Mytrah Energy Regulatory News (MYT)

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Mytrah Energy Limited

("Mytrah Energy" or the "Company")

Final Results for nine months ended 31 December 2012

The Board of Directors of Mytrah Energy Limited (the "Board") is pleased to announce the Company's financial results for the nine months period ended 31 December 2012, following the Company's change to its financial year end from March to December as announced on 13 March 2013. The audited report and accounts will be posted to shareholders on 30 June 2013 and will be available on the Company's website www.mytrah.com. The Company further announces that the Annual General Meeting will be held at 12 noon on 31 July 2013 at Anson Place, Mill Court, La Charroterie, St Peter Port, Guernsey, GY1 1EJ, Channel Islands.

Highlights:

·; Revenue of US$38.91 m including other operating income, for the 9 month period ended 31 December 2012 (Revenue for 12 month period ended 31 March 2012: US$ 6.97 m; other operating income 31 March 2012; Nil)

·; Earnings before other income, taxes, depreciation and amortisation US$ 35.48 m for the period ending 31 December 2012 (31 March 2012: US$ 3.78 m);

·; Profit after tax of US$12.02 m for the period ended 31 December 2012 (31 March 2012: loss after tax of US$ 2.83 m);

·; USD0.45 m and USD0.24 m of Generation Based Incentive ("GBI") and Renewable Energy Certificates ("REC") revenues respectively not accrued pending extension of GBI scheme and realization of RECs.

·; Currently 309.9 megawatts ("MW") of fully operational capacity

·; Exceptional ROE of approximately 20% for 9 months ended December, 2012, despite the current portfolio of 309.9 MW not running for the entire period

·; Licenses, access or concessions secured for areas suitable for upto 8,000 MW of future projects.

·; Increase in tariffs of 22.75% and 34.29% in Rajasthan (75.60 MW installed capacity) and Andhra Pradesh (63 MW installed capacity) respectively.

·; Average age of trade receivables 49 days (2012: 75 days)

Post Year End

·; Additional senior debt of US$203m secured across a diverse range of Indian senior debt providers led by The State Bank of India and PTC India Financial Services, to finance 238.2 MW of capacity, with turbines from Regen Power and Gamesa due for delivery in 2013.

·; Announced the proposed acquisition of 59.75 MW of capacity in the States of Tamil Nadu and Maharashtra subject to regulatory approval and formal documentation.

·; Anticipated total installed capacity of over 600 MW during 2013.

·; Proposed re-introduction of Generation Based Incentives announced by the Indian Government.

·; Change of year-end from March to December to reflect the Indian wind season.

Chairman and CEO's Statement 

Over the last nine months, Mytrah has consolidated its position as a profitable, cash generative, independent power producer ("IPP") with an expanding portfolio of operating wind farm projects across India.

We have also increased the visibility of our asset rollout schedule by securing debt financing for a total of 238.2 MW of capacity across three projects currently under development, which is expected to bring our installed capacity to over 600 MW during 2013. Reaching this significant milestone will highlight our leading position over our peer wind IPPs in India.

Our continued success is down to our abiity to forge strong relationships with wind turbine manufactuers; rigorous cost control; securing financing across a diverse range of leading Indian lenders and building teams with proven ability to execute wind projects and secure land and legal permissions. Moreover, we aim to have the best in class in asset management with respect to current and future projects.

We announced in March 2013 that we had secured US$203 m of additional senior debt to finance the construction of 238.2 MW of new capacity, split between two projects with Gamesa machines in Andhra Pradesh and Karnataka totalling 137.7 MW and one project of 100.5 MW with ReGen Power machines in Tamil Nadu. We believe that we are the first IPP in the Indian wind sector to secure this scale of funding and have now developed relationships with 15 banks, which we believe provides the Company with a significant and broad based support from the Indian Banking Sector for the Company's development pipeline totalling 1,500 MW during 2015, a testament to our project development strategy and a robust team that has propelled our leading position in the industry.

Following the completion of these projects and the proposed acquisition, Mytrah will have a total of over 600 MW connected to the grid and fully operational. These assets are spread over 16 project sites in 6 different states. We believe that this gives us two significant advantages. Firstly we will benefit from a portfolio effect, meaning that as our sites are spread across the wind rich states in India any variation in wind patterns across India is spread across our portfolio giving us increased visibility of generation and revenue streams over the long term. Secondly, the majority of our current sites have the ability to be significantly expanded. This means a large part of the development risk on future capacity is reduced as parts of the infrastructure are already in place for that expansion.

We would also like to highlight that of our expected portfolio of over 600 MW by the end of 2013, we anticipate that approximately 20% of those assets will be selling power under the Group Captive scheme. Group Captive schemes will enable Mytrah to be able to sell electricity that it produces directly to the end consumers. This is a new development for the Company and will have the affect of enabling us to leverage those assets into future increases in the power price and given the significant element of fixed costs in our production, any rise in the realised price for generated electricity results in an increase in the Company's operating margins. This is particularly important as there is no input cost inflation across the life of those assets and as a result we see this bringing significant value to Mytrah. In addition it is worth noting that the portion of our portfolio in the state of Maharashtra is under Power Purchase Agreements ("PPAs") with 13-year terms. Consequentially the tariff on those off-take agreements will get reset half way through the expected 25 year life of those assets that again should provide significant upside to the Company.

As we announced in April 2013, your Board is evaluating a potential initial public offering and listing of our wind power assets as a Business Trust ("Business Trust") on the Singapore Exchange Securities Trading Limited ("Proposed Listing"). A Business Trust is similar to a Real Estate Investment Trust ("REIT") structure for non-property assets. The Proposed Listing will be subject to regulatory approvals in Singapore and an application will be made to the relevant authorities in due course. We have engaged Global Book Runners and counsel for theProposed Listing.

The portfolio that would be acquired by the Business Trust is being evaluated and it is currently envisaged that the Company would maintain a significact ownership stake in the Business Trust. We expect the proceeds of the Proposed Listing to be used to pay down all or a substantial part of the Group's senior and mezzanine debt and part finance the rollout of the development pipeline, focussing on our target of 1,500 MW during 2015. Your Board believes that the Proposed Listing would optimise the cost of the Company's debt and equity, which is the Company's largest operational cost, and therefore enhance the underlying value of its assets and generating substantial shareholder value.

Our current portfolio continues to perform well, with PLFs at the portfolio level at or exceeding our initial estimates, validating our vigorous evaluation process used for all new projects and our strategy to build scale quickly whilst not compromising on the quality of our assets.

We believe that Mytrah's continued access to financing in India, our access to land enabling us to take greater control over our roll-out schedule, our diversified range of strong partnerships with wind turbine manufacturers, our ability to build assets at a competitive cost whilst managing development risk, and the quality of our management and teams will enable the Group to continue to grow rapidly and generate significant value for our shareholders.

Further information on the Company can be found at www.mytrah.com.

- Ends -

For further information please contact:

Business Review 

It is a pleasure to present Mytrah's preliminary audited financial results for the nine month period ended 31 December 2012

Financial Review

A summary of key financial results is set out in the tables below and discussed in this section.

Income statement summary

Revenue

For the nine month period ended 31 December 2012 the Group's revenue was US$ 38.91m, including other operating income (revenue 12 month period ended 31 March 2012: US$ 6.97m; other operating income 31 March 2012: Nil). The increase in revenues is attributable to increase in installed capacity during the period. USD 0.45 m and USD 0.24 m of Generation Based Incentive ("GBI") and Renewable Energy Certificates ("REC") revenues respectively not accrued pending extension of GBI scheme and realization of RECs.

Gross profit

As a result of increased revenues the Group has recorded a gross profit of US$ 25.60 m for the nine month period ended 31 December 2012 (31 March 2012: US$ 3.53m). The gross profit margins increased by 32.15% to 82.79% for the nine month period ended 31 December 2012 (31 March 2012: 50.64%). Gross profit increased by US$ 4.27 m on account of change in estimated useful life and residual value of wind farm assets as explained in note 35 of the consolidated financial statements.

EBITDA

EBITDA for the nine month period ended 31 December 2012 increased to US$ 35.48 m (31 March 2012: US$ 3.78 m), an increase of US$ 31.70m following the significant increase in Group's revenues. EBITDA includes other operating income of US$ 7.99m (31 March 2012: US$ Nil).

Finance costs

Finance costs for the nine month period ended 31 December 2012 were US$ 16.67 m compared with US$ 4.70 m for the year ended 31 March 2012, which was due to an increase in borrowings by 115.76 m to US$ 268.43 m at 31 December 2012 (31 March 2012: US$ 152.67), reflecting the increase in the Company's installed capacity during the period.

Depreciation and amortisation

Depreciation and amortisation for the nine month period ended 31 December 2012 was US$ 5.59 m (31 March 2012: US$ 3.28 m). The increase in depreciation was mainly on account of depreciation on wind farms and other plant and machinery capitalised during the period. Also during the period, in line with international accounting standards, the group has revised the useful life of wind farms assets and increased the useful life of Wind Turbine Generator to 25 years from 20 years. Refer note 35 of the consolidated financial statements for further details on change in useful life of plant and machinery.

Taxation

The tax expense for the period ended 31 December 2012 was US$ 1.19 m (31 March 2012: tax credit of US$ 1.37 m). The tax expense represents the net deferred tax liability on timing differences accounted during the period.

Profit after tax

The Group recorded a profit after tax of US$ 12.03 m for the nine month period ended 31 December 2012 (31 March 2012: loss after tax of US$ 2.83m). The operations resulted in profit for the period from continuing operations attributable to the equity holders of the Company which was primarily due to an increase in revenues by US$ 23.95 m during the period ended 31 December 2012.

Profit per share:

Basic and diluted earnings per share from continuing operations for the nine month period ended 31 December 2012 were US$ 0.0735, compared with US$ (0.0173) for the year ended 31 March 2012.

Financial position

Our balance sheet at 31 December 2012 can be summarised as set out in the table below:

Net assets increased by 6.4% to US$ 118.73 m (31 March 2012: US$ 111.60 m) and the net assets per share by 6.4% to US$ 0.73 (31 March 2012: US$ 0.68 ). The main movements in the balance sheet items were trade receivables, trade payables and loans drawn down during the financial year.

Capital structure

Strong 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 do so on a weekly basis, ensuring that the Group has adequate liquidity.

As at 31 December 2012 the Group had net debt of US$ 258.97 m (31 March 2012: US$ 149.52 m). During the nine month period ended 31 December 2012, additional loans of US$ 115.76 m were drawn down (31 March 2012: US$ 152.67 m). The Group continues to be able to borrow at competitive rates and therefore currently deems this to be the most effective means of raising finance. The Group was able to establish good relationships with banks and financial institutions which enabled it to raise further financing since period end.

Principal risks and uncertainties

The Group is faced with a variety of risks to the management of the business and the execution of its strategy. These risks are managed on a day-to-day basis by the Management Committee and formally reviewed by the Audit Committee and the Board to monitor that appropriate and proportionate mitigation in the form of processes and controls are in place. A summary of the key business risks are detailed below.

Business Interruption/Critical Service Failure

The Group's current wind farms are dependent on stable patterns of wind, operations and maintenance undertaken by Suzlon Energy Limited ("Suzlon"), grid connectivity and other critical resources. 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.

In mitigation of this risk, Mytrah uses independent consultants to conduct wind feasibility studies when evaluating projects and also use independent consultants to evaluate wind turbine generators supplied to our wind farms. We also ensure periodic preventative maintenance is undertaken. The Group is building an asset management team to ensure, and where possible enhance standards of asset management undertaken both internally for our self-build projects and those projects built and maintained by our turnkey partners.

We are commissioning 100.5 MW of capacity from ReGen Power and 137.7 MW with Gamesa, diversifying our development and asset management risk.

Delay in commissioning projects

Construction projects are by their very nature complicated and subject to numerous factors that could cause a delay in the completion and commissioning of a wind farm. The majority of our current projects and those under construction and at final stages of delivery are under contracts with Suzlon, and more recently, ReGen Power and Gamsea which have provisions that enable Mytrah to make claims for liquidated damages in the event there is a delay in commissioning a project. In addition our projects are closely managed on a daily basis, with issues quickly escalated to senior levels within the organisation.

Information Technology/Processing

As the business expands and processes become increasingly automated, our IT requirements are growing and are now more critical to our operations. We have an experienced IT team in place, ensuring systems are well maintained and our growing IT requirements are being fulfilled. We have an SAP enterprise resource management software which is facilitating the expansion of the business and enhancing the quality of information available to our management and executive teams.

Environmental Compliance

Non-compliance with environmental legislation would expose the Group to various potential penalties and would run counter to our core values. To mitigate this risk, the Group undertakes an environmental and social due diligence report for each project. The majority of our environmental compliance activities are currently undertaken by Suzlon and Regen Power. However Mytrah has the necessary expertise and procedures to ensure compliance with environmental legislation in respect to the commissioning of projects under our self-development strategy. Compliance with environmental legislation is at the heart of our self-build development strategy.

Managing Change

The Group continues to be in a rapid growth phase and the Indian renewable energy sector is also one of rapid change, with new measures being introduced on a national and state level. To mitigate this risk, the Group uses independent consultants and outsourced contractors where appropriate to ensure the Group's activities can be scaled up or down as required on a timely basis and help ensure the business can be flexible in response to changes in the industry and the political and economic environment.

Availability and cost of Financing

The Group is reliant, at this early stage of its development, on the timely availability of senior debt and mezzanine financing in order to finance its ambitious asset roll-out schedule. To mitigate this risk, the financing team has established relationships across a diverse range of finance providers in India, including The State Bank of India, which is a testament to the attractiveness of the Group's business model and the strength of our management team. Projects can also be financed from internal cash generation in the event that new debt financing becomes unavailable to the Group.

The largest operational cost of the Group is the cost of debt. The Group's projects are financed by project based debt. Management has structured the projects in such a way that debt is only drawn down once key development milestones are reached and the majority of debt is only drawn down once capacity is installed and it starts generating revenue. The cost of debt is factored into each project at the evaluation stage to ensure it meets or exceeds our minimum IRR requirements. As mentioned in the Chairman and CEO's statement, the Board is also evaluating the possibility of a Business Trust Listing that would substantially or wholly pay down the Group's debt.

Strategy Review and Future Growth

The Group's business model is based on delivering wind assets at a competitive price whilst minimising development risk to generate value to shareholders. The Group has agreements with three leading global wind turbine manufacturers, Suzlon Energy Limited ('Suzlon'), Regen Power ("ReGen") and Gamesa Wind Turbines Private Limited ('Gamesa'). As detailed above, we have also announced the proposed acquisition of 59.75 MW of operational assets subject to regulatory approval and formal documentation. Over time we expect the fragmented renewable energy sector in India to consolidate, and the Group will continue to evaluate opportunities as and when they arise.

With 309.9 MW of operational capacity now in place and an expected total of 600 MW during 2013, the Group has demonstrated its ability to deliver wind capacity at speed and at a competitive price, whilst firmly establishing credibility as a relative newcomer into the sector by being one of the largest wind IPPs in India since its incorporation two and a half years ago.

Mytrah is not just intending to become the number one wind IPP in terms of scale in India, but also aims to be a competitive cost and value based operator in the country, in order to secure higher returns for shareholders. It's not just about scale, but about the quality, cost and performance of the assets to generate stable and long-term income streams. Specifically, we aim to achieve this through a combination of achieving project costs below the market benchmark, innovative financing and attention to detail in site selection and project implementation cycles. These will be significantly important and are key differentiating factors for the Group against its peers.

During the financial year, in September 2012, we embarked on our first three projects with both Gamesa and Regen in the states of Karnataka, Andhra Pradesh and Tamil Nadu totalling 238.2 MW. Following the completion of these sites Mytrah will have over 600 MW spread across six states and 16 projects providing both a portfolio effect from a risk perspective and as highlighted above reduced execution risk on future developments as the majority of these sites have the capacity to be significantly expanded.

In September 2012, in order to focus management time on its core activities and in keeping with the Company's strategy to outsoucre project development to de-risk the development of our projects, the Company entered into an agreement with Bindu Urja Infrastructure Private Limited ("BUIL") for the provision of balance of plant services. Pursuant to the agreement with BUIL, the Company finalised the re-deployedment of its plant and project management teams to,BUIL which has enabled the Group to de-risk the development of our projects.

In addition to our existing assets we have secured a number of allotments with exclusive licenses, rights and concessions with the Governments of Andhra Pradesh in respect of approximately 2,800 MW, Karnataka for approximately 1,600 MW and Gujarat for 1,000 MW. The acquisition of high quality development assets is a strategic priority for the long-term sustainability of the business. The availability of suitable land in the wind-rich states is a valuable and finite resource and these agreements and any future agreements with other wind rich States are a strategic priority for the long-term sustainability of the business and provides a competitive advantage and a future engine for growth.

 As at the period-end, our allotments and concessions secured across wind-rich locations in states in western and southern India, which include relevant leases and direct allotments, licenses and sanctions from the respective state authorities for the installation of wind power generation farms, are at an estimated capacity of up to 8,000 MW.

In addition to the acquisition of future land assets, we have continued the installation of wind masts to collect more wind data across our various sites and we now have 122 masts spread across all wind rich states.

Our existing development pipeline is expected to take us to a total of 1,500 MW during 2015 and we look forward to providing further updates on our development activities and more as the year progresses.

Operational review

Operational Overview:-

The Group currently has seven projects fully developed and connected to the grid totalling to 309.9 MW of installed capacity as set out below:

Subsequent to the period end and following the announcement of the proposed acquisition of 59.75 MW, which remains subject to regulatory approval and formal documentation, we repositioned the timing of some of our development pipeline which included 24 MW at Gotne in Maharashtra and the movement of 31.25 MW at Sautada in Maharashtra into the Company's 2014- 2015 development pipeline. This has been done at no cost to the Company.

The Board believes that one of the significant advantages of the Group's business model is its ability to adapt by adjusting the size and locations of individual projects. We are aware of the many well reported cases of significant delays within the Indian infrastructure market and consider our ability to redeploy capital without any additional cost and avoiding being tied into delayed projects with rising costs a significant and unique advantage that Mytrah has over the majority of its competitors.

The assets currently under development and due for completion in stages during 2013 are as follows:-

I am also pleased to inform that the Group's strategy of holding the project and turbine prices generally constant over a long period of time is now playing out as there has been positive momentum on the regulatory side in terms of feed in tariffs; Andhra Pradesh has increased the tariff for wind power projects from Rs 3.50 per kWh to Rs 4.70 per kWh, Gujarat has increased its tariff to Rs 4.15 per kWh and recently Maharashtra State Electricity Board announced a revised tariff structure ranging up to Rs. 5.81 per kWh.

In addition, the Rajasthan State Electricity Regulatory Commission has issued a tariff order determining the tariff for wind power plants as Rs. 5.46 per KwH and Rs. 5.73 per Kwh for "Jaisalmer and Barmer" districts respectively. This will have a positive impact on the Group's future plans and portfolio. The Group also expects the state of Karnataka to increase their tariffs in the near term by passing a judgment in response to the petitions filled in Karnataka Electricity Regulatory Commission by all the major Wind associations of the country; again providing significant benefit to the Group's future portfolio as any increases in the feed in tariff will have a favorable impact on the Company's future projects.

Of our existing projects only 16.8 MW have off take agreements related to the Renewable Energy Certificate Market ("REC"). The market for REC trading has been subdued with trading occurring at the floor price in limited volumes. The Company is pleased that its decision to enter into long term PPA's for the majority of its assets has proved correct at this stage and provides a very high visibility of revenues and profitability for the duration of those contracts. In addition as highlighted above in the Chairman and CEO's statement, we expect that about 20% of our portfolio by the end of 2013 will be selling power under the Group Captive scheme, this has the effect of leveraging those assets into future increases in the power price.

Depreciation of the Indian Rupee against the US dollar of approximately 7.0% during the period, has not impacted the Company's performance at the India level. This is primarily due to all capital assets being procured in Indian Rupees as well as all loan liabilities being contracted in Indian Rupees. As a result, the weakening of the Indian Rupee against all major currencies is not expected to have any economic or cash impact on the Group and its business.

During the period we have seen the average age of our trade receivables fall from 75 days to 49 days. This is a reflection of the improved financial position of many State Electricity Boards following the government refinancing announced in September 2012 and the increase in electricity prices across the sector.

Market Environment

There continues to be a significant shortage of power supply in India. Although India's development in electricity generation has increased significantly over the past decade, the development of new power generation facilities and increases in electricity generation has not kept up with the increase in demand for electricity. This is in part due to India's dependence on thermal sources for meeting its power requirements. As of April 2013, more than 67% of India's installed power generation capacity was from thermal sources, primarily coal-fuelled power plants, and these sources represented 83% of India's electricity generation. However, thermal power plants in India have experienced challenges in meeting generation targets primarily due to an inadequate supply of coal produced in India as a result of low productivity and infrastructure constraints and the increasing cost of coal imports caused by, among other things, a weakening Indian Rupee. As a result, India has experienced, and is currently facing, a significant power supply deficit. This power deficit was 8.5% and 8.7% in 2011-12 and 2012-13, respectively, with all states facing an energy shortage. With some 50% of rural areas not having access to the electricity grid, current electricity consumption per capita at only 25% of the Global average and with urbanisation expected to increase from 28% to 41% by 2030, the energy sector in India represents a significant opportunity underpinned by a substantial capacity deficit.

Indeed, the demand for electricity in India is expected to continually grow by some 7% compounded annual over the next 10 years. The current Five Year plan called for an increase in total generation capacity to 310 GW by 2017. It is expected that this target will not be met with an estimated shortfall of between 55 GW - 60 GW by 2017. The country's installed capacity is approximately 214 GW and with the well-publicised difficulty in delivering cost-effective fossil fuel based power, Mytrah is in a strong position to benefit as the deficit continues to grow. Due to the above mentioned supply issues, recent advances in wind turbine technology and the opening of the electricity market to the private sector, in certain instances the cost of wind power in India has reached 'Grid Parity' with traditional thermal power generation. This is particularly evident in Mytrah's case as the capital cost of our assets is estimated to be the lowest in the industry.

The fundamental market continues to move advantageously for Mytrah. As highlighted above, over the last 8 months we have recently seen significant increases in long-term tariffs for wind generated electricity across all of our principal states while our project and asset prices remained at similar levels. We believe we will continue to see increases in power tariffs flowing through to energy producers as the underlying prices charged to end consumers have increased and as India tries to address its continued significant power shortage.

On 1 April 2012, the Generation Based Incentive ("GBI") scheme expired. However, in the recent Budget session for 2013-14, the Finance Minister announced the reintroduction of the GBI scheme. Details of the new GBI scheme are yet to be announced by the government. Several of our projects which are at an advanced stage of development and are expected to be commissioned during 2013 will benefit from this scheme.

Whilst GDP growth in India has slowed over the last year it is still estimated to be 5%. In April 2012, the Reserve Bank of India cut interest rates by 0.5% and a further 0.25% cut in September 2012. Although the Indian Rupee and inflation targets remain under pressure, we believe there is potential for further rate cuts over the coming year. As interest on our debt is our main operational cost, any reduction in interest rates provides a significant benefit to Mytrah

Corporate

In order to support our rapid development, in December 2012 we were pleased to appoint Investec Bank as our Joint Broker alongside Mirabaud Securities. We believe that Investec's involvement will help us fulfil our growth potential.

The Board is committed to high levels of corporate governance, demonstrated by the broad compliance with the Quoted Companies Alliance Corporate Governance Guidelines for Smaller Quoted Companies ("QCA Code").

The Board appointed KPMG as auditors in place of Deloitte in November 2012, following an evaluation of a number of vendors by management and a final recommendation from the Audit Committee.

In November 2012, the Board reduced in size to three directors, Ravi Kailas (Chairman & CEO), Rohit Phansalkar (Independent non-executive) and Russell Walls (Senior independent non-executive) in order to improve operating efficiencies.

Human Capital

At Mytrah, our core values drive our valuations. We aspire to be considered as an employer of choice, and thereby have fostered high working standards and positive employee relations. Our work culture is inclusive, where we respect and value individual differences.

Health, safety and wellbeing

As part of our Health Series initiative, the Company continued its investments in various initiatives starting from comprehensive health insurance for its employees to regular health check-ups. We have implemented a Safety Health and Environment Policy (SHE) to ensure safety of our employees at project sites.

Compliance

HR tracks the changes in labour laws in the locations where we have a presence. We also ensure that there is continued emphasis on developing guidelines and approaches for HR governance and compliance in this phase of rapid growth.

Corporate and Social Responsibility ("CSR")

All CSR activities through out the lifecycle of our turnkey projects are undertaken by our turnkey suppliers, namely Suzlon and more recently, ReGen Power. These activities are monitored internally.

As we initiate our self-development projects, Mytrah is responsible for CSR activities before and after the construction phase (during which, the manufacture is responsible for CSR activities).

We have engaged independent third party expertise in this field to assist in the development of our own comprehensive social environmental, health and safety management system alongside establishing detailed standards, policies and procedures and internal accountabilities and governance. These standards, policies and procedures are designed to ensure Mytrah complies with the following standards (which are consistent with local regulatory requirements and guidelines, both generic and sector specific, issued by the World Bank Group):-

·; ISO 14001 (Environmental Management Systems)

·; ISO 18001 (Occupational Health & Safety)

·; ISO 9001 (Quality Management Systems

Compliance with our internal standards, policies and procedures will be monitored by a management steering committee chaired by the chief operating officer and also subject to quarterly review by internal audit and at least annually by an independent third party.

Outlook

This has been another period of transformational growth for Mytrah where we continue to demonstrate our unrivalled ability to execute our strategy of generating reliable and long-term revenue streams and enhancing shareholder value through rapid execution at scale of high quality assets at a competitive price whilst managing development risk. We will continue to be highly active in our pursuit to generate shareholder value by evaluating the Proposed Listing detailed in the Chairman and CEO's statement, seeking attractive opportunities and further raising our profile as the leading wind IPP in India to achieve our ambitious and unprecedented rollout schedule.

Finally, I would like to take this opportunity to welcome our new shareholders and once again thank all our shareholders, management, advisors and associates for their support as we executed our strategy over the period.

Ravi Kailas

Chairman and CEO

24 June 2013

The accompanying notes form an intergral part of these consolidated financial statements

The accompanying notes form an intergral part of these consolidated financial statements

These financial statements were approved by the Board of Directors and authorised for use on 24 June 2013

Signed on behalf of the Board of Directors by:

Ravi Kailas Russell Walls

Chairman and CEO Director

The accompanying notes form an intergral part of these consolidated financial statements

Consolidated statement of changes in equity for the period ended 31 December 2012

The accompanying notes form an intergral part of these consolidated financial statements

The accompanying notes form an intergral part of these consolidated financial statements

Notes to the consolidated financial statements for the period ended 31 December 2012

1. General information

Mytrah 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 Anson Place, Mill Court, La Charroterie, St. Peter Port, Guernsey GY1 1EJ. Mytrah Energy Limited has the following subsidiary undertakings, (together the "Group"), all of which are directly or indirectly held by the Company, for which consolidated financial statements are being prepared, as set out below:

The principal activity of the Company is to operate wind energy farms as a leading independent power producer, and to engage in the sale of energy to the Indian market through the Company's subsidiaries.

These financial statements are presented in US dollars (USD). Foreign operations are included in accordance with the policies set out in note 3.

Notes to the consolidated financial statements for the period ended 31 December 2012 (continued)

2. Adoption of new and revised accounting standards and interpretations

In the current period, the following new and revised standard and interpretation have been adopted by the Group, none of which had a material impact on the current period or prior period reported results or financial position:

At the date of authorisation of the financial statements, the following standards and interpretations, have not been applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been endorsed by the EU).

Based on the Group's current business model and accounting policies, Management does not expect that the adoption of these standards or interpretations will have a material impact on the financial statements of the Group. The Group does not intend to apply any of these pronouncements early.

Notes to the consolidated financial statements for the period ended 31 December 2012 (continued)

3. Significant accounting policies

The Group accounting policies are summarized below:

Basis of accounting

These consolidated financial statements have been prepared in accordance with and comply with IFRS as adopted by the European Union.

The consolidated financial statements have been prepared on the historical cost basis, except for the revaluation of certain financial instruments. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

The Directors have taken advantage of the exemption offered by Section 244 (5) of the Companies (Guernsey) Law, 2008 from preparation of individual financial statements of the Company as the Company is preparing and presenting consolidated financial statements for the financial period ended 31 December 2012 and the year ended 31 March 2012.

Consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 December (previously 31 March) 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.

Going concern

The Directors have considered the financial position of the Group, its cash position and forecast cash flows for the 12 months period from the date of signing these financial statements when considering going concern. The Directors have, at the time of approving the financial statements,a reasonable expectation that the Group have adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements.

Foreign currencies

The consolidated financial statements are presented in USD, which is the presentational currency of the Company, as the financial statements will be used by international investors and other stakeholders because the Company's shares are listed on AIM. The functional currency of the parent company is sterling ("GBP").The functional currency of the subsidiaries is mentioned in note 1.

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 USD: INR exchange rates used to translate the INR financial information into the presentation currency of USD were as follows:

Notes to the consolidated financial statements for the period ended 31 December 2012 (continued)

3. Significant accounting policies (continued)

Foreign currencies (continued)

The GBP: USD exchange rates used to translate the GBP financial information into the presentation currency of USD were as follows:

Revenue recognition

Revenue is recognised when it is probable that future economic benefits will flow to the entity 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 registration under the relevant programme has taken place and its eligibility criteria are met under the Indian Renewable Energy Development Agency Limited - Generation Based Incentive scheme.

Interest income

Interest income is recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliabily. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

Financial instruments

Financial instruments

Financial assets and financial liabilities are recognised in the consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Financial assets

All financial assets are recognised and derecognised on trade date where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned, and are initially measured at fair value, plus transaction costs.

Financial assets 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.

Following the disposal of investments classified as held to maturity during the period, Management will not classify such assets as held for this purpose in line with provisions of IAS 39.

Notes to the consolidated financial statements for the period ended 31 December 2012 (continued)

3. Significant accounting policies (continued)

Financial instruments (continued)

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.

Investment income is recognised on an effective interest basis for debt instruments.

Loans and receivables (including cash and bank balances)

Cash and bank balances and trade and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

Cash and bank balances comprise cash in hand and cash at bank or deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of change in value.

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 profit and loss are carried in the statement of financial position at fair value with gains or losses recognised in the income statement.

Available-for-sale financial assets ("AFS")

Investment 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. Gains and losses arising from changes in fair value are 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. This method uses an effective interest rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. 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. In addition, if there is objective evidence that the investment has been impaired, the financial asset is measured at the present value of estimated cash flows. Any changes to the carrying amount of the investment are recognised in profit or loss.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the financial asset's original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in the income statement.

Notes to the consolidated financial statements for the period ended 31 December 2012 (continued)

3. Significant accounting policies (continued)

Financial instruments (continued)

Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

Financial liabilities and equity

Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.

Compound instruments

The component parts of compound instruments (convertible bonds) 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. This amount is recorded as a liability on an amortised costs basis using the effective interest method until extinguished upon conversion or at the instruments' maturity date. 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 and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

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 preference share held by the non-controlling interest shareholders are classified as equity ( NCI) and the related put options are accounted for as a derivative liablilities under IAS 39 at fair value with changes therein recognised in profit and loss.

Notes to the consolidated financial statements for the period ended 31 December 2012 (continued)

3. Significant accounting policies (continued)

Property, plant and equipment

Recognition and measurement

Property, plant and equipment are recognised as assets in the statement of financial position if it is probable that the Group will derive future economic benefits from them and the cost of the asset can be reliably estimated.

Items of property, plant and equipment are stated at cost less accumulated depreciation and any provision for impairment. Cost includes expenditure that is directly attributable to the acquisition of the asset.The cost of self-constructed assets includes the cost of materials, direct labour and any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Advances paid in respect of work that is yet to be performed is classified as an advanced payment 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 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 within "other gains and losses " 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, plantand 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

The Company has revised its estimated useful life of plant and machinery during the period ended 31 December 2012 and accordingly applied component based method of charging depreciation for plant and machinery. The component wise break up of the plant and machinery and the useful lives determined for the components are mentioned below:

Notes to the consolidated financial statements for the period ended 31 December 2012 (continued)

3. Significant accounting policies (continued)

Property, plant and equipment (continued)

Lease acquisition costs and leasehold improvements are depreciated over the primary period of the lease or estimated useful lives of the assets, whichever is less. Assets under construction are not depreciated, as they are not ready for use.

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

Impairment

At each reporting date, the Company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.

Intangible assets

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

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the period/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. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

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 liability method. 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 of the jurisdiction of the company which 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 income statement, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also dealt 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.

Notes to the consolidated financial statements for the period ended 31 December 2012 (continued)

3. Significant accounting policies (continued)

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

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 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.

Retirement benefit costs

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. Payments made to state-managed retirement benefit schemes are dealt with as payments to defined contribution schemes where the group's obligations under the schemes are equivalent to those arising in a defined contribution retirement benefit scheme.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in the consolidated income statement in full in the period in which they occur.

Past service cost is recognised immediately to the extent that the benefits are already vested, and otherwise is amortised on a straight-line basis over the average period until the benefits become vested.

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in the future contributions to the scheme.

Earning 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 period. 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.

Government grants

The Company 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 recognized as a credit to the consolidated income statement.

Notes to the consolidated financial statements for the period ended 31 December 2012 (continued)

3. Significant accounting policies (continued)

Share-based payments

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value excludes the effect of non-market-based vesting conditions. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 33.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of equity instruments that will eventually vest. 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 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.

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 recognized as it accrues in the income statement, using the effective interest method. Dividend income is recognised in the income statment 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 loans and borrowings. Borrowing costs are recognised in the 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.

Notes to the consolidated financial statements for the period ended 31 December 2012 (continued)

4. Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group's accounting policies, which are described in note 3, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future period.

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.

Useful life of depreciable assets

Management reviews the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets to the Group and any change in useful lives and methods of depreciation are adjusted prospectively if appropriate. Refer note 35 for further details on changes in the useful life of plant and machinery.

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.

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.

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.

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, ability to determine prices etc and concluded that the arrangements do not meet the criteria for service concession arrangements.

Notes to the consolidated financial statements for the period ended 31 December 2012 (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 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. Revenue

Generation based incentive are recognised on fulfilment of eligibility criteria prescribed under Indian Renewable Energy Development Agency Limited - Generation Based Incentives Scheme.

Other operating income represents liquidated damages claimed on certain project suppliers in relation to delays in the execution , cancellation and downsizing of certain projects.

7. Expenses by nature

Notes to the consolidated financial statements for the period ended 31 December 2012 (continued)

8. Auditor's remuneration

The auditor's remuneration is as follows:

9. Staff Costs

Notes to the consolidated financial statements for the period ended 31 December 2012 (continued)

10. Finance income

11. Finance costs

Amounts included in the cost of qualifying assets during the year arose on borrowings sanctioned for the purpose of financing construction of a qualifying asset and it represents the actual borrowing costs incurred on those borrowings, calculated using the effective interest rate method.

Notes to the consolidated financial statements for the period ended 31 December 2012 (continued)

12. Taxation

The debit/(credit) for the period/ year can be reconciled to the profit/(loss) per the income statement as follows:

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 32.45% 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 2,326,395 (31 March 2012: USD 159,221) as MAT is greater than corporate income tax for the current period.

Income tax recognised directly in equity

In addition to the amount charged to the income statement, the following amounts relating to tax have been recognised directly in equity:

Notes to the consolidated financial statements for the period ended 31 December 2012 (continued)

13. Earnings per share

Basic earnings per share is calculated by dividing profit/(loss) attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period/ year.

During the current period, there were no dilutive options for the computation of diluted earnings per share.

14. Intangible assets

Notes to the consolidated financial statements for the period ended 31 December 2012 (continued)

15. Property, plant and equipment