growing. naturally. - mytrah · wind subsidiaries corporate structure 99.99% mytrah energy (india)...
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Mytrah Energy Limited
Growing.Naturally.
Annual Report
2016
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, UK
Joint BrokersMirabaud Securities LLPBressenden Place,
London, SW1E 5DH
Investec Bank plc2 Gresham Street, London
EC2V 7QP, UK
Financial PRYellow Jersey PR Ltd22 Upper Ground
London SE1 9PD, UK
LegalKing & Spalding International LLP125 Old Broad Street
London EC2N 1AR, UK
RegistrarsComputershare Investor Services (Guernsey) LimitedP.O. Box 393, Kingsway House
Havilland Street, St. Peter Port,
Guernsey, GY1 3FN
Auditors
KPMG Audit LLCHeritage Court,
41 Athol Street, Douglas,
Isle of Man, IM99 1HN
Corporate structure 002
About us 004
Key numbers 006
Mytrah’s business journey 008
Mytrah in 2016 010
ContentsCorporate overview 002-010
Financial section 066-112
Statutory section 056-064
Business operations 022-055
Management review 012-021
A message from the Chairman 012
Questions and answers with the Chief Executive Officer 018
The Chief Financial Officer’s review 020
Directors’ report 056
Corporate governance report 058
Remuneration report 062
The outlook for the renewable energy sector in India 022
Wind resource assessment 036
Asset management 038
Corporate governance 040
Our people 044
Safety, health and environment 046
Corporate social responsibility 048
Risk management 054
Independent auditor’s report 066
Consolidated income statement 067
Consolidated statement of financial position 068
Consolidated statement of changes in equity 069
Consolidated statement of cash flows 070
Notes to the consolidated financial statements 071
Wind subsidiaries
Corporate structure
99.99%Mytrah Energy (India) Private
Limited
100%Bindu Vayu (Mauritius)
Limited
Mytrah Energy Limited
Solar subsidiaries
URJAMytrah Vayu Urja Pvt. Ltd.
100%
ADVAITHMytrah Advaith Power Pvt. Ltd.
99.90%
KRISHNAMytrah Vayu
(Krishna) Pvt. Ltd.
100%
TEJASMytrah Tejas
Power Pvt. Ltd.
100%HEMAVATIMytrah Vayu (Hemavati)
Pvt. Ltd.
100%
AAKASHMytrah Aakash Power Pvt. Ltd.
100%GUJARAT
Mytrah Vayu (Gujarat) Pvt. Ltd.
100%
SOMMytrah Vayu
(Som) Pvt. Ltd.
100%
BVUPLBindu Vayu
Urja Pvt. Ltd.
100%
BHAGIRATHAMytrah
Bhagiratha Power Pvt. Ltd.
73.5%
ARKAVATIMytrah Vayu
(Arkavati) Pvt. Ltd.
100%
AINESHMytrah Ainesh Power Pvt. Ltd.
100%NARMADAMytrah Vayu (Narmada)
Pvt. Ltd.
100%
ABHINAVMytrah
Abhinav Power Pvt. Ltd.
100%GODAVARIMytrah Vayu
(Godavari) Pvt. Ltd.
100%
TUNGABHADRAMytrah Vayu
(Tungabadra) Pvt. Ltd.
95%
ADARSHMytrah Adarsh Power Pvt. Ltd.
100%AGRIYA
Mytrah Agriya Power Pvt. Ltd.
100%AADHYA
Mytrah Aadhya Power Pvt. Ltd.
99.9%PENNAR
Mytrah Vayu (Pennar) Pvt. Ltd.
100%
BHAANUJMytrah
Bhaanuj Power Pvt. Ltd.
100%
BHIMAMytrah Vayu
(Bhima) Pvt. Ltd.
100%
AKSHAYAMytrah Akshaya Energy Pvt. Ltd.
99.90%INDRAVATIMytrah Vayu
(Indravati) Pvt. Ltd.
100%
NWFPLNidhi Wind
Farms Pvt. Ltd.
100%
MANJIRAMytrah Vayu
(Manjira) Pvt. Ltd.
70.49%
002 | Mytrah Energy Limited
Mytrah will lead the world in
seizing renewables opportunities
Mission
Core Values
IntegrityAll our actions are governed
by the principles of ethics,
honesty and transparency
CreativityWe foster a spirit
of innovation and
entrepreneurship
ExcellenceWe deliver best-in-class
results, as we excel in
everything we do
Social responsibilityWe will be the catalysts
of positive change
in the society
Respect for individuals
We treat others the way
we expect to be treated –
with respect
Annual Report 2016 | 003
004 | Mytrah Energy Limited
Mytrah,an India-focused renewable energy specialist
About us
Mytrah Energy is one of the
world’s largest and fastest-
growing independent power
producers in the renewable
energy sector.
We own and operate 16 wind
energy plants in 8 states
and have more than 20 new
wind and solar plants under
construction. We also have
data on 221 potential future
project sites across India.
Thanks to our skilled workforce
and distinctive business model,
we build all our plants on time
and within budget, planning
for sustainable growth.
Our goal is to continue
building sustainable wind and
solar plants at scale that meet
our return requirements.
We joined the Alternative
Investment Market of the
London Stock Exchange
in 2010, getting access to
international capital, expertise,
and partners.
Harnessing the windThe four steps for an independent power producer
Installation of the wind mastPut up wind masts in locations selected
for optimum wind potential.
Agreements and approvalsDesign project, obtain necessary
approvals and procure land. Purchase
turbines and equipment.
Windmill erectionWindmill and transmission infrastructure
development.
Generate powerManage our plants to deliver maximum
electricity to our customers.
Annual Report 2016 | 005
Key numbers
1,000
Commissioned capacity (MW)
221
Future locations with wind data
16
Wind farms in operation
006 | Mytrah Energy Limited
362
Revenue in 2016 (USD m)
385
Revenue growth in 2016 (%)
128
EBITDA in 2016 (USD m)
94
EBITDA growth in 2016 (%)
1038
Fixed Assets in 2016 (USD m)
33
Fixed Assets growth in 2016 (%)
Annual Report 2016 | 007
Mytrah’s business journey
2010
Installed capacity (MW)
0Funds raised
USD 80m equity through IPO
on the LSE
2012
Installed capacity (MW)
299Diversification
in wind turbine selection
Gamesa and Regen added to
Suzlon portfolio
2011
Installed capacity (MW)
82Funds raised
USD 92m non-dilutive
mezzanine capital
008 | Mytrah Energy Limited
2014
Installed capacity (MW)
528Funds raised
USD 70m bonds issued,
purchased by Merrill Lynch
International and Apollo Funds
2016
Installed capacity (MW)
1000Funds raised
USD 380m equivalent rupee
term loan agreement with
3 major Indian banks to
refinance existing senior loans
2015
Installed capacity (MW)
583Funds raised
USD 60m additional bonds
issued, bringing total finance
raised under this structure to
USD 130m
2013
Installed capacity (MW)
310Funds raised
USD 18m non-dilutive
mezzanine capital
Annual Report 2016 | 009
Mytrah in 2016
Financial highlights The 2016 results reflect the adoption
of IFRIC 12 – Service Concession
Arrangements, which has affected
the treatment of revenue and revision
of estimated useful life of property,
plant and equipment and accelerated
depreciation/amortisation, as previously
announced and detailed hereafter
Reported Revenue of USD 362.23m,
an increase of 385% (63% on a directly
comparable basis as per previous year
policies) over the previous year (2015:
USD 74.72m)
Reported EBITDA of USD 128.13m, up
94% (70% on a directly comparable
basis as per previous year policies) (2015:
65.92m)
Underlying Profit Before Tax of USD
4.76m, up by 121% (2015 2.15m)
Secured a direct loan facility of up to
USD 175m from Asian Development
Bank to fund the development of a
portfolio of wind and solar projects
Refinanced the existing portfolio of sites
through a USD 380m debt package
with three banks, the largest such
domestic refinancing in India’s
renewables sector
Received USD 23m from GE Energy
Financial Services for an equity stake
in Mytrah Vayu (Tungabhadra) Private
Limited, a subsidiary of Mytrah Energy
Repaid remaining mezzanine debt of
USD 14.91m outstanding with PTC India
Financial Services Limited
2016 marked a major milestone and acceleration in Mytrah’s development. The company reached 1 GW of wind power generation capacity - adding 417 MW in just one year – and delivered a strong operating results while moving its new solar business into the construction phase. To do this, Mytrah secured close to $1bn of financing during the year.
72%
94%
USD 1 bn
Power generation capacity increased
Reported EBITDA increase of
Secured close to
of capital to refinance and support growth
in 2016, reaching 1000 MW 6 months ahead of
our initial target
010 | Mytrah Energy Limited
Operational highlights Completed construction of 417 MW
wind projects, enhancing installed
capacity to 1 GW (over 600 wind
turbines), significantly ahead of the
Company’s initial target
Entered into power purchase
agreements for 140 MW of solar
power capacity, bringing the total
to 422 MW AC (480MW DC) in
Telangana, Punjab and Karnataka
Signed contracts with Tier-1
suppliers for 175MW solar modules
and 150MW solar inverters
Initiated the construction of solar
projects in Telangana and Punjab
Post period-end, won a 250MW wind
power project in auction through
the first competitive bid in the Indian
wind power sector
Vikram Kailas and Shirish Navlekar
were appointed as the CEO and
CFO of Mytrah Energy Limited
respectively
Revenue
2013
45.3
5.5
062
.96.
10.
467
.66.
30.
810
9.6
10.2
6.2
2014 2015 2016
Sale of electricity (USD m)
Generation-based incentive (USD m)
Other operating income (USD m)
48.8
95
64.3
94
66.4
89
113.
2
2013 2014 2015 2016
Underlying EBITDA
Underlying EBITDA (USD m)
EBITDA margin (%)
93
Post IFRIC 12 adoption, EBIDTA is USD 128.1 m
538.
1
646.
5
949.
1
1212
.5
2013 2014 2015 2016
Total Assets
Total assets (USD m)
Annual Report 2016 | 011
Our 2016 performance reflects all our
hard work
A message from the Chairman
012 | Mytrah Energy Limited
India’s renewable energy sector is still in
its early development stages, but a lot has
happened in such a short time, and a lot
continues to happen. Mytrah can’t stand
still, and it won’t.
Yes, we want to build on what we’ve
already successfully achieved. But we also
have to respond quickly to capture the
opportunities presented by changing
markets and technologies.
Five years of growth in just one yearWe commissioned 417MW of wind energy
capacity for 2016 – close to the total
amount we’d commissioned during the
first five years of our existence, up to the
end of 2015. So we closed 2016 with 1 GW
of wind energy capacity with total of 617
wind turbines now installed. I believe this
could be the quickest time a renewable
energy company has taken to reach this
coveted milestone anywhere in the world.
The sun starts to shineOur business had been focused on wind
energy for its first five years. As tempting
as it is to focus just on your strengths, we
continued to look for new opportunities.
During this period, the solar energy
business was becoming more viable, as the
commissioning costs of solar plants were
coming down, and electricity sales prices
were becoming attractive.
We entered this new market in 2016 with
vigour. More than 100 people are working
on our maiden projects in 21 locations,
with a sizeable 480MW of capacity.
We secured these projects through
competitive bidding processes, with
attractive 25-year contracted electricity
sales prices. I expect this combination of
scale and attractive prices will give us years
of profitable growth.
Data mining and analysis – a worthwhile investment We recognise that a series of one-off
profitable projects does not necessarily
lead to multi-year growth and
outperformance. We need to find new
ways to do things better, and, indeed, find
completely new approaches to take.
One method of doing this is to ‘mine’ and
analyse large amounts of operational data,
leading to many small improvements
in how we do things. When all these
are added together, this leads to better
spreads, cash flows, and returns on
investment. It’s the so-called ‘aggregation
of marginal gains’ that is critical to get the
very best performance from our assets.
World recognitionWe’re constantly comparing ourselves
with our competitors – if only to make
sure what we’re doing is still cutting-edge.
So we were, of course, thrilled that two of
our research papers were shortlisted as
breakthrough papers at the 2016 European
Wind Energy Awards, reflecting our
achievements in the market.
Dealing with market trendsIn the past 18 months, solar has joined
wind as a cost competitive renewable
energy supply source. This means
competition is increasing and electricity
prices are declining. Being able to adapt
quickly and efficiently is crucial.
While prices have fallen for new plants,
we have continued to achieve good
margins by carefully selecting our projects.
In fact, the larger we’ve grown, the more
profitable we’ve become. I believe this
validates our business model, and confirms
our commitment to it.
We closed 2016 with
1 GWof wind energy capacity.
I AM DELIGHTED WITH THESE RESULTS, WHICH SHOW JUST HOW FAR MYTRAH HAS COME IN ONLY SIX YEARS. IN 2016, WE COMMISSIONED MORE WIND CAPACITY THAN EVER BEFORE, UNDERLINING THE CAPABILITY OF OUR TEAM AND THE DEPTH OF OUR PIPELINE. THIS ADDITIONAL CAPACITY HELPED TO DRIVE OUR EBITDA UP 70% FROM LAST YEAR ON A DIRECTLY COMPARABLE BASIS. INDIA ALSO EXPERIENCED BETTER WIND CONDITIONS IN 2016, WHICH LED TO A 7% INCREASE IN POWER PRODUCTION ON A LIKE-FOR-LIKE BASIS.
OUR ABILITY TO RE-FINANCE 543 MW OF WIND ASSETS WITH USD 380 MILLION FROM SOPHISTICATED LENDERS IN INDIA DEMONSTRATES THE QUALITY AND REVENUE VISIBILITY IN OUR OPERATING WIND FARMS. THIS WAS THE SINGLE LARGEST DOMESTIC REFINANCING IN THE SECTOR EVER, CONTINUING OUR LEADERSHIP IN FINANCIAL INNOVATION. THIS INNOVATION HAS ALSO BEEN APPLIED TO SOLAR THIS YEAR, AND I AM PLEASED TO SAY THAT WE HAVE MANAGED TO SECURE SENIOR LOANS OF OVER USD 300 MILLION TO BUILD OUT OUR SOLAR PROJECTS.
Annual Report 2016 | 013
Operational performance2016 has been a strong year for Mytrah’s
operating wind plant portfolio, with
revenues and EBITDA ahead of market
expectations on an underlying basis, and
well ahead as reported.
This result has been facilitated by good
winds across much of the portfolio –
and by the tireless work of our asset
management team in driving continuous
improvements in wind farm availability.
2016 has seen a marked improvement in
machine performance across a number
of plants, particularly in Rajasthan where
our Kaladonger plant showed a 4%
improvement in availability.
Overall, we believe that our portfolio
approach, with plants spread across
multiple geographies, equipment suppliers
and regulatory regimes continues to
benefit the company in smoothening our
cash flow, and is increasingly effective as
our fleet size increases.
Project ConstructionThe construction portfolio described in
Mytrah’s 2016 half-year results has been
completed, taking us to 1000 MW well
ahead of our target of mid-2017. This
fantastic result, achieved through the
focused dedication of our projects, business
development and finance teams, clearly
demonstrates the level of execution
capability which Mytrah has built. The plants
constructed during 2016 are listed below.
Project Capacity
Capacity at 31 Dec 2015 583.00 MW
Bhesada 10.40 MW
Vajrakarur 2 105.00 MW
Nazeerabad 100.80 MW
Nidhi 90.10 MW
Nipaniya 30.00 MW
Aspari 79.90 MW
Burgula Extension 1.60 MW
Total 1000.80 MW
Project pipelineIn addition to the projects under
construction, Mytrah has an extensive
pipeline of wind projects exceeding 4000
MW. With data from 221 wind masts across
10 states, the Company’s wind database
provides differentiated access to new
project sites. For solar, we continue to
develop project options and participate
in auctions as these are announced. We
never bid so low in an auction that this
compromises our returns, and so we do
not win all of the bids we participate
in. We have a wide range of options for
developing our solar business, including
more large-scale government contracted
plants as well as direct sales to private
business customers and, when the time is
right, consumers.
FinancingDuring 2016, the Group secured close to
USD 1bn of financing in various forms,
including a USD 380m refinancing of
all the senior debt in its first 543 MW
operating wind plants, which set a new
benchmark for the industry. This new
facility was 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.
In addition to the refinancing, we closed
USD 150m senior debt financing for our
wind projects in construction and USD
315m for our solar projects. A part of this
debt was a USD 175m credit line agreed
with ADB, the first time this prestigious
institution has approved such a structure.
Finally, we secured a USD 100m equity line
of credit with GE Energy Financial Services,
which enabled us to invest USD 23m
into one of our SPVs and gives us further
support for growth.
These transactions, conducted with
sophisticated financial institutions,
underline the growing maturity of our
business and the quality of our asset
portfolio.
Macro environmentIndia continues to be one of the world’s
fastest-growing economies and renewable
energy is contributing to this growth
through the rapid deployment of low cost,
distributed, generation capability as well as
by generating substantial employment.
As a consequence, the renewable energy
sector continues to enjoy strong support
from the Central Government, with the
Prime Minister, in 2015, 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. The benefits of this target
and the supporting policies were clearly
evident, with 3.6 GW of wind capacity
installed in 2015-16 (2014-15, 2.6 GW), and
solar installation almost doubling to 4 GW.
In addition to completing construction
of these projects, we have also begun
construction of a number of wind and
solar plants, which are due for completion
in 2017-18. These are summarised
alongside. We will provide further details
of progress on these projects in due
course.
Project Capacity
Capacity at 31 December 2016 1000.80 MW
Wind AdditionsAspari Extension, AP 69.90 MW
Maniyachi, Tamil Nadu 250.00 MW
Solar Additions
Bareta, Punjab 25.00 MW
Balran, Punjab 25.00 MW
Telangana Portfolio 327.00 MW
Karnataka Portfolio 45.00 MW
Totals 1742.70 MW
014 | Mytrah Energy Limited
A key outcome of the Government’s focus
is the UDAY (Ujwal DISCOM Assurance
Yojana) reform approved in November
2015. The scheme has improved the
financial health of the state electricity
boards (SEBs), which purchase most
of Mytrah’s electricity under long-term
contracts, improving the security of our
revenue streams.
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. Focused on investor returns,
the business is growing and maturing in
all aspects, setting visible and achievable
targets, delivering projects on time and
continually improving financial structures.
Experienced management and high
quality technical staff, strong relationships
with a diverse group of wind turbine
suppliers and strong financial capability
are now well-proven and Mytrah will
continue to make a significant investment
in its people, systems and processes to
ensure we have the foundation needed
to support sustained growth and an ever-
expanding footprint.
OutlookOperating in a fast growing and rapidly
developing country of 1.2 bn people,
Mytrah is ideally placed. India is expected
to grow at over 7% per annum according
to the IMF, and there is clear evidence that
electricity consumption is correlated to
GDP growth. Both wind and solar power
are faster to market and cost-competitive
over alternative sources of power, which
in India is primarily coal. As a result, the
Government has set aggressive targets
to deliver capacity addition in renewable
energy.
Mytrah is among the largest providers of
renewable energy, has a strong pipeline of
development options and deep capability
across the entire value chain in wind and
solar. This, combined with our proven
financial capability, gives us a strong
platform to continue to grow our business
and create value for our investors.
Business Review
ParticularsYear ended 31 December 2016
USD mnYear ended 31 December 2015
USD mnChange USD mn
Revenue 362.23 74.72 287.51 Other operating income 6.22 0.88 5.34 Construction cost (224.67) 0.00 (224.67)Employee benefits expenses* (2.66) (2.40) (0.26) Other operating expenses (12.99) (7.28) (5.71)Earnings before interest, tax, depreciation and amortisation (EBITDA)
128.13 65.92 62.21
Depreciation and amortisation expense (47.42) (16.40) (31.02)Equity Settled Employee Benefits (2.99) (0.64) (2.35)Operating Profit 77.72 48.88 28.84 Finance income 4.93 3.34 1.59 Finance costs (81.84) (51.22) (30.62)Other finance costs on refinancing (6.39) (0.54) (5.85)Profit/ (loss) before tax (5.58) 0.46 (6.04)Taxation expense 0.98 (0.08) 1.06 Profit/ (loss) after tax (4.60) 0.38 (4.98)Reported EBITDA as above 128.13 65.92 62.21 Non-recurring and non-cash adjustments: Doubtful advances written-off 0.42 0.00 0.42 Provision for trade receivables 0.10 0.23 (0.13)Indirect-tax cost on inter-group transactions 0.00 0.28 (0.28)GBI Registration fee 0.44 0.00 0.44 Total adjustments 0.96 0.51 0.45Underlying EBITDA 129.09 66.43 62.66 Reported profit/ (loss) before tax as above (5.58) 0.46 (6.04)Adjustments as referred above 0.96 0.51 0.45Equity Settled Employee Benefits 2.99 0.64 2.35One-off interest cost on re-financing of
existing term loans
6.39 0.54 5.85
Underlying profit/ (loss) before tax 4.76 2.15 2.61 * In the published 2015 results, Employee Benefit Expenses was reported including Equity Settled Employee Benefits of (0.64) m. In this presentation, this cost is shown below the EBITDA line.
Annual Report 2016 | 015
RevenueFor the year ended 31 December 2016
the Group’s revenue has increased by USD
287.51m, reflecting the capacity growth
from 583 MW at 31 December 2015 to
1000 MW at the current year-end. On a like
for like basis, revenue increased by USD
46.92m.
In India, the Group is adopting Ind-
AS, (Indian – adoption of International
Financial Reporting Standards (IFRS)) for
the first time, with effect from 1st April
2016. As part of the first-time adoption,
the Group needs to evaluate and align all
its accounting treatment under both Ind-
AS and IFRS. During the year, the Group
has reviewed its accounting treatment
with respect to revenue recognition and
started implementing IFRIC 12 accounting
for revenue recognition from Service
Concession Arrangements.
Service Concession Arrangements
(SCA) apply to all of the Group’s current
solar projects and certain wind plants
on a prospective basis. As per IFRIC
12 accounting, in the current year
the Group has begun recognising
construction revenue, which is earned
by the Indian holding company, MEIPL,
when it constructs assets for its SPVs. In
Adoption of IFRIC 12 Service Concession Arrangement AccountingAs a result of our continued focus on
prudent accounting, and changes in
the Indian accounting standards, the
management has reviewed the useful life
of our assets and decided to reduce it. We
have also determined that this change
brings some of our assets into a different
accounting treatment, specifically Service
Concession Agreements (SCA) referred to
earlier. We have decided to apply these
policies to all of our plants prospectively.
The impact is illustrated in the table below,
which shows how the 2016 results would
have looked under our 2015 accounting
policies (this table is presented for
information only and is not audited).
The impact of the change in useful life for
our assets can be seen in the increased
depreciation charge in the reported
accounts relative to the direct comparison
below. As noted under ‘Revenue’ below,
the impact of the SCA treatment is to
increase the reported EBITDA because of
the inclusion of construction revenue.
ParticularsYear ended
31 December 2016 USD mn
Year ended 31 December 2015
USD mn
Change Increase/ (Decrease)
USD mn
Change in % Increase/ (Decrease)
Revenue 121.64 74.72 46.92 63%
Other operating income 6.22 0.88 5.34 607%
Construction Cost 0.00 0.00 0.00 -
Employee benefits expenses (2.66) (2.40) (0.26) 11%
Other operating expenses (12.99) (7.28) (5.71) 78%
Earnings before interest, tax, depreciation and amortisation (EBITDA)
112.21 65.92 46.29 70%
Depreciation and amortisation expense (25.67) (16.40) (9.27) 56%
Equity Settled Employee Benefits (2.99) (0.64) (2.35) 367%
Operating Profit 83.55 48.88 34.67 71%
Finance income 4.93 3.35 1.58 47%
Finance costs (81.84) (51.22) (30.62) 60%
Other finance costs on refinancing (6.39) (0.54) (5.85) 1083%
Profit/ (Loss) Before Tax 0.25 0.47 (0.22) (47%)
Reported EBITDA as above 112.21 65.92 46.29 70%
Non-recurring and non-cash adjustments:
Doubtful advances written-off 0.42 0.00 0.42 -
Provision for trade receivables 0.10 0.23 (0.13) (56%)
Indirect-tax cost on inter-group transactions 0.00 0.28 (0.28) 100%
GBI Registration fee 0.44 0.00 0.44 -
Total adjustments 0.96 0.51 0.45 88%
Underlying EBITDA 113.17 66.43 46.74 70%
Reported PBT as above 0.25 0.47 (0.22) (47%)
Adjustments as referred above 0.96 0.51 0.45 88%
Equity Settled Employee Benefits 2.99 0.64 2.35 367%
One-off interest cost on re-financing of
existing term loans
6.39 0.54 5.85 1083%
Underlying profit before tax 10.59 2.16 8.43 390%
016 | Mytrah Energy Limited
the past, construction revenue was not
recognised as the same was eliminated
as part of Intra-company eliminations.
However, now as per the requirements of
IFRIC 12 accounting, the same are being
recognised as Revenue. Consequent to the
adoption of IFRIC 12 accounting, assets
which qualify for SCA accounting are
treated as intangibles/intangibles under
development.
The impact in the current year financials of
this change in accounting policy is given
below:
a) Impact on revenue and EBITDA
ParticularsAmount (USDm)
Construction Revenue 240.59
Construction Cost (224.67)
Margin added to EBITDA 15.92
b) Impact on Balance SheetAssets valued at USD 406.86 million,
created based on the Service Concession
Arrangement, are classified as intangibles
and amortised over a period of 25 years
as per the Group’s accounting policy.
These assets would have been classified as
Property, Plant and Equipment earlier.
EBITDAEBITDA for the year 2016 increased to USD
128.13m (2015: USD 65.92m) an increase
of USD 62.21m, a 94% increase, reflecting
the increase in revenue due to capacity
expansion and a slight improvement in
EBITDA margin as new plants in their initial
free O&M period come into the mix.
Finance costFinancing costs at USD 81.84m were USD
30.62m higher than the prior year due to
the increased debt level associated with
the capacity expansion.
Finance incomeHigher finance income of USD 4.93m
(2015: USD 3.34m) was generated due to
higher cash balance in the system and
resultant increase in interest on bank
deposits and investments.
Profit before taxProfit before tax (PBT) of USD (5.58)m
for the period 2016 (2015: USD 0.46m).
PBT was affected by the interest costs
associated with assets which were not
fully performing in 2016, and the change
in the estimated useful life of assets,
increased depreciation/ amortisation
expense. PBT was also affected by one-off
costs associated with refinancing. On an
underlying basis, PBT was USD 4.76m (2015
USD 2.15m), and increase of 121%..
TaxationThe tax for the year 2016 was a credit of
USD 0.98m (2015: cost of USD 0.08m).
Earnings per shareBasic and diluted earnings per share for the
year 2016 was USD (2.5) cents (2015 USD:
0.71 cents) and USD (2.5) cents (2015 USD:
0.71 cents) respectively.
Financial positionThe net book value of our property, plant
and equipment and associated intangible
assets has increased by USD 257.97m
(increase by 33%), almost all of which
relates to investments made during the
year in the construction of our new plants
and that have started generating revenues
in the year 2016 and will be operational
throughout 2017.
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 at 31 December 2016, the Group had
gross debt of USD 945.10m (2015: USD
674.20m). During the year ended 31
December 2016, additional loans of USD
290.73m (net of repayments) were drawn
for the construction of new assets that
will start generating revenue in the year
ending 2017. The Group continues to
borrow at competitive rates and therefore
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 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 the notes to
the consolidated financial statements,
including details of how the Group
manages risk in respect of capital, interest
rates, foreign currencies and liquidity.
Cash flowThe cash generated from operations
during the year was USD 74.52m (2015:
inflow USD 74.64m). Cash flow did not
increase in line with EBITDA due to an
increase in receivables, primarily those
associated with operations in Rajasthan.
This situation was resolved post-period
end, with an inflow of USD 27.7m received
in March 2017, bringing receivables back
into line with historic norms.
Investing activities for the current year
resulted in a cash outflow of USD 288.67m
(2015: outflow of USD 236.62m). Net
financing cash inflows were USD 221.73m
(2015: inflows of USD 162.72m). The
increase in financing cash inflows was
mainly due to a drawdown of loan facilities
(net of refinancing) of USD 290.73 m (2015:
USD 370.8m) during the current year. At
31 December 2016, the Group had cash
and bank balances of USD 45.18m (31
December 2015: USD 55.58m).
Liquidity and investmentsAt 31 December 2016, the Group had a
strong liquidity position comprising liquid
assets of USD 56.22m and undrawn/
committed credit facilities of USD 71.31m,
which will be used for financing the
projects under construction. The Group’s
net debt position at 31 December 2016 has
increased to USD 945.10 m (31 December
2015: USD 674.20m). The increase is mainly
on account of a drawdown of loan facilities
during the year.
Ravi KailasChairman
Mytrah Energy Ltd
Annual Report 2016 | 017
“Our entry into the solar energy
space promises to create long-term
sustainable value for the Company”
Questions and answers with the Chief Executive Officer
How do you sum up 2016 for Mytrah?There was a real change of pace, which
bodes well for our future growth. We’ve
emerged as one of India’s fastest-growing
renewable energy companies.
I should highlight three things in particular.
First, it was a great year for wind energy
capacity. We had an expansion target of
200 MW at the start of the year, but ended
up setting into motion 500 MW. This
proves we’re more than capable of getting
challenging projects off the ground.
Second, we received USD 1 billion to
fund new projects, the biggest allocation
of funding in our history. This shows that
investors and lenders fully understand and
support our overall business model.
Third, we made an impressive debut
in the solar energy space, with 480 MW
of capacity across 21 sites in three States.
By developing wind and solar assets, we
reduce our dependence on one technology.
Our existing investment in wind meant
we had a lot of infrastructure in place, and
were’nt starting solar from scratch.
How did you manage to increase wind energy capacity so significantly?We’ve now got well-established standard
operating procedures. This means we
get things right first time, and don’t have
to keep reworking things. We execute
projects ‘by the book’ – carefully, but
efficiently.
018 | Mytrah Energy Limited
We also maintain a large portfolio of
options and select projects carefully,
choosing those which are most likely to be
developed quickly.
Aggressive solar project bids have pushed tariffs down below 4.47 cents/kWh. How can you operate in this market and still improve overall profitability?We’ve always focused on returns from
invested capital, and invested only
in projects that strengthen business
profitability. This approach does’nt change
now that we’re involved with solar energy
projects.
For example, we’ve won bids for 480 MW
in Punjab, Telangana, and Karnataka, which
are considered A-rated locations marked
by supportive state governments. We won
these bids with an average tariff of more
than 8.19 cents/kWh while other bidders
won with an average tariff of about 7.15
cents/kWh. These projects have 25-year
power purchase agreements, providing
long-term revenue certainty.
How did your refinancing go?We concluded the largest ever refinancing
agreement in India’s renewable energy
sector – USD 380 million of senior loans
from 22 banks across 543 MW of operating
wind farms. This arrangement reduced our
interest rate by about 140 basis points, and
extended average debt maturity by about
three years, reducing costs and improving
long-term liquidity.
Where does the renewable energy industry stand at the moment?There is definitely a growing demand for
clean energy around the world.
In 2015, global investment in renewable
energy capacity, at USD 266 billion, was
significantly more than the investment in
new coal and gas plants, estimated at USD
130 billion.
In 2015, for the first time ever,
renewables, excluding large hydro, made
up a majority, 53.6%, of the capacity of
all technologies installed. This growth
continued in 2016.
We see the same trends in India, as
technology and material sciences move
forward.
But, more and more, renewable energy
is not just cleaner than fossil fuels, but
cheaper. Some Indian solar tariffs have
dropped below 4.47 cents/kWh and some
wind tariffs below 5.22 cents/kWh. Given
that renewable energy in India, unlike in
Europe, isn’t constrained by a centralised
power grid, it’s easier for renewable energy
to play a bigger role in the national power
mix.
So competition is likely to increase, and innovation will become even more important. What have you done to make sure you’ve got the right skills for the future?That is right. We can’t expect today’s
technology to necessarily be around
tomorrow. We have to make sure we can
adapt in the future, and even play our role
in shaping it.
So we took several initiatives during
the year to help us be prepared. We
strengthened our middle management
team by recruiting people from prominent
Indian business schools, and running
personalised training programmes. And we
improved our programmes for developing
and preparing managers and leaders of
the future.
What are your priorities for 2017-18?We continue to focus on returns. So
although we hope to commission about
300 MW of wind energy capacity, and
about 500 MW of solar energy capacity,
our priority is to make each project more
profitable than the last.
Mytrah has over
4,000MWof potential new wind energy projects in India
Annual Report 2016 | 019
“We’re in good
shape to grow”
The Chief Financial Officer’s review
Mytrah needs a sound financial foundation
to handle changing markets and
technologies, and to succeed as a long-
term profitable business. In particular, we’re
after:
A competitive capital cost per MW of
energy capacity
Low equity and debt financing costs
Long-term debt arrangements
A large consortium of lenders that gives
us flexibility, and
Innovative financial structures that make
it possible to optimise costs and improve
cash flows.
From the start, we’ve focused on value
over volume – high profitability expressed
clearly in superior returns on capital
employed. To achieve this, we know
exactly what projects to bid for, what
tariffs to look for, what geographies to go
into, and what technologies to source. It
sets in motion a virtuous cycle of viability,
profitability, and sustainability.
When it comes to tariffs, they need to
be attractive and long-lived. In 2016, we
won all our bids in Punjab, Telangana and
Karnataka with tariffs of 8.15 cents/kWh or
more, lasting 25 years.
020 | Mytrah Energy Limited
These are the financing highlights of 2016.
Funding new and existing projects quickly and easily
We comfortably mobilised USD 314.5
million to implement our solar energy
projects, and USD 149.5 million to support
ongoing wind energy projects.
Fostering good relationships with global funding institutions
We increased the number of banking
relationships to 25, adding Rural Electricity
Corporation, Asian Development Bank, and
HDFC Bank.
Asian Development Bank, a prestigious
multilateral institution, provided USD 175
million, impressed by our track record. This
was the first time the bank had provided a
pre-approved line of credit in our sector.
We also forged an equity line of credit of
USD 104.3 million with GE Energy Finance.
We only drew about USD 23 million of this
– the rest is available to us to quickly take
advantage of new opportunities.
Lowering financing costs
We refinanced USD 380 million at a much
lower cost with an extended maturity cycle
of about 18 years. We can also top up the
debt at the renegotiated cost.
In addition, we secured all new debt at
rates of at least 50 basis points below what
our competitors are paying.
Maximising cash flows even while growing
We continued to negotiate to have all our
outstanding debt extended beyond a 15-
year maturity period, improving cash flows
and fiscal comfort.
Set for growthWe’re in good shape to grow. Our lenders
are happy to continue lending because our
projects have comfortable interest covers
and profit buffers. What’s more, because
the company’s low equity structure is
supported by non-dilutive mezzanine
equity, the long-term interests of our
shareholders are protected.
Mytrah started by raising USD
80 million in 2010-11. By 2014,
it had a collective loan book
of USD 372.64 million, and
had generation assets of 543
MW. The company kept the
momentum going to reach a
collective fund mobilisation of
more than
USD 1.49 bn
Annual Report 2016 | 021
The outlook for the renewable energy sector in India
022 | Mytrah Energy Limited
India also sees the opportunity to reduce
the cost of power generation in the long
term by encouraging larger projects,
aggressive research and development, and
the domestic production of raw materials,
components and products. What’s more, it
sees the opportunity to create many more
skilled jobs.
Where India’s positioned today The third largest energy consumer in
the world – it imports more than 80% of its
crude oil requirements and more than 45%
of its gas requirements
The 7th largest solar energy producer
The fourth largest wind energy producer,
with more than 28,000 MW of capacity
The 5th largest total renewable energy
producer excluding hydro
India’s already relying less on fossil
fuels as its primary energy source. The
Indian Government has implemented a
renewable energy plan that’s commercially
viable without subsidies. This has made
it possible for global corporations and
utilities to make big renewable energy
investments. The result speaks for itself.
Renewable energy capacity went up from
33.7 GW in 2014 to about 50 GW in 2016, a
yearly growth of 16%. The yearly growth for
overall energy capacity was 9%.
China saw the most renewable energy
investments in 2016, totalling USD 78.3
billion, which was actually down 32% from
2015. India was one of the most exciting
markets in 2016, with USD 9.7 billion of
renewable energy investments.
The Indian Government has put in place
many initiatives to promote renewables.
We look at some of the wind and solar
specific ones below. Other general ones
include:
The Green Energy Corridor project
for developing the power transmission
network
The Smart Cities Mission
The Integrated Power Development
Scheme for encouraging distribution
companies and making net-metering
compulsory
The Ujjwal Discom Assurance Yojana
(UDAY) scheme, and
The Green Climate Fund.
“The trend is clear:
India’s moving away from dirty fossil fuels
towards clean renewables. Technological advances and sensible prices are making more and more
projects viable.”Vikram Kailas,
CEO, Mytrah Energy Ltd
THE RACE IS ON TO TACKLE AND REVERSE CLIMATE CHANGE BROUGHT ABOUT BY BURNING COAL, OIL, AND GAS. AND AS IF THAT WEREN’T IMPORTANT ENOUGH, THESE FOSSIL FUELS ARE IN ANY CASE, RUNNING OUT – THE WORLD ENERGY FORUM PREDICTS RESERVES WILL BE EXHAUSTED IN LESS THAN A CENTURY. SO THE WORLD’S FOCUS IS NOW FIRMLY ON HARNESSING THE POTENTIAL OF RENEWABLE ENERGY SOURCES.
Annual Report 2016 | 023
Growth in Renewable Energy Installed Capacity
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
2,000
1,500
1,000
500
0
Gig
a W
att
IndiaChina USA Europe Rest of the World
Source: IRENA statistics
Growth in Wind Energy Installed Capacity
IndiaChina USA Europe Rest of the World
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
500
400
300
200
100
0
Gig
a W
att
Source: IRENA statistics
Growth in Solar Energy Installed Capacity
IndiaChina USA Europe Rest of the World
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
300
250
200
150
100
50
0
Gig
a W
att
Source: IRENA statistics
149
81
Wind energy by country as on 31 December 2016 (GW)
China The US Germany India Spain
50
29 23
Source: IRENA Statistics
024 | Mytrah Energy Limited
India’s energy mix last year Capacity in MW FY2016 % share 2016
Coal 188,968 60%
Gas 25,282 8%
Diesel 919 0%
Nuclear 5,780 2%
Large hydro 43,139 14%
Renewables 50,018 16%
Total 314,106 100%
Beating its targetsIndia’s expected to go above and beyond its climate change commitments. In fact, the Indian
Government has forecast it will exceed the renewable energy targets set in Paris in November
2015 by nearly half, and at least three years ahead of schedule. A recent draft 10-year energy
blueprint by CEA, suggests 57% of the country’s total electricity capacity could be derived
from non-fossil fuel sources by 2027– the Paris Climate Accord had targeted 40% by 2030.
Originally, the country’s renewables target was 175 GW by 2022. But the blueprint now has
India generating a total of 275 GW from renewable energy by 2027, in addition to 72 GW
from existing large hydro projects and 15 GW from nuclear energy. Nearly 200 GW could
come from clean sources like wind and solar.
India’s renewable energy demand is expected to increase seven-fold by 2035 (Source: BP Energy Outlook).
The share of renewable energy in India’s fuel mix could increase to 24% by 2027(Source: Central Electricity Authority,
Ministry of Power, Government of India).
Renewable energy: The global and Indian position
Global renewable energy installed capacity of 2000 GW
Global wind energy installed capacity of 486 GW; India seventh with 27 GW
Global solar energy installed capacity of 305 GW; India 11th with 9 GW
26
9
Solar energy by country as on 31 December 2016 (GW)
China Germany Japan The US India
43
40
34
Source: Bridge to India solar handbook 2016
India’s added 16.2 GW of renewable energy capacity over three years
Small hydro power
Wind Biomass/Cogen
Waste to energy
Solar Total
2016 4,334 28,700 7,857 114 9,013 50,018
2015 4,177 25,088 4,551 127 4,879 38,822
2014 3,991 22,465 4,166 108 3,063 33,792
Annual Report 2016 | 025
Wind energy
026 | Mytrah Energy Limited
2015 2016
25,0
88 28,7
00
2014
22,4
65
Installed capacity (MW)
WIND ENERGY WAS FIRST PUT FORWARD AS A POTENTIAL SOLUTION TO INDIA’S POWER CHALLENGES AT THE END OF THE LAST CENTURY. BUT SEEN AS EXPENSIVE AND UNRELIABLE, THE FIRST INVESTMENTS IN WIND WERE MADE BY MAINSTREAM INDEPENDENT POWER PRODUCERS TO GENERATE TAX CREDITS.
Things have changed. Improvements
in towers, blades, turbines and the
appearance of local manufacturers have
reduced project and operating costs and
made wind energy viable. Today, it’s at par
with other power forms and generates just
over 29 GW.
What supports it Government policy
Central and State Governments continue
to make favourable policy announcements,
like the Renewable Generation Obligation
and the Renewable Purchase Obligation.
Technological advancesMore efficient technology is making
wind energy viable in traditionally less
windy States like Madhya Pradesh and
Rajasthan (the first plants were in windier
Andhra Pradesh, Tamil Nadu, Gujarat, and
Karnataka).
Other official initiatives
These include: National Offshore Wind
Energy Policy, Comprehensive Guidelines
for Development of Onshore Wind Power
Projects, UDAY scheme supporting
state electricity boards and Policy for
Repowering of the Wind Power Projects.
Growth estimates The Indian Wind Energy Association has
estimated the on-shore wind energy
potential using current technology to be
300 GW, which indicates many years of
sustainable growth.
(www.inwea.org)
The Ministry of New and Renewable
Energy has pledged to achieve 60 GW of
wind energy capacity by 2022.
(www.mnre.gov.in)
Complementary technologiesWind Solar
How much power? Generates more at night Generates during the day
Resource requirement Land: 1 acre per MW which does not need to be
adjacent but is limited to windy zones
Land: 5 adjacent acres per MW which is less
constrained in certain areas since the sun is more
widespread
Water: Negligible Water: Constant supply
Indigenisation About 70% Most equipment and components are imported
India’s wind energy capacity is around
29 GWaccounting for about 9% of the total energy capacity and about 64% of
the total renewable energy capacity supplied to the national grid. This is
equivalent to reducing carbon emissions by more than 58.56 million tonnes
a year, or planting some 1.76 billion trees.
Annual Report 2016 | 027
Solar energy
028 | Mytrah Energy Limited
India’s sunshine advantage India gets solar radiation of
5-7 kWhper sq. m for
300-330 days a year.
Annual Report 2016 | 029
SOLAR INSTALLATIONS CONTINUE TO GROW FAST IN INDIA, MAINLY DUE TO A STEEP FALL IN SOLAR MODULE COSTS AND INTEREST RATES, MAKING MORE PROJECTS VIABLE.
Today, solar energy accounts for 73% of
India’s total renewable energy capacity.
Today the country has 9 GW of total
installed solar capacity. In 2016, solar
capacity went up by about 4 GW, the
biggest amount ever.
Recently, aggressive bidding at solar
project auctions brought tariffs down,
making solar energy the cheapest energy
source. The price went from 26.68 cents/
kWh in 2010 to about 10.43 cents/kWh in
2015 and 5.96 cents/kWh or USD 59.62/
MWh in 2016, and has continued to fall
post this report date.
This dramatic fall in solar electricity prices
can be attributed to a number of factors
including:
The opportunity to construct very large
projects which reduces cost through
economies of scale
The global fall in solar equipment prices
(e.g. solar module prices fell 30% in 2016)
Government-backed power purchase
agreements which reduce perceived
offtake risk and lower debt costs
Falling interest rates
The involvement of international firms
with lower cost of capital.
In recent times…
STEEP FALLThe swift decline in module prices improved economics for the projects which were won at record low tariffs last year.
Indian module average selling price Chinese modules
(In $/Watt)
Nov 2015
0.55
0.53
0.50
0.48
0.45
0.43
0.40
0.38
0.35Nov 2016
Source: Mercom Capital Group
0.53
0.49
0.380.36
…and over the years!
CHEAPER ALL THE TIMEFalling panel costs have seen Indian solar producers slash electricity prices.
Solar multi-silicon panel spot price ($.Watt)
Jan 2010
Jan 2011
Jan 2012
Jan 2013
Jan 2014
Jan 2015
Jan 2016
Jan 2017
2.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
Source: PV Insights
030 | Mytrah Energy Limited
What supports it Renewable Purchase Obligation
A national policy which requires offtakers
to purchase a growing portion of their
electricity from renewable sources.
Government policyThe Union Government amended the
National Tariff Policy in 2016 to favour solar
projects. The policy says States must use
solar energy for 8% of their total electricity
requirements, excluding hydroelectricity,
by 2022.
Other official initiativesThese include: the National Solar Mission,
exclusive solar ultra mega power projects,
rooftop projects on government buildings,
a solar bundling scheme, the Canal Bank/
Canal Top scheme, the Viability Gap Funding
scheme, and the Solar Park scheme.
Growth estimatesThe Ministry of New and Renewable
Energy has pledged to achieve 100 GW of
solar energy capacity by 2022. The sector
added 4 GW in 2016 and expects this to
grow to 9 GW in 2017.
Solar energy – soon to be the cheapest everywhere Since 2009, solar energy prices have come down by 62%. Solar energy is already cheaper than coal-based grid energy in some parts of the world. According to Bloomberg New Energy Finance, by 2025, solar could be cheaper than coal virtually everywhere in the world. Technological advances have brought about this industry growth: diamond wire saws can slice wafers more efficiently, and superior cells can generate more electricity each day.
India solar demand forecast
INDIA SOLAR DEMAND FORECAST2011 to 2015 cumulative installation figures reflect large-scale + rooftop installs
F: ForecastAnnual rooftop Annual utility-scaleCumulative Right-hand scale
10,000
8,000
6,000
4,000
2,000
0
50,000
40,000
30,000
20,000
5,000
0
9,500
6
2,000
7,500
2009 2010 2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F 2020F
Solar installations (MW)
Source: Mercom Capital Group
Solar farm costs are shrinking
SOLAR FARM COSTS ARE SHRINKINGThe global weighted average of a utility-scale solar project is set to fall by 84% as component costs continue to decline. $/kilowatt
Module Inverter Racking and mounting OtherOther BoS hardware Installation/EPC/development
5,0004,5004,0003,5003,0002,5002,0001,5001,0005000
Source: Bloomberg
20092010
20112012
20132014
20152016
20172018
20192020
20212022
20232024
2025
Annual Report 2016 | 031
Performance of our wind energy projects
WE MEASURE THE PERFORMANCE OF OUR WIND ENERGY PROJECTS BY THEIR AVERAGE ANNUAL PLANT LOAD FACTOR (PLF). THE PLF MEASURES WIND FARM EFFICIENCY. THIS IS CALCULATED BY DIVIDING THE ACTUAL GROSS ELECTRICITY A WIND FARM GENERATES BY THE OUTPUT EXPECTED IF THE WIND FARM HAD OPERATED AT FULL CAPACITY DURING THE SAME PERIOD. WITH A HIGHER PLF, THE WIND FARM’S FIXED COSTS ARE DISTRIBUTED OVER MORE KILOWATT HOURS OF OUTPUT, RESULTING IN A LOWER COST PER UNIT OF ELECTRICITY.
Seasonal wind patterns affect the PLF. A
wind farm will generally generate more
electricity and have a higher PLF during
the high wind season between April
and September than during the low
wind season.
Machine availability and grid availability
also affect the PLF. Machine availability
is the amount of time a wind turbine
generator (WTG) is operational and able
to generate electricity over a specified
period of time. It can be affected by
maintenance and operational failures.
Grid availability is the amount of time
the grid is able to accept electricity
generated by the WTGs over a specified
period of time.
Overall machine availability at new wind
farms is usually lower during the first
few months because the WTGs are often
shut down for checks and adjustments.
Seasonal wind patterns, machine availability and grid availability affect the PLF
032 | Mytrah Energy Limited
Sl. No.
Site LocationCapacity
(MW)2014 MA 2014 GA 2015 MA 2015 GA 2016 MA 2016 GA
1 Mokal Rajasthan 42 97% 93% 96% 97% 96% 97%2 Kaldonger Rajasthan 76 96% 99% 93% 98% 97% 97%3 Bhesada Rajasthan 50 - - 82% 98% 98% 95%4 Nidhi Rajasthan 90 - - - - 93% 91%5 Mahidad Gujarat 25 98% 100% 96% 100% 98% 99%6 Jammanwada Gujarat 53 97% 100% 98% 99% 98% 99%7 Chakla Maharashtra 39 98% 94% 97% 98% 96% 99%8 Sinner Maharashtra 13 96% 100% 93% 99% 97% 100%9 Vajrakarur Andhra Pradesh 63 98% 100% 97% 99% 95% 98%10 Burgula Andhra Pradesh 38 100% 100% 100% 99% 100% 100%11 Pottipodu Andhra Pradesh 105 - - - - 89% 94%12 Aspari Andhra Pradesh 80 - - - - 99% 96%13 Savalsung Karnataka 95 98% 90% 99% 99% 99% 99%14 Nazeerabad Telangana 101 - - - - 87% 98%15 Vagarai Tamil Nadu 101 95% 78% 99% 74% 97% 90%16 Nipanya Madhya Pradesh 30 - - - - 40% 93%
Portfolio 1000 97% 95% 95% 96% 93% 97%
The table below sets out our plant machine availability (MA) and grid availability (GA) for the past three years.
Annual Report 2016 | 033
Our new projects
AS OF 31 DECEMBER 2016, WE HAD WON BIDS FOR 21 SOLAR ENERGY PLANTS IN THREE INDIAN STATES – PUNJAB, TELANGANA AND KARNATAKA – WITH A TOTAL CAPACITY OF
480 MW. THE REGULATORY REGIMES IN THESE STATES ARE PARTICULARLY FAVOURABLE FOR THE SOLAR ENERGY INDUSTRY.
We have bid carefully, making sure we win
bids near the higher end of the relevant
tariff bands. Our weighted average tariff
over all 21 projects is 8.47 cents/kWh.
We now have over 200 people working in
our solar business. Building wind projects
and building solar projects share many
similarities, so the move into solar is
actually a cost-effective one.
The map shows where our solar energy
projects are located. In addition to solar
projects, we have 320 MW of wind projects
under construction.
As of 31 December 2016, we had signed PPAs of
480 MW
Punjab
Karnataka19
181314
15
11
12
107
Punjab Projects 2
21
17 98
5
3
6
4
16
2120
TelenganaProjects 16
KarnatakaProjects 3
2
Tamil Nadu
Telengana
AndhraPradesh
1
Solar projects
Wind projects
034 | Mytrah Energy Limited
The table below gives more information about each of our solar projects.
SL. No
Project/ Site StateCapacity in MWs (AC)
Capacity in MWs (DC)
Tariff (Rs/KWH)
PPA Status
1 Bareta Punjab 25.0 26.2 5.97 Signed
2 Bhakara Kalan Punjab 25.0 26.2 5.97 Signed
3 Thimmajipet Telangana 8.0 9.2 5.69 Signed
4 Arvapally Telangana 8.0 9.2 5.72 Signed
5 Gadwal Telangana 15.0 17.2 5.65 Signed
6 Alampur Telangana 11.0 12.6 5.72 Signed
7 Tandur Telangana 15.0 17.2 5.72 Signed
8 Nagarkurnool Telangana 15.0 17.2 5.67 Signed
9 Guntipally Telangana 15.0 17.2 5.72 Signed
10 Thungathurthy Telangana 15.0 17.2 5.72 Signed
11 Chegunta Telangana 15.0 17.2 5.72 Signed
12 Tunki Bollaram Telangana 15.0 17.2 5.71 Signed
13 Shanigaram Telangana 15.0 17.2 5.72 Signed
14 Domakonda Telangana 15.0 17.2 5.72 Signed
15 Reddypet Telangana 15.0 17.2 5.72 Signed
16 Wanaparthy Telangana 50.0 57.5 5.56 Signed
17 KM Pally Telangana 50.0 57.5 5.59 Signed
18 Kamareddy Telangana 50.0 57.5 5.59 Signed
19 Sindagi Karnataka 15.0 17.2 5.44 Signed
20 Hunagund Karnataka 15.0 17.2 5.50 Signed
21 Raibagh Karnataka 15.0 17.2 5.50 Signed
Total 422 480
The table below gives information about each of our wind energy projects under development.
Site Location (State) Proposed Installed Capacity (MW)
Aspari Extension Andhra Pradesh 69.9
Maniyachi Tamil Nadu 250
Total 319.9
Annual Report 2016 | 035
Wind resource assessment capability
8States
221Future locations with wind data
036 | Mytrah Energy Limited
The team has analysed dozens of diverse
locations, creating a project pipeline of over
4000 MW.
We have forged alliances with the Indian
Institutes of Technology and Birla Institute of
Technology and Science, Pilani, for sharing
academic knowledge and data relating to the
sector.
The highlights of 2016 Extended wind pattern coverage to Kerala
and Chattisgarh.
Presented three breakthrough papers:
‘Big Data, Artificial Intelligence & Cloud
Computing; a smarter way to manage your
fleet’ Wind Europe breakthrough abstract
2016 Hamburg
‘Wind power forecasting based on WRF and
ANN enhanced with Statistical Capabilities’
Wind Europe breakthrough abstract 2016
Hamburg
‘RNRG #40C Vs Class 1; comparison of
operational characteristics’ Wind Europe
breakthrough abstract 2016 Hamburg
Signed a memorandum of understanding
with the Birla Institute of Technology and
Science, Pilani.
Mytrah is the only independent power producer in India whose research and development in wind energy has ISO certification.
OUR WIND RESOURCE CAPABILITY IS CRUCIAL TO OUR GROWTH – OPERATIONAL AND FINANCIAL. IT’S ESSENTIALLY OUR RESEARCH AND DEVELOPMENT FUNCTION RESPONSIBLE FOR FINDING POTENTIAL PROJECT SITES, LOOKING AT FACTORS LIKE WIND PATTERNS, LAND ACCESSIBILITY, GRID AVAILABILITY, AND LAND COST. WIND RESOURCE ASSESSMENT HELPS US PRIORITISE PROJECTS BASED ON RETURN ON INVESTMENT.
Annual Report 2016 | 037
Asset management
97Grid availability
in 2016 (%)*
97.5Machine availability
in 2016 (%)*
* for stabilised plants
038 | Mytrah Energy Limited
We have not only engineers who
handle the technology side, but also
people who deal with commercial and
regulatory issues, IT, data analytics, sector
developments, and finance. We’ve got
an ISO 9001-certified asset management
team of around 80 people. This core
business function can improve our
financial performance through a continued
focus on small improvements.
The technical challenges Managing assets is harder than it may
appear. This is because:
We have a diversified portfolio with
varying technologies spread over a
geographic distance of 2500 km
Assets are located in a range of terrains,
with different weather conditions, and
wind speeds can vary throughout the
year, and from year to year, and
Assets are located at different altitudes,
from 20 metres to 950 metres,
enhancing complexity since wind power
varies with air pressure.
To deal with these challenges, we’ve got
one Central Monitoring Centre, and, at
every site, a plant manager. The centralised
team aggregates data in real time from
150 data points on each wind turbine,
and compares this data with benchmarks.
Any deviations can highlight maintenance
that’s needed, or improvements that could
be made. The teams on the ground carry
out this work.
The operating environment Apart from maintaining our portfolio of
operational assets, the asset management
team looks after the customer side and the
regulatory side of the business. They make
sure every dollar we earn is realised, and
that we keep up with the latest policies
announced by the Central and State
Governments. Where necessary, they work
with the other companies and industry
associations to fulfill these responsibilities.
The next big thing – solarMoving into the solar energy sector brings
new challenges with it. As soon as we took
the decision to make this move, we took
steps to make sure our asset management
team possessed the skills it needed – even
before a solar energy plant had been
commissioned. We’re confident we’re ready
to deal with the technical and regulatory
issues of solar.
Our priorities for 2017 The demands on our asset management
team will grow as we continue to increase
significantly our power generating
capacity, in both wind and solar. We will
continue to develop our data analysis
capabilities so that we can squeeze more
performance from every asset.
OUR WIND ASSETS ARE CURRENTLY MADE UP OF 16 PLANTS SPREAD ACROSS EIGHT STATES. MANAGING THOSE ASSETS ISN’T JUST A MATTER OF DOING MAINTENANCE FROM TIME TO TIME – WE ACTUALLY MONITOR IN REAL TIME THE OPERATING ENVIRONMENT AS WELL AS THE ASSETS THEMSELVES.
The centralised team aggregates data in real time from 150 data points on each wind turbine, and compares this data with benchmarks.
Annual Report 2016 | 039
Going above and beyond compliance
Corporate governance
WE BELIEVE IN THE HIGHEST STANDARDS OF CORPORATE GOVERNANCE. THIS GOES BEYOND JUST UPHOLDING THE LAW OF THE LAND. IT MEANS DOING WHAT’S RIGHT AND PROPER TO DO, RATHER THAN JUST WHAT WE HAVE TO DO.
We look to the best governance practices
from around the world. Here are some of
the things we’ve done.
We invested in SAP before we had even
commissioned a wind plant, convinced
it was right to put process before profit.
All our payments are processed through
this system, and checked by the internal
audit team.
We appointed EY (formerly Ernst &
Young) as the co-sourced internal
auditor and KPMG as the external
auditor before we had generated any
revenue.
We put a process in place where all our
employees have to regularly confirm
they’re familiar with our governance
policies and are following them, and
report where this isn’t happening.
We put a process in place for getting
consent before entering into any
transaction that might conflict with our
policies.
040 | Mytrah Energy Limited
Ravi KailasChairman & Nominations Committee Chairman, Mytrah Energy Limited
Chairman, Mytrah Energy (India) Private Limited
Mr Kailas has 26 years of entrepreneurial
experience in telecoms, franchising,
manufacturing, software, infrastructure,
and financial options. He was the founder
of a number of start-up companies,
including Zip Global Network, a telecoms
services company, Xius Technologies, a
telecoms software company, and Altius, a
real estate options company.
He has a Bachelor’s degree in Electronics
and Communication Engineering from
Osmania University, and a Master’s degree
from the Graduate School of Business,
Stanford University.
Rohit PhansalkarNon-Executive Director & Remuneration Committee Chairman, Mytrah Energy Limited
Independent Director, Mytrah Energy (India) Private Limited
Mr Phansalkar is chairman and CEO of RKP
Capital Inc., a US-based merchant banking
boutique.
He was previously chairman and CEO
of Osicom Technologies, an optical
networking company, the co-founder,
Vice Chairman and CEO of Newbridge
Capital, a private equity firm investing in
India, and the head of the Energy Finance
Group at Oppenheimer & Co. He was also
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. He has an MBA from
the Graduate School of Business, Harvard
University.
Russell WallsNon-Executive Director & Audit Committee Chairman, Mytrah Energy Limited
Independent Director & Audit Committee Chairman, Mytrah Energy (India) Private Limited
Mr Walls has a financial background, with
extensive experience as a finance director,
and has worked in a number of sectors.
He is currently non-executive director
of Biocon Limited (healthcare), Signet
Jewellers Limited (retail), and the regulated
holding company for the UK general
insurance business of Aviva (Insurance) plc.
He was previously independent non-
executive Director and Chairman of the
Audit Committee of Aviva (Insurance)
plc, and group Finance Director of
BAA plc (transport), Wellcome plc
(pharmaceuticals), and Coats Viyella
plc (textiles). In addition, he was senior
independent non-executive Director
and Chairman of the audit Committee
of Stagecoach Group plc (transport) and
Hilton Group plc (leisure).
The Directors We have a strong and diverse international
Board of Directors at Mytrah Energy
Limited, which is listed on the Alternative
Investment Market in London, and Mytrah
Energy (India) Private Limited, which is the
wholly-owned Indian operating company.
Under Indian Company Law, Directors
are required to declare that appropriate
financial and compliance processes are in
place and operating effectively.
Our Management Assurance Group helps
the Directors implement governance
policies, while strengthening and
streamlining all our business processes.
The group is ISO 9001:2008-certified for its
internal audit work.
The biographies of all the directors are
given below.
Annual Report 2016 | 041
042 | Mytrah Energy Limited
Shirish NavlekarCFO, Mytrah Energy Limited
CFO, Mytrah Energy (India) Private Limited
Mr Navlekar has 34 years of experience in
the infrastructure sector.
He was previously CEO of the power
business of Cairn India Limited, CFO in the
Delhi International Airport, and head of
project finance at GMR. He has also worked
with multinational corporations, including
General Electric, Mirant Asia Pacific Limited,
and Coastal Power Company.
Vikram KailasCEO, Mytrah Energy Limited
Managing Director, Mytrah Energy (India)
Private Limited
Mr Kailas previously 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. Before that, he was associated
with Deloitte Consulting in Hyderabad.
Susan Wallace, FCISCompany Secretary, Mytrah Energy Limited
Ms Wallace is a Fellow of the Institute of Chartered Secretaries and Administrators, and the
author of the institute’s Company Secretary’s Troubleshooter (third edition, June 2012).
She has more than 20 years of experience in the company secretarial and corporate
governance fields.
Before setting up Bruce Wallace Associates with Martha Bruce, she was an Executive
Director of David Venus & Company, where she provided outsourced company secretarial
support and corporate governance advice to a wide range of private and public
companies.
Ms Wallace began her career at several legal and accountancy practices, including
Eversheds and KPMG.
Bob SmithDirector, Mytrah Energy (India) Private Limited
Mr Smith has 26 years of experience in
the energy industry, including 17 years
in oil and gas with BP, and nine years in
renewables.
He leads investor relations at Mytrah.
Milind JoshiNominee Director, Mytrah Energy (India)
Private Limited
Mr Joshi has 21 years of experience in
operations and investments, principally in
the transportation and energy sectors.
He is on the Boards of several infrastructure
companies, and is responsible for the
origination and execution of transactions
at IDFC Alternatives.
Charandeep KaurIndependent Director, Mytrah Energy (India) Private Limited
Ms Kaur is a partner in the Delhi office of Trilegal, and specialises in mergers and acquisitions,
joint ventures, private equity investments, entry strategies, and foreign direct investment.
She is currently secretary of the International Bar Association Women’s Interest Group, and
vice-chair of the Inter Pacific Bar Association Legal Practice Committee.
Annual Report 2016 | 043
Our people
044 | Mytrah Energy Limited
OUR PEOPLE ARE THE CORNERSTONE OF OUR SUCCESS. AGAIN AND AGAIN, THEY’VE PROVEN THEY CAN COMPLETE A PROJECT ON TIME AND WITHIN BUDGET, AND MAKE EACH PROJECT MORE PROFITABLE THAN THE LAST. THEIR ABILITY AND COMMITMENT HAVE BROUGHT RESULTS, AND HELPED MYTRAH MAKE A NAME FOR ITSELF IN THE GLOBAL RENEWABLE ENERGY SECTOR.
Initiatives and rewards New management training programmesIn 2016, we put in place improved training
programmes for senior, middle, and first-time
managers.
The senior programme is for those who we
expect to take on top-level leadership roles
in the next couple of years. Ten people took
part in this training during 2016.
The middle programme helps managers
develop their skills further. We recruited
people from prominent Indian business
schools during the year, and they took part in
this training.
The first-time programme is for those who
we’ve promoted to managerial positions for
the first time. It’s designed to give them the
skills and confidence they need to manage a
team.
New collaboration platform We set up a platform during the year where
everyone in Mytrah can share knowledge and
ideas, recognise successes and brainstorm
together.
Options and bonuses We’ve got an employee stock option plan and a
financial bonus scheme to reward performance
and encourage people to stay and do well.
About 15% of the team benefited in 2016.
On-the-spot awards During a collaborative project, or shortly after
it’s completed, one team may recognise the
contribution another team or group of people
has made to the project. The recipients receive
a certificate on the spot, and a cash award.
34
Average age of the team There’s a mix of youth, experience and
expertise at Mytrah. While more than 60%
of us are under the age of 35, the senior
management team has a combined 410
years of experience in the sector.
4.5
Average number of days of training for each person
We give technical and personal skills
training to increase knowledge, develop
creativity and share insights. There are
classroom sessions, workshops and
individual assignments.
92
Retention rate (%)We think this high number speaks for itself.
Our employee retention rate was higher
than the industry average – at the senior
manager level it was nearly 100%.
What gives us the edge
Annual Report 2016 | 045
Our approach to Safety, Health and Environment
Sustainability
046 | Mytrah Energy Limited
Keeping standards high We’re committed to fostering harmony
between our business, the communities
where we operate and the environment.
To do this, we’ve developed our own
Environment and Social Management
System, which our lenders have approved.
This system:
Contains a set of management
procedures that deal with the
environmental and social impacts and
risks associated with renewable power
generation
Is implemented, controlled and
managed at the project and asset level,
and governed and monitored by senior
management at the corporate level
Complies with ISO 9001, ISO 14001 and
OHSAS 18001, and
Supports our vision and core values.
Promoting safety We have a ‘nobody gets hurt’ philosophy
– this means our employees and
stakeholders can expect a safe, clean and
healthy working environment all the time.
Our health and safety practices include
full and clear instructions, safe working
methods, and a systematic work permit
system with defined targets (statutory and
voluntary compliance with safety norms).
To date, we’ve conducted more than 20
million ‘safe person’ hours of operations. In
2016, we had 658,536 safe person hours
at five self-development sites, and no
recordable accidents.
Monitoring impacts on the environment Wind and solar plants generate few
pollutants. But there are certain other
considerations, like noise, water, ambient
air quality, and shadow flicker. We monitor
these regularly to make sure they’re within
the limits allowed.
Our wind farms across India currently
prevent the release of more than 1,608,800
tonnes of carbon dioxide into the
atmosphere each year.
To date, we’ve conducted more than 20 million ‘safe person’ hours of operations. In 2016, we had 658,536 safe person hours at five self-development sites, and no recordable accidents.
Annual Report 2016 | 047
Making a difference through corporate social responsibility
Sustainability
048 | Mytrah Energy Limited
Our responsibilityAt Mytrah, community engagement is
intrinsic to our holistic approach of making
the world a better place to live in.
Our approachMytrah plays the role of a catalyst in
promoting comprehensive development
by facilitating participatory community
development with an enduring impact.
The Company’s role is that of an
empowerment and collaboration agent.
Our strategyMytrah engages with communities as
a priority; it embarks on result-oriented
projects/programmes guided by
need-based analyses and stakeholder
consultation. Mytrah undertakes or
supports CSR initiatives beyond its
immediate geographies of presence in
addition to affirmative action in matters of
national importance based on community
needs and exigent circumstances (natural
disasters).
The Company’s CSR engagement covers
four areas:
Development skills and promoting
entrepreneurship
Undertaking WASH (water, sanitation
and hygiene) initiatives
Sport promotion
Forging collaborations and partnerships
Annual Report 2016 | 049
Improving lives and livelihood
On-going initiativesLink Volunteers Project: The Link
Volunteers is a partnership project with
Banerjee & Luke Foundation in Borabanda,
an aggregation of Hyderabad slums. The
objectives:
Improve knowledge and skills of 100
Link Volunteers to enhance slum
healthcare services
Establish early diagnosis, collect
epidemiological data from slums
related to hypertension and diabetes to
facilitate proactive intervention
Create viable primary healthcare
management associations through
collaborative efforts between non-
government and government
organisations
Replicate/expand the project; influence
the State’s healthcare policies
Swachh Bharat Sanitation Project: This
partnership project with the Government
of Andhra Pradesh contributes to the
State’s SWACHH Bharat programme
through the construction of 112
household toilets in Guntur district. In
addition to financial support, the Company
also monitors toilet construction and
upkeep. Two villages that have enjoyed the
Company’s support have been declared
‘Open Defecation Free’ by the Government
authorities.
Art for Social Cause - Kala Mytrah Project: An Art for Social Cause-Art Camp
was conducted in line with Mytrah’s
understanding of art and culture catalyzing
social development. Paintings were
contributed by renowned Indian artists.
The proceeds from sales were invested
in project Kala Mytrah. The project (in
collaboration with UNICEF) provides
technical support. Mahita, an NGO based
in Hyderabad with over 20 years of work
experience in social development, is
executing the project.
Training of the adolescent girl – Kala Mytrah Project: This project, driven by
Mytrah, is conducted in collaboration with
UNICEF to provide education and life-skills
to adolescent girls (age group 14-19 years)
and school drop-outs. The project is being
managed by Mahita.
050 | Mytrah Energy Limited
Initiatives in 2016The focus was to provide rural livelihood
opportunities in the areas of the
Company’s presence. The Company
enhanced livelihoods of 807 individuals.
Farmer-produce organisation: This project
(managed by BAIF Development Research
Foundation) collects and sells farmer
produce without intermediaries, enhancing
ease and realisations. These centers also
provide farmers with hired implements and
inputs that enhance output.
Fodder purchase: Mytrah created a rural
livelihood opportunity by incentivising
the growing of high-yield fodder in Pargi
district, which touched 46 farmers.
Integrated livestock development: Mytrah collaborated with BAIF
Development Research Foundation to
undertake artificial cattle insemination in
Pargi and Savalsang, which is expected to
increase milk output and incomes.
Skill building and Entrepreneurship Development Project: This partnership
project with BAIF Development Research
Foundation is the outcome of a survey
conducted in Ranga Reddy district of
Telangana state and Vijayapur district of
Karnataka state. The project promotes
livelihood opportunities through
skill building and entrepreneurship
development. A group of 20 individuals
were selected and trained in Government
institutes to enhance employability.
Mytrah also collaborated with partners to
implement such projects in neighbouring
districts.
School sanitation: The Company
collaborated with Sri Parameswari
Educational Society, an NGO dedicated
to cleanliness in 45 Government schools
(Guntur district). Groups within the school
monitored and sustained the health and
sanitation drive.
Clean water infrastructure: A study
undertaken by Fiinivation, a Delhi-based
specialist in Vajrakarur, Aspari and Jaisalmer
districts, highlighted the need for clean
water sources. The team collaborated with
gram panchayats to establish and operate
reverse osmosis plants in respective
areas. The Company commissioned
RO plants with UV filtration facility in 7
areas. The plant was operated through
a card, ensuring clean water for every
neighbourhood family.
Annual Report 2016 | 051
Support for sport
052 | Mytrah Energy Limited
Initiative in 2016Mytrah Energy, through the Mytrah
Foundation, partnered the Gopichand
Foundation to fund the annual training
of about 30-35 athletes. This is a coach-
led, athlete-centric initiative wherein
the funding from Mytrah will be used
to cover various costs incurred by
athletes including boarding, food and
dietary supplements, emoluments of the
coaches and support staff, equipment,
competition and training-related travel
and other requirements to raise their
game to globally competitive levels.
Mr. Abhishek Kumar Sharma, cyclist, engaged in a mission to cycle 20,000 km across India to promote the Swachh Bharat initiative, was supported by Mytrah to complete the 3900 km leg from Hyderabad to New Delhi.
Ms. Arunima Sinha’s (first Indian woman amputee to climb Mount Everest) Sports Academy for disabled children was supported by Mytrah.
Annual Report 2016 | 053
Making the business strong and sustainable
Risk management
DURING A CORPORATE’S JOURNEY FROM A FLEDGLING TO AN INDUSTRY LEADER, ITS RISK PROFILE CHANGES – FROM ONE OF SURVIVING THE DAY-TO-DAY TRAVAILS TO ONE OF SUSTAINING ITS POSITION. THE SAME HOLDS TRUE AT MYTRAH, ONE OF INDIA’S LEADING I.P.P. PLAYER IN THE RENEWABLE ENERGY SPACE. RISK MANAGEMENT AT MYTRAH IS AN INTEGRAL PART OF THE BUSINESS MODEL, MODERATING ADVERSE RISK IMPACT ON OBJECTIVES.
Operational de-risking
Revenue visibility: All of
the electricity produced
by Mytrah’s wind and solar
plants is sold under long-
term contracts to stable
counter-parties.
To reduce the reliance on
any one system, Mytrah has a
range of contract structures
and counterparties.
Cutting-edge technology: Mytrah 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.
Pervasive presence: To
manage natural variability,
characteristic of renewable
energy generation, Mytrah
has diversified its activities
from a geographical
perspective, by installing
wind energy assets across
16 locations in 8 Indian
states. The Company’s wind
presence will continue to
expand to new locations,
and the addition of solar to
the portfolio provides further
diversification into the future.
Growth de-risking
Capacity enhancement: Mytrah added 417 MW of
wind power capacity against an envisaged addition
of 200 MW in 2016. A strong and mature team,
supported by well-established operating procedures,
is the key to managing continued delivery.
New technology: The addition of a large-scale solar
project portfolio creates new delivery risks which
have been managed by creating a substantial and
experienced solar team.
054 | Mytrah Energy Limited
Management de-risking
Knowledge capital: The
Company has accorded
significant important to
enhancing knowledge
capital within the
organisation. In addition
to specific training
programmes for a select
group of individuals, it has
institutionalised a training
calendar that provides
training to every employee
(in excess of four person
days) on technical and
behavioural skills.
Team strength: The
Company added more than
100 people at the junior
and middle management
levels – an infusion of youth,
experience and expertise –
to strengthen the capability
matrix of the team. This will
help in managing business
growth over the coming
years seamlessly.
Management capabilities: The Company is focused
on creating its leadership
pipeline which promises to
take the Company forward
over the coming years.
For this, the Company
has identified a group of
star performers who have
been put through a Talent
Management Programme
for strengthening their
business management skill.
This is followed by a planned
rotation across all key
functions for a year to fast-
track the individual’s growth
towards leadership roles
within the organisation.
Leveraging automation: Mytrah is making
significant investments in business process
automation. This facilitates accurate and disciplined
business operations in a cost-effective manner.
The result of these initiatives is reflected in an important reality: Mytrah has rapidly acquired
a pan-Indian personality even while it is relatively
young.
Annual Report 2016 | 055
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’s Statement on page 13.
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 page 15,
which are incorporated in this report by reference.
Results and dividendsThe Group posted profit after tax of USD (4.60)m for the year ended
31 December 2016 (31 December 2015: USD 0.39m) on a turnover of
USD 362.23m (31 December 2015: USD 74.72m) and EBITDA of USD
128.13m (31 December 2015: USD 65.2m). At 31 December 2016
the Group had cash and bank balances including liquid investments
of USD 55.87m (31 December 2015: USD 98.86m). The Directors do
not recommend the payment of a dividend for the current year (31
December 2015: USD nil).
Capital structureAs at 31 December 2016 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.
Details of options granted to directors are set out on page 110 in
note 38 and information about the 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.
Directors’ Report
DirectorThe directors, who served throughout the year were as follows:
Name Age Position Date of Appointment
Ravi Kailas 51 Chairman and CEO 13 August 2010
Rohit Phansalkar 72 Non-Executive Director 13 August 2010
Russell Walls 72 Non-Executive Director 4 November 2011
The Directors present their report, together with the audited financial statements for the year ended 31 December 2016. The information in
the Chairman’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.
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 41. 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 2017 Annual General Meeting.
To strengthen the governance of the Company, and taking note of
the Quoted Companies Alliance Corporate Governance Guidelines
for Smaller Quoted Companies (“QCA Guidelines”), on 9 August
2016 the Board approved two senior non board appointments;
Statutory Reports
056 | Mytrah Energy Limited
Mr Vikram Kailas was appointed Chief Executive Officer and Mr
Shirish Navlekar was appointed Chief Financial Officer.
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 liabilities 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 2016.
Substantial shareholdersOn 25 April 2017, the substantial shareholders of the company
holding 3% or more of the 163,636,000 Ordinary Shares in issue
were identified as follows:
The Raksha Trust* 94,751,030 57.9%
Esrano Overseas Ltd 24,000,000 14.7%
Capital Research Global
Investors12,272,700 7.5%
Henderson Global Investors 8,543,269 5.2%
Premier Asset Managers 5,350,000 3.3%
* 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 2016 (year ended 31 December2015: nil).
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 15 June 2016. A resolution concerning the
re-appointment of KPMG Audit LLC as Auditors will be proposed at
the 2017 Annual General Meeting.
By order of the Board
Susan WallaceCompany Secretary
Registered Office:Ground Floor, Dorey Court, Admiral Park,
St Peter Port, Guernsey, GY1 2HT
Registered in Guernsey with registered number 52284
Dated: 08 June 2017
Annual Report 2016 | 057
The Board embraces the high standards of corporate governance
contained in the 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.
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 approved and implemented a new Disclosure Policy
and updated and approved the Company’s Code on Share Dealing,
in line with the changes made to the AIM Rules following the
implementation of the EU Market Abuse Regime, effective from 3
July 2016. The Board and its Committees reviewed their terms of
references, to ensure they continued to be 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 BoardCompositionThe composition of the Board is shown on page 41. 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) Private Ltd (MEIPL). The Directors of MEL, along with
a number of others, are also Directors of MEIPL. The non board
appointments of Mr Vikram Kailas CEO and Mr Shirish Navlekar CFO,
both directors of MEIPL, strengthens the executive managerial team
and enables efficient dissemination of managerial information and
reporting, allowing the Board to make the optimum strategical and
financial decisions in the best interests of the Group’s stakeholders.
The role and operations of the BoardThe 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, the 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, the CEO, Senior Independent Director or the Company
Secretary as appropriate. The Board also receive management
information on a regular basis which sets out the performance of
the business. The CEO and CFO are invited to attend all scheduled
Board meetings and where appropriate they will also attend the
Audit Committee meetings.
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;
Corporate Governance Report
Statutory Reports
058 | Mytrah Energy Limited
Acquisitions and Group structure changes;
Financing activities and facility agreements;
Industry regulatory and compliance developments;
Related party transactions;
Approval of Annual and Half-Year Reports;
The EU Market Abuse Regulations;
Share options
Risk and internal controls
Attendance at scheduled Board Meetings during the year is shown below:
Director
Formal Scheduled Board Meetings during the year ended
31 December 2016
Maximum Possible
Attendance
Meetings Attended
Ravi Kailas 4 1
Rohit Phansalkar 4 4
Russell Walls 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 or the 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
the 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.
ConflictsConsideration 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 evaluationA 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 that were addressed 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.
The Board considers each year whether the review should be
conducted by an independent third party and in 2016 a Board
Evaluation was not conducted.
Board developmentAll new Directors appointed to the Board receive a comprehensive
on-going structured training and development programme. Russell
Walls and Rohit Phansalkar visited the Hyderabad Office a number
of times during the year, where they had a structured programme
of both formal and informal meetings with senior management. The
Company’s NOMAD is invited to attend a Board meeting each year
to update the Board on its general duties and current best practice
governance issues.
Reappointment of Directors at the Annual General MeetingThe 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) Private Limited, met regularly with shareholders and
their views were reported back to the Board. Mr Kailas and Mr Smith
also participated in a number of targeted investor roadshows and
roundtables, video interviews with Proactive Investors as well as
ad hoc meetings and presentations with investors, brokers and
bankers. This allowed all Directors to develop a good understanding
of the shareholders’ needs and expectations and in turn for the
Annual Report 2016 | 059
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 available on the
investor relations section of the Company’s website and distributed
to those shareholders who have requested to continue to receive
hard copies. The Annual Report 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 committeesThe 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.
NominationMembershipSince 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:
DirectorMaximum Possible
AttendanceMeetings Attended
Ravi Kailas 1 1
Rohit Phansalkar 1 1
Russell Walls 1 1
ResponsibilitiesThe 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.
RemunerationFull information on the composition, role, operation and meeting
attendance of the Remuneration Committee is set out in the
Remuneration Report on page 61.
AuditMembershipSince 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.
DirectorMaximum Possible
AttendanceMeetings Attended
Rohit Phansalkar 3 3
Russell Walls 3 3
ResponsibilitiesThe 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;
Statutory Reports
060 | Mytrah Energy Limited
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 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 training on
the Group Code of Conduct. 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 2016. As part of this review, the Board received
assurances from the Chairman, the Chief Executive Officer and the
Chief Financial Officer of Mytrah Energy Limited that the Directors
Responsibilities Statement on page 57 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 33.78m
of the Group at 31 December 2016, 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
cover it’s capital commitments. 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.
Remuneration reportThis report describes the Group’s overall remuneration policy and
Annual Report 2016 | 061
gives details of the compensation arrangements for Directors for
the year to 31 December 2016.
The remuneration committeeMembershipSince 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.
Attendance at scheduled Committee Meetings during the year is
shown below. Additional ad-hoc meetings by conference call were
also held during the year.
DirectorMaximum Possible
AttendanceMeetings Attended
Rohit Phansalkar 1 1
Russell Walls 1 1
Role and responsibilitiesThe 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 the 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
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.
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 view
Annual Bonus Variable Executives 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 KPIs
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
Statutory Reports
062 | Mytrah Energy Limited
Basic salarySalaries are reviewed annually for the Executive Director, CEO and
CFO.
Annual bonusAt the discretion of the Committee, the Executive Director, CEO
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 reward package
supports the achievement of key business measures and rewards
outperformance.
Mytrah share option schemeThe Company has a 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 is contractually entitled to a lump-sum life assurance
benefit and private healthcare medical insurance, car and housing
allowances. The Chairman 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 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 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 nonexecutive
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 AIM All-Share index.
10%
20%
40%
30%
MYTRAH ENERGYAIM ALL-Share Index
0%
-10%
-20%
-30%
-40%
-50%Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17
Annual Report 2016 | 063
Director’s interests in share awardsAs at 31 December 2016, the Directors held the following share options (refer to note 38 of the consolidated financial statement for more
detail):
Name Date of grant* New GrantsExercise price per
share (pence)
Executive Director
Ravi Kailas** 13 May 2016 4,999,989 0.1p
5,225,000 0.1p
Non-Executive Directors
Rohit Phansalkar 13 May 2016 82,500 0.1p
Russell Walls 13 May 2016 82,500 0.1p
*All options were cancelled and new options were granted at a reduced exercise price of 0.1p on 13 May 2016.
** The share options granted to Mr Ravi Kailas were transferred to the Raksha Trust, a Jersey based discretionary trust settled by Mr Ravi Kailas
of which he and some of his family members and also a philanthropic trust are discretionary beneficiaries.
Director’s emoluments and compensation (audited)Directors’ remuneration for the year ended 31 December 2016 was as follows:
Name Year ended 31 December 2016 (USD) Year ended 31 December 2015 (USD)
Executive
Ravi Kailas 1,459,020 1,258,490
Non-Executive
Rohit Phansalkar 74,536 84,056
Russell Walls 81,312 91,698
Total 1,614,868 1,434,244
During the year, no Director held any interest in the shares or loan stock of any subsidiary of the Company.
Directors’ share interests (audited)The interests of the Directors in shares of the company as at 31 December 2016 are shown below
Ordinary Shares held at 31 December 2015
Executive Director
Ravi Kailas 94,751,030*
Non-Executive Directors
Rohit Phansalkar 7000
Russell Walls 30,000
* 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.
Approved and signed on behalf of the Board
Rohit PhansalkarRemuneration Committee Chairman
Statutory Reports
064 | Mytrah Energy Limited
Financial section
Annual Report 2016 | 065
Financial Statements
066 | Mytrah Energy Limited
Independent Auditor’s Report
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 year ended
31 December 2016 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 auditorAs explained more fully in the Directors’ Responsibilities Statement as
set out on page 57, 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 statementsAn 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 statementsIn our opinion the Group financial statements:
• giveatrueandfairviewofthestateoftheGroup’saffairsasat
31 December 2016 and of its loss for the year then ended;
• have been properly prepared in accordance with IFRS as
adopted by the European Union; and
• havebeenprepared inaccordancewith the requirementsof
the Companies (Guernsey) Law, 2008.
Matters on which we are required to report by exceptionWe 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:
• properaccountingrecordshavenotbeenkept;or
• the financial statements are not in agreement with the
accounting records; or
• wehavenotreceivedalltheinformationandexplanationswe
require for our audit.
KPMG Audit LLC
Chartered Accountants
Heritage Court,
41 Athol Street
08 June 2017 Douglas, Isle of Man
To
The members of
Mytrah Energy Limited
Annual Report 2016 | 067
Consolidated statement of other comprehensive income for the year ended 31 December 2016
Consolidated income statement for the year ended 31 December 2016
NoteYear ended
31 December 2016Year ended
31 December 2015
USD USD
Continuing operations
Revenue 6 362,232,072 74,719,666
Other operating income 6 6,221,785 881,589
Construction Cost (224,672,249) -
Employee benefits expense 7 (2,656,137) (2,398,525)
Other expenses 8 (12,994,790) (7,280,624)
Earnings before interest, tax, depreciation and amortisation (EBITDA)
128,130,681 65,922,106
Depreciation and amortisation charge 15 & 16 (47,422,935) (16,403,741)
Equity settled employee benefits 38 (2,990,421) (641,188)
Operating profit 77,717,325 48,877,177
Finance income 10 4,933,555 3,347,383
Finance costs 11 (81,843,197) (51,221,870)
Other finance costs on refinancing 12 (6,386,413) (541,185)
Net finance costs (83,296,055) (48,415,672)
(Loss) / Profit before tax (5,578,730) 461,505
Income tax expense 13 976,277 (80,763)
(Loss)/ Profit for the year from continuing operations (4,602,453) 380,742
(Loss)/ Profit attributable to
-Owners of the Company (4,086,048) 1,162,991
-Non-controlling interest (516,405) (782,249)
Loss / Earnings per share
Basic 14 (0.02497) 0.00711
Diluted 14 (0.02497) 0.00711
The accompanying notes form an integral part of these consolidated financial statements.
Year ended 31 December 2016
Year ended 31 December 2015
USD USD
(Loss) / Profit for the year (4,602,453) 380,742
Other comprehensive income / (loss)
a) Items that will never be reclassified to profit and loss
Actuarial gain/ (loss) on employment benefit obligations (note 32d) 189,424 (283,309)
b) Items that may be reclassified to profit or loss
Change in fair value of available-for-sale financial assets (note 32c) (462,900) 355,167
Foreign currency translation adjustments (note 32a) (916,189) (3,510,858)
Other comprehensive loss (1,189,665) (3,439,000)
Total comprehensive loss (5,792,118) (3,058,258)
Total comprehensive loss attributable to
- Owners of the Company (5,275,713) (2,276,009)
- Non-controlling interest (516,405) (782,249)
The accompanying notes form an integral part of these consolidated financial statements.
Financial Statements
068 | Mytrah Energy Limited
Consolidated statement of financial position as at 31 December 2016
NoteAs at
31 December 2016As at
31 December 2015
USD USD
AssetsNon-current assetsIntangible assets 15 440,884,000 195,248
Property, plant and equipment 16 597,218,572 779,930,202
Other non-current assets 17 31,183,297 33,697,599
Other investments 18 344,355 2,055,483
Deferred tax assets 19 8,347,337 5,744,587
Total non-current assets 1,077,977,561 821,623,119
Current assetsTrade receivables 20 52,491,512 17,487,165
Other current assets 21 21,463,598 10,986,956
Current investments 22 10,700,833 43,384,798
Cash and bank balances 23 45,172,919 55,577,280
Total current assets 129,828,862 127,436,199
Total assets 1,207,806,423 949,059,318
LiabilitiesCurrent liabilitiesBorrowings 24 68,976,071 49,764,216
Finance lease obligations 25 218,208 101,165
Trade and other payables 27 26,389,922 23,130,462
Retirement benefit obligations 28 47,103 33,035
Current tax liabilities 13 414,987 3,176,482
Total current liabilities 96,046,291 76,205,360
Non-current liabilitiesBorrowings 24 876,121,830 624,433,184
Finance lease obligations 25 11,797,678 6,316,717
Derivative financial instruments 26 3,375,881 3,429,381
Other payables 27 79,505,674 114,422,081
Retirement benefit obligations 28 526,652 298,615
Total non-current liabilities 971,327,715 748,899,978
Total liabilities 1,067,374,006 825,105,338
Net assets 140,432,417 123,953,980
EquityShare capital 29 72,858,278 72,858,278
Capital contribution 30 16,721,636 16,721,636
Retained earnings 31 1,139,870 9,767,315
Other reserves 32 (20,432,502) (26,098,232)
Equity attributable to owners of the Company 70,287,282 73,248,997
Non-controlling interests 33 70,145,135 50,704,983
Total equity 140,432,417 123,953,980
These consolidated financial statements were approved by the Board of Directors and authorised for release on 08 June 2017.
Signed on behalf of the Board of Directors by:
Ravi Kailas Russell WallsChairman Director
The accompanying notes form an integral part of these consolidated financial statements.
Annual Report 2016 | 069
Cons
olid
ated
sta
tem
ent o
f cha
nges
in e
quity
fo
r the
yea
r end
ed 3
1 D
ecem
ber 2
016
Shar
e ca
pita
lCa
pita
l co
ntrib
utio
nFo
reig
n Cu
rren
cy
tran
slatio
n re
serv
e
Equi
ty
sett
led
empl
oyee
be
nefit
s re
serv
e
Fair
valu
e re
serv
eAc
tuar
ial
valu
atio
n re
serv
e
Reta
ined
ea
rnin
gsCa
pita
l re
dem
ptio
n re
serv
e
Deb
entu
re
rede
mpt
ion
rese
rve
Shar
e w
arra
nt
rese
rve
Non
-co
ntro
lling
in
tere
st
Tota
l
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
Bala
nce
as a
t 31
Dec
embe
r 201
472
,858
,278
16,7
21,6
36(3
6,87
0,96
2)4,
003,
406
195,
253
4,52
615
,520
,003
56
7,24
8-
-55
,532
,625
128,
532,
013
Profi
t for
the
year
--
--
--
1,16
2,99
1-
--
(782
,249
)38
0,74
2
Oth
er c
ompr
ehen
sive
inco
me:
Fore
ign
curr
ency
tran
slat
ion
adju
stm
ents
(not
e 32
a)-
-(3
,510
,858
)-
--
--
--
-(3
,510
,858
)
Actu
aria
l los
s on
empl
oyee
ben
efit o
blig
atio
ns (n
ote
32d)
--
--
-(2
83,3
09)
--
--
-(2
83,3
09)
Issu
e of
sha
re w
arra
nts
(not
e 32
g)-
--
--
--
--
2,03
8,96
0-
2,03
8,96
0
Purc
hase
of C
CPS
from
NC
I (no
te 3
3)-
--
--
--
--
-(2
,345
,085
)(2
,345
,085
)
Buy
back
of C
CPS
from
NC
I (no
te 3
3)-
--
--
--
--
-(1
,777
,864
)(1
,777
,864
)
Tax
on b
uy b
ack
of C
CPS
(not
e 31
)-
--
--
-(2
53,9
76)
--
--
(253
,976
)
Issu
e of
sha
res
to N
CI (
note
33)
--
--
--
--
--
77,5
5677
,556
Cre
atio
n of
DRR
(not
e 32
f)-
--
--
-(5
,560
,906
)-
5,56
0,90
6-
--
CRR
on
buy-
back
(not
e 3
2e)
--
--
--
(1,1
00,7
97)
1,10
0,79
7-
--
-
Cha
nge
in fa
ir va
lue
of a
vaila
ble-
for-
sale
fina
ncia
l
inst
rum
ents
(not
e 3
2c)
--
--
355,
167
--
--
--
355,
167
Equi
ty s
ettle
d sh
are
base
d pa
ymen
ts (n
ote
32b
and
note
38)
--
-74
0,63
4-
--
--
--
740,
634
Bala
nce
as a
t 31
Dec
embe
r 201
572
,858
,278
16,7
21,6
36(4
0,38
1,82
0)4,
744,
040
550,
420
(278
,783
)9,
767,
315
1,66
8,04
55,
560,
906
2,03
8,96
050
,704
,983
123,
953,
980
(Los
s) fo
r the
yea
r -
--
--
-(4
,086
,048
)-
--
(516
,405
)(4
,602
,453
)
Oth
er c
ompr
ehen
sive
inco
me:
Fore
ign
curr
ency
tran
slat
ion
adju
stm
ents
(not
e 32
a)-
-(9
16,1
89)
--
--
--
--
(916
,189
)
Actu
aria
l gai
n on
em
ploy
ee b
enefi
t obl
igat
ions
(not
e 32
d)-
--
--
189,
424
--
--
-18
9,42
4
Tax
on d
ivid
end
paid
to N
CI (n
ote
31)
--
--
--
(424
,820
)-
--
-(4
24,8
20)
Buy
back
of C
CPS
from
NC
I (no
te 3
3)-
--
--
--
--
-(3
,126
,782
)(3
,126
,782
)
Tax
on b
uy b
ack
of C
CPS
(not
e 31
)-
--
--
-(4
80,2
45)
--
--
(480
,245
)
Issu
e of
sha
res
to N
CI (
note
33)
--
--
--
--
--
23,0
83,3
3923
,083
,339
Cre
atio
n of
DRR
(not
e 32
f)-
--
--
-(1
,434
,744
)-
1,43
4,74
4-
--
CRR
on
buy-
back
(not
e 32
e)-
--
--
-(2
,201
,588
)2,
201,
588
--
--
Cha
nge
in fa
ir va
lue
of a
vaila
ble-
for-
sale
fina
ncia
l
inst
rum
ents
(not
e 32
c)
--
--
(462
,900
)-
--
--
-(4
62,9
00)
Equi
ty s
ettle
d sh
are
base
d pa
ymen
ts (n
ote
32b
and
note
38)
--
-3,
219,
063
--
--
--
-3,
219,
063
Bala
nce
as a
t 31
Dec
embe
r 201
672
,858
,278
16,7
21,6
36(4
1,29
8,00
9)7,
963,
103
87,5
20(8
9,35
9)1,
139,
870
3,86
9,63
36,
995,
650
2,03
8,96
070
,145
,135
140,
432,
417
The
acco
mpa
nyin
g no
tes
form
an
inte
gral
par
t of t
hese
con
solid
ated
fina
ncia
l sta
tem
ents
.
Financial Statements
070 | Mytrah Energy Limited
Consolidated statement of cash flow for the year ended 31 December 2016
Year ended 31 December 2016
Year ended 31 December 2015
USD USD
Cash flows from operating activities
(Loss) / profit before tax (5,578,731) 461,505
Adjustments:
Depreciation and amortisation charge 47,422,935 16,403,741
Interest on bank deposits (2,155,159) (1,237,561)
Finance lease income (527,781) (421,815)
Finance costs including other finance costs on refinancing 88,229,610 51,763,055
Loss on derivative financial instruments 31,900 220,985
Gain on disposal of current investments (2,185,775) (1,796,093)
Profit on sale of property, plant and equipment (16,738) (3,770)
Equity settled employees benefits 2,990,421 641,188
Advanceswrittenoff 424,142 -
Provision of trade receivables 101,010 225,991
Changes in working capital:
Trade receivables and accrued income (44,083,220) (320,766)
Other assets (2,711,621) (2,697,290)
Trade and other payables (2,912,442) 12,522,231
Cash generated from operating activities 79,028,551 75,761,401
Taxes paid (net) (4,509,861) (1,117,253)
Net cash generated from operating activities 74,518,690 74,644,148
Cash flows from investing activities
Purchase of property, plant & equipment and intangible assets (342,959,017) (162,676,708)
Redemption / (investment) in mutual funds (net) 33,669,617 (31,758,406)
Acquisition of business, net of cash acquired - (314,229)
Redemption /(deposits) placed with banks (net) 18,418,171 (43,046,142)
Interest income on bank deposits 2,204,121 1,176,577
Net cash used in investing activities (288,667,108) (236,618,908)
Cash flows from financing activities
Dividends to Series A CCPS holders including tax thereon (2,511,609) -
Buy back of non-controlling interest and taxes thereon (4,643,260) (2,455,569)
Proceeds from issue of shares to non-controlling interest 23,083,339 77,556
Purchase of shares from non-controlling interest - (3,378,980)
Payment under finance lease obligations (1,993,090) (895,783)
Proceeds from borrowings 639,679,649 317,085,724
Proceeds from issue of non-convertible bonds - 53,710,035
Repayment of borrowings (348,946,823) (128,289,905)
Interest paid (82,942,718) (73,128,253)
Net cash generated from finance activities 221,725,488 162,724,825
Net increase /(decrease) in cash and cash equivalents 7,577,070 750,065
Cash and cash equivalents at beginning of the year 5,910,786 5,423,092
Effectofexchangeratesoncashandcashequivalents (186,861) (262,371)
Cash and cash equivalents at end of the year (note 23) 13,300,995 5,910,786
The accompanying notes form an integral part of these consolidated financial statements.
Annual Report 2016 | 071
1. General information
Mytrah Energy Limited (“MEL” or the “Company” or the “Parent 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 AIM of the London Stock Exchange. The address of
the registered office is PO Box 156, Frances House, Sir William Place, St Peter Port, Guernsey, GY1 4EU. 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:
Subsidiaries Country of incorporation or residence
Date of Incorporation
Proportion of ownership interest / voting power
Activity
31 December 2016
31 December 2015
USD USD
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 Refer Note 1
Mytrah Energy Capital Pte. Ltd (“MECPL”)1 Singapore 10 April 2014 - 100.00 Refer Note 1
Mytrah Energy (India) Private Limited (“MEIPL”) (formerly ‘Mytrah Energy (India) Limited’)
India 12 November 2009
99.99 99.99 Operating company
Bindu Vayu Urja Private Limited (“BVUPL”) India 5 January 2011 100.00 100.00 Operating company
Mytrah Vayu Urja Private Limited (“MVUPL”) India 24 November 2011
100.00 100.00 Operating company
Mytrah Vayu (Pennar) Private Limited (“MVPPL”) India 21 December 2011
100.00 100.00 Operating company
Mytrah Vayu (Gujarat) Private Limited (“MVGPL”) India 24 December 2011
100.00 100.00 Operating company
Mytrah Engineering & Infrastructure Private Limited (“ME&IPL”)
India 29 March 2012 100.00 100.00 Operating company
Mytrah Engineering Private Limited (“MEPL”) India 30 March 2012 100.00 100.00 Operating company
Mytrah Vayu (Krishna) Private Limited (“MVKPL”) India 18 June 2012 100.00 100.00 Operating company
Mytrah Vayu (Manjira) Private Limited (“MVMPL”) India 18 June 2012 70.49 72.97 Operating company
Mytrah Vayu (Bhima) Private Limited (“MVBPL”) India 22 June 2012 100.00 100.00 Investment company
Mytrah Vayu (Indravati) Private Limited (“MVIPL”) India 22 June 2012 100.00 100.00 Operating company
Mytrah Power (India) Limited (“MPIL”) India 12 September 2013
100.00 100.00 Operating company
Mytrah Vayu (Godavari) Private Limited (“MVGoPL”) India 21 February 2014 100.00 100.00 Operating company
Mytrah Tejas Power Private Limited (“MTPPL”) India 22 August 2014
100.00 100.00 Operating company
Mytrah Vayu (Som) Private Limited (“MVSPL”) India 30 March 2015
100.00 100.00 Operating company
Mytrah Vayu (Tungabhadra) Private Limited (“MVTPL”)
India 30 March 2015
95.00 99.99 Operating company
Mytrah Aadhya Power Private Limited (“MADPPL”) India 16 July 2015 99.90 100.00 Operating company
Nidhi Wind Farms Private Limited (“NWFPL”) 2 India 16 July 2010 100.00 100.00 Operating company
Mytrah Aakash Power Private Limited (“MAKPPL”) India 09 September 2015
100.00 100.00 Operating company
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
072 | Mytrah Energy Limited
Subsidiaries Country of incorporation or residence
Date of Incorporation
Proportion of ownership interest / voting power
Activity
31 December 2016
31 December 2015
USD USD
Mytrah Agriya Power Private Limited (“MAGRPPL”) India 04 January 2016
100.00 - Operating company
Mytrah Abhinav Power Private Limited (“MABHPPL”)
India 04 January 2016
100.00 - Operating company
Mytrah Adarsh Power Private Limited (“MADAPPL”) India 04 January 2016
100.00 - Operating company
Mytrah Advaith Power Private Limited (“MADVPPL”) India 04 January 2016
99.90 - Operating company
Mytrah Akshaya Energy Private Limited (“MAKEPL”) India 02 June 2016
99.90 - Operating company
Mytrah Ainesh Power Private Limitted (“MAIPPL”) India 10 June 2016
100.00 - Operating company
Mytrah Bhannuj Power Private Limited (“MBHAPPL”)
India 29 July 2016
100.00 - Operating company
Mytrah Bhagiratha Power Private Limited (“MBHGPPL”)
India 01 August 2016
73.50 - Operating company
Mytrah Vayu (Arkavati) Private Limited (“MVARPL”) India 23 September 2016
100.00 - Operating company
Mytrah Vayu (Hemavati) Private Limited (“MVHPL”) India 05 October 2016 100.00 - Operating company
Mytrah Vayu (Narmada) Private Limited (“MVNPL”) India 25 October 2016
100.00 - Operating company
1WoundoffagainstapplicationbytheGrouptoconcernedauthoritywitheffectfrom02January2016.2 Acquired by the Group on 01 August 2015.
The principal activity of the Group is to operate Wind Energy Farms and Solar Power Plants as a leading independent power producer
and to engage in the sale of energy to the Indian market through the Company’s subsidiaries.
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 01 January 2016:
Standard or interpretation Effective for reporting periods starting on or after
IFRS 14 Regulatory Deferral Accounts Annual periods beginning on or after 01 January 2016
Accounting for Acquisitions of Interests in Joint Operations
(Amendments to IFRS 11)
Annual periods beginning on or after 01 January 2016
Clarification of Acceptable Methods of Depreciation and Amortisation
(Amendments to IAS 16 and IAS 38)
Annual periods beginning on or after 01 January 2016
Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41) Annual periods beginning on or after 01 January 2016
Equity Method in Separate Financial Statements (Amendments to IAS 27) Annual periods beginning on or after 01 January 2016
Annual Improvements to IFRSs 2012–2014 Cycle – various standards Annual periods beginning on or after 01 January 2016
Investment Entities: Applying the Consolidated Exception
(Amendments to IFRS 10, IFRS 12 and IAS 28)
Annual periods beginning on or after 01 January 2016
Disclosure Initiative (Amendments to IAS 1) Annual periods beginning on or after 01 January 2016
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.
Notes to the consolidated financial statements for the year ended 31 December 2016
Annual Report 2016 | 073
2. Adoption of new and revised accounting standards and interpretations (continued)
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
appliedinthesefinancialstatements,wereinissuebutnotyeteffective.TheGroupisintheprocessofevaluatingtheimpactofthe
following new standards 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
theguidanceonrecognitionandderecognitionoffinancialinstrumentsfromIAS39.IFRS9iseffectiveforannualreportingperiods
beginning on or after 01 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 recognised. It replaces
existing revenue recognition guidance, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customer Loyalty
Programmes.IFRS15iseffectiveforannualreportingperiodsbeginningonorafter01January2018,withearlyadoptionpermitted.
IFRS 16 Leases
In January 2016, the IASB issued a new standard, IFRS 16, ‘Leases’. The new standard brings most leases on-balance sheet for
lessees under a single model, eliminating the distinction between operating and finance leases. Lessor accounting, however,
remains largely unchanged and the distinction between operating and finance leases is retained. IFRS 16 supersedes IAS 17, ‘Leases’,
andrelatedinterpretationsandiseffectiveforactualperiodbeginningonafter01January2019,notyetendorsedbyEuropean
Union(EU). Earlier adoption of IFRS 16 is permitted if IFRS 15, ‘Revenue from Contracts with Customers’, has also been applied.
At the date of authorisation of these financial statements, the following Standards and relevant Interpretations, have not been
appliedinthesefinancialstatementsandwereeffectivefortheactualperiodbeginningonorafterthebelowmentionedrespective
dates, but not yet endorsed by EU.
IASB effective date Standard EU effective date
01 January 2017 Disclosure initiative (Amendments to IAS 7) Not yet endorsed
01 January 2017 Recognition of Deferred Tax Assets for Unrealised Losses (Amendment to IAS 12) Not yet endorsed
01 January 2017 Annual Improvement’s to IFRSs 2014-2016 Cycle (Amendments to IFRS 12 Disclosure
of interest in Other Entities)
Not yet endorsed
01 January 2018 Classification and Measurement of Share-based Payment Transactions (Amendments
to IFRS 2)
Not yet endorsed
01 January 2018 Applying IFRS 9 Financial instruments with IFRS 4 Insurance contracts (Amendments
to IFRS 4)
Not yet endorsed
01 January 2018 Annual improvement’s to IFRSs 2014-2016 Cycle (Amendments to IFRS 1 First-time
Adoption of IFRSs and IAS 28 Investment in Associates and Joint Ventures)
Not yet endorsed
01 January 2018 IFRIC 22 Foreign Currency Transactions and Advance consideration Not yet endorsed
3. Significant accounting policies
The Group accounting policies are summarized below:
3.1 Basis of accounting These financial statements comprise of the 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 the accounts (together referred as the “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.
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
074 | Mytrah Energy Limited
3. Significant accounting policies (continued)
3.1 Basis of accounting (continued)
a) Derivative financial instruments are measured at fair value;
b) Available-for-sale financial assets are measured at fair value;
c) Long termborrowings,exceptobligationsunderfinance leaseswhicharemeasuredatamortisedcostusing theeffectiveinterest rate method;
d) Share based payment expenses are measured at fair value; and
e) Net employee benefit (asset) / liability that is measured based on actuarial valuation.
TheDirectorshavetakenadvantageof theexemptionofferedbySection244(5)of theCompanies (Guernsey)Law,2008frompreparation of standalone financial statements of the Company as the Company is preparing and presenting consolidated financial statements for the financial year ended 31 December 2016.
The accounting policies set out below have been applied consistently to all years and presented in these consolidated financial statements.
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 the acquiree’s identifiable net asset basis. Subsequent to acquisition, the carrying amount of non-controlling interest is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity.
The Group builds solar and wind power plants under public-to-private Service Concession Arrangements (SCAs), and the same are treated as Intangible assets and gains/ losses arising from construction / development services, (where work is sub-contracted within the Group) are treated as realized and not eliminated on consolidation.
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”). The functional currency of all the subsidiaries is Indian Rupee (INR), except for BVML and MESPL, which are determined as USD. These financial statements are presented in US dollars (USD).
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 year, 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.
Exchangedifferencesonmonetaryitemsarerecognisedinincomestatementintheyear.Forthepurposesofpresentingconsolidatedfinancial 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 year. Income and expense items are translated at the average exchange rates for the
Notes to the consolidated financial statements for the year ended 31 December 2016
Annual Report 2016 | 075
The following exchange rates were used to translate the GBP financial information into USD:
31 December 2016 31 December 2015Closing rate 67.8080 66.1261
Average rate for the year 67.0887 64.0387
31 December 2016 31 December 2015Closing rate 1.2336 1.4802
Average rate for the year 1.3552 1.5283
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. Electricity generated from the last bill cycle date to the end of the period/ year are recognized as unbilled revenue and are billed in subsequent period on actualization basis as per the terms of contractual arrangements.
Generation-based incentives Revenue from generation-based incentives are recognised based on the number of units supplied, when 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 recognized after registration of the project with United Nations Framework Convention on
Climate Change (UNFCCC), generation of emission reductions and on execution of a firm contract of sale and billing to the customers.
Interest income Interestincomeisrecognisedasitaccruesusingtheeffectiveinterestratemethod.
Construction Revenue from Service Concession Arrangements Revenue related to construction under a service concession arrangement is recognised based on the stage of completion of the
work performed, consistent with the accounting policy on recognising revenue on construction contracts. Operation or Service revenue is recognised in the period in which services are provided by the Group.
Contract expenses are recognized as incurred unless they create an asset related to future contract activity. An expected loss on a contract is recognised immediately in profit or loss.
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
year, unless exchange rates fluctuate significantly during that year, in which case the exchange rates at the dates of the transactions areused.Exchangedifferencesarising,ifany,arerecognisedinothercomprehensiveincomeandaccumulatedinequity.
The following exchange rates were used to translate the INR financial information into USD:
3. Significant accounting policies (continued)
3.4 Foreign currencies (continued)
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
076 | Mytrah Energy Limited
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:
•Loansandreceivables
•Financialassetsatfairvaluethroughprofitorloss
•Available-for-salefinancialassets
•Held-to-maturityinvestments
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
Theeffectiveinterestratemethodisamethodofcalculatingtheamortisedcostofafinancialassetheldatamortisedcostandof
allocatinginterestincomeovertherelevantyear.Theeffectiveinterestrateistheratethatexactlydiscountsestimatedfuturecash
receipts(includingallfeesandpointspaidorreceivedthatformanintegralpartoftheeffectiveinterestrate,transactioncostsand
other premiums or discounts) through the expected life of the debt instrument, or (where appropriate) a shorter year, 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
attributablecosts.Subsequenttoinitialrecognitiontheyaremeasuredatamortisedcostusingtheeffectiveinterestmethod,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’.
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,interestcalculatedusingtheeffectiveinterestmethodandforeignexchangegainsandlossesonmonetaryassets,whichare
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-maturityinvestmentsaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.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 year. Financial assets are considered to be
3. Significant accounting policies (continued)
3.6 Financial instruments (continued)
Notes to the consolidated financial statements for the year ended 31 December 2016
Annual Report 2016 | 077
impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the
financialasset,theestimatedfuturecashflowsoftheinvestmenthavebeenaffected.
Forfinancialassetscarriedatamortisedcost,theamountoftheimpairmentlossrecognisedisthedifferencebetweentheasset’s
carryingamountandthepresentvalueofestimatedfuturecashflows,discountedatthefinancialasset’soriginaleffectiveinterest
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
considereduncollectible,itiswrittenoffagainsttheallowanceaccount.Subsequentrecoveriesofamountspreviouslywrittenoff
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
reservetoprofitor loss.Theamountreclassified is thedifferencebetweentheacquisitioncost (netofanyprincipal repayment
and amortisation) and the current fair value, less any impairment loss previously recognized 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 recognized, then the impairment loss is reversed through profit or loss, otherwise, it is reversed
through Other Comprehensive Income.
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.
Non-derivative financial liabilities
Non-derivative financial liabilities are initially recognised at fair value less any directly attributable costs. Subsequent to initial
recognition,theseliabilitiesaremeasuredatamortisedcostusingeffectiveinterestmethod.
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
liabilitycomponentofcompoundfinancialinstrumentismeasuredatamortisedcostusingeffectiveinterestmethod.Theequity
component is determined by deducting the amount of the liability component from the fair value of the compound instrument as
awhole.Thisisrecognisedandincludedinequity,netofincometaxeffects,andisnotsubsequentlyremeasured.
Financial liabilities
Financial liabilities are initially measured at fair value, net of transaction costs and subsequently measured at amortised cost using
theeffectiveinterestmethod.
Theeffectiveinterestmethodisamethodofcalculatingtheamortisedcostofafinancialliabilityandofallocatinginterestexpense
overtherelevantyear.Theeffectiveinterestrateistheratethatexactlydiscountsestimatedfuturecashpayments(includingall
feesandpointspaidorreceivedthatformanintegralpartoftheeffectiveinterestrate,transactioncostsandotherpremiumsor
discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on
initial recognition.
3. Significant accounting policies (continued)
3.6 Financial instruments (continued)
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
078 | Mytrah Energy Limited
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 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 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.
Wherepartsofanitemofproperty,plantandequipmenthavedifferentusefullives,theyareaccountedforasseparateitems(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 embedded 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 year 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.
In respect of an intangible asset, borrowing costs attributable to the construction of power plants are capitalised up to the date of
commercial operations date (COD). All borrowing costs subsequent to the COD are charged to the Income Statement in the year in
which such costs are incurred.
All other borrowing costs are expensed in the year in which they are incurred.
3. Significant accounting policies (continued)
3.6 Financial instruments (continued)
Notes to the consolidated financial statements for the year ended 31 December 2016
Annual Report 2016 | 079
Depreciation
Depreciationisprovidedtowriteoffthecostofproperty,plantandequipmentovertheirestimatedusefullivesaftertakinginto
account their estimated residual value, using the straight-line method as stated below
Furniture and fittings 5 years
Office equipment 3-5 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. The Group adopted component accounting of depreciation for the plant and machinery class of the property, plant and equipment.
During the year, Management has re-assessed and revised the estimated useful lives to the Wind Turbine Generators (WTG’s) based on experience and technical evaluation. The Company also revised the residual value between 0 - 10% (previous year: 20%) of the cost, in order to reflect the actual usage of the assets. The revised useful lives of the components of plant and machinery or WTGs are as follows:
Component of plant Revised useful life Prior year useful life Nacelles and its parts 15 years 25 years
Rotor blades 15 years 30 years
Tubular towers and Civil works – Tower 50 years 50 years
Transformers 25 years 25 years
Final testing and commissioning 15 years 25 years
Electrical works and Civil works – Others 10 years 50 years
Power evacuation 20 years 20 years
Impairment At each reporting date, management reviews the carrying amounts of its tangible assets to determine whether there is any
indicationthatthoseassetshavesufferedanimpairmentloss.Iftherecoverableamountofanassetisestimatedtobelessthanitscarrying 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 The Group has identified the following intangible assets. a) Service Concession Arrangements (SCA) b) Software
Service Concession Arrangements Under the SCAs, where the Group has received the right to charge the State Electricity Utilities (Grantor), such rights are recognised
and classified as “Intangible Assets”. Such right is not an unconditional right to receive consideration because the amounts are contingent to the extent the Grantor uses the services and thus are recognised and classified as intangible assets.
Software Software that are acquired by the Group and have finite useful lives are measured at costs less accumulated amortization and
accumulated impairment losses.
Amortisation The amortization method used is selected on the basis of the expected pattern of consumption of the expected future economic
3. Significant accounting policies (continued)
3.7 Property, plant and equipment (continued)
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
080 | Mytrah Energy Limited
benefits embodied in the asset, and is applied consistently from period to period, unless there is a change in the expected pattern of consumption of those future economic benefits. The Group determined that the amortisation method that reflects appropriately the expected pattern of consumption of the expected future economic benefits is correlated with the amortisation of the asset base.
Intangibles are amortised over its useful life using straight line method as stated below:
ServiceConcessionArrangements–OvertheperiodofPowerPurchaseAgreementi.e.,25yearsusingthedifferentialdepreciationmethodology under straight line method as per the principles envisaged in the CERC Guidance in this regard.
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
reportingdate.Taxableprofitdiffersfromprofitasreportedintheconsolidatedincomestatementbecauseitexcludesitemsofincome 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 Deferredtaxisthetaxexpectedtobepayableorrecoverableondifferencesbetweenthecarryingamountsofassetsandliabilities
in the financial statements and the corresponding tax bases used in the computation of the taxable profit, and is accounted forusingthebalancesheetapproach.Deferredtax liabilitiesaregenerally recognised forall taxable temporarydifferencesanddeferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporarydifferencescanbeutilised.Suchassetsandliabilitiesarenotrecognisedifthetemporarydifferencesarisefromtheinitialrecognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transactionthataffectsneitherthetaxableprofitnortheaccountingprofit.
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.
Anydeferredtaxassetorliabilityarisingfromdeductibleortaxabletemporarydifferencesinrespectofunrealisedinter-companyprofits 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 year 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.
Deferredtaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttosetoffcurrenttaxassetsagainstcurrenttaxliabilities 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.
3.10 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
3. Significant accounting policies (continued)
3.8 Intangible assets (continued)
Notes to the consolidated financial statements for the year ended 31 December 2016
Annual Report 2016 | 081
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 year in which they are incurred. Land taken on lease are amortised over a year ranging upto 25 years in line with the lease agreements.
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
thatanoutflowofresourcesthatcanbereliablyestimatedwillberequiredtosettlesuchanobligation.Iftheeffectofthetimevalue 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 years, 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 recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.
Re-measurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest)andtheeffectoftheassetceiling(ifany,excludinginterest),arerecognizedimmediatelyinothercomprehensiveincome(OCI). The Group determines the net interest expense/ (income) on the net defined benefit liability/ (asset) for the year by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual year to the then-net defined benefit liability/ (asset), taking into account any changes in the net defined benefit liability/ (asset) during the year as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognized 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 year, based on the Group’s estimateofequityinstrumentsthatwilleventuallyvest.Thefairvalueexcludestheeffectofnon-market-basedvestingconditions.
At each balance sheet date, the Group revises its estimate of the number of equity instruments expected to vest as a result of
3. Significant accounting policies (continued) 3.10 Leases (continued)
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
082 | Mytrah Energy Limited
theeffectofnon-market-basedvestingconditions.Theimpactoftherevisionoftheoriginalestimates,ifany,isrecognisedintheincome 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 year.
For cash settled share based payments, a liability is recognised for the amount payable at the balance sheet date with a corresponding charge being made to the income statement.
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 averagenumberofordinary sharesoutstanding for theeffectsofalldilutivepotentialordinary shares,which includesall stockoptions 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,usingtheeffectiveinterestmethod.Dividendincomeisrecognisedintheconsolidatedincomestatementonthedatethat 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 usingtheeffectiveinterestmethod.Theassociatedcashflowsareclassifiedasfinancingactivitiesinthestatementofcashflows.
Foreign currency gains and losses are reported on a net basis with in finance income and expense.
3. Significant accounting policies (continued) 3.13 Share-based payments (continued)
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
resultsmaydifferfromtheseestimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
yearinwhichtheestimateisrevisediftherevisionaffectsonlythatyearorintheyearoftherevisionandfutureyearsiftherevisionaffects
both current and future years.
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 and intangible assets under service concession arrangement
Management reviews the useful lives of depreciable assets and intangible 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/amortisation 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
4. Critical accounting judgements and key sources of estimation uncertainty
Notes to the consolidated financial statements for the year ended 31 December 2016
Annual Report 2016 | 083
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 had assessed the applicability of IFRIC 12 Service Concession Arrangements for certain arrangements. In assessing
the applicability, management had exercised significant judgement in relation to the underlying ownership of the assets, the ability
to enter into Power Purchase Arrangements (‘PPA’) with any customer and the ability to determine prices and concluded that the
arrangements did not meet the criteria for service concession arrangements in the past.
During the year, as a result of review of useful lives of Property Plant and Equipment (‘PPE’), based on technical evaluation, wherever
the estimated economic life of wind and solar projects are in line with the PPA period i.e 25 years, management has adopted IFRIC
12 prospectively for such wind and solar assets. Management believe that the financial statements will provide more reliable and
relevant information with the application of IFRIC 12.
In assessing the applicability of IFRIC 12, Management has exercised significant judgement in relation to (i) the arrangements that
are covered under the scope of the accounting for service concessions which in turn depends on the specific terms and conditions
of the power purchase agreements with the counter parties and estimates of the life of the related assets, (ii) the understanding
of the nature of the payments in order to determine the classification of the service concession arrangement as a financial asset
or as an intangible asset and (iii) the recognition of the revenue from construction including the timing and related margin to be
recognized.
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 (Chief Financial Officer).
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
categorisedintodifferentlevelsinafairvaluehierarchybasedontheinputsusedinthevaluationtechniquesasfollows:
• Level1:Quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities.
• Level2: Inputsotherthanquotedprices includedinLevel1thatareobservablefortheassetor liability,eitherdirectly(i.e.as
prices) or indirectly (i.e. derived from prices).
• Level3:Inputsfortheassetorliabilitythatisnotbasedonobservablemarketdata(unobservableinputs).
4. Critical accounting judgements and key sources of estimation uncertainty (continued)
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
084 | Mytrah Energy Limited
6. Revenue
The Group’s revenue from continuing operations is as follows:
Year ended 31 December 2016
Year ended 31 December 2015
USD USD
Sale of electricity 109,623,601 67,665,168
Generation based incentive 1 10,226,577 6,374,688
Sale of renewable energy certificates 1,777,778 679,810
Construction revenue 2 240,590,269 -
Sale of verified carbon units 13,847 -
Total revenue 362,232,072 74,719,666
Finance income (note 10) 4,933,555 3,347,383
Other operating income 3 6,221,785 881,589
Total income 373,387,412 78,948,638
1 Generation based incentives are recognised on fulfilment of eligibility criteria prescribed under Indian Renewable Energy Development
Agency Limited - Generation Based Incentive Scheme.
2 The amount of revenue, corresponding cost and margin recorded in statement of consolidated income statement on account of
exchange of construction services for an intangible asset under service concession arrangement is USD 240,590,269 (31 December 2015:
USD Nil), USD 224,672,249 (31 December 2015: USD Nil) and USD 15,918,020 (31 December 2015: USD Nil) respectively.
3 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 amounting to USD 1,118,180 (31 December 2015: USD 881,589) and
delay in commissioning of wind projects amounting to USD 5,103,605 (31 December 2015: USD Nil).
Iftheinputsusedtomeasurethefairvalueofassetorliabilitymightbecategorisedindifferentlevelsofthefairvaluehierarchy,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.
g) Measurement of earnings before interest, tax, depreciation and amortization (EBIDTA)
The Group has elected to present earnings before interest, tax, depreciation and amortisation (EBIDTA) as a separate line item on
the face of the statement of profit and loss. The Group measures EBIDTA on the basis of profit / (loss) from continuing operations.
In its measurement, the Company has not included depreciation and amortisation expenses, finance cost, equity settled employee
benefits expenses, tax expense and finance income.
4. Critical accounting judgements and key sources of estimation uncertainty (continued)
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 earns its revenues from customers located in India.
5. Segment information
Notes to the consolidated financial statements for the year ended 31 December 2016
Annual Report 2016 | 085
9. Auditor’s remuneration
The auditor’s remuneration is as follows (excluding taxes, if any):
10. Finance income
Year ended 31 December 2016
Year ended 31 December 2015
USD USD
Interest on bank deposits 2,155,159 1,237,561
Loss on derivative instruments within CCDs - (88,384)
Loss on derivative instruments within CCPS (31,900) (132,601)
Finance income on security deposits 527,781 421,815
Gain on disposal of current investments 2,185,775 1,796,093
Others 96,740 112,899
Total finance income 4,933,555 3,347,383
7. Employee benefits expense
Year ended 31 December 2016
Year ended 31 December 2015
USD USD
Salaries and bonus 2,000,594 2,241,999
Contribution to provident fund 50,011 32,150
Staffwelfare 116,749 58,039
Gratuity and leave encashment (note 28) 488,783 66,337
Total 2,656,137 2,398,525
Year ended 31 December 2016
Year ended 31 December 2015
USD USD
Fees payable to the auditors of Company and its subsidiaries for:
Audit of the Company’s annual accounts 68,438 77,179
Audit of the Company’s subsidiaries pursuant to legislation 106,800 83,690
Total audit fees 175,238 160,869
Review of Company’s interim accounts 33,202 31,330
Review of the Company’s subsidiaries interim accounts pursuant to legislation 23,141 30,396
Other audit services 29,495 -
Total non-audit fees 85,838 61,726
8. Otheroperatingexpensesincludecostsrelatingtowrite-offofdoubtfuladvancesUSD424,142(31December2015:USDNil),provision
for trade receivables USD 101,010 (31 December 2015: USD 225,991), repairs and maintenance cost of USD 6,277,548 (31 December
2015: USD 2,421,039).
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
086 | Mytrah Energy Limited
11. Finance costsYear ended
31 December 2016Year ended
31 December 2015USD USD
Interest on borrowings (105,232,479) (70,987,900)
Other borrowing costs1 (6,253,807) (4,398,853)
Interest on liability portion of CCPS (495,988) (519,611)
Total interest expense (111,982,274) (75,906,364)
Less: amounts included in the cost of qualifying assets2 (note 16) 30,139,077 24,684,494
Total finance cost recognised in the income statement (81,843,197) (51,221,870)
13. TaxationYear ended
31 December 2016Year ended
31 December 2015USD USD
Current tax charge (1,798,393) (5,560,396)
Deferred tax charge (note 19) 2,774,670 5,479,633
Income tax expense 976,277 (80,763)
1 Includes finance cost on finance lease obligations USD 1,302,032 (31 December 2015: USD 1,272,277).
2 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 asset and it represents the actual finance costs incurred on those
borrowings,calculatedusingtheeffectiveinterestratemethod.
12. Other finance costs on refinancingYear ended
31 December 2016Year ended
31 December 2015USD USD
Loan refinancing costs (6,386,413) (541,185)
Total (6,386,413) (541,185)
Loan refinancing costs represents the cost of prepayment and unamortized transaction costs incurred upon refinancing the existing
senior term loans.
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 1,480. As such, the Company’s tax liability is zero. However, considering that the Company’s operations are entirely
basedinIndia,theeffectivetaxrateoftheGroupof34.61%(31December2015:34.61%)hasbeencomputedbasedonthecurrenttax
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 1,558,712 (31 December 2015: USD 3,538,655) 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
timingdifferencesaccountedduringtheyear.
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 2016
Year ended 31 December 2015
USD USD
Profit/(Loss) before tax (5,578,730) 461,505
Enacted tax rates 34.61% 34.61%
Expected tax income / (expense) 1,930,798 (159,727)
Effectof:
Otherpermanentdifferences 1,215,958 2,100,705
MAT charge (1,798,393) (5,560,396)
MAT deferred tax credit 1,558,712 3,538,655
Income tax expense recognised in the consolidated income statement 976,277 (80,763)
Notes to the consolidated financial statements for the year ended 31 December 2016
Annual Report 2016 | 087
Tax assets / liabilities recognised in the consolidated statement of financial position:
13. Taxation (continued)
Basic earnings per share is calculated by dividing profit / (Loss) attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during the year.
At 31 December 2016, 36,340,389 potential ordinary shares (includes CCPS, share options and share warrants) (31 December 2015:
46,545,082)wereexcludedfromthedilutedweightedaveragenumberofsharescalculationbecausetheireffectwouldhavebeenanti-
dilutive.
Theaveragemarketvalueof theCompany’sshares for thepurposeofcalculatingthedilutiveeffectofshareoptionswasbasedon
quoted market prices for the year during which the shares and share options were outstanding.
14. Earnings per share
Year ended 31 December 2016
Year ended 31 December 2015
USD USD
Basic and Diluted:
a) Profit/(Loss) attributable to the equity holders of the Company (4,086,048) 1,162,991
b) Weighted average number of ordinary shares (basic) 163,636,000 163,636,000
Add:Effectofweightedaveragenumberofshareoptionsoutstanding - -
c) Weighted average number of ordinary shares (diluted) 163,636,000 163,636,000
Diluted earnings/(loss) per share (0.02497) 0.00711
Basic earnings/(loss) per share (0.02497) 0.00711
As at 31 December 2016
As at 31 December 2015
USD USD
Current tax assets - -
Current tax liabilities 414,987 3,176,482
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
088 | Mytrah Energy Limited
15. Intangible assets
Application Software
Intangibles under Service
Concession Arrangement*
Intangible asset under
development
Total
USD USD USD USD
Opening cost as at 1 January 2015 788,727 - - 788,727
Additions 75,900 - - 75,900
Exchangedifference (32,644) - - (32,644)
Balance as at 31 December 2015 831,983 - - 831,983Accumulated amortization as at 1 January 2015Balance at the beginning of the year 460,658 - - 460,658
Charge for the year 200,059 - - 200,059
Exchangedifferences (23,982) - - (23,982)
Balance as at 31 December 2015 636,735 - - 636,735Net value as at 31 December 2015 195,248 - - 195,248Opening cost as at 1 January 2016 831,983 - - 831,983
Additions 148,478 411,223,875 4,880,110 416,252,462
Transfer from Property, plant and equipment - - 455,164,959 455,164,959
Transfer in / (out) - - (411,223,875) (411,223,874)
Exchangedifference (22,211) (4,362,219) (517,890) (4,902,320)
Balance as at 31 December 2016 958,250 406,861,656 48,303,304 456,123,210Accumulated amortization as at 1 January 2016Balance at the beginning of the year 636,736 - - 636,735
Charge for the year 141,283 14,633,719 - 14,775,002
Exchangedifferences (17,295) (155,233) - (172,527)
Balance as at 31 December 2016 760,724 14,478,486 - 15,239,210Net value as at 31 December 2016 197,526 392,383,170 48,303,304 440,884,000
* Refer note 24 for security restrictions on property, plant and equipment/Intangibles under Service Concession Agreement.
Notes to the consolidated financial statements for the year ended 31 December 2016
Annual Report 2016 | 089
Not
es to
the
cons
olid
ated
fina
ncia
l sta
tem
ents
fo
r the
yea
r end
ed 3
1 D
ecem
ber 2
016
Furn
iture
and
fittin
gs
Offi
ce
equi
pmen
t
Land
and
build
ings
Plan
t and
Mac
hine
ry#
Com
pute
rsVe
hicl
esLe
ase
hold
impr
ovem
ents
Asse
ts u
nder
finan
ce le
ase2
Asse
ts
und
er c
ours
e of
cons
truct
ion
Tota
l
USD
USD
USD
USD
USD
USD
USD
USD
USD
Ope
ning
cos
t as
at 1
Janu
ary
2015
133,
711
142,
209
1,99
3,79
250
0,80
0,05
624
7,89
254
8,82
321
4,86
66,
086,
533
26,3
68,2
7253
6,53
6,15
4
Add
ition
s21
,989
145,
282
--
76,8
1665
,110
73,9
1428
,079
,288
286,
039,
204
314,
501,
603
Dis
posa
ls(8
39)
(234
)-
-(5
,921
)(4
9,09
9)-
--
(56,
093)
Tran
sfer
in /
(out
)-
-2,
220,
748
54,1
68,8
98-
--
-(5
6,38
9,64
6)-
Exchange
differen
ce(5
,796
)(1
0,03
3)(1
46,5
66)
(20,
916,
114)
(12,
145)
(21,
553)
(10,
573)
(534
,648
)(7
,984
,279
)(2
9,64
1,70
7)
Bala
nce
as a
t 31
Dec
embe
r 201
514
9,06
527
7,22
44,
067,
974
534,
052,
840
306,
642
543,
281
278,
207
33,6
31,1
7324
8,03
3,55
182
1,33
9,95
7Ac
cum
ulat
ed d
epre
ciatio
n as
at 1
Janu
ary 2
015
73,4
5281
,024
90,3
1725
,518
,229
182,
270
219,
825
92,5
7216
8,51
8-
26,4
26,2
07
Adj
ustm
ent f
or d
ispo
sals
(839
)(2
25)
--
(5,8
03)
(31,
323)
--
-(3
8,19
0)
Dep
reci
atio
n /
amor
tizat
ion
char
ge25
,725
40,3
1428
,137
14,0
76,6
3156
,406
104,
375
27,0
712,
155,
804
-16
,514
,463
Exchange
differen
ce(3
,603
)(4
,373
)(4
,352
)(1
,423
,003
)(8
,979
)(1
0,73
7)(4
,405
)(3
3,27
3)-
(1,4
92,7
25)
Bala
nce
as a
t 31
Dec
embe
r 201
594
,735
116,
740
114,
102
38,1
71,8
5722
3,89
428
2,14
011
5,23
82,
291,
049
-41
,409
,755
Net
val
ue a
s at
31
Dec
embe
r 201
554
,330
160,
484
3,95
3,87
249
5,88
0,98
382
,748
261,
141
162,
969
31,3
40,1
2424
8,03
3,55
177
9,93
0,20
2O
peni
ng c
ost a
s at
1 Ja
nuar
y 20
1614
9,06
527
7,22
44,
067,
974
534,
052,
840
306,
642
543,
281
278,
207
33,6
31,1
7324
8,03
3,55
182
1,33
9,95
7
Add
ition
s26
,482
53,8
87-
- 1
71,6
76
98,
198
61,
976
22,
331,
548
294,
852,
854
317,
596,
619
Dis
posa
ls-
(149
)-
(48,
304)
(6,9
00)
(44,
777)
- -
- (1
00,1
30)
Tran
sfer
in /
(out
)-
- 2
2,07
8,11
5 18
,689
,042
--
- -
(40,
767,
157)
-
Tran
sfer
to In
tang
ible
ass
ets
unde
r
deve
lopm
ent
--
--
--
--
(455
,164
,959
)(4
55,1
64,9
59)
Exchange
differen
ce(3
,978
)(7
,446
) (3
35,1
03)
(13,
444,
310)
(9,3
54)
(14,
042)
(7,5
58)
(1,0
71,0
74)
791,
328
(14,
101,
535)
Bala
nce
as a
t 31
Dec
embe
r 201
617
1,56
932
3,51
6 2
5,81
0,98
6 53
9,24
9,26
8 4
62,0
64
582
,660
3
32,6
25
54,
891,
647
47,7
45,6
1766
9,56
9,95
2Ac
cum
ulat
ed d
epre
ciatio
n as
at 1
Janu
ary 2
016
94,7
35 1
16,7
40
114
,102
3
8,17
1,85
7 2
23,8
94
282
,140
1
15,2
38
2,2
91,0
49
- 4
1,40
9,75
5
Adj
ustm
ent f
or d
ispo
sals
- (8
1)-
(46,
203)
(6,8
90)
(42,
618)
--
- (9
5,79
2)
Dep
reci
atio
n/A
mor
tisat
ion
char
ge #
33,4
45 5
8,61
0 1
04,1
82
30,1
21,9
60 6
2,80
5 1
00,6
30
41,
268
1,9
25,1
66
- 3
2,44
8,06
6
Exchange
differen
ce(2
,705
) (3
,516
) (3
,935
)(1
,265
,850
) (6
,147
) (7
,614
) (3
,296
) (1
17,5
86)
- (1
,410
,649
)
Bala
nce
as a
t 31
Dec
embe
r 201
612
5,47
5 1
71,7
53
214
,349
66
,981
,764
273
,662
3
32,5
38
153
,210
4
,098
,629
-
72,
351,
380
Net
val
ue a
s at
31
Dec
embe
r 201
646
,094
151
,763
2
5,59
6,63
7 47
2,26
7,50
4 1
88,4
02
250
,122
1
79,4
15
50,
793,
018
47,7
45,6
1759
7,21
8,57
2
16.
Prop
erty
, pla
nt a
nd e
quip
men
t
1.
An
amou
nt o
f USD
30,
139,
077
(31
Dec
embe
r 201
5: U
SD 2
4,68
4,49
4) p
erta
inin
g to
inte
rest
on
borr
owin
gs is
cap
italis
ed a
s th
e fu
nds
wer
e us
ed fo
r con
stru
ctio
n of
qua
lifyi
ng a
sset
s (re
fer n
ote
11).
Refe
r not
e 24
for s
ecur
ity re
stric
tions
on
prop
erty
, pla
nt a
nd e
quip
men
t.
2.
The
Gro
up le
ased
the
right
s to
use
pow
er e
vacu
atio
n fa
cilit
ies
unde
r a le
ase
arra
ngem
ent w
ith re
late
d pa
rtie
s.
Financial Statements
090 | Mytrah Energy Limited
Notes to the consolidated financial statements for the year ended 31 December 2016
16. Property, plant and equipment (continued)
Year ended 31 December 2016
Year ended 31 December 2015
USD USD
Amortization of intangible assets (refer note 15) 14,775,002 200,059
Depreciation / amortization charge on tangible and intangible assets 32,448,066 16,514,463
Depreciation and amortization capitalized during the year, net relating to wind
farm assets under course of construction
199,867 (310,781)
Total depreciation and amortization charge 47,422,935 16,403,741
# During the year, the management has revised the estimated useful lives and residual value of certain components of WTGs which has
resulted in an additional charge of depreciation amounting to USD 21,749,298 (31 Dec 2015: USD Nil) for the year ended 31 December
2016.
17. Other non-current assets
18. Other investments
As at 31 December 2016
As at 31 December 2015
USD USD
Deposits 9,847,022 6,546,423
Capital advances 8,649,379 14,740,851
Prepayments 12,686,896 12,410,325
Total other non-current assets 31,183,297 33,697,599
As at 31 December 2016
As at 31 December 2015
USD USD
Deposits with banks1 344,355 2,055,483
Total 344,355 2,055,483
Deposits mainly comprise of refundable security deposits placed with related parties towards usage of land and power evacuation
facilitiesforaperiodof20years.Thedifferencebetweenthefairvalueandthenominalvalueofthepowerevacuationdepositshas
beenclassifiedasassetsunderfinancelease.Further,thedifferencebetweenthefairvalueandnominalvalueoflanddepositshasbeen
classified as prepayments.
Capital advances represent advance payments made to suppliers and related parties for the construction (including procurement of
land) of wind farm and solar plant 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 of 20 years and are renewable provided the main lease is renewed
by the government authorities and other parties.
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.
3. Summary of depreciation and amortization charge:
Annual Report 2016 | 091
The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the current year.
19. Deferred tax assets
As at 31 December 2015
Recognised in income statement
Exchange Difference
As at 31 December 2016
USD USD USD USD
Property, plant and equipment (18,108,667) (7,207,774) 525,624 (24,790,817)
Provisions 115,021 87,335 (3,779) 198,577
Share issue costs 136,285 (134,330) (1,955) -
MAT credit 5,271,060 1,558,712 (147,277) 6,682,495
Unrealised inter-group profits 1,825,516 (1,799,323) (26,193) -
Tax losses 16,505,372 10,270,051 (518,341) 26,257,082
Net deferred tax asset 5,744,587 2,774,671 (171,921) 8,347,337
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
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 and are not generally due within 30 – 45 days.
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 118 days during the year ended 31 December 2016 (31 December 2015: 86 days)
The maximum exposure to credit risk at the reporting date is the carrying value of each customer.
As at 31 December 2016
As at 31 December 2015
USD USD
Deferred tax assets 33,138,154 23,853,254
Deferred tax liabilities (24,790,817) (18,108,667)
Deferred tax asset, net 8,347,337 5,744,587
20. Trade receivables
As at 31 December 2016
As at 31 December 2015
USD USD
Trade receivables 52,804,880 17,706,023
Less: Provision for impairment of trade receivables (313,368) (218,858)
Net trade receivables 52,491,512 17,487,165
DeferredtaxassetsandliabilitiesareoffsetwheretheGrouphasalegallyenforceablerighttodoso.Thefollowingarethedetailsof
deferred tax balances recognised in the consolidated statement of financial position:
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
092 | Mytrah Energy Limited
Ageing of receivables are as follows:
20. Trade receivables (continued)
21. Other current assets
22. Current investments
As at 31 December 2016
As at 31 December 2015
USD USD
Available-for-sale investments carried at fair value (mutual funds) 10,669,612 43,384,798
Other investment 31,221 -
Total current investments 10,700,833 43,384,798
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 2016, the Group has 45 customers (31 December 2015: 26 customers).
Prepayments primarily relate to amounts paid in advance for lease rentals for land.
Accrued income primarily represents amounts receivable from customers 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 2016.
Other receivables primarily include advances to vendors of USD 4,980,658 (31 December 2015: USD 2,958,411).
As at 31 December 2016
As at 31 December 2015
USD USD
Not due 3,186,847 4,485,052
0-60 days 15,948,773 3,465,789
61-90 days 8,653,037 5,540,277
91-180 days 20,416,714 2,886,860
More than 180 days 4,286,141 1,109,187
Total 52,491,512 17,487,165
As at 31 December 2016
As at 31 December 2015
USD USD
Deposits 287,702 288,263
Accrued interest 511,960 574,656
Prepayments 1,511,940 991,868
Accrued income 12,982,342 5,029,539
Other receivables 6,169,654 4,102,630
Total other current assets 21,463,598 10,986,956
Notes to the consolidated financial statements for the year ended 31 December 2016
Annual Report 2016 | 093
22. Current investments (continued)
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 2016
Units as at 31 December 2015
IDFC cash fund – Growth- Regular Plan - 317,137
L&T Liquid Fund – Growth - 29,956
Birla Sun Life Cash Plus – Growth regular1 397,749 -
IDFC Cash Fund Growth – Direct plan 159,530 -
HDFC Liquid Fund – Regular plan - Growth1 7,570 -
HDFC Liquid Fund – Direct plan – Growth option 48,557 -
Birla Sun Life Cash Plus – Growth – Direct plan1 522,795 -
Birla Sun Life Cash Plus – Growth - 7,538,897
SBI Premier Liquid Fund -Regular Plan –Growth - 167,246
Union KBC Liquid Growth Fund - 35,382
1Investments in mutual funds include amounts of USD 3,836,643 (31 December 2015: USD 8,627,681) 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
2,185,775 (31 December 2015: USD 1,796,093) (refer note 10) recognised in the consolidated income statement.
Bank deposits include margin money deposits of USD 27,976,963 (31 December 2015: USD 43,174,683) placed with banks towards bank
guarantees provided to various third parties.
Amounts due for settlement within 12 months - USD 68,976,071 (31 December 2015: USD 49,764,216)
Amounts due for settlement on or after 12 months - USD 876,121,830 (31 December 2015: USD 624,433,184)
1. The Company’s subsidiary, Mytrah Energy (India) Private Limited (“MEIPL”) has issued non-convertible bonds (NCBs) for an amount
of ~ USD 113.3 million (INR 7,424 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.
23. Cash and bank balances
24. Borrowings
As at 31 December 2016
As at 31 December 2015
USD USD
Cash on hand 434 15
Bank balances 13,300,561 5,910,771
Cash and cash equivalents 13,300,995 5,910,786
Bank deposits 31,871,924 49,666,494
Total cash and bank balances 45,172,919 55,577,280
As at 31 December 2016
As at 31 December 2015
USD USD
Borrowings at amortised cost
Non-convertible bonds1 107,475,548 109,503,048
Compulsorily convertible debentures2 6,119 16,332,726
Term loans from banks and financial institutions3 795,152,378 533,747,671
Working capital loans from banks4 42,463,856 14,613,955
Total borrowings 945,097,901 674,197,400
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
094 | Mytrah Energy Limited
The NCBs are secured by collateral support in the form of pledge of 100% of the MEIPL’s shares held by Bindu Vayu Mauritius Limited
(“BVML”), and pledge of equity shares held by MEIPL in MVUPL (49%), BVUPL (49%), MVPPL (49%), MVKPL (49%), MVBPL (99.98%) and
MVMPL (2.37%). 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 MEIPL to MVBPL.
As part of the financing arrangement, the Group has incurred an amount of USD 1,501,610 as arrangement fees. The Group
accountedforthesecostsastransactioncostsunderIAS39andareamortisedoverthetermofNCBsusingtheeffectiveinterestrate
method. The carrying amount of the liability measured at amortised cost is USD 107,475,548 (31 December 2015: USD 109,503,048)
In the financial year 2014, the Group had 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 8,612,412 warrants
has been derecognized in the previous year and the fair value of the 11,439,762 warrants amounting to USD 2,038,960 is recognised
as equity.
2(a). In 2012, the Company’s subsidiary, MEIPL 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:
• TheCCDscarryafixedrateofinterestpayablequarterlyinarrearsontheprincipalamountoftheCCDsoutstanding;and
• TheCCDs,alongwithunpaidinterest,ifany,mandatorilyconvertintosuchnumberofequitysharesofMEIPLattheendof49
months from the date of initial disbursement so as to provide the investor a stated rate of return.
Further, the agreement states that PFS can put the CCDs (the “put option”) or alternatively, MEIPL can call the CCDs (the “call option”)
in exchange for cash providing PFS a stated rate of return. The CCDs has call / Put option in exchange for cash providing PFS a stated
rate of return.
In accordance with the terms of the agreement, PFS has exercised the put option on the CCDs and accordingly the Company has
re-paid the entire CCD amount including redemption premium thereon on 22 July 2016.
2(b). Compulsorily convertible debentures issued to Enerpac AG:
During the year ended 31 December 2016, MADPPL issued 8,298 Compulsorily Convertible Debentures (“CCDs”) at INR 50 each to
Enerparc AG (the “Investor”) under an agreement between Enerparc AG and MADPPL. The said are CCDs, from time to time are
entitledtosimpleinterestupto11.50%p.a,witheffectfromtheCommercialOperatingDate(COD)oftheprojectsinMADPPL.The
CCDs are compulsorily convertible into equity shares before the expiry of 18 years from the date of allotment of such CCDs or at any
earlier date mutually agreed between the parties.
3. The Group has drawn down the term loan facilities with banks and financial institutions to finance the construction of wind farm
assets and solar assets. The carrying amount of the liability measured at amortised cost is USD 795,152,378 (31 December 2015:
USD 533,747,671). The repayment terms of the term loans range from 13 to 18 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 is secured by way of first charge on the pledge of shares held by MEIPL in the equity shares representing
51% of the total paid up equity share capital of BVUPL, MVKPL, MVPPL and MVUPL, 94.30% of MVTPL, 95.50% of MVSPL and 69.89%
of MVMPL. BVUPL, MVPPL, MVMPL, MVUPL and MVKPL are under obligor co-obligor structure. The loans drawn by MVMPL is also
secured by pledge of 51% CCPS held by MEIPL in MVMPL. Loan drawn by MVSPL is secured by way of first ranking pledge of 60% of
CCDs held by MEIPL. Loans taken by MVIPL and MVGoPL are secured by way of first charge on the pledge of shares to the extent of
22.24% and 20.04% held by MVBPL in MVIPL and MVGoPL respectively.
24. Borrowings (continued)
Notes to the consolidated financial statements for the year ended 31 December 2016
Annual Report 2016 | 095
4. 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 10.20% to 13.15% per annum.
5. Refer note 36 for maturity profile of the borrowings.
25. Finance lease obligations
The Group leased the rights to use power evacuation facilities under a lease arrangement with related parties/third 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 2016
As at 31 December 2015
As at 31 December 2016
As at 31 December 2015
USD USD USD USD
Not later than one year 1,678,008 871,311 218,208 101,165
Later than one year and not later than five years 6,712,034 3,485,244 1,168,032 541,521
Later than five years 20,688,679 12,198,354 10,629,646 5,775,196
29,078,721 16,554,909 12,015,886 6,417,882
Less: future finance charges 17,062,835 10,137,027 - -
Present value of minimum lease payments 12,015,886 6,417,882 12,015,886 6,417,882
As at 31 December 2016
As at 31 December 2015
USD USD
Included in :
-Current liabilities 218,208 101,165
-Non-current liabilities 11,797,678 6,316,717
Total 12,015,886 6,417,882
26. Derivative financial instruments
As at 31 December 2016
As at 31 December 2015
USD USD
Fair value of options embedded in:
Compulsorily convertible preference shares (note 33) 3,375,881 3,429,381
Total 3,375,881 3,429,381
24. Borrowings (continued)
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
096 | Mytrah Energy Limited
27. Trade and other payables
As at 31 December 2016
As at 31 December 2015
USD USD
Current:
Trade payables1 9,079,808 10,705,902
Liability component of CCPS 2 2,597,853 4,234,334
Interest accrued but not due on borrowings 14,118,208 5,658,409
Other payables 594,052 2,531,817
26,389,921 23,130,462
Non-current:
Liability component of CCPS2 - 2,160,722
Other payables3 79,505,674 112,261,359
79,505,674 114,422,0811 Trade payable relate to amounts outstanding for trade purchases and ongoing costs.
2 Liability component of CCPS includes 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.
28. Retirement benefit obligations Defined 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 50,011 (31 December 2015: USD 32,150) represents contributions
payable to these schemes by the Group at rates specified in the rules of the plan. As at 31 December 2016, contributions of USD nil (31
December 2015: 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 credit method.
The projected unit credit method is an accrued benefits valuation method in which the scheme liabilities make allowance for projected
earnings.Theaccumulatedbenefitobligation(ABO)isanactuarialmeasureofthepresentvalueforservicealreadyrenderedbutdiffers
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 340,560 (31 December 2015: USD 193,391).
Notes to the consolidated financial statements for the year ended 31 December 2016
Annual Report 2016 | 097
Movements in the present value of the benefit obligation are as follows:
(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. Leaves in excess of 50 days are settled to the employee at the end of calendar
year.
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 credit method is an accrued benefits valuation method in which the scheme liabilities make allowance for projected
earnings.Theaccumulatedbenefitobligation(ABO)isanactuarialmeasureofthepresentvalueforservicealreadyrenderedbutdiffers
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 270,409 (31 December 2015: USD 155,368).
28. Retirement benefit obligations (continued)
Year ended 31 December 2016
Year ended 31 December 2015
USD USD
Change in benefit obligation
Projected benefit obligation at the beginning of the year 193,391 21,285
Current and past service cost 174,006 44,044
Interest cost 17,442 1,966
Benefits paid (6,174) -
Actuarial loss / (gain) (32,228) 132,550
Translation adjustment (5,877) (6,454)
Projected benefit obligation at the end of the year (A) 340,560 193,391
Movement in fair value of plan assets
Opening balance of fair value of plan assets 17,109 16,277
Contributions made during the year 24,564 -
Expected return 2,190 1,503
Benefits paid (6,174) -
Translation adjustment (475) (671)
Closing balance of fair value of plan assets (B) 37,214 17,109
Net liability recognised in the balance sheet (A-B) 303,346 176,282
Cost of employee benefits for the year
Current service cost 174,006 44,044
Interest cost 17,442 1,966
Expected return 2,190 (1,503)
Net actuarial loss/(gain) recognised in other comprehensive income (32,228) 132,550
Net loss recognised for the year 161,410 177,057
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
098 | Mytrah Energy Limited
Movements in the present value of the benefit obligation are as follows:
Key assumptions used in actuarial valuation of gratuity and leave encashment obligations
(c) Summary of retirement benefit obligations recognised in the balance sheet
28. Retirement benefit obligations (continued)
Year ended 31 December 2016
Year ended 31 December 2015
USD USD
Change in benefit obligation
Projected benefit obligation at the beginning of the year 155,368 8,865
Interest cost 14,689 819
Current service cost 283,441 21,011
Benefits paid (21,647) (20,960)
Actuarial (gain) / loss (156,656) 150,759
Translation adjustment (4,786) (5,126)
Projected benefit obligation at the end of the year 270,409 155,368
Cost of employee benefits for the year
Interest cost 14,689 819
Current service cost 283,441 21,011
Net actuarial (gain) / loss recognised in other comprehensive income (156,656) 150,759
Net loss recognised for the year 141,474 172,589
Year ended 31 December 2016
Year ended 31 December 2015
USD USD
Discount rate 7.00% 7.90%
Long-term rate of compensation increase (%) 10.00% 12.00%
Attrition 6.00% 10.00%
Mortality table LIC (2006 -08) LIC (2006 -08)
Current portion Non-currentPortion
Liability recognised as at 31 December 2016: USD USD
Gratuity 9,496 293,850
Leave encashment 37,607 232,802
47,103 526,652
Liability recognised as at 31 December 2015:
Gratuity 7,842 168,440
Leave encashment 25,193 130,175
33,035 298,615
Notes to the consolidated financial statements for the year ended 31 December 2016
Annual Report 2016 | 099
29. Share capital
30. Capital contribution
As at 31 December 2016
As at 31 December 2015
USD USD
Issued and fully paid up share capital of the Company:
163,636,000 (31 December 2015: 163,636,000) ordinary shares with no par value 72,858,278 72,858,278
As at 31 December 2016
As at 31 December 2015
USD USD
Capital contributions at beginning and end of the year 16,721,636 16,721,636
Balance at end of the year 16,721,636 16,721,636
31. Retained earnings
As at 31 December 2016
As at 31 December 2015
USD USD
Balance at beginning of the year 9,767,315 15,520,003
(Loss) / profit for the year (4,086,048) 1,162,991
Tax on buy back of CCPS from non-controlling interest (424,820) (253,976)
Tax on distributed income pursuant to the buyback of Series A CCPS (480,245) -
Creation of capital redemption reserve on buy back (2,201,588) (1,100,797)
Creation of debenture redemption reserve (1,434,744) (5,560,906)
Balance at end of the year 1,139,870 9,767,315
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.
In the financial year 2013, the Company’s subsidiary, MEIPL 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 INR 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 2016, 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”.
As at 31 December 2016
As at 31 December 2015
USD USD
Balance at beginning of the year (40,381,820) (36,870,962)
Foreign currency translation adjustments (916,189) (3,510,858)
Balance at end of the year (41,298,009) (40,381,820)
32. Other reserves
(a) Foreign currency translation reserve
Foreigncurrencytranslationreservecomprisesforeigncurrencydifferencesarisingfromthetranslationofthefinancialstatementsof
foreign operations from their functional currency into the Group’s presentational currency.
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
100 | Mytrah Energy Limited
As at 31 December 2016
As at 31 December 2015
USD USD
Balance at beginning of the year 4,744,040 4,003,406
Additional cost during the year 3,219,063 740,634
Balance at end of the year 7,963,103 4,744,040
As at 31 December 2016
As at 31 December 2015
USD USD
Balance at beginning of the year 550,420 195,253
Change in the fair value of available for sale financial instruments (462,900) 355,167
Balance at end of the year 87,520 550,420
As at 31 December 2016
As at 31 December 2015
USD USD
Balance at beginning of the year (278,783) 4,526
Gain / (loss) on actuarial valuation of post-employment benefits 189,424 (283,309)
Balance at end of the year (89,359) (278,783)
As at 31 December 2016
As at 31 December 2015
USD USD
Balance at beginning of the year 1,668,045 567,248
Creation of CRR on buyback 2,201,588 1,100,797
Balance at end of the year 3,869,633 1,668,045
As at 31 December 2016
As at 31 December 2015
USD USD
Balance at beginning of the year 5,560,906 -
Addition for the year 1,434,744 5,560,906
Balance at end of the year 6,995,650 5,560,906
32. Other reserves (continued)
(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.
(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.
(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.
(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, 2013.
(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, 2013.
Notes to the consolidated financial statements for the year ended 31 December 2016
Annual Report 2016 | 101
As at 31 December 2016
As at 31 December 2015
USD USD
Balance at beginning of the year 2,038,960 -
Issue of share warrants - 2,038,960
Balance at end of the year 2,038,960 2,038,960Total other reserves (20,432,502) (26,098,232)
32. Other reserves (continued)
(g) Share warrant reserve
Share warrant reserve comprises fair value of warrants issued to NCB holders in the previous year. The fair value of share purchase
warrants issued during the year was calculated using the Black-Scholes-Merton option-pricing model. The inputs for this model include
stock price, exercise price, expected term, volatility, risk free rates, etc..
As at 31 December 2016
As at 31 December 2015
USD USD
Compulsorily convertible preference shares (CCPS) (refer note a)Balance at beginning of the year 50,704,975 54,827,924
Buy back / purchase of CCPS from non-controlling interest holders (3,126,782) (4,122,949)
Balance at the end of the year 47,578,193 50,704,975Equity shares held by captive customers (refer note b)Balance at beginning of the year - 704,701
Issue of equity shares to non-controlling interest holders 127,406 77,548
Share of loss attributable to non-controlling interest holders (92,980) (782,249)
Balance at the end of the year 34,426 -Equity shares held by others (refer note c)Balance at beginning of the year 8 -
Issue of equity shares to non-controlling interest holders 22,955,933 8
Share of loss attributable to non-controlling interest holders (423,425) -
Balance at the end of the year 22,532,516 8Total (a)+(b)+(c ) 70,145,135 50,704,983
33. Non-controlling interests
a) Compulsorily convertible preference shares In the year ended 31 March 2012, MEIPL issued 11,666,566 Series A CCPS at INR 300 (~USD 6) each to India Infrastructure Fund (IIF) under
an Investment Agreement dated 20 June 2011 between the MEIPL, IIF and Mr.Ravi Kailas. The following are the salient features of the CCPS:
• IIFisentitledtoreceiveapreferencedividendbeforeanydividendsaredeclaredtotheordinaryshareholders.Thesecarryastep-updividend which is cumulative.
• TheCCPSconvertintoequitysharesofMEIPLatafixedpriceofINR300(~USD6)pershare,forafixednumberofshares,attheendof six years if the call and put options are not exercised by either of the parties.
• Aspartoftheinvestmentagreement,IIFwereissuedwith100ordinarysharesinMEIPL.
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
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
102 | Mytrah Energy Limited
USD 11,866,684 was estimated by discounting the mandatory preference share dividend of six year cash flows using an interest rate fromanequivalentinstrumentwithoutaconversionfeature,withtheresidualvalueofUSD55,395,172representingequity.Theeffectiveinterest 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 3,375,881 (31 December 2015: USD 3,429,381) (see consolidated statement of financial position), the liability component of the preference shares was USD 2,597,853 (31 December 2015: USD 6,395,056) and the equity component of the CCPS was USD 47,578,193 (31 December 2015: USD 50,704,975).
During the current year, the Group has purchased and bought back 466,667 shares (31 December 2015: 583,334 shares) from IIF at a premium of INR 300. In accordance with the principles enunciated in IAS 32, the Company has reduced face value of the CCPS bought back amounting to USD 3,126,782 (31 December 2015: USD 4,122,949) from the ‘non-controlling interest’ and the premium, being the dividend payable over the term of the CCPS, amounting to USD 2,086,791 (31 December 2015: USD 2,790,287) has been reduced from the liability component of CCPS.
b) Equity shares held by captive customers (i) 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 5,344,250 (31 December 2015: 4,729,840) equity shares of INR 10 par value (USD 788,144) (31 December 2015 – USD 782,249). The shares issued to the captive consumers have been classified as non-controlling interest in these consolidated financial statements.
(ii) During the year, 240,000 equity shares (@ INR 10/- per share) of Mytrah Bhagiratha Power Private Limited (“MBHGPPL”) have been issued to prospective Captive Consumers.
c) Class A Equity shares and Series A Debentures held by others: MVTPL has issued 1,691,160 Class A Equity Shares of INR 50 each and 29,180,800 Series A Compulsorily Convertible Debentures (“CCDs”)
at INR 50 each to Guayama P.R Holdings B.V (the “Investor”) under an agreement with Guayama P.R Holdings B.V. As per the terms of the Agreement, MVTPL based on the availability of distributable cash surplus shall pay step up Class A Yield on Series A Debentures as given below:
(i) 7% per annum from the date of investment until 3rd anniversary date;
(ii) 10% in the 4th year;
(iii) 13% in the 5th year;
(iv) 15% in the 6th years on cumulative basis;
(v) 17% from 7th year onwards till the date of conversion on cumulative basis.
Further based on the availability of distributable cash surplus, the investor is also eligible for (i) Specified Class A Yield from the date of its investment till the date of conversion for the period from the date of investment till 6th
anniversary date IRR of 15% on cumulative basis excluding interest on class A Debentures and any amount paid as part of buy back of securities.
(ii) After the 6th anniversary till the time the investor holds the security is eligible for 17% IRR on cumulative basis.
Series A Compulsorily Convertible Debentures are compulsorily convertible after the completion of 6 years from the date of investment at the fixed ratio of one Class A Equity shares for One Series A Debenture held. Liquidity events mentioned in the agreement are under the discretion of the Group and are not enforceable by the Investor. Management estimated that there is no distributable cash surplus as per the terms of the agreement to record any liability as at 31 December 2016.
As at 31 December 2016
As at 31 December 2015
USD USD
Capital commitments 128,882,398 269,788,515
34. Commitments(a) Capital commitments
The capital expenditures authorised and contracted primarily relate to wind farm and solar plant assets under construction, which have not
been provided for in the accounts. These commitments are net of advances paid of USD 8,649,379 (31 December 2015: USD 14,740,851).
33. Non-controlling interests (continued)
Notes to the consolidated financial statements for the year ended 31 December 2016
Annual Report 2016 | 103
35. Capital management The 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 interest 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:
34. Commitments (continued)(b) Operating leases
The Group leases office premises under cancellable operating lease agreements with a term of three years. The 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 1,381,380 (31 December
2015: USD 789,184). At 31 December 2016, the Group has no outstanding commitments for future minimum lease payments under
non-cancellable operating leases.
As at 31 December 2016
As at 31 December 2015
USD USD
Debt (note 24) 945,097,901 674,197,400
Cash and bank balances (note 23) (45,172,919) (55,577,280)
Net debt (a) 899,924,982 618,620,120
Equity (including non-controlling interests) 137,917,154 123,953,980
Net debt and equity (b) 1,037,842,136 742,574,100
Net debt/ (net debt+equity) ratio 87% 83%
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 and solar 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.
36. Financial instruments – Fair values and risk management IFRS 13 Fair Value Measurement requires entities to disclose measurement of fair values, for both financial and non-financial assets and
liabilities.Fairvaluesarecategorisedintodifferentlevelsinafairvaluehierarchybasedontheinputsusedinthevaluationtechniquesas
follows:
• Level1:Quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities.
• Level2:InputsotherthanquotedpricesincludedinLevel1thatareobservablefortheassetorliability,eitherdirectly(i.e.asprices)
or indirectly (i.e. derived from prices).
• Level3:Inputsfortheassetorliabilitythatisnotbasedonobservablemarketdata(unobservableinputs).
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
104 | Mytrah Energy Limited
Not
es to
the
cons
olid
ated
fina
ncia
l sta
tem
ents
fo
r the
yea
r end
ed 3
1 D
ecem
ber 2
016
36.
Fina
ncia
l ins
trum
ents
- Fa
ir va
lues
and
risk
man
agem
ent (
cont
inue
d) (c
ontin
ued)
A
ccou
ntin
g cl
assi
ficat
ions
and
fair
valu
e
Th
e fo
llow
ing
tabl
e sh
ows
the
carr
ying
am
ount
s an
d fa
ir va
lues
of fi
nanc
ial a
sset
s an
d fin
anci
al li
abili
ties,
incl
udin
g th
eir l
evel
s in
the
fair
valu
e hi
erar
chy.
31 D
ecem
ber 2
016:
Carr
ying
am
ount
Fair
valu
e
Des
igna
ted
at fa
ir va
lue
thro
ugh
profi
t or
loss
Loan
s and
re
ceiv
able
sAv
aila
ble-
for-
sale
Oth
er fi
nanc
ial
liabi
litie
sTo
tal
Leve
l 1Le
vel 2
Leve
l 3
USD
USD
USD
USD
USD
USD
USD
USD
Fina
ncia
l ass
ets
mea
sure
d at
fair
valu
eCu
rren
t inv
estm
ents
(not
e 22
)-
-10
,700
,833
-10
,700
,833
10,7
00,8
33-
-
Secu
rity
Dep
osit
(not
e 17
and
21)
-7,
293,
977
--
7,29
3,97
7-
7,29
3,97
7-
-7,
293,
977
10,7
00,8
33-
17,9
94,8
1010
,700
,833
7,29
3,97
7-
Fina
ncia
l ass
ets
not m
easu
red
at fa
ir va
lue
Trad
e re
ceiv
able
s (n
ote
20)
-52
,491
,512
--
52,4
91,5
12
Oth
er a
sset
s (n
ote
17 a
nd 2
1)-
24,9
84,4
28-
-24
,984
,428
Cash
and
ban
k ba
lanc
es (n
ote
23)
-45
,172
,919
--
45,1
72,9
19
Oth
er in
vest
men
ts (n
ote
18)
-34
4,35
5-
-34
4,35
5
-12
2,99
3,21
4-
-12
2,99
3,21
4Fi
nanc
ial l
iabi
litie
s m
easu
red
at fa
ir va
lue
Der
ivat
ive
finan
cial
inst
rum
ents
(not
e 26
)-
--
3,37
5,88
13,
375,
881
-3,
375,
881
-
Fina
nce
leas
e ob
ligat
ion
(not
e 25
)-
--
12,0
15,8
8612
,015
,886
-12
,015
,886
-
--
-15
,391
,767
15,3
91,7
67-
15,3
91,7
67-
Fina
ncia
l lia
bilit
ies
not m
easu
red
at fa
ir va
lue
Borr
owin
gs (n
ote
24)
--
-94
5,09
7,90
194
5,09
7,90
1
Trad
e an
d ot
her p
ayab
les
(not
e 27
)-
--
26,3
89,9
2126
,389
,921
Oth
er p
ayab
les
– no
n-cu
rren
t (no
te 2
7)-
--
79,5
05,6
7479
,505
,674
--
-1,
050,
993,
496
1,05
0,99
3,49
6
Not
e:
1.
In th
is ta
ble,
the
Gro
up h
as d
iscl
osed
the
fair
valu
e of
eac
h cl
ass
of fi
nanc
ial a
sset
s an
d lia
bilit
ies
in w
ay th
at p
erm
its th
e in
form
atio
n to
be
com
pare
d w
ith th
e ca
rryi
ng a
mou
nts.
2.
For a
ll fin
anci
al a
sset
s an
d fin
anci
al li
abili
ties
not m
easu
red
at fa
ir va
lue,
the
carr
ying
val
ue is
a re
ason
able
app
roxi
mat
ion
of fa
ir va
lues
.
Annual Report 2016 | 105
31 D
ecem
ber 2
015:
Carr
ying
am
ount
Fair
valu
e
Des
igna
ted
at fa
ir va
lue
thro
ugh
profi
t or
loss
Loan
s and
re
ceiv
able
sAv
aila
ble-
for-
sale
Oth
er fi
nanc
ial
liabi
litie
sTo
tal
Leve
l 1Le
vel 2
Leve
l 3
USD
USD
USD
USD
USD
USD
USD
USD
Fina
ncia
l ass
ets
mea
sure
d at
fair
valu
eCu
rren
t inv
estm
ents
(not
e 22
)-
-43
,384
,798
-43
,384
,798
43,3
84,7
98-
-
Secu
rity
Dep
osit
(not
e 17
and
21)
-3,
812,
663
--
3,81
2,66
3-
3,81
2,66
3-
-3,
812,
663
43,3
84,7
98-
47,1
97,4
6143
,384
,798
3,81
2,66
3-
Fina
ncia
l ass
ets
not m
easu
red
at fa
ir va
lue
Trad
e re
ceiv
able
s (n
ote
20)
-17
,487
,165
--
17,4
87,1
65
Oth
er a
sset
s (n
ote
17 a
nd 2
1)-
23,3
67,0
69-
-23
,367
,069
Cash
and
ban
k ba
lanc
es (n
ote
23)
-55
,577
,280
--
55,5
77,2
80
Oth
er in
vest
men
ts (n
ote
18)
-2,
055,
483
--
2,05
5,48
3
-98
,486
,997
--
98,4
86,9
97Fi
nanc
ial l
iabi
litie
s m
easu
red
at fa
ir va
lue
Der
ivat
ive
finan
cial
inst
rum
ents
(not
e 26
)-
--
3,42
9,38
13,
429,
381
-3,
429,
381
-
Fina
nce
leas
e ob
ligat
ion
(not
e 25
)-
--
6,41
7,88
26,
417,
882
-6,
417,
882
-
--
-9,
847,
263
9,84
7,26
3-
9,84
7,26
3-
Fina
ncia
l lia
bilit
ies
not m
easu
red
at fa
ir va
lue
Borr
owin
gs (n
ote
24)
--
-67
4,19
7,40
067
4,19
7,40
0
Trad
e an
d ot
her p
ayab
les
(not
e 27
)-
--
23,1
30,4
6223
,130
,462
Oth
er p
ayab
les
– no
n-cu
rren
t (no
te 2
7)-
--
114,
422,
081
114,
422,
081
--
-81
1,74
9,94
381
1,74
9,94
3
Not
es to
the
cons
olid
ated
fina
ncia
l sta
tem
ents
fo
r the
yea
r end
ed 3
1 D
ecem
ber 2
016
36.
Fina
ncia
l ins
trum
ents
- Fa
ir va
lues
and
risk
man
agem
ent (
cont
inue
d)
A
ccou
ntin
g cl
assi
ficat
ions
and
fair
valu
e (c
ontin
ued)
Financial Statements
106 | Mytrah Energy Limited
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
managementfocusistominimisepotentialadverseeffectsofmarketriskonitsfinancialperformance.TheGroup’sriskmanagement
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
partwhentheGroupholdsfinancialassetsandliabilitiesdenominatedinacurrencydifferentfromthefunctionalcurrencyof
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 7.11% (31 December 2015: 7.23%).
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 2016
Annual Report 2016 | 107
36. Financial instruments - Fair values and risk management (continued)
(ii) Interest rate risk (continued) The Group’s exposure to interest rates on financial instruments is detailed below:
As at 31 December 2016
As at 31 December 2015
USD USD
Financial assets
Cash and bank balances (note 23) 45,172,919 55,577,280
Total interest rate dependent financial assets 45,172,919 55,577,280
Financial liabilities
Borrowings (note 24) 945,097,901 674,197,400
Total interest rate dependent financial liabilities 945,097,901 674,197,400
As at 31 December 2016
As at 31 December 2015
USD USD
Amount used 812,413,702 688,203,430
Amount unused 71,313,882 223,024,206
Total finance facilities 883,727,584 911,227,636
The amounts included above for interest rate dependent financial assets are fixed interest bearing financial assets.
If the 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 2016 would have been increased/ decreased by
USD 7,599,146 (31 December 2015: USD 4,369,594).
(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.
The Group has access to financing facilities as described below, of which USD 71,313,882 (31 December 2015: USD 223,024,206)
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.
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
108 | Mytrah Energy Limited
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 2016 and 31 December 2015:
31 December 2016:2017 2018 2019 2020 Thereafter Total
USD USD USD USD USD USD
Non-derivative financial liabilities:
Borrowings 68,976,072 42,674,585 158,742,881 46,947,256 627,757,107 945,097,901
Trade and other payables 23,792,068 - - - - 23,792,068
Liability component of CCPS 2,597,853 2,597,853 - - - 5,195,706
Finance lease obligations 218,208 244,392 273,720 306,566 10,973,002 12,015,888
Other non-current liabilities 6,083,218 17,560,311 3,149,845 - - 26,793,374
Derivative Financial liabilities:
Derivative instruments not designated as hedge 3,375,881 - - - - 3,375,881
Total financial liabilities 105,043,300 63,077,141 162,166,446 47,253,822 638,730,109 1,016,270,818
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
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 power purchase 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.
Theindustrycurrentlygetsbenefits/supportfromtheIndianGovernment.ChangesintheGovernmentpolicycouldimpacttariffs
/ taxes which could have an impact on the revenue and the profit of the Group.
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 Director #
2. Mr Rohit Phansalkar - Non-Executive Director
3. Mr Russell Walls - Non-Executive Director
4. Mr. Vikram Kailas - Chief Executive Officer (w.e.f 09 August 2016)
# Chief Executive Officer up to 08 August 2016.
Notes to the consolidated financial statements for the year ended 31 December 2016
Annual Report 2016 | 109
The entities where certain key management personnel have significant influence are: 1. Bindu Urja Infrastructure Limited
2. Mytrah Wind Developers Private Limited
37. Related party transactions (continued)
Year ended 31 December 2016
Year ended 31 December 2015
USD USD
Advance given/ (adjusted) towards development and construction of wind farm projects:
Bindu Urja Infrastructure Limited 6,773,992 2,396,019
Mytrah Wind Developers Private Limited - (24,120)
Purchase towards development and construction of wind farm projects:
Bindu Urja Infrastructure Limited 4,440,552 604,166
Security deposits for usage of land and power evacuation facilities:
Bindu Urja Infrastructure Limited 634,384 2,862,561
Upfront lease rentals paid for land and leased power evacuation facilities:
Bindu Urja Infrastructure Limited 6,080,381 1,151,762
Reimbursement of expenses:
Bindu Urja Infrastructure Limited 1,299,237 1,361,116
Year ended 31 December 2016
Year ended 31 December 2015
USD USD
Advance towards development and construction of wind farm projects:
Bindu Urja Infrastructure Limited 3,260,388 7,144,801
Security deposits for usage of land and power evacuation facilities (note 16, 17 & 21 ):
Bindu Urja Infrastructure Limited 20,764,584 20,649,107
Mytrah Wind Developers Private Limited 6,333,137 6,494,218
Other payables
Bindu Urja Infrastructure Limited - 1,318,150
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
The following related party transactions occurred during the year:
The following balances were outstanding at the end of the year:
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 2016
Year ended 31 December 2015
USD USD
Salaries and bonus 2,038,368 1,434,244
Share-based payments 2,344,575 639,228
Total 4,382,943 2,073,472
Mr. Ravi Kailas (Chairman) transferred 11,544,989 options (includes 1,320,000 options transferred from Mr. Vikram Kailas), which were
granted to him by the company, to R&H Trust Co (Jersey) Limited on 13 May 2016.
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
110 | Mytrah Energy Limited
38. Share-based payments
The Group has an equity-settled share option scheme for certain directors of the Company and employees in the Group. In addition to
the equity-settled share options, the Group makes other minor issues of cash settled options to its certain employees. These cash settled
grants do not result in the issuance of common stock and are considered immaterial by the Group. All options have a vesting period over
three years. Each share option converts into one ordinary share of the concerned entity on exercise. Options may be exercised at any
time from the date of vesting to the date of the expiry. No amounts are paid or payable by the recipient until the receipt of the option.
The options carry neither rights to dividends nor voting rights. Options lapse if the employee leaves the concerned entity before the
options vest.
Mytrah Energy Limited: During the year, the Company has reissued 11,893,324 share options to directors and group employees at the exercise price of GBP 0.01
by replacing 21,640,058 share options which were issued to directors and group employees at the exercise price of GBP 1.15, GBP 0.75
and GBP 0.772 as the case may be. In accordance with IFRS 2, the Group has charged the incremental fair value of the modified 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 2016
Year ended 31 December 2015
Number of share options
Weighted average exercise price
Number of share options
Weighted average exercise price
GBP GBP
Outstanding at beginning of year 24,138,758 0.95 14,668,839 1.06
Granted during the year 11,893,324 0.01 9,680,000 0.78
Exercised during the year * (85,434) 0.01 - -
Cancelled during the year (21,641,158) 0.92 (210,081) 0.77
Outstanding at the end of the year 14,305,490 0.21 24,138,758 0.95
The options outstanding as at 31 December 2016 had a weighted average exercise price of GBP 0.21, and a weighted average remaining
contractual life of 3 years and 4 months.
Details of options granted during the year are as follows:
Year ended Employees / Directors Options granted during the year
Expiry Date Exercise price Fair value at grant date
GBP GBP31 December 2016 Employees and Directors 11,893,324 23.12. 2021 0.01 0.50
31 December 2015 Directors 9,680,000 23.12. 2021 0.78 0.76
The aggregate incremental fair value of the share options issued during the year was USD 4,267,131. The incremental 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:
* represents cash settled share options.
Weighted average share price (GBP) 0.50
Weighted average exercise price (GBP) 0.01
Expected volatility 43.41%
Expected life 3 years
Risk-free interest rate 0.94%
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 2,973,768 (net of employee
benefits expense capitalized USD 30,383) (31 December 2015: USD 639,228 (net of employee benefits cost capitalized USD 68,528)) in
relation to share-based payment transactions and the unamortised expense as at 31 December 2016 is USD 1,149,654 (31 December
2015: USD 2,681,038).
Further, Mr. Ravi Kailas (Chairman) transferred 11,544,989 options (includes 1,320,000 options transferred by Mr. Vikram Kailas), which
were granted to him by the company, to R&H Trust Co (Jersey) Limited on 13 May 2016.
Notes to the consolidated financial statements for the year ended 31 December 2016
Annual Report 2016 | 111
38. Share-based payments (continued)
Mytrah Energy (India) Private Limited: MEIPL has issued 56,900 options to group employees at the exercise price of INR 1,200 and cancelled 18,584 share options which were
issued 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.
The aggregate fair value of the share options issued during the year was USD 98,543 (31 December 2015: 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) 682
Weighted average exercise price (INR) 1,200
Expected volatility 43.41%
Expected life 3 years
Risk-free interest rate 7.38%
Expected volatility is determined based on the evaluation of the historical volatility of the Parent 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 16,653 (net of
employee benefits expense capitalized USD 198,258) (31 December 2015: USD 1,960 (net of employee benefits expense capitalized
USD 30,918)) in relation to share-based payment transactions and the unamortised expense as at 31 December 2016 is USD 143,513 (31
December 2015 : USD 258,612).
39. Contingent liabilities The 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.
Year ended 31 December 2016
Year ended 31 December 2015
Number of share options
Weighted average exercise price
Number of share options
Weighted average exercise price
INR INR
Outstanding at beginning of year 273,450 1,200 - -
Granted during the year 56,900 1,200 277,450 1,200
Cancelled during the year (18,584) 1,200 (4,000) 1,200
Outstanding at the end of the year 311,766 1,200 273,450 1,200
The options outstanding as at 31 December 2016 had a weighted average exercise price of INR 1,200.
Details of options granted during the year are as follows:
Year ended Employees / Directors Options granted during the year
Exercise price
Fair value at grant date
INR INR31 December 2016 Employees and Directors 56,900 1,200 600-1800
31 December 2015 Employees and Directors 277,450 1,200 600
As at 31 December 2016
As at 31 December 2015
USD USD
a) Indirect tax matters pending in appeal 1,490,166 1,528,068
c) Direct tax matters pending in appeal 5,255,326 -
c) Guarantees given towards construction and execution of wind power projects - 903,057
6,745,492 2,431,125
Notes to the consolidated financial statements for the year ended 31 December 2016
Financial Statements
112 | Mytrah Energy Limited
40. Other matters In the previous year, one of the suppliers of a “Wind turbine generator” filed an arbitration application before the High Court of Telangana
and Andhra Pradesh (‘Honorable High Court’) seeking appointment of an arbitrator alleging that MEIPL has breached the terms of an
agreement and is liable for liquidated damages. The High Court, accordingly, appointed an Arbitrator and the application was disposed.
Subsequently, the Arbitrator appointed by the High Court has passed away. MEIPL is yet to receive any notice from High Court on
any fresh proceedings in this regard. 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. Further, based on a legal opinion,
no additional disclosure is considered necessary as required under IAS 37.
41. Comparatives Previous year’s figures have been regrouped / reclassified wherever necessary to conform with the current year’s classification / disclosure.
Signed on behalf of the Board of Directors by:
Ravi Kailas Russell WallsChairman Director
The accompanying notes form an integral part of these consolidated financial statements.
Notes to the consolidated financial statements for the year ended 31 December 2016
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