Mytrah Energy Regulatory News (MYT)

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Mytrah Energy Limited

("Mytrah Energy" or the "Company")

Final Results for year end 31 March 2012

The Board of Directors of Mytrah Energy Limited (the "Board") is pleased to announce the Company's annual financial results for the year ended 31 March 2012. The 2012 Audited Annual Report and Accounts will be posted to shareholders today and is 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 8 November 2012 at Anson Place, Mill Court, La Charroterie, St Peter Port, Guernsey, GY1 1EJ, Channel Islands.

Highlights:

·; Revenue of USD 6.97m for the year ended 31 March 2012 (2011: USD nil);

·; Earnings before interest, taxes, depreciation and amortisation (EBITDA) of USD 3.78m for the year ended 31 March 2012 (2011: USD (1.15m));

·; Loss after tax of USD 2.83m for the year ended 31 March 2012 (2011: USD 1.58m);

·; Profitable at the Indian operating company level;

·; USD 156.69m of debt financing secured from Infrastructure Development Finance Company ("IDFC") and Indian Renewable Energy Development Agency ("IREDA") as at 31 March 2012 (2011: USD 100.00m) which includes USD 115.71m of mezzanine financing secured from Indian Infrastructure Fund, IDFC and PTC Financial services ("PTC") as at 31 March 2012 (2011: USD nil);

·; 316 megawatt ("MW") (186 MW during the year) of fully operational capacity with a further 24 MW scheduled to be delivered in Q3 of 2012-13;

·; Signed an memorandum of understanding ("MoU") with the Government of Andhra Pradesh to develop 2,850 MW of capacity over the next seven years;

·; Signed an MoU with the Government of Karnataka for 1,627 MW of capacity;

·; Licences, access, allotments or concessions secured for areas suitable for over 5,000 MW of self-developed projects;

·; Strengthening of the management team; and

·; The dollar strengthening has a minimal cash and economic impact on the Company as all of its contracts are in Indian rupees.

Post Year End

·; Installed capacity increased to 316 MW across seven projects in four States;

·; Additional senior debt of USD 109.99m secured with L & T Infra, IREDA and State Bank of Patiala;

·; Draw down on non-dilutive mezzanine funding of USD 18.15m from PTC;

·; Projects performing ahead of forecast plant load factors ("PLF"); and

·; Proposed restructuring of the Board

Ravi Kailas, Mytrah Energy's Chairman and Chief Executive Officer, commented:

Over the last 12 months, Mytrah has rapidly evolved into an independent power producer ("IPP") with a portfolio of operating wind farm projects across India. In a short time span and from a standing start, we believe we have become one of the top two largest wind IPPs in India during 2012. We have reached this milestone by establishing strong relationships with leading wind turbine manufacturers, securing mezzanine funding with no equity dilution, securing senior debt from a wide spectrum of leading Indian lenders, building one of the best and most comprehensive execution teams in this space, securing allotments and concessions for an estimated 5000 MW wind development portfolio across various states, and completing 316.2 MW of wind projects, 186 MW during the year ended March 2012 and 130.2 MW post year end.

The Group and its subsidiaries have secured non-dilutive funding totalling USD 115.71m from India Infrastructure Fund, IDFC and PTC during the year. We are the first IPP in the wind sector to secure this scale and type of funding, which we believe is testament to our project development strategy and team.

In addition, we announced in December 2011 that our 100% owned subsidiary, Bindu Vayu Urja Private Limited had secured new senior loan funding totalling USD 185.18m. This comprised USD 115.71m which is fully underwritten by IDFC, and USD 69.47m which has now completed syndication. The Group believes that this is the largest single senior debt placement for a wind power focused renewable IPP in India.

Furthermore, post year-end, our 100% owned subsidiary, Mytrah Vayu (Pennar) Private Limited has secured senior debt totalling USD 71.55m. This takes our total senior loan funding to USD 256.55m. All senior debt has been secured at rates that the Board considers competitive and is for a tenure of 14 years.

Albeit with a slight delay, we currently have a well-diversified portfolio of 316.2 MW of fully operational assets across seven projects in four states and 24 MW under advanced stages of construction to be delivered in Q3 of 2012-13. The underlying assets have a very strong cash flow profile with long-term Power Purchase Agreements ("PPAs") and generate predictable and long-term cash flows providing attractive returns for our shareholders. These projects have, so far performed above our initial estimated PLF validating the assessments made by the company.

In an environment where identifying and executing projects with attractive returns is becoming an increasingly difficult task, our team has done a fabulous job of identifying a further 270 MW of projects that meet and pass our stringent criteria in terms of risks of project execution, project cost and above normal returns. These projects are under advanced stages of development where construction is expected to begin in October/November 2012 and are targeted to be commissioned and generating power in stages by the first half of 2013. I am happy to report that 340.2 MW is by far the single largest addition of assets in such a period by any wind IPP in India and we expect to reach a cumulative total of approximately 600 MW of operational wind capacity by the end of the first half of 2013, at which point Mytrah should be established as the largest independent wind IPP in India.

The cost of wind power in India has almost reached 'Grid Parity' with traditional thermal power generation in almost all the states that we operate in. 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 recent auctions for new coal fired generation in the states of Karnataka and Andhra Pradesh and the tariff announcements by CERC for commissioned projects revealed prices that are higher than what the states offer for wind power. This creates a fundamental business proposition for Mytrah and its business and de-risks the business from any adverse regulatory changes. Furthermore, the growing energy demand without equivalent growth in supply produces a constant upward thrust on power prices and given the fuel supply, permitting and environmental issues associated with the conventional sector, the power outages continue to be rampant throughout the nation and the industries and commercial establishments continue to incur about Rs. 16-20 /KwH to generate power through diesel generators, further re-enforcing the strength of our business.

Overall, this has been a transformational year for the Company and we have laid a strong foundation for long term profitable and sustainable growth. In a short span of time, we have built, what I believe is a unique, vibrant and exciting organisation capable of being an industry leader and drive change in the industry. I believe that Mytrah's continued access to financing, its access to a deep and wide development portfolio, strong partnerships with equipment vendors, differentiated strategy, favourable industry dynamics and experienced management team will enable the Group to maintain its rapid growth and deliver a highly accretive and profitable portfolio of superior asset returns to its investors.

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

- Ends -

 For further information please contact:

Chairman and CEO's Statement 

It is a pleasure to present Mytrah's preliminary audited financial results for the year ended 31 March 2012, our first operating year as a public company. The Group began recognising revenue for the first time in the current financial year, with wind farms in Gujarat, Rajasthan and Maharashtra states becoming operational. I am happy to inform that these projects have, so far, performed above our initial estimated PLFs validating the assessments made by the Group. The Group currently has 316 MW (186 MW during the year ended 31 March 2012) of fully operational capacity with a further 24 MW scheduled to be delivered in Q3 of 2013. The Group reported an EBITDA of USD 3.78m for the year ended 31 March 2012 (2011: USD (1.15m)) and considers EBITDA to be a key performance indicator.

Financial review

For the year ended 31 March 2012, the Group's revenue was USD 6.97m (2011: USD nil) and loss after tax of USD 2.83m (2011: USD 1.57m). Due to the 14.5% fall in the exchange rate between the Indian Rupee and US dollar, there was an exchange loss on translating foreign operations of USD 12.02m (2011: USD 0.93m) included within total comprehensive loss for the year of USD 14.82m (2011: USD 2.50m). This is a translation reserve and has no cash or operational impact and is purely a conversion item. The tax credit for the year ended 31 March 2012 is USD 1.37m (2011: USD 0.38m charge) which is primarily due to a deferred tax credit of USD 1.53m (2011: USD nil), which was partially offset by a current tax charge of USD 0.16m. Finance cost for the Group for the year ended 31 March 2012 was USD 4.70m compared with USD 0.04m for the year ended 31 March 2011 which was due to an increase in borrowings which were USD 152.67m at 31 March 2012 compared to USD nil at 31 March 2011.

Net assets of the Group increased by 59% to USD 111.60m (2011: USD 70.34m) and the net assets per share by 59% to USD 0.68m (2011: USD 0.43m). The main movements in the balance sheet items were property, plant and equipment capitalised during the year and loans drawn down during the financial year. Property, plant and equipment increased to USD 371.21m as at 31 March 2012 (2011: USD 28.28m).

The cash used in operations during the year was USD 5.79m (2011: USD 3.01m). Investing activities for the year ended 31 March 2012 resulted in a cash outflow of USD 188.68m which was USD 137.87m higher than the year ended 31 March 2011. This was due to higher spend on property, plant and equipment. Net financing cash inflows were USD 214.09m (2011: USD 71.34m). The increase in financing cash inflows was mainly due to draw down of loan facilities, proceeds from issue of compulsory convertible debentures ("CCD") and compulsory convertible preference shares ("CCPS") during the year ended 31 March 2012 amounting to USD 123.85m (2011: USD 0.2m), USD 33.44m (2011: USD nil) and USD 69.47m (2011: USD nil) respectively. At 31 March 2012 the Group had cash and bank balances of USD 3.15m (2011: USD 16.86m).

At 31 March 2012 the Group had at its disposal USD 130.00m (2011: USD nil) of undrawn, committed borrowing facilities. The Group's net debt position has changed over the course of the year and is mainly on account of the drawdown of loan facilities during the year.

Strategy, Business and Operations Review

The delivery of wind energy projects is being managed across two phases. The Group has business partnership agreements with two leading global wind turbine manufacturers, Suzlon on a turnkey basis and Gamesa for our self-development phase. Post period, the Group has added ReGen, further diversifying our vendor relationships.

It is important to note that although short-term operational targets are of significance to the Group, with the funding and revenue generating assets of 316.2 MW now in place, we have greater visibility on the speed of delivering approximately 600 MW of our roll-out schedule by the first half of 2013. We have also demonstrated our ability to deliver assets at speed and at low cost that benchmarks well against our peers in the Indian market.

Mytrah is not just intending to become the number one wind IPP in India, but also aims to be a competitive cost and value based operator in the country to secure higher returns for shareholders. Specifically, we aim to achieve this through a combination of achieving project costs about 10% below the market benchmark, innovative financing and refinement in site selection and project implementation cycles. These will be significantly important and differentiating factors over our peers.

To achieve this, we have secured fixed terms for the delivery of 1,000 MW of capacity with Suzlon, which will help the Group achieve the objective of becoming the largest and lowest cost venture in the Indian wind energy sector. Importantly, the turnkey framework of our agreement with Suzlon removes the execution risk associated with developing these projects. Suzlon takes responsibility for managing and constructing the projects while Mytrah provides the wind turbine manufacturer with access to our ambitious roll-out schedule with a goal to achieve utility scale by 2017.

During the financial year, in May 2011, we signed our second agreement with a wind turbine manufacturer, Gamesa. This helps us implement our 'self-development model' where Mytrah will play a direct role in managing the execution of the projects and Gamesa will take responsibility for the manufacture, supply, erection and supply of the wind turbines for these sites.

Operational review

Subsequent to 31 March 2012, Mytrah has seven projects fully developed and connected to the grid totalling 316.2 MW:

In addition we currently have a further 24 MW under development with Suzlon at Gotne in Maharashtra; we expected this project to be fully commissioned during the 2013 fiscal year. Including this project, the Group will have a fully commissioned and connected asset base of about 340.2 MW.

As announced earlier, the Company has reduced the size of its project at Sinner in Maharashtra by 10.5 MW to 18.9 MW, from the previously announced 29.4 MW, and has cancelled the project at Hanumanthappa, Karnataka (35.7 MW). In addition, we have also decided to cancel the 33 MW project at Vita, Maharashtra. The Board had become concerned about possible delays at these sites and therefore decided to redeploy the Group's resources to sites where we have greater visibility on the execution timetables. Upon cancellation of such projects, there are no penalties imposed on the Group and no adverse financial impact or uncertainty with respect to recovering amounts advanced to the main contractor Suzlon, as the Group's ability to claim liquidated damages is not affected by project cancellations. The Board believes that one of the significant advantages of the Group's business model is to be able to adapt to such circumstances by adjusting the size and locations of individual projects. In addition, and again due to the turnkey nature of its contracts, the Company does not incur an increase in the cost of the projects and has also realised any advances paid to the vendors. We believe that it is worth re-emphasising this point as its value cannot be underestimated, by redeploying the Company's resources. We believe that this will enable the Group to reach its target of over 600 MW by the first half of 2013 in the quickest and most efficient manner. 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 any of its competitors.

I am also pleased to inform that the Group's strategy of holding the project and turbine prices constant over a long period of time is now playing out as there has been some positive momentum on the regulatory side in terms of the feed in tariff; the Maharashtra State Electricity Board has recently increased its tariff from Rs. 5.37 per kWh to Rs. 5.67 per kWh and two of the Company's projects (Sinner and Gotne) in Maharashtra have benefited from this increase in tariff providing a significant increase in the overall return on these projects. In addition, the Rajasthan State Electricity Board has increased its tariff from Rs. 4.64 per KwH to Rs. 5.18 per Kwh that has benefited part of our Kaladongar project in that state and will also benefit our future portfolio. The Gujarat State Electricity Board has also announced a significant increase in feed in tariffs from Rs. 3.56 per Kwh to Rs. 4.61 per Kwh which will greatly benefit the Group's future portfolio. The Group expects the state of Andhra Pradesh to increase their tariffs in the near term followed by the state of Karnataka; again providing significant benefit to the Group's future portfolio. As the project cost has not changed any increase in the feed in tariff will have a favourable impact on the Company's financials.

All of our projects are under long-term (20-25 years) PPA's with the credible counter parties thus providing a very high visibility of revenues and profitability for the next 20-25 years.

The market for Renewable Energy Certificate ("REC") trading has stabilised since its emergence over a year ago and provides an opportunity to participate in generating higher revenues and value for our shareholders. Mytrah has contracted 27.30 MW capacity under the average power purchase cost (APPC) + REC scheme on its project at Jamanwada. The revenues and benefits under the REC would be visible in the second half of 2013 fiscal year.

A sharp depreciation in Indian currency by about 14.5% 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. However, reporting at the Mytrah Energy Limited ("MEL") level, the impact of converting INR to USD is reflected in losses due to foreign exchange conversion.

Also, I am happy to report that all of our contracts are Indian Rupee based and the recent weakening of rupee against all major currencies is not expected to have any economic or cash impact on the Group and its businesses.

Future Growth and Development Portfolio

In addition to our existing development portfolio of 3,000 MW, this year we also signed a MoU with the Government of Andhra Pradesh under which we have received allotments/concessions for about 2,850 MW. This gives Mytrah an exclusive license, access and concessions for developing and owning 2,850 MW of wind capacity at sites that have been assessed as wind-rich in that state over the next seven years. We have also secured similar allotments with exclusive licenses, rights and concessions with Government of Karnataka for development and ownership of approximately 1,627 MW.

The availability of suitable sites in the wind-rich states is a valuable and finite resource. The acquisition of high quality development assets is a strategic priority for the long-term sustainability of the business and provides a competitive advantage as we begin the self-development phase of our strategy.

As at the year-end, our allotments and concessions secured across wind-rich locations in states in western and southern India, which include relevant leases and direct allotments, licences and sanctions from the respective state authorities for the installation of wind power generation farms, are at an estimated capacity of over 5,000 MW. The value of these assets are not reflected in our balance sheet and in the recent past some of our peers have valued and acquired similar assets for between $40,000 - $90,000 per MW. The Group has appointed a reputed third party to value the assets and expects the exercise to be completed by the end of March 2013.

We have continued the installation of wind masts to collect more wind data across our various sites and we now have more than 100 masts spread across all wind rich states and the results so far are very encouraging.

As I mentioned earlier, in an environment where identifying and executing projects with attractive returns is becoming an increasingly difficult task, as has been evident from the difficulties that most of our competition has faced, our team has done an outstanding job of identifying a further 270 MW of projects that meet and pass our stringent criteria in terms of risks of project execution, project cost and above normal returns. These projects are under advanced stages of development where construction is expected to begin in October/November 2012 and are targeted to be commissioned and generating power in stages by the first half of 2013. We are confident that these are some of the best assets in the country and are being developed at a cost that will deliver highly attractive returns to our shareholders.

Further, of our development portfolio mentioned above, about 500-700 MW is at a very advanced stage and can be commissioned as early as in the year 2014. We plan to start construction at some of these locations in mid-2013 with a target to commission the assets by mid-2014. I look forward to giving a further update on our development activities and more as the year progresses.

Asset Performance

The performance of the Group's assets so far has been extremely encouraging and is well over the Group's and its lenders' initial expectations. We look forward to covering this and more through a first half year update shortly.

Market Environment

There continues to be a significant shortage of power supply in India, with current capacity deficit of 11.2% at peak power demand and 8.3% at base power demand. 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 urbanisation expected to increase from 28% to 41% by 2030, the energy sector in India provides a strong backdrop for growth underpinned by a substantial capacity deficit. Indeed, the demand for electricity is expected to continually grow by some 7% compound annual growth rate over the next 10 years.

The current Five Year plan called for an increase in total generation capacity to 342 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 200 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, the cost of wind power in India has almost 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 18 months we have 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 the same level. 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.

As on the Balance Sheet date, we have registered aggregate capacity of 186 MW under different Special Purpose Vehicles for eligibility under the Generation Based Incentive ("GBI") scheme. Post 1 April 2012, the extension in GBI scheme has not been announced by the Government. Several representations have been made by renewable energy players and respective industry forums seeking extension in the GBI scheme which we believe is under active consideration of the Government and a notification to this effect is expected soon.

Whilst GDP growth in India has slowed over the last year it is still estimated to be in excess of 6.5%. 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 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 January 2012 we were pleased to appoint Deutsche Bank as our Joint Broker alongside Mirabaud Securities. We believe that Deutsche Bank's involvement will provide us further reach to fulfil our growth potential.

Over the last year, we have spent a great deal of time and energy on developing a comprehensive framework for selecting, developing, implementing/executing and operating projects. We now have comprehensive standard operating procedures (SOPs) for all key activities, quality manuals, accounting manuals, SHE Policy and have also institutionalised a robust set of systems and processes that we believe are world class and compare with that of the best companies in the world in our sector. We expect these systems to create a long-term positive impact and put the organization on a path of strong and sustainable growth.

We have also taken further steps to broadly comply with the Quoted Companies Alliance Corporate Governance Guidelines for Smaller Quoted Companies.

To manage the growing scale and size of operations the Company recently implemented SAP and it went live successfully in July 2012.

In order to improve operational efficiency, the Directors have decided to reduce the Board to three Directors, namely myself, Russell Walls and Rohit Phansalkar.

Alastair Cade and Vikram Kailas will step down from the MEL board, but will continue in their current operational roles and will remain on the Board of our main operating subsidiary, Mytrah Energy (India) Limited (MEIL). Both Philip Swatman and Peter Neville will not be seeking re-election at the Annual General Meeting on 8 November 2012. I would like to place on record my appreciation for their valuable contribution and to thank both Philip and Peter for their support of Mytrah during their tenure.

Human Capital

The recent developments in the Indian power sector have laid the road ahead for Mytrah's rapid growth in terms of building strong presence not only in the wind energy space but also in other forms of renewable energy generation.

Keeping in mind the targeted capacity the Company grew from 24 to 91 employees over the last financial year. 70% of the employees belong to the wind business.

During the year, our HR Policies were benchmarked with the best in industry practices and standardised for transparency and consistency. This was important as we grew and attracted talent from across various industries and sectors.

The performance management process was also rolled out to ensure that goals and deliverables were captured and assessed for compensation increases. During the last year we had 85 employees who went through the appraisal process.

During the rapid growth phase, it was important that we built an organisational culture that had values institutionalised. The core values of Mytrah were formalised in line with the Mission statement. The five core values are Integrity, Creativity, Excellence, Respect for individuals and being Socially Responsible. Our reward mechanisms would ensure that positive adherence to these values are recognised. We have scheduled Value workshops to reiterate the core values across the organization,

Although talent scouting and retention remain a challenge in this space, Mytrah was able to attract and retain critical talent with an employee turnover percentage of only 2% which is much below the average attrition of 15-20% in our sector.

In our pursuit of the massive capacity expansion plans and the need to get direct employability skills, it was important that we devise new ways to attract and retain talent in the crucial phase. The organisation has embarked into a few retention strategies to overcome the demand for trained personnel comprising skilled engineers, supervisors and managers including:

a) Campus Hiring: Hiring a captive talent pool into the organisation to meet the growing talent demands. A contractual commitment is sought from employees to recover the investments made in training.

b) Learning & Development through opportunities to hone specialised skills. Deploying employees on short-term engagements in other areas coupled with on-site deployment.

c) Talent Management Practices: Focusing on rewarding competencies that contribute to exceptional business performance in light of retaining talent.

We continue to grow and are a 156 strong human capital base (70% forming the wind business) at the end of the first quarter of the financial year 2012-13.

We have also taken on office space across India to ensure easier access to resources and administration. We have a total of 11 offices across India that include five site offices, five regional offices and the corporate office at Hyderabad.

Corporate and Social Responsibility ("CSR")

All activities in respect of the construction of our wind farms have been undertaken by Suzlon under our turnkey phase I of our strategy. All activities, including social CSR activities and compliance with applicable standards set out in Indian environmental legislation are undertaken by Suzlon and are monitored internally to ensure our CSR standards are being met.

As we initiate phase II of our strategy and self-develop our wind farms we will have a comprehensive CSR policy and procedures in place. Details will be posted on our corporate website in due course and set out in our next annual report.

Mytrah is committed to promoting the health, safety and welfare of our people. Employees are expected to follow health and safety policies and procedures and make management aware of potential safety hazards.

Business Outlook

This year has been transformational for Mytrah and we are confident that we have built a strong investment proposition based on generating reliable and long-term cash flows through the development of wind projects in India. Based on this, the coming months are set to be highly active and progressive for Mytrah as we rapidly deploy our funds to develop the Company's operational and corporate standing within the Indian energy sector and consolidate our position as a leading wind IPP in the country.

Finally, I would like to take this opportunity to thank our shareholders, team, advisers and associates for their support over the period as we execute our ambitious strategy and continue to deliver a profitable utility scale generating capacity.

Ravi Shankar Kailas

Chairman and CEO

27 September 2012

These financial statements were approved by the Board of Directors and authorised for use on 27 September 2012

Signed on behalf of the Board of Directors by:

Ravi Shankar Kailas Vikram Kailas

Chairman and CEO Chief Financial Officer and Director

Notes to the consolidated financial statements for the year ended 31 March 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. 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:

(1) Non-controlling interests:

A. Under Indian law a public company must have at least seven members. Sixty shares are held by the following shareholders: Ravi Kailas, Angad Paul, Vikram Kailas, Sree Ramulu Kailas, Uma Thondepu and Vasudevi Kailas.

B. As part of the agreement to issue compulsory convertible preference shares ("CCPS"), the India Infrastructure fund ("IIF") was issued with 100 ordinary shares in MEIL.

(2) Incorporated in January 2011 and acquired by MEIL on 4 October 2011. The effective interest is as noted above as this is a wholly-owned subsidiary of MEIL.

(3) Incorporated in December 2011 as a wholly-owned subsidiary of MEIL.

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 Indian subsidiaries, MEIL, BVUPL and MVPPL.

2. Adoption of new and revised standards and interpretations

In the current year, the following new and revised standards and interpretations have been adopted by the Group, none of which had a material impact on the current year 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 Company'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.

3 Significant accounting policies

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 year ended 31 March 2012 and the comparative period.

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

The financial information in this announcement, which was approved by the Board of Directors on 27 September 2012 does not constitute the Group's statutory accounts for the years ended 31 March 2012 and 2011, but is derived from those accounts. The auditor has reported on those accounts; their report is unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under sections 263(2) and 263(3) of The Companies (Guernsey) Law, 2008.

Whilst the financial information included in this preliminary announcement has been prepared in accordance with IFRS, this announcement does not itself contain sufficient information to comply with IFRS. The Company will publish the full financial statements for the Group that comply with IFRS by end of September 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 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 Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategy, Business and Operations Review. The financial position of the Group and its cash flows are described in the financial review on page 6. In addition, note 32 of the financial statements included the Group's objectives, details of its financial instruments and hedging activities, and its exposure to credit risk and liquidity risk.

As highlighted in note 32 of the financial statements, the Group meets its day-to-day working capital requirements by maintaining adequate reserves, banking facilities and reserve borrowing facilities. Subsequent to year end, the Group made further capital commitments of USD 200.10 m in addition to the existing capital commitments of USD 63.90 m at the year end. These capital commitments are in relation to the supply of additional wind farm assets, the supply of which the Directors consider are an integral part of their business plan. The Group forecast shows that it has USD 285m of funding to fund these projects, with USD 265 m already secured at the date of approval of these financial statements and do not indicate there will be any breaches of covenants associated with these funding.

The Group's forecasts and projections, taking into account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current facilities. In addition, the Directors believe that the Group's maximum liability under the agreements is capped at a level well within available resources.

Therefore, after making enquiries and assessing the Group's financial position, anticipated future performance, its available and planned bank facilities and capital expenditure plans, together with other risks facing the Group, the Directors have a reasonable expectation that the Group has 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 annual 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 main operating subsidiary of the Group is Indian Rupees ("INR").

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 profit or loss 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 loss 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:

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 at INR 0.50 (~USD 0.01) per unit, when registration under the relevant programme has taken place and its eligibility criteria met under the Indian Renewable Energy Development Agency Limited - Generation Based Incentive scheme.

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.

Effective Interest Rate method

The effective interest 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 profit or loss.

Financial instruments (continued)

Available-for-sale financial assets

Listed shares and listed redeemable notes 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 the investments revaluation 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 profit or loss.

The fair value of AFS monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the balance sheet date. The foreign exchange gains or losses that are recognised in profit or loss are determined based on the amortised cost of the monetary asset. Other foreign exchange gains and losses are recognised in other comprehensive income.

Held-to-maturity investments

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 profit or loss.

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 FVTPL.

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.

Property, plant and equipment

Initial recognition

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 and direct labour, 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 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 of property, plant and equipment.

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 income" for gains and "other operating expenses" for losses in the 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 to 20 years

Buildings 20 years

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 reassessed annually.

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.

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 year. Taxable profit differs from profit as reported in the statement of comprehensive income 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.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

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.

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.

Leasing

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 reliably 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 full in the period in which they occur. They are recognised outside profit or loss and presented in other comprehensive income.

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.

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 34.

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 profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to equity reserves.

SAYE 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.

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.

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.

Held-to-maturity financial assets

The Directors have reviewed the Group's held-to-maturity financial assets in the light of its capital maintenance and liquidity requirements and have confirmed the Group's positive intention and ability to hold those assets to maturity. The carrying amounts of the held-to-maturity financial assets is USD 964,281 (2011: USD nil). Details of these assets are set out in note 18.

Impairment of fixed assets

The determination of recoverable amounts of the CGUs assessed in the annual impairment test requires the Group to estimate the fair value net of disposal costs as well as value in use. The assessment of value in use requires assumptions to be made with respect to the operating cash flows of the CGUs as well as the discount rates.

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 (see note 20).

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

All revenue is from continuing operations.

Revenue from two customers relating to power generating activities represent USD 6,254,838 (2011: USD nil) of the total revenue.

7. Loss for the year

8. Auditor's remuneration

The analysis of the auditor's remuneration is as follows:

9. Staff Costs

The average monthly number of employees (including executive Directors) was:

10. Investment income

11. Other gains and losses

Available-for-sale financial assets represent investments in mutual funds and redeemable bonds. During the year disposals of available-for-sale investments resulted in a gain of USD 815,356 (2011: USD 141,648), and the change in fair value of the derivative instruments within CCDs resulted in a gain of USD 39,921. Gains were partially offset by the change in fair value of the derivative instruments within CCPS of USD (323,715) (2011: USD nil).

12. 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.

13. Taxation

The credit for the year can be reconciled to the 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 feeof 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 32.60% has been computed based on the current tax rates prevailing in India.

The Indian income tax rate decreased from 33.22% to 32.45% with effect from assessment year 2011-12. 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 159,221 as MAT is greater than corporate income tax for the current period. In the prior year, the Company was not liable for MAT as the Company did not have any taxable profits.

In the prior period, a permanent difference between tax losses and book losses arose as current Indian tax law does not allow losses incurred before trading commences to be carried forward.

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:

14. Earnings per share

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

Options to purchase ordinary shares that were excluded from the computation of diluted earnings per share because they are anti-dilutive were 14,708,689 at 31 March 2012, and 4,877,400 at 31 March 2011.

15. Intangible assets

The amortisation period for application software is four years.

16. Property, plant and equipment