a culture of excellence - mytrah · 100%bindu vayu holding 100% holding mytrah energy (india)...

2015A N N U A L R E P O R T

The story of how Mytrah Energy’s project implementation excellence has helped the Company emerge as one of the India’s fastest growing renewable energy companies in just five years

A Culture of Excellence

Corporate InformationRegistered officeMytrah Energy LimitedGround Floor, Dorey Court,

Admiral Park, St Peter Port,

Guernsey GY1 2HT

Nominated AdvisorInvestec Bank plc2 Gresham Street, London

EC2V 7QP

United Kingdom

Joint BrokersMirabaud Securities LLP33 Grosvenor Place,

London SW1X 7HY

United Kingdom

Investec Bank plc2 Gresham Street, London

EC2V 7QP

United Kingdom

Financial PR

Yellow Jersey PR Ltd76 Great Suffolk St, London

SE1 0BL

Tel: +44 (0) 7768 537 739

LegalKing & Spalding International LLP125 Old Broad Street

London EC2N 1AR

United Kingdom

RegistrarsComputershare Investor Services (Guernsey) LimitedP.O. Box 393

Kingsway House

Havilland Street

St. Peter Port, Guernsey

GY1 3FN

Channel Islands

AuditorsKPMG Audit LLCHeritage Court,

41 Athol Street, Douglas,

Isle of Man, IM99 1HN

Tel: +44 (0) 1624 681 000

Contents

Corporate structure 02

Consistent growth and financial

innovation 05

Natural hedging of risk through

diversification 08

2015 in retrospect 10

Robust performance 12

Operational projects 32

Projects under implementation 34

How we do business 39

Governance 40

Principal risks and uncertainities 48

Chairman’s overview 16

Performance review 24

Macro outlook – performance

and promise 30

Directors’ Report 50

Corporate Governance Report 53

Remuneration Report 58 Independent Auditor’s Report 62

Consolidated Income

Statement 63 Consolidated Statement

of Financial Position 64 Consolidated Statement of

Changes in Equity 65

Consolidated Statement of

Cash Flows 66

Notes to the Consolidated

Financial Statements 67

Notice to AGM 108

02

16

32

50

Mytrah Vayu Urja

Bindu Vayu Urja

Mytrah Vayu

Pennar

Mytrah Vayu

Krishna

Mytrah Vayu

Manjira

Mytrah Vayu

Indravati

Corporate structure

Mytrah Energy Limited, Guernsey (MEL)

100% Holding

100% Holding

Mytrah Energy (India) Limited (MEIL)

Bindu Vayu (Mauritius) Limited (BVML)

AIM Listed Company

Indian Operating Company

Company Holding our Wind Farms

Mytrah Energy Limited is an India based renewable energy developer and

producer, listed on the London Stock Exchange since 2010. Its portfolio

includes a blend of wind and solar assets.

Mytrah has a simple structure, where MEL shareholders own 100% of the

Company’s operating business. This means that if you own 1% of the shares of

MEL you also own 1% of the equity cash flow from our wind farms.

02 Mytrah Energy Limited Annual Report 2015

Mytrah is one of the fastest-growing renewable energy companies in the worldMytrah’s superior performance has been the result of

best-in-class practices, experienced personnel and

a cost-efficient approach. The Company maximises

electricity generation from wind farms by deploying

the complete range of capabilities and competencies.

Mytrah’s distinctive business model enables it to

identify, plan and execute projects on schedule and

within budget. The Company’s project team has

delivered 583 MW of renewable energy assets across

six states within five years.

Mytrah’s market knowledge, extensive relationships

and expertise enabled it to build strong positions in

the high-value, rapidly growing Indian energy market.

Mytrah has created a visible projects pipeline of 3,500

MW, which is likely to be progressively commissioned,

accelerating the Company towards its medium-term

objective of installing 5,000 MW of renewable energy

(wind and solar) assets.

Listed on the Alternate Investment Market (AIM) of

the London Stock Exchange, Mytrah has access to

international capital, expertise and industry partners;

it’s smart approach positions it as a progressive force

in the global renewable energy sector, delivering

sustainable growth.

583 MW

Wind power plants created in five years

Overview

Corporate Governance

Business Review

Financial Statements03Mytrah Energy Limited Annual Report 2015

616.5 MW

Operating Capacity as on 03 Mar 2016

11Wind farms in operation

211Wind masts

3Wind farms under

construction


USD 74.7 m

Revenue in 2015

7%Revenue growth in 2015

USD 66.4

m

Underlying EBITDA in 2015

3%EBITDA growth in 2015

Overview


Business Review


OUR TRANSFORMATION JOURNEY

Consistent growth and financial innovation

2010

Operational capacity

Funds raised

USD 80m

equity through IPO

on the LSE

0 MW

2011


Funds raised

USD 92m

Non-dilutive mezzanine

capital

82 MW

2012


Diversification in Wind Turbine Selection

Gamesa and Regen

added to Suzlon portfolio

299 MW

Mytrah has established a solid platform for sustained development, through competitive and innovative financing and a strong asset base

Performance delivered Possess expertise in site selection, wind

data/assessment, land bank, operations and

management

Strong management expertise

Projects delivered on time and within budget

Improving machine availability and efficiency

Consistent growth and profitability


2013


Funds raised

USD 18m

non-dilutive mezzanine

capital

310 MW

2014


Funds raised

USD 70m bonds issued,

purchased by Merrill

Lynch International and

Apollo Funds

542 MW

2015


Fund raised

USD 60m additional

bonds issued, bringing

total new finance raised

under this structure to

USD 130m

583 MW

Innovative financing Building projects without equity dilution

Strong support of institutional investors

USD 130m rupee bonds listed in India

Largest refinancing in renewables sector in India

Good relations with banks and multilateral

funding agencies

Diversification 11 operating assets across six states

Equipment sourced from multiple suppliers

of global repute

Diverse sales models (Government FIT/

private sale)

Varying PPA tenures (10Y, 13Y, 20Y and 25Y)

Overview


Business Review


Natural hedging of risk through diversification

RAJASTHAN

Kaladonger 75.6 MW

Mokal 42.0 MW

Bhesada 39.9 MW

GUJARAT

Mahidad 25.2 MW

Jamanwada 52.5 MW

MAHARASHTRA

Sinnar 12.6 MW

Chakala 39.0 MW

ANDHRA PRADESH

Burgula 37.4 MW

Vajrakarur 63.0 MW

TAMIL NADU

Vagarai 100.5 MW

Operational Wind Power Plants as of Dec 2015

KARNATAKA

Savalsung 95.2 MW

11

2

3

4

5

6

7

89

10

1111

910

2 3

4

5

6

7

8

Plant State Capacity (MW)

1. Kaladonger Rajasthan 75.6

2. Mokal Rajasthan 42.0

3. Bhesada Rajasthan 39.9

4. Mahidad Gujarat 25.2

5. Jamanwada Gujarat 52.5

6. Sinnar Maharashtra 12.6

7. Chakala Maharashtra 39.0

8. Savalsung Karnataka 95.2

9 Burgula Andhra Pradesh 37.4

10. Vajrakarur Andhra Pradesh 63.0

11. Vagarai Tamil Nadu 100.5


State-wise capacity distribution

Gujarat 77.7 MW

Rajasthan 157.5 MW

Maharashtra 51.6 MW

Andhra Pradesh 100.4 MW

Karnataka 95.2 MW

Tamil Nadu 100.5 MW

13%

27%

10%17%

16%

17%

Technology supplier

Suzlon 349.8 MW

Gamesa 132.6 MW

ReGen 100.5 MW61%22%

17%

Pervasive presence Wind and solar energies are dependent on nature,

and the wind speeds and solar radiation vary from

location to location. To manage this natural variability,

we have diversified our activities from a geographical

perspective, by installing wind energy assets across

11 locations in 6 Indian states. Our wind presence will

continue to expand to new locations, and the addition

of solar to the portfolio provides further diversification

into the future.

The result is that Mytrah has rapidly acquired a pan-

Indian personality even while it is relatively young,

reducing reliance on any one location and greatly

increasing its options for further expansion.

PPA Duration

20 years 269.5 MW

25 years 161.3 MW

13 years 51.6 MW

< 10 years 100.5 MW

46%9%

28%

17%

Cutting-edge technologyMytrah augmented its operational flexibility by

sourcing wind turbines and other ancillary equipment

from large, dependable and diversified vendors,

ensuring adaptability across different downstream

needs, terrains and wind patterns on the one hand

and enhancing margins on the other. We managed to

optimise the mix of our diversified equipment supplies,

and ensure increased performance of our power

generation

Revenue visibility All of the electricity produced by Mytrah’s wind and

solar plants is sold under long-term contracts to stable

counter-parties. Again, to reduce the reliance on any

one system, Mytrah has a range of contract structures

and counterparties.

Overview


Business Review


2015 in retrospectFinancial highlights, 2015

Revenue of USD 74.72m, an increase of 7% over the

previous year (2014: USD 69.55m)

Underlying EBITDA of USD 66.43m up 3% (2014:

64.34m); underlying EBITDA margin of 89%

In INR terms revenue increased by 13%, underlying

EBITDA increased by 9%

Post period end, signed a new Rupee Term Loan

Agreement of INR 25.8 billion (approx. USD 380m)

to refinance senior loans from 22 banks across

543 MW of operating wind farms; 140 basis points

interest savings

Secured USD 232.5m senior loans for 250 MW

projects under construction

Term sheet with DFI for USD 175m senior loan for

wind and solar projects

Operational highlights, 2015

616.5 MW of revenue generating wind assets

operating at present

240 MW assets in construction on track for the

upcoming wind season, of which Bhesada - 50.4 MW

- fully commissioned and connected to the grid post

period end

Construction underway on an additional 220 MW,

bringing total currently in construction to 460 MW

Began new wind turbine supply relationships with

General Electric and Inox

Signed EoI with Government of Karnataka for

developing 450 MW wind projects

Installed 317kW of rooftop solar projects

Signed power purchase agreements (PPAs) for

282 MW of solar projects; additional 95 MW PPAs are

expected to be signed shortly

Refinance of USD380m senior loans from 22 banks across 543 MW of operating wind farms

Interest savings of 140 bps

Average maturity of debt extended by approximately three years

Largest refinancing in India’s renewable energy sector

USD 380mRefinancing 3 large banks

(including two

existing banks)

Term Loan and Working Capital Lenders


Overview


Business Review


2015

Total Assets

949.1

646.5

538.1

430.7

2014

2013

2012

USD 949.1m

0.92015

Revenue

28.1

45.3

62.9

67.6

2.7

5.5

6.1

6.3

8.0

0.0

0.4

2014

2013

2012

USD 74.7m

Sale of electricity (USD m)

Generation-based incentive (USD m)

Other Operating Income (USD m)

56.5

57.3

42.7

25.6

75%

83%

84%

83%

2015

Gross Profit

2014

2013

2012

USD 56.5m

Gross profit (USD m) Total Assets (USD m)

Gross margin

Underlying EBITDA

USD 66.4m2015

2014

2013

2012

48.8

64.3

66.4

35.5

95%

94%

89%

91%

Underlying EBITDA (USD m)

Underlying EBITDA margin

Robust performance


Overview


Business Review


Focused on delivering superior and consistent growth


The Company has 211 wind masts installed

in eight states

Mytrah has an extensive pipeline of wind projects

exceeding

3,000 MW

Overview


Business Review


On behalf of the Board, I am pleased

to present the consolidated annual

accounts for Mytrah Energy Limited

(“Mytrah” or the “Company”, and

with the subsidiary companies,

the “Group”) for the year ended 31

December 2015.

Mytrah, which listed in London

in October 2010, manages a

diversified renewable energy

portfolio and is one of India’s largest

renewable energy Independent

Power Producers (‘IPP’). During the

year to 31 December 2015, Mytrah

grew its generation capacity to

583 MW, a 10% increase over the

previous year. Additional capacity

of 25.2 MW was added post year-

end, taking the operational wind

portfolio to a total capacity of 616.5

MW at present, all of which was

created within a short time span of

Increasing our wind power generation capacity by 10% in 2015 to 583 MW was a significant feat and this expansion has continued since the year end, reaching 616.5 MW at present. The growth has been delivered on budget and is ahead of schedule so that we now expect to have a capacity of 783 MW at the start of wind season 2016; 40 MW ahead of our previous guidance.

of renewable electricity production capacity in

the next few years.

Mytrah has the ability to reach

1,380 MW

five years. When this operational

capacity is combined with projects

currently under construction, and

a successful entry into the solar

business, Mytrah has the ability to

reach 1,380 MW (c. 1.40 GW) of

renewable electricity production

capacity in the next few years.

The Board is delighted to report

a set of strong results, which

demonstrates the quality and

maturity of Mytrah’s business. The

Company continues to pursue a

strategy of diversification, and

this has allowed Mytrah to remain

resilient in a year characterised

by variable wind speeds which

were generally lower than the

historical long-term average.

The Company delivered robust

revenue growth of 13% YoY in

rupee terms (7% in USD) during

Chairman’s overview


Whilst the wind is outside the

Company’s control, continued

focus by the operations team

has delivered good availability,

with some plants exceeding 99%

mechanical availability in the year

to 31 December 2015. The depth of

capability in Mytrah’s operations

team is an increasingly important

competitive advantage as the

Company’s operating portfolio

expands.

Project constructionThe construction portfolio has

increased over the year from

300 MW to 460 MW. From

this portfolio, the wind project

at Bhesada (50.4 MW) is fully

commissioned and operational at

present and construction of other

new projects, including Vajrakarur

2 and Nazeerabad (approximately

150 MW combined), is progressing

as planned, targeting for

commissioning ahead of the wind

season. In addition, Mytrah is

pleased to state that construction

at the 90 MW Nidhi wind farm in

Rajasthan has progressed ahead of

plan, and c. 40 MW of this project

is also now expected to be on

stream ahead of the wind season.

This brings our expected capacity

to 783 MW going into the 2016

wind season. An additional 220

MW of projects are in construction

and expected to be commissioned

ahead of the 2017 wind season,

taking the Company past the

1 GW milestone in operational wind

capacity.

In an effort to assist Mytrah’s

shareholders in understanding

the most important stages of the

life cycle of a wind project during

its development, the Company

has provided below a quantified

assessment of the progress of its

current wind projects as at the

current date. This is based on the

management’s experience and not

verified by any third party.

the period. The Company has also

increased generating capacity and

has executed a transformational

refinancing deal post period-end,

which will underpin continued

strong capacity expansion.

The refinancing is a first of its

kind and the largest in the Indian

renewable/wind sector, bringing

together 10 operating wind plants

into one financial structure with

an A-rating, resulting in interest

rate reduction by 140 bps. The

new structure greatly simplifies

Mytrah’s business; replacing 22

separate senior lenders and six loan

facilities with just three lenders in a

single loan facility.

Operational performanceElectricity generation is influenced

by the quality of the wind resource

for the year, and the mechanical

availability of the wind plants.

During the period under review,

wind speeds have been variable

from month to month and

somewhat below expectations

over the entire period. However,

the Company’s current wind farms

are geographically spread across

six states, covering over 2000

km from the northern to southern

part of India. This has, to some

extent, mitigated the effects of

the low wind this year, as some

plants experienced slightly better

wind conditions than others. This

‘portfolio effect’ has enabled the

Company to deliver a profit even

in a poor wind year, and also

facilitated refinancing of the 543

MW operating portfolio.

An additional 220 MW of projects are in constructionand expected to be commissioned ahead of the 2017 wind season, taking the Company past the 1 GW milestone in operational wind capacity.

Overview


Business Review


Project pipeline In addition to the projects under

construction, Mytrah has an

extensive pipeline of wind projects

exceeding 3000 MW. With 211

wind masts installed in 8 states,

the Company’s wind data base

continues to provide differentiated

access to new project sites. As

part of the ongoing pipeline

development work, the Company

signed a non-binding Expression of

Interest (EoI) with the Government

of Karnataka to develop 450 MW

of renewable projects in Karnataka

State during February 2016.

FinancingDuring the year 2015, the Group

has extended the existing bond

facility (including India-listed

non-convertible bonds issued by

Mytrah Energy (India) Limited)

by a further USD 60m (2014: USD

70m), bringing the total finance

raised under this structure to USD

130m. The Company has also raised

over USD 200m of senior debt for

new projects and, post period end,

secured a USD 380m refinancing

of all the senior debt in its 543 MW

operating wind portfolio. This new

facility will be used to refinance

22 existing senior lenders in

operating wind projects, reducing

the interest rate by an average of

140 basis points and extending

the average maturity of debt by

approximately three years. The

re-financing greatly simplifies the

Company’s debt structure and also

provides approximately USD 8m

of additional funds, which Mytrah

will use to finance further capacity

expansion within this group.

These transactions, conducted with

sophisticated financial institutions,

underline the growing maturity of

our business and the quality of our

operating asset portfolio.

Macro environmentWith a growth of over 7% in

the 9-month period ended 31

December 2015, India is considered

one of the world’s fastest-growing

economies. The International

Monetary Fund (IMF) predicted

that India would retain the status of

Generating capacity increased by

10%

wind masts installed in 8 states

211

Project Expected Capacity in 2016 Wind Season

Substation Progress

Export Line Progress

Wind Turbine Progress

Bhesada 50.4 MW Complete &

charged

Complete &

charged

All 24 turbines

commissioned

Vajrakarur 2 100 MW Complete &

charged

Complete &

charged

11 out of 50 turbines

commissioned.

Erection of another

30 turbines is

complete

Nazeerabad 50 MW 85% Complete 85% Complete Erection of all 24

turbines is complete.

Nidhi Wind Farms 40 MW 80% Complete 80% Complete Erection of all 24

turbines is complete.

Additional 220 MW

in construction

Target commissioning

ahead of 2017 wind

season

70% Complete 60% Complete Foundation

construction in

progress

Strong pipeline


senior debt in its 543 MW operating wind portfolio

Refinancing of

USD 380m

the fastest growing economy until

2020. Both manufacturing and

electricity outputs experienced

strong growth (3.1% and 4.5%

respectively) in the period, boosting

overall industry performance.

The renewable energy sector

continues to enjoy strong support

from the central Government, with

the Prime Minister creating a target

of 175 GW of renewable capacity

installed by 2022. Of this, 100 GW is

expected to be solar, 60 GW wind,

and 15 GW other technologies.

A key outcome of the

Government’s focus is the UDAY

(Ujwal DISCOM Assurance Yojana)

reform approved in November

2015. The scheme aims at

improving the financial health of

the state electricity boards (SEBs),

which purchase most of Mytrah’s

electricity under long-term

contracts. UDAY aims to reduce

the debt burden of the SEBs and

is expected to translate into faster

and more reliable payments from

some of the weaker SEBs.

Solar2015 has seen rapid development in

the solar sector of India. Over 15 GW

of capacity auctions have been run

across various states, and Mytrah

has acquired rights to 377 MW

of projects in Telangana (327 MW)

and Punjab (50 MW). These

projects have long-term power

purchase agreements with the

state electricity boards, and will

be constructed over the next 12 –

18 months, adding to the 1 GW of

wind capacity under construction.

At present, PPAs have been signed

for 282 MW of these projects, with

the remaining 95 MW expected to

follow shortly.

In addition to the success in large

project bids, Mytrah has also

installed 317kW of rooftop systems

for commercial customers. The

solar team has grown rapidly,

now numbering over 30 and more

details of the Company’s solar

plans will be released to the market

at the appropriate time.

Maturing businessMytrah is a pure-play renewable

power generation company

with a clear focus on maximising

performance of its operating

assets, delivering new capacity

on time and within budget, and

building a sustainable pipeline

of future opportunities. The

business is growing and maturing

in all aspects; setting visible and

achievable targets, leading to on-

time project delivery, continually

improving financial structures,

experienced management, high

quality technical staff, and strong

relationships with a diverse group

of wind turbine suppliers.

Mytrah will continue to make a

significant investment in people,

systems and processes to ensure

we have the foundation needed to

support sustained growth and an

ever-expanding footprint.

OutlookFollowing a solid performance

in 2015, the Company is focused

on continued growth in the

renewable energy sector within

the wind and solar markets. The

Company’s diversified portfolio has

demonstrated robustness in spite

of higher-than-expected seasonal

weather volatility during 2015 and

this is reinforced by the confidence

of lenders, which entered into a

new refinancing arrangement,

underpinning management’s belief

that the variable wind this year is

a temporary limitation and not a

routine pattern.

The portfolio exhibits strong

diversification benefits with 11

assets across six states. We expect

to continue to grow rapidly,

entering the 2016 wind season with

783 MW operating, and a further

220 MW in construction.

The GoI’s focus on the renewable

energy sector is set to continue

through 2016 and beyond. We

expect a significant number of

investment opportunities for the

Company as there is an increased

activity across the sector, and a

number of States taking positive

steps to support renewables. We

are currently evaluating a number

of potential opportunities for

further investment and will invest

selectively, providing the terms are

attractive for our shareholders. Safe

and efficient management of assets

in operation or under maintenance

or construction remains our top

priority. Mytrah intends to continue

to remain active and focused in

the renewables space and looks

forward to a further year of steady

portfolio performance and growth

and to further positive engagement

with our stakeholders.

Overview


Business Review


Business reviewParticulars Year ended

31 December 2015

Year ended

31 December 2014Change

(USD m) (USD m) (USD m)

Revenue income 74.72 69.55 5.17

Other operating income 0.88 0.37 0.51

Employee benefits expenses (3.04) (4.45) 1.41

Other operating expenses (7.28) (9.35) 2.07

Earnings before interest, tax, depreciation and

amortisation (EBITDA)

65.28 56.12 9.16

Depreciation and amortisation expense (16.40) (11.36) (5.04)

Operating Profit 48.88 44.76 4.12

Finance income 3.35 1.05 2.30

Finance costs (51.22) (42.92) (8.30)

Other finance costs on refinancing (0.54) (0.61) 0.07

Profit Before Tax 0.47 2.28 (1.81)

Taxation expense (0.08) (0.40) 0.32

Profit after tax 0.39 1.88 (1.49)

Reported EBITDA as above 65.28 56.12 9.16

Non-recurring and non-cash adjustments:

Doubtful advances written-off - 2.15 (2.15)

Provision for trade receivables 0.23 - 0.23

Transaction costs incurred in relation to raising

of long-term finance

- 4.25 (4.25)

Share-based payments 0.64 0.92 (0.28)

Indirect-tax cost on inter-group transactions 0.28 0.90 (0.62)

Total adjustments 1.15 8.22 (7.07)

Underlying EBITDA 66.43 64.34 2.09


RevenueFor the year ended 31 December

2015, the Group’s revenue has

increased by USD 5.17m, reflecting

a 7% growth year-on-year, on

account of capacity additions. The

increase in revenues is primarily on

account of increase in electricity

generated during the year due

to an increase in the operating

capacity by 10% to 583 MW.

EBITDAUnderlying EBITDA for the year 2015

increased to USD 66.43m (2014:

USD 64.34m), an increase of USD

2.09m, approximately 3% increase

(9% in rupee terms), reflecting a

reduction in non-recurring and

non-cash adjustments of USD 1.15m

(2014: USD 8.22m). The increase in

EBITDA is due to the increase in

revenue partly offset by increase

in costs of generation as the free

O&M period came to an end in

some of the assets.

Finance costFinancing costs at USD 51.76m

were USD 8.23m higher than the

prior year due to the expensing

of interest on operating assets

commissioned during the

current year, which were under

construction during the previous

year and was capitalised, and fair

valuation of security deposits

(a non-cash impact of USD 1.27m).

Finance incomeHigher finance income of USD

3.35m (2014 : USD 1.05m) was

generated due to higher cash

balance in the system and a

resultant increase in Interest on

Bank deposits and investment in

AAA bonds.

Profit before taxProfit before tax (PBT) of USD

0.47m for the period 2015 (2014:

USD 2.28m). Lower PBT during

2015 is largely on account of higher

finance costs and O&M expenses

of USD 2.13m (2014: USD 0.72)

incurred during the year as the free

warranty period in some projects

was completed.

TaxationThe tax expense for the year

2015 was USD 0.08m (2014: USD

0.40m).

Earnings per share:Basic and diluted earnings per

share for the year 2015 was USD

0.71 cents (2014 USD: 1.14 cents)

and USD 0.71 cents (2014 USD: 1.14

cents) respectively.

Financial positionThe net book value of our Property,

plant and equipment has increased

by USD 270m (increase by 53%),

almost all of which relates to

investments made during the year

in the construction of our new

plants that will start generating

revenues in the year 2016. The

Company’s liquidity, as measured

by current ratio (current assets over

current liabilities) has improved to

1.67 compared to 0.73 last year.

Net book value of property plant and

equipment increased by

53%

Overview


Business Review


Mytrah has a total asset value of

USD 949m


Capital structureStrong financial capital

management is an integral part of

the Directors’ strategy to achieve

the Group’s stated objectives. The

Directors review financial capital

reports on a quarterly basis and the

Group treasury function does the

review on a weekly basis, ensuring

that the Group has adequate

liquidity.

As on 31 December 2015, the Group

had gross debt of USD674.2m

(2014: USD 456.26m). During the

year ended 31 December 2015,

additional loans of USD 242.5m

(net of repayments) were drawn

for the construction of new assets

that will start generating revenue in

the period ending 2016. The Group

continues to borrow at competitive

rates and currently deems this to be

the most effective means of raising

finance. The Group has established

good relationships with banks

and financial institutions enabling

it to raise further financing on

competitive terms.

As the assets under construction

start generating revenues in 2016

and 2017, we expect that the

Leverage (expressed as Net Debt/

EBITDA) position of the Company

will improve substantially with the

increasing EBITDA.

Further information on the Group’s

capital structure is provided in

Note 1 to the consolidated financial

statements, including details of

how the Group manages risk in

respect of capital, interest rates,

foreign currencies and liquidity.

A debt maturity profile is also

included.

Cash flowThe cash generated from

operations during the year was

USD 74.64m (2014: inflow USD

50.08m). Investing activities for

the current year resulted in a cash

outflow of USD 236.62m (2014:

outflow of USD 94.69m). Net

financing cash inflows were USD

162.72m (2014: inflows of USD

42.04m). The increase in financing

cash inflows was mainly due to a

drawdown of loan facilities of USD

370.80m (2014: USD 176.23m)

during the current year. At

31 December 2015, the Group had

cash and bank balances of USD

55.58m (31 December 2014: USD

14.27m).

The Company has effectively

managed its receivables position

and, despite the increase in

revenues, the position is unchanged

compared to the previous period.

Liquidity and investmentsAt 31 December 2015, the Group

had a strong liquidity position

comprising liquid assets of USD

101.02m and undrawn/committed

credit facilities of USD 223.02m,

which will be used for financing

the projects under construction.

The Group’s net debt position at

31 December 2015 has increased to

USD 618.62m (31 December 2014:

USD 441.99m). The increase is

mainly on account of a drawdown

of loan facilities during the year.

Ravi Kailas

Chairman & CEO

Mytrah Energy Ltd

Assets2015 2014

(USD m) (USD m)

Property, plant and equipment 779.93 510.11

Intangible assets 0.20 0.33

Other investments 2.06 1.59

Other non-current assets 33.7 81.43

Cash and bank balances including liquid investments 98.96 25.23

Current assets 28.47 25.88

Current tax assets 0.00 1.46

Deferred tax assets 5.74 0.46

Total assets 949.06 646.49

Overview


Business Review


In conversation with Vikram Kailas, CFO, Mytrah Energy Ltd.

Managing Director,

Mytrah Energy (India) Ltd.

Performance review

QA&

Q Were you pleased with the working of the Company during 2015?

A: Absolutely. Let me list out the reasons for this in a sequential order:

One, I must report at the outset that despite the Company encountering

possibly the lowest average wind year in 20 years, the Company

reported reasonable earnings. This is a powerful demonstration of the

robustness of our business model, where geographical diversification

helps mitigate the effects of poor wind, and rigorous financial

management ensures that debt payments are made on time.

Two, despite the relatively low wind, and some slowing of economic

activity in India as a whole, Mytrah executed its new project construction

on schedule and within budgeted costs.

The result is that we expect to have 783 MW commissioned in this

expansion phase by June 2016, 40 MW ahead of our previous guidance

to the market.

Revenues in Indian Rupees has increased by

13%


Q How did the Company emerge stronger in 2015?

A: When we began our business in 2010, we were

principally a wind energy company because the

economics of operations were largely in favour of

this form of energy generation. However, we always

insisted that we were a renewable energy company

with an eye on emerging opportunities in the renewable

energy landscape. By the virtue of this responsiveness

to emerging opportunities, we extended into the

business of solar energy generation.

Solar is a natural extension of our business, allowing us

to leverage many of the same skills and relationships

that have made us successful in wind to date, and I

look forward to building out our 377 MW of projects

over the coming months.

Q Readers would be curious to know the secret of the Company’s ability

to perform better than its operating plan. A: Mytrah’s outperformance in terms of project

implementation is the result of two things – a culture of

urgency and a culture of governance. These are well-

worded and well-prioritised imperatives. The culture

of urgency is compatible with the rapid growth of our

sector and the Company’s aggressive asset-building

programme. The culture of governance is a logical

extension of this urgency; when market realities are

transforming at a breakneck speed, companies need

to foster a culture of internal discipline that enhances

operational predictability. When you combine speed

and science, amazing things can happen, and I think it

is this that has enabled us to outperform .

Of course, there was a systematised methodology in

place, which let us evolve from reactive firefighters

to analytical planners. We built projects in line with

the established SOPs; we executed by the book; we

respected the process. The result was that we did not

need to revisit, redo or rework key operational aspects.

We were able to combine systemic predictability and

robustness with a highly entrepreneurial approach,

which is quite unusual for a company that has only

been half a decade in existence.

Q So what exactly differentiates the Mytrah DNA?

A: In just three words: ‘Do something unique’. We are

attractively placed to make this happen: we have no

sectoral benchmarks to fall back upon; we carry no

organisational baggage that forces us to do things

only in a specific way; we recruited and trained in the

Mytrah way of doing things, which made everything –

even the most challenging target – possible!

Q What is exciting within the global and Indian renewable sector?

A: The renewable energy space is abuzz with the

arrival of state-of-the-art technology.

One, hub heights are progressively increasing; what

used to be a standard height of 80 metres in the past

has now increased to 100 metres-plus, which makes

it possible for renewable energy companies to tap

into a larger number of locations that were earlier not

considered viable for wind energy.

Two, over the last few years, blades have got

progressively longer – from around 97 metres to around

116 metres (and a projected 150 metres over the coming

years) – increasing the sweep area and enhancing the

electricity produced from each wind turbine.

Interest saving from USD 380m refinancing

140 bps

Overview


Business Review


Three, carbon is progressively replacing fibreglass

as the material of choice for making blades, allowing

rotation even at low wind speeds of 2-3 metres per

second, which again opens up a large number of

prospective geographies for setting up windmills.

Four, wind farms are getting progressively digitised.

Scores of algorithms are being written that make it

possible for blade direction to proactively change in

line with changing wind directions and speeds, thereby

boosting operating efficiencies.

The result is that increased plant load factors through

technological improvements could transform the face

of the sector.

Q The big question: how competitive is renewable energy compared to fossil fuels?

A: The cost of commissioning power through the

coal route is INR 4.50 to INR 5 per kilowatt-hour; the

cost of commissioning wind energy is practically the

same. So from a long-term perspective, wind energy

has already achieved the all-important point of grid

Cash & cash equivalents

USD 55.6m


parity. Solar PV tariffs have declined by more than

60% over last five years - from ~INR 7 per unit in FY

15 to ~INR 4.5 per unit in FY16 on account of a decline

in capital costs, innovative financing and availability of

long tenure loans. The latest tariffs in the solar energy

space are pegged at about INR 4.50 to INR 5 per kWh

(some projects in Rajasthan have been priced around

INR 4.30 per kWh), which makes the entire energy

generation sector vibrant and full of possibilities.

Q Does this mean then that wind/solar energy could replace conventional

energy sources? A: Obviously. This is only a matter of when. As we see

it, a keen emphasis should be laid on renewable energy

sources for the next few years until the world invents

more efficient storage capacity. Energy storage

(battery) costs are indeed declining; if they continue in

this direction then, combined with renewable energy

availability at INR 4.50 per kWh, we are likely to see a

dramatic transformation in the way people consume

energy across the world.

Q How is Mytrah prepared to make the most of this emerging reality?

A: Mytrah has amassed 616.5 MW in wind energy assets

during the past five years. We now intend to deliver

1,000 MW over the next two years, along with 377 MW

of solar, and an attractive annual increment thereafter.

We possess the experience, passion, knowledge and

funding to make this happen and in the process,

emerging as one of the fastest growing renewable

energy companies in the world.

We possess the experience, passion, knowledge and funding to make this happen and, in the process, emerging as one of the fastest growing renewable energy companies in the world.

Overview


Business Review


Delivering new capacities on time and within budget, and building a sustainable pipeline of future opportunities


The Government of India has an ambitious target

of installing

of renewable power capacities by 2022

175 GW

Overview


Business Review


Macro outlook – performance and promise

Positive policy actions, together with the decline in

oil prices, have helped make India one of the fastest-

growing large economies in the world. Growth of

Indian economy accelerated to 7.6% in FY 2015-16.

According to IMF, by 2019, India‘s output will exceed

the combined output of the three next largest emerging

market economies – Russia, Brazil and Indonesia.

India is the fourth largest energy consumer in the world

Electricity consumption growth has closely followed growth in per capita GDP in India.

India’s per-capita consumption of power is one of

the lowest at 1010 kWh (Source: Business Standard,

April 5, 2016).

WPI inflation YoY at -0.9% (in Jan 2016 ) is the lowest

in nine years.

RBI cuts repo rate by 125 bps in last two years on easing

inflation and to catalyse economic growth.

Source: IEA Statistics, 2016

50

40

30

20

10

0

1,000

800

600

400

200

01971 1978 1985 1991 1999 2006 2013

GD

P p

er C

apit

a, IN

R ’0

00

Ele

ctri

city

Co

nsum

pti

on

per

Cap

ita,

kW

h

GDP per Capita (INR)

Electricity Consumption per Capita (kWh)

Source: 1. Office of the Economic Adviser, Govt. of India,

Ministry of Commerce & Industry.

2. Reserve Bank of India

10%

8%

6%

4%

2%

0%

-2%

-4%

-6%RBI Repo RatesInflation (year on year) %

Jan-11 Feb-12 Mar-13 Apr-14 May-15 Jun-16

China

U.S.

Russia

India

Japan

Rest of World

Source: BP Energy Outlook 2016 edition

India projected to continue growing at a robust pace

Controlled inflation propelled RBI to announce rate cuts

(Source: IMF World Economic Outlook, October 2015)

16%

14%

12%

10%

8%

6%

4%

2%

0%

-2%

-4%

2000 2005 2010 2015 2020

India China WorldUnited States

GDP Growth Rate - Year on Year (%)


Access to Electricity

An estimated 237 million people – 19% of India’s

population – did not have access to electricity in 2013.

Power supply demand gap

In India, the installed generating capacity of

over 272,000 MW cannot meet the peak load of

157,000 MW – due to leakages and losses.

India’s overall coal-fired plant load factor fell 3.2%

to 60%, and gas-fired utilisation remained flat at

about 22% in the first half of FY16 (Source: Live Mint,

November 15, 2015).

In India, the demand-supply gap has surpassed

capacity addition.

Source: The Central Electricity Authority of India (CEA)

160

140

120

100

80

60

40

20

0F

Y 0

3

FY

04

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

Dem

and

, GW

Peak Demand, GW Peak Met, GW

Renewable energy – Unprecedented growth potential

The Indian government has ambitious plans for the deployment of 175 GW renewable power capacities by 2022,

including 100 GW of solar and 60 GW of wind, which may require an investment of around USD150 billion in the

next seven years (Source: LiveMint, November 7, 2015).

Power supply-demand gap

Financing

State Policies

Green Transmission

corridor

COP21 Commitments – Reducing CO2

emissions by 33% by 2030

RPOs

Feed-in-Tariffs

Gas

India - 2016 India - 2022

Government of India, Renewable

Energy Targets (MW) 2022

Nuclear

Wind

Solar

Others

15,000

1,00,000

60,0009,0755,248

25,188

Hydro

Coal

Wind

Solar

Others

Small Hydro

Bio-power

Souce: The Central Electricity Authority of India (CEA)

& The Ministry of New and Renewable Energy (MNRE)

60.94%

8.52%2.01%

14.84%

13.7%

25,188

5,248

4,1884,761

Source: IEA World Energy Outlook, 2015

100% 100% 100%

81%

96%

74%

National

China India

Urban Rural

Overview


Business Review


Operational projects

2015 2014

Site Installed

Capacity (MW)

Commissioning

Date

Turbine Make

and Capacity

Machine

Availability (%)

Machine

Availability (%)

Kaladonger 75.6 Sep 2012 Suzlon, 2.1 MW 93 96

Mokal 42 Sep 2011 Suzlon, 2.1 MW 96 97

Mahidad 25.2 Oct 2011 Suzlon, 2.1 MW 96 98

Jamanwada 52.5 Mar 2013 Suzlon, 2.1 MW 98 98

Chakala 39 Feb 2012 Suzlon, 1.5 MW 97 97

Sinnar 12.6 Sep 2012 Suzlon, 2.1 MW 93 96

Vagarai 100.5 Feb 2015 Regen, 1.5 MW 98 77

Burgula 37.4 Mar 2014 Gamesa, 0.85 MW 100 100

Vajrakarur 63 Dec 2012 Suzlon, 2.1 MW 97 98

Savalsung 95.2 Jan 2015 Gamesa, 0.85 MW 99 98

Average 97 95


Electricity production from our plants in 2015Mytrah’s portfolio diversification approach has a

smoothing effect on its electricity production, reducing

the impact of the naturally variable wind. In 2015, this

portfolio effect helped the Group deliver a reasonable

profit in the lowest wind year for 20 years.

The Group’s wind farms are planned using long-term

weather data, which provides 20 years of wind history

for each site. Based on this data, the chart below

approximates how the variations in wind pattern would

have affected the electricity generation of Mytrah’s

543 MW operating portfolio over the last 20 years,

using 2015 as the baseline.

As can be seen, 2015 represents the lowest average

portfolio wind of the last 21 years, and if, for example,

the same 543 MW portfolio had been operating in

2013, it would have produced a little over 20% more

than it did in 2015. The inter-year variation on a

portfolio basis is substantially lower than the individual

plant variation, and we expect this effect to continue

to reduce generation variability as we add more wind

farms as well as solar capacity to our portfolio.

90%

100%

110%

120%

130%

199

5

199

6

199

7

199

8

199

9

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

1 This chart represents changes in generation due to the wind only. The effects of machine availability and other variables are

not included.

Overview


Business Review


Projects under implementation

Project management capabilityAt Mytrah, we managed 11 project locations by the close

of 2015, demonstrating our capability in the management

of challenging ground realities. The Company addressed

these challenges through various initiatives: enhanced

involvement of local residents by engagement of

residents proximate to projects in infrastructural and

civil assignments, and direct logistical control.

These realities made it possible for the Company to

manage diverse locations through robust centralised

control and systems-driven vigilance.

The result is that most of the Company’s projects were

delivered on schedule; a few events were completed

ahead of the estimated deadline..

Operation

Under Construction

Gujarat Rajasthan Andhra Pradesh

Maharashtra Karnataka Tamil Nadu

Pipeline

Madhya Pradesh

Rajasthan

Gujarat

Maharashtra

Tamil Nadu

Karnataka

Telangana

Andhra Pradesh Wind Studies7000 MW

Approval Stage2500 MW

Ready to Build1000 MW


Solar powerThe Group has made significant progress on its first multi megawatt, grid-connected solar photo voltaic power

projects in the states of Telangana and Punjab. This is an important development, which builds on its first

100%-owned solar power project to strengthen its presence in the Indian solar market.

327 MW TelanganaThe solar projects portfolio will be spread across six

different districts of Telangana state. Land acquisition

and governmental approvals continue to progress in

line with Mytrah’s project plan. The weighted average

tariff that was quoted by Mytrah and accepted

by the Telangana state utility was INR 5.65 per kWh.

50 MW PunjabThe Company has also been successful in bidding for

a project in the State of Punjab having won a capacity

of 50 MW at a tariff of INR 5.97 per kWh, the second

highest tariff under the RFS (Request for Selection).

In addition to the projects outlined, Mytrah is currently in discussion about a number of grid-connected solar PV

power projects in India with a combined potential capacity of up to 1,000 MW. Mytrah has demonstrated that it

has strong capabilities in solar power projects to complement established abilities in wind energy, enabling it to

provide robust energy solutions through either technology.

In addition to the success in large project bids, Mytrah has also installed 317 kW of rooftop systems for commercial

customers.

Mytrah has acquired rights to develop

solar projects in Telangana and Punjab

377 MW

Overview


Business Review


Mytrah’s operations team is an increasingly important competitive advantage as the Company’s operating portfolio expands


across all wind power plants

Mytrah has achieved an average Machine

Availability of

97%

Overview


Business Review


At Mytrah, the Wind Resource Department has enhanced competitiveness

Wind Resource Department

At Mytrah, we had two options when we started our

Company in 2010.

One, access wind data patterns and turbines from an

external vendor, liberate bandwidth, monetise assets

and reduce risk.

Two, integrate backwards into the proprietary

collection of wind data patterns that could empower

us with the knowledge of what to do, where to do it

and when to do it.

At Mytrah, we selected to pursue the latter option

because proprietary research would tell us where a

suitable combination of wind pattern, land availability

grid availability and land cost would translate into the

highest value for the Company. This research would

also create a rich pipeline of prospective sites that

could be prioritised and ranked based on their intrinsic

profitability, making it possible for the Company

to address highest prospective returns across the

foreseeable future.

At Mytrah, we have selected to engage in research

pertaining to site identification, technology selection

and performance monitoring, carving out a distinctive

identity from scratch in just five years.

Our competitive advantageMytrah’s wind resource department has carved

a niche for itself in the space of just five years,

liberating the Company from a dependence on turbine

manufacturers.

Mytrah’s geographic mix of wind masts extends

from the Southern tip of India to the Northern part in

Rajasthan. The wind masts cover most of the terrain in

India comprising sea shores, forests, sand dunes, hills,

plain lands and low mountain passes in the Western

Ghats.

Mytrah’s wind resource department – effectively

its research and development driver - has analysed

locations and created a potential 10,000 MW project

pipeline (2,500 MW of projects cleared with approvals

in hand and 1,000 MW projects ready for construction).

Mytrah has emerged as the only independent power

producer in India to possess an ISO certification for its

wind resource department, demonstrating its process

discipline .

Mytrah’s wind resource department was the only Indian

company to have participated in CREYAP 2013 (an

initiative by the European Wind Energy Association).

This prestigious event required participants to report

predictive results from a given set of wind data. Mytrah

reported predictive results within 2% of the mean,

which was among the best achieved across 37 global

companies. During the 2015 edition, the Company was

the only one from within Asia to report predictive results

within 2% of the mean, figuring within the highest quartile.

Mytrah’s 211 live masts in 160 locations across 8 Indian

states represents the wide extent of our terrain

understanding, strengthening our ability in optimal site

selection . This is also one of the largest live installations

in the global IPP space, with a data availability of nearly

99% (global average 94%), one of the highest in the

world.

Mytrah’s competent 17-member team (average age 27),

has exhibited the capability to monitor real-time wind

turbine performance; becoming the only domestic

company to do so thus far. Besides, the Company

has monitored turbine generation throughout in real-

time and monthly mast performance via smartphones,

enhancing responsiveness and evolving progressively.

Mytrah’s wind resource department is in the process

of commissioning the highest wind mast in the Asia-

Pacific at 200 metres in Tamil Nadu – demonstrating

sophistication in wind mast design and competence in

accessing land permissions.

Mytrah’s team entered into alliances for the exchange

of academic knowledge with prominent Indian Institute

of Technologies and management institutes entailing

student exchange programmes for working on live

projects. This exchange will enrich the Company’s

cutting-edge technology understanding, strengthening

its ability to select the right prospective locations for

wind energy generation.


How we do business

MissionMytrah will lead the world in seizing renewables

opportunities.

Core Values

IntegrityOur actions are ethical, honest and transparent.

CreativityWe foster a spirit of innovation and entrepreneurship.

ExcellenceWe deliver best-in-class results, as we excel in everything we do.

Respect for individualsWe treat others the way we expect to be treated – with respect.

Social responsibilityWe are a catalyst of positive change in society.

Overview


Business Review


Our core philosophy

Governance

Mytrah Energy Limited & Mytrah Energy (India) Limited Board

L-R: Milind Joshi, Rohit Phansalkar, Vikram Kailas, Bob Smith, Ravi Kailas, Charandeep Kaur, Russell Walls, Shirish Navlekar

Mytrah adheres to the highest standards of Corporate Governance, driven by a strong and diverse Board of

Directors at both Mytrah Energy Ltd., which is listed in London, and Mytrah Energy (India) Ltd., which is the

wholly owned Indian operating company.

Under Indian Company Law, the Directors are required to declare that appropriate financial and compliance

processes are both in place and operating effectively. The Board ensures that processes are being effectively

followed through a rigorous internal audit programme, supported by external audits.

Chairman and Chief Executive Officer, Mytrah Energy Ltd.

Nominations Committee Chairman, Mytrah Energy Ltd.

Chairman, Mytrah Energy (India) Ltd.

Mr. Ravi Kailas has 25 years of entrepreneurial

experience in telecom, franchising, manufacturing,

software, infrastructure and financial options. He

was the founder of a number of start-up companies,

including Zip Global network, a telecom services

company, Xius Technologies, a telecom software

company, and Altius, a real estate options company.

Mr Kailas has a Bachelor’s degree in Electronics

and Communications Engineering from Osmania

University and a Master’s degree from the Graduate

School of Business, Stanford University.

Ravi Kailas

Non-Executive Director & Audit Committee Chairman,

Mytrah Energy Ltd.

Independent Director & Audit Committee Chairman,


Mr Russell Walls has a strong financial background,

with extensive experience as a finance director,

and possesses a broad range of experience across

a number of sectors. Mr Walls is currently Non-

Executive Director of Biocon Limited (healthcare),

Signet Jewellers Ltd (retail) and the regulated holding

company for the UK General Insurance business

of Aviva (Insurance) plc. Mr Walls was formerly

independent Non-Executive Director and Chairman

of the Audit Committee of Aviva (Insurance) plc,

Group Finance Director of BAA plc (transport),

Wellcome plc (pharmaceuticals) and Coats Viyella

plc (textiles). In addition, Mr Walls was former senior

Independent Non-Executive Director and Chairman

of the audit committee of Stagecoach Group plc

(transport) and Hilton Group plc (leisure).

Russell Walls


Shirish Navlekar

CFO & Director, Mytrah Energy (India) Ltd.

Over 33 years of experience in the Infrastructure Sector. Previously, he was the CEO of the Power Business of

Cairn India Limited and CFO in the Delhi International Airport and Head of Project Finance at GMR. Has also

worked with leading multinational corporations including General Electric, Mirant Asia Pacific Ltd. and Coastal

Power Company.

Non-Executive Director & Remuneration Committee

Chairman, Mytrah Energy Ltd.

Independent Director, Mytrah Energy (India) Ltd.

Mr. Phansalkar is the Chairman and CEO of RKP

Capital Inc., a US based merchant banking boutique.

He was previously the Chairman and CEO of Osicom

Technologies, an optical networking company. He

was the co-founder, Vice Chairman and CEO of

Newbridge Capital, a private equity firm investing

in India, and formerly the Head of Energy Finance

Group at Oppenheimer & Co. Mr Phansalkar was

Co-head of the Energy Finance Group at Shearson

American Express, Managing Director of Bear

Stearns and Managing Director at Oppenheimer &

Co. Mr Phansalkar was the Founding Chairman of The

India Fund. Mr Phansalkar received an MBA from the

Graduate School of Business, Harvard University.

Director, Mytrah Energy (India) Ltd

25 years of experience in the Energy Industry,

including 17 years in Oil & Gas with BP, and 8 years

in Renewables, including Solar, Marine and Wind.

Currently leads Investor Relations for Mytrah Energy

Ltd.

Nominee Director, Mytrah Energy (India) Ltd.

Over 20 years of experience across operations

and investments, principally in the transportation

and energy sector and is on the Board of several

Infrastructure Companies. He is currently responsible

for origination and execution of transactions at IDFC

Alternatives.

Independent Director, Mytrah Energy (India) Ltd.

A partner in the Delhi office of Trilegal, specialises

in mergers and acquisitions, joint ventures, private

equity investments, entry strategies and foreign direct

investment. Currently Secretary of the International

Bar Association (IBA) Women’s Interest Group and

Vice Chair of the Inter Pacific Bar Association (IPBA)

Legal Practice Committee.

CFO, Mytrah Energy Ltd.

Managing Director, Mytrah Energy (India) Ltd.

Worked in the Energy & Utilities investment

banking group at Credit Suisse in New York, where

he was involved in a number of renewable energy

transactions. Prior to joining Credit Suisse, he was

associated with Deloitte Consulting in Hyderabad.

Rohit Phansalkar

Bob Smith

Milind Joshi

Charandeep Kaur

Vikram Kailas

Overview


Business Review


ProactiveThe Board of Mytrah Energy Ltd. brings together

exceptional governance experience across multiple

countries. It is supported by the strong and highly

experienced Board of our Indian operating company,


Mytrah invested in SAP before it installed any wind

turbines, convinced that process would precede profit.

All its payments are processed through this system

and checked by the internal audit team.

Mytrah appointed Big Four auditors (E&Y as the co-

sourced internal auditor and KPMG as the external

auditor) even before it had generated a rupee of

revenue.

More than mandatedMytrah believes that good corporate governance

emerges from the application of the best management

practices and upholding not only the letter of the law,

but also the spirit of it. Hence, apart from complying

with the mandatory requirements prescribed by AIM,

the Company has implemented a number of non-

mandatory policies and guidelines, aiming to capture

the best of both Indian and UK practices.

We have put into place farsighted and rigorous policies

pertaining to:

Code of conduct

Bribery and corruption

Business relationships (including business courtesy),

dealing with government officials and other corporates

Fraud detection and prevention

Selecting suppliers and fair dealings

Sexual harassment at the workplace

Corporate social responsibility

Conflict of interest and whistleblowing

Mytrah has established a mechanism of periodic

online self-declaration, wherein all employees need to

declare that they are familiar with and abide by the

governance policies, and report any deviations. There

is also an established online process to seek consent

before entering into a transaction which may carry a

risk of conflict with the Group’s policies and any such

transaction is declared to the Board on a quarterly

basis.

Mytrah has an internal audit team, the MAG (Management

Assurance Group) which is ISO 9001:2008 certified for

its quality compliance while conducting audits. The ISO

certification has been maintained and there were no

deviations noted during the surveillance audit conducted

by the certifying agency. The MAG team assists the Board

in implementation of the governance policies and in

strengthening and streamlining business processes.


Quality, Safety, Health and EnvironmentManagement of QSHE is a strategic focus area for

the Mytrah group. The Company has benchmarked

its Operation & Maintenance and Power Marketing

processes against the world’s best quality standards.

Mytrah Energy (India) Limited (MEIL) has certificated

for ISO 9001:2008, ISO 14001:2004 and OHSAS

18001:2007 standards for integrated quality,

environmental and occupational health and safety

management systems.

ISO 9001 Quality Management System Standard —

formalises our commitment towards quality of work

ISO 14001 Environmental Management Systems

Standard — formalises our commitment towards the

environment

OHSAS 18001 Occupational Health & Safety

Management System Standard — formalises our

commitment towards a safe and healthy workplace

Our belief

Overview


Business Review


At Mytrah, our competitive advantage is derived from the passion and knowledge brought to the fore by our people.

Our people

On-time execution of our projects would not be

possible without the hard work and dedication of our

people across all our divisions.

In a rapidly growing renewable energy sector, we are

committed to attracting and retaining the best people,

and developing them to ensure they achieve their full

potential.

At Mytrah, we have created just such an organisational

culture. Over the years, we have grown virtually from

scratch in 2010 to around 200 professionals by the

close of 2015 .

Our competitive advantageMytrah is a company established around a culture of

maverick achievement, sustained outperformance and

the need to emerge as a respected global benchmark.

The Company’s average age is well below the age

group in peer sectors.

The Company selected to recruit a combination of

professionals from outside the utility or renewable

energy sector, infusing creative freshness, and

experienced industry professionals.

We aim to be consistently recognised as an employer

of choice with a competitive reward structure that

recognises performance and retention levels that are

above the industry norm. The Company demonstrated

a high retention of people that was higher than the

industry benchmark; the retention at the senior

manager level was nearly 100%.

Key initiatives undertaken during the yearThe Company embarked on the creation of a corporate

brand that would attract talent. The Company

strengthened its positioning around stability and

entrepreneurial vigour.

The Company enriched its talent pool through selective

recruitment from prominent management and

Engineering institutes. The ensuing Mytrah Leadership

Talent program, is a specific program launched recently

to identify budding young, entrepreneurial talent from

Management Institutes who will be business leaders

of the Company. This recruitment is followed by a

planned rotation across all the Company’s functions for

a year with the objective to fast-track the individual’s

growth towards business roles within the organisation.

The planned rotation would enable them to get a well-

rounded perspective of the various roles and functions

in the organisation, thus preparing for the rigour ahead

as they scale the corporate ladder.

The Company also embarked on the process of creating

a leadership pipeline, by shortlisting nearly a dozen of

employees for larger responsibilities. This was part of

the leadership development program of identifying

and strengthening the leadership pipeline from within

the organisation. The leadership development program

mapped the internal leaders against a set of leadership

competencies and clearly defined the development

programs for each one of them to be leader ready

Productivity (Employee per MW)

Dec 2011 - 0.67 Dec 2012 - 0.62 Dec 2013 - 0.68 Dec 2014 - 0.37 Dec 2015 - 0.44

The O&M and Projects team are highly skilled and efficient which helped the Company to achieve one of the highest productivities (employee per MW).


in a couple of years. This programme has a mix of

premier business school exposure coupled with action

learning methodology in key projects and coaching

interventions.

The Managerial Leadership Program was also launched

to fast track the junior level managers who exhibited

strong managerial traits. The leadership and managerial

programs will strengthen the middle and senior levels

of the organisation thus preparing the organisation for

accelerated growth and people readiness.

During the year, apart from strengthening the talent pool,

there was equal emphasis on rewards and recognition

of our valued employees. We have constantly strived

to reiterate the way we reward employees and

enhance our employee recognition experience. Our

reward and recognition experience are modelled

around constant feedback during the performance

management process and acknowledgement in forums

to reinforce positive affirmation. In order to retain top

talent and encourage high performance, the Company

announced an Employee Stock Option Plan and a

financial retention scheme for its high performers and

potential achievers.

The Company continued to invest in many initiatives

that build positive employee experiences ranging from

investment in learning programs, celebrating successes,

encouraging work life balance, health awareness

camps, encouraging employees to contribute ideas &

suggestions and fun at workplace.

Overview


Business Review


At Mytrah, we invest in communities with as much passion as we invest in our core business.

Our responsibility

Mytrah is a responsible corporate citizen.

Over the last few years, the Company has extended

its distinctive business focus and passion to its CSR

engagement as well.

Towards achieving harmony between business

interests and our socioeconomic and environmental

responsibility, a conscious effort is being made to

align ourselves with the charitable activities defined

under Section 2 (15) of the Indian Income Tax Act

1961, activities specified in Schedule VII of the Indian

Companies Act 2013 and the UN agreed Sustainable

Development Goals (SDGs).

CSR approach Mytrah is committed to play the role of a catalyst in

promoting comprehensive development by facilitating

participatory community development with enduring

impact. We consider participation as a process of

empowerment and an effective means of collaboration.

CSR strategyMytrah considers the community as a priority

intervention area; it is committed to embark on

result-oriented projects/programmes guided by need

based-analyses and stakeholder consultations. Mytrah

undertakes and supports CSR initiatives beyond its

geography in addition to affirmative action on matters

of national importance based on community needs

and exigent circumstances (natural disasters).

The Company’s CSR engagement covers four

prominent areas:

Development skills and promoting entrepreneurship

Undertaking WASH (water, sanitation and hygiene)

initiatives

Promoting sports

Forging collaborations and partnerships

CSR initiatives Link Volunteers Project: The Link Volunteers is a

partnership project with Banerjee & Luke Foundation,

being implemented in Borabanda, a conglomeration of

slums in Hyderabad. The project has three objectives:

improve knowledge and skills of 100 Link Volunteers to

deliver better urban healthcare services in the selected

slums; establish early diagnosis methods, collect

epidemiological data from the slum area population

related to hypertension and diabetes to facilitate

early intervention services; to eventually create viable

associations in primary healthcare management,

through collaborative efforts between non-government

and government organisations; replicating/expanding

the project and influencing healthcare policies of the

state.


Skill building and Entrepreneurship Development

Project: This partnership project with BAIF

Development Research Foundation (national NGO

with over 48 years of community development

experience) is the outcome of a ‘Needs Assessment’

survey conducted at Nazeerabad in Ranga Reddy

district of Telangana State and Savalsang of Vijayapura

district of Karnataka. The purpose of this project is to

promote livelihood opportunities through skill building

and entrepreneurship development.

Swachh Bharat Sanitation Project: This partnership

project with the Government of Andhra Pradesh makes

it possible to contribute to the Individual House Hold

Sanitation initiative of SWACHH Bharat programme of

GoAP through the construction of 500 household toilets

in Guntur and Kurnool districts (Andhra Pradesh).

Art for Social Cause - Kala Mytrah Project: Driven

by Mytrah Energy’s recognition of the power and

contributory role of art and culture in consistently

employing imagination and creativity to espouse social

cause, enact human feelings and establish the message

for humanity and society, an Art for Social Cause

-Art Camp was conducted, with exclusive paintings

contributed by renowned artists from India. The sale

proceeds of which are directed towards the project

Kala Myth. The project (in collaboration with UNICEF)

provides technical support. Mahita, an NGO based at

Hyderabad with over 20 years of work experience in

social development, is executing the project.

The objectives of the project: Facilitating secondary

coaching and certification along with life-skills to

500 adolescent girls in the age-group of 14-19 years

in Borabanda (at least 75% to pass the Secondary

Education examination); formation and strengthening

adolescent girls collectives in four centres to help young

girls and children restore their rights through parents,

community involvement and participation; showcasing

project results to relevant government partners

and supporting them to develop comprehensive

programmes for the empowerment of adolescent girls

with a focus on their education.

Support to sports Mr. Indrajit Singh, shot putter and first athlete to

qualify for Rio 2016 Olympics, is being supported by

Mytrah.

Ms. Arunima Sinha’s (first Indian woman amputee to

climb Mount Everest) Sports Academy for disabled

children is being supported.

Mr. Abhishek Kumar Sharma, cyclist, who is on a

mission to complete 20,000 km of cycling across

India, while promoting the Swachh Bharat initiative,

has been supported by Mytrah to complete his journey

of 3900 kilometres from Hyderabad to New Delhi,

where he will meet the Honourable Prime Minister.

Mytrah is contemplating the possibility of establishing

a sports academy with a focus on supporting budding

sports persons.

Facilitating secondary coaching and certification along with life-skills to 500 adolescent girls in the age-group of 14-19 years in Borabanda

Overview


Business Review


Principal risks and uncertainities

Operational RiskMitigation

Mytrah employs external and

internal specialists to estimate

the long-term energy yield from

its projects. These predictions are

based upon historical measured

weather patterns, which are used

to calculate energy yields over

a 20-year period. The analysis

provides the Group with a range

of possible forecasts, ranging from

50% (p50) certainty up to 90%

(p90) certainty for the long-term

energy yield from its projects.

Mytrah’s projects, in common

with other renewable energy in

India, enjoy a preferential right to

access the grid, displacing fossil

fuel generation when necessary.

The Group proactively engages

with the Government and utilities

to ensure that its projects are able

to export power into the grid as

required. To protect the Group

against technical performance risk,

we seek contractual protection by

warranty

Generation Performance

The amount of electricity

produced from wind and solar

technologies is dependent

on the prevailing weather

conditions, which are variable

in nature. External factors like

grid connectivity may affect

the performance of wind and

solar farms. New projects also

carry a risk that the technical

performance of the plant is not

as planned.

FundingMitigation

The Group has a finance team

with significant corporate finance

experience to proactively manage

the various funding activities. The

team has established long term

relationships across a diverse

range of finance providers in

India and has demonstrated its

ability to find innovative financing

approaches that reduce the cost

of debt.

The execution of the Group’s

growth pipeline will be dependent

on the ability to secure adequate

sources of project finance, at

an appropriate cost and time,

to finance the construction of

future projects.

Counterparty risk of suppliers and power off-takersMitigation

The Group manages this risk

through credit checks, bank

guarantees and the careful drafting

of contracts in consultation with

internal and external legal advisors

where appropriate.

The Group also continuously

monitors the credit ratings and

financial health of the State utilities,

which purchase its electricity, with

a focus on payment track records.

The Group has exposure to the

failure of contract performance

by its contractual counterparties

(EPC contractors, consultants,

banks and financial institutions,

and power off-takers). This could

affect the revenue in the short-

to medium-term.

Business interruption/critical service failureMitigation

Mytrah uses independent

consultants to evaluate wind

turbine generators supplied to our

wind farms on a periodic basis. We

ensure preventative maintenance

is undertaken as required and

closely monitor spares stocks

and the performance of our O&M

teams. The Group has built a highly

experienced asset management

team to assure, and where

possible enhance, standards of

asset management across all of

the Group’s wind and solar plants.

The Group’s current operations

and maintenance activities are

undertaken by third parties and

also by in-house teams. In the

event that a critical resource

was not available then this could

affect the operation of a wind

farm and have a knock-on effect

on our revenue.


TechnologyMitigation

The Group has relationships

with a variety of wind and solar

equipment suppliers, each using

its own technology. This diverse

supplier base, together with

the experience of the internal

team, gives the Group access to

extensive knowledge about current

and future technology trends and

enables informed decision making

when selecting the technology for

each project.

A rigorous technology selection

process and strong IT security

is enabled to mitigate the risk. IT

systems are constantly reviewed

and updated to meet the needs of

the Group. Procedures have been

established for the protection of

our technology assets.

The performance of the Group’s

wind farms is affected by

the choice, deployment and

subsequent development of

wind turbines, solar modules and

key operating technologies.

The Group must maintain,

develop and avoid interruption

to its turbines and key

information technology systems

and adequately protect key data.

Execution of projects on timeMitigation

The Group manages these risks

through selecting sites on which

it believes it can secure planning

and development consent,

employing suitably qualified and

significantly experienced staff to

manage the consenting process

and ensure compliance with

the latest legislation, as well as

ensuring maximum engagement

of local authorities and interested

stakeholders from a very early

stage. The Group has significant

experience of securing planning

consents for renewable energy

projects and knowledge of the

important stages involved. The

Group uses this experience when

selecting sites for development.

Key concerns are addressed

through periodic review meetings

of top management teams at site

and head offices.

The construction and

commissioning of the projects

may be delayed due to several

exogenous factors such as delays

in supply from various contractors,

accidents, unforeseen difficulties

with land procurement, changes

in Government policies, delays in

receipt of necessary regulatory

approvals and non-availability of

external infrastructure such as

transmission lines, leading to cost

and interest overruns.

Government, political and regulatory issuesMitigation

The Group continuously monitors

possible changes to legislation and

engages in consultation processes

to safeguard the Group’s interests.

The Group has embedded

operating policies and procedures

in all of our businesses to ensure

compliance with existing legislation

and regulation.

The Group actively engages with

the relevant government and

association and policy makers to

help ensure that we are properly

positioned to respond to any

proposed changes.

The Group’s business is subject

to laws and regulations covering

a wide range of matters including

health and safety, equipment,

employment, insurance coverage

and other operational issues,

which can change failure to

comply could have financial or

reputational implications, could

result in increased litigation and

claims and have a negative impact

on the Group’s ability to expand

and business profitability.

Interest ratesMitigation

The cost of debt is factored into

each project at the evaluation stage

to ensure it meets or exceeds our

minimum IRR requirements. The

Group maintains a diverse range of

financing structures in its projects

and has flexibility to adjust these

in response to changing interest

rates.

The largest operational cost of

the Group is the cost of debt. The

Group’s projects are financed

by project-based debt. Adverse

changes in interest rates could

have a material impact on cash

flows and profitability.

Overview


Business Review


Directors’ Report

The Directors present their report, together with the

audited financial statements for the year ended 31

December 2015. The information in the Chairman and

Chief Executive’s Statement, the Business Review, the

Directors’ Profiles, the Corporate Governance Report

and the Directors’ Responsibilities Statement form

part of the Directors’ Report. These together contain

certain forward looking statements and forecasts with

respect to the financial condition, results, operations

and business of Mytrah Energy Limited which may

involve risk and uncertainty because they relate to

events and depend upon circumstances that will

occur in the future. There are a number of factors that

could cause actual results or developments to differ

materially from those expressed or implied by these

forward looking statements and forecasts. Nothing

in this Annual Report to shareholders should be

construed as a profit forecast.

Principal activities and review of businessThe principle activities of the Group are developing,

owning and operating renewable energy assets in

India. A detailed review of the business is set out in the

Chairman and Chief Executive’s Statement on page 16.

Business ReviewThe Company is required by the Companies (Guernsey)

Law 2008 to include a Business Review in this report.

The information that fulfils the requirements of the

Business Review can be found on pages 16 to 49, which

are incorporated in this report by reference.

Results and dividendsThe Group posted profit after tax of USD 0.39m for the

year ended 31 December 2015 (31 December 2014: USD

1.88m) on a turnover of USD 74.72m (31 December

2014: USD 69.55m) and EBITDA of USD 65.28m (31

December 2014: USD 56.12m). At 31 December 2015

the Group had cash and bank balances including liquid

investments of USD 98.96m (31 December 2014: USD

25.23m).

The Directors do not recommend the payment of a

dividend for the current year (31 December 2014: USD

nil).

Capital StructureAs at 31 December 2015 the Company had an issued

share capital of 163,636,000 ordinary shares with

no par value (refer note 29). The Company has one

class of ordinary shares, which carry no right to fixed

income. Each share carries the right to one vote

at general meetings of the Company. There are no

specific restrictions on the size of a holding nor on the

transfer of shares, which are both governed by the

general provisions of the Articles of Incorporation and

prevailing legislation. The directors are not aware of

any agreements between holders of the Company’s

shares that may result in restrictions on transfers or on

voting rights.

During the year the Company has replaced the warrants

issued in 2014 by issuing 11,439,762 new warrants to

non-convertible debenture investors (‘investors’).

These new warrants provide an option to the investors

to purchase an equivalent number of ordinary shares in

Mytrah Energy Limited at a fixed price of GBP 0.7729.

Details of employee share schemes are set out in note

38 of the consolidated financial statements.

No person has any special rights of control over the

Company’s share capital and all issued shares are fully

paid.


The Board has a breadth of experience relevant

to the Group at its current stage of development

and the Directors believe that any changes to the

Board’s composition can be managed without undue

disruption.

The biographical profiles of the Directors can be found

on page 40.

The Company’s Articles of Incorporation require that

all Directors are subject to re-election by shareholders

at the first Annual General Meeting following their initial

appointment, and at each Annual General Meeting

one-third of the Directors retire by rotation. The Board

has voluntarily adopted the relevant provisions of the

UK Corporate Governance Code regarding annual re-

election of directors and will all offer themselves for

re-election by shareholders at the 2016 Annual General

Meeting.

Directors’ InterestsDetails of the share interests of the Directors, their

service contracts and terms of appointment are shown

in the Remuneration Report.

Directors’ indemnity and insuranceThe Company provides an indemnity to all its Directors

with respect to liablilities arising from the fulfilment (or

lack thereof) of their duties as Directors. The Company

also has in place liability insurance covering the

Directors. Both the indemnity and insurance were in

force during the year ended 31 December 2015.

Name Age Position Date of Appointment

Ravi Kailas 49 Chairman and CEO 13 August 2010

Rohit Phansalkar 71 Non-Executive Director 13 August 2010

Russell Walls 72 Non-Executive Director 4 November 2011

DirectorsThe directors, who served throughout the year were as follows:

Substantial shareholdersOn 31 March 2016, the Company had been notified of the following holdings of 3% or more of the 163,636,000

Ordinary Shares:

Name Percentage of voting rights

and issued share capital

The Raksha Trust* 58.5

Esrano Overseas Ltd 14.6

Capital Research Global Investments 7.4

Henderson Global Investors 5.5

Moab Capital Partners LLC 3.4

*The Raksha Trust is a Jersey based discretionary trust settled by Ravi Kailas, the Chairman and CEO of the

Company, of which he and some of his family members and also a philanthropic trust are discretionary beneficiaries.

Acquisition of the Company’s own sharesThe Company did not acquire any of its shares during the year ended 31 December 2015 (year ended 31 December

2014: nil).

Overview


Business Review


Statement of Directors’ responsibilities in respect of the Annual Report and the consolidated financial statementsThe Directors are responsible for preparing the Annual

Report and the financial statements in accordance

with applicable law and regulations.

The Directors have elected to prepare the consolidated

financial statements in accordance with International

Financial Reporting Standards (‘IFRS’) as adopted

by the European Union. The consolidated financial

statements are required to give a true and fair view of

the state of affairs of the Group and of the profit or loss

of the Group for the year.

In preparing those consolidated financial statements,

the Directors are required to:

Select suitable accounting policies and then apply

them consistently;

Make judgments and estimates that are reasonable

and prudent;

State whether applicable accounting standards have

been followed, subject to any material departures

being disclosed and explained in the consolidated

financial statements; and

Prepare the consolidated financial statements on

the going concern basis unless it is inappropriate to

presume that the Group will continue in business.

The Directors confirm that they have complied with

the above requirements in preparing the annual

consolidated financial statements.

The Directors are responsible for keeping proper

accounting records that disclose with reasonable

accuracy at any time the financial position of the Group

and enable them to ensure that the consolidated

financial statements comply with the Companies

(Guernsey) Law 2008. They are also responsible for

safeguarding the assets of the Group and hence for

taking steps to prevent and detect fraud and other

irregularities.

The Directors are responsible for the maintenance and

integrity of the corporate and financial information

included in the Company’s website.

In addition, the Directors confirm, to the best of their

knowledge, that:

The Group financial statements prepared in

accordance with IFRS as adopted by the European

Union give a true and fair view of the assets, liabilities,

financial position and profit of the Group; and

The Business Review includes a fair review of the

development and performance of the business and the

position of the Group, together with a description of

the principle risks and uncertainties that it faces.

Disclosure of information to auditorsEach Director has responsibility for ensuring that, as

far as he is aware, there is no relevant audit information

of which the auditors are unaware, and that he has

taken all the steps that he ought to have taken to

make himself aware of any relevant information that is

relevant to the preparation of the auditors’ report and

to establish that the Group’s auditors are aware of that

information.

AuditorsThe Auditors, KPMG Audit LLC, were appointed at

the Annual General Meeting held on 6 August 2015.

A resolution concerning the re-appointment of KPMG

Audit LLC as Auditors will be proposed at the 2016

Annual General Meeting.

By order of the Board

Susan WallaceCompany Secretary

25 February 2016

Registered Office:Ground Floor

Dorey Court

Admiral Park

St Peter Port

Guernsey

GY1 2HT


Corporate Governance Report

The Board embraces the high standards of corporate

governance contained in the 2013 Quoted Companies

Alliance Corporate Governance Guidelines for Smaller

Quoted Companies (“QCA Guidelines”) and, where

relevant, the UK Corporate Governance Code issued

by the Financial Reporting Council.

In respect to the QCA Guidelines, as at the date of

this report the Group was compliant, save that the

Board does not have a Chairman deemed independent

on appointment as recommended under Guideline 9 of

the said QCA Guidelines. However, the Board believes

that Ravi Kailas’s appointment as Chairman and CEO

is appropriate for the business in its current stage of

development.

The Board continually reviews its governance arrangements. During the year: An annual Internal Audit Plan was approved and

adopted for the Group’s subsidiaries in India (where the

principle operations of the Group are undertaken). The

internal assurance group along with the external advisers

were appointed to conduct regular assessments on

internal and external regulatory and legislative issues

pertinent to the Group, such as compliance with Land

Procurement and Land Laws, EHS compliance, entity

level fraud risk management framework and balance of

plant operations. These assessments are reviewed by

the MEL Audit Committee on a quarterly basis;

As part of the Annual Internal Audit Plan, the Internal

Auditors conducted periodic fraud and corruption

and risk assessment audit reviews and reported their

findings on a quarterly basis to the Audit Committee

which, in turn, made recommendations to the Board

where appropriate;

The Board conducted an annual Board and

Committee effectiveness review;

The Board and its Committees reviewed and updated

their terms of references, to ensure they are in line with

best practice and corporate governance guidelines.

The Board maintained a responsibilities’ statement

setting out the roles and responsibilities of the Board,

Chairman and CEO and the Senior Independent

Director. In line with best practice, the Board made the

current terms of reference for each Board Committee

available on the Investor Relations’ section of the

corporate website.

The BoardComposition

The composition of the Board is shown on page 40. It

is considered that a smaller number of directors allow

the Board to work more effectively and increase the

speed and efficiency of decision making at MEL, given

that the majority of operational decisions are actually

made at the Board of the wholly owned subsidiary,

Mytrah Energy (India) Ltd (MEIL). The Directors of

MEL, along with a number of others, are also Directors

of MEIL.

The Role and Operations of the Board

The role of the Board is to ensure delivery of the

business strategy and long-term shareholder value.

The general obligations of the Board and the roles and

responsibilities of the Chairman and CEO and Senior

Independent Director are set out in a formal Board

responsibilities statement approved by the Board. The

Board fulfils its role by approving the annual operating

plan and monitoring business performance throughout

the year. The Board held four formal scheduled Board

meetings during the financial year and in addition held

a number of unscheduled ad-hoc meetings, typically

by conference call. There is in place a schedule of

matters reserved for Board approval.

The Board have approved an annual Board calendar

setting out the dates, location and standing agenda

items for each formal scheduled Board and Committee

meeting and scheduled Board calls. Board papers are

circulated to Directors in advance of scheduled and

unscheduled meetings, which are of an appropriate

quality to enable the Directors to fulfil their obligations

and adequately monitor the performance of the

business. Directors who are unable to attend a

meeting are expected to provide their comments to

the Chairman and CEO, Senior Independent Director or

the Company Secretary as appropriate. The Board also

receive management information on a regular basis

Overview


Business Review


which sets out the performance of the business.

During the year, the topics subject to Board discussion

at formal scheduled Board meetings included: -

Business strategy and Annual Operating Plan;

Investor relations;

Financial and operational performance;

Project updates;

Market and competitor reports;

Acquisitions and Group structure changes;

Financing activities and facility agreements;

The issuance of warrants;

Industry regulatory and compliance developments;

Related party transactions;

Approval of Annual and Half-Year Reports;

Findings of the Board and Committee effectiveness

review;

Board Evaluation Review;

Risk and internal controls

Approval of CSR policy

Attendance at scheduled Board Meetings during the year is shown below:

Formal Scheduled Board Meetings during the

year ended 31 December 2015

Director Maximum

Possible

Attendance

Meetings

Attended

Attendance

Ravi Kailas 4 2 2

Rohit Phansalkar 4 4 4

Russell Walls 4 4 4

Board Balance and Independence

Following an annual formal review by the Board

undertaken in December 2015, taking into account all

relevant factors as set out in the QCA Guidelines and

UK Corporate Governance Code, the Board considers

Rohit Phansalkar and Russell Walls to be independent

in character and judgment.

Whilst the Board does not have a Chairman who was

deemed independent on appointment, the Board

consists of one executive director and two independent

non-executive directors. Consequently, over half the

Board is comprised of independent non-executive

directors to ensure that no individual or small group of

individuals can dominate the Board’s decision taking.

Senior Independent Director

Russell Walls is the Senior Independent Director. He is

available to investors to discuss governance issues or

should there be matters of concern that have not, or

cannot, be addressed through the normal channels of

communication with the Chairman and CEO.

Russell Walls is also available to act as an intermediary

between Directors, if required, and to act as a sounding

board for the Chairman and CEO.

Advice, Insurance and Indemnities

All Directors have access to the services of the

Company Secretary and may take independent

professional advice at the Company’s expense in

conducting their duties.

The Company provides indemnity insurance cover

for its Directors and officers, which is reviewed and

renewed annually.

Conflicts

Consideration of Directors’ interests is a standing

agenda item at each formal scheduled Board meeting.

Each Director is required to disclose any actual or

potential conflicts of interest and a register of Directors’

interests is maintained by the Company Secretary. If

there is a conflict of interest or a matter relating to a

particular Director or a related party transaction, then

the Board understands that the relevant Director shall

excuse themselves from the discussion.

Board Evaluation

A formal and rigorous evaluation of the performance

and effectiveness of the Board and its Committees

was undertaken in Q4 2015 and was coordinated by

the Company Secretary. The review focussed on

important factors such as; internal communications, risk

management, succession and committee structures

and internal and external stakeholder communications.

The review gave the Board an opportunity to identify

a small number of areas of corporate governance

matters to be addressed in more detail in 2016.

Throughout the year the Board has continued to

review and assess all policies and practices throughout

the organisation to comply with the highest standard

of corporate governance best practice.


The Board will consider each year whether the review

should be conducted by an independent third party.

Board Development

All new Directors appointed to the Board receive a

comprehensive structured induction programme. In

2015, Russell Walls and Rohit Phansalkar visited the

Hyderabad Office four times during the year, where

they had a structured programme of both formal and

informal meetings with senior management.

Reappointment of Directors at the Annual General

Meeting

The Company’s Articles of Incorporation require all

new Directors to submit themselves for re-election by

shareholders in their first year following appointment.

The Company’s Articles of Incorporation also require

all Directors to submit themselves for re-election at

least every three years if they wish to continue to serve

on the Board and are considered by the board to be

eligible.

It is deemed best practice in the UK for the boards

of FTSE350 listed companies to annually submit

themselves for re-election by shareholders. The Board

has decided to voluntarily comply with this provision

of the UK Corporate Governance Code and annually

submit themselves for re-election at the Annual

General Meeting.

Relations with investors

Throughout the year, Ravi Kailas and Bob Smith, a

Director of Mytrah Energy (India) Limited, met regularly

with shareholders and their views were reported back

to the Board. This allowed all Directors to develop

a good understanding of the shareholders’ needs

and expectations and in turn for the shareholders to

appreciate the opportunities and constraints faced by

the Group. Consideration of investor relations issues

is a standing agenda item at each formal scheduled

Board meeting.

The Company produces an Annual Report which is

distributed to all shareholders and available on the

investor relations section of the Company’s website,

which also contains information on the Group, copies

of Board Committee terms of references and market

announcements.

The Board ensures that financial reporting and

operational updates are communicated to the market

on a timely basis and give an accurate and balanced

assessment of the business. The Company’s share

dealing policy sets out how the Directors meet their

obligations under the AIM rules in this regard and how

the advisers are involved in the market communications

process coordinated by the Company Secretary.

Board Committees

The terms of reference of the Board Committees set

out below are all available in the corporate governance

section of the Company’s website at www.mytrah.com.

NominationMembership

Since November 2012, the Nomination Committee

is chaired by Ravi Kailas and its other members are

Rohit Phansalkar and Russell Walls. The Committee

formally met once during the year to review Board

and Committee composition. The Committee has a

calendar of activities for the year.

Attendance at scheduled Committee Meetings during the year is shown below:

Director Maximum Possible

Attendance

Meetings

Attended

Ravi Kailas 1 1

Rohit Phansalkar 1 1

Russell Walls 1 1

Responsibilities

The key responsibilities of the Committee are:-

i. Recommending Director nominees to the Board;

ii. Recommending Committee chairs and membership

to the Board and Committees;

iii. When appropriate, taking into account the current

stage of the Company’s development, reviewing

succession plans for the Board and Committees;

iv. Making recommendations to the Board in respect

of the re-appointment of any non-executive

Director at the conclusion of their specified term

of office taking into account their performance and

their contribution together with the knowledge,

skills, leadership and experience requirements of

the Board and Committees; and

v. Regularly reviewing the structure, size and

composition (including the balance of skills,

knowledge and experience) required for the Board.

Overview


Business Review


RemunerationFull information on the composition, role, operation and

meeting attendance of the Remuneration Committee

is set out in the Remuneration Report on page 58.

AuditMembership

Since November 2012, the Audit Committee is chaired

by Russell Walls and its other member is Rohit

Phansalkar. Russell Walls is considered by the Board to

have recent and relevant financial experience.

The Committee has a calendar of activities agreed

each year. Senior management, the external auditors

and a representative of the out-sourced internal

audit service providers, (Ernst & Young), may attend

meetings at the request of the Committee. Ravi Kailas

has a standing invite to attend all meetings and receive

all meeting materials.

Attendance at scheduled Committee Meetings during

the year is shown below. Additional ad-hoc meetings

by conference call were also held during the year.

Responsibilities

The key responsibilities of the Committee are:

i. Monitoring the integrity of financial statements,

including approving any material changes

in accounting policy, reviewing the financial

statements, and any market announcements

relating to the Group’s financial performance;

ii. Reviewing the integrity of internal financial control

and risk management systems and codes of

corporate conduct and ethics and any published

statements regarding these systems and codes;

iii. Making recommendations to the Board regarding

the engagement of the external auditors, approving

their terms of engagement, monitoring their

objectivity and performance and setting policy

regarding the provision of non-audit services by the

external auditors;

iv. Reviewing the plan, scope and results of the annual

audit, the external auditors’ letter of comments and

management’s response thereto; and

v. Receiving reports from internal audit relating to

risk control and management’s response to internal

audit review findings.

During the year, the topics subject to Committee

discussion at formal scheduled Board meetings

included:

Receipt and consideration of reports from the

external auditors regarding the scope and findings of

their audit of the annual report and review of the half-

year report;

Recommendation of the annual report and half-year

report to the Board for approval, together with the

management representation letter and audit fees;

Review of audit and non-audit related fees paid to

the external auditors and monitoring the independence

of the external auditors;

Receipt and consideration of reports from the

internal auditors and management’s responses to their

findings; and

Review and consideration of accounting treatment

policy changes in line with industry practice, as

recommended by external auditors.

To ensure the objectivity and independence of the

external auditors, any service provided by the external

auditors must be approved in accordance with the

Group’s policy on auditor independence and the

provision of non-audit services, which is consistent with

the UK Auditing Practices Board’s Ethical Standards

for Auditors.

The external auditor is only selected to provide

non-audit services if they are well placed to provide

the required service at a competitive cost and the

Committee is satisfied that the assignment will not

impair their objectivity. In accordance with relevant

professional standards, the external auditors have

confirmed their independence as auditors in a letter

to the Directors. Details of fees paid to the external

Attendance at scheduled Committee Meetings during the year is shown below. Additional ad-hoc meetings by

conference call were also held during the year.


Attendance

Meetings

Attended


Russell Walls 3 3


auditors for both audit and non-audit services are

given in the note 9 to the financial statements.

Internal ControlThe Board is responsible for ensuring the Group has

effective and sound systems of internal controls, which

are designed to manage, but not eliminate, the risk

of failure to achieve business objectives and provide

reasonable, but not absolute, assurance against

material misstatements and loss.

The day-to-day management and monitoring of the

Group’s systems of internal control is delegated to the

Management Committee, comprising the Chairman &

Chief Executive and Chief Financial Officer

The Management Committee ensures that the Group’s

risk management framework and control culture

are embedded within the business, and to that end,

during the year the Management Committee ensured

that each employee undertook induction training on

the Group Code of Conduct established during the

year. The Executive Director and senior management

provides assurance to the Board, through the Audit

Committee, that risks are monitored, appropriately

escalated and managed within the risk appetite of the

Board.

The systems of internal control are designed to cover

all business, financial, reputational and legal risks of

the Group and are embedded within the day to day

operations of the Group.

The financial reporting controls in place are designed

to maintain proper accounting records and provide

reasonable assurance concerning the accuracy

and integrity of financial information reported both

internally and externally. The financial reporting

controls are monitored on a monthly basis by internal

audit and are reported on a monthly basis to the

Management Committee and on a quarterly basis to

the Audit Committee.

Effectiveness of the identification and evaluation of

business risk and the mitigation provided by controls

are assessed on an annual basis by each business

area. This annual review is coordinated by the internal

auditors and reported to the Management Committee

for review and challenge before ultimately being

reported to the Audit Committee. This risk and control

assessment process forms a key part of the annual

internal audit plan and links to the Board’s assessment

of the key risks and the overall effectiveness of internal

controls.

In accordance with the QCA Guidelines and UK

Corporate Governance Code and best practice

guidance for directors on internal controls issued by

the Financial Reporting Council, the Board, with the

advice of the Audit Committee, has reviewed the

effectiveness of the systems of internal control for the

year to 31 December 2015. As part of this review, the

Board received assurances from the Chairman & Chief

Executive and the Chief Financial Officer of Mytrah

Energy Limited that the Directors Responsibilities

Statement on page 52 is founded on a sound system

of risk management and internal controls and that the

systems of internal controls are operating effectively

in all material respects in relation to reporting financial

risks and the mitigation of material business risks.

Relationship AgreementThe Company, Mirabaud (the Company’s co-broker),

Strand Hanson and certain shareholders, namely, Bindu

Urja Capital Inc, Bindu Urja Investments Inc, Bindu Urja

Holdings Inc, Ravi Kailas, Sila Energy Inc and Esrano

Overseas Limited (the ‘Shareholders’) entered into a

relationship agreement on 4th October 2010 whereby

those Shareholders undertake to the Company and

Strand Hanson, inter alia, not to exercise their voting

rights to take control of the Board and to conduct

all transactions and relationships between them (and

any of their associates or concert parties) and the

Company on terms which allow the Company to carry

on its business independently, at arm’s length and on

a normal commercial basis. The agreement remains in

force for so long as such Shareholders, their associates

and concert parties together control, directly or

indirectly, more than 30% of the voting rights of the

Company.

Going ConcernThe Directors have considered the net current assets

of USD 51.23m of the Group at 31 December 2015, the

Group’s cash position and forecast cash flows for 18

months period from the date of these consolidated

financial statements. The Directors also continue to

monitor the cash flows from time to time including

the short term and long term liquidity position. At the

balance sheet date, the Company has adequate unused

long term credit facilities to offset the short term loans

taken. The Directors have a reasonable expectation

that the Group has adequate resources to continue its

operational existence for a foreseeable future and thus

adopt going concern basis of accounting in preparing

these consolidated financial statements.

Overview


Business Review


Role and Responsibilities

The Remuneration Committee determines and agrees

with the Board the broad policy for the remuneration

of the Group’s employees, as well as reviewing the

ongoing appropriateness and relevance of the Group’s

remuneration policy, ensuring that it is structured in a

way that aligns reward with performance, shareholder

interests and the long-term interests of the business.

The key responsibilities of the Committee are: -

i. Determining the total individual remuneration

packages, including pension arrangements, of the

Executive director and senior management.

ii. Reviewing and approving share incentive plans and

non-material changes to them;

iii. Approving and determining targets for

performance-related pay schemes, including the

annual discretionary bonus scheme;

iv. Reviewing and approving the scope of any

termination payments and severance terms for

Executive directors, ensuring that contractual

terms on termination and any payments made are

fair to the individual and the Company, that failure

is not rewarded and that the duty to mitigate loss is

fully recognised.

The full terms of reference of the Remuneration

Committee are available on the Company’s website

(www.mytrah.com) and on request from the Company

Secretary.

The Committee has access to the advice and views

of the Chairman and Chief Executive as well as the

use of external consultants, if required. No external

consultants were engaged by the Committee during

the period.

Remuneration PolicyThe Board considers that appropriate remuneration

policies are a key driver of performance and a central

element of corporate strategy. The Group remuneration

policy aims to: -

provide market competitive total compensation;

motivate, retain and promote individual and

corporate outperformance;

differentiate on merit and performance;

emphasise variable performance-driven

remuneration;

ensure adherence to the Group’s Code of Conduct;

align senior management with shareholders’

interests; and

Attendance at scheduled Committee Meetings during the year is shown below. Additional ad-hoc meetings by

conference call were also held during the year.


Attendance

Meetings

Attended


Russell Walls 2 2

This report describes the Group’s overall remuneration policy and gives details of the compensation arrangements

for Directors for the year to 31 December 2015.

The Remuneration CommitteeMembership

Since November 2012, the Remuneration Committee is chaired by Rohit Phansalkar and its other member is

Russell Walls. A calendar of activities for the Committee for the year has been agreed.

Senior management attend meetings at the request of the Committee and recuse themselves from discussions

and decisions taken by the Remuneration Committee in respect of their own remuneration.

Remuneration Report


deliver clarity, transparency and fairness of process.

The Group remuneration policy has a strong focus on

variable compensation as the Board believes that the

interests of the business, shareholders and employees

are best served by containing fixed remuneration costs

and maximising the proportion of total remuneration

that is directly performance related.

The key components of the Group’s total remuneration package include:

Element Structure Purpose Performance Measure

Basic salary Fixed Base salary for the role Annual performance review.

Other benefits Fixed Benefits in Kind. Subject to market comparable review

Annual Bonus Variable Executive and senior

management bonuses

are determined by the

Remuneration Committee

taking into account the

performance of the business,

individual performance and

market comparatives.

Committee discretion, taking into

account:

Delivery of the Annual Operating Plan

Performance against agreed KPI’s

Overall financial performance of the

Group

Market comparables

Any other factor deemed relevant by

the Committee

Share Option

Grants

Variable Share awards aim to align

total remuneration with the

growth of the business and

shareholder value.

Market comparables and individual

performance. Annual awards are

not envisaged by the Remuneration

Committee.

Basic salarySalaries are reviewed annually for the Executive

Director and CFO.

Annual bonusAt the discretion of the Committee, the Executive

Director and CFO may receive a cash bonus based

on industry comparative measures, management

performance and potential company growth and are

generally paid in May each year. The Committee has

the discretion and flexibility to take into account other

factors in determining any bonus.

Each element of the Executive Directors’ reward

package supports the achievement of key business

measures and rewards outperformance.

Mytrah Share Option SchemeThe Company has a Share Option Plan The Mytrah

Energy Employee Cashless Stock Option Scheme.

This scheme enable participants to acquire shares at

an option price fixed at the time of grant. A participant

may receive one or several awards of stock options.

Benefits and benefits in kindThe Chairman & Chief Executive is contractually

entitled to a lump-sum life assurance benefit and

private healthcare medical insurance, car and housing

allowances. The Chairman & Chief Executive does not

have any pension entitlements.

The Directors, both executive and non-executive,

also benefit from indemnity arrangements in respect

of their services as Directors, and from Directors’ and

Officers’ indemnity insurance.

Directors’ Service ContractsThe Chairman & Chief Executive has a service

agreement with the Company, which is terminable by

either party on not less than 12 months’ notice. There

are no provisions for remuneration payable on early

termination.

Non-Executive DirectorsThe remuneration of the non-executive Directors

is determined by the Executive Director. The non-

executive Directors serve the Company under formal

letters of appointment that are terminable on six month’s

Overview


Business Review

Financial Statements59Mytrah Energy Limited Annual Report 2015 59

written notice which sets out their role, obligations as a

director and the expected time commitment required.

It is the Company’s policy that the non-executive

Directors have been granted options to align the

interests of non-executive Directors with shareholders.

Such awards are approximate in value on grant with

one year’s fees and, in compliance with the QCA

Guidelines, are not subject to performance conditions.

The Group share dealing code requires non-executive

Directors to hold shares acquired through the exercise

of options throughout their tenure (other than to the

extent of paying taxes related to the exercise of an

option).

During the year, the annual fee payable to each non-

executive Director was £45,000 per annum. An

additional fee of £10,000 is payable in respect to the

chairmanship of a Board committee and £5,000 in

respect to the Senior Independent Director role.

Performance GraphThe following graph shows the Company’s share price performance compared with the performance of the FTSE

AIM All Share Index.

Directors’ emoluments and compensation (audited)Directors’ remuneration for the year ended 31 December 2015 was as follows:

Name Year ended

31 December 2015

USD

Year ended

31 December 2014

USD

Executive

Ravi Kailas 1,258,490 2,433,360

Non-Executive

Rohit Phansalkar 84,056 90,618

Russell Walls 91,698 98,856

Total 1,434,244 2,622,834

100p

90p

80p

70p

60p

50p

Jan-15

Feb-15

Mar

-15

Apr-15

May

-15

Jun-15

Jul-1

5

Aug-15

Sep-15

Oct

-15

Nov-15

Dec-15

Jan-16

Feb-16

Mar

-16

40p

MYT FTSE AIM ALL Share (rebased to MYT)

60 Mytrah Energy Limited Annual Report 201560 Mytrah Energy Limited Annual Report 2015

Directors’ share interests (audited)The interests of the Directors in shares of the Company as at 31 December 2015 are shown below.

1 In 2015, the Remuneration Committee rewarded Ravi Kailas a discretionary bonus after taking into account the

performance of the business, Mr Kailas’ individual performance and market comparatives.

* 94,751,030 shares are held by R&H Trust Co (Jersey) Limited (the “Trustee”) as trustee of The Raksha Trust (the

“Trust”), a Jersey based discretionary trust settled by Mr. Kailas, of which he and some of his family members and

also a philanthropic trust are discretionary beneficiaries.

Ordinary Shares held

at 31 December 2015

Executive Director

Ravi Kailas 94,751,030*

Non-Executive Directors

Rohit Phansalkar 7,000

Russell Walls 30,000

Director’s interests in share awardsAs at 31 December 2015, the Directors held the following share options (refer to note 36 of the consolidated

financial statements for more detail):

Name Date of grant Number of Ordinary

Shares under option

Exercise price per share

(pence)

Executive Director

Ravi Kailas 22 December 2011 9,090,889 115p

31 May 2015 9,500,000 77.5p

Non-Executive Directors

Rohit Phansalkar 4 October 2010* 38,700 77.5p

10 January 2013* 21,300 77.5p

31 May 2015 90,000 77.5p

Russell Walls 22 December 2011* 38,700 77.5p

10 January 2013* 21,300 77.5p

31 May 2015 90,000 77.5p

*Options were repriced to 77.5p on 31 May 2015.

During the year, no Director held any interest in the shares or loan stock of any subsidiary of the Company.

Approved and signed on behalf of the Board

Rohit Phansalkar

Remuneration Committee Chairman

Overview


Business Review

Financial Statements61Mytrah Energy Limited Annual Report 2015 61


Independent auditor’s report to the members of Mytrah Energy Limited

We have audited the Group financial statements (the “consolidated financial statements”) of Mytrah Energy

Limited (the “Company”) and its subsidiaries (together the “Group”) for the for the year ended 31 December 2015

which comprise the Consolidated Income Statement, Consolidated Statement of Other Comprehensive Income,

Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity, Consolidated

Statement of Cash Flows and the related notes to the consolidated financial statements. The financial reporting

framework that has been applied in their preparation is applicable law and International Financial Reporting

Standards (IFRSs) as adopted by the European Union.

This report is made solely to the Company’s members, as a body, in accordance with Section 262 of the Companies

(Guernsey) Law, 2008. Our audit work has been undertaken so that we might state to the Company’s members

those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest

extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the

Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and auditor

As explained more fully in the Directors’ Responsibilities Statement as set out on page 52, the Directors are

responsible for the preparation of the financial statements and for being satisfied that they give a true and fair

view. Our responsibility is to audit, and express an opinion on, the Group financial statements in accordance with

applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply

with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to

give reasonable assurance that the financial statements are free from material misstatement, whether caused by

fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group’s

circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant

accounting estimates made by the Directors; and the overall presentation of the financial statements. In addition,

we read all the financial and non-financial information in the annual report to identify material inconsistencies with

the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies

we consider the implications for our report.

Opinion on financial statements

In our opinion the Group financial statements:

• give a true and fair view of the state of the Group’s affairs as at 31 December 2015 and of its profit for the year

then ended;

• have been properly prepared in accordance with IFRSs as adopted by the European Union; and

• have been prepared in accordance with the requirements of the Companies (Guernsey) Law, 2008.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies (Guernsey) Law, 2008

requires us to report to you if, in our opinion:

• proper accounting records have not been kept; or

• the financial statements are not in agreement with the accounting records; or

• we have not received all the information and explanations we require for our audit.

27 April 2016

KPMG Audit LLC

Chartered Accountants

Heritage Court,

41 Athol Street

Douglas,

Overview


Business Review


Consolidated income statement for the year ended 31 December 2015

Consolidated statement of other comprehensive income for the year ended 31 December 2015

Note Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Continuing operations

Revenue 6 74,719,666 69,554,186

Other operating income 6 881,589 368,022

Employee benefits expense 7 (3,039,713) (4,449,186)

Other expenses 8 (7,280,624) (9,353,711)

Earnings before interest, tax, depreciation and

amortisation (EBITDA)

65,280,918 56,119,311

Depreciation and amortisation charge 15 & 16 (16,403,741) (11,363,761)

Operating profit 48,877,177 44,755,550

Finance income 10 3,347,383 1,047,757

Finance costs 11 (51,221,870) (42,923,651)

Other finance costs on refinancing 12 (541,185) (605,748)

Net finance costs (48,415,672) (42,481,642)

Profit before tax 461,505 2,273,908

Income tax expense 13 (80,763) (397,934)

Profit for the year from continuing operations 380,742 1,875,974

Profit attributable to

- Owners of the Company 1,162,991 1,875,974

- Non-controlling interest (782,249) -

Earnings per share

Basic 14 0.00711 0.01146

Diluted 14 0.00711 0.01145

The accompanying notes form an integral part of these consolidated financial statements.

Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Profit for the year 380,742 1,875,974

Other comprehensive income / (loss)

a) Items that will never be reclassified to profit and loss

Actuarial (loss)/ gain on employment benefit obligations (note 32d) (283,309) 5,054

b) Items that may be reclassified to profit or loss

Change in fair value of available-for-sale financial assets (note 32c) 355,167 101,773

Foreign currency translation adjustments (note 32a) (3,510,858) (4,028,502)

Other comprehensive loss (3,439,000) (3,921,675)

Total comprehensive loss (3,058,258) (2,045,701)

Total comprehensive loss attributable to

- Owners of the Company (2,276,009) (2,045,701)

- Non-controlling interest (782,249) -



Consolidated statement of financial position as at 31 December 2015

Note As at

31 December 2015

As at

31 December 2014

USD USD

Assets

Non-current assets

Intangible assets 15 195,248 328,069

Property, plant and equipment 16 779,930,202 510,109,947

Other non-current assets 17 33,697,599 81,430,536

Other investments 18 2,055,483 1,589,719

Deferred tax assets 19 5,744,587 455,433

Total non-current assets 821,623,119 593,913,704

Current assets

Trade receivables 20 17,487,165 17,695,157

Other current assets 21 10,986,956 8,185,384

Current tax assets 13 - 1,457,032

Current investments 22 43,384,798 10,966,118

Cash and bank balances 23 55,577,280 14,268,232

Total current assets 127,436,199 52,571,923

Total assets 949,059,318 646,485,627

Liabilities

Current liabilities

Borrowings 24 49,764,216 57,426,521

Finance lease obligations 25 101,165 -

Trade and other payables 27 23,130,462 14,438,617

Retirement benefit obligations 28 33,035 1,431

Current tax liabilities 13 3,176,482 285,746

Total current liabilities 76,205,360 72,152,315

Non-current liabilities

Borrowings 24 624,433,184 398,829,925

Finance lease obligations 25 6,316,717 -

Derivative financial instruments 26 3,429,381 5,046,655

Other payables 27 114,422,081 41,912,277

Retirement benefit obligations 28 298,615 12,442

Total non-current liabilities 748,899,978 445,801,299

Total liabilities 825,105,338 517,953,614

Net assets 123,953,980 128,532,013

Equity

Share capital 29 72,858,278 72,858,278

Capital contribution 30 16,721,636 16,721,636

Retained earnings 31 9,767,315 15,520,003

Other reserves 32 (26,098,232) (32,100,529)

Equity attributable to owners of the Company 73,248,997 72,999,388

Non-controlling interests 33 50,704,983 55,532,625

Total equity 123,953,980 128,532,013

These consolidated financial statements were approved by the Board of Directors and authorised for use on 25

February 2016.

Signed on behalf of the Board of Directors by:

Ravi Kailas Russell Walls

Chairman and CEO Director


Overview


Business Review


Co

nso

lid

ate

d s

tate

me

nt

of

ch

an

ge

s in

eq

uit

y

for

the y

ear

en

ded

31

Decem

ber

20

15

Am

ou

nt

US

D

Sh

are

cap

ital

Cap

ital

co

ntr

ibuti

on

Fo

reig

n

Curr

ency

transl

ati

on

rese

rve

Eq

uit

y

sett

led

em

plo

yee

benefits

re

serv

e

Fair

valu

e

rese

rve

Actu

ari

al

valu

ati

on

re

serv

e

Reta

ined

earn

ing

sC

ap

ital

red

em

pti

on

re

serv

e

Deb

entu

re

red

em

pti

on

re

serv

e

Share

w

arr

ant

rese

rve

No

n-

co

ntr

olli

ng

in

tere

st

To

tal

Bala

nce

as

at

31

De

ce

mb

er

20

1372,8

58

,278

7,3

57,6

20

(32,8

42,4

60

)3

,08

3,4

60

93

,48

0(5

28

)14

,33

9,8

15-

--

55

,39

5,172

120

,28

4,8

37

Pro

fit

for

the y

ear

--

--

--

1,8

75

,974

--

--

1,8

75

,974

Oth

er

co

mp

reh

en

sive

in

co

me

:

Fo

reig

n c

urr

en

cy t

ran

slati

on

ad

just

men

ts (

no

te 3

2a)

--

(4,0

28

,50

2)

--

--

--

--

(4,0

28

,50

2)

Actu

ari

al g

ain

s o

n e

mp

loyee b

en

efi

t o

blig

ati

on

s (n

ote

32d

)-

--

--

5,0

54

--

--

-5

,05

4

Co

ntr

ibu

tio

ns

receiv

ed

du

rin

g t

he y

ear

(no

te 3

0)

-9

,36

4,0

16-

--

--

--

--

9,3

64

,016

Bu

y b

ack o

f C

CP

S f

rom

NC

I (n

ote

33

)-

--

--

--

--

-(5

67,2

48

)(5

67,2

48

)

Tax o

n b

uy b

ack o

f C

CP

S (

no

te 3

1)-

--

--

-(1

28

,53

8)

--

--

(128

,53

8)

Issu

e o

f sh

are

s to

NC

I (n

ote

33

)-

--

--

--

--

-70

4,7

01

70

4,7

01

CR

R o

n b

uy-b

ack (

no

te 3

2e)

--

--

--

(56

7,2

48

)5

67,2

48

--

--

Ch

an

ge in

fair

valu

e o

f availa

ble

-fo

r-sa

le fi

nan

cia

l in

stru

men

ts (

no

te 3

2c)

--

--

101,773

--

--

--

101,773

Eq

uit

y s

ett

led

sh

are

base

d p

aym

en

ts

(no

te 3

2b

an

d n

ote

38

)-

--

919

,94

6-

--

--

--

919

,94

6

Bala

nce

as

at

31

De

ce

mb

er

20

1472,8

58

,278

16,7

21,6

36

(36

,870

,96

2)

4,0

03

,40

619

5,2

53

4,5

26

15,5

20

,00

35

67,2

48

--

55

,53

2,6

25

128

,53

2,0

13

Pro

fit

for

the y

ear

--

--

--

1,16

2,9

91

--

-(7

82,2

49

)3

80

,74

2

Oth

er

co

mp

reh

en

sive

in

co

me

:

Fo

reig

n c

urr

en

cy t

ran

slati

on

ad

just

men

ts (

no

te 3

2a)

--

(3,5

10,8

58

)-

--

--

--

(3,5

10,8

58

)

Actu

ari

al lo

ss o

n e

mp

loyee b

en

efi

t o

blig

ati

on

s (n

ote

32d

)-

--

--

(28

3,3

09

)-

--

--

(28

3,3

09

)

Issu

e o

f sh

are

warr

an

ts (

no

te 3

2g

)-

--

--

--

--

2,0

38

,96

0-

2,0

38

,96

0

Pu

rch

ase

of

share

s fr

om

no

n-

co

ntr

olli

ng

in

tere

st (

no

te 3

3)

--

--

--

--

--

(2,3

45

,08

5)

(2,3

45

,08

5)

Bu

y b

ack o

f C

CP

S f

rom

NC

I (n

ote

33

)-

--

--

--

--

-(1

,777,8

64

)(1

,777,8

64

)

Tax o

n b

uy b

ack o

f C

CP

S (

no

te 3

1)-

--

--

-(2

53

,976

)-

--

-(2

53

,976

)

Issu

e o

f sh

are

s to

NC

I (n

ote

33

)-

--

--

--

--

-77,5

56

77,5

56

Cre

ati

on

of

deb

en

ture

red

em

pti

on

re

serv

e (

no

te 3

2f)

--

--

--

(5,5

60

,90

6)

-5

,56

0,9

06

--

-

CR

R o

n b

uy-b

ack (

no

te 3

2e)

--

--

--

(1,10

0,7

97)

1,10

0,7

97

--

--

Ch

an

ge in

fair

valu

e o

f availa

ble

-fo

r-sa

le fi

nan

cia

l in

stru

men

ts (

no

te 3

2c)

--

--

35

5,16

7-

--

--

-3

55

,16

7

Eq

uit

y s

ett

led

sh

are

base

d p

aym

en

ts

(no

te 3

2b

an

d n

ote

38

)-

--

74

0,6

34

--

--

--

-74

0,6

34

Bala

nce

as

at

31

De

ce

mb

er

20

157

2,8

58

,27

816

,72

1,6

36

(40

,38

1,8

20

)4

,74

4,0

40

55

0,4

20

(27

8,7

83

)9

,76

7,3

151,

66

8,0

45

5,5

60

,90

62

,03

8,9

60

50

,70

4,9

83

123

,95

3,9

80

Th

e a

cco

mp

an

yin

g n

ote

s fo

rm a

n in

teg

ral p

art

of

these

co

nso

lidate

d fi

nan

cia

l st

ate

men

ts.


Consolidated statement of cash flow for the year ended 31 December 2015

Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Cash flows from operating activities


Adjustments:

Depreciation and amortisation charge 16,403,741 11,363,761

Interest on bank deposits (1,237,561) (873,087)

Finance lease income (421,815) -

Finance costs including other finance costs on refinancing 51,763,055 43,529,399

Loss on derivative financial instruments 220,985 470,015

Gain on disposal of current investments (1,796,093) (644,685)

Profit / (loss) on sale of fixed assets (3,770) 50,533

Equity settled employees benefits 641,188 919,946

Changes in working capital:

Trade receivables and accrued income (94,775) (12,495,840)

Other assets (2,697,290) 1,572,891

Trade and other payables 12,522,231 5,529,064

Cash generated from operating activities 75,761,401 51,695,905

Taxes paid (1,117,253) (1,619,747)

Net cash generated from operating activities 74,644,148 50,076,158

Cash flows from investing activities

Purchase of property, plant and equipment (162,676,708) (98,302,479)

Redemption / (Investment) in mutual funds (net) (31,758,406) 706,262

Acquisition of business, net of cash acquired (314,229) -

Redemption /(Deposits) placed with banks (net) (43,046,142) 2,331,544

Interest income on bank deposits 1,176,577 575,333

Net cash used in investing activities (236,618,908) (94,689,340)

Cash flows from financing activities

Capital contributions from shareholders - 9,364,016

Buy back of non-controlling interest and taxes thereon (2,455,569) (1,263,034)

Proceeds from issue of shares to non-controlling interest 77,556 704,701

Purchase of shares from non-controlling interest (3,378,980) -

Payment under finance lease obligations (895,783) -

Proceeds from borrowings 317,085,724 112,007,516

Proceeds from issue of non-convertible bonds 53,710,035 64,219,712

Repayment of borrowings (128,289,905) (83,627,302)

Interest paid (73,128,253) (59,358,753)

Net cash generated from finance activities 162,724,825 42,046,856

Net increase /(decrease) in cash and cash equivalents 750,065 (2,566,326 )

Cash and cash equivalents at beginning of the year 5,423,092 8,248,924

Effect of exchange rates on cash and cash equivalents (262,371) (259,506)

Cash and cash equivalents at end of the year (note 23) 5,910,786 5,423,092


Overview


Business Review


Notes to the consolidated financial statements for the year ended 31 December 2015

1. General informationMytrah Energy Limited (“MEL” or the “Company”) is a non-cellular company liability limited by shares incorporated

on 13 August 2010 under the Companies (Guernsey) Law, 2008 and is listed on the Alternate Investment Market

(‘AIM’) of the London Stock Exchange. The address of the registered office is Ground Floor, Dorey Court, Admiral

Park, St. Peter Port, Guernsey GY1 2HT. Mytrah Energy Limited has the following subsidiary undertakings, (together

the “Group” or the “Company”), all of which are directly or indirectly held by the Company, for which consolidated

financial statements have been prepared, as set out below:

Subsidiary Country of

incorporation

or residence

Date of

Incorporation

Proportion of ownership interest / voting

power

Activity

31 December 2015 31 December 2014

Bindu Vayu (Mauritius)

Limited (“BVML”)

Mauritius 15 June 2010 100.00 100.00 Investment

company

Mytrah Energy (Singapore)

Pte. Ltd (“MESPL”)

Singapore 16 August 2013 100.00 100.00 Investment

company

Cygnus Capital (Singapore)

Pte. Ltd (“CCSPL”)1

Singapore 19 March 2014 100.00 100.00 Investment

company

Mytrah Energy Capital Pte.

Ltd (“MECPL”)1

Singapore 10 April 2014 100.00 100.00 Investment

company

Mytrah Energy (India)

Limited (“MEIL”)

India 12 November 2009 99.99 99.99 Operating

company

Bindu Vayu Urja Private

Limited (“BVUPL”)

India 5 January 2011 99.99 99.99 Operating

company

Mytrah Vayu Urja Private

Limited (“MVUPL”)

India 24 November 2011 99.99 99.99 Operating

company

Mytrah Vayu (Pennar)

Private Limited (“MVPPL”)

India 21 December 2011 99.99 99.99 Operating

company

Mytrah Vayu (Gujarat)

Private Limited (“MVGPL”)

India 24 December 2011 99.99 99.99 Operating

company

Mytrah Engineering &

Infrastructure Private

Limited (“MEIPL”)

India 29 March 2012 99.99 99.99 Operating

company

Mytrah Engineering Private

Limited (“MEPL”)

India 30 March 2012 99.99 99.99 Operating

company

Mytrah Vayu (Krishna)

Private Limited (“MVKPL”)

India 18 June 2012 99.99 99.99 Operating

company

Mytrah Vayu (Manjira)

Private Limited (“MVMPL”)


company

Mytrah Vayu (Bhima)

Private Limited (“MVBPL”)

India 22 June 2012 99.99 99.99 Investment

company

Mytrah Vayu (Indravati)

Private Limited (“MVIPL”)


company

Mytrah Power (India)

Limited (“MPIL”)

India 12 September 2013 99.99 99.99 Operating

company

Mytrah Vayu (Godavari)

Private Limited (“MVGoPL”)

India 21 February 2014 99.99 99.99 Operating

company

Mytrah Tejas Power Private

Limited (“MTPPL”)

India 22 August 2014 99.99 99.99 Operating

company

Mytrah Vayu (Som) Private

Limited (“MVSPL”)

India 30 March 2015 99.99 - Operating

company

Mytrah Vayu (Tungabhadra)

Private Limited (“MVSPL”)

India 30 March 2015 99.99 - Operating

company

Mytrah Aadhya Power

Private Limited (“MADPPL”)

India 16 July 2015 99.99 - Operating

company


Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)

Subsidiary Country of

incorporation

or residence

Date of

Incorporation

Proportion of ownership interest / voting

power

Activity


Nidhi Wind Farms Private

Limited (“NWFPL”)2

India 16 July 2010 99.99 - Operating

company

Mytrah Aakash Power

Private Limited (“MAKPPL”)

India 09 September 2015 99.99 - Operating

company

1 Wound off against application by the Group to concerned authority subsequent to balance sheet date.2 Acquired by Group on 01 August 2015.

The principal activity of the Group is to operate wind energy farms as a leading independent power producer and

to engage in the sale of energy to the Indian market through the Company’s subsidiaries.

During the previous year, MEIL has entered into an agreement with MVUPL for transfer of its wind power business.

Accordingly, during the current year the assets and liabilities relating to wind power generation business segment

in MEIL are transferred to MVUPL on fulfilment of conditions specified in the agreement.

1. General information (continued)

2. Adoption of new and revised accounting standards and interpretations

2.1 New and amended standards adopted during the year

The Group has adopted the following new standards and amendments, including any consequential amendments

to other standards with date of initial application of 1 January 2015:

Standard or interpretation Effective for reporting periods starting on or after

Defined Benefit Plans: Employee Contributions

(Amendments to IAS 19)

Annual periods beginning on or after 1 January 2015

Annual Improvements to IFRSs 2010–2012 Cycle Annual periods beginning on or after 1 January 2015

Annual Improvements to IFRSs 2011–2013 Cycle Annual periods beginning on or after 1 January 2015

Novation of Derivatives and Continuation of Hedge

Accounting (Amendments to IAS 39)

Annual periods beginning on or after 1 January 2015

Levies Annual period beginning on or after 1 January 2015

Financial Instruments: Presentation- offsetting financials

assets and financial liabilities (amendments to IAS 32)

Annual period beginning on or after 1 January 2015

Based on the Group’s current business model and accounting policies the adoption of these standards or

interpretations did not have a material impact on the consolidated financial statements of the Group.

2.2 New standards and interpretations not yet adopted

At the date of authorisation of these consolidated financial statements, the following standards and interpretations,

have not been applied in these financial statements, were in issue but not yet effective (and in some cases had not

yet been endorsed by the EU). The Group is in the process of evaluating the impact of the following new standard

on its consolidated financial statements.

IFRS 9- Financial instruments

IFRS 9, published in July 2014, replaces the existing guidance in IAS 39 Financial Instruments: Recognition and

Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instruments,

including a new expected credit loss model for calculating impairment on financial assets, and the new general

hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial

instruments from IAS 39. IFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018, with

early adoption period.

IFRS 15, Revenue from Contracts with Customers

IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is

Overview


Business Review



recognised. It replaces existing revenue recognition guidance, including IAS 18 Revenue, IAS 11 Construction

Contracts and IFRIC 13 Customer loyalty Programmes. IFRS 15 is effective for annual reporting periods beginning

on or after 1 January 2018, with early adoption permitted.

Further, the following new or amended standards are not expected to have a significant impact on the Group’s

consolidated financial statements:

• IFRS14: Regulatory deferral accounts.

• Accounting for acquisitions of interest in Joint Operations (amendments to IFRS 11)

• Clarification of acceptable methods of depreciation and amortisation (amendments to IAS 16 and IAS 38)

• Defined benefit plans: Employee contributions (Amendments to IAS 19)

2. Adoption of new and revised accounting standards and interpretations (continued)

2.2 New standards and interpretations not yet adopted (continued)

3. Significant accounting policiesThe Group accounting policies are summarised below:

3.1 Basis of accounting

These financial statements comprise of consolidated statement of financial position, consolidated income

statement, consolidated statement of other comprehensive income, consolidated statement of changes in equity,

consolidated statement of cash flows, significant accounting policies and notes to accounts (together referred as

“consolidated financial statements”).

These consolidated financial statements have been prepared in accordance with International Financial Reporting

Standard and its interpretations as adopted by the European Union (EU) (‘IFRS’).

The consolidated financial statements have been prepared on the historical cost basis, except for the following

material items in the statement of financial position. Historical cost is generally based on the fair value of the

consideration given in exchange for assets.

a) Derivative financial instruments are measured at fair value.

b) Available-for-sale financial assets are measured at fair value.

c) Long term borrowings, except obligations under finance leases which are measured at amortised cost using

the effective interest rate method.

d) Share based payment expenses are measured at fair value.

e) Net employee benefit (asset) / liability that is measured based on actuarial valuation.

The Directors have taken advantage of the exemption offered by Section 244 (5) of the Companies (Guernsey)

Law, 2008 from preparation of standalone financial statements of the Company as the Company is preparing and

presenting consolidated financial statements for the financial year ended 31 December 2015.

The accounting policies set out below have been applied consistently to all years presented in the these

consolidated financial statements, except the change in presentation of analysis of expenses in income statement

as explained in note 3.17.

3.2 Consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled

by the Company (its subsidiaries) up to 31 December each year. Control is achieved where the Company has

the power to govern the financial and operating policies of an investee entity so as to obtain benefits from

its activities. All intra-group transactions, balances, income and expenses are eliminated on consolidation. The

financial statements of subsidiaries are included in the consolidated financial statements from the date on which

control commences until the date on which control is ceased.

Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. The interests

of non-controlling shareholders may be initially measured either at fair value or at the non-controlling interests’

proportionate share of the fair value of the acquiree’s identifiable net assets. The choice of measurement basis is

made on an acquisition by acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling



3. Significant accounting policies (continued)

3.2 Consolidation (continued)

interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of

subsequent changes in equity.

3.3 Going concern

The Directors have considered the financial position of the Group, its cash position and forecast cash flows

for the 18 months period from the date of these consolidated financial statements. The Directors have, at the

time of approving the consolidated financial statements, a reasonable expectation that the Group has adequate

resources to continue its operational existence for a foreseeable future. Thus they continue to adopt the going

concern basis of accounting in preparing these consolidated financial statements. Further details are contained

in the Directors Report.

3.4 Foreign currencies

The consolidated financial statements are presented in USD, which is the presentational currency of the Company,

as the financial statements will be used by international investors and other stakeholders as the Company’s shares

are listed on AIM. The functional currency of the parent company is Pound Sterling (“GBP”).

In preparing the financial statements of each individual group entity, transactions in currencies other than the

entity’s functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates

of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are

retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in

foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-

monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences on monetary items are recognised in income statement in the period. For the purposes

of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are

translated into US dollars (USD) using exchange rates prevailing at the end of each reporting period. Income

and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate

significantly during that period, in which case the exchange rates at the dates of the transactions are used.

Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity.

The functional currency of all the above subsidiaries is Indian Rupee (INR), except for BVML, MESPL, MECPL and

CCSPL which are determined as USD. These financial statements are presented in US dollars (USD).

The following exchange rates were used to translate the INR financial information into USD:


Closing rate 66.1261 63.5901

Average rate for the year 64.0387 60.8917

The following exchange rates were used to translate the GBP financial information into USD:


Closing rate 1.4802 1.5532

Average rate for the year 1.5283 1.6476

3.5 Revenue recognition

Revenue is recognised when it is probable that future economic benefits will flow to the group and these benefits

can be measured reliably.

Sale of electricity

Revenue from the sale of electricity is recognised when earned on the basis of contractual arrangements and

reflects the number of units supplied in accordance with joint meter readings undertaken on a monthly basis by

representatives of the buyer and the Group at rates stated in the contract or as applicable, net of any actual or

expected trade discounts.

Generation-based incentives

Revenue from generation-based incentives are recognised based on the number of units supplied, when

Overview


Business Review



registration under the relevant programme has taken place or if the eligibility criteria is met under the Indian

Renewable Energy Development Agency Limited - Generation Based Incentive scheme.

Sale of Renewable Energy Certificates (RECs)

Revenue from sale of RECs is recognised after registration of the project with central and state government

authorities, generation of power and execution of a contract for sale through recognised exchanges in India.

Sale of Verified Carbon Units (VCUs) and Certified Emission Reductions (CERs)

Revenue from sale of VCUs/CERs is recognised after registration of the project with United Nations Framework

Convention on Climate Change (UNFCCC), generation of emission reductions, execution of a firm contract of sale

and billing to the customers.

Interest income

Interest income is recognised as it accrues using the effective interest rate method.

3.6 Financial instruments

Financial instruments

Financial assets and financial liabilities are recognised in the consolidated statement of financial position when the

Group becomes a party to the contractual provisions of the instrument.

Non-derivative financial assets

All financial assets are recognised and derecognised on trade date where the purchase or sale of a financial asset

is under a contract whose terms require delivery of the financial asset within the timeframe established by the

market concerned, and are initially measured at fair value, plus transaction costs.

Financial assets within the scope of IAS 39 are classified into the following specified categories as:

• Loans and receivables

• Financial assets at fair value through profit or loss

• Available-for-sale financial assets

• Held-to-maturity investments

The classification depends on the nature and purpose of the financial assets and is determined at the time of initial

recognition. Financial assets are categorised as current assets if they are expected to be settled within 12 months

otherwise they are classified as non-current.

Effective interest rate method

The effective interest rate method is a method of calculating the amortised cost of a financial asset held at

amortised cost and of allocating interest income over the relevant period. The effective interest rate is the rate

that exactly discounts estimated future cash receipts (including all fees on points paid or received that form

an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the

expected life of the debt instrument, or (where appropriate) a shorter period, to the net carrying amount on initial

recognition.

Loans and receivables (including cash and bank balances)

Cash and bank balances and trade and other receivables that have fixed or determinable payments that are not

quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are initially recognised

at fair value plus any directly attributable costs. Subsequent to initial recognition they are measured at amortised

cost using the effective interest method, less any impairment.

Cash and bank balances comprise cash in hand and cash at bank and deposits. Cash equivalents are short-

term, highly liquid investments that are readily convertible to known amounts of cash, which are subject to an

insignificant risk of change in value. Deposits with banks and financial institutions maturing after 12 months from

the date of balance sheet have been classified under non-current assets as ‘other investments’.


3.5 Revenue recognition (continued)



Financial assets at fair value through profit and loss

Financial assets at fair value through profit or loss include financial assets that are held for trading or are designated

by the entity to be carried at fair value through profit or loss upon initial recognition. Financial assets at fair value

through consolidated profit and loss are carried in the statement of financial position at fair value with gains or

losses recognised in the income statement. Directly attributable costs are recognised in profit and loss as incurred.

Available-for-sale financial assets (“AFS”)

Investments in mutual funds held by the Group that are traded in an active market are classified as being AFS and

are stated at fair value plus any attributable transaction costs. Subsequent to initial recognition they are measured

at fair value with changes in fair value being recognised in other comprehensive income and accumulated in fair

value reserve with the exception of impairment losses, interest calculated using the effective interest method and

foreign exchange gains and losses on monetary assets, which are recognised directly in the income statement.

Held-to-maturity investments (“HTM”)

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and

fixed maturity. Investments are classified as held-to-maturity if it is the positive intention and ability of Group’s

management to hold them until maturity. Held-to-maturity investments are subsequently measured at amortised

cost using the effective interest method. Gains and losses are recognised in the consolidated statement of

comprehensive income when the investments are derecognised or impaired, as well as through the amortisation

process.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are

considered to be impaired when there is objective evidence that, as a result of one or more events that occurred

after the initial recognition of the financial asset, the estimated future cash flows of the investment have been

affected.

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference

between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the

financial asset’s original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets

with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance

account. When a trade receivable is considered uncollectible, it is written off against the allowance account.

Subsequent recoveries of amounts previously written off are credited. Changes in the carrying amount of the

allowance account are recognised in the consolidated income statement.

Impairment of available-for-sale

Impairment losses on available-for-sale financial assets are recognised by classifying the losses accumulated

in the fair value reserve to profit or loss. The amount reclassified is the difference between the acquisition cost

(net of any principal repayment and amortisation) and the current fair value, less any impairment loss previously

recognised in profit or loss. If the fair value of an impaired available-for-sale debt security subsequently increases

and the increase can be related objectively to an event occurring after the impairment loss was recognised, then

the impairment loss is reversed through profit or loss, otherwise, it is reversed through OCI.

Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset

expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset

to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership

and continues to control the transferred asset, the Group recognises its retained interest in the asset and an

associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of

ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises

a collateralised borrowing for the proceeds received.


3.6 Financial instruments (continued)

Overview


Business Review



Non-derivative financial liabilities

Non-derivative financial liabilities are initially recognised at fair value less any directly attributable costs. Subsequent

to initial recognition, these liabilities are measured at amortised cost using effective interest method.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting

all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct

issue costs.

Compound instruments

The component parts of compound instruments issued by the Group are classified separately as financial liabilities

and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value

of the liability component is estimated using the prevailing market interest rate for a similar non-convertible

instrument. Subsequent to initial recognition the liability component of compound financial instrument is measured

at amortised using effective interest method. The equity component is determined by deducting the amount

of the liability component from the fair value of the compound instrument as a whole. This is recognised and

included in equity, net of income tax effects, and is not subsequently remeasured.

Financial liabilities

Financial liabilities are initially measured at fair value, net of transaction costs and subsequently measured at

amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating

interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated

future cash payments (including all fees on points paid or received that form an integral part of the effective

interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability,

or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled

or they expire.

Embedded derivatives

Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives

when their risks and characteristics are not closely related to those of the host contracts and the host contracts

are not measured at fair value through profit and loss.

An embedded derivative is presented as a non-current asset or a non-current liability if the remaining maturity of

the hybrid instrument to which the embedded derivative relates is more than 12 months and is not expected to be

realised or settled within 12 months.

The Company has taken an accounting policy choice in accordance with IAS 32 and IAS 39 wherein the Company

writes options that give non-controlling shareholders right to put subsidiary’s shares to the Company in exchange

for a variable number of Company’s shares and the Company has an option to settle in cash when the non-

controlling shareholders exercise the options. Accordingly the compulsorily convertible preference shares held by

the non-controlling interest (NCI) shareholders are classified as equity and the related put options are accounted

for as a derivative liabilities under IAS 39 at fair value with changes therein recognised in profit and loss.

3.7 Property, plant and equipment

Recognition and measurement

Property, plant and equipment are recognised as assets in the statement of financial position if it is probable that

the Group will derive future economic benefits from them and the cost of the asset can be reliably estimated.

Items of property, plant and equipment are stated at cost less accumulated depreciation and any provision for

impairment. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of


3.6 Financial instruments (continued)



self-constructed assets includes the cost of materials, direct labour and any other costs directly attributable to

bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items

and restoring the site on which they are located. Advances paid in respect of work that is yet to be executed is

classified as a capital advance within other non-current assets in the consolidated statement of financial position.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as

separate items (major components) of property, plant and equipment.

The cost of replacing part of an item of plant and equipment is recognised in the carrying amount of an item if it

is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be

measured reliably. The cost of the day-to-day servicing of plant and equipment are recognised in the consolidated

income statement as incurred.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the

proceeds from disposal with the carrying amount of property, plant and equipment and are recognised in the

consolidated income statement.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction and production of qualifying assets are

capitalised as part of the costs of those assets. Qualifying assets are those that take a substantial period of time

to prepare for their intended use. Capitalisation of borrowing costs continues up to the date when the assets are

substantially ready for their use.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on

qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are expensed in the period in which they are incurred.

Depreciation

Depreciation is provided to write off the cost of property, plant and equipment over their estimated useful lives

after taking into account their estimated residual value, using the straight-line method as stated below:

Furniture and fittings 5 years

Office equipment 4-5 years

Computers 4 years

Vehicles 5 years

Plant and machinery 5-50 years

Buildings 20 years

Lease acquisition costs, leasehold improvements and leased assets are depreciated over the primary period of the

lease or estimated useful lives of the assets, whichever is less. Assets under construction are not depreciated, as

they are not available for use.

The depreciation methods, useful lives and residual value, are reviewed at each reporting date and adjusted

prospectively if appropriate.

Further, the Group has adopted component accounting of depreciation for the plant and machinery class of the

property, plant and equipment and accordingly adopted the following useful lives for each of the components:

Component of plant and machinery Useful life (in years)

Nacelles 25

Blades 30

Towers 50

Transformers 25

Erection and commissioning 25

Civil works, electrical lines and evacuation facilities 50


3.7 Property, plant and equipment (continued)

Overview


Business Review



Impairment

At each reporting date, management reviews the carrying amounts of its tangible assets to determine whether

there is any indication that those assets have suffered an impairment loss. If the recoverable amount of an asset

is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable

amount. An impairment loss is recognised as an expense immediately. The recoverable amount of an asset is the

greater of its value in use and fair value less cost to sell. Value in use is based on the estimated future cash flows,

discounted to their present value using a pre-tax discount rate that reflects current market assessments of the

time value of money and risks specific to the asset.

3.8 Intangible assets

Intangible assets that are acquired by the Group and have finite useful lives are measured at costs less accumulated

amortisation and accumulated impairment losses. Intangibles are amortised over its useful life using straight line

method as stated below:

Application software 4 years

ERP software license 4 years

Amortisation method, useful lives and residual values are reviewed at each reporting date and adjusted


3.9 Taxation

Income tax expense represents the sum of current tax and deferred tax.

Current tax

Current tax is the expected tax payable on the taxable income for the year, using the rates enacted or substantially

enacted at the reporting date and any adjustments (if any) to the tax payable in respect of previous year. Taxable

profit differs from profit as reported in the consolidated income statement because it excludes items of income or

expense that are taxable or deductible in future years and it further excludes items that are permanently exempt

from tax or allowable as a tax deduction.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts

of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of

the taxable profit, and is accounted for using the balance sheet approach. Deferred tax liabilities are generally

recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is

probable that taxable profits will be available against which deductible temporary differences can be utilised.

Such assets and liabilities are not recognised if the temporary differences arise from the initial recognition of

goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a

transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent

that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be

recovered.

Any deferred tax asset or liability arising from deductible or taxable temporary differences in respect of unrealised

inter-company profits are recognised using the tax rate enacted or substantially enacted of the jurisdiction in

which the Company owns the assets.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled

or the asset is realised on tax laws and rates that have been enacted at the balance sheet date. Deferred tax

is charged in the consolidated income statement, except when it relates to items charged or credited in other

comprehensive income, in which case the deferred tax is also recognised with in other comprehensive income.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets

against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the

Group intends to settle its current tax assets and liabilities on a net basis.


3.7 Property, plant and equipment (continued)



3.10 Leases

Determining whether an arrangement contains a lease

At inception of an arrangement, the Group determines whether the arrangement is or contains a lease. At

inception or on re-assessment of an arrangement that contains a lease, the Group separates the payment and

other consideration required by the arrangement into those for the lease and those for other elements on the

basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate

the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the

underlying asset. Subsequently, the liability is reduced as the payments are made and an imputed finance cost on

the liability is recognised using the Group’s incremental borrowing rate.

Leased Assets

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and

rewards incident to the ownership. The leased assets are measured initially at an amount equal to the lower of

their fair value and present value of minimum lease payments. All other leases are classified as operating leases.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where

another systematic basis is more representative of the time pattern in which economic benefits from the leased

asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period

in which they are incurred. Land taken on lease basis from the suppliers of wind turbine generators is amortised

over the period ranging upto 20 years.

3.11 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation, as a result of past

events, and it is probable that an outflow of resources that can be reliably estimated will be required to settle

such an obligation. If the effect of the time value of money is material, provisions are determined by discounting

the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects

current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Unwinding of the discount is recognised in the consolidated income statement as a finance cost. Provisions are

reviewed at each balance sheet date and are adjusted to reflect the current best estimate.

A contingent liability is disclosed where the existence of an obligation will only be confirmed by one or more

future events or where the amount of the obligation cannot be measured reliably. Contingent assets are not

recognised, but are disclosed where an inflow of economic benefits is probable.

A provision for onerous contracts, if any, is measured at the present value of the lower of the expected cost

of terminating the contract and the expected net cost of continuing with the contract. Before a provision is

established, the Group recognises any impairment loss on the assets associated with that contract.

3.12 Employee benefits

Short term employee benefits

Short term employee benefits are expensed as the related services are provided. A liability is recognised for the

amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a

result of past service provided by the employee and the obligation can be estimated reliably.

Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

Defined benefit plans

The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating

the amount of future benefit that employees have earned in the current and prior periods, discounting that

amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit

credit method. When the calculation results in a potential asset for the Group, the recognised asset is limited to

the present value of economic benefits available in the form of any future refunds from the plan or reductions in


Overview


Business Review



future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any

applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on

plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised

immediately in other comprehensive income (OCI). The Group determines the net interest expense (income) on

the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined

benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking

into account any changes in the net defined benefit liability (asset) during the period as a result of contributions

and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised

in consolidated income statement.

3.13 Share-based payments

Equity-settled share-based payments to employees, directors and key management personnel are measured

at the fair value of the equity instruments at the grant date with a corresponding increase in the equity over

the vesting period, based on the Group’s estimate of equity instruments that will eventually vest. The fair value

excludes the effect of non-market-based vesting conditions.

At each balance sheet date, the Group revises its estimate of the number of equity instruments expected to

vest as a result of the effect of non-market-based vesting conditions. The impact of the revision of the original

estimates, if any, is recognised in the income statement such that the cumulative expense reflects the revised

estimate, with a corresponding adjustment to equity reserves.

Share options granted to employees are treated as cancelled as and when employees cease to contribute to the

scheme. This results in accelerated recognition of the expenses that would have arisen over the remainder of the

original vesting period.

3.14 Earnings per share

The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is

calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted

average number of ordinary shares outstanding during the year. Diluted EPS is determined by adjusting the profit

or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding

for the effects of all dilutive potential ordinary shares, which includes all stock options granted to employees and

Directors, CCPS, CCDs and share warrants issued to investors and lenders.

3.15 Government grants

The Group recognises government grants only when there is reasonable assurance that the conditions attached

to them will be complied with, and the grants will be received. Government grants received in relation to assets

are presented as a reduction to the carrying amount of the related asset. Grants related to income are recognised

as a credit to the consolidated income statement.

3.16 Finance income and expense

Finance income consists of interest income on funds invested (including available-for-sale financial assets),

dividend income and gains on the disposal of available-for-sale financial assets. Interest income is recognised as it

accrues in the consolidated income statement, using the effective interest method. Dividend income is recognised

in the consolidated income statement on the date that the Company’s right to receive payment is established. The

associated cash flows are classified as investing activities in the statement of cash flows.

Finance expenses consist of interest expense on borrowings. Borrowing costs are recognised in the consolidated

income statement using the effective interest method. The associated cash flows are classified as financing

activities in the statement of cash flows.

Foreign currency gains and losses are reported on a net basis with in finance income and expense.


3.12 Employee benefits (continued)



3.17 Change in presentation and analysis of expenses in the income statement

During the year, the Group has changed the presentation analysis expenses from function to nature by including

‘Earnings before interest, tax, depreciation and amortisation’ (EBITDA) as a separate line item in the income

statement to provide more reliable and more relevant information to the users of financial statements. Management

believes that disclosure of expenses by nature is meaningful measure for investors because it provides an analysis

of our operating results, ability to service debt and performance of the Company. Further EBITDA is considered

by chief operating decision makers to track business evolution, establish operational and strategic targets and

make important business decisions. The Company measures EBIDTA on the basis of profit/(loss) from operations.

For EBITDA measurement, the Company has not included the depreciation and amortisation expenses, finance

cost, tax expense and other income.

Presentation of consolidated income statement under previous year format and comparatives:

Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Revenue 74,719,666 69,554,186

Cost of revenue (18,236,434) (12,204,117)

Gross Profit 56,483,232 57,350,069

Other operating income 881,589 368,022

Administrative expenses (8,487,644) (12,962,541)

Operating profit 48,877,177 44,755,550

Finance income 3,347,383 1,047,757

Finance costs (51,221,870) (42,923,651)

Other finance costs on refinancing (541,185) (605,748)

Net finance cost (48,415,672) (42,481,642)


(Loss) / profit for the year has been arrived at after charging:

Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Amortisation of intangible assets

- included in administrative expenses 200,059 196,294

Depreciation of property, plant and equipment

- included in cost of revenue 15,671,822 10,902,101

- included in administrative expenses 531,860 265,366

Employee costs

- included in administrative expenses 3,039,713 4,449,186

Other expenses

- included in cost of revenue 2,564,612 1,302,016

- included in administrative expenses 4,716,012 8,051,695


4. Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group’s accounting policies, which are described in note 3, the Directors are required to

make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not

readily apparent from other sources. The estimates and associated assumptions are based on historical experience

and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates

are recognised in the period in which the estimate is revised if the revision affects only that period or in the period

of the revision and future periods if the revision affects both current and future periods.

Overview


Business Review



4. Critical accounting judgements and key sources of estimation uncertainty (continued)

Critical judgements and estimates in applying the Group’s accounting policies

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying

amounts of assets and liabilities within the next financial year are discussed below.

a) Useful life of depreciable assets

Management reviews the useful lives of depreciable assets at each reporting date, based on the expected

utility of the assets to the Group and any change in useful lives and methods of depreciation are adjusted


b) Classification of financial instruments as equity or liability

Significant judgement is required to apply the rules under IAS 32, Financial Instruments: Presentation and

IAS 39: Financial Instruments: Recognition and Measurement to assess whether an instrument is equity or a

financial liability. Management has exercised significant judgement to evaluate the terms and conditions of

certain financial instruments with reference to the applicability of contingent settlement provisions, evaluation

of whether options under the contract will be derivative or a non-derivative, assessing if certain settlement

terms are within the control of the Company and if not whether the occurrence of these events are extremely

rare, highly abnormal and very unlikely, clarifications between the parties to the agreement subsequent to the

date of the agreement to conclude that the instruments be classified as an equity instrument.

c) Deferred tax assets

The assessment of the probability of future taxable income in which deferred tax assets can be utilised is

based on the Group’s latest approved budget forecast, which is adjusted for significant non-taxable income

and expenses and specific limits to the use of any unused tax loss or credit. The tax rules in India in which the

Group operates are also carefully taken into consideration. If a positive forecast of taxable income indicates

the probable use of a deferred tax asset, especially when it can be utilised without a time limit, that deferred

tax asset is usually recognised in full. The recognition of deferred tax assets that are subject to certain legal

or economic limits or uncertainties is assessed individually by management based on the specific facts and

circumstances.

d) Recoverability of trade receivables

The Group analyses the historical payment patterns of customers, customer concentrations, customer

creditworthiness and current economic trends on an ongoing basis. If the financial condition of a customer

deteriorates, additional provision is made in the accounts.

e) Determination if the arrangement meets the definition of a service concession under IFRIC 12 Service Concession

Arrangements

Management has assessed applicability of IFRIC 12: Service Concession Arrangements for certain arrangements.

In assessing the applicability, management has exercised significant judgement in relation to the underlying

ownership of the assets, the ability to enter into power purchase arrangements with any customer and ability

to determine prices and concluded that the arrangements do not meet the criteria for service concession

arrangements.

f) Measurement of fair value

The Group has an established control framework with respect to the measurement of fair values. This includes

a valuation team that has overall responsibility for overseeing all significant fair value measurements, including

Level 3 fair values, and reports directly to the CFO.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party

information, such as broker quotes or pricing services, is used to measure fair values, then the valuation

team assesses the evidence obtained from third parties to support the conclusion that such valuation meets

the requirements of IFRS, including the level in the fair value hierarchy in which such valuations should be

classified.

Significant valuation issues are reported to the Group Audit Committee.

When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the

valuation techniques as follows:



• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability,

either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3: Inputs for the asset or liability that is not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of asset or liability might be categorised in different levels of the

fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair

value hierarchy as the lowest level input that is significant to the entire measurement.

4. Critical accounting judgements and key sources of estimation uncertainty (continued)

5. Segment information

IFRS 8 establishes standards for the way to report information on operating segments and related disclosures

about products and services, geographic areas, and major customers. The Group operations predominantly relate

to generation and sale of electricity. The chief operating decision maker evaluates the Group’s performance and

allocates resources based on an analysis of various performance indicators at operational unit level. Accordingly

there is only a single operating segment “generation and sale of electricity”. Consequently no segment disclosures

of the Group are presented.

The Group has all of its non-current assets located within India and earn its revenues from customers located in

India.

6. RevenueThe Group’s revenue from continuing operations is as follows:

Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Sale of electricity 67,665,168 62,971,005

Generation based incentive 6,374,688 6,130,994

Sale of renewable energy certificates 679,810 410,270

Sale of verified carbon units - 41,917

Total revenue 74,719,666 69,554,186

Finance income (note 10) 3,347,383 1,047,757

Other operating income 881,589 368,022

Total income 78,948,638 70,969,965

Generation based incentives are recognised on fulfilment of eligibility criteria prescribed under Indian Renewable

Energy Development Agency Limited - Generation Based Incentive Scheme.

Other operating income recognised during the year represents liquidated damages claimed from project suppliers

in relation to low machine availability as against the guaranteed machine availability.

7. Employee benefits expense

Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Salaries and bonus1 2,241,999 3,436,443

Contribution to provident fund 32,150 38,405

Staff welfare 58,039 46,427

Gratuity and leave encashment (note 28) 66,337 7,965

Share based payments (note 38) 641,188 919,946

Total 3,039,713 4,449,186

1 Includes costs relating to one-off bonus expense of USD Nil (31 December 2014: USD 1,262,650) attributable to

successful financing transaction.

Overview


Business Review



8. Other operating expenses include costs relating to write-off of doubtful advances USD Nil (31 December 2014:

USD 2,154,881), provision for trade receivables USD 225,991 (31 December 2014: USD Nil), transaction costs of

USD Nil (31 December 2014: USD 2,990,977) incurred in relation to raising of long-term finance, un-eliminated

indirect tax cost of USD 275,112 (31 December 2014: USD 902,779) on inter-group transactions.

9. Auditor’s remunerationThe auditor’s remuneration is as follows:

Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Fees payable to the auditors of Company and its subsidiaries for :

Audit of the Company’s annual accounts 84,057 80,732

Audit of the Company’s subsidiaries pursuant to legislation 83,690 64,455

Total audit fees 167,747 145,187

Review of Company’s interim accounts 31,330 29,657

Review of the Company’s subsidiaries interim accounts pursuant to

legislation

30,396 -

Non-audit related assurance services - 255,410

Total non-audit fees 61,726 285,067

10. Finance income

Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Interest on bank deposits 1,237,561 873,087

Loss on derivative instruments within CCDs (88,384) (317,613)

Loss on derivative instruments within CCPS (132,601) (152,402)

Finance income on security deposits 421,815 -

Gain on disposal of current investments 1,796,093 644,685

Others 112,899 -

Total finance income 3,347,383 1,047,757

11. Finance costs

Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Interest on borrowings (70,987,900) (54,744,911)

Other borrowing costs2 (4,398,853) (4,313,211)

Interest on liability portion of CCPS (519,611) (546,465)

Total interest expense (75,906,364) (59,604,587)

Less: amounts included in the cost of qualifying assets1 (note 16) 24,684,494 16,680,936

Total finance cost recognised in the income statement (51,221,870) (42,923,651)

1 Amounts included in the cost of qualifying assets during the year represent interest on project specific as well as

general borrowings which are sanctioned for the purpose of construction of a qualifying assets and it represents

the actual finance costs incurred on those borrowings, calculated using the effective interest rate method.

2 Includes finance cost on finance lease obligations USD 1,272,277 (31 December 2014: USD Nil).



13. Taxation

Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Current tax charge (5,560,396) (520,441)

Deferred tax charge (note 19) 5,479,633 122,507

Income tax expense (80,763) (397,934)

The Company is exempt from Guernsey income tax under the Income Tax (Exempt bodies) (Guernsey) Ordinance,

1989 and is subject to an annual fee of USD 962. As such, the Company’s tax liability is zero. However considering

that the Company’s operations are entirely based in India, the effective tax rate of the Group of 34.61% (31

December 2014:33.99%) has been computed based on the current tax rates prevailing in India

Indian companies are subject to corporate income tax or Minimum Alternate Tax (“MAT”). If MAT is greater than

corporate income tax then MAT is levied. The Company has recognised MAT of USD 5,560,396 (31 December

2014: USD 803,932) as MAT is greater than corporate income tax for the current year. The tax expense represents

current tax charge and non-cash net deferred tax liability on timing differences accounted during the year.

12. Other finance costs on refinancing

Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Loan refinancing costs (541,185) (605,748)

Total (541,185) (605,748)

Loan refinancing costs represents the cost of prepayment and unamortised transaction costs incurred upon

refinancing the existing senior term loans.

The prima-facie tax expense for the year is reconciled to the tax expense recognised in consolidated income

statement as follows:

Year ended

31 December 2015

Year ended

31 December 2014

USD USD


Enacted tax rates 34.61% 33.99%

Expected tax expense (159,727) (772,901)

Effect of:

Income not offered to tax - 125,091

Other permanent differences 2,100,705 249,876

MAT charge (5,560,396) (803,932)

MAT deferred tax credit 3,538,655 803,932

Income tax expense recognised in the consolidated income statement (80,763) (397,934)

Tax assets / liabilities recognised in the consolidated statement of financial position:

As at

31 December 2015

As at

31 December 2014

USD USD

Current tax assets - 1,457,032

Current tax liabilities 3,176,482 285,746

Overview


Business Review



14. Earnings per shareBasic earnings per share is calculated by dividing profit attributable to ordinary shareholders of the Company by

the weighted average number of ordinary shares outstanding during the year.

Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Basic and Diluted:

a) Profit attributable to the equity holders of the Company 1,162,991 1,875,974

b) Weighted average number of ordinary shares (basic) 163,636,000 163,636,000

Add: Effect of weighted average number of share options

outstanding

- 201,050

c) Weighted average number of ordinary shares (diluted) 163,636,000 163,837,050

Basic earnings per share 0.00711 0.01146

Diluted earnings per share 0.00711 0.01145

At 31 December 2015, 46,545,082 potential ordinary shares (includes CCPS, share options and share warrants)

(31 December 2014: 29,450,597) were excluded from the diluted weighted average number of shares calculation

because their effect would have been anti-dilutive.

The average market value of the Company’s shares for the purpose of calculating the dilutive effect of share options

was based on quoted market prices for the year during which the shares and share options were outstanding.

15. Intangible assets Application software

As at

31 December 2015

As at

31 December 2014

USD USD

Cost

Balance at the beginning of the year 788,727 750,444

Additions during the year 75,900 62,357

Exchange differences (32,644) (24,074)

Closing balance 831,983 788,727

Amortisation

Balance at the beginning of the year 460,658 280,709

Charge for the year 200,059 196,294

Exchange differences (23,982) (16,345)


Carrying amount


Opening balance 328,069 469,735

84 Mytrah Energy Limited Annual Report 2015N

ote

s to

th

e c

on

solid

ate

d fi

nan

cia

l st

ate

me

nts

for

the y

ear

en

ded

31

Decem

ber

20

15 (

co

nti

nu

ed

)

16. P

rop

ert

y, p

lan

t an

d e

qu

ipm

en

tF

urn

itu

re a

nd

fitt

ing

s

Offi

ce

eq

uip

ment

Land

and

build

ing

s

Pla

nt

and

Machin

ery

Co

mp

ute

rsV

ehic

les

Lease

ho

ld

imp

rovem

ents

Ass

ets

und

er

finance le

ase

2

Win

d f

arm

ass

ets

und

er

co

urs

e o

f

co

nst

ructi

on

To

tal

US

DU

SD

US

DU

SD

US

DU

SD

US

DU

SD

US

DU

SD

Op

en

ing

co

st a

s at

1 Jan

uary

20

1414

0,2

97

145

,84

72,0

37,4

1829

1,76

6,4

67

25

5,6

97

45

8,6

77

20

5,2

04

-16

7,5

66

,86

84

62,5

76

,475

Ad

dit

ion

s-

38

97,4

79

--

170

,59

018

,03

96

,35

6,2

56

84

,53

3,9

31

91,0

86

,68

4

Dis

po

sals

(2,6

95

)-

-(1

41,5

83

)-

(62,7

73

)(1

,829

)-

-(2

08

,88

0)

Tra

nsf

er

in /

(o

ut)

--

-227,14

5,6

04

--

--

(227,14

5,6

04

)-

Exch

an

ge d

iffe

ren

ce

(3,8

91)

(4,0

27)

(51,10

5)

(17,9

70

,43

2)

(7,8

05

)(1

7,6

71)

(6,5

48

)(2

69

,723

)1,4

13,0

77

(16

,918

,125

)

Bala

nce

as

at

31

De

ce

mb

er

20

1413

3,7

1114

2,2

09

1,9

93

,79

25

00

,80

0,0

56

24

7,8

92

54

8,8

23

214

,86

66

,08

6,5

33

26

,36

8,2

72

53

6,5

36

,15

4

Accu

mu

late

d d

ep

recia

tio

n

as

at

1 Jan

uary

20

14

51,11

25

4,7

09

63

,74

215

,214

,40

912

7,8

48

164

,372

71,3

95

--

15,7

47,5

87

Ad

just

men

t fo

r d

isp

osa

ls(1

,40

9)

--

(56

,78

9)

-(3

2,3

17)

(321)

--

(90

,83

6)

Dep

recia

tio

n /

am

ort

isati

on

ch

arg

e26

,26

329

,112

29

,65

311

,270

,89

16

0,6

46

95

,129

24

,56

417

5,9

86

-11

,712

,24

4

Exch

an

ge d

iffe

ren

ce

(2,5

14)

(2,7

97)

(3,0

78

)(9

10,2

82)

(6,2

24

)(7

,35

9)

(3,0

66

)(7

,46

8)

-(9

42,7

88

)

Bala

nce

as

at

31

De

ce

mb

er

20

1473

,45

28

1,0

24

90

,317

25

,518

,229

182,2

70

219

,825

92,5

72

168

,518

-26

,426

,20

7

Ne

t valu

e a

s at

31

De

ce

mb

er

20

146

0,2

59

61,18

51,9

03

,475

475

,28

1,8

27

65

,622

328

,99

812

2,2

94

5,9

18,0

1526

,36

8,2

72

510

,10

9,9

47

Op

en

ing

co

st a

s at

1 Jan

uary

20

1513

3,7

1114

2,2

09

1,9

93

,79

25

00

,80

0,0

56

24

7,8

92

54

8,8

23

214

,86

66

,08

6,5

33

26

,36

8,2

72

53

6,5

36

,15

4

Ad

dit

ion

s21,9

89

145

,28

2-

-76

,816

65

,110

73

,914

28

,079

,28

828

6,0

39

,20

43

14,5

01,6

03

Dis

po

sals

(83

9)

(23

4)

--

(5,9

21)

(49

,09

9)

--

-(5

6,0

93

)

Tra

nsf

er

in /

(o

ut)

--

2,2

20

,74

85

4,16

8,8

98

--

--

(56

,38

9,6

46

)-

Exch

an

ge d

iffe

ren

ce

(5,7

96

)(1

0,0

33

)(1

46

,56

6)

(20

,916

,114

)(1

2,14

5)

(21,5

53

)(1

0,5

73

)(5

34

,64

8)

(7,9

84

,279

)(2

9,6

41,70

7)

Bala

nce

as

at

31

De

ce

mb

er

20

1514

9,0

65

27

7,2

24

4,0

67

,97

45

34

,05

2,8

40

30

6,6

42

54

3,2

81

27

8,2

07

33

,63

1,17

32

48

,03

3,5

51

82

1,3

39

,95

7

Accu

mu

late

d d

ep

recia

tio

n

as

at

1 Jan

uary

20

15

73

,45

28

1,0

24

90

,317

25

,518

,229

182,2

70

219

,825

92,5

72

168

,518

-26

,426

,20

7

Ad

just

men

t fo

r d

isp

osa

ls(8

39

)(2

25

)-

-(5

,80

3)

(31,3

23

)-

--

(38

,19

0)

Dep

recia

tio

n /

am

ort

isati

on

ch

arg

e25

,725

40

,314

28

,13

714

,076

,63

15

6,4

06

104

,375

27,0

71

2,15

5,8

04

-16

,514

,46

3

Exch

an

ge d

iffe

ren

ce

(3,6

03

)(4

,373

)(4

,35

2)

(1,4

23

,00

3)

(8,9

79

)(1

0,7

37)

(4,4

05

)(3

3,2

73

)-

(1,4

92,7

25

)

Bala

nce

as

at

31

De

ce

mb

er

20

159

4,7

35

116

,74

011

4,1

02

38

,17

1,8

57

22

3,8

94

28

2,1

40

115

,23

82

,29

1,0

49

-4

1,4

09

,75

5

Ne

t valu

e a

s at

31

De

ce

mb

er

20

155

4,3

30

160

,48

43

,95

3,8

72

49

5,8

80

,98

38

2,7

48

26

1,14

116

2,9

69

31,

34

0,1

24

24

8,0

33

,55

17

79

,93

0,2

02

1.

An

am

ou

nt

of

US

D 2

4,6

84

,49

4 (

31

Decem

ber

20

14: U

SD

16

,68

0,9

36

) p

ert

ain

ing

to

in

tere

st o

n b

orr

ow

ing

s is

cap

italis

ed

as

the f

un

ds

were

use

d f

or

co

nst

ructi

on

of

qu

alif

yin

g a

ssets

(re

fer

no

te 1

1).

Refe

r n

ote

24

fo

r se

cu

rity

rest

ricti

on

s o

n p

rop

ert

y, p

lan

t an

d e

qu

ipm

en

t.

2.

Th

e G

rou

p lease

d t

he r

igh

ts t

o u

se p

ow

er

evacu

ati

on

facili

ties

un

der

a lease

arr

an

gem

en

t w

ith

rela

ted

part

ies.

3.

Su

mm

ary

of

dep

recia

tio

n a

nd

am

ort

isati

on

ch

arg

e:

Overview


Business Review



16. Property, plant and equipment (continued)

Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Amortisation of intangible assets (refer note 15) 200,059 196,294

Depreciation / amortisation charge on tangible assets 16,514,463 11,712,244

Depreciation and amortisation capitalised during the year, net relating

to wind farm assets under course of construction

(310,781) (544,777)

Total depreciation and amortisation charge 16,403,741 11,363,761

17. Other non-current assets

As at

31 December 2015

As at

31 December 2014

USD USD

Deposits 6,546,423 25,894,400

Capital advances 14,740,851 47,190,987

Prepayments 12,410,325 8,345,149

Total other non-current assets 33,697,599 81,430,536

Deposits mainly comprise of refundable security deposits placed with related parties towards usage of land and

power evacuation facilities for a period of 20 years. The difference between the fair value and the nominal value

of the deposits has been classified as assets under finance lease.

Capital advances represent advance payments made to suppliers and related parties for the construction of wind

farm assets, as part of long-term construction service contracts.

Prepayments primarily relate to amounts paid in advance towards lease rentals for lands which have been taken

on lease basis from the suppliers of wind turbine generators and related parties for a period ranging up to 20

years and are renewable provided the main lease is renewed by the government authorities and other parties.

18. Other investments

As at

31 December 2015

As at

31 December 2014

USD USD

Deposits with banks1 2,055,483 1,589,719

Total 2,055,483 1,589,719

1 Represents margin money deposits placed with banks and financial institutions towards bank guarantees

provided to various third parties with maturity period greater than one year.


19. Deferred tax assetsThe following are the major deferred tax liabilities and assets recognised by the Group and movements thereon

during the current year.

As at

31 December 2014

Recognised in

income statement

Exchange

Difference

As at

31 December 2015

USD USD USD USD

Property, plant and equipment (15,412,758) (3,394,107) 698,198 (18,108,667)

Provisions 18,861 100,041 (3,881) 115,021

Share issue costs 123,158 18,432 (5,305) 136,285

MAT credit 1,917,653 3,538,655 (185,248) 5,271,060

Unrealised inter-group profits 1,619,272 277,092 (70,848) 1,825,516

Tax losses 12,189,247 4,939,520 (623,395) 16,505,372

Net deferred tax asset 455,433 5,479,633 (190,479) 5,744,587

As at

31 December 2013

Recognised in

income statement

Exchange

Difference

As at

31 December 2014

USD USD USD USD

Property, plant and equipment (8,903,204) (7,063,501) 553,947 (15,412,758)

Provisions 8,509 11,064 (712) 18,861

Share issue costs 241,401 (116,285) (1,958) 123,158

MAT credit 1,181,572 803,932 (67,851) 1,917,653

Unrealised inter-group profits 1,871,806 (207,911) (44,623) 1,619,272

Tax losses 5,947,979 6,695,208 (453,940) 12,189,247

Net deferred tax asset 348,063 122,507 (15,137) 455,433


Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The following

are the details of deferred tax balances recognised in the consolidated statement of financial position:

As at

31 December 2015

As at

31 December 2014

USD USD

Deferred tax assets 23,853,254 15,868,191

Deferred tax liabilities (18,108,667) (15,412,758)

Deferred tax asset, net 5,744,587 455,433

Overview


Business Review



20. Trade receivables

As at

31 December 2015

As at

31 December 2014

USD USD

Trade receivables 17,706,023 17,695,157

Less : Provision for impairment of trade receivables (218,858) -

Net trade receivables 17,487,165 17,695,157

Trade receivables disclosed above are classified as loans and receivables in accordance with IAS 32 and are

therefore measured at amortised cost. Trade receivables held by the Group which are non-interest bearing were

not collectively impaired or written off.

Trade receivables include amounts which are past due at the reporting date but against which the Group has

not recognised any allowance for doubtful receivables because there has not been a significant change in credit

quality and the amounts are still recoverable. The average age of the receivables was 86 days during the year

ended 31 December 2015 (31 December 2014: 64 days)

The maximum exposure to credit risk at the reporting date is the carrying value of each customer.

Ageing of receivables are as follows:

As at

31 December 2015

As at

31 December 2014

USD USD

Not due 4,485,052 2,271,528

0-60 days 3,465,789 3,778,755

61-90 days 5,540,277 4,302,756

91-180 days 2,886,860 5,961,239

More than 180 days 1,109,187 1,380,879

Total 17,487,165 17,695,157

The fair value of trade receivables approximates their carrying amounts largely due to the short-term maturities of

these instruments and hence management considers the carrying amount of trade receivables to be approximately

equal to their fair value. The Group doesn’t hold any collateral security.

As at 31 December 2015, the Group has 26 customers (31 December 2014: 23 customers).

21. Other current assets

As at

31 December 2015

As at

31 December 2014

USD USD

Deposits 288,263 296,571

Accrued interest 574,656 536,159

Prepayments 991,868 713,682

Accrued income 5,029,539 5,624,079

Other receivables 4,102,630 1,014,893

Total other current assets 10,986,956 8,185,384

Prepayments primarily relate to amounts paid in advance for lease rentals for land and power evacuation facilities.

Accrued income primarily represents amounts receivable from the customer on the sale of electricity and the

amount recoverable from Indian Renewable Energy Development Authority (“IREDA”) as generation based

incentive but not billed for as at 31 December 2015.

Other receivables primarily include advances to vendors of USD 2,958,411 (31 December 2014: USD 696,536).



23. Cash and bank balances

As at

31 December 2015

As at

31 December 2014

USD USD

Cash on hand 15 21

Bank balances 5,910,771 5,423,071

Cash and cash equivalents 5,910,786 5,423,092

Bank deposits 49,666,494 8,845,140

Total cash and bank balances 55,577,280 14,268,232

Bank deposits include margin money deposits of USD 43,174,683 (31 December 2014: USD 8,560,694) placed with

banks towards bank guarantees provided to various third parties.

The Group has investments in the following mutual fund schemes, which are classified as available-for-sale

investments.

Mutual fund scheme:

Units as at

31 December 2015

Units as at

31 December 2014

USD USD

IDFC cash fund – Growth- Regular Plan1 282,731 173,577

L&T Liquid Fund – Growth1 29,956 29,956

Birla Sun Life Cash Plus Growth 7,538,897 -

SBI Premier Liquid Fund -Regular Plan –Growth 167,246 91,940

Union KBC Liquid Growth Fund 35,382 16,475

BSL Cash plus growth regular plan - 601,656

IDFC cash fund – Growth- Regular Plan 34,406 -

1 Investments in mutual funds include amounts of USD 8,627,681 (31 December 2014: 7,168,676) placed as lien with

banks and financial institutions.

The fair value of the quoted units is determined by reference to published data. During the year, disposals resulted

in a net gain of USD 1,796,093 (31 December 2014: USD 664,685) (refer note 10) recognised in the consolidated

income statement.

22. Current investments

As at

31 December 2015

As at

31 December 2014

USD USD

Available-for-sale investments carried at fair value (mutual funds) 43,384,798 10,966,118

Total current investments 43,384,798 10,966,118

24. Borrowings

As at

31 December 2015

As at

31 December 2014

USD USD

Borrowings at amortised cost

Non-convertible bonds1 109,503,048 60,838,129

Compulsorily convertible debentures2,3 16,332,726 25,805,524

Term loans from banks and financial institutions4 533,747,671 339,862,736

Working capital loans from banks5 14,613,955 29,750,057

Total borrowings 674,197,400 456,256,446

Amounts due for settlement within 12 months - USD 49,764,216 (31 December 2014: USD 57,426,521)

Amounts due for settlement on or after 12 months - USD 624,433,184 (31 December 2014: USD 398,829,925)

Overview


Business Review



1. The Company’s subsidiary, Mytrah Energy (India) Limited (“MEIL”) has issued non-convertible bonds (NCBs)

for an amount of ~ USD 113.3 million (INR 7424 million) primarily to partly finance wind farm projects under

construction. The NCBs are listed on the wholesale debt segment of Bombay Stock Exchange, India. The

NCBs are repayable at the end of fifth anniversary from the draw-down date and carry a cash coupon of 12%

per annum payable on semi-annual basis.

The NCBs are secured by collateral support in the form of pledge of 100% of the MEIL’s shares held by Bindu

Vayu Mauritius Limited (“BVML”), 100% of the CCPS held by BVML in MEIL and pledge of equity shares held

by MEIL in MVUPL (48.99%), MVPPL (48.99%), MVKPL (48.99%), MVBPL (99.98%) and MVMPL (18.99%).

Further, hypothecation by way of first and exclusive charge over the monies lying in credit therein from time

to time, and by way of first charge over all receivables arising from the loans disbursed by the MEIL to MVBPL.

As part of financing arrangement, the Group has incurred an amount of USD 1,501,610 as arrangement fees.

The Group accounted these costs as transaction cost under IAS 39 and are amortised over the term of NCBs

using effective interest rate method. The carrying amount of the liability measured at amortised cost is USD

109,503,048 (31 December 2014: USD 60,838,129)

During the year 2014, the Group has issued 8,612,412 warrants to the NCBs investors. These warrants provide

an option to the investors to purchase an equivalent number of ordinary shares in Mytrah Energy Limited at a

fixed price of GBP 0.7729 based on the Company’s share price traded before the day immediately preceding

the exercise date of the warrant. The fair value of the warrants as at 31 December 2014 amounted to USD

1,703,053 and was recognised accordingly as derivative financial liability.

Further on 30 March 2015, the Group has replaced the warrants issued in 2014 by issuing 11,439,762 new

warrants to the investors. These new warrants provide an option to the investors to purchase an equivalent

number of ordinary shares in Mytrah Energy Limited at a fixed price of GBP 0.7729. Accordingly the derivative

financial liability of USD 1,703,053 relating to existing 8,612,412 warrants has been derecognised during the

current year and the fair value of the 11,439,762 warrants amounting to USD 2,038,960 is recognised as equity.

2. During 2012, the Company’s subsidiary, MEIL has issued 3,333,333 compulsory convertible debentures (“CCDs”)

at INR 300 (~ USD 5.71) each to PTC India Financial Services Limited (PFS) (the “Investor”) amounting to USD

18,285,211 under an agreement between the Group and PFS. The purpose of this is to fund the capital projects

of the Group. The following are the significant terms in relation to the CCDs:

• The CCDs carry a fixed rate of interest payable quarterly in arrears on the principal amount of the CCDs

outstanding.

• The CCDs, along with unpaid interest, if any, mandatorily convert into such number of equity shares of

MEIL at the end of 49 months from the date of initial disbursement so as to provide the investor a stated

rate of return.

• The CCDs are secured by collateral support in the form of pledge of 49% shares of Bindu Vayu Urja Private

Limited (“BVUPL”) held by MEIL.

Further, the agreement states that PFS can put the CCDs (the “put option”) or alternatively, MEIL can call the

CCDs (the “call option”) in exchange for cash providing PFS a stated rate of return. The call option can be

exercised any time from the date of issue whereas the put option can be exercised over a period beginning

from 41 months to 47 months from the date of issue of CCDs.

3. During 2011, MEIL has issued 5,000,000 compulsory convertible debentures (“CCDs”) at INR 300 (~ USD 6)

each to IDFC including any of its affiliates under an agreement between the Group and IDFC. The purpose

of this is to fund the capital projects of the Group. The CCDs carry a fixed rate of interest payable quarterly

in arrears on the principal amount of the CCDs outstanding. The CCDs are secured by collateral support in

the form of pledge of shares held by Bindu Urja Capital Inc (BUCI) in the Company, certain non-disposal

24. Borrowings (continued)



undertakings by the Company and an irrevocable and unconditional corporate guarantee by the Company to

IDFC.

Further, the Company has entered into an option agreement with IDFC, whereby IDFC can put the CCDs (the

“put option”) or alternatively, the Group can call the CCDs (the “call option”) in exchange for cash providing

IDFC a stated rate of return. The call option can be exercised any time after 18 months from the date of issue

whereas the put option can be exercised over a period beginning from 36 months to 48 months from the date

of issue of CCDs.

In accordance with the terms of the option agreement with IDFC, the Company has exercised the call option

on the CCDs and accordingly has redeemed the entire CCDs in two tranches.

4. The Group has drawn down the term loan facility with banks and financial institutions to finance the construction

of wind farm assets. The carrying amount of the liability measured at amortised cost is USD 533,747,671 (31

December 2014: USD 339,862,736). The repayment terms of the term loans range from 12 to 14 years. In

compliance with the terms of the loan agreement, the Group has created a charge on all project movable,

immovable properties, cash flows, receivables and revenues in favour of banks and financial institutions.

Further, the loan drawn down by BVUPL, MVPPL, MVUPL, MVKPL, MVMPL and MVSPL is secured by way

of first charge on the pledge of shares held by MEIL in the equity shares representing 51% of the total paid

up equity share capital of the BVUPL, MVPPL, MVUPL, MVKPL, MVMPL and MVSPL respectively. The loans

drawn down by MVIPL and MVGoPL is secured by way of first charge on the pledge of shares held by the

MVBPL in the equity shares representing 51% of the total paid-up equity share capital of MVIPL and MVGoPL

respectively. The loan drawn by MEL is secured by irrevocable and unconditional guarantee from BVML.

5. The working capital loan facilities are secured by way of first charge and hypothecation of entire immovable

properties pertaining to the respective projects, both present and future, including movable plant and

machinery, machinery spares, tools, accessories, entire project cash flows, receivables, book debts and

revenues of the respective entities. The working capital facilities relating to wind farm development activities

are secured by way of first pari-passu charge on current assets related to wind farm development activity. The

facilities are repayable on a yearly rollover basis and carries interest in the range of 11% to 13.5% per annum.

6. Refer note 36 for maturity profile of the borrowings.

24. Borrowings (continued)

25. Finance lease obligationsThe Group leased the rights to use power evacuation facilities under a lease arrangement with related parties.

Future finance lease payments due, and their present values, are shown in the following table:

Minimum lease payments Present value of minimum lease payments

As at

31 December 2015

As at

31 December 2014

As at

31 December 2015

As at

31 December 2014

USD USD USD USD

Not later than one year 871,311 - 101,165 -

Later than one year and not later

than five years

3,485,244 - 541,521 -

Later than five years 12,198,354 - 5,775,196 -

16,554,909 - 6,417,882 -

Less : future finance charges 10,137,027 - - -

Present value of minimum lease

payments

6,417,882 - 6,417,882 -

Overview


Business Review



26. Derivative financial instruments

As at

31 December 2015

As at

31 December 2014

USD USD

Fair value of options embedded in:

Compulsorily convertible preference shares (note 33) 3,429,381 3,432,610

Compulsorily convertible debentures (note 24) - (89,008)

Share warrants (note 24) - 1,703,053

Total 3,429,381 5,046,655

27. Trade and other payables

As at

31 December 2015

As at

31 December 2014

USD USD

Current:

Trade payables1 10,705,902 6,405,402

Liability component of CCPS2 4,234,334 4,403,201

Interest accrued but not due on borrowings 5,658,409 3,353,664

Other payables 2,531,817 276,350

23,130,462 14,438,617

Non-current:

Liability component of CCPS2 2,160,722 4,521,985

Other payables3 112,261,359 37,390,292

114,422,081 41,912,277

1 Trade creditors relate to amounts outstanding for trade purchases and ongoing costs.

2 Liability component of CCPS represents the mandatory preference share dividend payable to IIF, discounted

using interest rate implicit in the arrangement. (Refer note 33).

3 Other payables include payables for purchase of capital assets.

The Group has financial risk management policies in place to ensure that all payables are paid within the pre-

agreed credit terms.

The fair value of trade and other payables approximates their carrying amounts largely due to the short-term

maturities of these instruments and hence management considers that the carrying amount of trade and other

payables to be approximately equal to their fair value.

As at

31 December 2015

As at

31 December 2014

USD USD

Included in :

- Current liabilities 101,165 -

- Non-current liabilities 6,316,717 -

Total 6,417,882 -

25. Finance lease obligations (continued)



28. Retirement benefit obligationsDefined contribution plan

Provident fund:

The Group makes contributions to a defined contribution retirement benefit plan for qualifying employees. Under

the plan, the Group is required to contribute a specified percentage of the qualified employees’ pay to fund the

benefits. These contributions are made to a fund administered and managed by the Government of India. The

Group’s monthly contributions are charged to the consolidated income statement in the year they are incurred.

The total cost charged to consolidated income statement of USD 32,150 (31 December 2014: USD 38,405)

represents contributions payable to these schemes by the Group at rates specified in the rules of the plan. As

at 31 December 2015, contributions of USD nil (31 December 2014: USD nil) were due in respect of the current

reporting year.

Defined benefit plan

(a) Gratuity

In accordance with the Payment of Gratuity Act, 1972 of India, the Group provides for gratuity, a defined benefit

retirement plan (the ‘Gratuity Plan’) covering eligible employees. The Group makes annual contributions under the

Gratuity Plan to Life Insurance Corporation of India to fund the benefit obligation.

The present value of the defined benefit obligation, the related current service cost and past service cost was

measured using the projected unit cost method.

The projected unit cost method is an accrued benefits valuation method in which the scheme liabilities make

allowance for projected earnings. The accumulated benefit obligation (ABO) is an actuarial measure of the

present value for service already rendered but differs from the projected unit cost method in that it includes no

assumption for future salary increases. At the balance sheet date the gross ABO was USD 193,391 (31 December

2014: USD 21,285).

Movements in the present value of the benefit obligation are as follows:

Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Change in benefit obligation

Projected benefit obligation at the beginning of the year 21,285 25,362

Current service cost 44,044 4,479

Interest cost 1,966 2,393

Benefits paid - (9,443)

Actuarial loss / (gain) 132,550 (930)

Translation adjustment (6,454) (576)

Projected benefit obligation at the end of the year (A) 193,391 21,285

Movement in fair value of plan assets

Opening balance of fair value of plan assets 16,277 14,376

Contributions made during the year - 10,848

Expected return 1,503 1,009

Benefits paid - (9,443)

Translation adjustment (671) (513)

Closing balance of fair value of plan assets (B) 17,109 16,277

Net liability recognised in the balance sheet (A-B) 176,282 5,008

Cost of employee benefits for the year

Current service cost 44,044 4,479

Interest cost 1,966 2,393

Expected return (1,503) (1,009)

Net actuarial loss/(gain) recognised in other comprehensive income 132,550 (930)

Net loss recognised for the year 177,057 4,933

Overview


Business Review



28. Retirement benefit obligations (continued)

(b) Leave encashment

The Group also provides for leave encashment (the “leave encashment plan”), a defined benefit plan covering

eligible employees. Under the leave encashment plan, employees are entitled to future payments upon termination

of service with the Company, whether it is by death during service or upon reaching retirement age.

The present value of the defined benefit obligation and the related current service cost was measured using the

projected unit credit method.

The projected unit cost method is an accrued benefits valuation method in which the scheme liabilities make

allowance for projected earnings. The accumulated benefit obligation (ABO) is an actuarial measure of the

present value for service already rendered but differs from the projected unit credit method in that it includes no

assumption for future salary increases. At the balance sheet date the ABO was USD 155,368 (31 December 2014:

USD 8,865).

Movements in the present value of the benefit obligation were as follows:

Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Change in benefit obligation

Projected benefit obligation at the beginning of the year 8,865 12,255

Interest cost 819 1,156

Current service cost 21,011 946

Benefits paid (20,960) (1,153)

Actuarial loss/ (gain) 150,759 (4,124)

Translation adjustment (5,126) (215)

Projected benefit obligation at the end of the year 155,368 8,865

Cost of employee benefits for the year

Interest cost 819 1,156

Current service cost 21,011 946

Net actuarial loss/ (gain) recognised in other comprehensive income 150,759 (4,124)

Net loss/ (gain) recognised for the year 172,589 (2,022)

Key assumptions used in actuarial valuation of gratuity and leave encashment obligations:

Year ended

31 December 2015

Year ended

31 December 2014

Discount rate 7.90% 9.30%

Long-term rate of compensation increase (%) 12.00% 8.00%

Attrition 10.00% 6.00%

Mortality table LIC (2006 -08) LIC (2006 -08)

(c) Summary of retirement benefit obligations recognised in the balance sheet

Current portion Non-current Portion

USD USD

Liability recognised as at 31 December 2015:

Gratuity 7,842 168,440

Leave encashment 25,193 130,175

33,035 298,615

Liability recognised as at 31 December 2014:

Gratuity - 5,008

Leave encashment 1,431 7,434

1,431 12,442



29. Share capital

As at

31 December 2015

As at

31 December 2014

USD USD

Issued and fully paid up share capital of the Company:

163,636,000 (31 December 2014: 163,636,000) ordinary shares with

no par value

72,858,278 72,858,278

After its incorporation on 13 August 2010 MEL acquired 119,999,999 shares in BVML, from its existing shareholders

namely, Esrano Overseas Ltd, Bindu Urja Investments Inc, Bindu Urja Holding Inc, Bindu Urja Capital Inc and Sila

Energy Inc. In consideration of the said transfer the Company issued shares of the Company at no par value in its

capital. Subsequently the Company issued 43,636,000 shares of no par value through listing of its shares on AIM.

The issued share capital refers to ordinary share capital, which carries voting rights with entitlement to an equal

share in dividends authorised by the board and in the distribution of the surplus assets of the Company.

30. Capital contribution

As at

31 December 2015

As at

31 December 2014

USD USD

Capital contributions at beginning of the year 16,721,636 7,357,620

Capital contributions received during the year - 9,364,016

Balance at end of the year 16,721,636 16,721,636

During the financial year 2013, the Company’s subsidiary, MEIL entered into an investment agreement with related

parties, Mytrah Wind Developers Private Limited (“MWDPL”) and Bindu Urja Infrastructure Limited (‘BUIL’) to issue

40,000,000 Series B Cumulative Compulsorily Redeemable Preference Shares (“RPS”) at Rs. 300 (~ USD 5.71)

per share and carry a nominal dividend of 0.01% per annum. Pursuant to the agreement, BUIL and MWDPL made

long-term non-reciprocal capital contributions (“capital contributions”) of USD 16,721,636 as at 31 December 2015,

which as per the terms of agreement are not available for distribution as dividend. Management has evaluated

that these contributions are in substance in the nature of equity and accordingly classified the amounts received

as “Capital Contributions”.

31. Retained earnings

As at

31 December 2015

As at

31 December 2014

USD USD

Balance at beginning of the year 15,520,003 14,339,815

Profit for the year 1,162,991 1,875,974

Tax on buy back of CCPS from non-controlling interest (253,976) (128,538)

Creation of capital redemption reserve on buy back (1,100,797) (567,248)

Creation of debenture redemption reserve (5,560,906) -


Overview


Business Review



32. Other reserves (a) Foreign currency translation reserve

Foreign currency translation reserve comprises foreign currency differences arising from the translation of the

financial statements of foreign operations from their functional currency into the Group’s presentational currency.

As at

31 December 2015

As at

31 December 2014

USD USD

Balance at beginning of the year (36,870,962) (32,842,460)

Foreign currency translation adjustments (3,510,858) (4,028,502)

Balance at end of the year (40,381,820) (36,870,962)

(b) Equity-settled employee benefits reserve:

The equity-settled employee benefits reserve relates to the share options granted to employees and key

management personnel under the employee share option plan. Further information about share-based payments

is set out in note 38.

As at

31 December 2015

As at

31 December 2014

USD USD


Additional cost during the year 740,634 919,946


(c) Fair value reserve

The fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets

until the assets are derecognised or impaired.

As at

31 December 2015

As at

31 December 2014

USD USD

Balance at beginning of the year 195,253 93,480

Change in the fair value of available for sale financial instruments 355,167 101,773

Balance at end of the year 550,420 195,253

(d) Actuarial valuation reserve

Actuarial valuation reserve comprises the cumulative net gains/ losses on actuarial valuation of post-employment

obligations. Refer note 28 for further details.

As at

31 December 2015

As at

31 December 2014

USD USD

Balance at beginning of the year 4,526 (528)

(Loss)/ gain on actuarial valuation of post-employment benefits (283,309) 5,054

Balance at end of the year (278,783) 4,526

(e) Capital redemption reserve (CRR)

Capital redemption reserve is created on redemption of compulsorily convertible preference shares during the

year in accordance with the provisions of Indian Companies Act.

As at

31 December 2015

As at

31 December 2014

USD USD

Balance at beginning of the year 567,248 -

Creation of CRR on buyback 1,100,797 567,248

Balance at end of the year 1,668,045 567,248



32. Other reserves (continued)

33. Non-controlling interests

As at

31 December 2015

As at

31 December 2014

USD USD

Compulsorily convertible preference shares (CCPS) (refer note a)


Purchase of CCPS from non- controlling interest holders (2,345,085) -

Buy back of CCPS from non-controlling interest holders (1,777,864) (567,248)

Balance at the end of the year 50,704,975 54,827,924

Equity shares held by captive customers (refer note b)

Balance at beginning of the year 704,701 -

Issue of shares to non-controlling interest holders 77,556 704,701

Share of loss attributable to non-controlling interest holders (782,249) -

Balance at the end of the year 8 704,701

Total (a)+(b) 50,704,983 55,532,625

(g) Share warrant reserve

Share warrant reserve comprises fair value of warrants issued to NCBs during the year. The fair value of share

purchase warrants issued during the year was calculated using the Black-Scholes option-pricing model. The inputs

for this model include stock price, exercise price, expected term, volatility, risk free rates, etc.

As at

31 December 2015

As at

31 December 2014

USD USD

Balance at beginning of the year - -

Issue of share warrants 2,038,960 -

Balance at end of the year 2,038,960 -

Total other reserves (26,098,232) (32,100,529)

(f) Debenture redemption reserve (DRR)

Debenture redemption reserve is created on outstanding NCBs at the year end in accordance with the provisions

of Indian Companies Act.

As at

31 December 2015

As at

31 December 2014

USD USD

Balance at beginning of the year - -

Creation of DRR on redemption 5,560,906 -

Balance at end of the year 5,560,906 -

a) Compulsorily convertible preference shares

During the year ended 31 March 2012, the MEIL issued 11,666,566 Series A CCPS at INR 300 (~USD 6) each to India

Infrastructure Fund (IIF) under an Investment Agreement date 20 June 2011 between the MEIL, IIF and Mr. Ravi

Kailas. The following are the salient features of the CCPS:

• IIF is entitled to receive a preference dividend before any dividends are declared to the ordinary shareholders.

These carry a step-up dividend which is cumulative.

• The CCPS convert into equity shares of MEIL at a fixed price of INR 300 (~USD 6) per share, for a fixed number

of shares, at the end of six years if the call and put options are not exercised by either of the parties.

• As part of the investment agreement, IIF were issued with 100 ordinary shares in MEIL.

Overview


Business Review



33. Non-controlling interests (continued)

34. Commitments(a) Capital commitments

As at

31 December 2015

As at

31 December 2014

USD USD

Capital commitments 269,788,515 165,970,144

The capital expenditures authorised and contracted primarily relate wind farm assets under construction, which

have not been provided for in the accounts. These commitments are net of advances paid of USD 14,740,851 (31

December 2014: USD 47,190,987) .

(b) Operating leases

The Group leases office premises under cancellable operating lease agreements with a term of three years. The

Further, the Company entered into an option agreement with IIF on the same date whereby the Company can

call the CCPS (the “call option”) or alternatively, IIF can put the CCPS (the “put option”) in exchange for cash or a

variable number of shares in the Company providing IIF a stated rate of return. The call option can be exercised

at any time after four years three months and the put option can be exercised at any time after five years three

months from the date of issue.

In accordance with IAS 32, Financial Instruments: Presentation and IAS 39 Financial Instruments: Measurement,

upon initial recognition, the issue proceeds has been segregated in the financial statements as mentioned below.

The issue proceeds of USD 69,932,181 (net of issue costs of USD 1,891,056) were first attributed to the embedded

derivatives, with the fair value of the options amounting to USD 2,670,325. As the instrument entitles the

holder to a fixed number of shares the remaining value of the proceeds were bifurcated such that there is a

liability component and an equity component. The liability component, being USD 11,866,684 was estimated

by discounting the mandatory preference share dividend of six year cash flows using an interest rate from an

equivalent instrument without a conversion feature, with the residual value of USD 55,395,172 representing equity.

The effective interest rate on the financial liability is 5.6%.

The options are subsequently measured at fair value through profit and loss and the financial liability is subsequently

measured at amortised cost. The year-end balance of the options was USD 3,429,381 (31 December 2014: USD

3,432,610) (see consolidated statement of financial position), the liability component of the preference shares was

USD 6,395,056 (31 December 2014: USD 8,925,186) and the equity component of the CCPS was USD 50,704,975

(31 December 2014: USD 54,827,924). During the current year, the Group has not paid any dividend to IIF (31

December 2014: USD Nil).

During the current year, the Group has purchased and bought back 583,334 shares (31 December 2014: 116,670

shares) from IIF at a premium of INR 300 (USD 9.72). In accordance with the principles enunciated in IAS 32, the

Company has reduced face value of the CCPS bought back amounting to USD 4,122,949 (31 December 2014:

USD 567,248) from the ‘non-controlling interest’ and the premium, being the dividend payable over the term of

the CCPS, amounting to USD 2,790,287 (31 December 2014: USD 567,248) has been reduced from the liability

component of CCPS.

b) Equity shares held by captive customers

During the year ended 31 December 2014, MVMPL has commissioned a captive power generating plant in

Tamilnadu under Captive Group Project (“CGP”) framework, where the electricity generated is consumed by

a group of consumers. To qualify as a captive generating plant, an entity must meet the requirements set forth

under the relevant regulations, which specify that a minimum 26% equity interest in the captive generating plant

should be held by a Captive Consumers or group of Captive Consumers. Accordingly, MVMPL has entered into

power purchase agreements (PPA) with Captive Consumers and issued 4,729,840 equity shares of INR 10 par

value (USD 782,249). The shares issued to the captive consumers have been classified as non-controlling interest

in these consolidated financial statements.



34. Commitments (continued)

35. Capital managementThe Group manages its capital to ensure that entities in the Group will be able to continue as a going concern

while maximising the return to stakeholders through its optimisation of the debt and equity balance.

The capital structure of the Group consists of net debt, which includes the borrowings disclosed in note 24 after

deducting cash and bank balances, equity attributable to owners of the Company comprising issued capital and

reserves and retained earnings and non-controlling as disclosed in notes below.

The Group’s risk management committee reviews the capital structure on a semi-annual basis. As part of this

review, the committee considers the cost of capital and the risks associated with each class of capital.

The gearing ratio at the year-end is as follows:

As at

31 December 2015

As at

31 December 2014

USD USD

Debt (note 24) 674,197,400 456,256,446

Cash and bank balances (note 23) (55,577,280) (14,268,232)

Net debt (a) 618,620,120 441,988,214

Equity (including non-controlling interests) 123,953,980 128,532,013

Net debt and equity (b) 742,574,100 570,520,227

Net debt/(net debt+equity) ratio 83% 77%

Debt is defined as long and short-term borrowings (excluding derivatives) as detailed in note 24. Equity includes

all capital and reserves of the Group that are managed as capital, including non-controlling interests of the Group.

Details of the significant accounting policies and methods adopted (including the criteria for recognition, the basis

of measurement and the basis for recognition of income and expenses) for each class of financial asset, financial

liability and equity instrument are disclosed in note 3.

The Group’s objective when managing capital is to safeguard the Group’s ability to continue as a going concern

in order to provide returns for shareholders and benefits for stakeholders. The Group also proposes to maintain

an optimal capital structure to reduce the cost of capital. Hence, the Group may adjust any dividend payments,

return capital to shareholders or issue of new shares. Total capital is the equity as shown in the consolidated

statement of financial position. Currently, the Group primarily monitors its capital structure in terms of evaluating

the funding of wind farm projects. Management is continuously evolving strategies to optimise the returns and

reduce the risks. It includes plans to optimise the financial leverage of the Group.

Equity comprises all components of equity and includes the non-controlling interests.

lease arrangement contains a renewal clause providing the Company with the option of extending the lease for a

further period of three years to four years at the prevailing market rates.

Total operating lease expense recognised in the consolidated income statement as other expenses is USD 789,184

(31 December 2014: USD 649,187). At 31 December 2015, the Group had no outstanding commitments for future

minimum lease payments under non-cancellable operating leases.

36. Financial instruments – Fair values and risk managementIFRS 13 Fair Value Measurement requires entities to disclose measurement of fair values, for both financial and

non-financial assets and liabilities. Fair values are categorised into different levels in a fair value hierarchy based

on the inputs used in the valuation techniques as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either

directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3: Inputs for the asset or liability that is not based on observable market data (unobservable inputs).

Overview


Business Review


No

tes

to t

he

co

nso

lid

ate

d fi

nan

cia

l st

ate

me

nts

for

the y

ear

en

ded

31

Decem

ber

20

15 (

co

nti

nu

ed

)

36

. Fin

an

cia

l in

stru

me

nts

– F

air

valu

es

an

d r

isk m

an

ag

em

en

t (c

on

tin

ued

)

Acco

un

tin

g c

lass

ificati

on

s an

d f

air

valu

e

Th

e f

ollo

win

g t

ab

le s

ho

ws

the c

arr

yin

g a

mo

un

ts a

nd

fair

valu

es

of

fin

an

cia

l ass

ets

an

d fi

nan

cia

l lia

bili

ties,

in

clu

din

g t

heir

levels

in

th

e f

air

valu

e h

iera

rch

y.

31

De

ce

mb

er

20

15:

Carr

yin

g a

mo

un

tF

air

valu

e

Desi

gn

ate

d

at

fair

valu

e

thro

ug

h p

rofi

t

or

loss

Lo

ans

and

receiv

ab

les

Availa

ble

-fo

r-

sale

Oth

er

financia

l

liab

iliti

es

To

tal

Level 1

Level 2

Level 3

US

DU

SD

US

DU

SD

US

DU

SD

US

DU

SD

Fin

an

cia

l ass

ets

me

asu

red

at

fair

valu

e

Cu

rren

t in

vest

men

ts (

no

te 2

2)

--

43

,38

4,7

98

-4

3,3

84

,79

84

3,3

84

,79

8-

-

--

43

,38

4,7

98

-4

3,3

84

,79

84

3,3

84

,79

8-

-

Fin

an

cia

l ass

ets

no

t m

easu

red

at

fair

valu

e

Tra

de r

eceiv

ab

les

(no

te 2

0)

-17

,48

7,16

5-

-17

,48

7,16

5

Oth

er

ass

ets

(n

ote

17 a

nd

21)

-12

,43

8,8

81

--

12,4

38

,88

1

Cash

an

d b

an

k b

ala

nces

(no

te 2

3)

-5

5,5

77,2

80

--

55

,577,2

80

Oth

er

invest

men

ts (

no

te 1

8)

-2,0

55

,48

3-

-2,0

55

,48

3

-8

7,5

58

,80

9-

-8

7,5

58

,80

9

Fin

an

cia

l liab

ilit

ies

me

asu

red

at

fair

valu

e

Deri

vati

ve fi

nan

cia

l in

stru

men

ts (

no

te 2

6)

--

-3

,429

,38

13

,429

,38

1-

3,4

29

,38

1-

Fin

an

ce lease

ob

ligati

on

s (n

ote

25

)-

--

6,4

17,8

82

6,4

17,8

82

-6

,417

,88

2-

--

-9

,84

7,2

63

9,8

47

,26

3-

9,8

47

,26

3-

Fin

an

cia

l liab

ilit

ies

no

t m

easu

red

at

fair

valu

e

Bo

rro

win

gs

(no

te 2

4)

--

-6

74

,19

7,4

00

674

,19

7,4

00

Tra

de a

nd

oth

er

payab

les

(no

te 2

7)

--

-23

,13

0,4

62

23

,13

0,4

62

Oth

er

payab

les

– n

on

-cu

rren

t (n

ote

27)

--

-11

4,4

22,0

81

114

,422,0

81

--

-8

11,7

49

,94

38

11,7

49

,94

3

No

te:

1.

In t

his

tab

le, t

he G

rou

p h

as

dis

clo

sed

th

e f

air

valu

e o

f each

cla

ss o

f fi

nan

cia

l ass

ets

an

d li

ab

iliti

es

in w

ay t

hat

perm

its

the in

form

ati

on

to

be c

om

pare

d w

ith

th

e c

arr

yin

g a

mo

un

ts.

2.

Fo

r all

fin

an

cia

l ass

ets

an

d fi

nan

cia

l lia

bili

ties

no

t m

easu

red

at

fair

valu

e, t

he c

arr

yin

g v

alu

e is

a r

easo

nab

le a

pp

roxim

ati

on

of

fair

valu

es.

100 Mytrah Energy Limited Annual Report 2015N

ote

s to

th

e c

on

solid

ate

d fi

nan

cia

l st

ate

me

nts

for

the y

ear

en

ded

31

Decem

ber

20

15 (

co

nti

nu

ed

)

36

. Fin

an

cia

l in

stru

me

nts

– F

air

valu

es

an

d r

isk m

an

ag

em

en

t (c

on

tin

ued

)

Acco

un

tin

g c

lass

ificati

on

s an

d f

air

valu

e

Th

e f

ollo

win

g t

ab

le s

ho

ws

the c

arr

yin

g a

mo

un

ts a

nd

fair

valu

es

of

fin

an

cia

l ass

ets

an

d fi

nan

cia

l lia

bili

ties,

in

clu

din

g t

heir

levels

in

th

e f

air

valu

e h

iera

rch

y.

31

De

ce

mb

er

20

14:

Carr

yin

g a

mo

un

tF

air

valu

e

Desi

gn

ate

d

at

fair

valu

e

thro

ug

h p

rofi

t

or

loss

Lo

ans

and

receiv

ab

les

Availa

ble

-fo

r-

sale

Oth

er

financia

l

liab

iliti

es

To

tal

Level 1

Level 2

Level 3

US

DU

SD

US

DU

SD

US

DU

SD

US

DU

SD

Fin

an

cia

l ass

ets

me

asu

red

at

fair

valu

e

Cu

rren

t in

vest

men

ts (

no

te 2

2)

--

10,9

66

,118

-10

,96

6,118

10,9

66

,118

--

--

10,9

66

,118

-10

,96

6,1

1810

,96

6,1

18-

-

Fin

an

cia

l ass

ets

no

t m

easu

red

at

fair

valu

e

Tra

de r

eceiv

ab

les

(no

te 2

0)

-17

,69

5,15

7

--

17,6

95

,15

7

Oth

er

ass

ets

(n

ote

17 a

nd

21)

-3

2,3

51,20

9-

-3

2,3

51,20

9

Cash

an

d b

an

k b

ala

nces

(no

te 2

3)

-14

,26

8,2

32

--

14,2

68

,23

2

Oth

er

invest

men

ts (

no

te 1

8)

-1,5

89

,719

--

1,5

89

,719

-6

5,9

04

,317

--

65

,90

4,3

17

Fin

an

cia

l liab

ilit

ies

me

asu

red

at

fair

valu

e

Deri

vati

ve fi

nan

cia

l in

stru

men

ts (

no

te 2

6)

--

-5

,04

6,6

55

5,0

46

,65

5-

5,0

46

,65

5-

Fin

an

ce lease

ob

ligati

on

s (n

ote

25

)-

--

--

--

-5

,04

6,6

55

5,0

46

,65

5-

5,0

46

,65

5-

Fin

an

cia

l liab

ilit

ies

no

t m

easu

red

at

fair

valu

e

Bo

rro

win

gs

(no

te 2

4)

--

-4

56

,25

6,4

46

45

6,2

56

,44

6

Tra

de a

nd

oth

er

payab

les

(no

te 2

7)

--

-14

,43

8,6

1714

,43

8,6

17

Oth

er

payab

les

– n

on

-cu

rren

t (n

ote

27)

--

-4

1,9

12,2

77

41,9

12,2

77

--

-5

12,6

07

,34

05

12,6

07

,34

0

No

te:

1.

In t

his

tab

le, t

he G

rou

p h

as

dis

clo

sed

th

e f

air

valu

e o

f each

cla

ss o

f fi

nan

cia

l ass

ets

an

d li

ab

iliti

es

in w

ay t

hat

perm

its

the in

form

ati

on

to

be c

om

pare

d w

ith

th

e c

arr

yin

g a

mo

un

ts.

2.

Fo

r all

fin

an

cia

l ass

ets

an

d fi

nan

cia

l lia

bili

ties

no

t m

easu

red

at

fair

valu

e, t

he c

arr

yin

g v

alu

e is

a r

easo

nab

le a

pp

roxim

ati

on

of

fair

valu

es.

Overview


Business Review


36. Financial instruments – Fair values and risk management (continued)

Measurement of fair value:

The following is the summary of valuation techniques used in the measurement of fair value of financial instruments:

Current investments:

Current investments represent the investments in traded mutual funds, whose fair value is determined by reference

to their quoted market price at the reporting date. The fair value represents the net asset value as stated by the

issuer of these mutual fund units in the published statements. Net asset value represents the price at which either

the issuer will issue further units in the mutual fund or the investor can redeem the investments.

Derivative financial instruments:

The fair value of the option contracts embedded in the derivative financial instruments are determined using

binomial lattice model. The inputs for this model include stock price, internal rate of return, expected time for

option expiry, volatility, risk free rate, etc.

Financial risk management:

The Group’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk.

The Group’s primary risk management focus is to minimise potential adverse effects of market risk on its financial

performance. The Group’s risk management assessment and policies and processes are established to identify

and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor such risks and

compliance with the same. Risk assessment and management policies and processes are reviewed regularly to

reflect changes in market conditions and the Group’s activities. The Board of Directors and the Audit Committee

is responsible for overseeing the Group’s risk assessment and management policies and processes.

A. Market Risk

(i) Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate

because of changes in foreign exchange rate. The Group’s presentation currency is the US dollar. The Group’s

exposure to foreign currency arises in part when the Group holds financial assets and liabilities denominated in a

currency different from the functional currency of the entity. Based on the current profile of the Group, the net

liability held in foreign currency is not significant and as such the Group’s exposure to currency risk is limited.

(ii) Interest rate risk

Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest

rates. The Group is exposed to interest rate risk on its cash and bank balances. Cash and bank balances expose

the Group to cash flow interest rate risk. However, the Group does not carry any fixed interest bearing financial

liabilities that are designated at fair value through profit or loss except for the derivative financial instruments

embedded in the CCPS, CCDs and share warrants. Hence, the Group is exposed to the fair value risk on such

derivative financial instruments.

The average interest rate on short-term bank deposits during the year was 7.23% (31 December 2014: 7.41%).

Interest rate risk management

The primary goal of the Group’s investment strategy is to ensure risk free returns are earned on surplus funds.

Market price risk arises from cash and bank balances held by the Group. The Group monitors its investment

portfolio based on market expectations and creditworthiness. Material investments within the portfolio are

managed on an individual basis.




The Group’s exposure to interest rates on financial instruments is detailed below:

As at

31 December 2015

As at

31 December 2014

USD USD

Financial assets

Cash and bank balances (note 23) 55,577,280 14,268,232

Total interest rate dependent financial assets 55,577,280 14,268,232

Financial liabilities

Borrowings (note 24) 674,197,400 456,256,446

Total interest rate dependent financial liabilities 674,197,400 456,256,446

The amounts included above for interest rate dependent financial assets are fixed interest bearing financial assets.

If interest rate on INR denominated borrowings had been increased or decreased by 100 basis points with all

other variables held constant, post tax income for the year ended 31 December 2015 would have been increased/

decreased by USD 4,369,594 (31 December 2014: USD 4,181,483).

(iii) Price risk

The Group is exposed to mutual funds price (Net Asset Value – ‘NAV’) risk because of investments in debt-based

mutual fund units held by the Group and classified on the statement of financial position as available-for-sale

financial assets. The Group is not exposed to any commodity price risk. In order to manage its price risk arising

from investment in mutual fund units, the Group diversifies its portfolio; in accordance with the limits set by the

Group risk management policies.

As the Group invests in mutual fund units which in turn invest in short-term (in the range 30-90 days) equity

instruments with low yield and hence carry a very minimal mark-to-market risk. Moreover, the accruals earned by

the said units are distributed on a daily basis; which mainly represents the dividend accruals rather than the fair

value movements. Hence, any reasonable movement in interest yields are not expected to have any impact on

the NAV of the said units.

B. Liquidity risk

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established

an appropriate liquidity risk management framework for the management of the Group’s short, medium and

long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining

adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and

actual cash flows, and by matching the maturity profiles of financial assets and liabilities. Details of additional

undrawn facilities that the Group has at its disposal to reduce further liquidity risk are set out below.

As at

31 December 2015

As at

31 December 2014

USD USD

Amount used 688,203,430 464,190,622

Amount unused 223,024,206 189,565,287

Total finance facilities 911,227,636 653,755,909

The Group has access to financing facilities as described below, of which USD 223,024,206 (31 December 2014:

USD 189,565,287) were unused at the balance sheet date. The Group expects to meet its other obligations from

operating cash flows and proceeds of maturing financial assets.


Overview


Business Review




The following table details the Group’s remaining contractual maturity for its financial liabilities with agreed

repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities

based on the earliest date on which the Group can be required to pay as at 31 December 2015 and 31 December

2014:

As at 31 December 2015:

2016 2017 2018 2019 Thereafter Total

USD USD USD USD USD USD

Non-derivative financial

liabilities:

Borrowings 49,764,216 27,435,882 33,127,511 152,798,868 411,070,923 674,197,400

Trade and other payables 18,896,128 - - - - 18,896,128

Liability component of CCPS 4,234,334 2,160,722 - - - 6,395,056

Finance lease obligations 101,165 113,305 126,902 142,130 5,934,381 6,417,883

Other non-current liabilities 97,511,227 8,431,342 8,479,512 - - 114,422,081

Derivative Financial liabilities:

Derivative instruments not

designated as hedge

1,158,698 2,270,683 - - - 3,429,381

Total financial liabilities 171,665,768 40,411,934 41,733,925 152,940,998 417,005,304 823,757,929

As at 31 December 2014:

2015 2016 2017 2018 Thereafter Total

USD USD USD USD USD USD

Non-derivative financial

liabilities:

Borrowings 57,426,521 34,302,336 21,865,745 23,374,759 319,287,085 456,256,446

Trade and other payables 38,374,132 - - - - 38,374,132

Liability component of CCPS 4,403,201 4,521,985 - - - 8,925,186

Finance lease obligations - - - - - -

Other non-current liabilities - 1,835,801 2,355,741 2,355,741 2,504,293 9,051,576

Derivative Financial liabilities:

Derivative instruments not

designated as hedge

(89,008) 3,432,610 - - 1,703,053 5,046,655

Total financial liabilities 100,114,846 44,092,732 24,221,486 25,730,500 323,494,431 517,653,995

C. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer

contract, leading to a financial loss. The group’s credit risk arises from accounts receivable balances on the sale

of electricity. The Indian entities have entered into purchase power agreements with transmission / distribution

companies incorporated by the Indian State Governments and captive customers. The Group is therefore

committed to sell power to these customers and any potential risk of default is on Government parties. The Group

is paid monthly by the transmission companies and captive customers for the electricity it supplies. The Group

assesses the credit quality of the purchaser based on its financial position and other information.

Financial assets that potentially expose the Company to credit risk consist principally of cash and bank balances,

which are held with institutions with a minimum credit rating of AA. The fair value of financial assets represents

the maximum credit exposure.

The Group is reliant on a small number of suppliers and customers. Refer note 20 for the ageing of trade receivables.

The industry currently benefits supports from the Indian Government. Changes in the Government policy could

impact tariff/ taxes which could have an impact on the revenue and the profit of the Group.



37. Related party transactions Balances and transactions between the Company and its subsidiaries, which are related parties of the Company,

have been eliminated and are not disclosed in this note. The transactions with related parties are priced on an

arm’s length basis and are settled as per agreed terms. Details of transactions between the Group and related

parties are disclosed below.

The key management personnel of the Group are:

1. Mr Ravi Kailas - Chairman and CEO

2. Mr Rohit Phansalkar - Non-Executive Director

3. Mr Russell Walls - Non-Executive Director

The entities where certain key management personnel have significant influence are:

1. Bindu Urja Infrastructure Limited

2. Mytrah Wind Developers Private Limited

The following related party transactions occurred during the year: Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Advance given/ (adjusted) towards development and

construction of wind farm projects:

Bindu Urja Infrastructure Limited 2,396,019 543,124

Mytrah Wind Developers Private Limited (24,120) (2,353,002)

Purchase towards development and construction of wind farm

projects:

Bindu Urja Infrastructure Limited 604,166 15,567,368

Mytrah Wind Developers Private Limited - -

Security deposits for usage of land and power evacuation facilities:

Bindu Urja Infrastructure Limited 2,862,561 10,492,772

Mytrah Wind Developers Private Limited - 4,325,020

Upfront lease rentals paid for land and leased power evacuation

facilities :



Reimbursement of expenses:

Bindu Urja Infrastructure Limited 1,361,116 799,311

Capital contributions received from (note 30):

Bindu Urja Infrastructure Limited - 6,847,647


Overview


Business Review



The following balances were outstanding at the end of the year: Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Advance towards development and construction of wind farm

projects:


Mytrah Wind Developers Private Limited - 24,290

Security deposits for usage of land and power evacuation facilities

(note 17):


Mytrah Wind Developers Private Limited 6,494,218 6,753,210

Other payables

Bindu Urja Infrastructure Limited 1,318,150 -

Upfront lease rentals paid for land and leased power evacuation

facilities (net of amortisation) :



Capital contributions received from (note 30):



Remuneration of key management personnel:

The remuneration of key management personnel of the Group, is set out below for each of the categories specified

in IAS 24 Related Party Disclosures.

Year ended

31 December 2015

Year ended

31 December 2014

USD USD

Salaries and bonus 1,434,244 2,622,834

Share-based payments 639,228 763,215

Total 2,073,472 3,386,049

As per the CCPS investment agreement (note 33), for a period of one year from the completion date or

commissioning of a cumulative 400 MW capacity, whichever is later, Mr Ravi Kailas without prior consent of IIF

shall not sell or dispose, directly or indirectly his shareholding in Mytrah Energy Limited.

37. Related party transactions (continued)

38. Share-based paymentsThe Group has an equity-settled share option scheme for certain directors of the Company and employees in the

Group. All options have a vesting period of three years. Each share option converts into one ordinary share of

the concerned entity on exercise. No amounts are paid or payable by the recipient on receipt of the option. The

options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date

of vesting to the date of the expiry. Options lapse if the employee leaves the concerned entity before the options

vest.

Mytrah Energy Limited:

During the year, the Company has issued 9,680,000 options to Directors at the exercise price of GBP 0.78 and

cancelled 210,081 share options which were issued to group employees at the exercise price of GBP 0.77. In

accordance with IFRS 2, the Group has charged the fair value of the options issued over the vesting period of the

options.



Expected volatility is determined based on the evaluation of the historical volatility of the Company’s share price

from the date of listing on 12 October 2010 to the date of issue of options. During the year the Group recognised

expense of USD 639,228 (net of employee benefits expense capitalised USD 68,528) (31 December 2014: USD

919,946 (net of employee benefits cost capitalised USD Nil)) in relation to share-based payment transactions and

the unamortised expense as at 31 December 2015 is USD 2,681,038 (31 December 2014: USD 245,830).

Mytrah Energy (India) Limited:

During the year, the Company’s subsidiary has issued 277,450 options to group employees at the exercise price

of INR 1,200. In accordance with IFRS 2, the Group has charged the fair value of the options issued over the

vesting period of the options

Details of the share options outstanding at the end of the year are as follows.

Year ended 31 December 2015 Year ended 31 December 2014

Number of share

options

Weighted

average exercise

price (INR)

Number of share

options

Weighted

average exercise

price (INR)

Outstanding at beginning of year - - - -

Granted during the year 277,450 1,200 - -

Cancelled during the year (4,000) 1,200 - -

Outstanding at the end of the year 273,450 1,200 - -

The options outstanding as at 31 December 2015 had a weighted average exercise price of INR 1,200.

Details of the share options outstanding at the end of the year are as follows.

Year ended 31 December 2015 Year ended 31 December 2014

Number of share

options

Weighted

average exercise

price (GBP)

Number of share

options

Weighted

average exercise

price (GBP)

Outstanding at beginning of year 14,668,839 1.06 14,828,706 1.14

Granted during the year 9,680,000 0.78 2,871,502 0.77

Cancelled during the year (210,081) 0.77 (3,052,669) 1.03

Outstanding at the end of the year 24,138,758 0.95 14,668,839 1.06

The options outstanding as at 31 December 2015 had a weighted average exercise price of GBP 0.95, and a

weighted average remaining contractual life of 4 years and 2 months.

Details of options granted during the year are as follows:

Year ended Employees /

Directors

Options granted

during the year

Expiry date Exercise price

(GBP)

Fair value at grant

date (GBP)

31 December 2015 Directors 9,680,000 23.12.2021 0.78 0.76

31 December 2014 Employees 2,871,502 01.02.2017 0.77 0.77

The aggregate fair value of the share options issued during the year was USD 3,287,465. The fair value of options

is measured using the Black-Scholes Merton valuation model. Service and non-market performance conditions

attached to the arrangements were not taken into account in measuring fair value. Measurement inputs include

the following:

Weighted average share price (GBP) 0.76

Weighted average exercise price (GBP) 0.78

Expected volatility 43.88%

Expected life 3 years

Risk-free interest rate 0.73%

38. Share-based payments (continued)

Overview


Business Review



Details of options granted during the year are as follows:

Year ended Employees /

Directors

Options granted

during the year

Exercise price

(INR)

Fair value at grant

date (INR)

31 December 2015 Employees and

Directors

277,450 1,200 600

The aggregate fair value of the share options issued during the year was USD 291,487. The fair value of options

is measured using the Black-Scholes Merton valuation model. Service and non-market performance conditions

attached to the arrangements were not taken into account in measuring fair value. Measurement inputs include

the following:

Weighted average share price (INR) 600

Weighted average exercise price (INR) 1,200

Expected volatility 42.00%

Expected life 3 years

Risk-free interest rate 7.59%

Expected volatility is determined based on the evaluation of the historical volatility of the Holding Company’s

share price from the date of listing on 12 October 2010 to the date of issue of options. During the year the Group

recognised expense of USD 1,960(net of employee benefits expense capitalised USD 30,918) in relation to share-

based payment transactions and the unamortised expense as at 31 December 2015 is USD 258,612.

38. Share-based payments (continued)

39. Contingent liabilitiesThe Group is involved in appeals, claims, inspections and other matters that arise from time to time in the ordinary

course of business. Following are the details of contingent liabilities not recognised in these consolidated financial

statements.

As at

31 December 2015

As at

31 December 2014

USD USD

a) Indirect tax matters pending in appeal 1,528,068 1,589,008

b) Guarantees given towards construction and execution of wind

power projects

903,057 -

2,431,125 1,589,008

40. Other mattersDuring the year, one of the supplier of “Wind turbine generator” filed an arbitration application before the High

Court of Telangana and Andhra Pradesh (‘Honourable High Court’) seeking appointment of an arbitrator alleging

that MEIL has breached the terms of an agreement and is liable for liquidated damages. Management has not

acknowledged these claims as debts, given the nature of the underlying dispute, allegations between the parties

and significant uncertainties relating to the financial claims. Management is evaluating the financial effect and

considers that additional disclosure as required under IAS 37 could prejudice the outcome of the case.

41. Comparatives Previous year’s figures have been regrouped / reclassified wherever necessary to conform with the current year’s

classification / disclosure.

108

Notice of Annual General MeetingMytrah Energy Limited

(Incorporated and registered in Guernsey with company number 52284)

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about

the contents of this document or as to the action you should take, you are recommended immediately to seek

your own financial advice from your stockbroker, bank manager, solicitor, accountant or other independent

financial adviser duly authorised pursuant to the Financial Services and Markets Act 2000.

If you have sold or otherwise transferred all of your Ordinary Shares in Mytrah Energy Limited, please immediately

forward this document and the accompanying Form of Proxy to the purchaser or transferee or to the stockbroker,

bank or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or

transferee. However, such documents should not be forwarded or transmitted in or into any jurisdiction in which

such act would constitute a violation of the relevant laws in such jurisdictions. Therefore, persons into whose

possession this document comes should inform themselves about and observe any such laws and restrictions in

any such jurisdictions. Any failure to comply with these restrictions may constitute the violation of the security

laws of such jurisdictions. If you have sold or transferred only part of your holding of Ordinary Shares in Mytrah

Energy Limited you should retain these documents.

Notice is hereby given that the 2016 Annual General Meeting (“AGM”) of the shareholders of Mytrah Energy

Limited (the “Company”) will be held at Ground Floor, Dorey Court, Admiral Park, St Peter Port, Guernsey GY1

2HT, Channel Islands on Wednesday 15 June 2016 at 12.00 noon to consider and, if thought fit, pass the following

resolutions.

Resolutions 1 to 10 will be proposed as ordinary resolutions and resolution 11 will be proposed as a special resolution.

Ordinary resolutions

1. To receive the accounts of the Company and the directors’ report for the financial year ended 31 December

2015 and the report of the Company’s auditor thereon (the “Annual Report and Accounts”).

2. To approve the “Directors’ Remuneration Report” set out in the Annual Report and Accounts for the financial

year ended 31 December 2015.

3. To re-appoint KPMG Audit LLC as auditor of the Company, to hold office until the conclusion of the next AGM

to be held in 2017.

4. To authorise the Directors to determine the remuneration of the auditor of the Company.

5. To re-elect as a Director Mr Ravi Shankar Kailas, who voluntarily retires in accordance with the recommendations

of the UK Corporate Governance Code.

6. To re-elect as a Director Mr Rohit Phansalkar, who voluntarily retires in accordance with the recommendations


7. To re-elect Mr John Russell Fotheringham Walls, who voluntarily retires in accordance with the recommendations


8. THAT the Directors of the Company be and are hereby authorised to exercise all powers of the Company to

issue or grant equity securities (as defined in the Articles of Incorporation of the Company) in the capital of

the Company in accordance with Article 4.3 of the Articles of Incorporation of the Company:

(A) up to a maximum number of 54,545,333 ordinary shares of the Company (“Ordinary Shares”) (equal

to approximately one third of the number of Ordinary Shares in issue as at the date of publication of

this notice) and after giving effect to the exercise of any warrants, options or other convertible shares

outstanding at the date of the passing of this Resolution (such number to be reduced by any issue or

grants made under paragraph (B) below in excess of any equivalent number); and

109

(B) up to a maximum number of 109,090,666 Ordinary Shares (equal to approximately two- thirds of the

number of Ordinary Shares in issue as at the date of publication of this notice) and after giving effect to

the exercise of any warrants, options or other convertible shares outstanding as at the date of the passing

of this Resolution (such number to be reduced by any issues or grants made under paragraph (A) above)

solely in connection with an offer by way of a rights issue:

(i) to Ordinary Shareholders in proportion (as nearly as may be practicable) to their existing holdings;

and

(ii) to holders of other shares or securities, as required by the rights of those securities or as the Directors

of the Company otherwise consider necessary,

and so that the Directors of the Company may impose any limits or restrictions and make any arrangements

which it considers necessary or appropriate to deal with treasury shares, fractional entitlements, legal,

regulatory or practical problems in, or under the laws of, any territory or any other matter,

such authorities to expire at the end of the AGM of the Company to be held in 2017 or, if earlier, at

the close of business on the date falling 15 months from the date of passing of this Resolution (unless

previously renewed, revoked or varied by the Company by ordinary resolution), but, in each case, during

this period the Company may make offers, and enter into agreements, which would, or might, require

equity securities to be issued or granted after the authority given to the Directors of the Company

pursuant to this Resolution ends and the Directors of the Company may issue or grant equity securities

under any such offer or agreement as if the authority given to the Directors of the Company pursuant to

this Resolution had not ended. This Resolution revokes and replaces all unexercised authorities previously

granted to the Directors of the Company to issue or grant securities but without prejudice to any issue of

shares or grant of rights already made, offered or agreed to be made pursuant to such authorities.

9. THAT the Company be and is hereby generally authorised in accordance with section 315 of The Companies

(Guernsey) Law, 2008 (as amended) (the “Companies Law”), conditional on Ordinary Shares of the Company

remaining listed on AIM, a market operated by the London Stock Exchange, to make one or more market

acquisitions (within the meaning of section 316 of the Companies Law) of Ordinary Shares (which following

their acquisition may be cancelled or, to the extent permitted by the Companies Law, be held in treasury),

provided that:

(A) the maximum aggregate number of Ordinary Shares that may be purchased under this authority is

32,727,200 (equal to approximately 20 per cent. of the number of Ordinary Shares in issue as at the date

of publication of this notice);

(B) the minimum price (exclusive of expenses) which may be paid for an Ordinary Share is £0.01 per Ordinary

Share;

(C) the maximum price (exclusive of expenses) which may be paid for an Ordinary Share is 150% of the

highest independent bid made (i) on the day on which that Ordinary Share is acquired and (ii) on the

trading platform where the purchase is carried out; and

(D) the authority hereby conferred shall (unless it is previously renewed, revoked or varied by the Company

by ordinary resolution) expire at the conclusion of the AGM of the Company held in 2017 or, if earlier,

at the close of business on 15 December 2017, save that the Company may make a contract to acquire

Ordinary Shares under this authority before its expiry which will or may be executed wholly or partly after

its expiration and the Company may make an acquisition of Ordinary Shares pursuant to such a contract,

and the general authority previously granted pursuant to section 315 of the Companies Law at the annual

general meeting of the Company held on 6th August 2015 be and it is hereby revoked.

10. THAT the Company be and is hereby authorised to send or supply information and documents in electronic

form or by means of a website.

110

Special Resolution

11. THAT, if Resolution 8 (being the proposed ordinary resolution of the Company numbered 8 in this notice of

AGM) is passed, the Directors of the Company be and they are hereby authorised to exercise all powers of the

Company to issue or grant equity securities (as defined in the Articles of Incorporation of the Company) in the

capital of the Company wholly for cash pursuant to the issue or grant referred to in Resolution 8 (being the

proposed ordinary resolution of the Company numbered 8 in this notice of AGM) as if the pre-emption rights

contained in article 4.13 of the Articles of Incorporation of the Company did not apply to such issue or grant,

this authorisation being limited to:

(A) the issue or grant of equity securities in connection with an offer of such securities by way of rights

(including without limitation, under a rights issue, open offer or similar arrangement) to holders of equity

securities in proportion (as nearly as may be practicable) to their respective holdings of such securities,

but subject to such exclusions or other arrangements as the Directors may deem necessary or expedient

to deal with fractional entitlements, record dates or any other legal or practical problems under the laws

of any territory, or the requirements of any regulatory authority or stock exchange; and

(B) the issue or grant of equity securities up to a maximum number of 54,545,333 Ordinary Shares (equal to

approximately one-third of the number of Ordinary Shares in issue as at the date of publication of this

notice) and after giving effect to the exercise of any warrants, options or other convertible securities

outstanding as at the date of this Resolution,

such authorities to expire at the end of the AGM of the Company to be held in 2017 or, if earlier, at the close

of business on the date falling 15 months from the date of the passing of this Resolution (unless previously

renewed, revoked or varied by the Company by special resolution) save that the Company may before such

expiry make an offer or agreement which would or might require equity securities to be issued or granted after

such expiry and the Directors may issue or grant equity securities in pursuance of such an offer or agreement

as if the authority conferred by the above resolution had not expired. This resolution revokes and replaces all

unexercised authorities previously granted to the Directors of the Company to issue or grant equity securities

in the capital of the Company wholly for cash as if the pre-emption rights contained in article 4.13 of the Article

of Incorporation of the Company did not apply to such issue or grant but without prejudice to any issue of

shares or grant of rights already made, offered or agreed to be made pursuant to such authorities.

By order of the Board

Susan Wallace

Company Secretary

Registered Office:

Ground Floor

Dorey Court

Admiral Park

St Peter Port

Guernsey

GY1 2HT

Registered in Guernsey with registered number 52284

Dated: 30 April 2016

111

Notes:

1. A member entitled to attend and vote at the AGM is entitled to appoint one or more proxies to speak and

vote instead of them. A proxy need not be a member of the Company. Completion and return of the Form of

Proxy will not preclude members from attending or voting at the AGM if they so wish.

2. More than one proxy may be appointed provided each proxy is appointed to exercise the rights attached to

different shares.

3. In accordance with the provisions of the UK Corporate Governance Code it should be noted that a vote

withheld is not a vote in law and will not be counted in the calculation of the proportion of the votes for and

against each resolution.

4. A Form of Proxy is enclosed for use at the AGM. The Form of Proxy should be completed in accordance with

the instructions set out therein and sent, together with the power of attorney or other authority, if any, under

which it is signed, or a notarially certified copy of such power or authority, so as to reach the Company’s agent,

for this purpose being, Computershare Investor Services (Guernsey) Limited, c/o the Pavilions, Bridgwater

Road, Bristol, BS99 6ZY not less than 48 hours before the time for holding the AGM.

5. All persons recorded on the register of shareholders as holding shares in the Company as at close of business

on the day which is two business days before the day of the meeting or, if the AGM is adjourned, as at 48

hours before the time of any adjourned AGM, shall be entitled to attend and vote (either in person or by

proxy) at the AGM and shall be entitled to one vote per share held.

6. If the AGM falls to be adjourned because it is not quorate, it will be adjourned to the same time and place

five business days later or to such other day and/or time and/or place as the Directors of the Company may

determine, whereupon those shareholders then present in person, by their representative or by proxy, shall

form the quorum. In the event of any such adjournment the Company will announce the adjournment via a

regulatory information service but no notification will be sent directly to shareholders.

7. Where there are joint registered holders of any shares such persons shall not have the right of voting individually

in respect of such shares but shall elect one of their number to represent them and to vote whether in person

or by proxy in their name. In default of such election the person whose name stands first on the register of

shareholders shall alone be entitled to vote.

8. On a poll votes may be given either personally or by proxy and a shareholder entitled to more than one vote

need not use all their votes or cast all the votes they use in the same way.

9. Any corporation which is a shareholder may by resolution of its Board of Directors or other governing body

authorise such person as it thinks fit to act as its representative at the AGM. Any person so authorised shall be

entitled to exercise on behalf of the corporation which he represents the same powers (other than to appoint

a proxy) as that corporation could exercise if it were an individual shareholder.

10. As at 30 April 2016 (the latest practicable date prior to the printing of this notice) the Company’s issued share

capital consisted of 163,636,000 Ordinary Shares of no par value, all carrying one vote each per share. No

Ordinary Shares are held in treasury.

11. Copies of the following documents are available for inspection at the registered office of the Company during

usual business hours on any weekday (weekends and public holidays excluded) and will be available for

inspection at the place of the AGM for 15 minutes before and during the AGM itself:

(a) a copy of the Company’s Annual Report and Accounts for the year ended 31 December 2015; and

(b) copies of the service contract for Ravi Kailas and the Non-Executive Directors’ appointment letters.

112

Explanatory notes to the Notice of Annual General Meeting

At the AGM there are 11 Resolutions which shareholders will be asked to consider and, if thought fit, approve. An

explanation of each of these Resolutions is given below. Resolutions 1 to 10 (inclusive) are proposed as ordinary

resolutions. An ordinary resolution requires more than 50% of votes cast at the AGM relating to that resolution to

be in favour of it for the resolution to be passed. Resolution 11 is proposed as a special resolution, which requires at

least 75% of votes cast at the AGM relating to that resolution to be in favour of it for the resolution to be passed.

Ordinary Resolutions

Resolution 1: Annual Report and Accounts

For each financial year the Directors are required to lay the Annual Report and Accounts before its annual general

meeting. Shareholders are asked to receive the Annual Report and Accounts of the Company for the year ended

31 December 2015.

Resolution 2: Report on Directors’ Remuneration

The Annual Report and Accounts for the year ended 31 December 2015 contains a Report on Directors’ Remuneration,

which sets out the remuneration policy for the Company and reports on the remuneration arrangements in place

for its directors. The shareholder vote will be advisory only, but the Directors of the Company will take the

outcome of the vote into consideration when reviewing and setting the Company’s remuneration policy.

Resolutions 3 and 4: Appointment and remuneration of the Auditors

KPMG Audit LLC have indicated that they are willing to continue to be the Company’s Auditors for the next year.

You are asked to approve their reappointment and to authorise the Directors of the Company to determine their

remuneration.

Resolutions 5 to 7 (inclusive): Election of Directors

In accordance with the recommendations of the UK Corporate Governance Code, Ravi Kailas, Russell Walls and

Rohit Phansalkar, have resolved to voluntarily submit themselves for re-election by the shareholders at the AGM.

Having considered the performance and contribution made by each of the Directors, the Board believes that

each of them continue to perform effectively and with commitment to their roles and, as such, recommends their

re-election. Brief biographical details of the Directors seeking re-election can be found in the Annual Report and

Accounts.

Resolution 8: Authority to issue shares

Paragraph (A) of this Resolution would give the Directors the authority to issue shares or grant rights to subscribe

for, or convert any securities into, shares up to a maximum number of 54,545,333 Ordinary Shares in the Company.

This amount represents approximately one-third of the issued Ordinary Share capital of the Company as at the

date of publication of this notice.

In line with guidance issued by the Association of British Insurers (‘ABI’), paragraph (B) of this Resolution would

give the Directors authority to issue shares or grant rights to subscribe for, or convert any securities into, shares in

connection with a rights issue in favour of shareholders up to a maximum number of 109,090,666 Ordinary Shares

in the Company. This amount (before any reduction) represents approximately two-thirds of the issued Ordinary

Share capital of the Company as at the date of publication of this notice.

In order to ensure that the maximum amount of shares issuable under Resolution 8 is in total never more than an

amount equal to approximately two-thirds of the issued Ordinary Share capital, deductions will be made from

(A) or (B) to ensure that this remains the case, whether or not the Company issues shares under (A) or (B) first.

Without prejudice to the Company’s business strategy (which may involve future issues of shares), the Directors

have no specific present intention to exercise either of the authorities sought under this Resolution. However,

if they do exercise the authorities, the Directors intend to follow ABI recommendations concerning their use

(including as regards the Directors standing for re-election in certain cases).

113

The authorities sought under paragraphs (A) and (B) of this Resolution will expire at the conclusion of the AGM

of the Company held in 2017, or, if earlier,15 months after the date of the AGM.

Resolution 9: Authority to purchase own shares

The Company has previously granted authority to make market acquisitions of its Ordinary Shares to address,

among other things, any imbalance in the supply of, and demand for, Ordinary Shares. The current authority

expires at the end of the AGM.

This Resolution proposes to renew the authority of the Company to make market acquisitions of up to a maximum

number of 32,727,200 Ordinary Shares in the Company. This amount represents approximately 20% of the issued

Ordinary Shares capital of the Company as at the date of publication of this notice.

The Directors will exercise this power only when, in the light of market conditions prevailing at the time, they

believe that the effect of such purchases will be in the best interests of the Company and of its shareholders

generally and when the directors believe, after careful consideration, that such a purchase would be expected

to result in an increase in adjusted earnings per share. The Directors consider it to be desirable for this general

authority to be available to provide flexibility in the management of the Company’s capital resources and to satisfy

the exercise of employee share options under the Mytrah Employee and Mytrah Executive Share Option Schemes.

The Company may hold in treasury any of its own shares that it purchases pursuant to the authority conferred

by this Resolution, (subject to a maximum limit of 10% of issued share capital as set out in the Companies Law).

In accordance with the Companies Law, the Company may only make market purchases of its Ordinary Shares

provided it satisfies the ‘solvency test’ (as detailed in the Companies Law) if (i) it is able to pay its debts as

they become due; and (ii) the value of its assets is greater than the value of its liabilities. In connection with any

purchase of the Company’s Ordinary Shares, the Directors will therefore need to confirm that the solvency test

will be satisfied immediately following such purchase being made.

The minimum price which may be paid for an Ordinary Share is £0.01. Given the volatility of the share price and

limited liquidity, the maximum price which may be paid for an Ordinary Share has been set at 150% of the highest

independent bid made (i) on the day on which that Ordinary Share is acquired and (ii) on the trading platform

where the purchase is carried out. However, the Board will seek at all times to comply, where practicable, with

best practice guidance which recommends that the maximum price, exclusive of expenses, which may be paid

for an Ordinary Share is the higher of: (i) an amount equal to 5% above the average market value for an Ordinary

Share for the five business days immediately preceding the date of the purchase; and (ii) the higher of the price

of the last independent trade and the highest current independent bid on the trading venues where the purchase

is carried out.

Any Ordinary Shares purchased under the renewed authority will either be cancelled or held in treasury (subject to

the maximum number of shares that may be held in treasury of 10% of the issued Ordinary shares of the Company,

as set out in section 317 of the Companies Law), which may be re-issued to satisfy the exercise of employee share

options under the Mytrah Employee and Mytrah Executive Share Option Schemes.

As at the date of publication of this notice: no Ordinary Shares are held by the Company in treasury; options to

subscribe for Ordinary Shares are outstanding over a total of 24,134,258 Ordinary Shares; and warrants conferring

the right to subscribe for shares are outstanding in respect of 11,439,762 Ordinary Shares.

The authority sought under this Resolution will expire at the end of the AGM to be held in 2017, or, if earlier, at the

close of business on 15 December 2017.

Resolution 10

The Company is seeking members’ consent to send or supply information and documents in electronic form and

via a website. The use of electronic communications will deliver savings to the Company in terms of administration,

printing and postage costs.

114

Special Resolution

Resolution 11 Disapplication of pre-emption rights

Article 4.13 of the Articles of Incorporation requires that where Ordinary Shares are issued, or rights to subscribe

for, or convert any securities into, Ordinary Shares are granted, wholly for cash, or where Ordinary Shares are sold

out of treasury wholly for cash, either shareholder approval must be sought to make a non-pre-emptive offer or a

pre-emptive offer must be made to all existing shareholders (but allowing the Directors to make such provision as

they think fit in relation to fractional entitlements and/or certain overseas shareholders and/or any other matters).

The Board believes that the ability to issue new Ordinary Shares on a non-pre-emptive basis is in the best interests

of the Company as this affords considerable flexibility and a significant reduction in time and costs in effecting

fundraisings.

If approved, the disapplication authority will allow the Board to issue up to a maximum number of 54,545,333

Ordinary Shares (equal to approximately one-third of the total number of Ordinary Shares in issue as at the date

of publication of this notice) on a non pre-emptive basis.

The authority sought under this Resolution will expire at the end of the AGM of the Company to be held in 2017

or, if earlier, 15 months after the date of the AGM.

Mytrah Energy Limited

(Incorporated and registered in Guernsey with company number 52284)

Form of Proxy

Please read the notice of Annual General Meeting and the explanatory notes below before completing this form.

For use by holders of Ordinary Shares at the Annual General Meeting of Mytrah Energy Limited (the “Company”)

convened for Wednesday 15 June 2016 at 12 noon at Ground Floor, Dorey Court, Admiral Park, St Peter Port,

Guernsey GY1 2HTand at any adjournment thereof:

I/We………………………………………………………………………………………………………………………………….....………………………………………..(Block Capitals)

Of…………………………………………………………………………………………………………………...……………...………........………………………………..(Block Capitals)

being (a) shareholder(s) of the Company hereby appoint the Chairman of the meeting

or ……….………………………………………………………………...……………………...……………………...…………………………………………………………………………………….

as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company (the “AGM”)

to be held on Wednesday 15 June 2016 at 12 noon and at any adjournment thereof.

I/WE direct the proxy to vote on the Resolutions as follows:

Ordinary Resolutions FOR AGAINST WITHHELD 1. To receive the Annual Report and Accounts of the Company for

the year ended 31 December 2015, together with the Report of the

Directors and Auditors thereon.

2. To approve the Directors’ Remuneration Report set out in the

Annual Report and Accounts for the year ended 31 December 2015.

3. To reappoint KPMG Audit LLC as Auditors of the Company, to hold

office until the conclusion of the next Annual General Meeting of

the Company to be held in 2017.

4. To authorise the Directors to determine the remuneration of the

Auditors of the Company.

5. To re-elect as a Director Mr Ravi Shankar Kailas, who voluntarily

retires in accordance with the recommendations of the UK

Corporate Governance Code.

6. To re-elect as a Director Mr Rohit Phansalkar, who voluntarily retires

in accordance with the recommendations of the UK Corporate

Governance Code.

7. To re-elect as a Director Mr John Russell Fotheringham Walls, who

voluntarily retires in accordance with the recommendations of the

UK Corporate Governance Code.

8. To authorise the Directors to issue Ordinary Shares.

9. To authorise the Company to make market purchases of its own

shares which may be cancelled or held as treasury shares.

10. To authorise the Company to send or supply information and

documents in electronic form or by means of a website.

Special Resolution FOR AGAINST WITHHELD 11. To disapply pre-emption rights under Article 4.13 of the Articles of

Incorporation.

Please indicate with an X in the appropriate space how you wish your vote to be cast. On receipt of the form duly

executed and in the absence of a specific direction, your proxy will vote or abstain as he or she thinks fit on the

resolutions.

Signed: .………………………………… Date ……………………….2016

Notes:

1. If it is desired to appoint as proxy any person other than the Chairman of the AGM, his/her name and address

should be inserted in the relevant place and reference to the Chairman of the meeting deleted and the

alteration initialled.

2. If the shareholder is a corporation, this form must be executed under its common seal or under the hand of its

duly authorised officer or attorney.

3. In the case of joint registered holders of any shares, such persons shall not have the right of voting individually

in respect of such shares but shall elect one of their number to represent them and to vote whether in person

or by proxy in their name. In default of such election the person whose name stands first on the register of

shareholders shall alone be entitled to vote.

4. Any alterations to this Form of Proxy should be initialled by the person who signs it.

5. The Form of Proxy should be completed in accordance with the instructions set out therein and sent, together

with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of

such power or authority, so as to reach the Company’s agent, for this purpose being, Computershare Investor

Services (Guernsey) Limited, c/o the Pavilions, Bridgwater Road, Bristol, BS99 6ZY not less than 48 hours

before the time for holding the Meeting.

6. Completing and returning a Form of Proxy will not prevent a member from attending in person at the meeting

and voting should he or she so wish.

7. In the event that a Form of Proxy is returned without an indication as to how the proxy shall vote on the

resolutions, the proxy will exercise his discretion as to whether and, if so, how he votes.

8. A shareholder entitled to exercise more than one vote need not cast all his or her votes in the same way.

9. In accordance with the provisions of the UK Code of Corporate Governance it should be noted that a vote

withheld is not a vote in law and will not be counted in the calculation of the proportion of the votes for and

against each resolution.

A [email protected]

www.mytrah.com

a culture of excellence - mytrah · 100%bindu vayu holding 100% holding mytrah energy (india)...

Documents