TIDMGKO
RNS Number : 0164U
Greenko Group plc
15 December 2011
15 December 2011
Greenko Group plc
("Greenko", "the Company" or "the Group")
Interim results for the six months ended 30 September 2011 ("the
period")
Greenko, a clean energy generator and supplier to themainstream
Indian energy market, announces its interim results for the six
months ended 30 September 2011.
HIGHLIGHTS
Financial
-- Turnover was EUR19.8 million (2010: EUR25.8 million)
-- EBITDA was EUR11.2 million (2010: EUR11.4 million)
-- Cash balances and deposits EUR49.75 million (2010: EUR73.3 million)
Operational
-- Extension of partnership with General Electric ("GE") for a further 200 new turbines
-- Debt finance secured for wind projects in Andhra Pradesh and Karnataka ($180m in total)
-- 650MW of wind concessions added, taking wind pipeline to 1GW
-- Assets in operation and under development total 1.6GW
Post period end
-- Investment of $50m by GE Energy Financial Services into wind subsidiary
-- New $70m investment by Standard Chartered, now fully funded to 1GW
Commenting on the results, Anil Chalamalasetty, CEO and Managing
Director of Greenko, said:
"Greenko continues to make real progress. In addition to our
operational assets, our development pipeline is diversified, high
quality and now of real scale with over 400MW under various stages
of construction. We are bringing new assets on stream and we are
finding ourselves in a position of increasing strength and stature
with which to secure finance and enter into operational and
technical partnerships, such as our agreement with GE and the new
commitment from Standard Chartered."
"Given the large power deficit in India, the conditions for
renewable power producers are likely to remain favourable for many
years to come. We are scaling our business quickly and successfully
and we remain very well positioned to achieve our medium term goals
and those beyond."
For further information visit www.greenkogroup.com or call;
Greenko
Anil Chalamalasetty +91 (0)98 4964 3333
Mahesh Kolli +91 (0)99 4958 6332
Tim Bowen +44 (0)7973 668818
Arden Partners
Richard Day / Adrian Trimmings +44 (0) 20 7614 5917
Tavistock Communications
Matt Ridsdale +44 (0) 20 7920 3150 / mridsdale@tavistock.co.uk
Mike Bartlett +44 (0) 20 7920 3150 / mbartlett@tavistock.co.uk
Chairman's Statement
I am pleased to report Greenko's interim results for the six
months ended 30 September 2011. We are a leading clean energy
generator and supplier to the mainstream Indian energy market with
a geographically diversified portfolio. The Company has existing
hydro, biomass and natural gas assets and is on track to begin
generating from its new wind assets in the near term. The core
foundations have now been put in place for Greenko to progress
substantially over the coming years.
During the first half, construction began on a number of our
development assets. Of our funded development pipeline of nearly
1GW, projects with an aggregate capacity of more than 400MW are now
being built. When taken together with the 183MW of operational
assets, the proportion of our financed portfolio either operational
or under construction is now nearly 60 per cent. This clearly shows
the progress Greenko is making and further demonstrates the ability
of our team to overcome the challenges associated with permitting,
acquiring land and securing the debt and equity finance to get
projects up and running.
We continue to make good progress in wind and were pleased that
in October GE Energy Financial Services, the investment arm of
General Electric, chose to invest $50 million in our differentiated
wind platform. They have endorsed our strategy by making this
commitment to Greenko, their only renewable investment in India.
Separately, we have entered into an operational partnership
agreement with GE Energy, a global leader in wind technology.
More generally, the power sector in India continues to be
characterised by ever increasing demand and significant shortages.
This is compounded by environmental issues and weak merchant
markets whereby large utilities will honour long term purchase
agreements but often choose not to buy power in the spot market
which can be expensive. Greenko's strategy is designed specifically
to respond to these conditions as we have limited fuel supply risk
and we use environmentally sustainable methods of power generation.
Unlike power generators using fossil fuels, Greenko has access to
long term power off-take agreements which allow us to lock in
attractive margins and long term shareholder returns. The macro
conditions therefore continue to be very favourable for us and our
shareholders.
We have today separately announced a commitment for $70 million
investment from Standard Chartered, together with additional
commitments to provide project level US dollar finance for our wind
portfolio. With this level of support from these two leading names
in the industry, Greenko is well funded for all its development
needs to secure its medium term target of 1GW of operational
capacity by 2015.
Dividends
In line with Group policy, earnings will continue to be fully
re-invested to finance the ongoing growth of the business. The
Directors therefore do not recommend the payment of a dividend for
the period. Our dividend policy is reviewed on an annual basis,
depending on the profitability and cash requirements of the Group
going forward.
Outlook
Despite difficult economic conditions around the world, the
Indian economy continues to grow rapidly, with the latest forecasts
expecting growth of between 7.25% and 7.75% for the fiscal year to
March 2012. As the economy grows, further strain is being placed on
India's power generating capacity which is already far below the
level demanded of it. To try and tackle the problem, there is a
drive to grow reliable power production capacity and new
initiatives such as the Renewable Energy Certificates programme,
which has now been implemented in India, demonstrating the Indian
Government's support. Today, renewable energy is the fastest
growing asset class within the Indian power sector.
Whilst the aggregate deficit at a national level is well known,
there are particularly pronounced regional deficits in areas
enjoying strong economic development which are outpacing the
regional development of grid capacity. Karnataka, a state in the
South of India which is home to more than 50 million people, is one
such example and an area where we have substantial assets under
development. It is one of the most industrial states in the country
and yet has insufficient coal or gas for power. Greenko is already
a mainstream energy provider in Karnataka and, once our wind
projects in the state are completed, we expect to be the largest
independent power producer in the state. With such significant
demand, prices and market conditions more generally are likely to
be increasingly attractive.
Our portfolio is dominated by hydro and wind and we are
confident that this puts Greenko in a strong, commercially
sustainable position,. Because of the rare combination of factors
at play in the Indian energy market - from the low quality of
India's natural resources to the high prices paid for power in a
market where demand hugely outstrips supply - both these
technologies have reached grid parity. In reaching the point where
power is generated at the same cost as the most competitive
alternatives including fossil fuels, our business model is
substantially de-risked as Greenko is no longer reliant on
regulatory support. Although it was always very unlikely that
regulatory support for power generated from renewable sources would
be withdrawn or reduced, it provides even greater certainty and in
fact makes the economics of power generation from hydro and wind
superior to other methods as tools such as long term power purchase
agreements. This allows us to lock-in rates of returns available
only to generators using sustainable means. We can therefore be
confident of our future prospects.
From next year, the contribution from our wind portfolio will
start becoming financially significant and, when combined with the
cash flows from our operational hydro assets, will provide a
growing platform for the further development of our portfolio.
Our strategy remains to grow our portfolio through a combination
of fast track development, green field expansion and selective
late-stage project acquisitions, thereby operating a diversified
set of small and medium scale projects to reduce risk and enhance
shareholder value. We remain confident that we are on track to
reach our target of 1GW of operational capacity by 2015 and that we
are well positioned to be a clear leader in both hydro and wind in
India's burgeoning renewable power generation industry.
Y. Harish Chandra Prasad
Chairman
Chief Executive's Review
During the first half, we made good operational progress in
securing finance and a technical partnership with GE which will
support our wind platform. Revenues in the first half have however
been impacted by a number of factors including currency movements,
a weak market for CERs and a smaller contribution from biomass. A
particular highlight of the period has been the record performance
of our hydro power plants which have contributed substantially to
EBITDA and, with no fuel supply risks, are contributing at margins
in excess of 90 per cent. In the six months ended 30 September
2011, we also continued to make significant progress in wind,
exemplified by our $50 million strategic partnership with the
General Electric subsidiary, GE Energy Financial Services. In
addition, the Company raised GBP50 million in new equity funding
from predominantly institutional investors.
Equity and debt funding rounds have been successfully completed;
substantially de-risking the portfolio. With the announcement today
of a $70 million commitment from Standard Chartered, we are now
fully financed to our medium term target of 1GW. I am pleased to
report that most of our development assets are now under
construction, taking us closer to unlocking the cash flow potential
of the portfolio.
Over the last three years, Greenko has invested substantially in
recruiting talent to manage its interests both at a corporate
level, where we now have 200 employees, and across the group where
our team is now 800 strong. The executive team of 30, which
includes the Board of Directors and the management team as well as
those senior executives that support them, is extremely
experienced.
Financial Review
Revenue for the period was EUR19.8 million, down from EUR25.8
million this time last year. The reduction relates mainly to our
decision to warehouse CERs generated by our projects, which last
year contributed some EUR3.1 million to interim revenues. Market
prices for CERs were weak in anticipation of an unfavourable
outcome to on-going international climate change discussions.
During the period under review the CER market saw prices falling
from the long term average. A strategic decision was therefore
taken to not sell any CERs until prices stabilise. As at 30
September 2011, the Group had a stock of 264,717 CERs.
Revenue was also negatively impacted by foreign currency
movements in the Rupee to Euro exchange rate and by the reduced
contribution from our biomass assets where the input costs rose
substantially.
Earnings before interest, tax, depreciation and amortisation
were EUR11.2 million. Net profit was EUR1.88 million, down from
EUR7.85 million as interest rates on borrowings increased and, more
significantly, because the CERs sold in the 2010 interim period
attracted a 100 per cent margin.
Net profit attributable to shareholders of the Group was 1.51
million. Earnings per share were 1.15 cents. At the period end,
cash at bank was EUR49.75 million versus EUR36.32 million at the
full year as the Company generated cash and strengthened its
balance sheet with an equity fund raising of GBP50 million.
The Group's Property Plant & Equipment and Intangible Assets
increased by 21.4% to EUR244.06 million. Total borrowings at the
balance sheet date were EUR93.32 million, a reduction of EUR19.1
million.
Operational Review
Hydro
Our 104 MW portfolio of operating hydro plants performed very
well during the period under review with capacity levels that
exceeded our initial expectations. A further 359MW of hydro assets
are under development and remain on track with Dikchu (96MW), the
Group's largest hydro project, due to be commissioned early in
2014.
As disclosed in our 2011 Annual Report in September,
infrastructure development activities has begun at Paudital Lassa
(24MW), Jeori (10MW) and Ullipu 1 & 2 (36MW). The cluster of
projects in the Cauvery basin is also in the advanced stages of
pre-construction development with most of the approvals due to be
in place by the end of this financial year.
Wind
Over the last six months Greenko has made real progress with its
wind development assets, with over 500MW of projects either under
construction or brought to an advanced stage of development,
pre-construction.
Our technology and execution partnership with GE is enabling us
to target returns not previously possible in India. This is in part
because of the use of turbines specifically designed for use in
environments with slower wind speeds, commonplace in India.
The Group's first wind project, Ratnagiri (65MW), is at an
advanced stage of execution although as previously reported there
have been some delays due to the logistics involved in delivering
larger diameter blades that are being used for the first time in
India, as well as the extended monsoon season in the region. The
Group expects all 65MW to be commissioned in time for the 2012
monsoon season.
Our other wind projects remain on track which will see 1GW
developed across the states of Andhra Pradesh, Maharashtra,
Karnataka and Rajasthan.
For the first 100MW phase of our 300MW project in Karnataka, the
Company has secured $90 million of debt funding with Infrastructure
Lending & Financial Services which accounts for 70% of the
phase I project cost. Greenko has also entered into an execution
and supply agreement with GE to fully commission phase I by
November 2012. This is similarly the case with the first 100 MW
phase of the 200MW Andhra Pradesh project which also has $90
million debt funding secured through the Infrastructure Development
Finance Company, again accounting for 70% of the phase I project
cost. The Company is entering a supply and execution agreement with
GE for commissioning by March 2013. Both projects have required
approvals in place.
Natural Gas
The existing 38.8MW liquid fuel plant is operating below the
levels we had forecast as higher fuel costs have caused the
government to stop drawing down on the power agreement we have in
place. The contract guarantees Greenko a fixed margin over input
costs and, during the period, prices were too high to make supply
economic. We believe this situation to be temporary and expect to
begin generating again in the second half of the financial
year.
Due to the well-publicised production issues within the Krishna
Godavari D6 basin, the 58.4MW Greenko Godavari project is awaiting
final clearance from the state and it is now expected that it will
be operational by the second quarter of the 2012 financial
year.
Biomass
The group has six biomass power plants with a combined output of
41.5MW. Due to an extended monsoon season, our biomass plants
performed at a level below what had been expected but these
conditions were clearly beneficial for our hydro assets. In the
monsoon season, transportation of agricultural waste is more
difficult resulting in higher biomass prices which means that
biomass assets are less competitive.
Production at our only plant on a merchant power agreement was
suspended for a period of three months because it was not cost
effective to export power on the tariff available at that time.
Whilst the contribution from biomass in the first half was
disappointing, indications so far are that it will improve during
the second half.
Business Development
The strength of Greenko's infrastructure, brand reputation and
supply relationships provide it with excellent access to potential
opportunities and financing partners. Our strategy remains to
develop the existing portfolio whilst reviewing further potential
acquisitions and new concessions.
Any new acquisitions will have to meet our stringent investment
criteria and, in this regard, it is unlikely that acquisitions will
be made in wind where Greenko's strategy is clearly differentiated
and other, already operating wind assets are unlikely to meet our
criteria. We however continue to evaluate new greenfield wind sites
where significant valuation uplift can be gained by securing deals
early in the development chain. We also continue to see
opportunities to scale our hydro business and are in the process of
analysing over 800MW of potential new projects.
Market Environment & Group Strategy
The widely reported power deficit in India continues to grow
and, as a result, the environment for power generators at a macro
level remains very favourable.
The industrial and social ramifications of India's energy
deficit are becoming increasingly apparent. As the country
continues to miss its targets for energy generation capacity,
development and progression is being held up. A significant
proportion of people in India do not have regular access to power,
and businesses are working around power outages which constrain
economic development. However, the political will to address the
problem is strong and is likely to manifest itself in continued
government support for companies intending to build and operate
power generation facilities, primarily in the form of favourable
planning and application processes rather than tax breaks or other
incentives.
India benefits from hydro and wind grid parity, meaning that the
cost of generating electricity from these sources is the same per
megawatt as generation from fossil fuels. This is unusual in both
the developed and developing world and is a product of the poor
quality of fossil fuels in India and the rapidly improving
efficiency of renewable technologies. This past year has seen a
rise in coal supply issues in India so extreme that one third of
new generating capacity that had been planned to use coal has now
been scrapped. This reinforces our strategy to focus primarily on
our hydro and wind assets which both have minimal supply risk and
strengthens our position to realise our potential as both a
mainstream and renewable independent power producer.
Anil Kumar Chalamalasetty
CEO and Managing Director
Greenko Group plc
(All amounts in Euros unless otherwise stated)
Interim condensed consolidated statement of financial
position
As at As at As at
30 September 30 September 31 March
2011 2010 2011
Un-audited Un-audited Audited
-------------- -------------- ------------
Assets
Non-current assets
Property, plant and equipment 189,219,582 146,989,419 156,415,781
Intangible assets 54,841,131 53,982,031 58,828,404
Bank deposits 3,878 1,476,372 1,255,891
Trade and other receivables 17,618,306 8,292,192 7,169,602
-------------- -------------- ------------
261,682,897 210,740,014 223,669,678
-------------- -------------- ------------
Current assets
Inventories 6,668,132 4,636,895 5,497,352
Trade and other receivables 26,937,345 29,154,043 22,367,825
Available-for-sale financial
assets 68,930 93,309 80,579
Bank deposits 9,581,848 39,468,161 9,228,944
Derivative financial instruments - 16,692 -
Current income tax assets 43,775 - -
Cash and cash equivalents 40,171,594 33,836,942 27,086,024
-------------- -------------- ------------
83,471,624 107,206,042 64,260,724
-------------- -------------- ------------
Total assets 345,154,521 317,946,056 287,930,402
-------------- -------------- ------------
Equity
Capital and reserves attributable
to equity holders of the Company
Ordinary shares 708,202 597,091 597,091
Share premium 185,689,540 132,880,088 132,880,088
Share-based payment reserve 1,516,421 1,298,228 1,493,852
Revaluation reserve 94,987 175,889 135,790
Currency translation reserve (10,498,271) 1,725,275 (2,928,407)
Other reserves including capital
subsidy (3,227,350) (1,428,146) (487,295)
Retained earnings 16,572,502 12,315,059 15,031,671
-------------- -------------- ------------
190,856,031 147,563,484 146,722,790
-------------- -------------- ------------
Non - controlling interests 37,919,431 38,139,241 36,671,644
-------------- -------------- ------------
Total equity 228,775,462 185,702,725 183,394,434
-------------- -------------- ------------
Liabilities
Non-current liabilities
Borrowings 83,542,987 71,524,248 68,803,493
Deferred income tax liabilities 14,784,582 12,818,843 15,374,254
Retirement benefit obligations 77,477 79,363 81,982
-------------- -------------- ------------
98,405,046 84,422,454 84,259,729
-------------- -------------- ------------
Current Liabilities
Trade and other payables 8,198,708 6,643,698 6,259,674
Current tax liability - 264,907 46,235
Derivative Financial liabilities - - 11,912
Borrowings 9,775,305 40,912,272 13,958,418
-------------- -------------- ------------
17,974,013 47,820,877 20,276,239
-------------- -------------- ------------
Total liabilities 116,379,059 132,243,331 104,535,968
-------------- -------------- ------------
Total equity and liabilities 345,154,521 317,946,056 287,930,402
-------------- -------------- ------------
Greenko Group plc
(All amounts in Euros unless otherwise stated)
Interim condensed consolidated statement of comprehensive
income
Six month period Six month Year ended
ended period ended 31 March
30 September 30 September 2011
2011 2010 Audited
Un-audited Un-audited
----------------- -------------- -------------
Sale of power 19,797,799 22,699,810 40,047,733
Sale of emission reductions - 3,114,672 4,397,680
----------------- -------------- -------------
Total Revenue 19,797,799 25,814,482 44,445,413
----------------- -------------- -------------
Other operating income 317,816 152,579 581,501
Cost of material and power generation (6,037,494) (11,576,757) (17,094,171)
Employee benefit expense (1,451,984) (1,452,654) (3,343,090)
Other operating expenses (1,384,737) (1,528,460) (3,684,612)
Depreciation and amortization (3,517,036) (2,886,399) (6,577,924)
Excess of group's interest in the
fair value of acquiree's assets
and liabilities over cost - - 4,275,134
----------------- -------------- -------------
Operating profit 7,724,364 8,522,791 18,602,251
Finance income 826,524 3,671,670 4,479,087
Finance cost (5,464,649) (3,049,731) (9,076,970)
----------------- -------------- -------------
Net finance income / (cost) (4,638,125) 621,939 (4,597,883)
----------------- -------------- -------------
Profit before income tax 3,086,239 9,144,730 14,004,368
Income tax expense (1,202,413) (1,297,211) (2,563,824)
----------------- -------------- -------------
Profit for the period/year 1,883,826 7,847,519 11,440,544
----------------- -------------- -------------
Attributable to:
Equity holders of the Company 1,511,045 6,204,404 8,889,745
Non - controlling interests 372,781 1,643,115 2,550,799
----------------- -------------- -------------
1,883,826 7,847,519 11,440,544
----------------- -------------- -------------
Other Comprehensive income/(loss)
Unrealized gains on available-for-sale
financial assets (7,914) 6,295 (3,748)
Exchange differences on translating
foreign operations **(9,438,016) (2,290,552) (8,196,933)
----------------- -------------- -------------
Total other comprehensive income/(loss) (9,445,930) (2,284,257) (8,200,681)
----------------- -------------- -------------
Total comprehensive income (7,562,104) 5,563,262 3,239,863
----------------- -------------- -------------
Total comprehensive income attributable
to:
Equity holders of the Company (6,077,616) 4,369,448 2,382,236
Non - controlling interests (1,484,488) 1,193,814 857,627
----------------- -------------- -------------
(7,562,104) 5,563,262 3,239,863
----------------- -------------- -------------
Earnings per share for profit attributable
to the equity holders of the Company
during the period/year*
-basic (in cents)
-diluted (in cents) 1.15 5.20 7.44
1.03 4.71 6.68
----------------- -------------- -------------
*Earnings per share both basic and diluted have been computed
based on profit for the period/year attributable to the equity
shareholders.
** The currency translation difference was on account of adverse
change in Euro/Indian Rupee exchange rate since the Company's
operating assets are in Indian Rupee and the financial statements
presentation currency is Euro.
Greenko Group plc
(All amounts in Euros unless otherwise stated)
Interim condensed consolidated statement of changes in
equity
Total equity
attributable
Share-based Currency to equity Non-
Ordinary Share payment Revaluation translation Other Retained holders of controlling Total
shares premium reserve reserve reserve reserves earnings the Company interests Equity
----------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ ----------- -----------
At 1 April 2011 597,091 132,880,088 1,493,852 135,790 (2,928,407) (487,295) 15,031,671 146,722,790 36,671,644 183,394,434
Transfer from
revaluation
reserve to
retained
earnings - - - (29,786) - - 29,786 - - -
Equity issue during
the year 111,111 52,809,452 - - - - - 52,920,563 - 52,920,563
Increase of
interest
in subsidiary - - - - - (2,732,275) - (2,732,275) 2,732,275 -
Value of employee
services - - 22,569 - - - - 22,569 - 22,569
Transactions with
Owners 111,111 52,809,452 22,569 (29,786) - (2,732,275) 29,786 50,210,857 2,732,275 52,943,132
----------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ ----------- -----------
Profit for the
period - - - - - - 1,511,045 1,511,045 372,781 1,883,826
Other comprehensive
income
Unrealised gain on
available-for-sale
financial assets - - - - - (7,914) - (7,914) - (7,914)
Currency
translation
reserve - - - (11,017) (7,569,864) 134 - (7,580,747) (1,857,269) (9,438,016)
Total comprehensive
income for the
period - - - (11,017) (7,569,864) (7,780) 1,511,045 (6,077,616) (1,484,488) (7,562,104)
----------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ ----------- -----------
At 30 September
2011 708,202 185,689,540 1,516,421 94,987 (10,498,271) (3,227,350) 16,572,502 190,856,031 37,919,431 228,775,462
----------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ ----------- -----------
Greenko Group plc
(All amounts in Euros unless otherwise stated)
Interim condensed consolidated statement of changes in
equity
Total equity
attributable
Share-based Currency to equity Non -
Ordinary Share payment Revaluation translation Other Retained holders of controlling Total
shares premium reserve reserve reserve reserves earnings the Company interests Equity
----------------- ----------- ----------- ------------ ------------ ------------ ---------- ------------ ----------- -----------
At 1 April 2010 597,091 132,880,088 1,095,571 209,622 3,565,337 (1,434,441) 6,078,111 142,991,379 36,945,427 179,936,806
Transfer from
revaluation
reserve to
retained
earnings - - - (32,544) - - 32,544 - - -
Value of employee
services - - 202,657 - - - - 202,657 - 202,657
Transactions with
Owners - 202,657 (32,544) - - 32,544 202,657 - 202,657
----------------- ----------- ----------- ------------ ------------ ------------ ---------- ------------ ----------- -----------
Profit for the
period - - - - - - 6,204,404 6,204,404 1,643,115 7,847,519
Other comprehensive
income
Unrealised gain on
available-for-sale
financial assets - - - - - 6,295 - 6,295 - 6,295
Currency
translation
reserve - - - (1,189) (1,840,062) - - (1,841,251) (449,301) (2,290,552)
Total comprehensive
income for the
period - - - (1,189) (1,840,062) 6,295 6,204,404 4,369,448 1,193,814 5,563,262
----------------- ----------- ----------- ------------ ------------ ------------ ---------- ------------ ----------- -----------
At 30 September
2010 597,091 132,880,088 1,298,228 175,889 1,725,275 (1,428,146) 12,315,059 147,563,484 38,139,241 185,702,725
----------------- ----------- ----------- ------------ ------------ ------------ ---------- ------------ ----------- -----------
Greenko Group plc
(All amounts in Euros unless otherwise stated)
Interim condensed consolidated condensed statement of cash
flow
Six month Six month Year ended
ended ended 30 31March
30 September September 2011
2011 2010 Audited
Un-audited Un-audited
-------------- ------------- -------------
A. Cash flows from operating activities
Profit before income tax 3,086,239 9,144,730 14,004,368
Adjustments for
Depreciation and amortization 3,517,036 2,886,399 6,577,924
Profit on sale of assets 969 - (55)
Share based payment 22,569 202,657 398,281
Finance income (826,524) (3,671,670) (4,479,087)
Finance cost 5,464,649 3,049,731 9,076,970
Provision for impairment of trade and
other receivables - - 377,424
Excess of group's interest in the fair
value of acquiree's assets and liabilities
over cost - - (4,275,134)
Changes in working capital
Inventories (1,499,511) 794,415 (296,694)
Trade and other receivables (4,817,550) (2,310,141) (1,995,836)
Trade and other payables 2,389,950 (4,386,874) (2,141,198)
-------------- ------------- -------------
Cash generated from / (used in) operations 7,337,827 5,709,245 17,246,963
Taxes paid (1,089,568) (1,107,160) (2,012,617)
-------------- ------------- -------------
Net cash generated from / (used in)
operating activities 6,248,259 4,602,085 15,234,346
-------------- ------------- -------------
B. Cash flows from investing activities
Purchase of property, plant and equipment
and capital expenditure (43,611,111) (14,639,629) (27,641,226)
Proceeds from sale of property, plant
and equipment 2,733 - 747
Acquisition of business, net of cash
acquired - (22,297,449) (20,766,701)
Investment in mutual funds - (42,323) (41,494)
Advance for purchase of equity (11,605,268) 7,787,371 8,665,547
Payment of acquisition costs relating
to earlier years (132,562) (9,391,848) (9,877,819)
Acquistion of license holding companies (24) - (265,396)
Bank deposits 374,534 (30,639,185) 409,941
Interest received 825,722 3,654,187 4,222,274
Dividends received 401 246 1,621
-------------- ------------- -------------
Net cash used in investing activities (54,145,575) (65,568,630) (45,292,506)
-------------- ------------- -------------
C. Cash flows from financing activities
Proceeds from issue of shares 56,210,002 - -
Payment of share issue expenses (3,252,304) - (1,617,757)
Proceeds from borrowings 29,749,242 50,977,019 72,838,508
Repayments of borrowings (14,548,320) (14,710,062) (63,449,232)
Interest paid (6,430,863) (2,986,012) (10,588,245)
-------------- ------------- -------------
Net cash from financing activities 61,727,757 33,280,945 (2,816,726)
-------------- ------------- -------------
Net increase / (decrease) in cash and
cash equivalents 13,830,441 (27,685,600) (32,874,886)
Cash and cash equivalents at the beginning
of the period/year 27,086,024 62,256,298 62,256,298
Exchange (losses)/gains on cash and
cash equivalents (744,871) (733,756) (2,295,388)
-------------- ------------- -------------
Cash and cash equivalents at the end
of the period/year 40,171,594 33,836,942 27,086,024
-------------- ------------- -------------
1. Basis of preparation
These financial statements are the un-audited interim condensed
consolidated financial statements (hereafter 'the Interim Financial
Statements') of Greenko Group plc, a company incorporated in the
Isle of Man, and its subsidiaries (hereafter 'the Group' or 'the
Greenko Group') for the six-month period ended 30 September 2011
(hereafter 'the interim period').
The interim condensed consolidated financial statements have
been prepared in accordance with the International Financial
Reporting Standards (IFRS) as adopted by the European Union.
The Interim Financial Statements have been prepared in
accordance with International Accounting Standard 34 (IAS 34)
'Interim Financial Reporting'. They should be read in conjunction
with the Consolidated Financial Statements for the year ended 31
March 2011 (hereafter 'the Annual Financial Statements'), as they
provide an update of previously reported information. The Interim
Financial Statements were approved for issue by the Board of
Directors on 14 December, 2011.
The Interim Financial Statements have been prepared in
accordance with the accounting policies and methods of computation
set out in the Annual Financial Statements, except for the
accounting policy changes described below made after the date of
the Annual Financial Statements. The presentation of the Interim
Financial Statements is consistent with the Annual Financial
Statements, except where noted below. Where necessary, comparative
information has been reclassified or expanded from the previously
reported Interim Financial Statements to take into account any
presentational changes made in the Annual Financial Statements or
in these Interim Financial Statements.
The preparation of the Interim Financial Statements requires
management to make estimates and assumptions that affect the
reported amounts of revenues, expenses, assets, liabilities and the
disclosure of contingent liabilities at the date of the Interim
Financial Statements. If in the future such estimates and
assumptions, which are based on management's best judgments at the
date of the Interim Financial Statements, deviate from the actual
circumstances, the original estimates and assumptions will be
modified as appropriate in the period in which the circumstances
change.
In the opinion of the Board of Directors, the Interim Financial
Statements present fairly the financial position of operations and
cash flows in conformity with IAS 34.
2. Changes in accounting policies
2.1 Overall considerations
The Group has adopted the following new interpretations,
revisions and amendments to IFRS issued by the International
Accounting Standards Board, which are relevant to and effective for
the Group's financial statements for the accounting period
beginning 1 April 2011:
-- Amendments to IAS 34 Interim Financial Reporting
-- Improvements to IFRSs 2010
Significant effects on current period or prior periods arising
from the first time application of these new requirements are
described below.
2.2 Amendments to IAS 34 Interim Financial Reporting
The amendments clarified certain disclosures relating to events
and transactions that are significant to an understanding of
changes in the Group's circumstances since the last annual
financial statements. The Group's interim financial statements as
of 30 September 2011 reflect these amended disclosure requirements,
where applicable
2.3 Improvements to IFRSs 2010
The Improvements to IFRSs 2009 ('2009 Improvements') made
several minor amendments to IFRSs. None of the amendments are
relevant to the Group.
3. Earnings per share
Both the basic and diluted earnings per share have been
calculated using the profit attributable to shareholders of the
parent company (Greenko Group plc) as the numerator, i.e. no
adjustments to profits were necessary during the six months period
to 30 September 2011 and 2010.
The weighted average number of shares for the purposes of the
calculation of diluted earnings per share can be reconciled to the
weighted average number of ordinary shares used in the calculation
of basic earnings per share as follows:
30 September 30 September 31 March
2011 2010 2011
Weighted average number of
ordinary shares used in basic
earnings per share 130,832,931 119,418,237 119,418,237
Shares deemed to be issued
for no consideration in respect
of share-based payments - 1,863,325 1,255,418
Shares deemed to be issued
for no consideration to preference
shareholders of subsidiary
company 15,544,507 10,578,048 12,384,938
Weighted average number of
ordinary shares used in diluted
earnings per share 146,377,438 131,859,611 133,058,593
------------- ------------- ------------
4. Related party transactions
The group is not controlled by any single individual or group or
entity. Aloe Environment Fund and Aloe Environment Fund II (which
are both managed by Aloe Private Equity S.A.S.) together with a
share holding of 11.87 percent (9.85 percent considering dilution
with GEEMF options for 29.12 million ordinary shares) and GEEMF
holder of 17.06 percent shareholding in Greenko Mauritius and
options for 17.06 percent ordinary shares in exchange for its
shareholding in Greenko Mauritius with substantial management
reserved rights as at 30 September 2011 have significant influence
over the group.
The following transactions were carried out with related
parties:
30 September 30 September
Remuneration to key managerial personnel 2011 2010
------------- -------------
Anil Kumar Chalamalasetty 126,785 216,829
Mahesh Kolli 126,784 216,828
Harish Chandra Prasad Y 22,500 22,500
Vivek Tandon 20,000 20,000
Hari Kiran Vadlamani 20,000 20,000
Narasimharamulu Pantam 20,000 20,000
Vinodka Murria 20,000 20,000
356,069 536,157
------------- -------------
5. Property, plant and equipment
Furniture,
Plant and fixtures & Capital
Land Buildings machinery equipment Vehicles work-in-progress Total
---------- ------------ ------------- ------------- ---------- ----------------- -------------
Year ended 31
March 2011
Opening net
book amount 2,408,710 9,625,323 32,469,933 443,544 332,091 63,271,709 108,551,310
Acquisition of
subsidiary 123,844 15,404,703 12,600,969 56,363 27,470 999,131 29,212,480
Additions 971,346 29,370,312 32,220,643 339,054 244,222 27,385,004 90,530,581
Disposals /
capitalization - - - - (10,190) (59,996,772) (60,006,962)
Depreciation
charge - (1,396,597) (3,028,870) (108,681) (68,124) - (4,602,272)
Exchange
differences (153,252) (2,363,115) (3,261,638) (32,056) (23,061) (1,436,234) (7,269,356)
---------- ------------ ------------- ------------- ---------- ----------------- -------------
Closing net
book amount 3,350,648 50,640,626 71,001,037 698,224 502,408 30,222,838 156,415,781
---------- ------------ ------------- ------------- ---------- ----------------- -------------
At 31 March
2011
Cost 3,350,648 52,220,996 77,337,305 880,985 672,972 30,222,838 164,685,744
Accumulated
depreciation - (1,580,370) (6,336,268) (182,761) (170,564) - (8,269,963)
---------- ------------ ------------- ------------- ---------- ----------------- -------------
Net book amount 3,350,648 50,640,626 71,001,037 698,224 502,408 30,222,838 156,415,781
---------- ------------ ------------- ------------- ---------- ----------------- -------------
Six months
period ended 30
September 2011
Opening net
book amount 3,350,648 50,640,626 71,001,037 698,224 502,408 30,222,838 156,415,781
Additions 35,048 42,252 112,027 78,165 76,214 44,308,263 44,651,969
Disposals /
capitalization - - - (176) (3,608) - (3,784)
Depreciation
charge - (808,040) (1,608,099) (50,355) (41,133) - (2,507,627)
Exchange
differences (172,536) (2,566,674) (3,585,245) (36,606) (26,704) (2,948,992) (9,336,757)
---------- ------------ ------------- ------------- ---------- ----------------- -------------
Closing net
book amount 3,213,160 47,308,164 65,919,720 689,252 507,177 71,582,109 189,219,582
---------- ------------ ------------- ------------- ---------- ----------------- -------------
At 30 September
2011
Cost 3,213,160 49,590,140 71,488,992 911,432 708,847 71,582,109 199,494,680
Accumulated
depreciation - (2,281,976) (7,569,272) (222,180) (201,670) - (10,275,098)
---------- ------------ ------------- ------------- ---------- ----------------- -------------
Net book amount 3,213,160 47,308,164 65,919,720 689,252 507,177 71,582,109 189,219,582
---------- ------------ ------------- ------------- ---------- ----------------- -------------
6. Intangible assets
Electricity
Licences PPAs Goodwill Total
------------ ------------ ----------- ------------
Year ended 31 March 2011
Opening net book amount 23,347,422 11,983,268 5,630,335 40,961,025
Acquisition through business
combination 10,585,317 1,302,180 9,629,700 21,517,197
Additions 780,272 - - 780,272
Amortization charge (354,732) (1,620,920) - (1,975,652)
Net exchange differences (1,102,141) (484,162) (868,135) (2,454,438)
------------ ------------ ----------- ------------
Closing net book amount 33,256,138 11,180,366 14,391,900 58,828,404
------------ ------------ ----------- ------------
At 31 March 2011
Cost 33,648,273 13,396,836 14,391,900 61,437,009
Accumulated amortization (392,135) (2,216,470) - (2,608,605)
------------ ------------ ----------- ------------
Net book amount 33,256,138 11,180,366 14,391,900 58,828,404
------------ ------------ ----------- ------------
Six month period ended 30 September
2011
Opening net book amount 33,256,136 11,180,368 14,391,899 58,828,403
Acquisition through business
combination - - - -
Amortization charge (199,445) (809,964) - (1,009,409)
Net exchange differences (1,695,163) (546,370) (736,330) (2,977,863)
------------ ------------ ----------- ------------
Closing net book amount 31,361,528 9,824,034 13,655,569 54,841,131
------------ ------------ ----------- ------------
At 30 September 2011
Cost 31,926,732 12,711,418 13,655,569 58,293,719
Accumulated amortization (565,202) (2,887,386) - (3,452,588)
------------ ------------ ----------- ------------
Net book amount 31,361,530 9,824,032 13,655,569 54,841,131
------------ ------------ ----------- ------------
7. Duringthe period ended 30 September, 2011, Termination
Notices under the respective Power Purchase Agreements were served
by AMR Power, Jasper Power in order to negotiate for a higher
tariff. These Notices are being adjudicated by the Regulatory
Commission and accordingly power continues to be supplied to the
concerned State Utilities pending the legal process. Action for
wheeling and banking of Power to third parties for Merchant Sale
from Rithwik Projects is also pending in due process of Law. If the
cases are settled in favor of the Companies, group is expected to
gain in realizing a better tariff.
8. Commitments and contingencies
Capital expenditure contracted for at 30 September 2011 but not
yet incurred aggregated to 105,529,550 (31 March 2011:
134,679,176).
9. Events after the reporting period
(a) The group has entered into a conditional share subscription
agreement with a division of GE Energy Financial Services ("GE"),
which is a subsidiary unit of General Electric whereby GE has
agreed to invest US$ 50 million to support the development of the
initial 500 MW out of group's planned development of 1GW of wind
energy projects across India.
(b) As set out in the group's audited accounts for the year
ended 31 March 2011, the group has amended and restated the put
option it has in place with Global Environment Emerging Markets
Fund III L.P, ("GEEMF") which was originally entered into in
November 2009 (the "Put Option"). The preference shares in group's
subsidiary Greenko Mauritius ("Preference Shares") held by Global
are continue to be treated in group's accounts under IFRS as equity
rather than debt. Closing documentation for the amendment to the
Put Option and the issue of certain warrants to GEEMF enabling
GEEMF to subscribe for additional Preference Shares pursuant to the
terms of the Warrant Instrument (together the "Transaction") has
been completed.
(c) The group has formalized its agreement ("the Agreement")
with GE Energy ("GE"), for the supply and erection of further wind
turbine generators ("WTGs") and closing documentation has been
completed. The Agreement replaces the previously announced
Memorandum of Understanding on the framework agreement, entered
into with GE in May 2011. The core features of the Agreement are
for the supply and commissioning of 200 WTGs on a phased basis over
the next 3 years. This is in addition to the 65MW already under
construction. Further WTGs can be supplied on similar terms by
mutual consent.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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