role and Operations of the Board
The role of the Board is to ensure delivery of the
business strategy and long-term shareholder value.
The general obligations of the Board and the roles and
responsibilities of the Chairman and CEO and Senior
Independent Director are set out in a formal Board
responsibilities statement approved by the Board. The
Board fulfils its role by approving the annual operating
plan and monitoring business performance throughout
the year. The Board held four formal scheduled Board
meetings during the financial year and in addition held
a number of unscheduled ad-hoc meetings, typically
by conference call. There is in place a schedule of
matters reserved for Board approval.
The Board have approved an annual Board calendar
setting out the dates, location and standing agenda
items for each formal scheduled Board and Committee
meeting and scheduled Board calls. Board papers are
circulated to Directors in advance of scheduled and
unscheduled meetings, which are of an appropriate
quality to enable the Directors to fulfil their obligations
and adequately monitor the performance of the
business. Directors who are unable to attend a
meeting are expected to provide their comments to
the Chairman and CEO, Senior Independent Director or
the Company Secretary as appropriate. The Board also
receive management information on a regular basis
Overview
Corporate Governance
Business Review
Financial Statements53Mytrah Energy Limited Annual Report 2015
which sets out the performance of the business.
During the year, the topics subject to Board discussion
at formal scheduled Board meetings included: -
Business strategy and Annual Operating Plan;
Investor relations;
Financial and operational performance;
Project updates;
Market and competitor reports;
Acquisitions and Group structure changes;
Financing activities and facility agreements;
The issuance of warrants;
Industry regulatory and compliance developments;
Related party transactions;
Approval of Annual and Half-Year Reports;
Findings of the Board and Committee effectiveness
review;
Board Evaluation Review;
Risk and internal controls
Approval of CSR policy
Attendance at scheduled Board Meetings during the year is shown below:
Formal Scheduled Board Meetings during the
year ended 31 December 2015
Director Maximum
Possible
Attendance
Meetings
Attended
Attendance
Ravi Kailas 4 2 2
Rohit Phansalkar 4 4 4
Russell Walls 4 4 4
Board Balance and Independence
Following an annual formal review by the Board
undertaken in December 2015, taking into account all
relevant factors as set out in the QCA Guidelines and
UK Corporate Governance Code, the Board considers
Rohit Phansalkar and Russell Walls to be independent
in character and judgment.
Whilst the Board does not have a Chairman who was
deemed independent on appointment, the Board
consists of one executive director and two independent
non-executive directors. Consequently, over half the
Board is comprised of independent non-executive
directors to ensure that no individual or small group of
individuals can dominate the Board’s decision taking.
Senior Independent Director
Russell Walls is the Senior Independent Director. He is
available to investors to discuss governance issues or
should there be matters of concern that have not, or
cannot, be addressed through the normal channels of
communication with the Chairman and CEO.
Russell Walls is also available to act as an intermediary
between Directors, if required, and to act as a sounding
board for the Chairman and CEO.
Advice, Insurance and Indemnities
All Directors have access to the services of the
Company Secretary and may take independent
professional advice at the Company’s expense in
conducting their duties.
The Company provides indemnity insurance cover
for its Directors and officers, which is reviewed and
renewed annually.
Conflicts
Consideration of Directors’ interests is a standing
agenda item at each formal scheduled Board meeting.
Each Director is required to disclose any actual or
potential conflicts of interest and a register of Directors’
interests is maintained by the Company Secretary. If
there is a conflict of interest or a matter relating to a
particular Director or a related party transaction, then
the Board understands that the relevant Director shall
excuse themselves from the discussion.
Board Evaluation
A formal and rigorous evaluation of the performance
and effectiveness of the Board and its Committees
was undertaken in Q4 2015 and was coordinated by
the Company Secretary. The review focussed on
important factors such as; internal communications, risk
management, succession and committee structures
and internal and external stakeholder communications.
The review gave the Board an opportunity to identify
a small number of areas of corporate governance
matters to be addressed in more detail in 2016.
Throughout the year the Board has continued to
review and assess all policies and practices throughout
the organisation to comply with the highest standard
of corporate governance best practice.
54 Mytrah Energy Limited Annual Report 2015
The Board will consider each year whether the review
should be conducted by an independent third party.
Board Development
All new Directors appointed to the Board receive a
comprehensive structured induction programme. In
2015, Russell Walls and Rohit Phansalkar visited the
Hyderabad Office four times during the year, where
they had a structured programme of both formal and
informal meetings with senior management.
Reappointment of Directors at the Annual General
Meeting
The Company’s Articles of Incorporation require all
new Directors to submit themselves for re-election by
shareholders in their first year following appointment.
The Company’s Articles of Incorporation also require
all Directors to submit themselves for re-election at
least every three years if they wish to continue to serve
on the Board and are considered by the board to be
eligible.
It is deemed best practice in the UK for the boards
of FTSE350 listed companies to annually submit
themselves for re-election by shareholders. The Board
has decided to voluntarily comply with this provision
of the UK Corporate Governance Code and annually
submit themselves for re-election at the Annual
General Meeting.
Relations with investors
Throughout the year, Ravi Kailas and Bob Smith, a
Director of Mytrah Energy (India) Limited, met regularly
with shareholders and their views were reported back
to the Board. This allowed all Directors to develop
a good understanding of the shareholders’ needs
and expectations and in turn for the shareholders to
appreciate the opportunities and constraints faced by
the Group. Consideration of investor relations issues
is a standing agenda item at each formal scheduled
Board meeting.
The Company produces an Annual Report which is
distributed to all shareholders and available on the
investor relations section of the Company’s website,
which also contains information on the Group, copies
of Board Committee terms of references and market
announcements.
The Board ensures that financial reporting and
operational updates are communicated to the market
on a timely basis and give an accurate and balanced
assessment of the business. The Company’s share
dealing policy sets out how the Directors meet their
obligations under the AIM rules in this regard and how
the advisers are involved in the market communications
process coordinated by the Company Secretary.
Board Committees
The terms of reference of the Board Committees set
out below are all available in the corporate governance
section of the Company’s website at www.mytrah.com.
NominationMembership
Since November 2012, the Nomination Committee
is chaired by Ravi Kailas and its other members are
Rohit Phansalkar and Russell Walls. The Committee
formally met once during the year to review Board
and Committee composition. The Committee has a
calendar of activities for the year.
Attendance at scheduled Committee Meetings during the year is shown below:
Director Maximum Possible
Attendance
Meetings
Attended
Ravi Kailas 1 1
Rohit Phansalkar 1 1
Russell Walls 1 1
Responsibilities
The key responsibilities of the Committee are:-
i. Recommending Director nominees to the Board;
ii. Recommending Committee chairs and membership
to the Board and Committees;
iii. When appropriate, taking into account the current
stage of the Company’s development, reviewing
succession plans for the Board and Committees;
iv. Making recommendations to the Board in respect
of the re-appointment of any non-executive
Director at the conclusion of their specified term
of office taking into account their performance and
their contribution together with the knowledge,
skills, leadership and experience requirements of
the Board and Committees; and
v. Regularly reviewing the structure, size and
composition (including the balance of skills,
knowledge and experience) required for the Board.
Overview
Corporate Governance
Business Review
Financial Statements55Mytrah Energy Limited Annual Report 2015
RemunerationFull information on the composition, role, operation and
meeting attendance of the Remuneration Committee
is set out in the Remuneration Report on page 58.
AuditMembership
Since November 2012, the Audit Committee is chaired
by Russell Walls and its other member is Rohit
Phansalkar. Russell Walls is considered by the Board to
have recent and relevant financial experience.
The Committee has a calendar of activities agreed
each year. Senior management, the external auditors
and a representative of the out-sourced internal
audit service providers, (Ernst & Young), may attend
meetings at the request of the Committee. Ravi Kailas
has a standing invite to attend all meetings and receive
all meeting materials.
Attendance at scheduled Committee Meetings during
the year is shown below. Additional ad-hoc meetings
by conference call were also held during the year.
Responsibilities
The key responsibilities of the Committee are:
i. Monitoring the integrity of financial statements,
including approving any material changes
in accounting policy, reviewing the financial
statements, and any market announcements
relating to the Group’s financial performance;
ii. Reviewing the integrity of internal financial control
and risk management systems and codes of
corporate conduct and ethics and any published
statements regarding these systems and codes;
iii. Making recommendations to the Board regarding
the engagement of the external auditors, approving
their terms of engagement, monitoring their
objectivity and performance and setting policy
regarding the provision of non-audit services by the
external auditors;
iv. Reviewing the plan, scope and results of the annual
audit, the external auditors’ letter of comments and
management’s response thereto; and
v. Receiving reports from internal audit relating to
risk control and management’s response to internal
audit review findings.
During the year, the topics subject to Committee
discussion at formal scheduled Board meetings
included:
Receipt and consideration of reports from the
external auditors regarding the scope and findings of
their audit of the annual report and review of the half-
year report;
Recommendation of the annual report and half-year
report to the Board for approval, together with the
management representation letter and audit fees;
Review of audit and non-audit related fees paid to
the external auditors and monitoring the independence
of the external auditors;
Receipt and consideration of reports from the
internal auditors and management’s responses to their
findings; and
Review and consideration of accounting treatment
policy changes in line with industry practice, as
recommended by external auditors.
To ensure the objectivity and independence of the
external auditors, any service provided by the external
auditors must be approved in accordance with the
Group’s policy on auditor independence and the
provision of non-audit services, which is consistent with
the UK Auditing Practices Board’s Ethical Standards
for Auditors.
The external auditor is only selected to provide
non-audit services if they are well placed to provide
the required service at a competitive cost and the
Committee is satisfied that the assignment will not
impair their objectivity. In accordance with relevant
professional standards, the external auditors have
confirmed their independence as auditors in a letter
to the Directors. Details of fees paid to the external
Attendance at scheduled Committee Meetings during the year is shown below. Additional ad-hoc meetings by
conference call were also held during the year.
Director Maximum Possible
Attendance
Meetings
Attended
Rohit Phansalkar 3 3
Russell Walls 3 3
56 Mytrah Energy Limited Annual Report 2015
auditors for both audit and non-audit services are
given in the note 9 to the financial statements.
Internal ControlThe Board is responsible for ensuring the Group has
effective and sound systems of internal controls, which
are designed to manage, but not eliminate, the risk
of failure to achieve business objectives and provide
reasonable, but not absolute, assurance against
material misstatements and loss.
The day-to-day management and monitoring of the
Group’s systems of internal control is delegated to the
Management Committee, comprising the Chairman &
Chief Executive and Chief Financial Officer
The Management Committee ensures that the Group’s
risk management framework and control culture
are embedded within the business, and to that end,
during the year the Management Committee ensured
that each employee undertook induction training on
the Group Code of Conduct established during the
year. The Executive Director and senior management
provides assurance to the Board, through the Audit
Committee, that risks are monitored, appropriately
escalated and managed within the risk appetite of the
Board.
The systems of internal control are designed to cover
all business, financial, reputational and legal risks of
the Group and are embedded within the day to day
operations of the Group.
The financial reporting controls in place are designed
to maintain proper accounting records and provide
reasonable assurance concerning the accuracy
and integrity of financial information reported both
internally and externally. The financial reporting
controls are monitored on a monthly basis by internal
audit and are reported on a monthly basis to the
Management Committee and on a quarterly basis to
the Audit Committee.
Effectiveness of the identification and evaluation of
business risk and the mitigation provided by controls
are assessed on an annual basis by each business
area. This annual review is coordinated by the internal
auditors and reported to the Management Committee
for review and challenge before ultimately being
reported to the Audit Committee. This risk and control
assessment process forms a key part of the annual
internal audit plan and links to the Board’s assessment
of the key risks and the overall effectiveness of internal
controls.
In accordance with the QCA Guidelines and UK
Corporate Governance Code and best practice
guidance for directors on internal controls issued by
the Financial Reporting Council, the Board, with the
advice of the Audit Committee, has reviewed the
effectiveness of the systems of internal control for the
year to 31 December 2015. As part of this review, the
Board received assurances from the Chairman & Chief
Executive and the Chief Financial Officer of Mytrah
Energy Limited that the Directors Responsibilities
Statement on page 52 is founded on a sound system
of risk management and internal controls and that the
systems of internal controls are operating effectively
in all material respects in relation to reporting financial
risks and the mitigation of material business risks.
Relationship AgreementThe Company, Mirabaud (the Company’s co-broker),
Strand Hanson and certain shareholders, namely, Bindu
Urja Capital Inc, Bindu Urja Investments Inc, Bindu Urja
Holdings Inc, Ravi Kailas, Sila Energy Inc and Esrano
Overseas Limited (the ‘Shareholders’) entered into a
relationship agreement on 4th October 2010 whereby
those Shareholders undertake to the Company and
Strand Hanson, inter alia, not to exercise their voting
rights to take control of the Board and to conduct
all transactions and relationships between them (and
any of their associates or concert 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. The agreement remains in
force for so long as such Shareholders, their associates
and concert parties together control, directly or
indirectly, more than 30% of the voting rights of the
Company.
Going ConcernThe Directors have considered the net current assets
of USD 51.23m of the Group at 31 December 2015, the
Group’s cash position and forecast cash flows for 18
months period from the date of these consolidated
financial statements. The Directors also continue to
monitor the cash flows from time to time including
the short term and long term liquidity position. At the
balance sheet date, the Company has adequate unused
long term credit facilities to offset the short term loans
taken. The Directors have a reasonable expectation
that the Group has adequate resources to continue its
operational existence for a foreseeable future and thus
adopt going concern basis of accounting in preparing
these consolidated financial statements.
Overview
Corporate Governance
Business Review
Financial Statements57Mytrah Energy Limited Annual Report 2015
Role and Responsibilities
The Remuneration Committee determines and agrees
with the Board the broad policy for the remuneration
of the Group’s employees, as well as reviewing the
ongoing appropriateness and relevance of the Group’s
remuneration policy, ensuring that it is structured in a
way that aligns reward with performance, shareholder
interests and the long-term interests of the business.
The key responsibilities of the Committee are: -
i. Determining the total individual remuneration
packages, including pension arrangements, of the
Executive director and senior management.
ii. Reviewing and approving share incentive plans and
non-material changes to them;
iii. Approving and determining targets for
performance-related pay schemes, including the
annual discretionary bonus scheme;
iv. Reviewing and approving the scope of any
termination payments and severance terms for
Executive directors, ensuring that contractual
terms on termination and any payments made are
fair to the individual and the Company, that failure
is not rewarded and that the duty to mitigate loss is
fully recognised.
The full terms of reference of the Remuneration
Committee are available on the Company’s website
(www.mytrah.com) and on request from the Company
Secretary.
The Committee has access to the advice and views
of the Chairman and Chief Executive as well as the
use of external consultants, if required. No external
consultants were engaged by the Committee during
the period.
Remuneration PolicyThe Board considers that appropriate remuneration
policies are a key driver of performance and a central
element of corporate strategy. The Group remuneration
policy aims to: -
provide market competitive total compensation;
motivate, retain and promote individual and
corporate outperformance;
differentiate on merit and performance;
emphasise variable performance-driven
remuneration;
ensure adherence to the Group’s Code of Conduct;
align senior management with shareholders’
interests; and
Attendance at scheduled Committee Meetings during the year is shown below. Additional ad-hoc meetings by
conference call were also held during the year.
Director Maximum Possible
Attendance
Meetings
Attended
Rohit Phansalkar 2 2
Russell Walls 2 2
This report describes the Group’s overall remuneration policy and gives details of the compensation arrangements
for Directors for the year to 31 December 2015.
The Remuneration CommitteeMembership
Since November 2012, the Remuneration Committee is chaired by Rohit Phansalkar and its other member is
Russell Walls. A calendar of activities for the Committee for the year has been agreed.
Senior management attend meetings at the request of the Committee and recuse themselves from discussions
and decisions taken by the Remuneration Committee in respect of their own remuneration.
Remuneration Report
58 Mytrah Energy Limited Annual Report 2015
deliver clarity, transparency and fairness of process.
The Group remuneration policy has a strong focus on
variable compensation as the Board believes that the
interests of the business, shareholders and employees
are best served by containing fixed remuneration costs
and maximising the proportion of total remuneration
that is directly performance related.
The key components of the Group’s total remuneration package include:
Element Structure Purpose Performance Measure
Basic salary Fixed Base salary for the role Annual performance review.
Other benefits Fixed Benefits in Kind. Subject to market comparable review
Annual Bonus Variable Executive and senior
management bonuses
are determined by the
Remuneration Committee
taking into account the
performance of the business,
individual performance and
market comparatives.
Committee discretion, taking into
account:
Delivery of the Annual Operating Plan
Performance against agreed KPI’s
Overall financial performance of the
Group
Market comparables
Any other factor deemed relevant by
the Committee
Share Option
Grants
Variable Share awards aim to align
total remuneration with the
growth of the business and
shareholder value.
Market comparables and individual
performance. Annual awards are
not envisaged by the Remuneration
Committee.
Basic salarySalaries are reviewed annually for the Executive
Director and CFO.
Annual bonusAt the discretion of the Committee, the Executive
Director and CFO may receive a cash bonus based
on industry comparative measures, management
performance and potential company growth and are
generally paid in May each year. The Committee has
the discretion and flexibility to take into account other
factors in determining any bonus.
Each element of the Executive Directors’ reward
package supports the achievement of key business
measures and rewards outperformance.
Mytrah Share Option SchemeThe Company has a Share Option Plan The Mytrah
Energy Employee Cashless Stock Option Scheme.
This scheme enable participants to acquire shares at
an option price fixed at the time of grant. A participant
may receive one or several awards of stock options.
Benefits and benefits in kindThe Chairman & Chief Executive is contractually
entitled to a lump-sum life assurance benefit and
private healthcare medical insurance, car and housing
allowances. The Chairman & Chief Executive does not
have any pension entitlements.
The Directors, both executive and non-executive,
also benefit from indemnity arrangements in respect
of their services as Directors, and from Directors’ and
Officers’ indemnity insurance.
Directors’ Service ContractsThe Chairman & Chief Executive has a service
agreement with the Company, which is terminable by
either party on not less than 12 months’ notice. There
are no provisions for remuneration payable on early
termination.
Non-Executive DirectorsThe remuneration of the non-executive Directors
is determined by the Executive Director. The non-
executive Directors serve the Company under formal
letters of appointment that are terminable on six month’s
Overview
Corporate Governance
Business Review
Financial Statements59Mytrah Energy Limited Annual Report 2015 59
written notice which sets out their role, obligations as a
director and the expected time commitment required.
It is the Company’s policy that the non-executive
Directors have been granted options to align the
interests of non-executive Directors with shareholders.
Such awards are approximate in value on grant with
one year’s fees and, in compliance with the QCA
Guidelines, are not subject to performance conditions.
The Group share dealing code requires non-executive
Directors to hold shares acquired through the exercise
of options throughout their tenure (other than to the
extent of paying taxes related to the exercise of an
option).
During the year, the annual fee payable to each non-
executive Director was £45,000 per annum. An
additional fee of £10,000 is payable in respect to the
chairmanship of a Board committee and £5,000 in
respect to the Senior Independent Director role.
Performance GraphThe following graph shows the Company’s share price performance compared with the performance of the FTSE
AIM All Share Index.
Directors’ emoluments and compensation (audited)Directors’ remuneration for the year ended 31 December 2015 was as follows:
Name Year ended
31 December 2015
USD
Year ended
31 December 2014
USD
Executive
Ravi Kailas 1,258,490 2,433,360
Non-Executive
Rohit Phansalkar 84,056 90,618
Russell Walls 91,698 98,856
Total 1,434,244 2,622,834
100p
90p
80p
70p
60p
50p
Jan-15
Feb-15
Mar
-15
Apr-15
May
-15
Jun-15
Jul-1
5
Aug-15
Sep-15
Oct
-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar
-16
40p
MYT FTSE AIM ALL Share (rebased to MYT)
60 Mytrah Energy Limited Annual Report 201560 Mytrah Energy Limited Annual Report 2015
Directors’ share interests (audited)The interests of the Directors in shares of the Company as at 31 December 2015 are shown below.
1 In 2015, the Remuneration Committee rewarded Ravi Kailas a discretionary bonus after taking into account the
performance of the business, Mr Kailas’ individual performance and market comparatives.
* 94,751,030 shares are held by R&H Trust Co (Jersey) Limited (the “Trustee”) as trustee of The Raksha Trust (the
“Trust”), a Jersey based discretionary trust settled by Mr. Kailas, of which he and some of his family members and
also a philanthropic trust are discretionary beneficiaries.
Ordinary Shares held
at 31 December 2015
Executive Director
Ravi Kailas 94,751,030*
Non-Executive Directors
Rohit Phansalkar 7,000
Russell Walls 30,000
Director’s interests in share awardsAs at 31 December 2015, the Directors held the following share options (refer to note 36 of the consolidated
financial statements for more detail):
Name Date of grant Number of Ordinary
Shares under option
Exercise price per share
(pence)
Executive Director
Ravi Kailas 22 December 2011 9,090,889 115p
31 May 2015 9,500,000 77.5p
Non-Executive Directors
Rohit Phansalkar 4 October 2010* 38,700 77.5p
10 January 2013* 21,300 77.5p
31 May 2015 90,000 77.5p
Russell Walls 22 December 2011* 38,700 77.5p
10 January 2013* 21,300 77.5p
31 May 2015 90,000 77.5p
*Options were repriced to 77.5p on 31 May 2015.
During the year, no Director held any interest in the shares or loan stock of any subsidiary of the Company.
Approved and signed on behalf of the Board
Rohit Phansalkar
Remuneration Committee Chairman
Overview
Corporate Governance
Business Review
Financial Statements61Mytrah Energy Limited Annual Report 2015 61
62 Mytrah Energy Limited Annual Report 2015
Independent auditor’s report to the members of Mytrah Energy Limited
We have audited the Group financial statements (the “consolidated financial statements”) of Mytrah Energy
Limited (the “Company”) and its subsidiaries (together the “Group”) for the for the year ended 31 December 2015
which comprise the Consolidated Income Statement, Consolidated Statement of Other Comprehensive Income,
Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity, Consolidated
Statement of Cash Flows and the related notes to the consolidated financial statements. The financial reporting
framework that has been applied in their preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
This report is made solely to the Company’s members, as a body, in accordance with Section 262 of the Companies
(Guernsey) Law, 2008. Our audit work has been undertaken so that we might state to the Company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the
Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditor
As explained more fully in the Directors’ Responsibilities Statement as set out on page 52, the Directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair
view. Our responsibility is to audit, and express an opinion on, the Group financial statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply
with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to
give reasonable assurance that the financial statements are free from material misstatement, whether caused by
fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group’s
circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant
accounting estimates made by the Directors; and the overall presentation of the financial statements. In addition,
we read all the financial and non-financial information in the annual report to identify material inconsistencies with
the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies
we consider the implications for our report.
Opinion on financial statements
In our opinion the Group financial statements:
• give a true and fair view of the state of the Group’s affairs as at 31 December 2015 and of its profit for the year
then ended;
• have been properly prepared in accordance with IFRSs as adopted by the European Union; and
• have been prepared in accordance with the requirements of the Companies (Guernsey) Law, 2008.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies (Guernsey) Law, 2008
requires us to report to you if, in our opinion:
• proper accounting records have not been kept; or
• the financial statements are not in agreement with the accounting records; or
• we have not received all the information and explanations we require for our audit.
27 April 2016
KPMG Audit LLC
Chartered Accountants
Heritage Court,
41 Athol Street
Douglas,
Overview
Corporate Governance
Business Review
Financial Statements63Mytrah Energy Limited Annual Report 2015
Consolidated income statement for the year ended 31 December 2015
Consolidated statement of other comprehensive income for the year ended 31 December 2015
Note Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Continuing operations
Revenue 6 74,719,666 69,554,186
Other operating income 6 881,589 368,022
Employee benefits expense 7 (3,039,713) (4,449,186)
Other expenses 8 (7,280,624) (9,353,711)
Earnings before interest, tax, depreciation and
amortisation (EBITDA)
65,280,918 56,119,311
Depreciation and amortisation charge 15 & 16 (16,403,741) (11,363,761)
Operating profit 48,877,177 44,755,550
Finance income 10 3,347,383 1,047,757
Finance costs 11 (51,221,870) (42,923,651)
Other finance costs on refinancing 12 (541,185) (605,748)
Net finance costs (48,415,672) (42,481,642)
Profit before tax 461,505 2,273,908
Income tax expense 13 (80,763) (397,934)
Profit for the year from continuing operations 380,742 1,875,974
Profit attributable to
- Owners of the Company 1,162,991 1,875,974
- Non-controlling interest (782,249) -
Earnings per share
Basic 14 0.00711 0.01146
Diluted 14 0.00711 0.01145
The accompanying notes form an integral part of these consolidated financial statements.
Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Profit for the year 380,742 1,875,974
Other comprehensive income / (loss)
a) Items that will never be reclassified to profit and loss
Actuarial (loss)/ gain on employment benefit obligations (note 32d) (283,309) 5,054
b) Items that may be reclassified to profit or loss
Change in fair value of available-for-sale financial assets (note 32c) 355,167 101,773
Foreign currency translation adjustments (note 32a) (3,510,858) (4,028,502)
Other comprehensive loss (3,439,000) (3,921,675)
Total comprehensive loss (3,058,258) (2,045,701)
Total comprehensive loss attributable to
- Owners of the Company (2,276,009) (2,045,701)
- Non-controlling interest (782,249) -
The accompanying notes form an integral part of these consolidated financial statements.
64 Mytrah Energy Limited Annual Report 2015
Consolidated statement of financial position as at 31 December 2015
Note As at
31 December 2015
As at
31 December 2014
USD USD
Assets
Non-current assets
Intangible assets 15 195,248 328,069
Property, plant and equipment 16 779,930,202 510,109,947
Other non-current assets 17 33,697,599 81,430,536
Other investments 18 2,055,483 1,589,719
Deferred tax assets 19 5,744,587 455,433
Total non-current assets 821,623,119 593,913,704
Current assets
Trade receivables 20 17,487,165 17,695,157
Other current assets 21 10,986,956 8,185,384
Current tax assets 13 - 1,457,032
Current investments 22 43,384,798 10,966,118
Cash and bank balances 23 55,577,280 14,268,232
Total current assets 127,436,199 52,571,923
Total assets 949,059,318 646,485,627
Liabilities
Current liabilities
Borrowings 24 49,764,216 57,426,521
Finance lease obligations 25 101,165 -
Trade and other payables 27 23,130,462 14,438,617
Retirement benefit obligations 28 33,035 1,431
Current tax liabilities 13 3,176,482 285,746
Total current liabilities 76,205,360 72,152,315
Non-current liabilities
Borrowings 24 624,433,184 398,829,925
Finance lease obligations 25 6,316,717 -
Derivative financial instruments 26 3,429,381 5,046,655
Other payables 27 114,422,081 41,912,277
Retirement benefit obligations 28 298,615 12,442
Total non-current liabilities 748,899,978 445,801,299
Total liabilities 825,105,338 517,953,614
Net assets 123,953,980 128,532,013
Equity
Share capital 29 72,858,278 72,858,278
Capital contribution 30 16,721,636 16,721,636
Retained earnings 31 9,767,315 15,520,003
Other reserves 32 (26,098,232) (32,100,529)
Equity attributable to owners of the Company 73,248,997 72,999,388
Non-controlling interests 33 50,704,983 55,532,625
Total equity 123,953,980 128,532,013
These consolidated financial statements were approved by the Board of Directors and authorised for use on 25
February 2016.
Signed on behalf of the Board of Directors by:
Ravi Kailas Russell Walls
Chairman and CEO Director
The accompanying notes form an integral part of these consolidated financial statements.
Overview
Corporate Governance
Business Review
Financial Statements65Mytrah Energy Limited Annual Report 2015
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58
,278
7,3
57,6
20
(32,8
42,4
60
)3
,08
3,4
60
93
,48
0(5
28
)14
,33
9,8
15-
--
55
,39
5,172
120
,28
4,8
37
Pro
fit
for
the y
ear
--
--
--
1,8
75
,974
--
--
1,8
75
,974
Oth
er
co
mp
reh
en
sive
in
co
me
:
Fo
reig
n c
urr
en
cy t
ran
slati
on
ad
just
men
ts (
no
te 3
2a)
--
(4,0
28
,50
2)
--
--
--
--
(4,0
28
,50
2)
Actu
ari
al g
ain
s o
n e
mp
loyee b
en
efi
t o
blig
ati
on
s (n
ote
32d
)-
--
--
5,0
54
--
--
-5
,05
4
Co
ntr
ibu
tio
ns
receiv
ed
du
rin
g t
he y
ear
(no
te 3
0)
-9
,36
4,0
16-
--
--
--
--
9,3
64
,016
Bu
y b
ack o
f C
CP
S f
rom
NC
I (n
ote
33
)-
--
--
--
--
-(5
67,2
48
)(5
67,2
48
)
Tax o
n b
uy b
ack o
f C
CP
S (
no
te 3
1)-
--
--
-(1
28
,53
8)
--
--
(128
,53
8)
Issu
e o
f sh
are
s to
NC
I (n
ote
33
)-
--
--
--
--
-70
4,7
01
70
4,7
01
CR
R o
n b
uy-b
ack (
no
te 3
2e)
--
--
--
(56
7,2
48
)5
67,2
48
--
--
Ch
an
ge in
fair
valu
e o
f availa
ble
-fo
r-sa
le fi
nan
cia
l in
stru
men
ts (
no
te 3
2c)
--
--
101,773
--
--
--
101,773
Eq
uit
y s
ett
led
sh
are
base
d p
aym
en
ts
(no
te 3
2b
an
d n
ote
38
)-
--
919
,94
6-
--
--
--
919
,94
6
Bala
nce
as
at
31
De
ce
mb
er
20
1472,8
58
,278
16,7
21,6
36
(36
,870
,96
2)
4,0
03
,40
619
5,2
53
4,5
26
15,5
20
,00
35
67,2
48
--
55
,53
2,6
25
128
,53
2,0
13
Pro
fit
for
the y
ear
--
--
--
1,16
2,9
91
--
-(7
82,2
49
)3
80
,74
2
Oth
er
co
mp
reh
en
sive
in
co
me
:
Fo
reig
n c
urr
en
cy t
ran
slati
on
ad
just
men
ts (
no
te 3
2a)
--
(3,5
10,8
58
)-
--
--
--
(3,5
10,8
58
)
Actu
ari
al lo
ss o
n e
mp
loyee b
en
efi
t o
blig
ati
on
s (n
ote
32d
)-
--
--
(28
3,3
09
)-
--
--
(28
3,3
09
)
Issu
e o
f sh
are
warr
an
ts (
no
te 3
2g
)-
--
--
--
--
2,0
38
,96
0-
2,0
38
,96
0
Pu
rch
ase
of
share
s fr
om
no
n-
co
ntr
olli
ng
in
tere
st (
no
te 3
3)
--
--
--
--
--
(2,3
45
,08
5)
(2,3
45
,08
5)
Bu
y b
ack o
f C
CP
S f
rom
NC
I (n
ote
33
)-
--
--
--
--
-(1
,777,8
64
)(1
,777,8
64
)
Tax o
n b
uy b
ack o
f C
CP
S (
no
te 3
1)-
--
--
-(2
53
,976
)-
--
-(2
53
,976
)
Issu
e o
f sh
are
s to
NC
I (n
ote
33
)-
--
--
--
--
-77,5
56
77,5
56
Cre
ati
on
of
deb
en
ture
red
em
pti
on
re
serv
e (
no
te 3
2f)
--
--
--
(5,5
60
,90
6)
-5
,56
0,9
06
--
-
CR
R o
n b
uy-b
ack (
no
te 3
2e)
--
--
--
(1,10
0,7
97)
1,10
0,7
97
--
--
Ch
an
ge in
fair
valu
e o
f availa
ble
-fo
r-sa
le fi
nan
cia
l in
stru
men
ts (
no
te 3
2c)
--
--
35
5,16
7-
--
--
-3
55
,16
7
Eq
uit
y s
ett
led
sh
are
base
d p
aym
en
ts
(no
te 3
2b
an
d n
ote
38
)-
--
74
0,6
34
--
--
--
-74
0,6
34
Bala
nce
as
at
31
De
ce
mb
er
20
157
2,8
58
,27
816
,72
1,6
36
(40
,38
1,8
20
)4
,74
4,0
40
55
0,4
20
(27
8,7
83
)9
,76
7,3
151,
66
8,0
45
5,5
60
,90
62
,03
8,9
60
50
,70
4,9
83
123
,95
3,9
80
Th
e a
cco
mp
an
yin
g n
ote
s fo
rm a
n in
teg
ral p
art
of
these
co
nso
lidate
d fi
nan
cia
l st
ate
men
ts.
66 Mytrah Energy Limited Annual Report 2015
Consolidated statement of cash flow for the year ended 31 December 2015
Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Cash flows from operating activities
Profit before tax 461,505 2,273,908
Adjustments:
Depreciation and amortisation charge 16,403,741 11,363,761
Interest on bank deposits (1,237,561) (873,087)
Finance lease income (421,815) -
Finance costs including other finance costs on refinancing 51,763,055 43,529,399
Loss on derivative financial instruments 220,985 470,015
Gain on disposal of current investments (1,796,093) (644,685)
Profit / (loss) on sale of fixed assets (3,770) 50,533
Equity settled employees benefits 641,188 919,946
Changes in working capital:
Trade receivables and accrued income (94,775) (12,495,840)
Other assets (2,697,290) 1,572,891
Trade and other payables 12,522,231 5,529,064
Cash generated from operating activities 75,761,401 51,695,905
Taxes paid (1,117,253) (1,619,747)
Net cash generated from operating activities 74,644,148 50,076,158
Cash flows from investing activities
Purchase of property, plant and equipment (162,676,708) (98,302,479)
Redemption / (Investment) in mutual funds (net) (31,758,406) 706,262
Acquisition of business, net of cash acquired (314,229) -
Redemption /(Deposits) placed with banks (net) (43,046,142) 2,331,544
Interest income on bank deposits 1,176,577 575,333
Net cash used in investing activities (236,618,908) (94,689,340)
Cash flows from financing activities
Capital contributions from shareholders - 9,364,016
Buy back of non-controlling interest and taxes thereon (2,455,569) (1,263,034)
Proceeds from issue of shares to non-controlling interest 77,556 704,701
Purchase of shares from non-controlling interest (3,378,980) -
Payment under finance lease obligations (895,783) -
Proceeds from borrowings 317,085,724 112,007,516
Proceeds from issue of non-convertible bonds 53,710,035 64,219,712
Repayment of borrowings (128,289,905) (83,627,302)
Interest paid (73,128,253) (59,358,753)
Net cash generated from finance activities 162,724,825 42,046,856
Net increase /(decrease) in cash and cash equivalents 750,065 (2,566,326 )
Cash and cash equivalents at beginning of the year 5,423,092 8,248,924
Effect of exchange rates on cash and cash equivalents (262,371) (259,506)
Cash and cash equivalents at end of the year (note 23) 5,910,786 5,423,092
The accompanying notes form an integral part of these consolidated financial statements.
Overview
Corporate Governance
Business Review
Financial Statements67Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015
1. General informationMytrah 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 and is listed on the Alternate Investment Market
(‘AIM’) of the London Stock Exchange. The address of the registered office is Ground Floor, Dorey Court, Admiral
Park, St. Peter Port, Guernsey GY1 2HT. Mytrah Energy Limited has the following subsidiary undertakings, (together
the “Group” or the “Company”), all of which are directly or indirectly held by the Company, for which consolidated
financial statements have been prepared, as set out below:
Subsidiary Country of
incorporation
or residence
Date of
Incorporation
Proportion of ownership interest / voting
power
Activity
31 December 2015 31 December 2014
Bindu Vayu (Mauritius)
Limited (“BVML”)
Mauritius 15 June 2010 100.00 100.00 Investment
company
Mytrah Energy (Singapore)
Pte. Ltd (“MESPL”)
Singapore 16 August 2013 100.00 100.00 Investment
company
Cygnus Capital (Singapore)
Pte. Ltd (“CCSPL”)1
Singapore 19 March 2014 100.00 100.00 Investment
company
Mytrah Energy Capital Pte.
Ltd (“MECPL”)1
Singapore 10 April 2014 100.00 100.00 Investment
company
Mytrah Energy (India)
Limited (“MEIL”)
India 12 November 2009 99.99 99.99 Operating
company
Bindu Vayu Urja Private
Limited (“BVUPL”)
India 5 January 2011 99.99 99.99 Operating
company
Mytrah Vayu Urja Private
Limited (“MVUPL”)
India 24 November 2011 99.99 99.99 Operating
company
Mytrah Vayu (Pennar)
Private Limited (“MVPPL”)
India 21 December 2011 99.99 99.99 Operating
company
Mytrah Vayu (Gujarat)
Private Limited (“MVGPL”)
India 24 December 2011 99.99 99.99 Operating
company
Mytrah Engineering &
Infrastructure Private
Limited (“MEIPL”)
India 29 March 2012 99.99 99.99 Operating
company
Mytrah Engineering Private
Limited (“MEPL”)
India 30 March 2012 99.99 99.99 Operating
company
Mytrah Vayu (Krishna)
Private Limited (“MVKPL”)
India 18 June 2012 99.99 99.99 Operating
company
Mytrah Vayu (Manjira)
Private Limited (“MVMPL”)
India 18 June 2012 72.97 73.41 Operating
company
Mytrah Vayu (Bhima)
Private Limited (“MVBPL”)
India 22 June 2012 99.99 99.99 Investment
company
Mytrah Vayu (Indravati)
Private Limited (“MVIPL”)
India 22 June 2012 99.99 99.99 Operating
company
Mytrah Power (India)
Limited (“MPIL”)
India 12 September 2013 99.99 99.99 Operating
company
Mytrah Vayu (Godavari)
Private Limited (“MVGoPL”)
India 21 February 2014 99.99 99.99 Operating
company
Mytrah Tejas Power Private
Limited (“MTPPL”)
India 22 August 2014 99.99 99.99 Operating
company
Mytrah Vayu (Som) Private
Limited (“MVSPL”)
India 30 March 2015 99.99 - Operating
company
Mytrah Vayu (Tungabhadra)
Private Limited (“MVSPL”)
India 30 March 2015 99.99 - Operating
company
Mytrah Aadhya Power
Private Limited (“MADPPL”)
India 16 July 2015 99.99 - Operating
company
68 Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
Subsidiary Country of
incorporation
or residence
Date of
Incorporation
Proportion of ownership interest / voting
power
Activity
31 December 2015 31 December 2014
Nidhi Wind Farms Private
Limited (“NWFPL”)2
India 16 July 2010 99.99 - Operating
company
Mytrah Aakash Power
Private Limited (“MAKPPL”)
India 09 September 2015 99.99 - Operating
company
1 Wound off against application by the Group to concerned authority subsequent to balance sheet date.2 Acquired by Group on 01 August 2015.
The principal activity of the Group 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 the Company’s subsidiaries.
During the previous year, MEIL has entered into an agreement with MVUPL for transfer of its wind power business.
Accordingly, during the current year the assets and liabilities relating to wind power generation business segment
in MEIL are transferred to MVUPL on fulfilment of conditions specified in the agreement.
1. General information (continued)
2. Adoption of new and revised accounting standards and interpretations
2.1 New and amended standards adopted during the year
The Group has adopted the following new standards and amendments, including any consequential amendments
to other standards with date of initial application of 1 January 2015:
Standard or interpretation Effective for reporting periods starting on or after
Defined Benefit Plans: Employee Contributions
(Amendments to IAS 19)
Annual periods beginning on or after 1 January 2015
Annual Improvements to IFRSs 2010–2012 Cycle Annual periods beginning on or after 1 January 2015
Annual Improvements to IFRSs 2011–2013 Cycle Annual periods beginning on or after 1 January 2015
Novation of Derivatives and Continuation of Hedge
Accounting (Amendments to IAS 39)
Annual periods beginning on or after 1 January 2015
Levies Annual period beginning on or after 1 January 2015
Financial Instruments: Presentation- offsetting financials
assets and financial liabilities (amendments to IAS 32)
Annual period beginning on or after 1 January 2015
Based on the Group’s current business model and accounting policies the adoption of these standards or
interpretations did not have a material impact on the consolidated financial statements of the Group.
2.2 New standards and interpretations not yet adopted
At the date of authorisation of these consolidated 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). The Group is in the process of evaluating the impact of the following new standard
on its consolidated financial statements.
IFRS 9- Financial instruments
IFRS 9, published in July 2014, replaces the existing guidance in IAS 39 Financial Instruments: Recognition and
Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instruments,
including a new expected credit loss model for calculating impairment on financial assets, and the new general
hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial
instruments from IAS 39. IFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018, with
early adoption period.
IFRS 15, Revenue from Contracts with Customers
IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is
Overview
Corporate Governance
Business Review
Financial Statements69Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
recognised. It replaces existing revenue recognition guidance, including IAS 18 Revenue, IAS 11 Construction
Contracts and IFRIC 13 Customer loyalty Programmes. IFRS 15 is effective for annual reporting periods beginning
on or after 1 January 2018, with early adoption permitted.
Further, the following new or amended standards are not expected to have a significant impact on the Group’s
consolidated financial statements:
• IFRS14: Regulatory deferral accounts.
• Accounting for acquisitions of interest in Joint Operations (amendments to IFRS 11)
• Clarification of acceptable methods of depreciation and amortisation (amendments to IAS 16 and IAS 38)
• Defined benefit plans: Employee contributions (Amendments to IAS 19)
2. Adoption of new and revised accounting standards and interpretations (continued)
2.2 New standards and interpretations not yet adopted (continued)
3. Significant accounting policiesThe Group accounting policies are summarised below:
3.1 Basis of accounting
These financial statements comprise of consolidated statement of financial position, consolidated income
statement, consolidated statement of other comprehensive income, consolidated statement of changes in equity,
consolidated statement of cash flows, significant accounting policies and notes to accounts (together referred as
“consolidated financial statements”).
These consolidated financial statements have been prepared in accordance with International Financial Reporting
Standard and its interpretations as adopted by the European Union (EU) (‘IFRS’).
The consolidated financial statements have been prepared on the historical cost basis, except for the following
material items in the statement of financial position. Historical cost is generally based on the fair value of the
consideration given in exchange for assets.
a) Derivative financial instruments are measured at fair value.
b) Available-for-sale financial assets are measured at fair value.
c) Long term borrowings, except obligations under finance leases which are measured at amortised cost using
the effective interest rate method.
d) Share based payment expenses are measured at fair value.
e) Net employee benefit (asset) / liability that is measured based on actuarial valuation.
The Directors have taken advantage of the exemption offered by Section 244 (5) of the Companies (Guernsey)
Law, 2008 from preparation of standalone financial statements of the Company as the Company is preparing and
presenting consolidated financial statements for the financial year ended 31 December 2015.
The accounting policies set out below have been applied consistently to all years presented in the these
consolidated financial statements, except the change in presentation of analysis of expenses in income statement
as explained in note 3.17.
3.2 Consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled
by the Company (its subsidiaries) up to 31 December each year. Control is achieved where the Company has
the power to govern the financial and operating policies of an investee entity so as to obtain benefits from
its activities. All intra-group transactions, balances, income and expenses are eliminated on consolidation. The
financial statements of subsidiaries are included in the consolidated financial statements from the date on which
control commences until the date on which control is ceased.
Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. The interests
of non-controlling shareholders may be initially measured either at fair value or at the non-controlling interests’
proportionate share of the fair value of the acquiree’s identifiable net assets. The choice of measurement basis is
made on an acquisition by acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling
70 Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
3. Significant accounting policies (continued)
3.2 Consolidation (continued)
interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of
subsequent changes in equity.
3.3 Going concern
The Directors have considered the financial position of the Group, its cash position and forecast cash flows
for the 18 months period from the date of these consolidated financial statements. The Directors have, at the
time of approving the consolidated financial statements, a reasonable expectation that the Group has adequate
resources to continue its operational existence for a foreseeable future. Thus they continue to adopt the going
concern basis of accounting in preparing these consolidated financial statements. Further details are contained
in the Directors Report.
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 as the Company’s shares
are listed on AIM. The functional currency of the parent company is Pound Sterling (“GBP”).
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 income statement 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 income and accumulated in equity.
The functional currency of all the above subsidiaries is Indian Rupee (INR), except for BVML, MESPL, MECPL and
CCSPL which are determined as USD. These financial statements are presented in US dollars (USD).
The following exchange rates were used to translate the INR financial information into USD:
31 December 2015 31 December 2014
Closing rate 66.1261 63.5901
Average rate for the year 64.0387 60.8917
The following exchange rates were used to translate the GBP financial information into USD:
31 December 2015 31 December 2014
Closing rate 1.4802 1.5532
Average rate for the year 1.5283 1.6476
3.5 Revenue recognition
Revenue is recognised when it is probable that future economic benefits will flow to the group and these benefits
can be measured reliably.
Sale of electricity
Revenue from the sale of electricity is recognised when earned on the basis of contractual arrangements and
reflects the number of units supplied in accordance with joint meter readings undertaken on a monthly basis by
representatives of the buyer and the Group at rates stated in the contract or as applicable, net of any actual or
expected trade discounts.
Generation-based incentives
Revenue from generation-based incentives are recognised based on the number of units supplied, when
Overview
Corporate Governance
Business Review
Financial Statements71Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
registration under the relevant programme has taken place or if the eligibility criteria is met under the Indian
Renewable Energy Development Agency Limited - Generation Based Incentive scheme.
Sale of Renewable Energy Certificates (RECs)
Revenue from sale of RECs is recognised after registration of the project with central and state government
authorities, generation of power and execution of a contract for sale through recognised exchanges in India.
Sale of Verified Carbon Units (VCUs) and Certified Emission Reductions (CERs)
Revenue from sale of VCUs/CERs is recognised after registration of the project with United Nations Framework
Convention on Climate Change (UNFCCC), generation of emission reductions, execution of a firm contract of sale
and billing to the customers.
Interest income
Interest income is recognised as it accrues using the effective interest rate method.
3.6 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.
Non-derivative 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 within the scope of IAS 39 are classified into the following specified categories as:
• Loans and receivables
• Financial assets at fair value through profit or loss
• Available-for-sale financial assets
• Held-to-maturity investments
The classification depends on the nature and purpose of the financial assets and is determined at the time of initial
recognition. Financial assets are categorised as current assets if they are expected to be settled within 12 months
otherwise they are classified as non-current.
Effective interest rate method
The effective interest rate 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.
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 initially recognised
at fair value plus any directly attributable costs. Subsequent to initial recognition they are measured at amortised
cost using the effective interest method, less any impairment.
Cash and bank balances comprise cash in hand and cash at bank and 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. Deposits with banks and financial institutions maturing after 12 months from
the date of balance sheet have been classified under non-current assets as ‘other investments’.
3. Significant accounting policies (continued)
3.5 Revenue recognition (continued)
72 Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
Financial assets at fair value through profit and loss
Financial assets at fair value through profit or loss include financial assets that are held for trading or are designated
by the entity to be carried at fair value through profit or loss upon initial recognition. Financial assets at fair value
through consolidated profit and loss are carried in the statement of financial position at fair value with gains or
losses recognised in the income statement. Directly attributable costs are recognised in profit and loss as incurred.
Available-for-sale financial assets (“AFS”)
Investments in mutual funds held by the Group that are traded in an active market are classified as being AFS and
are stated at fair value plus any attributable transaction costs. Subsequent to initial recognition they are measured
at fair value with changes in fair value being recognised in other comprehensive income and accumulated in fair
value 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 the income statement.
Held-to-maturity investments (“HTM”)
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and
fixed maturity. Investments are classified as held-to-maturity if it is the positive intention and ability of Group’s
management to hold them until maturity. Held-to-maturity investments are subsequently measured at amortised
cost using the effective interest method. Gains and losses are recognised in the consolidated statement of
comprehensive income when the investments are derecognised or impaired, as well as through the amortisation
process.
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. Changes in the carrying amount of the
allowance account are recognised in the consolidated income statement.
Impairment of available-for-sale
Impairment losses on available-for-sale financial assets are recognised by classifying the losses accumulated
in the fair value reserve to profit or loss. The amount reclassified is the difference between the acquisition cost
(net of any principal repayment and amortisation) and the current fair value, less any impairment loss previously
recognised in profit or loss. If the fair value of an impaired available-for-sale debt security subsequently increases
and the increase can be related objectively to an event occurring after the impairment loss was recognised, then
the impairment loss is reversed through profit or loss, otherwise, it is reversed through OCI.
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.
3. Significant accounting policies (continued)
3.6 Financial instruments (continued)
Overview
Corporate Governance
Business Review
Financial Statements73Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
Non-derivative financial liabilities
Non-derivative financial liabilities are initially recognised at fair value less any directly attributable costs. Subsequent
to initial recognition, these liabilities are measured at amortised cost using effective interest method.
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.
Compound instruments
The component parts of compound instruments issued by the Group are classified separately as financial liabilities
and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value
of the liability component is estimated using the prevailing market interest rate for a similar non-convertible
instrument. Subsequent to initial recognition the liability component of compound financial instrument is measured
at amortised using effective interest method. The equity component is determined by deducting the amount
of the liability component from the fair value of the compound instrument as a whole. This is recognised and
included in equity, net of income tax effects, and is not subsequently remeasured.
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 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 financial liability,
or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled
or they expire.
Embedded derivatives
Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives
when their risks and characteristics are not closely related to those of the host contracts and the host contracts
are not measured at fair value through profit and loss.
An embedded derivative is presented as a non-current asset or a non-current liability if the remaining maturity of
the hybrid instrument to which the embedded derivative relates is more than 12 months and is not expected to be
realised or settled within 12 months.
The Company has taken an accounting policy choice in accordance with IAS 32 and IAS 39 wherein the Company
writes options that give non-controlling shareholders right to put subsidiary’s shares to the Company in exchange
for a variable number of Company’s shares and the Company has an option to settle in cash when the non-
controlling shareholders exercise the options. Accordingly the compulsorily convertible preference shares held by
the non-controlling interest (NCI) shareholders are classified as equity and the related put options are accounted
for as a derivative liabilities under IAS 39 at fair value with changes therein recognised in profit and loss.
3.7 Property, plant and equipment
Recognition and measurement
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 reliably estimated.
Items of property, plant and equipment are stated at cost less accumulated depreciation and any provision for
impairment. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of
3. Significant accounting policies (continued)
3.6 Financial instruments (continued)
74 Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
self-constructed assets includes the cost of materials, direct labour and 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 executed is
classified as a capital advance within other non-current 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 (major components) of property, plant and equipment.
The cost of replacing part of an item of plant and equipment is recognised in the carrying amount of an item if it
is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be
measured reliably. The cost of the day-to-day servicing of plant and equipment are recognised in the consolidated
income statement as incurred.
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 in the
consolidated income statement.
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 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.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are expensed in the period in which they are incurred.
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
Plant and machinery 5-50 years
Buildings 20 years
Lease acquisition costs, leasehold improvements and leased assets 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 available for use.
The depreciation methods, useful lives and residual value, are reviewed at each reporting date and adjusted
prospectively if appropriate.
Further, the Group has adopted component accounting of depreciation for the plant and machinery class of the
property, plant and equipment and accordingly adopted the following useful lives for each of the components:
Component of plant and machinery Useful life (in years)
Nacelles 25
Blades 30
Towers 50
Transformers 25
Erection and commissioning 25
Civil works, electrical lines and evacuation facilities 50
3. Significant accounting policies (continued)
3.7 Property, plant and equipment (continued)
Overview
Corporate Governance
Business Review
Financial Statements75Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
Impairment
At each reporting date, management 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. The recoverable amount of an asset is the
greater of its value in use and fair value less cost to sell. Value in use is based on the estimated future cash flows,
discounted to their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and risks specific to the asset.
3.8 Intangible assets
Intangible assets that are acquired by the Group and have finite useful lives are measured at costs less accumulated
amortisation and accumulated impairment losses. Intangibles are amortised over its useful life using straight line
method as stated below:
Application software 4 years
ERP software license 4 years
Amortisation method, useful lives and residual values are reviewed at each reporting date and adjusted
prospectively if appropriate.
3.9 Taxation
Income tax expense represents the sum of current tax and deferred tax.
Current tax
Current tax is the expected tax payable on the taxable income for the year, using the rates enacted or substantially
enacted at the reporting date and any adjustments (if any) to the tax payable in respect of previous year. Taxable
profit differs from profit as reported in the consolidated income statement 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.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts
of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of
the taxable profit, and is accounted for using the balance sheet approach. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary differences arise from the initial recognition of
goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.
Any deferred tax asset or liability arising from deductible or taxable temporary differences in respect of unrealised
inter-company profits are recognised using the tax rate enacted or substantially enacted of the jurisdiction in
which the Company owns the assets.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled
or the asset is realised on tax laws and rates that have been enacted at the balance sheet date. Deferred tax
is charged in the consolidated income statement, except when it relates to items charged or credited in other
comprehensive income, in which case the deferred tax is also recognised with in other comprehensive income.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities on a net basis.
3. Significant accounting policies (continued)
3.7 Property, plant and equipment (continued)
76 Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
3.10 Leases
Determining whether an arrangement contains a lease
At inception of an arrangement, the Group determines whether the arrangement is or contains a lease. At
inception or on re-assessment of an arrangement that contains a lease, the Group separates the payment and
other consideration required by the arrangement into those for the lease and those for other elements on the
basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate
the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the
underlying asset. Subsequently, the liability is reduced as the payments are made and an imputed finance cost on
the liability is recognised using the Group’s incremental borrowing rate.
Leased Assets
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and
rewards incident to the ownership. The leased assets are measured initially at an amount equal to the lower of
their fair value and present value of minimum lease payments. 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. Land taken on lease basis from the suppliers of wind turbine generators is amortised
over the period ranging upto 20 years.
3.11 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 be reliably estimated will 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 income statement 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 one or more
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.
A provision for onerous contracts, if any, is measured at the present value of the lower of the expected cost
of terminating the contract and the expected net cost of continuing with the contract. Before a provision is
established, the Group recognises any impairment loss on the assets associated with that contract.
3.12 Employee benefits
Short term employee benefits
Short term employee benefits are expensed as the related services are provided. A liability is recognised for the
amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a
result of past service provided by the employee and the obligation can be estimated reliably.
Defined contribution plans
Obligations for contributions to defined contribution plans are expensed as the related service is provided.
Defined benefit plans
The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating
the amount of future benefit that employees have earned in the current and prior periods, discounting that
amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit
credit method. When the calculation results in a potential asset for the Group, the recognised asset is limited to
the present value of economic benefits available in the form of any future refunds from the plan or reductions in
3. Significant accounting policies (continued)
Overview
Corporate Governance
Business Review
Financial Statements77Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any
applicable minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on
plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised
immediately in other comprehensive income (OCI). The Group determines the net interest expense (income) on
the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined
benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking
into account any changes in the net defined benefit liability (asset) during the period as a result of contributions
and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised
in consolidated income statement.
3.13 Share-based payments
Equity-settled share-based payments to employees, directors and key management personnel are measured
at the fair value of the equity instruments at the grant date with a corresponding increase in the equity over
the vesting period, based on the Group’s estimate of equity instruments that will eventually vest. The fair value
excludes the effect of non-market-based vesting conditions.
At each balance sheet date, the Group revises its estimate of the number of equity instruments expected to
vest as a result of the effect of non-market-based vesting conditions. The impact of the revision of the original
estimates, if any, is recognised in the income statement such that the cumulative expense reflects the revised
estimate, with a corresponding adjustment to equity reserves.
Share options granted to employees are treated as cancelled as and when employees cease to contribute to the
scheme. This results in accelerated recognition of the expenses that would have arisen over the remainder of the
original vesting period.
3.14 Earnings per share
The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during the year. Diluted EPS is determined by adjusting the profit
or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding
for the effects of all dilutive potential ordinary shares, which includes all stock options granted to employees and
Directors, CCPS, CCDs and share warrants issued to investors and lenders.
3.15 Government grants
The Group recognises government grants only when there is reasonable assurance that the conditions attached
to them will be complied with, and the grants will be received. Government grants received in relation to assets
are presented as a reduction to the carrying amount of the related asset. Grants related to income are recognised
as a credit to the consolidated income statement.
3.16 Finance income and expense
Finance income consists of interest income on funds invested (including available-for-sale financial assets),
dividend income and gains on the disposal of available-for-sale financial assets. Interest income is recognised as it
accrues in the consolidated income statement, using the effective interest method. Dividend income is recognised
in the consolidated income statement on the date that the Company’s right to receive payment is established. The
associated cash flows are classified as investing activities in the statement of cash flows.
Finance expenses consist of interest expense on borrowings. Borrowing costs are recognised in the consolidated
income statement using the effective interest method. The associated cash flows are classified as financing
activities in the statement of cash flows.
Foreign currency gains and losses are reported on a net basis with in finance income and expense.
3. Significant accounting policies (continued)
3.12 Employee benefits (continued)
78 Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
3.17 Change in presentation and analysis of expenses in the income statement
During the year, the Group has changed the presentation analysis expenses from function to nature by including
‘Earnings before interest, tax, depreciation and amortisation’ (EBITDA) as a separate line item in the income
statement to provide more reliable and more relevant information to the users of financial statements. Management
believes that disclosure of expenses by nature is meaningful measure for investors because it provides an analysis
of our operating results, ability to service debt and performance of the Company. Further EBITDA is considered
by chief operating decision makers to track business evolution, establish operational and strategic targets and
make important business decisions. The Company measures EBIDTA on the basis of profit/(loss) from operations.
For EBITDA measurement, the Company has not included the depreciation and amortisation expenses, finance
cost, tax expense and other income.
Presentation of consolidated income statement under previous year format and comparatives:
Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Revenue 74,719,666 69,554,186
Cost of revenue (18,236,434) (12,204,117)
Gross Profit 56,483,232 57,350,069
Other operating income 881,589 368,022
Administrative expenses (8,487,644) (12,962,541)
Operating profit 48,877,177 44,755,550
Finance income 3,347,383 1,047,757
Finance costs (51,221,870) (42,923,651)
Other finance costs on refinancing (541,185) (605,748)
Net finance cost (48,415,672) (42,481,642)
Profit before tax 461,505 2,273,908
(Loss) / profit for the year has been arrived at after charging:
Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Amortisation of intangible assets
- included in administrative expenses 200,059 196,294
Depreciation of property, plant and equipment
- included in cost of revenue 15,671,822 10,902,101
- included in administrative expenses 531,860 265,366
Employee costs
- included in administrative expenses 3,039,713 4,449,186
Other expenses
- included in cost of revenue 2,564,612 1,302,016
- included in administrative expenses 4,716,012 8,051,695
3. Significant accounting policies (continued)
4. Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group’s accounting policies, which are described in note 3, the Directors are required to
make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates and associated assumptions are based on historical experience
and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision affects only that period or in the period
of the revision and future periods if the revision affects both current and future periods.
Overview
Corporate Governance
Business Review
Financial Statements79Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
4. Critical accounting judgements and key sources of estimation uncertainty (continued)
Critical judgements and estimates in applying the Group’s accounting policies
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are discussed below.
a) Useful life of depreciable assets
Management reviews the useful lives of depreciable assets at each reporting date, based on the expected
utility of the assets to the Group and any change in useful lives and methods of depreciation are adjusted
prospectively if appropriate.
b) Classification of financial instruments as equity or liability
Significant judgement is required to apply the rules under IAS 32, Financial Instruments: Presentation and
IAS 39: Financial Instruments: Recognition and Measurement to assess whether an instrument is equity or a
financial liability. Management has exercised significant judgement to evaluate the terms and conditions of
certain financial instruments with reference to the applicability of contingent settlement provisions, evaluation
of whether options under the contract will be derivative or a non-derivative, assessing if certain settlement
terms are within the control of the Company and if not whether the occurrence of these events are extremely
rare, highly abnormal and very unlikely, clarifications between the parties to the agreement subsequent to the
date of the agreement to conclude that the instruments be classified as an equity instrument.
c) 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.
d) Recoverability of trade receivables
The Group analyses the historical payment patterns of customers, customer concentrations, customer
creditworthiness and current economic trends on an ongoing basis. If the financial condition of a customer
deteriorates, additional provision is made in the accounts.
e) Determination if the arrangement meets the definition of a service concession under IFRIC 12 Service Concession
Arrangements
Management has assessed applicability of IFRIC 12: Service Concession Arrangements for certain arrangements.
In assessing the applicability, management has exercised significant judgement in relation to the underlying
ownership of the assets, the ability to enter into power purchase arrangements with any customer and ability
to determine prices and concluded that the arrangements do not meet the criteria for service concession
arrangements.
f) Measurement of fair value
The Group has an established control framework with respect to the measurement of fair values. This includes
a valuation team that has overall responsibility for overseeing all significant fair value measurements, including
Level 3 fair values, and reports directly to the CFO.
The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party
information, such as broker quotes or pricing services, is used to measure fair values, then the valuation
team assesses the evidence obtained from third parties to support the conclusion that such valuation meets
the requirements of IFRS, including the level in the fair value hierarchy in which such valuations should be
classified.
Significant valuation issues are reported to the Group Audit Committee.
When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the
valuation techniques as follows:
80 Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: Inputs for the asset or liability that is not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of asset or liability might be categorised in different levels of the
fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair
value hierarchy as the lowest level input that is significant to the entire measurement.
4. Critical accounting judgements and key sources of estimation uncertainty (continued)
5. Segment information
IFRS 8 establishes standards for the way to report information on operating segments and related disclosures
about products and services, geographic areas, and major customers. The Group operations predominantly relate
to generation and sale of electricity. The chief operating decision maker evaluates the Group’s performance and
allocates resources based on an analysis of various performance indicators at operational unit level. Accordingly
there is only a single operating segment “generation and sale of electricity”. Consequently no segment disclosures
of the Group are presented.
The Group has all of its non-current assets located within India and earn its revenues from customers located in
India.
6. RevenueThe Group’s revenue from continuing operations is as follows:
Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Sale of electricity 67,665,168 62,971,005
Generation based incentive 6,374,688 6,130,994
Sale of renewable energy certificates 679,810 410,270
Sale of verified carbon units - 41,917
Total revenue 74,719,666 69,554,186
Finance income (note 10) 3,347,383 1,047,757
Other operating income 881,589 368,022
Total income 78,948,638 70,969,965
Generation based incentives are recognised on fulfilment of eligibility criteria prescribed under Indian Renewable
Energy Development Agency Limited - Generation Based Incentive Scheme.
Other operating income recognised during the year represents liquidated damages claimed from project suppliers
in relation to low machine availability as against the guaranteed machine availability.
7. Employee benefits expense
Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Salaries and bonus1 2,241,999 3,436,443
Contribution to provident fund 32,150 38,405
Staff welfare 58,039 46,427
Gratuity and leave encashment (note 28) 66,337 7,965
Share based payments (note 38) 641,188 919,946
Total 3,039,713 4,449,186
1 Includes costs relating to one-off bonus expense of USD Nil (31 December 2014: USD 1,262,650) attributable to
successful financing transaction.
Overview
Corporate Governance
Business Review
Financial Statements81Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
8. Other operating expenses include costs relating to write-off of doubtful advances USD Nil (31 December 2014:
USD 2,154,881), provision for trade receivables USD 225,991 (31 December 2014: USD Nil), transaction costs of
USD Nil (31 December 2014: USD 2,990,977) incurred in relation to raising of long-term finance, un-eliminated
indirect tax cost of USD 275,112 (31 December 2014: USD 902,779) on inter-group transactions.
9. Auditor’s remunerationThe auditor’s remuneration is as follows:
Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Fees payable to the auditors of Company and its subsidiaries for :
Audit of the Company’s annual accounts 84,057 80,732
Audit of the Company’s subsidiaries pursuant to legislation 83,690 64,455
Total audit fees 167,747 145,187
Review of Company’s interim accounts 31,330 29,657
Review of the Company’s subsidiaries interim accounts pursuant to
legislation
30,396 -
Non-audit related assurance services - 255,410
Total non-audit fees 61,726 285,067
10. Finance income
Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Interest on bank deposits 1,237,561 873,087
Loss on derivative instruments within CCDs (88,384) (317,613)
Loss on derivative instruments within CCPS (132,601) (152,402)
Finance income on security deposits 421,815 -
Gain on disposal of current investments 1,796,093 644,685
Others 112,899 -
Total finance income 3,347,383 1,047,757
11. Finance costs
Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Interest on borrowings (70,987,900) (54,744,911)
Other borrowing costs2 (4,398,853) (4,313,211)
Interest on liability portion of CCPS (519,611) (546,465)
Total interest expense (75,906,364) (59,604,587)
Less: amounts included in the cost of qualifying assets1 (note 16) 24,684,494 16,680,936
Total finance cost recognised in the income statement (51,221,870) (42,923,651)
1 Amounts included in the cost of qualifying assets during the year represent interest on project specific as well as
general borrowings which are sanctioned for the purpose of construction of a qualifying assets and it represents
the actual finance costs incurred on those borrowings, calculated using the effective interest rate method.
2 Includes finance cost on finance lease obligations USD 1,272,277 (31 December 2014: USD Nil).
82 Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
13. Taxation
Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Current tax charge (5,560,396) (520,441)
Deferred tax charge (note 19) 5,479,633 122,507
Income tax expense (80,763) (397,934)
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 USD 962. As such, the Company’s tax liability is zero. However considering
that the Company’s operations are entirely based in India, the effective tax rate of the Group of 34.61% (31
December 2014:33.99%) has been computed based on the current tax rates prevailing in India
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 has recognised MAT of USD 5,560,396 (31 December
2014: USD 803,932) as MAT is greater than corporate income tax for the current year. The tax expense represents
current tax charge and non-cash net deferred tax liability on timing differences accounted during the year.
12. Other finance costs on refinancing
Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Loan refinancing costs (541,185) (605,748)
Total (541,185) (605,748)
Loan refinancing costs represents the cost of prepayment and unamortised transaction costs incurred upon
refinancing the existing senior term loans.
The prima-facie tax expense for the year is reconciled to the tax expense recognised in consolidated income
statement as follows:
Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Profit before tax 461,505 2,273,908
Enacted tax rates 34.61% 33.99%
Expected tax expense (159,727) (772,901)
Effect of:
Income not offered to tax - 125,091
Other permanent differences 2,100,705 249,876
MAT charge (5,560,396) (803,932)
MAT deferred tax credit 3,538,655 803,932
Income tax expense recognised in the consolidated income statement (80,763) (397,934)
Tax assets / liabilities recognised in the consolidated statement of financial position:
As at
31 December 2015
As at
31 December 2014
USD USD
Current tax assets - 1,457,032
Current tax liabilities 3,176,482 285,746
Overview
Corporate Governance
Business Review
Financial Statements83Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
14. Earnings per shareBasic earnings per share is calculated by dividing profit attributable to ordinary shareholders of the Company by
the weighted average number of ordinary shares outstanding during the year.
Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Basic and Diluted:
a) Profit attributable to the equity holders of the Company 1,162,991 1,875,974
b) Weighted average number of ordinary shares (basic) 163,636,000 163,636,000
Add: Effect of weighted average number of share options
outstanding
- 201,050
c) Weighted average number of ordinary shares (diluted) 163,636,000 163,837,050
Basic earnings per share 0.00711 0.01146
Diluted earnings per share 0.00711 0.01145
At 31 December 2015, 46,545,082 potential ordinary shares (includes CCPS, share options and share warrants)
(31 December 2014: 29,450,597) were excluded from the diluted weighted average number of shares calculation
because their effect would have been anti-dilutive.
The average market value of the Company’s shares for the purpose of calculating the dilutive effect of share options
was based on quoted market prices for the year during which the shares and share options were outstanding.
15. Intangible assets Application software
As at
31 December 2015
As at
31 December 2014
USD USD
Cost
Balance at the beginning of the year 788,727 750,444
Additions during the year 75,900 62,357
Exchange differences (32,644) (24,074)
Closing balance 831,983 788,727
Amortisation
Balance at the beginning of the year 460,658 280,709
Charge for the year 200,059 196,294
Exchange differences (23,982) (16,345)
Closing balance 636,735 460,658
Carrying amount
Closing balance 195,248 328,069
Opening balance 328,069 469,735
84 Mytrah Energy Limited Annual Report 2015N
ote
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or
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ssets
(re
fer
no
te 1
1).
Refe
r n
ote
24
fo
r se
cu
rity
rest
ricti
on
s o
n p
rop
ert
y, p
lan
t an
d e
qu
ipm
en
t.
2.
Th
e G
rou
p lease
d t
he r
igh
ts t
o u
se p
ow
er
evacu
ati
on
facili
ties
un
der
a lease
arr
an
gem
en
t w
ith
rela
ted
part
ies.
3.
Su
mm
ary
of
dep
recia
tio
n a
nd
am
ort
isati
on
ch
arg
e:
Overview
Corporate Governance
Business Review
Financial Statements85Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
16. Property, plant and equipment (continued)
Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Amortisation of intangible assets (refer note 15) 200,059 196,294
Depreciation / amortisation charge on tangible assets 16,514,463 11,712,244
Depreciation and amortisation capitalised during the year, net relating
to wind farm assets under course of construction
(310,781) (544,777)
Total depreciation and amortisation charge 16,403,741 11,363,761
17. Other non-current assets
As at
31 December 2015
As at
31 December 2014
USD USD
Deposits 6,546,423 25,894,400
Capital advances 14,740,851 47,190,987
Prepayments 12,410,325 8,345,149
Total other non-current assets 33,697,599 81,430,536
Deposits mainly comprise of refundable security deposits placed with related parties towards usage of land and
power evacuation facilities for a period of 20 years. The difference between the fair value and the nominal value
of the deposits has been classified as assets under finance lease.
Capital advances represent advance payments made to suppliers and related parties for the construction of wind
farm assets, as part of long-term construction service contracts.
Prepayments primarily relate to amounts paid in advance towards lease rentals for lands which have been taken
on lease basis from the suppliers of wind turbine generators and related parties for a period ranging up to 20
years and are renewable provided the main lease is renewed by the government authorities and other parties.
18. Other investments
As at
31 December 2015
As at
31 December 2014
USD USD
Deposits with banks1 2,055,483 1,589,719
Total 2,055,483 1,589,719
1 Represents margin money deposits placed with banks and financial institutions towards bank guarantees
provided to various third parties with maturity period greater than one year.
86 Mytrah Energy Limited Annual Report 2015
19. Deferred tax assetsThe following are the major deferred tax liabilities and assets recognised by the Group and movements thereon
during the current year.
As at
31 December 2014
Recognised in
income statement
Exchange
Difference
As at
31 December 2015
USD USD USD USD
Property, plant and equipment (15,412,758) (3,394,107) 698,198 (18,108,667)
Provisions 18,861 100,041 (3,881) 115,021
Share issue costs 123,158 18,432 (5,305) 136,285
MAT credit 1,917,653 3,538,655 (185,248) 5,271,060
Unrealised inter-group profits 1,619,272 277,092 (70,848) 1,825,516
Tax losses 12,189,247 4,939,520 (623,395) 16,505,372
Net deferred tax asset 455,433 5,479,633 (190,479) 5,744,587
As at
31 December 2013
Recognised in
income statement
Exchange
Difference
As at
31 December 2014
USD USD USD USD
Property, plant and equipment (8,903,204) (7,063,501) 553,947 (15,412,758)
Provisions 8,509 11,064 (712) 18,861
Share issue costs 241,401 (116,285) (1,958) 123,158
MAT credit 1,181,572 803,932 (67,851) 1,917,653
Unrealised inter-group profits 1,871,806 (207,911) (44,623) 1,619,272
Tax losses 5,947,979 6,695,208 (453,940) 12,189,247
Net deferred tax asset 348,063 122,507 (15,137) 455,433
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The following
are the details of deferred tax balances recognised in the consolidated statement of financial position:
As at
31 December 2015
As at
31 December 2014
USD USD
Deferred tax assets 23,853,254 15,868,191
Deferred tax liabilities (18,108,667) (15,412,758)
Deferred tax asset, net 5,744,587 455,433
Overview
Corporate Governance
Business Review
Financial Statements87Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
20. Trade receivables
As at
31 December 2015
As at
31 December 2014
USD USD
Trade receivables 17,706,023 17,695,157
Less : Provision for impairment of trade receivables (218,858) -
Net trade receivables 17,487,165 17,695,157
Trade receivables disclosed above are classified as loans and receivables in accordance with IAS 32 and are
therefore measured at amortised cost. Trade receivables held by the Group which are non-interest bearing were
not collectively impaired or written off.
Trade receivables include amounts which are past due at the reporting date but against which the Group has
not recognised any allowance for doubtful receivables because there has not been a significant change in credit
quality and the amounts are still recoverable. The average age of the receivables was 86 days during the year
ended 31 December 2015 (31 December 2014: 64 days)
The maximum exposure to credit risk at the reporting date is the carrying value of each customer.
Ageing of receivables are as follows:
As at
31 December 2015
As at
31 December 2014
USD USD
Not due 4,485,052 2,271,528
0-60 days 3,465,789 3,778,755
61-90 days 5,540,277 4,302,756
91-180 days 2,886,860 5,961,239
More than 180 days 1,109,187 1,380,879
Total 17,487,165 17,695,157
The fair value of trade receivables approximates their carrying amounts largely due to the short-term maturities of
these instruments and hence management considers the carrying amount of trade receivables to be approximately
equal to their fair value. The Group doesn’t hold any collateral security.
As at 31 December 2015, the Group has 26 customers (31 December 2014: 23 customers).
21. Other current assets
As at
31 December 2015
As at
31 December 2014
USD USD
Deposits 288,263 296,571
Accrued interest 574,656 536,159
Prepayments 991,868 713,682
Accrued income 5,029,539 5,624,079
Other receivables 4,102,630 1,014,893
Total other current assets 10,986,956 8,185,384
Prepayments primarily relate to amounts paid in advance for lease rentals for land and power evacuation facilities.
Accrued income primarily represents amounts receivable from the customer on the sale of electricity and the
amount recoverable from Indian Renewable Energy Development Authority (“IREDA”) as generation based
incentive but not billed for as at 31 December 2015.
Other receivables primarily include advances to vendors of USD 2,958,411 (31 December 2014: USD 696,536).
88 Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
23. Cash and bank balances
As at
31 December 2015
As at
31 December 2014
USD USD
Cash on hand 15 21
Bank balances 5,910,771 5,423,071
Cash and cash equivalents 5,910,786 5,423,092
Bank deposits 49,666,494 8,845,140
Total cash and bank balances 55,577,280 14,268,232
Bank deposits include margin money deposits of USD 43,174,683 (31 December 2014: USD 8,560,694) placed with
banks towards bank guarantees provided to various third parties.
The Group has investments in the following mutual fund schemes, which are classified as available-for-sale
investments.
Mutual fund scheme:
Units as at
31 December 2015
Units as at
31 December 2014
USD USD
IDFC cash fund – Growth- Regular Plan1 282,731 173,577
L&T Liquid Fund – Growth1 29,956 29,956
Birla Sun Life Cash Plus Growth 7,538,897 -
SBI Premier Liquid Fund -Regular Plan –Growth 167,246 91,940
Union KBC Liquid Growth Fund 35,382 16,475
BSL Cash plus growth regular plan - 601,656
IDFC cash fund – Growth- Regular Plan 34,406 -
1 Investments in mutual funds include amounts of USD 8,627,681 (31 December 2014: 7,168,676) placed as lien with
banks and financial institutions.
The fair value of the quoted units is determined by reference to published data. During the year, disposals resulted
in a net gain of USD 1,796,093 (31 December 2014: USD 664,685) (refer note 10) recognised in the consolidated
income statement.
22. Current investments
As at
31 December 2015
As at
31 December 2014
USD USD
Available-for-sale investments carried at fair value (mutual funds) 43,384,798 10,966,118
Total current investments 43,384,798 10,966,118
24. Borrowings
As at
31 December 2015
As at
31 December 2014
USD USD
Borrowings at amortised cost
Non-convertible bonds1 109,503,048 60,838,129
Compulsorily convertible debentures2,3 16,332,726 25,805,524
Term loans from banks and financial institutions4 533,747,671 339,862,736
Working capital loans from banks5 14,613,955 29,750,057
Total borrowings 674,197,400 456,256,446
Amounts due for settlement within 12 months - USD 49,764,216 (31 December 2014: USD 57,426,521)
Amounts due for settlement on or after 12 months - USD 624,433,184 (31 December 2014: USD 398,829,925)
Overview
Corporate Governance
Business Review
Financial Statements89Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
1. The Company’s subsidiary, Mytrah Energy (India) Limited (“MEIL”) has issued non-convertible bonds (NCBs)
for an amount of ~ USD 113.3 million (INR 7424 million) primarily to partly finance wind farm projects under
construction. The NCBs are listed on the wholesale debt segment of Bombay Stock Exchange, India. The
NCBs are repayable at the end of fifth anniversary from the draw-down date and carry a cash coupon of 12%
per annum payable on semi-annual basis.
The NCBs are secured by collateral support in the form of pledge of 100% of the MEIL’s shares held by Bindu
Vayu Mauritius Limited (“BVML”), 100% of the CCPS held by BVML in MEIL and pledge of equity shares held
by MEIL in MVUPL (48.99%), MVPPL (48.99%), MVKPL (48.99%), MVBPL (99.98%) and MVMPL (18.99%).
Further, hypothecation by way of first and exclusive charge over the monies lying in credit therein from time
to time, and by way of first charge over all receivables arising from the loans disbursed by the MEIL to MVBPL.
As part of financing arrangement, the Group has incurred an amount of USD 1,501,610 as arrangement fees.
The Group accounted these costs as transaction cost under IAS 39 and are amortised over the term of NCBs
using effective interest rate method. The carrying amount of the liability measured at amortised cost is USD
109,503,048 (31 December 2014: USD 60,838,129)
During the year 2014, the Group has issued 8,612,412 warrants to the NCBs investors. These warrants provide
an option to the investors to purchase an equivalent number of ordinary shares in Mytrah Energy Limited at a
fixed price of GBP 0.7729 based on the Company’s share price traded before the day immediately preceding
the exercise date of the warrant. The fair value of the warrants as at 31 December 2014 amounted to USD
1,703,053 and was recognised accordingly as derivative financial liability.
Further on 30 March 2015, the Group has replaced the warrants issued in 2014 by issuing 11,439,762 new
warrants to the investors. These new warrants provide an option to the investors to purchase an equivalent
number of ordinary shares in Mytrah Energy Limited at a fixed price of GBP 0.7729. Accordingly the derivative
financial liability of USD 1,703,053 relating to existing 8,612,412 warrants has been derecognised during the
current year and the fair value of the 11,439,762 warrants amounting to USD 2,038,960 is recognised as equity.
2. During 2012, the Company’s subsidiary, MEIL has issued 3,333,333 compulsory convertible debentures (“CCDs”)
at INR 300 (~ USD 5.71) each to PTC India Financial Services Limited (PFS) (the “Investor”) amounting to USD
18,285,211 under an agreement between the Group and PFS. The purpose of this is to fund the capital projects
of the Group. The following are the significant terms in relation to the CCDs:
• The CCDs carry a fixed rate of interest payable quarterly in arrears on the principal amount of the CCDs
outstanding.
• The CCDs, along with unpaid interest, if any, mandatorily convert into such number of equity shares of
MEIL at the end of 49 months from the date of initial disbursement so as to provide the investor a stated
rate of return.
• The CCDs are secured by collateral support in the form of pledge of 49% shares of Bindu Vayu Urja Private
Limited (“BVUPL”) held by MEIL.
Further, the agreement states that PFS can put the CCDs (the “put option”) or alternatively, MEIL can call the
CCDs (the “call option”) in exchange for cash providing PFS a stated rate of return. The call option can be
exercised any time from the date of issue whereas the put option can be exercised over a period beginning
from 41 months to 47 months from the date of issue of CCDs.
3. During 2011, MEIL has issued 5,000,000 compulsory convertible debentures (“CCDs”) at INR 300 (~ USD 6)
each to IDFC including any of its affiliates under an agreement between the Group and IDFC. The purpose
of this is to fund the capital projects of the Group. The CCDs carry a fixed rate of interest payable quarterly
in arrears on the principal amount of the CCDs outstanding. The CCDs are secured by collateral support in
the form of pledge of shares held by Bindu Urja Capital Inc (BUCI) in the Company, certain non-disposal
24. Borrowings (continued)
90 Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
undertakings by the Company and an irrevocable and unconditional corporate guarantee by the Company to
IDFC.
Further, the Company has entered into an option agreement with IDFC, whereby IDFC can put the CCDs (the
“put option”) or alternatively, the Group can call the CCDs (the “call option”) in exchange for cash providing
IDFC a stated rate of return. The call option can be exercised any time after 18 months from the date of issue
whereas the put option can be exercised over a period beginning from 36 months to 48 months from the date
of issue of CCDs.
In accordance with the terms of the option agreement with IDFC, the Company has exercised the call option
on the CCDs and accordingly has redeemed the entire CCDs in two tranches.
4. The Group has drawn down the term loan facility with banks and financial institutions to finance the construction
of wind farm assets. The carrying amount of the liability measured at amortised cost is USD 533,747,671 (31
December 2014: USD 339,862,736). The repayment terms of the term loans range from 12 to 14 years. In
compliance with the terms of the loan agreement, the Group has created a charge on all project movable,
immovable properties, cash flows, receivables and revenues in favour of banks and financial institutions.
Further, the loan drawn down by BVUPL, MVPPL, MVUPL, MVKPL, MVMPL and MVSPL is secured by way
of first charge on the pledge of shares held by MEIL in the equity shares representing 51% of the total paid
up equity share capital of the BVUPL, MVPPL, MVUPL, MVKPL, MVMPL and MVSPL respectively. The loans
drawn down by MVIPL and MVGoPL is secured by way of first charge on the pledge of shares held by the
MVBPL in the equity shares representing 51% of the total paid-up equity share capital of MVIPL and MVGoPL
respectively. The loan drawn by MEL is secured by irrevocable and unconditional guarantee from BVML.
5. The working capital loan facilities are secured by way of first charge and hypothecation of entire immovable
properties pertaining to the respective projects, both present and future, including movable plant and
machinery, machinery spares, tools, accessories, entire project cash flows, receivables, book debts and
revenues of the respective entities. The working capital facilities relating to wind farm development activities
are secured by way of first pari-passu charge on current assets related to wind farm development activity. The
facilities are repayable on a yearly rollover basis and carries interest in the range of 11% to 13.5% per annum.
6. Refer note 36 for maturity profile of the borrowings.
24. Borrowings (continued)
25. Finance lease obligationsThe Group leased the rights to use power evacuation facilities under a lease arrangement with related parties.
Future finance lease payments due, and their present values, are shown in the following table:
Minimum lease payments Present value of minimum lease payments
As at
31 December 2015
As at
31 December 2014
As at
31 December 2015
As at
31 December 2014
USD USD USD USD
Not later than one year 871,311 - 101,165 -
Later than one year and not later
than five years
3,485,244 - 541,521 -
Later than five years 12,198,354 - 5,775,196 -
16,554,909 - 6,417,882 -
Less : future finance charges 10,137,027 - - -
Present value of minimum lease
payments
6,417,882 - 6,417,882 -
Overview
Corporate Governance
Business Review
Financial Statements91Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
26. Derivative financial instruments
As at
31 December 2015
As at
31 December 2014
USD USD
Fair value of options embedded in:
Compulsorily convertible preference shares (note 33) 3,429,381 3,432,610
Compulsorily convertible debentures (note 24) - (89,008)
Share warrants (note 24) - 1,703,053
Total 3,429,381 5,046,655
27. Trade and other payables
As at
31 December 2015
As at
31 December 2014
USD USD
Current:
Trade payables1 10,705,902 6,405,402
Liability component of CCPS2 4,234,334 4,403,201
Interest accrued but not due on borrowings 5,658,409 3,353,664
Other payables 2,531,817 276,350
23,130,462 14,438,617
Non-current:
Liability component of CCPS2 2,160,722 4,521,985
Other payables3 112,261,359 37,390,292
114,422,081 41,912,277
1 Trade creditors relate to amounts outstanding for trade purchases and ongoing costs.
2 Liability component of CCPS represents the mandatory preference share dividend payable to IIF, discounted
using interest rate implicit in the arrangement. (Refer note 33).
3 Other payables include payables for purchase of capital assets.
The Group has financial risk management policies in place to ensure that all payables are paid within the pre-
agreed credit terms.
The fair value of trade and other payables approximates their carrying amounts largely due to the short-term
maturities of these instruments and hence management considers that the carrying amount of trade and other
payables to be approximately equal to their fair value.
As at
31 December 2015
As at
31 December 2014
USD USD
Included in :
- Current liabilities 101,165 -
- Non-current liabilities 6,316,717 -
Total 6,417,882 -
25. Finance lease obligations (continued)
92 Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
28. Retirement benefit obligationsDefined contribution plan
Provident fund:
The Group makes contributions to a defined contribution retirement benefit plan for qualifying employees. Under
the plan, the Group is required to contribute a specified percentage of the qualified employees’ pay to fund the
benefits. These contributions are made to a fund administered and managed by the Government of India. The
Group’s monthly contributions are charged to the consolidated income statement in the year they are incurred.
The total cost charged to consolidated income statement of USD 32,150 (31 December 2014: USD 38,405)
represents contributions payable to these schemes by the Group at rates specified in the rules of the plan. As
at 31 December 2015, contributions of USD nil (31 December 2014: USD nil) were due in respect of the current
reporting year.
Defined benefit plan
(a) Gratuity
In accordance with the Payment of Gratuity Act, 1972 of India, the Group provides for gratuity, a defined benefit
retirement plan (the ‘Gratuity Plan’) covering eligible employees. The Group makes annual contributions under the
Gratuity Plan to Life Insurance Corporation of India to fund the benefit obligation.
The present value of the defined benefit obligation, the related current service cost and past service cost was
measured using the projected unit cost method.
The projected unit cost method is an accrued benefits valuation method in which the scheme liabilities make
allowance for projected earnings. The accumulated benefit obligation (ABO) is an actuarial measure of the
present value for service already rendered but differs from the projected unit cost method in that it includes no
assumption for future salary increases. At the balance sheet date the gross ABO was USD 193,391 (31 December
2014: USD 21,285).
Movements in the present value of the benefit obligation are as follows:
Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Change in benefit obligation
Projected benefit obligation at the beginning of the year 21,285 25,362
Current service cost 44,044 4,479
Interest cost 1,966 2,393
Benefits paid - (9,443)
Actuarial loss / (gain) 132,550 (930)
Translation adjustment (6,454) (576)
Projected benefit obligation at the end of the year (A) 193,391 21,285
Movement in fair value of plan assets
Opening balance of fair value of plan assets 16,277 14,376
Contributions made during the year - 10,848
Expected return 1,503 1,009
Benefits paid - (9,443)
Translation adjustment (671) (513)
Closing balance of fair value of plan assets (B) 17,109 16,277
Net liability recognised in the balance sheet (A-B) 176,282 5,008
Cost of employee benefits for the year
Current service cost 44,044 4,479
Interest cost 1,966 2,393
Expected return (1,503) (1,009)
Net actuarial loss/(gain) recognised in other comprehensive income 132,550 (930)
Net loss recognised for the year 177,057 4,933
Overview
Corporate Governance
Business Review
Financial Statements93Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
28. Retirement benefit obligations (continued)
(b) Leave encashment
The Group also provides for leave encashment (the “leave encashment plan”), a defined benefit plan covering
eligible employees. Under the leave encashment plan, employees are entitled to future payments upon termination
of service with the Company, whether it is by death during service or upon reaching retirement age.
The present value of the defined benefit obligation and the related current service cost was measured using the
projected unit credit method.
The projected unit cost method is an accrued benefits valuation method in which the scheme liabilities make
allowance for projected earnings. The accumulated benefit obligation (ABO) is an actuarial measure of the
present value for service already rendered but differs from the projected unit credit method in that it includes no
assumption for future salary increases. At the balance sheet date the ABO was USD 155,368 (31 December 2014:
USD 8,865).
Movements in the present value of the benefit obligation were as follows:
Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Change in benefit obligation
Projected benefit obligation at the beginning of the year 8,865 12,255
Interest cost 819 1,156
Current service cost 21,011 946
Benefits paid (20,960) (1,153)
Actuarial loss/ (gain) 150,759 (4,124)
Translation adjustment (5,126) (215)
Projected benefit obligation at the end of the year 155,368 8,865
Cost of employee benefits for the year
Interest cost 819 1,156
Current service cost 21,011 946
Net actuarial loss/ (gain) recognised in other comprehensive income 150,759 (4,124)
Net loss/ (gain) recognised for the year 172,589 (2,022)
Key assumptions used in actuarial valuation of gratuity and leave encashment obligations:
Year ended
31 December 2015
Year ended
31 December 2014
Discount rate 7.90% 9.30%
Long-term rate of compensation increase (%) 12.00% 8.00%
Attrition 10.00% 6.00%
Mortality table LIC (2006 -08) LIC (2006 -08)
(c) Summary of retirement benefit obligations recognised in the balance sheet
Current portion Non-current Portion
USD USD
Liability recognised as at 31 December 2015:
Gratuity 7,842 168,440
Leave encashment 25,193 130,175
33,035 298,615
Liability recognised as at 31 December 2014:
Gratuity - 5,008
Leave encashment 1,431 7,434
1,431 12,442
94 Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
29. Share capital
As at
31 December 2015
As at
31 December 2014
USD USD
Issued and fully paid up share capital of the Company:
163,636,000 (31 December 2014: 163,636,000) ordinary shares with
no par value
72,858,278 72,858,278
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, Bindu Urja Holding Inc, Bindu Urja Capital Inc and Sila
Energy Inc. In consideration of the said transfer the Company issued shares of the Company at no par value in its
capital. Subsequently the Company issued 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.
30. Capital contribution
As at
31 December 2015
As at
31 December 2014
USD USD
Capital contributions at beginning of the year 16,721,636 7,357,620
Capital contributions received during the year - 9,364,016
Balance at end of the year 16,721,636 16,721,636
During the financial year 2013, the Company’s subsidiary, MEIL entered into an investment agreement with related
parties, Mytrah Wind Developers Private Limited (“MWDPL”) and Bindu Urja Infrastructure Limited (‘BUIL’) to issue
40,000,000 Series B Cumulative Compulsorily Redeemable Preference Shares (“RPS”) at Rs. 300 (~ USD 5.71)
per share and carry a nominal dividend of 0.01% per annum. Pursuant to the agreement, BUIL and MWDPL made
long-term non-reciprocal capital contributions (“capital contributions”) of USD 16,721,636 as at 31 December 2015,
which as per the terms of agreement are not available for distribution as dividend. Management has evaluated
that these contributions are in substance in the nature of equity and accordingly classified the amounts received
as “Capital Contributions”.
31. Retained earnings
As at
31 December 2015
As at
31 December 2014
USD USD
Balance at beginning of the year 15,520,003 14,339,815
Profit for the year 1,162,991 1,875,974
Tax on buy back of CCPS from non-controlling interest (253,976) (128,538)
Creation of capital redemption reserve on buy back (1,100,797) (567,248)
Creation of debenture redemption reserve (5,560,906) -
Balance at end of the year 9,767,315 15,520,003
Overview
Corporate Governance
Business Review
Financial Statements95Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
32. Other reserves (a) Foreign currency translation reserve
Foreign currency translation reserve comprises foreign currency differences arising from the translation of the
financial statements of foreign operations from their functional currency into the Group’s presentational currency.
As at
31 December 2015
As at
31 December 2014
USD USD
Balance at beginning of the year (36,870,962) (32,842,460)
Foreign currency translation adjustments (3,510,858) (4,028,502)
Balance at end of the year (40,381,820) (36,870,962)
(b) Equity-settled employee benefits reserve:
The equity-settled employee benefits reserve relates to the share options granted to employees and key
management personnel under the employee share option plan. Further information about share-based payments
is set out in note 38.
As at
31 December 2015
As at
31 December 2014
USD USD
Balance at beginning of the year 4,003,406 3,083,460
Additional cost during the year 740,634 919,946
Balance at end of the year 4,744,040 4,003,406
(c) Fair value reserve
The fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets
until the assets are derecognised or impaired.
As at
31 December 2015
As at
31 December 2014
USD USD
Balance at beginning of the year 195,253 93,480
Change in the fair value of available for sale financial instruments 355,167 101,773
Balance at end of the year 550,420 195,253
(d) Actuarial valuation reserve
Actuarial valuation reserve comprises the cumulative net gains/ losses on actuarial valuation of post-employment
obligations. Refer note 28 for further details.
As at
31 December 2015
As at
31 December 2014
USD USD
Balance at beginning of the year 4,526 (528)
(Loss)/ gain on actuarial valuation of post-employment benefits (283,309) 5,054
Balance at end of the year (278,783) 4,526
(e) Capital redemption reserve (CRR)
Capital redemption reserve is created on redemption of compulsorily convertible preference shares during the
year in accordance with the provisions of Indian Companies Act.
As at
31 December 2015
As at
31 December 2014
USD USD
Balance at beginning of the year 567,248 -
Creation of CRR on buyback 1,100,797 567,248
Balance at end of the year 1,668,045 567,248
96 Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
32. Other reserves (continued)
33. Non-controlling interests
As at
31 December 2015
As at
31 December 2014
USD USD
Compulsorily convertible preference shares (CCPS) (refer note a)
Balance at beginning of the year 54,827,924 55,395,172
Purchase of CCPS from non- controlling interest holders (2,345,085) -
Buy back of CCPS from non-controlling interest holders (1,777,864) (567,248)
Balance at the end of the year 50,704,975 54,827,924
Equity shares held by captive customers (refer note b)
Balance at beginning of the year 704,701 -
Issue of shares to non-controlling interest holders 77,556 704,701
Share of loss attributable to non-controlling interest holders (782,249) -
Balance at the end of the year 8 704,701
Total (a)+(b) 50,704,983 55,532,625
(g) Share warrant reserve
Share warrant reserve comprises fair value of warrants issued to NCBs during the year. The fair value of share
purchase warrants issued during the year was calculated using the Black-Scholes option-pricing model. The inputs
for this model include stock price, exercise price, expected term, volatility, risk free rates, etc.
As at
31 December 2015
As at
31 December 2014
USD USD
Balance at beginning of the year - -
Issue of share warrants 2,038,960 -
Balance at end of the year 2,038,960 -
Total other reserves (26,098,232) (32,100,529)
(f) Debenture redemption reserve (DRR)
Debenture redemption reserve is created on outstanding NCBs at the year end in accordance with the provisions
of Indian Companies Act.
As at
31 December 2015
As at
31 December 2014
USD USD
Balance at beginning of the year - -
Creation of DRR on redemption 5,560,906 -
Balance at end of the year 5,560,906 -
a) Compulsorily convertible preference shares
During the year ended 31 March 2012, the MEIL issued 11,666,566 Series A CCPS at INR 300 (~USD 6) each to India
Infrastructure Fund (IIF) under an Investment Agreement date 20 June 2011 between the MEIL, IIF and Mr. Ravi
Kailas. The following are the salient features of the CCPS:
• IIF is entitled to receive a preference dividend before any dividends are declared to the ordinary shareholders.
These carry a step-up dividend which is cumulative.
• The CCPS convert into equity shares of MEIL at a fixed price of INR 300 (~USD 6) per share, for a fixed number
of shares, at the end of six years if the call and put options are not exercised by either of the parties.
• As part of the investment agreement, IIF were issued with 100 ordinary shares in MEIL.
Overview
Corporate Governance
Business Review
Financial Statements97Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
33. Non-controlling interests (continued)
34. Commitments(a) Capital commitments
As at
31 December 2015
As at
31 December 2014
USD USD
Capital commitments 269,788,515 165,970,144
The capital expenditures authorised and contracted primarily relate wind farm assets under construction, which
have not been provided for in the accounts. These commitments are net of advances paid of USD 14,740,851 (31
December 2014: USD 47,190,987) .
(b) Operating leases
The Group leases office premises under cancellable operating lease agreements with a term of three years. The
Further, the Company entered into an option agreement with IIF on the same date whereby the Company can
call the CCPS (the “call option”) or alternatively, IIF can put the CCPS (the “put option”) in exchange for cash or a
variable number of shares in the Company providing IIF a stated rate of return. The call option can be exercised
at any time after four years three months and the put option can be exercised at any time after five years three
months from the date of issue.
In accordance with IAS 32, Financial Instruments: Presentation and IAS 39 Financial Instruments: Measurement,
upon initial recognition, the issue proceeds has been segregated in the financial statements as mentioned below.
The issue proceeds of USD 69,932,181 (net of issue costs of USD 1,891,056) were first attributed to the embedded
derivatives, with the fair value of the options amounting to USD 2,670,325. As the instrument entitles the
holder to a fixed number of shares the remaining value of the proceeds were bifurcated such that there is a
liability component and an equity component. The liability component, being USD 11,866,684 was estimated
by discounting the mandatory preference share dividend of six year cash flows using an interest rate from an
equivalent instrument without a conversion feature, with the residual value of USD 55,395,172 representing equity.
The effective interest rate on the financial liability is 5.6%.
The options are subsequently measured at fair value through profit and loss and the financial liability is subsequently
measured at amortised cost. The year-end balance of the options was USD 3,429,381 (31 December 2014: USD
3,432,610) (see consolidated statement of financial position), the liability component of the preference shares was
USD 6,395,056 (31 December 2014: USD 8,925,186) and the equity component of the CCPS was USD 50,704,975
(31 December 2014: USD 54,827,924). During the current year, the Group has not paid any dividend to IIF (31
December 2014: USD Nil).
During the current year, the Group has purchased and bought back 583,334 shares (31 December 2014: 116,670
shares) from IIF at a premium of INR 300 (USD 9.72). In accordance with the principles enunciated in IAS 32, the
Company has reduced face value of the CCPS bought back amounting to USD 4,122,949 (31 December 2014:
USD 567,248) from the ‘non-controlling interest’ and the premium, being the dividend payable over the term of
the CCPS, amounting to USD 2,790,287 (31 December 2014: USD 567,248) has been reduced from the liability
component of CCPS.
b) Equity shares held by captive customers
During the year ended 31 December 2014, MVMPL has commissioned a captive power generating plant in
Tamilnadu under Captive Group Project (“CGP”) framework, where the electricity generated is consumed by
a group of consumers. To qualify as a captive generating plant, an entity must meet the requirements set forth
under the relevant regulations, which specify that a minimum 26% equity interest in the captive generating plant
should be held by a Captive Consumers or group of Captive Consumers. Accordingly, MVMPL has entered into
power purchase agreements (PPA) with Captive Consumers and issued 4,729,840 equity shares of INR 10 par
value (USD 782,249). The shares issued to the captive consumers have been classified as non-controlling interest
in these consolidated financial statements.
98 Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
34. Commitments (continued)
35. Capital managementThe Group manages its capital to ensure that entities in the Group will be able to continue as a going concern
while maximising the return to stakeholders through its optimisation of the debt and equity balance.
The capital structure of the Group consists of net debt, which includes the borrowings disclosed in note 24 after
deducting cash and bank balances, equity attributable to owners of the Company comprising issued capital and
reserves and retained earnings and non-controlling as disclosed in notes below.
The Group’s risk management committee reviews the capital structure on a semi-annual basis. As part of this
review, the committee considers the cost of capital and the risks associated with each class of capital.
The gearing ratio at the year-end is as follows:
As at
31 December 2015
As at
31 December 2014
USD USD
Debt (note 24) 674,197,400 456,256,446
Cash and bank balances (note 23) (55,577,280) (14,268,232)
Net debt (a) 618,620,120 441,988,214
Equity (including non-controlling interests) 123,953,980 128,532,013
Net debt and equity (b) 742,574,100 570,520,227
Net debt/(net debt+equity) ratio 83% 77%
Debt is defined as long and short-term borrowings (excluding derivatives) as detailed in note 24. Equity includes
all capital and reserves of the Group that are managed as capital, including non-controlling interests of the Group.
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 3.
The Group’s objective when managing capital is to safeguard the Group’s ability to continue as a going concern
in order to provide returns for shareholders and benefits for stakeholders. The Group also proposes to maintain
an optimal capital structure to reduce the cost of capital. Hence, the Group may adjust any dividend payments,
return capital to shareholders or issue of new shares. Total capital is the equity as shown in the consolidated
statement of financial position. Currently, the Group primarily monitors its capital structure in terms of evaluating
the funding of wind farm projects. Management is continuously evolving strategies to optimise the returns and
reduce the risks. It includes plans to optimise the financial leverage of the Group.
Equity comprises all components of equity and includes the non-controlling interests.
lease arrangement contains a renewal clause providing the Company with the option of extending the lease for a
further period of three years to four years at the prevailing market rates.
Total operating lease expense recognised in the consolidated income statement as other expenses is USD 789,184
(31 December 2014: USD 649,187). At 31 December 2015, the Group had no outstanding commitments for future
minimum lease payments under non-cancellable operating leases.
36. Financial instruments – Fair values and risk managementIFRS 13 Fair Value Measurement requires entities to disclose measurement of fair values, for both financial and
non-financial assets and liabilities. Fair values are categorised into different levels in a fair value hierarchy based
on the inputs used in the valuation techniques as follows:
• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: Inputs for the asset or liability that is not based on observable market data (unobservable inputs).
Overview
Corporate Governance
Business Review
Financial Statements99Mytrah Energy Limited Annual Report 2015
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5,5
77,2
80
--
55
,577,2
80
Oth
er
invest
men
ts (
no
te 1
8)
-2,0
55
,48
3-
-2,0
55
,48
3
-8
7,5
58
,80
9-
-8
7,5
58
,80
9
Fin
an
cia
l liab
ilit
ies
me
asu
red
at
fair
valu
e
Deri
vati
ve fi
nan
cia
l in
stru
men
ts (
no
te 2
6)
--
-3
,429
,38
13
,429
,38
1-
3,4
29
,38
1-
Fin
an
ce lease
ob
ligati
on
s (n
ote
25
)-
--
6,4
17,8
82
6,4
17,8
82
-6
,417
,88
2-
--
-9
,84
7,2
63
9,8
47
,26
3-
9,8
47
,26
3-
Fin
an
cia
l liab
ilit
ies
no
t m
easu
red
at
fair
valu
e
Bo
rro
win
gs
(no
te 2
4)
--
-6
74
,19
7,4
00
674
,19
7,4
00
Tra
de a
nd
oth
er
payab
les
(no
te 2
7)
--
-23
,13
0,4
62
23
,13
0,4
62
Oth
er
payab
les
– n
on
-cu
rren
t (n
ote
27)
--
-11
4,4
22,0
81
114
,422,0
81
--
-8
11,7
49
,94
38
11,7
49
,94
3
No
te:
1.
In t
his
tab
le, t
he G
rou
p h
as
dis
clo
sed
th
e f
air
valu
e o
f each
cla
ss o
f fi
nan
cia
l ass
ets
an
d li
ab
iliti
es
in w
ay t
hat
perm
its
the in
form
ati
on
to
be c
om
pare
d w
ith
th
e c
arr
yin
g a
mo
un
ts.
2.
Fo
r all
fin
an
cia
l ass
ets
an
d fi
nan
cia
l lia
bili
ties
no
t m
easu
red
at
fair
valu
e, t
he c
arr
yin
g v
alu
e is
a r
easo
nab
le a
pp
roxim
ati
on
of
fair
valu
es.
100 Mytrah Energy Limited Annual Report 2015N
ote
s to
th
e c
on
solid
ate
d fi
nan
cia
l st
ate
me
nts
for
the y
ear
en
ded
31
Decem
ber
20
15 (
co
nti
nu
ed
)
36
. Fin
an
cia
l in
stru
me
nts
– F
air
valu
es
an
d r
isk m
an
ag
em
en
t (c
on
tin
ued
)
Acco
un
tin
g c
lass
ificati
on
s an
d f
air
valu
e
Th
e f
ollo
win
g t
ab
le s
ho
ws
the c
arr
yin
g a
mo
un
ts a
nd
fair
valu
es
of
fin
an
cia
l ass
ets
an
d fi
nan
cia
l lia
bili
ties,
in
clu
din
g t
heir
levels
in
th
e f
air
valu
e h
iera
rch
y.
31
De
ce
mb
er
20
14:
Carr
yin
g a
mo
un
tF
air
valu
e
Desi
gn
ate
d
at
fair
valu
e
thro
ug
h p
rofi
t
or
loss
Lo
ans
and
receiv
ab
les
Availa
ble
-fo
r-
sale
Oth
er
financia
l
liab
iliti
es
To
tal
Level 1
Level 2
Level 3
US
DU
SD
US
DU
SD
US
DU
SD
US
DU
SD
Fin
an
cia
l ass
ets
me
asu
red
at
fair
valu
e
Cu
rren
t in
vest
men
ts (
no
te 2
2)
--
10,9
66
,118
-10
,96
6,118
10,9
66
,118
--
--
10,9
66
,118
-10
,96
6,1
1810
,96
6,1
18-
-
Fin
an
cia
l ass
ets
no
t m
easu
red
at
fair
valu
e
Tra
de r
eceiv
ab
les
(no
te 2
0)
-17
,69
5,15
7
--
17,6
95
,15
7
Oth
er
ass
ets
(n
ote
17 a
nd
21)
-3
2,3
51,20
9-
-3
2,3
51,20
9
Cash
an
d b
an
k b
ala
nces
(no
te 2
3)
-14
,26
8,2
32
--
14,2
68
,23
2
Oth
er
invest
men
ts (
no
te 1
8)
-1,5
89
,719
--
1,5
89
,719
-6
5,9
04
,317
--
65
,90
4,3
17
Fin
an
cia
l liab
ilit
ies
me
asu
red
at
fair
valu
e
Deri
vati
ve fi
nan
cia
l in
stru
men
ts (
no
te 2
6)
--
-5
,04
6,6
55
5,0
46
,65
5-
5,0
46
,65
5-
Fin
an
ce lease
ob
ligati
on
s (n
ote
25
)-
--
--
--
-5
,04
6,6
55
5,0
46
,65
5-
5,0
46
,65
5-
Fin
an
cia
l liab
ilit
ies
no
t m
easu
red
at
fair
valu
e
Bo
rro
win
gs
(no
te 2
4)
--
-4
56
,25
6,4
46
45
6,2
56
,44
6
Tra
de a
nd
oth
er
payab
les
(no
te 2
7)
--
-14
,43
8,6
1714
,43
8,6
17
Oth
er
payab
les
– n
on
-cu
rren
t (n
ote
27)
--
-4
1,9
12,2
77
41,9
12,2
77
--
-5
12,6
07
,34
05
12,6
07
,34
0
No
te:
1.
In t
his
tab
le, t
he G
rou
p h
as
dis
clo
sed
th
e f
air
valu
e o
f each
cla
ss o
f fi
nan
cia
l ass
ets
an
d li
ab
iliti
es
in w
ay t
hat
perm
its
the in
form
ati
on
to
be c
om
pare
d w
ith
th
e c
arr
yin
g a
mo
un
ts.
2.
Fo
r all
fin
an
cia
l ass
ets
an
d fi
nan
cia
l lia
bili
ties
no
t m
easu
red
at
fair
valu
e, t
he c
arr
yin
g v
alu
e is
a r
easo
nab
le a
pp
roxim
ati
on
of
fair
valu
es.
Overview
Corporate Governance
Business Review
Financial Statements101Mytrah Energy Limited Annual Report 2015
36. Financial instruments – Fair values and risk management (continued)
Measurement of fair value:
The following is the summary of valuation techniques used in the measurement of fair value of financial instruments:
Current investments:
Current investments represent the investments in traded mutual funds, whose fair value is determined by reference
to their quoted market price at the reporting date. The fair value represents the net asset value as stated by the
issuer of these mutual fund units in the published statements. Net asset value represents the price at which either
the issuer will issue further units in the mutual fund or the investor can redeem the investments.
Derivative financial instruments:
The fair value of the option contracts embedded in the derivative financial instruments are determined using
binomial lattice model. The inputs for this model include stock price, internal rate of return, expected time for
option expiry, volatility, risk free rate, etc.
Financial risk management:
The Group’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk.
The Group’s primary risk management focus is to minimise potential adverse effects of market risk on its financial
performance. The Group’s risk management assessment and policies and processes are established to identify
and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor such risks and
compliance with the same. Risk assessment and management policies and processes are reviewed regularly to
reflect changes in market conditions and the Group’s activities. The Board of Directors and the Audit Committee
is responsible for overseeing the Group’s risk assessment and management policies and processes.
A. Market Risk
(i) Currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rate. The Group’s presentation currency is the US dollar. The Group’s
exposure to foreign currency arises in part when the Group holds financial assets and liabilities denominated in a
currency different from the functional currency of the entity. Based on the current profile of the Group, the net
liability held in foreign currency is not significant and as such the Group’s exposure to currency risk is limited.
(ii) 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. Cash and bank balances expose
the Group to cash flow interest rate risk. However, the Group does not carry any fixed interest bearing financial
liabilities that are designated at fair value through profit or loss except for the derivative financial instruments
embedded in the CCPS, CCDs and share warrants. Hence, the Group is exposed to the fair value risk on such
derivative financial instruments.
The average interest rate on short-term bank deposits during the year was 7.23% (31 December 2014: 7.41%).
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 creditworthiness. Material investments within the portfolio are
managed on an individual basis.
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
102 Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
The Group’s exposure to interest rates on financial instruments is detailed below:
As at
31 December 2015
As at
31 December 2014
USD USD
Financial assets
Cash and bank balances (note 23) 55,577,280 14,268,232
Total interest rate dependent financial assets 55,577,280 14,268,232
Financial liabilities
Borrowings (note 24) 674,197,400 456,256,446
Total interest rate dependent financial liabilities 674,197,400 456,256,446
The amounts included above for interest rate dependent financial assets are fixed interest bearing financial assets.
If interest rate on INR denominated borrowings had been increased or decreased by 100 basis points with all
other variables held constant, post tax income for the year ended 31 December 2015 would have been increased/
decreased by USD 4,369,594 (31 December 2014: USD 4,181,483).
(iii) Price risk
The Group is exposed to mutual funds price (Net Asset Value – ‘NAV’) risk because of investments in debt-based
mutual fund units held by the Group and classified on the statement of financial position as available-for-sale
financial assets. The Group is not exposed to any commodity price risk. In order to manage its price risk arising
from investment in mutual fund units, the Group diversifies its portfolio; in accordance with the limits set by the
Group risk management policies.
As the Group invests in mutual fund units which in turn invest in short-term (in the range 30-90 days) equity
instruments with low yield and hence carry a very minimal mark-to-market risk. Moreover, the accruals earned by
the said units are distributed on a daily basis; which mainly represents the dividend accruals rather than the fair
value movements. Hence, any reasonable movement in interest yields are not expected to have any impact on
the NAV of the said units.
B. 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 reduce further liquidity risk are set out below.
As at
31 December 2015
As at
31 December 2014
USD USD
Amount used 688,203,430 464,190,622
Amount unused 223,024,206 189,565,287
Total finance facilities 911,227,636 653,755,909
The Group has access to financing facilities as described below, of which USD 223,024,206 (31 December 2014:
USD 189,565,287) were unused at the balance sheet date. The Group expects to meet its other obligations from
operating cash flows and proceeds of maturing financial assets.
36. Financial instruments – Fair values and risk management (continued)
Overview
Corporate Governance
Business Review
Financial Statements103Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
36. Financial instruments – Fair values and risk management (continued)
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 as at 31 December 2015 and 31 December
2014:
As at 31 December 2015:
2016 2017 2018 2019 Thereafter Total
USD USD USD USD USD USD
Non-derivative financial
liabilities:
Borrowings 49,764,216 27,435,882 33,127,511 152,798,868 411,070,923 674,197,400
Trade and other payables 18,896,128 - - - - 18,896,128
Liability component of CCPS 4,234,334 2,160,722 - - - 6,395,056
Finance lease obligations 101,165 113,305 126,902 142,130 5,934,381 6,417,883
Other non-current liabilities 97,511,227 8,431,342 8,479,512 - - 114,422,081
Derivative Financial liabilities:
Derivative instruments not
designated as hedge
1,158,698 2,270,683 - - - 3,429,381
Total financial liabilities 171,665,768 40,411,934 41,733,925 152,940,998 417,005,304 823,757,929
As at 31 December 2014:
2015 2016 2017 2018 Thereafter Total
USD USD USD USD USD USD
Non-derivative financial
liabilities:
Borrowings 57,426,521 34,302,336 21,865,745 23,374,759 319,287,085 456,256,446
Trade and other payables 38,374,132 - - - - 38,374,132
Liability component of CCPS 4,403,201 4,521,985 - - - 8,925,186
Finance lease obligations - - - - - -
Other non-current liabilities - 1,835,801 2,355,741 2,355,741 2,504,293 9,051,576
Derivative Financial liabilities:
Derivative instruments not
designated as hedge
(89,008) 3,432,610 - - 1,703,053 5,046,655
Total financial liabilities 100,114,846 44,092,732 24,221,486 25,730,500 323,494,431 517,653,995
C. Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The group’s credit risk arises from accounts receivable balances on the sale
of electricity. The Indian entities have entered into purchase power agreements with transmission / distribution
companies incorporated by the Indian State Governments and captive customers. The Group is therefore
committed to sell power to these customers and any potential risk of default is on Government parties. The Group
is paid monthly by the transmission companies and captive customers for the electricity it supplies. The Group
assesses the credit quality of the purchaser based on its financial position and other information.
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 value of financial assets represents
the maximum credit exposure.
The Group is reliant on a small number of suppliers and customers. Refer note 20 for the ageing of trade receivables.
The industry currently benefits supports from the Indian Government. Changes in the Government policy could
impact tariff/ taxes which could have an impact on the revenue and the profit of the Group.
104 Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
37. 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. The transactions with related parties are priced on an
arm’s length basis and are settled as per agreed terms. Details of transactions between the Group and related
parties are disclosed below.
The key management personnel of the Group are:
1. Mr Ravi Kailas - Chairman and CEO
2. Mr Rohit Phansalkar - Non-Executive Director
3. Mr Russell Walls - Non-Executive Director
The entities where certain key management personnel have significant influence are:
1. Bindu Urja Infrastructure Limited
2. Mytrah Wind Developers Private Limited
The following related party transactions occurred during the year: Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Advance given/ (adjusted) towards development and
construction of wind farm projects:
Bindu Urja Infrastructure Limited 2,396,019 543,124
Mytrah Wind Developers Private Limited (24,120) (2,353,002)
Purchase towards development and construction of wind farm
projects:
Bindu Urja Infrastructure Limited 604,166 15,567,368
Mytrah Wind Developers Private Limited - -
Security deposits for usage of land and power evacuation facilities:
Bindu Urja Infrastructure Limited 2,862,561 10,492,772
Mytrah Wind Developers Private Limited - 4,325,020
Upfront lease rentals paid for land and leased power evacuation
facilities :
Bindu Urja Infrastructure Limited 1,151,762 7,789,286
Mytrah Wind Developers Private Limited - 1,835,013
Reimbursement of expenses:
Bindu Urja Infrastructure Limited 1,361,116 799,311
Capital contributions received from (note 30):
Bindu Urja Infrastructure Limited - 6,847,647
Mytrah Wind Developers Private Limited - 2,516,369
Overview
Corporate Governance
Business Review
Financial Statements105Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
The following balances were outstanding at the end of the year: Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Advance towards development and construction of wind farm
projects:
Bindu Urja Infrastructure Limited 7,144,801 5,625,356
Mytrah Wind Developers Private Limited - 24,290
Security deposits for usage of land and power evacuation facilities
(note 17):
Bindu Urja Infrastructure Limited 20,649,107 18,589,848
Mytrah Wind Developers Private Limited 6,494,218 6,753,210
Other payables
Bindu Urja Infrastructure Limited 1,318,150 -
Upfront lease rentals paid for land and leased power evacuation
facilities (net of amortisation) :
Bindu Urja Infrastructure Limited 7,948,273 7,579,358
Mytrah Wind Developers Private Limited 1,601,883 1,757,329
Capital contributions received from (note 30):
Bindu Urja Infrastructure Limited 9,904,122 9,904,122
Mytrah Wind Developers Private Limited 6,817,514 6,817,514
Remuneration of key management personnel:
The remuneration of key management personnel of the Group, is set out below for each of the categories specified
in IAS 24 Related Party Disclosures.
Year ended
31 December 2015
Year ended
31 December 2014
USD USD
Salaries and bonus 1,434,244 2,622,834
Share-based payments 639,228 763,215
Total 2,073,472 3,386,049
As per the CCPS investment agreement (note 33), for a period of one year from the completion date or
commissioning of a cumulative 400 MW capacity, whichever is later, Mr Ravi Kailas without prior consent of IIF
shall not sell or dispose, directly or indirectly his shareholding in Mytrah Energy Limited.
37. Related party transactions (continued)
38. Share-based paymentsThe Group has an equity-settled share option scheme for certain directors of the Company and employees in the
Group. All options have a vesting period of three years. Each share option converts into one ordinary share of
the concerned entity 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 concerned entity before the options
vest.
Mytrah Energy Limited:
During the year, the Company has issued 9,680,000 options to Directors at the exercise price of GBP 0.78 and
cancelled 210,081 share options which were issued to group employees at the exercise price of GBP 0.77. In
accordance with IFRS 2, the Group has charged the fair value of the options issued over the vesting period of the
options.
106 Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
Expected volatility is determined based on the evaluation of the historical volatility of the Company’s share price
from the date of listing on 12 October 2010 to the date of issue of options. During the year the Group recognised
expense of USD 639,228 (net of employee benefits expense capitalised USD 68,528) (31 December 2014: USD
919,946 (net of employee benefits cost capitalised USD Nil)) in relation to share-based payment transactions and
the unamortised expense as at 31 December 2015 is USD 2,681,038 (31 December 2014: USD 245,830).
Mytrah Energy (India) Limited:
During the year, the Company’s subsidiary has issued 277,450 options to group employees at the exercise price
of INR 1,200. In accordance with IFRS 2, the Group has charged the fair value of the options issued over the
vesting period of the options
Details of the share options outstanding at the end of the year are as follows.
Year ended 31 December 2015 Year ended 31 December 2014
Number of share
options
Weighted
average exercise
price (INR)
Number of share
options
Weighted
average exercise
price (INR)
Outstanding at beginning of year - - - -
Granted during the year 277,450 1,200 - -
Cancelled during the year (4,000) 1,200 - -
Outstanding at the end of the year 273,450 1,200 - -
The options outstanding as at 31 December 2015 had a weighted average exercise price of INR 1,200.
Details of the share options outstanding at the end of the year are as follows.
Year ended 31 December 2015 Year ended 31 December 2014
Number of share
options
Weighted
average exercise
price (GBP)
Number of share
options
Weighted
average exercise
price (GBP)
Outstanding at beginning of year 14,668,839 1.06 14,828,706 1.14
Granted during the year 9,680,000 0.78 2,871,502 0.77
Cancelled during the year (210,081) 0.77 (3,052,669) 1.03
Outstanding at the end of the year 24,138,758 0.95 14,668,839 1.06
The options outstanding as at 31 December 2015 had a weighted average exercise price of GBP 0.95, and a
weighted average remaining contractual life of 4 years and 2 months.
Details of options granted during the year are as follows:
Year ended Employees /
Directors
Options granted
during the year
Expiry date Exercise price
(GBP)
Fair value at grant
date (GBP)
31 December 2015 Directors 9,680,000 23.12.2021 0.78 0.76
31 December 2014 Employees 2,871,502 01.02.2017 0.77 0.77
The aggregate fair value of the share options issued during the year was USD 3,287,465. The fair value of options
is measured using the Black-Scholes Merton valuation model. Service and non-market performance conditions
attached to the arrangements were not taken into account in measuring fair value. Measurement inputs include
the following:
Weighted average share price (GBP) 0.76
Weighted average exercise price (GBP) 0.78
Expected volatility 43.88%
Expected life 3 years
Risk-free interest rate 0.73%
38. Share-based payments (continued)
Overview
Corporate Governance
Business Review
Financial Statements107Mytrah Energy Limited Annual Report 2015
Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)
Details of options granted during the year are as follows:
Year ended Employees /
Directors
Options granted
during the year
Exercise price
(INR)
Fair value at grant
date (INR)
31 December 2015 Employees and
Directors
277,450 1,200 600
The aggregate fair value of the share options issued during the year was USD 291,487. The fair value of options
is measured using the Black-Scholes Merton valuation model. Service and non-market performance conditions
attached to the arrangements were not taken into account in measuring fair value. Measurement inputs include
the following:
Weighted average share price (INR) 600
Weighted average exercise price (INR) 1,200
Expected volatility 42.00%
Expected life 3 years
Risk-free interest rate 7.59%
Expected volatility is determined based on the evaluation of the historical volatility of the Holding Company’s
share price from the date of listing on 12 October 2010 to the date of issue of options. During the year the Group
recognised expense of USD 1,960(net of employee benefits expense capitalised USD 30,918) in relation to share-
based payment transactions and the unamortised expense as at 31 December 2015 is USD 258,612.
38. Share-based payments (continued)
39. Contingent liabilitiesThe Group is involved in appeals, claims, inspections and other matters that arise from time to time in the ordinary
course of business. Following are the details of contingent liabilities not recognised in these consolidated financial
statements.
As at
31 December 2015
As at
31 December 2014
USD USD
a) Indirect tax matters pending in appeal 1,528,068 1,589,008
b) Guarantees given towards construction and execution of wind
power projects
903,057 -
2,431,125 1,589,008
40. Other mattersDuring the year, one of the supplier of “Wind turbine generator” filed an arbitration application before the High
Court of Telangana and Andhra Pradesh (‘Honourable High Court’) seeking appointment of an arbitrator alleging
that MEIL has breached the terms of an agreement and is liable for liquidated damages. Management has not
acknowledged these claims as debts, given the nature of the underlying dispute, allegations between the parties
and significant uncertainties relating to the financial claims. Management is evaluating the financial effect and
considers that additional disclosure as required under IAS 37 could prejudice the outcome of the case.
41. Comparatives Previous year’s figures have been regrouped / reclassified wherever necessary to conform with the current year’s
classification / disclosure.
108
Notice of Annual General MeetingMytrah Energy Limited
(Incorporated and registered in Guernsey with company number 52284)
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about
the contents of this document or as to the action you should take, you are recommended immediately to seek
your own financial advice from your stockbroker, bank manager, solicitor, accountant or other independent
financial adviser duly authorised pursuant to the Financial Services and Markets Act 2000.
If you have sold or otherwise transferred all of your Ordinary Shares in Mytrah Energy Limited, please immediately
forward this document and the accompanying Form of Proxy to the purchaser or transferee or to the stockbroker,
bank or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or
transferee. However, such documents should not be forwarded or transmitted in or into any jurisdiction in which
such act would constitute a violation of the relevant laws in such jurisdictions. Therefore, persons into whose
possession this document comes should inform themselves about and observe any such laws and restrictions in
any such jurisdictions. Any failure to comply with these restrictions may constitute the violation of the security
laws of such jurisdictions. If you have sold or transferred only part of your holding of Ordinary Shares in Mytrah
Energy Limited you should retain these documents.
Notice is hereby given that the 2016 Annual General Meeting (“AGM”) of the shareholders of Mytrah Energy
Limited (the “Company”) will be held at Ground Floor, Dorey Court, Admiral Park, St Peter Port, Guernsey GY1
2HT, Channel Islands on Wednesday 15 June 2016 at 12.00 noon to consider and, if thought fit, pass the following
resolutions.
Resolutions 1 to 10 will be proposed as ordinary resolutions and resolution 11 will be proposed as a special resolution.
Ordinary resolutions
1. To receive the accounts of the Company and the directors’ report for the financial year ended 31 December
2015 and the report of the Company’s auditor thereon (the “Annual Report and Accounts”).
2. To approve the “Directors’ Remuneration Report” set out in the Annual Report and Accounts for the financial
year ended 31 December 2015.
3. To re-appoint KPMG Audit LLC as auditor of the Company, to hold office until the conclusion of the next AGM
to be held in 2017.
4. To authorise the Directors to determine the remuneration of the auditor of the Company.
5. To re-elect as a Director Mr Ravi Shankar Kailas, who voluntarily retires in accordance with the recommendations
of the UK Corporate Governance Code.
6. To re-elect as a Director Mr Rohit Phansalkar, who voluntarily retires in accordance with the recommendations
of the UK Corporate Governance Code.
7. To re-elect Mr John Russell Fotheringham Walls, who voluntarily retires in accordance with the recommendations
of the UK Corporate Governance Code.
8. THAT the Directors of the Company be and are hereby authorised to exercise all powers of the Company to
issue or grant equity securities (as defined in the Articles of Incorporation of the Company) in the capital of
the Company in accordance with Article 4.3 of the Articles of Incorporation of the Company:
(A) up to a maximum number of 54,545,333 ordinary shares of the Company (“Ordinary Shares”) (equal
to approximately one third of the number of Ordinary Shares in issue as at the date of publication of
this notice) and after giving effect to the exercise of any warrants, options or other convertible shares
outstanding at the date of the passing of this Resolution (such number to be reduced by any issue or
grants made under paragraph (B) below in excess of any equivalent number); and
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(B) up to a maximum number of 109,090,666 Ordinary Shares (equal to approximately two- thirds of the
number of Ordinary Shares in issue as at the date of publication of this notice) and after giving effect to
the exercise of any warrants, options or other convertible shares outstanding as at the date of the passing
of this Resolution (such number to be reduced by any issues or grants made under paragraph (A) above)
solely in connection with an offer by way of a rights issue:
(i) to Ordinary Shareholders in proportion (as nearly as may be practicable) to their existing holdings;
and
(ii) to holders of other shares or securities, as required by the rights of those securities or as the Directors
of the Company otherwise consider necessary,
and so that the Directors of the Company may impose any limits or restrictions and make any arrangements
which it considers necessary or appropriate to deal with treasury shares, fractional entitlements, legal,
regulatory or practical problems in, or under the laws of, any territory or any other matter,
such authorities to expire at the end of the AGM of the Company to be held in 2017 or, if earlier, at
the close of business on the date falling 15 months from the date of passing of this Resolution (unless
previously renewed, revoked or varied by the Company by ordinary resolution), but, in each case, during
this period the Company may make offers, and enter into agreements, which would, or might, require
equity securities to be issued or granted after the authority given to the Directors of the Company
pursuant to this Resolution ends and the Directors of the Company may issue or grant equity securities
under any such offer or agreement as if the authority given to the Directors of the Company pursuant to
this Resolution had not ended. This Resolution revokes and replaces all unexercised authorities previously
granted to the Directors of the Company to issue or grant securities but without prejudice to any issue of
shares or grant of rights already made, offered or agreed to be made pursuant to such authorities.
9. THAT the Company be and is hereby generally authorised in accordance with section 315 of The Companies
(Guernsey) Law, 2008 (as amended) (the “Companies Law”), conditional on Ordinary Shares of the Company
remaining listed on AIM, a market operated by the London Stock Exchange, to make one or more market
acquisitions (within the meaning of section 316 of the Companies Law) of Ordinary Shares (which following
their acquisition may be cancelled or, to the extent permitted by the Companies Law, be held in treasury),
provided that:
(A) the maximum aggregate number of Ordinary Shares that may be purchased under this authority is
32,727,200 (equal to approximately 20 per cent. of the number of Ordinary Shares in issue as at the date
of publication of this notice);
(B) the minimum price (exclusive of expenses) which may be paid for an Ordinary Share is £0.01 per Ordinary
Share;
(C) the maximum price (exclusive of expenses) which may be paid for an Ordinary Share is 150% of the
highest independent bid made (i) on the day on which that Ordinary Share is acquired and (ii) on the
trading platform where the purchase is carried out; and
(D) the authority hereby conferred shall (unless it is previously renewed, revoked or varied by the Company
by ordinary resolution) expire at the conclusion of the AGM of the Company held in 2017 or, if earlier,
at the close of business on 15 December 2017, save that the Company may make a contract to acquire
Ordinary Shares under this authority before its expiry which will or may be executed wholly or partly after
its expiration and the Company may make an acquisition of Ordinary Shares pursuant to such a contract,
and the general authority previously granted pursuant to section 315 of the Companies Law at the annual
general meeting of the Company held on 6th August 2015 be and it is hereby revoked.
10. THAT the Company be and is hereby authorised to send or supply information and documents in electronic
form or by means of a website.
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Special Resolution
11. THAT, if Resolution 8 (being the proposed ordinary resolution of the Company numbered 8 in this notice of
AGM) is passed, the Directors of the Company be and they are hereby authorised to exercise all powers of the
Company to issue or grant equity securities (as defined in the Articles of Incorporation of the Company) in the
capital of the Company wholly for cash pursuant to the issue or grant referred to in Resolution 8 (being the
proposed ordinary resolution of the Company numbered 8 in this notice of AGM) as if the pre-emption rights
contained in article 4.13 of the Articles of Incorporation of the Company did not apply to such issue or grant,
this authorisation being limited to:
(A) the issue or grant of equity securities in connection with an offer of such securities by way of rights
(including without limitation, under a rights issue, open offer or similar arrangement) to holders of equity
securities in proportion (as nearly as may be practicable) to their respective holdings of such securities,
but subject to such exclusions or other arrangements as the Directors may deem necessary or expedient
to deal with fractional entitlements, record dates or any other legal or practical problems under the laws
of any territory, or the requirements of any regulatory authority or stock exchange; and
(B) the issue or grant of equity securities up to a maximum number of 54,545,333 Ordinary Shares (equal to
approximately one-third of the number of Ordinary Shares in issue as at the date of publication of this
notice) and after giving effect to the exercise of any warrants, options or other convertible securities
outstanding as at the date of this Resolution,
such authorities to expire at the end of the AGM of the Company to be held in 2017 or, if earlier, at the close
of business on the date falling 15 months from the date of the passing of this Resolution (unless previously
renewed, revoked or varied by the Company by special resolution) save that the Company may before such
expiry make an offer or agreement which would or might require equity securities to be issued or granted after
such expiry and the Directors may issue or grant equity securities in pursuance of such an offer or agreement
as if the authority conferred by the above resolution had not expired. This resolution revokes and replaces all
unexercised authorities previously granted to the Directors of the Company to issue or grant equity securities
in the capital of the Company wholly for cash as if the pre-emption rights contained in article 4.13 of the Article
of Incorporation of the Company did not apply to such issue or grant but without prejudice to any issue of
shares or grant of rights already made, offered or agreed to be made pursuant to such authorities.
By order of the Board
Susan Wallace
Company Secretary
Registered Office:
Ground Floor
Dorey Court
Admiral Park
St Peter Port
Guernsey
GY1 2HT
Registered in Guernsey with registered number 52284
Dated: 30 April 2016
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Notes:
1. A member entitled to attend and vote at the AGM is entitled to appoint one or more proxies to speak and
vote instead of them. A proxy need not be a member of the Company. Completion and return of the Form of
Proxy will not preclude members from attending or voting at the AGM if they so wish.
2. More than one proxy may be appointed provided each proxy is appointed to exercise the rights attached to
different shares.
3. In accordance with the provisions of the UK Corporate Governance Code it should be noted that a vote
withheld is not a vote in law and will not be counted in the calculation of the proportion of the votes for and
against each resolution.
4. A Form of Proxy is enclosed for use at the AGM. The Form of Proxy should be completed in accordance with
the instructions set out therein and sent, together with the power of attorney or other authority, if any, under
which it is signed, or a notarially certified copy of such power or authority, so as to reach the Company’s agent,
for this purpose being, Computershare Investor Services (Guernsey) Limited, c/o the Pavilions, Bridgwater
Road, Bristol, BS99 6ZY not less than 48 hours before the time for holding the AGM.
5. All persons recorded on the register of shareholders as holding shares in the Company as at close of business
on the day which is two business days before the day of the meeting or, if the AGM is adjourned, as at 48
hours before the time of any adjourned AGM, shall be entitled to attend and vote (either in person or by
proxy) at the AGM and shall be entitled to one vote per share held.
6. If the AGM falls to be adjourned because it is not quorate, it will be adjourned to the same time and place
five business days later or to such other day and/or time and/or place as the Directors of the Company may
determine, whereupon those shareholders then present in person, by their representative or by proxy, shall
form the quorum. In the event of any such adjournment the Company will announce the adjournment via a
regulatory information service but no notification will be sent directly to shareholders.
7. Where there are joint registered holders of any shares such persons shall not have the right of voting individually
in respect of such shares but shall elect one of their number to represent them and to vote whether in person
or by proxy in their name. In default of such election the person whose name stands first on the register of
shareholders shall alone be entitled to vote.
8. On a poll votes may be given either personally or by proxy and a shareholder entitled to more than one vote
need not use all their votes or cast all the votes they use in the same way.
9. Any corporation which is a shareholder may by resolution of its Board of Directors or other governing body
authorise such person as it thinks fit to act as its representative at the AGM. Any person so authorised shall be
entitled to exercise on behalf of the corporation which he represents the same powers (other than to appoint
a proxy) as that corporation could exercise if it were an individual shareholder.
10. As at 30 April 2016 (the latest practicable date prior to the printing of this notice) the Company’s issued share
capital consisted of 163,636,000 Ordinary Shares of no par value, all carrying one vote each per share. No
Ordinary Shares are held in treasury.
11. Copies of the following documents are available for inspection at the registered office of the Company during
usual business hours on any weekday (weekends and public holidays excluded) and will be available for
inspection at the place of the AGM for 15 minutes before and during the AGM itself:
(a) a copy of the Company’s Annual Report and Accounts for the year ended 31 December 2015; and
(b) copies of the service contract for Ravi Kailas and the Non-Executive Directors’ appointment letters.
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Explanatory notes to the Notice of Annual General Meeting
At the AGM there are 11 Resolutions which shareholders will be asked to consider and, if thought fit, approve. An
explanation of each of these Resolutions is given below. Resolutions 1 to 10 (inclusive) are proposed as ordinary
resolutions. An ordinary resolution requires more than 50% of votes cast at the AGM relating to that resolution to
be in favour of it for the resolution to be passed. Resolution 11 is proposed as a special resolution, which requires at
least 75% of votes cast at the AGM relating to that resolution to be in favour of it for the resolution to be passed.
Ordinary Resolutions
Resolution 1: Annual Report and Accounts
For each financial year the Directors are required to lay the Annual Report and Accounts before its annual general
meeting. Shareholders are asked to receive the Annual Report and Accounts of the Company for the year ended
31 December 2015.
Resolution 2: Report on Directors’ Remuneration
The Annual Report and Accounts for the year ended 31 December 2015 contains a Report on Directors’ Remuneration,
which sets out the remuneration policy for the Company and reports on the remuneration arrangements in place
for its directors. The shareholder vote will be advisory only, but the Directors of the Company will take the
outcome of the vote into consideration when reviewing and setting the Company’s remuneration policy.
Resolutions 3 and 4: Appointment and remuneration of the Auditors
KPMG Audit LLC have indicated that they are willing to continue to be the Company’s Auditors for the next year.
You are asked to approve their reappointment and to authorise the Directors of the Company to determine their
remuneration.
Resolutions 5 to 7 (inclusive): Election of Directors
In accordance with the recommendations of the UK Corporate Governance Code, Ravi Kailas, Russell Walls and
Rohit Phansalkar, have resolved to voluntarily submit themselves for re-election by the shareholders at the AGM.
Having considered the performance and contribution made by each of the Directors, the Board believes that
each of them continue to perform effectively and with commitment to their roles and, as such, recommends their
re-election. Brief biographical details of the Directors seeking re-election can be found in the Annual Report and
Accounts.
Resolution 8: Authority to issue shares
Paragraph (A) of this Resolution would give the Directors the authority to issue shares or grant rights to subscribe
for, or convert any securities into, shares up to a maximum number of 54,545,333 Ordinary Shares in the Company.
This amount represents approximately one-third of the issued Ordinary Share capital of the Company as at the
date of publication of this notice.
In line with guidance issued by the Association of British Insurers (‘ABI’), paragraph (B) of this Resolution would
give the Directors authority to issue shares or grant rights to subscribe for, or convert any securities into, shares in
connection with a rights issue in favour of shareholders up to a maximum number of 109,090,666 Ordinary Shares
in the Company. This amount (before any reduction) represents approximately two-thirds of the issued Ordinary
Share capital of the Company as at the date of publication of this notice.
In order to ensure that the maximum amount of shares issuable under Resolution 8 is in total never more than an
amount equal to approximately two-thirds of the issued Ordinary Share capital, deductions will be made from
(A) or (B) to ensure that this remains the case, whether or not the Company issues shares under (A) or (B) first.
Without prejudice to the Company’s business strategy (which may involve future issues of shares), the Directors
have no specific present intention to exercise either of the authorities sought under this Resolution. However,
if they do exercise the authorities, the Directors intend to follow ABI recommendations concerning their use
(including as regards the Directors standing for re-election in certain cases).
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The authorities sought under paragraphs (A) and (B) of this Resolution will expire at the conclusion of the AGM
of the Company held in 2017, or, if earlier,15 months after the date of the AGM.
Resolution 9: Authority to purchase own shares
The Company has previously granted authority to make market acquisitions of its Ordinary Shares to address,
among other things, any imbalance in the supply of, and demand for, Ordinary Shares. The current authority
expires at the end of the AGM.
This Resolution proposes to renew the authority of the Company to make market acquisitions of up to a maximum
number of 32,727,200 Ordinary Shares in the Company. This amount represents approximately 20% of the issued
Ordinary Shares capital of the Company as at the date of publication of this notice.
The Directors will exercise this power only when, in the light of market conditions prevailing at the time, they
believe that the effect of such purchases will be in the best interests of the Company and of its shareholders
generally and when the directors believe, after careful consideration, that such a purchase would be expected
to result in an increase in adjusted earnings per share. The Directors consider it to be desirable for this general
authority to be available to provide flexibility in the management of the Company’s capital resources and to satisfy
the exercise of employee share options under the Mytrah Employee and Mytrah Executive Share Option Schemes.
The Company may hold in treasury any of its own shares that it purchases pursuant to the authority conferred
by this Resolution, (subject to a maximum limit of 10% of issued share capital as set out in the Companies Law).
In accordance with the Companies Law, the Company may only make market purchases of its Ordinary Shares
provided it satisfies the ‘solvency test’ (as detailed in the Companies Law) if (i) it is able to pay its debts as
they become due; and (ii) the value of its assets is greater than the value of its liabilities. In connection with any
purchase of the Company’s Ordinary Shares, the Directors will therefore need to confirm that the solvency test
will be satisfied immediately following such purchase being made.
The minimum price which may be paid for an Ordinary Share is £0.01. Given the volatility of the share price and
limited liquidity, the maximum price which may be paid for an Ordinary Share has been set at 150% of the highest
independent bid made (i) on the day on which that Ordinary Share is acquired and (ii) on the trading platform
where the purchase is carried out. However, the Board will seek at all times to comply, where practicable, with
best practice guidance which recommends that the maximum price, exclusive of expenses, which may be paid
for an Ordinary Share is the higher of: (i) an amount equal to 5% above the average market value for an Ordinary
Share for the five business days immediately preceding the date of the purchase; and (ii) the higher of the price
of the last independent trade and the highest current independent bid on the trading venues where the purchase
is carried out.
Any Ordinary Shares purchased under the renewed authority will either be cancelled or held in treasury (subject to
the maximum number of shares that may be held in treasury of 10% of the issued Ordinary shares of the Company,
as set out in section 317 of the Companies Law), which may be re-issued to satisfy the exercise of employee share
options under the Mytrah Employee and Mytrah Executive Share Option Schemes.
As at the date of publication of this notice: no Ordinary Shares are held by the Company in treasury; options to
subscribe for Ordinary Shares are outstanding over a total of 24,134,258 Ordinary Shares; and warrants conferring
the right to subscribe for shares are outstanding in respect of 11,439,762 Ordinary Shares.
The authority sought under this Resolution will expire at the end of the AGM to be held in 2017, or, if earlier, at the
close of business on 15 December 2017.
Resolution 10
The Company is seeking members’ consent to send or supply information and documents in electronic form and
via a website. The use of electronic communications will deliver savings to the Company in terms of administration,
printing and postage costs.
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Special Resolution
Resolution 11 Disapplication of pre-emption rights
Article 4.13 of the Articles of Incorporation requires that where Ordinary Shares are issued, or rights to subscribe
for, or convert any securities into, Ordinary Shares are granted, wholly for cash, or where Ordinary Shares are sold
out of treasury wholly for cash, either shareholder approval must be sought to make a non-pre-emptive offer or a
pre-emptive offer must be made to all existing shareholders (but allowing the Directors to make such provision as
they think fit in relation to fractional entitlements and/or certain overseas shareholders and/or any other matters).
The Board believes that the ability to issue new Ordinary Shares on a non-pre-emptive basis is in the best interests
of the Company as this affords considerable flexibility and a significant reduction in time and costs in effecting
fundraisings.
If approved, the disapplication authority will allow the Board to issue up to a maximum number of 54,545,333
Ordinary Shares (equal to approximately one-third of the total number of Ordinary Shares in issue as at the date
of publication of this notice) on a non pre-emptive basis.
The authority sought under this Resolution will expire at the end of the AGM of the Company to be held in 2017
or, if earlier, 15 months after the date of the AGM.
Mytrah Energy Limited
(Incorporated and registered in Guernsey with company number 52284)
Form of Proxy
Please read the notice of Annual General Meeting and the explanatory notes below before completing this form.
For use by holders of Ordinary Shares at the Annual General Meeting of Mytrah Energy Limited (the “Company”)
convened for Wednesday 15 June 2016 at 12 noon at Ground Floor, Dorey Court, Admiral Park, St Peter Port,
Guernsey GY1 2HTand at any adjournment thereof:
I/We………………………………………………………………………………………………………………………………….....………………………………………..(Block Capitals)
Of…………………………………………………………………………………………………………………...……………...………........………………………………..(Block Capitals)
being (a) shareholder(s) of the Company hereby appoint the Chairman of the meeting
or ……….………………………………………………………………...……………………...……………………...…………………………………………………………………………………….
as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company (the “AGM”)
to be held on Wednesday 15 June 2016 at 12 noon and at any adjournment thereof.
I/WE direct the proxy to vote on the Resolutions as follows:
Ordinary Resolutions FOR AGAINST WITHHELD 1. To receive the Annual Report and Accounts of the Company for
the year ended 31 December 2015, together with the Report of the
Directors and Auditors thereon.
2. To approve the Directors’ Remuneration Report set out in the
Annual Report and Accounts for the year ended 31 December 2015.
3. To reappoint KPMG Audit LLC as Auditors of the Company, to hold
office until the conclusion of the next Annual General Meeting of
the Company to be held in 2017.
4. To authorise the Directors to determine the remuneration of the
Auditors of the Company.
5. To re-elect as a Director Mr Ravi Shankar Kailas, who voluntarily
retires in accordance with the recommendations of the UK
Corporate Governance Code.
6. To re-elect as a Director Mr Rohit Phansalkar, who voluntarily retires
in accordance with the recommendations of the UK Corporate
Governance Code.
7. To re-elect as a Director Mr John Russell Fotheringham Walls, who
voluntarily retires in accordance with the recommendations of the
UK Corporate Governance Code.
8. To authorise the Directors to issue Ordinary Shares.
9. To authorise the Company to make market purchases of its own
shares which may be cancelled or held as treasury shares.
10. To authorise the Company to send or supply information and
documents in electronic form or by means of a website.
Special Resolution FOR AGAINST WITHHELD 11. To disapply pre-emption rights under Article 4.13 of the Articles of
Incorporation.
Please indicate with an X in the appropriate space how you wish your vote to be cast. On receipt of the form duly
executed and in the absence of a specific direction, your proxy will vote or abstain as he or she thinks fit on the
resolutions.
Signed: .………………………………… Date ……………………….2016
Notes:
1. If it is desired to appoint as proxy any person other than the Chairman of the AGM, his/her name and address
should be inserted in the relevant place and reference to the Chairman of the meeting deleted and the
alteration initialled.
2. If the shareholder is a corporation, this form must be executed under its common seal or under the hand of its
duly authorised officer or attorney.
3. In the case of joint registered holders of any shares, such persons shall not have the right of voting individually
in respect of such shares but shall elect one of their number to represent them and to vote whether in person
or by proxy in their name. In default of such election the person whose name stands first on the register of
shareholders shall alone be entitled to vote.
4. Any alterations to this Form of Proxy should be initialled by the person who signs it.
5. The Form of Proxy should be completed in accordance with the instructions set out therein and sent, together
with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of
such power or authority, so as to reach the Company’s agent, for this purpose being, Computershare Investor
Services (Guernsey) Limited, c/o the Pavilions, Bridgwater Road, Bristol, BS99 6ZY not less than 48 hours
before the time for holding the Meeting.
6. Completing and returning a Form of Proxy will not prevent a member from attending in person at the meeting
and voting should he or she so wish.
7. In the event that a Form of Proxy is returned without an indication as to how the proxy shall vote on the
resolutions, the proxy will exercise his discretion as to whether and, if so, how he votes.
8. A shareholder entitled to exercise more than one vote need not cast all his or her votes in the same way.
9. In accordance with the provisions of the UK Code of Corporate Governance it should be noted that a vote
withheld is not a vote in law and will not be counted in the calculation of the proportion of the votes for and
against each resolution.
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