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As wind power will accelerate our growth and create a diversified generating portfolio that delivers strong returns to shareholders. It also gives India its first large scale wind project built using an independent developer model. With the difficulties facing India’s conventional power sector, hydropower – along with utility-scale wind power – is now the most attractive asset class in the country.

Greenko reports on its secured capacity in three categories

XXX MW Projects under construction XXX MW Active development XXX MW Operating assets

Together, these represent XXX GW of capacity


Greenko Group plc Annual Report 2013

Inside Highlights and Headlines 6 Chairman’s Statement 7 Business Philosophy Chief Executive Officer &

Managing Director’s Statement


Directors’ Report


Corporate Governance Report


Financial Performance

Independent Auditors’ Report


Consolidated Statement of Financial Position


Consolidated Statement of Comprehensive Income


Consolidated Statement of Changes in Equity


Consolidated Statement of Cash Flow


Notes to Consolidated Financial Statements


Greenko Group plc Annual Report 2013



Greenko Group plc Annual Report 2013

Greenko Group plc Annual Report 2013


Highlights and Headlines

(Taken from old report)

Financial Year Highlights • • • • •

Revenue of €36.9 million (2011: €44.4 million) EBITDA of €27.3 million (2011: €25.2 million) Profit after tax of €11.5 million (2011: €11.4 million) Basic EPS 6.95 cents (2011: 7.44 cents) Cash and Bank deposits of €63.1 million (2011: €37.6 million) • CERs on hand 346,300 (2011: 109,177) • Property, plant, equipment and intangibles of €305.8 million (2011: €215.2 million) • Successful equity placing raised £50 million, with US$120 million committed by GE and Standard Chartered into Greenko subsidiaries Operational Highlights • 950 MW of wind concessions announced, taking the wind pipeline beyond 1 GW • 74 MW of hydro concessions added in Karnataka • Approximately 500 MW of projects in construction, plus just over 900 MW in active development • Formalisation of GE technology partnership Post year end • Addition of eight operational hydro power projects, totalling 47MW, in Himachal Pradesh • Operating capacity increased to 260MW, as Greenko’s first wind farm began generating power • Anil Kumar Chalamalasetty and Mahesh Kolli subscribed £5 million for new shares at 225 pence per share • Appointment of Keith Henry as a Non-Executive Director

Despite strong currency headwinds, we grew EBITDA and improved the EBITDA margin from XX to XX. We also proved the value of a strategy focused on clean energy in India’s fuel and power deficit market and added XXX MW of assets to the business. More importantly, the endorsement of investments by Standard Chartered, GE and our shareholders totalling £XXX million now gives us the firepower to turn our pipeline into great projects that will deliver strong returns to our shareholders for decades to come. Anil Kumar Chalamalasetty, Chief Executive and MD of Greenko (Commenting on the results)

Greenko Group plc Annual Report 2013



Greenko Group plc Annual Report 2013

Chairman’s Statement

(Taken from old report)

This approach means we mitigate risk, secure multiple revenue streams and are well positioned to capture the most attractive new opportunities.

Picture to be replaced

The financial year ending 31 March 2012 was one of good progress for Greenko, as the foundations for significant capacity growth were completed and we reinforced our status as one of India’s leading clean energy producers. In particular, we added 1,071 MW of new projects and concessions; completed a technology partnership with GE; and secured approximately £130 million of new funding to give us the balance sheet capability to reach our target of 1 GW in 2015. We are pleased to report further progress in the early months of the new financial year, as Greenko’s first wind farm began generating power and our Executive Directors demonstrated a commendable commitment to the business with their agreement to invest £5 million at 225 pence per share. Greenko’s strategy is to create a well-diversified power portfolio that maximizes the return for its investors. We differ from most of our competitors by ensuring the business is not constrained by fuel supply, environmental permitting issues, power off-take risks or technology provider. Our intention is to work in those States that offer a good renewable resource, as well as a supportive economic and regulatory environment for renewable energy. As such, we are increasingly developing clusters of projects, as this builds on our local knowledge and goodwill, ensures faster implementation, better operational management and more robust resource data.

The Company’s profitable progress and strong underlying operational performance was achieved despite the challenging times in the Indian power market and difficult economic environment. The depreciation of the Rupee against the Euro by approximately 8 percent over the year has led to significant foreign currency translation differences in our consolidated accounts. The drop in power revenue of 12 percent was largely due to the weakness of our functional operating currency (the Indian Rupee) relative to our reporting (presentation) currency, and to the drop in headline revenue from our LVS project. Neither of these factors have an economic impact on our business or its actual profit. However, we have also taken significant steps to improve the underlying profitability through active and successful management of operational expenses and improved revenue realization at our biomass plants. We were again grateful for our shareholders’ on-going support when we raised £50 million in June 2011 through an equity placing. This was followed by investment commitments of US$50 million from GE Financial Services into our wind business and US$70 million by Standard Chartered via our Mauritian holding company, both at attractive terms for our existing shareholders. While the relationship with GE had previously only been through their wind turbine manufacturing business, the armslength investment by GE Financial Services is a welcome endorsement of our wind power strategy. We also expect to benefit from Standard Chartered’s strong expertise and ability to deploy its balance sheet into debt solutions for its investments, as the bank has globally mobilized US$6.4 billion of debt and equity into renewables since 2008, with Greenko being their first Indian renewable investment. We made significant progress over the year and while the headline megawatt figure did not increase as swiftly as we had anticipated a year ago, we have maintained a disciplined focus on only delivering high-quality assets that will produce attractive long-term cash flows. This discipline will not change. During the year, Greenko began executing its wind strategy, with 950 MW of new concessions announced and construction starting at our first two wind projects at Ratnagiri in Maharashtra and Basvanbagewadi in Karnataka. We also formalized our Technology Partnership with GE Energy, which gives us

Greenko Group plc Annual Report 2013


Business Philosophy


Greenko Group plc Annual Report 2013

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elit. Nam cursus. Morbi ut mi. Nullam enim leo, egestas id, condimentum at, laoreet mattis, massa. Sed eleifend nonummy diam. Duis tincidunt lectus quis dui viverra vestibulum. • Striving to empower sustainability with properly planned utilization of resources • Taking up small hydro power projects in clusters, our hydro portfolio is increased with less efforts • Strategy is to buy projects in distress by acquiring “matured licenses”, which have obtained all or most clearances • Intention is to work in those states that offer good renewable resources, as well as a supportive economic and regulatory environment for renewable energy

Greenko Group plc Annual Report 2013



Greenko Group plc Annual Report 2013

Chief Executive Officer & Managing Director’s Statement (Taken from old report)

to minority shareholders, mainly Global Environment Emerging Markets Fund III (“GEEMF”), which invested in the Group at the Mauritius subsidiary level in 2009, while profit after tax attributable to equity shareholders improved to €9.5 million (2011: €8.9 million).

Introduction It is a pleasure to present Greenko’s audited financial results for the year ended 31 March 2012, our fifth operating year as a public company. We demonstrated profitable growth, with an 8.5 percent increase in EBITDA and continued to build a portfolio that establishes Greenko as a mainstream utility player in the Indian energy market. Following successful fund raisings that brought commitments totaling approximately £130 million, we now have the balance sheet strength required to reach our 2015 target of 1 GW. The total power portfolio under our control represents 1.67 GW. This is made up of 183 MW operational at the year-end, over 550 MW in construction and 910 MW in active development. Financial Review For the full year, the Company’s revenue was €36.9 million (2011: €44.4 million), with generation of 769.8 GWh (2011: 807.6 GWh). EBITDA, a key performance indicator for Greenko, increased to €27.3 million (2011: €25.2 million), despite the financial performance being impacted by adverse currency movements and a weak market for CERs. Profit after tax was flat at €11.5 million (2011: €11.4 million) as EBITDA growth was offset by lower interest income. Basic EPS was 6.95 cents (2011: 7.44 cents). Profit after tax of €2.0 million (2011: €2.6 million) was attributed

The Group’s Plant, Property and Equipment and Intangible Assets increased by 42 per cent to €305.8 million (2011: €215.2 million), primarily due to a significant increase in construction activity. The funds raised during the year were deployed in various projects under implementation and the cash (including deposits) balance at the end of the year was €63.1 million (2011: €37.6 million). Post the year end, ACMK Enterprises Ltd, a company controlled by Anil Kumar Chalamalasetty and Mahesh Kolli, two of Greenko’s Executive Directors, subscribed to 2,222,222 new shares of face value € 0.005 at 225 pence per share amounting to £5 million. Total borrowing at the end of the year was €153.1 million (2011: €82.8 million) and as of the end of June, Greenko had approximately €252 million of committed but undrawn debt facilities in place. In the year, it also drew US$60 million from the Standard Chartered and GE commitments, with a further US$60 million still available to be drawn. As at 31 March 2012, the Company had a stock of 346,300 Certified Emission Reductions (“CERs”) (2011: 109,177). Market Environment and Group Strategy The macro environment within India continues to support Greenko. Over a third of India’s population does not have access to power and the country’s GDP growth is still estimated to be in excess of 7 per cent per annum. Given the continued population and GDP growth, plus a wider electrification programe, the country’s installed capacity is expected to reach 290 GW by 2017, from a current base of approximately 200 GW. Therefore, with fossil fuel’s difficulty in delivering sufficient cost-effective power capacity, Greenko remains well positioned to become a leading Indian power producer. Our projects benefit from long term power purchase agreements (“PPAs”) that are not available to conventional power producers, thereby enhancing the security and long-term visibility of our revenue. Most of our projects are registered under the Clean Development Mechanism

Greenko Group plc Annual Report 2013



Greenko Group plc Annual Report 2013

Corporate Governance and Corporate Social Resposnsibility

Annual Strategic Meeting (2012-2013).

Corporate Governance

assurance against material misstatement or loss.

The Group is committed to applying the highest principles of corporate governance, commensurate with its size. The Group had adopted the Quoted Companies Alliance (‘QCA’) Corporate Governance Guidelines for AIM Companies as published in September 2010. The Group believes it complies with the QCA Corporate Governance Guidelines, except :

The key matters relating to the system of internal control are set out below:

• The Board does not currently undertake performance evaluations of the Board, its committees or its individual directors; • Given the small size of the Board, a separate Nominations Committee has not been established. The Board as a whole reviews potential changes to its composition; Internal Controls The Board takes responsibility for establishing and maintaining reliable systems of control in all areas of operation. These systems of control, especially of financial control, can only provide reasonable, but not absolute,

• Greenko has established an operational management structure with clearly defined responsibilities and regular performance reviews. • The Group operates systems for reporting financial and non-financial information to the Board, including preparation and review of strategy plans and the preparation and review of annual budgets. • Financial results are monitored against budgets, forecasts and other performance indicators, with action dictated accordingly. • A structured approval process based on assessment of risk and value delivered. • Sufficient resource is focused to maintain and develop internal control procedures and information systems, especially in financial management. The Board considers that there have been no substantial weakness in internal financial controls that have resulted in

Greenko Group plc Annual Report 2013


Financial Statement

We demonstrated profitable growth, with an 8.5 per cent increase in EBITDA and continued to build a portfolio that establishes Greenko as a mainstream utility player in the Indian energy market.


Greenko Group plc Annual Report 2013

Greenko Group plc Annual Report 2013


Independent Auditors’ Report Independent Auditors’ Report to the Members of Greenko Group plc We have audited the accompanying consolidated financial statements of Greenko Group plc (‘the Company’) and its subsidiaries (collectively referred as ‘the Group’) for the year ended 31 March 2012 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flow and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (as adopted by the European Union). This report is made solely to the Company’s members, as a body, in accordance with our engagement with them. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors As explained more fully in the directors’ responsibilities statement set out on page 26, the directors are responsible for the preparation of the consolidated financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the consolidated financial statements in accordance with applicable law and International Standards on Auditing (UK


Greenko Group plc Annual Report 2013

and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors. Scope of the audit An audit involves obtaining evidence about the amounts and disclosures in the consolidated financial statements sufficient to give reasonable assurance that the consolidated financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the consolidated financial statements. Opinion on financial statements In our opinion the consolidated financial statements give a true and fair view, in accordance with International Financial Reporting Standards (as adopted by the European Union), of the state of the Group’s affairs as at 31 March 2012 and of its profit for the year then ended. Grant Thornton Chartered Accountants Third Floor Exchange House 54/58 Athol Street Douglas ISLE OF MAN IM1 1JD 20 September 2012

Consolidated statement of financial position as at 31 March 2012 (All amounts in Euros unless otherwise stated)


31 March 2012

31 March 2011

Assets Non-current assets Intangible assets Property, plant and equipment Bank deposits

5 6 12

79,383,807 226,445,726 2,143,954

58,828,404 156,415,781 1,255,891

Trade and other receivables


13,878,580 321,852,067

7,169,602 223,669,678

Current assets Inventories Trade and other receivables

11 10

7,578,255 31,191,722

5,497,352 22,367,825


65,607 103,722 12,429,118 48,513,270 99,881,694 421,733,761

80,579 9,228,944 27,086,024 64,260,724 287,930,402


708,202 185,556,658 1,516,421 62,085 (14,158,270) (3,224,221) 24,563,925 195,024,800 38,833,684 233,858,484

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

18 15 16

157,454 144,005,492 22,515,641 166,678,587

81,982 68,803,493 15,374,254 84,259,729


12,132,917 9,063,773

6,259,674 46,235 11,912 13,958,418

21,196,690 187,875,277 421,733,761

20,276,239 104,535,968 287,930,402

Available-for-sale financial assets Current income tax assets Bank deposits Cash and cash equivalents

12 12

Total assets Equity and liabilities Equity Ordinary shares Share premium Share-based payment reserve Revaluation reserve Currency translation reserve Other reserves including capital subsidy Retained earnings Equity attributable to owners of the Company Non-controlling interest Total equity Liabilities Non-current liabilities Retirement benefit obligations Borrowings Deferred income tax liabilities Current liabilities Trade and other payables Current tax liability Derivative financial liabilities Borrowings

9 15

Total liabilities Total equity and liabilities

Anil Kumar Chalamalasetty Chief Executive Officer & Managing Director 20 September 2012

Mahesh Kolli

President & Jt. Managing Director

Vasudeva Rao Kaipa

Executive Director & CFO

The notes are an integral part of these consolidated financial statements.

Greenko Group plc Annual Report 2013




Greenko Group plc Annual Report 2013


Greenko Group plc Annual Report 2013


Greenko Group plc 4th Floor, 14 Athol Street Douglas-IM1 1JA, Isle of Man.


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