Seizing the potential - ePagemakerSeizing the potential Mytrah Energy Limited Annual report 2013 [email protected] Mytrah_CV_V1.indd 1 11/06/14 12:14 PM

Seizing the potential

Mytrah Energy Limited Annual report 2013

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Mytrah_CV_V1.indd 1 11/06/14 12:14 PM

Company Advisers ..................................................01Our Company .......................................................03Our Mission ..........................................................05Our Philosophy .....................................................06Our Core Values ....................................................07Overview ...............................................................08Current Operational Highlights ..............................09Our Performance ...................................................10Chairman and CEO’s Statement .............................12Financial Performance ...........................................21Q&A with CFO ......................................................27Company Structure ...............................................30Our Intellectual Property ........................................43What went right in 2013 .......................................47Human Capital ......................................................49

Greener Earth ........................................................53Sustainability Report ..............................................55Directors’ Biographies ...........................................60Directors’ Report ...................................................66Corporate Governance Report ...............................68Remuneration Report ............................................73Independent Auditor’s Report to the

members of Mytrah Energy Limited .......................77Consolidated Income Statement ............................78Consolidated Statement of Comprehensive Income 79Consolidated Statement of Financial Position .........80Consolidated Statement of Changes in Equity ........81Consolidated Statement of Cash Flows ..................82Notes to the Consolidated Financial Statements .....83

Contents

A PRODuCt

[email protected]


Company Advisers

Nominated and financial adviserInvestec Bank Plc

2 Gresham Street,

London EC2V 7QP

United Kingdom

Tel: +44 (0) 20 7597 4000

Joint brokersInvestec Bank plc

2 Gresham Street,

London EC2V 7QP

United Kingdom

Tel: +44 (0) 20 7597 4000

Mirabaud Securities LLP

33 Grosvenor Place,

London SW1X 7HY

United Kingdom

Tel: +44 (0) 20 7321 2508

LegalKing & Spadling International LLP

125 Old Broad Street,

London EC2N 1AR

United Kingdom

Tessa Laws

21 Arlington Street,

London SW1A 1RN

United Kingdom

RegistrarsComputershare Investor Services

(Guernsey) Limited

P.O. Box 393

Kingsway House,

Havilland Street,

St. Peter Port,

Guernsey,

GY1 3FN

Channel Islands

AuditorKPMG Audit LLC

Heritage Court,

41 Athol Street,

Douglas,

Isle of Man, IM99 1HN

Tel: +44 (0) 1624 681 000

Financial PRSt Brides Media & Finance Ltd

3 St. Michael’s Alley,

London

EC3V 9DS

Tel: +44 (0) 20 7236 1177

Mytrah_Col_01_68_V3.indd 1 12/06/14 9:55 AM

Our CompanyMytrah Energy Limited (MEL) is based in

Guernsey and is listed on the Alternate

Investment Market (AIM) Segment of

the London Stock Exchange.

Its wholly-owned subsidiary, Mytrah

Energy (India) Limited (MEIL), is one of

the largest wind-based Independent

Power Producers in India with an

operating portfolio of 507.85 MW of

wind energy assets spread over ten

projects across six states in India. All

projects are secured through long-term

Power Purchase Agreements, ensuring

sustainable generation of revenues and

profits for the next 25 years.

Over 500 MW commissioned & operational!

02 03 Mytrah Energy Limited | 31 December 2013 | Financial Statements

Our MissionMytrah will lead the world in seizing renewables opportunities.

Mytrah Energy Limited | 31 December 2013 | Financial Statements 04 05

Our Core ValuesMytrah believes that the Company’s values drive its valuation. Integrity, Creativity,

Excellence, Respect for Individuals and Social Responsibility are the five core values

that engineer Mytrah’s DNA.

IntegrityAll our actions are governed by the

principles of ethics, honesty and

transparency.

CreativityWe foster a spirit of innovation and

entrepreneurship.

ExcellenceWe deliver the best-in-class results, as

we excel in everything we do.

Respect for individualsWe treat others the way we expect to

be treated – with respect.

Social responsibilityWe will be the catalysts of positive

change in the society.

Our PhilosophyBeing an inspiring solution, we are visionary, change catalysts, perceptive to the

needs of others, open, innovative and giving.

VisionaryMytrah was founded on the vision of

wind energy’s huge potential to be the

cheapest, most easily accessible way to

supply power to India.

Change catalystsAt Mytrah, we believe that every

person has the ability to create positive

change in the world. Accordingly, we’re

committed to using renewable energy

to achieve a clean-green world.

Perceptive to the needs of othersSensing India’s growing demand-supply

power gap, Mytrah saw wind energy as

a means to address this gap.

OpenMytrah’s culture encourages diversity

and inclusion while practicing

transparent and ethical corporate

governance.

InnovativeMytrah was a pioneer of the wind

Independent Power Producer (IPP)

model in India.

GivingAt Mytrah, we believe that private

wealth should be used for public good.


Burgula 37.4 MW operational

Savalsang 70.55 MW (out of 100.3 MW)

operational

Vagarai 90 MW (out of 100.5 MW)

operational

A total operating portfolio of

507.85 MW

Strong receivable

position with no

significant payment

delays

Current Operational Highlights

Performance of

operational projects

slightly ahead of

expectations

Generation Based

Incentive (‘GBI’)

Scheme reinstated with

improved terms

In the process of

securing in-principal

sanction of approximately

USD 200 m of senior

debt for upcoming projects

of 227 MW

Average age of trade

receivables

50 days

EBITDA of USD

46.51m,

an increase of 72%

An EBITDA margin of

approximately 95%

OverviewProfit before tax

(‘PBT’) of USD

10.70 m,

an increase of 107%

65% increase in revenue

and 107% increase in

PBT despite depreciation

in the average Indian

Rupee/USD exchange

rate by 7.47% from USD

54.37 m in FY2012 to

58.44 m

in FY2013

Revenue of USD

50.92 m,

an increase of 65%

Currently

507.85MW

of fully operational

capacity and 40.25 MW

under final stages of

construction

In Indian Rupee terms

revenue increased by

77.0%.Adjusted for one-off and

non-recurring income,

EBITDA by 85.03%, and

PBT by 122%

Strong liquidity as on 31 December 2013, comprising

of USD 32.62 m cash equivalents and liquid

investments and USD 85.34 m of undrawn loan

facilities totalling to USD 117.96 m

Group revenues, costs and debt are denominated in Indian Rupees and are therefore

matched. The dollar strengthening has no cash and

economic impact on the Company as all its contracts

are in Indian rupees


Our Performance

Revenue

55

50

45

40

35

30

25

20

15

10

5

0Mar-12onwards

Dec-12 Dec-13

USD m

2.8

5.5

0.7

Sale of electricityGeneration-Based Incentive

EBITDA and EBITDA Margin

50

40

30

20

10

0

-10

120.00

100.00

80.00

60.00

40.00

20.00

0.00

3.8

27.1

48.8

88%

54%

95%

USD m

EBIDTAEBIDTA Margin

Mar-12onwards

Dec-12 Dec-13

Return on Equity

20

10

0

-10

(5%)

6.3%

14.3%

%

Mar-12onwards

Dec-12 Dec-13

Gearing

80

70

60

50

40

30

20

10

0

35%

69%75%

Mar-12onwards

Dec-12 Dec-13

Operating Profit and Operating Profit Margin

40

30

20

10

0

-10

120

90

60

30

0

-30

Operating Profit

(0.8)

Operating Profit Margin

21.5

39.2

69%

77%

USD m %

Mar-12onwards

Dec-12 Dec-13

7.0

30.9

50.9

Note:EBITDA – for 2013 is after excluding one-off cost of USD 2.33 mEBITDA – for 2012 is after excluding one-off income of USD 7.99 m

%


Chairman and CEO’s StatementRavi Kailas Chairman and Chief Executive Officer

There is a significant shortage of power supply in India. We have seen no change in this position during the period and we believe that this will remain the case for many years to come.

507.85 MW commissioned

Machine & grid availability in excess of 97%

150 wind masts installed

200-300 MW of new orders placed

Strong growth in Revenue, EBITDA & PAT

Over the last 12 months, Mytrah has

consolidated its position as a profitable,

cash generative, Independent Power

Producer (”IPP”) with an expanding

portfolio of operating wind farm

projects across India.

Our operational portfolio, which post

year-end has risen from 309.9 MW to

507.85 MW, has performed slightly

ahead of our expectations with an

average Plant Load Factor (“PLF”) of

25.5% at the portfolio level. Within

the portfolio, the stabilised sites are

performing well ahead of our initial

expectations, in some cases exceeding

P50 estimates, with machine and

grid availability in excess of 97%. The

machine availability at the Jamanwada

(Gujarat) and Kaladongar (Rajasthan)

sites was approximately 90% for the

2013 wind season. These sites have

now been stabilised and we expect

their performance also to be ahead

of our expectations during 2014. This

productivity will have a further positive

impact on the overall revenue and

financial performance of the portfolio.

As I mentioned in our interim results, I

would like to reiterate that the Group’s

consistent strategy of holding project

and turbine costs generally constant

over a long period allows us to capture

the positive momentum provided by

rising tariffs. In addition, the fall in

the rupee during 2013, although now

seemingly stabilised, will undoubtedly

put further upward pressure on the

electricity price as the cost of production

from thermal sources increases due to

higher import costs.

We are able to maintain one of the

lowest costs of production in the

industry due to Mytrah’s significant

land assets and our various turbine

supply agreements, a substantial

and non-replicable advantage in the

market. Due to this, we expect to see

increasing margins across our portfolio

as electricity prices rise across India.

We now have 150 wind masts across

India, collecting significant valuable

proprietary wind data on a daily basis.

This allows our internal wind resource

team to evaluate and model this data

alongside independent studies. The

collection and analysis of this data

allows the Company to maximise the

value of our land assets and efficiently

allocate our resources. We believe that

the scale of our development activities

and our ability to obtain licences

and concessions across our land

assets located in wind-rich States are

important drivers for future growth,

long-term sustainability and the

creation of shareholder value.

We believe that Mytrah’s continued

access to financing in India, our access

to permitting enables us to take greater

control over our roll-out schedule, our

diversified range of strong partnerships

with wind turbine manufacturers, our

ability to build assets at a competitive

cost whilst managing development risk,

and the quality of our management

and teams will enable the Group to

continue to grow rapidly and generate

significant value for our shareholders.


Depreciation and amortisationDepreciation and amortisation for the

year ended 31 December 2013 was

USD 8.55 m (nine-month period ended

31 December 2012: USD 5.29 m).

The increase in depreciation is mainly

on account of an increase in average

operational capacity from 236 MW in

the previous year to 307 MW in the

current year.

TaxationThe tax expense for the year ended 31

December 2013 was USD 1.47 m (nine-

month period ended 31 December

2012: USD 1.19 m). The tax expense

is non-cash in nature and represents

net deferred tax liability on timing

differences accounted during the year.

Profit after taxThe Group recorded a profit after tax

of USD 6.90 m for the year ended 31

December 2013 (nine-month period

ended 31 December 2012: USD

11.97 m). Higher profit during the

period ended 31 December 2012 is

primarily on account of a non-recurring

income of USD 7.99 m during the

previous period. Adjusted for the non-

recurring income during last period the

PAT increased by an exceptional 71%.

Earnings per shareBasic and diluted earnings per share

from continuing operations for the year

ended 31 December 2013 was USD

0.0422, compared with USD 0.0731

for the nine-month period ended 31

December 2012.

Financial positionOur financial position as on 31 December 2013 can be summarised as set out in the table below:

Assets Liabilities Net assets/(liabilities)

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

Property, plant and equipment 446.83 - 446.83

Other non-current assets and liabilities 41.58 (21.20) 20.38

Current assets and liabilities 27.99 (20.14) 7.85

Cash and cash equivalents 21.38 - 21.38

Post-retirement obligations - (0.02) (0.02)

Deferred tax assets 0.35 - 0.35

Total before gross debt 538.13 (41.36) 496.77

Gross debt - (376.49) (376.49)

Total as on 31 December 2013 120.28

Total as on 31 December 2012 118.73

Business ReviewIt is a pleasure to present Mytrah’s audited financial results for the year ended 31 December 2013.

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

Income statement summaryYear/period ended Year ended

31 December 2013

Nine-months ended

31 December 2012

(Restated)*

Change

USD m USD m USD m

Revenue 50.92 30.92 20.00

Gross Profit 42.68 25.60 17.08

Other operating income - 7.99 (7.99)

EBITDA 46.51 35.12 11.39

Finance costs (net) 29.00 16.67 12.33

Depreciation, amortisation and direct costs 8.49 5.29 3.20

Profit before tax 8.37 13.16 (4.79)

Taxation expense (1.47) (1.19) (0.28)

Profit after tax 6.90 11.97 (5.07)

*The financial results for the previous year ended 31 December 2012 was restated upon retrospective adoption of the revised

IAS 19. Refer note 36 of financial statements.

Note: Due to change in the Group’s balance sheet date during the previous year, the previous year financial results were

presented for a nine-month period. Hence, the prior year results are not fully comparable with the current year results.

RevenueFor the year ended 31 December

2013, the Group’s revenue was USD

50.92 m, (nine-month period ended

31 December 2012: USD 30.92 m).

The increase in revenues is primarily

on account of a 71% increase in units

generated during the year due to an

increase in average operational capacity

from 236 MW in the previous year to

307 MW in the current year and an

increase in average PLFs. The increase

is also on account of GBI income of

USD 0.4 m relating to the previous year

recognised during the current year.

Gross profitAs a result of increased revenues, the

Group has recorded a gross profit of

USD 42.68 m for the year ended 31

December 2013 (nine-month period

ended 31 December 2012: USD

25.60 m). The gross profit margins

increased from 82.8% to 83.8% for

the year ended 31 December 2013.

Gross profit increased by USD 17.07 m

primarily on account of an increase in

the Group’s operating revenues and an

increase in fully-operational installed

capacity during the current year.

EBITDAEBITDA for the year ended 31

December 2013 increased to USD

46.52 m (nine-month period ended

31 December 2012: USD 35.12 m), an

increase of USD 18.39 m approximately

72% increase (adjusted for exceptional

income of USD 7.99 m in the previous

period) following the increase in the

Group’s operating revenues.

Finance costsFinance costs for the year ended 31

December 2013 were USD 29 m

compared with USD 16.67 m for

the nine-month period ended 31

December 2012. The increase is

primarily attributable to expensing of

interest on operating assets during

the current year which were in the

construction stage during the previous

year and was capitalised.

Net assets increased by 1.3% to USD

120.28 m (nine-month period ended

31 December 2012: USD 118.73 m)

and the net assets per share by 1.4% to

USD 0.74 (nine-month period ended 31

December 2012: USD 0.73). The main

movements in the Balance Sheet items

are property, plant and equipment,

trade receivables, trade payables, loans

drawn down from banks and financial

institutions during the financial year.

Capital structureStrong financial capital management

is an integral part of the Directors’

strategy to achieve the Group’s

stated objectives. The Directors review

financial capital reports on a quarterly-

basis and the Group treasury function

does the review on a weekly-basis,

ensuring that the Group has adequate

liquidity.

As on 31 December 2013, the Group

had a gross debt of USD 376.49 m

(31 December 2012: USD 258.97 m).

During the year ended 31 December

2013, additional loans of USD

117.51 m (net of repayments) were

drawn down. The Group continues to

be able to borrow at competitive rates

and therefore currently deems this to

be the most effective means of raising

finance. The Group has established

good relationships with banks and

financial institutions which enabled

it to raise further financing since the

previous period end.

Further information on the Group’s

capital structure is provided in note 1 to

the consolidated financial statements,

including details of how the Group

manages risk in respect of capital,

interest rates, foreign currencies and


commissioning of a wind farm. The

majority of our current projects and

those under construction and at final

stages of delivery, are under contracts

with Suzlon, and more recently,

ReGen Power and Gamesa which have

provisions that enable Mytrah to make

claims for liquidated damages in the

event there is a delay in commissioning

a project. In addition, our projects are

closely managed on a daily basis with

issues quickly escalated to senior levels

within the organisation.

Information technology/processing

As the business expands and processes

become increasingly automated, our

IT requirements are growing and are

now critical to our operations. We

have an experienced IT team in place,

ensuring systems are well-maintained

and our growing IT requirements are

fulfilled. We operate in SAP enterprise

resource management software

which is facilitating the expansion

of the business and enhancing the

quality of information available to our

management and executive teams.

Environmental compliance

Non-compliance with environmental

legislation would expose the Group

to various potential penalties and

would run counter to our core

values. To mitigate this risk, the

Group undertakes an Environmental

and Social Due Diligence Report for

each project. The majority of our

environmental compliance activities

are currently undertaken by Suzlon and

Regen Power. However, Mytrah has the

necessary expertise and procedures to

ensure compliance with environmental

legislation in respect to the

commissioning of projects under our

self-development strategy. Compliance

with environmental legislation is at the

heart of our self-build development

strategy.

Managing change

The Group continues to be in a

rapid growth phase and the Indian

renewable energy sector is also one

of rapid change with new measures

being introduced on a national and

state-level. To mitigate this risk, the

Group uses independent consultants

and outsourced contractors where

appropriate, to ensure the Group’s

activities can be scaled up or down

as required on a timely-basis and help

ensure the business remains flexible in

response to changes in the industry,

political and economic environment.

Availability and cost of financing

The Group is reliant, at this early

stage of its development, on the

timely availability of senior debt and

mezzanine financing in order to finance

its ambitious asset roll-out schedule.

To mitigate this risk, the financing

team has established relationships

across a diverse range of finance

providers in India, including the State

Bank of India, which is a testament

to the attractiveness of the Group’s

business model and the strength of our

management team. Projects can also be

financed from internal cash generation

in the event that new debt financing

becomes unavailable to the Group.

The largest operational cost of the

Group is the cost of debt. The Group’s

projects are financed by project-

based debt. The Management has

structured the projects in such a way

that debt is only drawn down once key

development milestones are reached

and the majority of debt is only drawn

down once capacity is installed and it

starts generating revenue. The cost

of debt is factored into each project

at the evaluation stage to ensure it

meets or exceeds our minimum IRR

requirements. As mentioned in the half-

year Financial Report, the Board is also

evaluating the possibility of a Business

Trust Listing that would substantially or

The largest operational cost of the Group is the cost of debt. The Group’s projects are financed by project-based debt. Management has structured the projects in such a way that debt is only drawn down once key development milestones are reached and the majority of debt is only drawn down once capacity is installed and it starts generating revenue.

Mytrah companies are rated investment gradeSPV SITE STATE CAPACITY (MW) Rating

MEIL Mahidad Gujarat 25.20* ICRA ‘BBB-’

MEIL Mokal Rajasthan 42.00

BVUPL Chakla Maharashtra 39.00

CARE ‘BBB’BVUPL Kaladongar Rajasthan 75.60

BVUPL Jamanwada Gujarat 52.50

BVUPL Sinnar Maharashtra 12.60

MVPPL Vajrakarur Andhra Pradesh 63.00 **India Ratings ‘A-’MVKPL Burgula Andhra Pradesh 37.40

**India Ratings ‘BBB-’MVKPL Savalsang Karnataka 70.55

MVMPL Vagarai Tamil Nadu 90.00 **India Ratings ‘BBB-’* ICRA, an Associate of Moody’s Investors Service** India Ratings, a Fitch Group Company

liquidity. A debt maturity profile is also

included.

Cash flow

The cash generated from operations

during the year was USD 29.37 m (2012:

USD 32.43 m). Investing activities for the

year ended 31 December 2013 resulted

in a cash outflow of USD 132.00 m

(2012: USD 138.57 m). Net financing

cash inflows were USD 110.50 m

(2012: USD 104.81 m). The increase

in financing cash inflows was mainly

due to draw down of loan facilities

USD 157.87 m (2012: USD 162.81 m)

and capital contributions from issue of

Redeemable Preference Shares (“RPS”) of

USD 7.35 m (2012: USD nil) during the

current year. As on 31 December 2013,

the Group had cash and bank balances

of USD 21.38 m (2012: USD 9.47 m).

Liquidity and investments

As on 31 December 2013, the Group

had liquid assets of USD 32.52 m and

undrawn/committed credit facilities of

USD 84.79 m, which will be used to

repay the short-term (bridge) loans. The

Group’s net debt position has changed

over the course of the year and is mainly

on account of draw down of loan

facilities during the year.

Principal risks and uncertaintiesThe Group is faced with a variety of risks

pertaining to the management of the

business and the execution of its strategy.

These risks are managed on a day-to-day

basis by the Management Committee

and formally reviewed by the Audit

Committee and the Board to monitor

that appropriate and proportionate

mitigation in the form of processes and

controls are in place. A summary of the

key business risks are detailed below.

Business interruption/critical service

failure

The Group’s current wind farms are

dependent on stable patterns of wind,

operations and maintenance undertaken

by Suzlon Energy Limited (“Suzlon”), grid

connectivity and other critical resources.

In the event that a critical resource was

not available then, this could affect the

operation of a wind farm and have a

knock-on effect on our revenue.

To mitigate this risk, Mytrah uses

independent consultants to conduct

wind feasibility studies when evaluating

projects and also use independent

consultants to evaluate wind turbine

generators supplied to our wind farms.

We also ensure that periodic preventative

maintenance is undertaken. The Group

is building an asset management team

to ensure, and where possible, enhance

standards of asset management

undertaken both internally for our self-

build projects and for those projects built

and maintained by our turnkey partners.

We are commissioning 100.5 MW of

capacity from ReGen Power and 137.7

MW with Gamesa, diversifying our

development and asset management

risks.

Delay in commissioning projects

Construction projects are, by their

very nature, complicated and subject

to numerous factors that could

cause a delay in the completion and


During the year, Mytrah continued to

draw debt against it facilities for the

238.2 MW asset roll-out scheduled

for Q1 2014. This debt financing was

secured across a diverse range of Indian

senior debt providers. In addition

during the year, we announced the

injection of USD 17.5 m in non-dilutive

mezzanine financing from our sponsor

group companies. This reaffirms the

sponsor Groups’ commitment to the

interests of all shareholders of the

Company and of minority shareholders

in particular.

Market environmentAs we highlight in each of our reports

to shareholders, there is a significant

shortage of power supply in India. We

have seen no change in this position

during the period and we believe that

this will remain the case for many

years to come. Wind energy currently

accounts for 20 GW of India’s total

capacity of 200 GW representing 10%

of installed capacity but less than 5%

of generating capacity. We expect wind

energy to increase significantly over the

next five years but due to the increase

in total capacity expected across India,

wind energy’s share of the generating

capacity is expected to actually reduce.

This puts India in an enviable position

regarding renewable power generation

and we anticipate that Mytrah will

continue to be a leading player within

the Indian market.

The fundamental market continues

to move advantageously for Mytrah.

During 2013, Andhra Pradesh increased

the tariff for wind power projects to

H 4.70 per kWh, Gujarat to H4.15 per

kWh, Rajasthan’s Jaisalmer and Barmer

districts to H 5.52 per kWh and H 5.80

per kWh respectively and Maharashtra

to H 5.81 per kWh.

Rising tariffs have been a constant

theme within the sector since our entry

in 2010. The average realisation price

(including GBI) across our portfolio in

2011 was H 4.75 per kWh. Following the

completion of our current development

of 238.2 MW taking our total portfolio

to 548.1 MW, this price is expected to

rise to H 5.23 per kWh and we anticipate

a continued increase to H 5.35 – 5.40

per kWh during 2014.

During 2013, the Ministry of New and

Renewable Energy of the Government

of India formally announced the

detailed scheme for the re-introduction

of GBI in India on 4 September 2013.

wholly pay down the Group’s debt.

Strategy review and future growth During the financial year we have

moved towards completion on our

first three projects with both Gamesa

and Regen turbines in the states of

Karnataka, Andhra Pradesh and Tamil

Nadu totalling 238.2 MW.

Following the period end, a total

of 197.95 MW including 37.4 MW at

Burgula in Andhra Pradesh, 70.55 MW

at Savalsang 1 in Karnataka and 90

MW at Vagarai in Tamil Nadu have

been added taking our operating

portfolio to 507.85 MW. With the

balance 40.25 MW due for completion

before the start of the 2014 wind

season, Mytrah will have 548.1 MW

spread across six states and 10 projects

providing a portfolio effect from a risk

perspective.

In addition, in September 2013 we

announced further orders for 227 MW

with Suzlon Energy Limited. This order

is composed of three projects totalling

227 MW. At Viswa (Rajasthan), 100.8

MW with an expected P50 PLF of 31%;

at Vajrakarur 2 (Andhra Pradesh),

100.8 MW with an expected P50 PLF

of 29%; and at Viraj (Maharashtra),

25.4 MW with an expected P50 PLF of

29%. As we discussed in our interim

statement, all of the projects are

located at outstanding sites and we

look forward to updating the market

on their progress during 2014.

The table below provides a detailed summary of our existing projects:

Project Name State Capacity (MW) Tariff1 J per kWh

Operational

Tejva Rajasthan 42.0 5.14

Mahidad Gujarat 25.2 4.06

Chakala Maharashtra 39.0 5.87

Kaladognar Rajasthan 75.6

58.8

16.8

5.14

5.68

Jamanwada Gujarat 52.5

27.3

25.2

4.64

4.06

Sinner Maharashtra 12.6 6.17

Vajrakarur 1 Andhra Pradesh 63.0

16.8

46.2

4.00

5.20

1Including current state tariff and GBI where applicable

In September 2013 we announced further orders for 227 MW with Suzlon Energy Limited. This order is composed of three projects totalling 227 MW. At Viswa (Rajasthan), 100.8 MW with an expected P50 PLF of 31%; at Vajrakarur 2 (Andhra Pradesh), 100.8 MW with an expected P50 PLF of 29%; and at Viraj (Maharashtra), 25.4 MW with an expected P50 PLF of 29%.

Vajrakarur 2 Andhra Pradesh 100.8 5.20 29%

Viswa Rajasthan 100.8 6.17 31%

Viraj Maharashtra 25.4 6.31 29%

Projects under construction

Savalsang 2 Karnataka 100.0 4.70 29%

Pavana Maharashtra 200.0 6.31 29%

Anila Andhra Pradesh 200.0 5.20 30%

Ananta Rajasthan 100.0 6.17 28%

1Including current state tariff and GBI where applicable

Active development projects – Mytrah land assets

Project Name State Capacity (MW) Tariff1 J per kWh Expected PLF at P50

Projects part commissioned, in stablisation and in final stages of construction

Burgula Andhra Pradesh 37.4 5.20 24%

Savalsang 1 Karnataka 100.3 4.70 25%

Vagarai Tamil Nadu 100.5 6.00 31%

The table below provides a detailed summary of our projects which are part-commissioned, under-stabilisation and those in

the final stages of construction and under-development:


The re-instated GBI scheme provides

an incentive to qualifying wind assets

commissioned on or after 1 April 2012,

at 50 paisa (H0.50) per kWh produced,

up to an increased cap of H10 m (USD

0.16 m) per MW installed under the

new GBI scheme compared to H6.2 m

(USD 0.11 m) per MW installed under

the old GBI scheme.

Following the announcement of the re-

introduction of the GBI scheme, all our

existing projects, totalling 548.1 MW,

qualify for the GBI scheme, with 186

MW qualifying under the old scheme

and 362.1 MW qualifying under the

new scheme.

ComplianceHR tracks the changes in labour laws

in the locations where we have a

presence. We also ensure that there

is continued emphasis on developing

guidelines and approaches for HR

governance and compliance in this

phase of rapid growth.

Corporate and social responsibility (“CSR”)All CSR activities throughout the lifecycle

of our turnkey projects are undertaken

by our turnkey suppliers, namely Suzlon

and more recently, ReGen Power and

Gamesa Wind Turbines. These activities

are monitored internally.

As we initiate our self-development

projects, Mytrah is responsible for

CSR activities before and after the

construction phase (during which, the

manufacturer is responsible for CSR

activities).

We have engaged independent third

party expertise in this field to assist

in the development of our own

comprehensive social, environmental,

health and safety management

system alongside establishing detailed

standards, policies and procedures

and internal accountabilities and

governance. These standards, policies

and procedures are designed to ensure

Mytrah complies with the following

standards (which are consistent with

local regulatory requirements and

guidelines, both generic and sector

specific, issued by the World Bank

Group):

ISO 14001 (Environmental Manage-

ment Systems)

ISO 18001 (Occupational Health &

Safety)

ISO 9001 (Quality Management

Systems)

Compliance with our internal

standards, policies and procedures

will be monitored by a management

steering committee and also subject to

quarterly review by internal audit and

at least annually by an independent

third party.

SummaryDuring 2013, Mytrah consolidated its

position as a leading IPP. We expect to

further consolidate this position during

2014 with an operational portfolio of

over half a GW completed three years

since our inception. We believe that we

will create significant shareholder value

during the next two years as we reach

an operating portfolio of over 1GW of

wind assets in India.

Finally, I would like to take this

opportunity to welcome our new

shareholders and once again thank

all our shareholders, management,

advisors and associates for their

support as we executed our strategy

over the period.

Ravi Kailas

Chairman and CEO

17 March 2014

Financial Performance


Revenue increased by 65% to USD 50.92 mIn 2013, the Group registered a

record performance with an increase

in revenue of USD 50.92 m. This was

due to the increase in units generated

by 70% and increase in average



current year.

EBIDTA of USD 46.51 m EBIDTA moved up by 80% to USD

48.84 m (adjusted for one-off non-

recurring cost of USD 2.33 m),

representing 95% EBIDTA margin.

Increase in EBIDTA was primarily

on account of increase in Group’s

operating revenues and increase in

average operational capacity.

Increase in operating profit by 18% to USD 39.22 mDespite an adverse currency movement

in the average Indian Rupee/USD

exchange rate by 7.47%, the Group

has registered an increase in operating

profit by 18% to USD 39.22 accounting

to 77% operating margin. An increase

in EBIDTA and operating profit margin

represents Group’s ability to transform

its strong operational capacity into

quality bottomline metrics.

Liquidity and investmentsLiquid assets of USD 31.52 m and

undrawn committed credit facilities

of USD 84.79 m provides a strong

liquidity position to the Group.

Robust growth with liquidity stock

Financial Highlights (USD m)

2013 2012 Change

Income statement

Revenues 50.92 30.92 +64%

EBIDTA 48.84 27.13 +80%

Operating margin 39.22 21.48 +83%

Balance sheet

Property, plant and equipment 446.83 358.17 +25%

Other assets 91.3 63.1 +45%

Equity 120.28 118.73 +1%

Debt 376.49 258.97 +45%

Other liabilities 41.36 43.57 (5%)

Income statementRobust topline performance

2013 has been a year of

transformational growth for the

Group, as it has continued to deliver

strong operating performance results.

The Group’s revenue has increased

by 65% to USD 50.92 m primarily

on account of an increase in average

operational capacity from 307 MW to

507.85 MW and an increase in average

PLFs of wind farm assets. The Group

has recognised a GBI income of USD

0.4 m based on the notification issued

by the regulatory authority on the GBI

scheme.

Other operating income in the previous

year, amounting to USD 7.99 m,

comprised liquidated damages claimed

on certain project suppliers in relation

to delays in the execution, cancellation

and downsizing for certain project.

There were no such claims during the

current year.

Adjusted EBIDTA increased by 80% to

USD 48.84 due to leading operational

metrics and strong control over costs,

leading to 95% EBIDTA margin.

Depreciation and amortisation

increased by USD 3.20 m primarily

on account of increased average



current year.

Finance cost for the year ended 31

December 2013 was higher by USD

3.26 m to 8.55 m primarily on account

of interest expensed off on operating

assets during the current year which

were capitalised in the previous year as

the assets were in construction stage.

The tax expense of the Group is

non-cash in nature and represents

net deferred tax liability on timing

differences accounted during the year.

Profit after tax adjusted for non-

recurring events on other operating

income and expenses during 2013

and 2012 resulted in an increase in

net profit by USD 2.92 m, a growth

of 73%.

Year/period ended Year ended 31

December 2013

Nine-months ended 31

December 2012 (Restated)*

Change

USD m USD m USD m

Revenue 50.92 30.92 +65%

Gross profit 42.68 25.60 +67%

Other operating income – 7.99 +100%

EBITDA 46.51 35.12 +32%

Finance costs (net) 29.00 16.67 +74%

Depreciation, amortisation and direct costs 8.49 5.29 +60%

Profit before tax 8.37 13.16 (36%)

Taxation expense (1.47) (1.19) +24%

Profit after tax 6.90 11.97 (42%)

Adjusted EBIDTA increased by 80% to USD 48.84 due to leading operational metrics and strong control over costs, leading to 95% EBIDTA margin.

Consistent and Sustainable Financial Growth


With total liabilities of USD 417.85 m, the debt-to-equity ratio stood at 75% against 69% in 2012. Liabilities primarily comprise loans borrowed to build up new operational projects. During the current year, the Group has drawn additional loans of USD 117.51 m (net of repayments).

Robust Balance Sheet

Total assets increases by 28%The Group continues to build its

available operational capacity. During

the year, the Group has moved towards

completion of three projects in the

states of Karnataka, Andhra Pradesh

and Tamil Nadu totalling 238.2 MW.

This resulted in an increase in property,

plant and equipment by 25% to

USD 446 m.

Major increase in other assets are from

investment liquid mutual fund units,

cash and bank balances and advances

to vendors.

The Group has received capital

contributions of USD 7.3 m from

the issue of redeemable preference

shares during the current year. Strong

financial capital management is an

integral part of the Management’s

strategy to achieve the Group’s stated

objectives. Management reviews the

treasury function on a regular basis to

ensure availability of adequate liquidity.

With total liabilities of USD 417.85 m,

the debt-to-equity ratio stood at

75% against 69% in 2012. Liabilities

primarily comprise loans borrowed to

build new operational projects. During

the current year, the Group has drawn

additional loans of USD 117.51 m

(net of repayments). The Group has

established good relationships with

banks and financial institutions which

enabled it to raise further financing

since the previous period end.

Balance sheet 2013 2012 Change

Property, plant and equipment 446.83 358.17 +25%

Other assets 91.3 63.1 +45%

Total assets 538.13 421.27 +28%

Equity 120.28 118.73 +1%

Financial debt 376.49 258.97 +45%

Other liabilities 41.36 43.57 (5%)

Total liabilities and equity 538.13 421.27 +28%

Relationship with 20 banksOver the last 3 years, Mytrah has developed relationships with 20 banks and financial institutions. These relationships have

enabled us to raise approximately USD 500 m to fund the development of our business.

PTC

Indian Renewable Energy Development Agency Ltd.(A Govt. of India Enterprise)


QA& with CFO


Q. How did the year pan out for you financially?A. Despite the world economy being

slow as per IMF, Mytrah has had a

successful 2013 with revenue rocketing

up by 65% from USD 30.92 m as

compared to USD 50. 92 m in 2012.

The EBITDA margin has been at an all-

time high of 95% since inception.

Q. What were the significant highlights of 2013? A. One of most significant highlights

of 2013 has been reinstating GBI with

improved terms.

The fundamental market continues

to move advantageously for Mytrah.

During 2013, Andhra Pradesh increased

the tariff for wind power projects to

H 4.70 per kWh, Gujarat to H4.15 per

kWh, Rajasthan’s Jaisalmer and Barmer

districts to H 5.46 per kWh and H 5.73

per kWh, respectively, and Maharashtra

to H 5.81 per kWh.

We have also commissioned 200 MW

of self-development projects in Burgula,

Savalsang and Vagarai.

Q. What is the capex invested during the year? A. The capital expenditure incurred

during the year is approximately USD

118 m. We have invested in land and

power evacuation facilities as well as in

the development and construction of

wind farms.

Q. What is the capex plan for the next 3 years? How do you expect to source funds? A. We are in the process of evaluating

various capex opportunities as well as

conducting several feasibility studies.

As of now, we have a strong relationship

with over 20 banks. Moreover, we plan

to maximise the efficiency of our cash

flows, such that we minimise our debt

component.

Q. What was the extent of funding you received in 2013 and what were the originating sources of the same? A. We raised approximately USD

157.8 m from banks and financial

institutions. We also received mezzanine

financing of USD 7.3 m from our Group

companies, reaffirming the sponsor

group companies’ commitment to our

shareholders.

Q. Please throw some light on your cash flows. A. Operations resulted in net cash inflow

of USD 29.4 m, which is indicative of

efficient cash flow management.

Q. What is the debt on your books? What is your leverage? Are you net debt positive?A. The gearing ratio is 75% which

indicates a strong Balance Sheet.

Q. What were some of the KPIs in finance that you were measurably proud of?A. Our ROE for the year is 14.2% and

expected to increase rapidly following

the commissioning of the new assets in

Savalsang, Vagarai and Burgula.

Vikram KailasChief Financial Officer

Q&A


Company Structure

Mytrah Energy Limited (MEL) Bindu Vayu

(Mauritius) Limited (BVML)

Mytrah Energy (India) Limited

(MEIL)

Mytrah Vayu

Pennar 63 MW

Bindu Vayu Urja

180 MW

Mytrah Vayu

Krishna 137.7

MW

Mytrah Vayu Urja

67.2 MW

Mytrah Vayu

Manjira 100.5

MW

AIM-listed

Indian

Holding Co.

100%

100%

100% 100%

100%100%

100%

Our companiesMEIL - Mytrah Energy (India) LimitedMahidad in Gujarat and Mokal in Rajasthan

BVUPL - Bindu Vayu Urja Private LimitedChakla, Sinner in Maharashtra, Kaladongar in Rajasthan and

Jamanwada in Gujarat

MVPPL - Mytrah Vayu (Pennar) Private LimitedVajrakarur in Andhra Pradesh

MVMPL - Mytrah Vayu (Manjeera) Private LimitedVagarai in Tamil Nadu

MVKPL - Mytrah Vayu (Krishna) Private LimitedSavalsang, Karnataka and Burgula


JAMANWADA

MAHIDAD

MEIL- Mytrah Energy (India) LimitedMahidad in Gujarat and Mokal in Rajasthan are part-financed with a term

loan of H 2470 m.

ICRA, an Associate of Moody’s Investors Service has rated MEIL BBB-Mokal Wind Power Project

Project location: Jaisalmer zone,

Rajasthan

Capacity: 42 MW

WTG model: S88 – 2.1 MW

There were issues in the initial

phase of operations after installing

the WTGs due to high ambient

temperature and grid related

problems. The issue was solved by

doing retrofit work like arranging

cooling fans with high capacity and

constant monitoring and correcting

the issues affecting the grid.

After rectifying these issues, the

wind farm is performing up to

estimated AEP (Annual Estimated

Production), which was expected

while the project was conceived.

These steps resulted in attaining

a grid availability of 99.42% and

WTG availability of 97.82%.

The best performing WTG

generated a PLF of 21.94%.

Some key factors have been

identified, for further improvement

of performance of the site on

which the asset management team

is working.

Mahidad Wind Power Project

Project location: Rajkot zone,

Gujarat

Capacity: 25.2 MW


Preventive measures have been

implemented such as applying

insulation coat to the transmission

lines to protect from moisture/

humidity and arranging bird guards

at the cut points and poles to stop

birds from hitting against the

turbines.

These activities resulted in

performance in line with estimated

AEP (Annual Estimated Production)

considered while the project was

conceived. These steps resulted in

attaining a high grid availability

of 99.59% and WTG availability of

97.24%.




CHAKLA

SINNER

BVUPL - Bindu Vayu Urja Private LimitedChakla and Sinner in Maharashtra; Kaladongar in Rajasthan and Jamanwada in Gujarat are part-financed with a term

loan of H 7490 m.

CARE has rated BVUPL BBB Chakla Wind Power Project

Project location: Nandurbar zone,

Maharashtra

Capacity: 39 MW


In the initial days of operation, there

were issues with WTGs due to a high

ambient temperature, which was

overcome by software up-gradation

in the WTGs.

The wind farm has achieved a high

grid availability of 99.43% and a

high WTG availability of 98.21%.



Kaladongar Wind Power Project

Project location: Jaisalmer zone,

Rajasthan

Capacity: 75.6 MW

WTG model: S9x – 2.1 MW

In FY 2013-14, the site attained a

grid availability of 98.78% and WTG

availability of 92.97%.



Some key factors have been

identified, for further improvement

of performance of the site on which

the asset management team is

working.

Jamanvada Wind Power Project

Project location: Kutch zone,

Gujarat

Capacity: 52.5 MW


In FY 2013-14, the grid availability of

99.90% and WTG availability is 90%.



Sinner Wind Power Project

Project location: Nasik zone,

Maharashtra

Capacity: 12.6 MW


The wind farm is performing well

beyond the AEP estimates at P50

while the project was conceived. In

FY 2013-14, the team has attained a

high grid availability of 99.77% and

WTG availability of 95.25%.




VAJRAKARUR

MVPPL - Mytrah Vayu (Pennar) Private LimitedVajrakarur in Andhra Pradesh is part-financed with term a loan

of H 2570 m.

India Ratings, a Fitch Group Company has rated MVPPL A-Vajrakarur Wind Power Project

Project location: Anantapur zone,

Andhra Pradesh

Capacity: 63 MW


The site has been performing

exceptionally well after a few minor

issues, which are common for any

wind farm. After the stabilisation,

the wind farm is performing

beyond the AEP estimates at P50

with high asset availability. In FY

2013-14, the team attained a high

grid availability of 99.64% and a

high WTG availability of 97.75%




MVMPL - Mytrah Vayu (Manjeera) Private LimitedVagarai in Tamil Nadu is part-financed with a term loan of H 4920 m.

90 MW is commissioned in Vagarai.

India Ratings, a Fitch Group Company has rated MVMPL BBB-

VAGARAI


MVKPL - Mytrah Vayu (Krishna) Private LimitedSavalsang in Karnataka and Burgula in Andhra Pradesh are part-financed

with a term loan of H 5840 m. 70.55 MW is commissioned in Savalsang

while 37.4 MW is commissioned in Burgula.

India Ratings, a Fitch Group Company has rated MVKPL BBB-

SAVALSANGBURGULA


Our Intellectual Property


Day-to-day monitoring and data securityAll the wind masts are connected

through modem and the data banks

which are integrated into a centralized

server on a daily basis. As a new

initiative, some of the sites are installed

with scientific loggers. The performance

monitoring assessment masts are

installed with scientific loggers for real

time monitoring of data. Multiple levels

of data security have been maintained

to ensure high level security. A highly

skilled engineering team is monitoring

the data on a daily basis. Any fault

or anomalies identified in the data

will be conveyed to the site engineers

to resolve issues at the earliest. This

day-to-day monitoring leads to a

high level of data availability of

around 99%.

Immediate futureMytrah is targeting 200 monitoring

stations and the installation of wind

masts of 200 meter height, by end

of financial year 2015 and expect to

roll these out across all the states we

operate in.

Tamil Nadu

Tamil Nadu is one of the leading states

for wind power in India. Even though

a significant number of potential sites

are occupied in Tamil Nadu, Mytrah has

covered all the low mountain passes in

the Western Ghats. The monitoring

covers the southernmost to the

westernmost part of Tamil Nadu. The

Southernmost wind mast is installed 5

km from the Bay of Bengal. To evaluate

the accurate assessment of near passes,

Mytrah has expanded the monitoring

campaigns in such a way that pass

effect will be captured in term of wind

speed and direction. Our first wind

monitoring station was commissioned

in Tamil Nadu in May 2011. Currently

a total of 22 wind masts are installed

in Tamil Nadu, all of which have now

been operating for over 12 months.

Karnataka

Mytrah has installed 30 wind

monitoring stations and screened

potential sites for development.

Monitoring stations are installed in all

types of landscapes from plain terrain

to complex terrain.

Andhra Pradesh

Andhra Pradesh is another one of the

leading state for wind energy. Mytrah

has identified a number of potential

sites in Andhra Pradesh and currently

has 30 wind masts are operating in the

state.

Maharashtra

Mytrah has 42 wind masts installed in

Maharashtra, our largest concentration

in one state. These cover most of the

hilly and elevated areas in the state.

Gujarat

A total of 11 wind masts are installed in

Gujarat, covering both the coastal and

central areas of the state.

Rajasthan

16 wind masts have been installed

in Rajasthan and the northern most

wind mast is just 25 km from the

international border.

Mytrah has one of the largest wind

data bank in India. It is the only

independent power producer that has

more than 150 wind masts across the

country. Mytrah has a geographic mix

of its wind masts from the southern

tip to just 25 kilometers away from the

international border in the north.

Mytrah has more than 150 wind

monitoring stations which range from

80 meter to 120 meter with minimum

four levels of monitoring heights.

Major monitoring levels are 50 meter,

65 meter, 80 meter, 90 meter, 100

meter and 120 meter.

The wind masts cover most of the

terrain in India such as sea shores,

forests, sand dunes, hills, plain lands

and most of the wide low mountain

passes in the Western Ghats.

As a result of extensive research,

Mytrah has plans to install a wind mast

of 200 meter, which will be the tallest

wind mast in Asia Pacific.

Performance Monitoring Assessment

(PMA) wind masts are installed in all the

operational sites of Mytrah to evaluate

and optimize the performance of the

operational wind turbine generators.

These wind masts are installed higher

than the hub height of the operational

turbines to measure the shear across

the rotors.

Our wind masts and extensive research will enable development of 5000 MW executable projects over long-term

Our Intellectual Property


What Went Right in 2013?

Implementation of Asset Management Solution (AMS)With an aim to achieve better

operational control by analysing the

performance of all the operational

assets, the Company is rolling out its

Asset Portfolio Management Solution

covering all existing and upcoming

sites. This automated report generation

system is scheduled to go live during

the first quarter of FY 2014-15.

Forecasting of generationThe RRF guidelines have been

suspended by CERC owing to

issues related to its implementation

throughout the country. However,

Mytrah is carrying out forecasting of its

generation across all our operational

projects in order to be ready for the

implementation of new guidelines

from CERC. The Company plans to

develop its forecasting accuracy and

reliability so that it can be integrated

to the condition based and predictive

maintenance of assets.

Condition Monitoring System: The

asset management team is closely

working with vendors and consultants

to install the CMS solution into

operational WTGs. CMS is an on-line

monitoring system of the condition

of major equipment in a WTG. This

system is expected to be the first of its

kind implemented in India.

Implementation of ISO Certification:

Mytrah Energy (India) Limited is

working aggressively to upscale the

renewable energy portfolio to 3,000

MW over the next five years. The

Company considers it essential for

the success of the Group to develop

standard operating procedures. These

will enable the Company not only

to facilitate the challenging needs

of its diverse project portfolio in

widespread geographic locations but

also ensure quality, safety and process

standardisation which will increase the

sustainability and profitability of the

operational assets.

“To standardise the procedures to be followed for operating the projects in accordance with international standards, QSHE certification program has been initiated.

QSHE certification includes the “Quality Management System (QMS): ISO 9001”, “Environment Management System (EMS): ISO 14001” and “Occupational Health and Safety Assessment Series (OHSAS): OHSAS 18000”) helps us to overcome the challenges internally by way of huge capacity additions, diversified project portfolio in terms of self-developed, acquired and turnkey projects”.

Our Asset Management


Operational performance Strong development pipeline in Andhra Pradesh, Maharashtra, Madhya

Pradesh, Karnataka, Rajasthan and Gujarat

Successfully commissioned 200 MW self-development projects

Portfolio generation at par with P_75 level

Overall machine availability at 97% and grid availability at 99%

Strong receivables cycle

Human Capital

400 MW projects in

construction pipeline

Other systems and processes ERP second phase

process maturity fund

management module went

live by September 2013

150 wind masts installed

are recording data

continuously

Environment and market Reintroduction of the generation-based Incentive (GBI) – a boost to the industry

Maharashtra (MERC) directed Discoms to meet RPO targets for both solar and non-solar from FY 11 to FY 14 giving

relief to the ailing REC market

Tariff increased in Rajasthan, Karnataka, Maharashtra and Madhya Pradesh

What went right in 2013?


steps to engage leaders/managers

more fully in work-related matters

involving their employees. We are now

coaching leaders/managers on how to

discuss performance and development

planning. We are already starting to

see the results of these efforts through

this communication and engagement

model. We launched both formal and

informal forums of communication to

enable this engagement.

Learning and developmentWe have a robust process of employee

and managerial development. In the

space we are, we needed to approach

learning and development differently.

This began from hiring diverse and

talented employees, and tapping into

their unique insights and creativity.

Our online induction program quickly

integrates our new employees into the

system. The culture we have built in the

organisation ensures that we provide

an equal footing for everyone in the

conversation and there is an exchange

of information amongst work groups.

The organisation provides formal

and informal ways of learning. Our

emphasis, through this, has been to

ensure learning both at the individual

level and the organisational level.

There is a formal process of measuring

effectiveness of learning imparted.

This has enabled employees to solve

technical challenges and acquire

additional responsibility in their role.

The purpose is to create opportunity

for everyone.

During the year, the learning programs

equipped our employees not only to

manage but stay ahead of change.

Health, safety and well-being As part of our Health Series initiative,

the Company continued its investments

in various initiatives starting from

comprehensive health insurance for its

employees to regular health check-ups.

We have implemented a Safety Health

and Environment Policy (SHE) to ensure

safety of our employees at project sites.

Code of conductAs per the strong internal governance

practice followed by Mytrah, a code of

conduct for all its employees, within the

core value system of the Company, has

been laid down. The policy is available

on the Company’s ESS (Employee Self

Service) portal and every employee of

the Company has to affirm within the

same at the time of joining. Further, a

regular awareness/induction program

is being scheduled to impart these

initiatives.

During the year under review, there

were no such transactions, which were

entered by the Company or any of its

employees that fraudulent, illegal or

violative of Mytrah’s code of conduct,

ethics and its core value system, except

certain minor incidents, which had

no impact on the Company’s overall

financial position. However, these have

been appropriately dealt with in terms

of the Company’s code of conduct and

ethics.

Sexual harassment policyThe Company also recognises that

sexual harassment violates the

fundamental right of gender equality,

right to life and liberty and right to work

with human dignity. To implement the

Company’s zero-tolerance to sexual

harassment, a strong policy has been

developed within a provision for

suitable penal actions against sexual

At Mytrah, our core values drive our

valuation. We aspire to be considered

as an employer of choice, and thereby

have fostered high working standards

and positive employee relations. Our

work culture is inclusive, where we

respect and value individual differences.

In 2013, we began to place a

greater focus on developing the

skills and knowledge of our human

resources. We laid an emphasis on

sharpening the saw through a range

of technical learning programs and

skill enhancement assignments. Our

belief stemmed from the premise that

if we can engage employees fully then

we will achieve our goals, and they, as

individuals, can achieve theirs.

We identified three major HR initiatives

that were focused on engaging

employees. They were recognition

and awards programs, the employee

engagement survey and fostering

communication.

Recognition and awards programs One of the key drivers of engagement

is recognition. Employees appreciate

when their contributions are recognised

and valued. Recognition also reinforces

positive employee behavior that reflect

organisational values and are critical

to achieving goals. The Company

promoted a culture of employee

recognition where contributions

and successes are acknowledged

and celebrated. We introduced and

awarded the Chairman’s Award for

‘Outstanding Performance’ for our

employees. We also launched the

‘Myway’ Awards which recognised

employees who exhibited the core

values of the organisation.

Touch (Employee Engagement Survey)To increase employee engagement,

we need to know to what extent

employees are currently engaged,

and where there are opportunities to

improve their work life. Conducting a

survey early in the year allowed us to

gather information to help us make

work place improvements and tell

employees what we want to hear from

them. This helped in creating a higher

sense of morale and a stronger sense of

loyalty and commitment.

The team led the design and

administration of the survey along with

an external firm that possesses survey

expertise. Employees and the leadership

team actively participated in the survey

and were involved in identifying actions

to be taken in response to the results.

The overall engagement score moved

from 85% last year (12-13) to 89% this

year (13-14). The top 5 dimensions that

scored high this year were Leadership

(93%), Autonomy and empowerment

(92%), Mission and Purpose (92%),

Decision Making (92%) and Role Clarity

(91%). Findings indicate that we are a

great place to work, with high levels of

engagement overall. However, there is

room for improvement and we have

identified actions to be taken in the

areas identified for improvement.

Fostering communication The relationship between employees

and their leaders/managers is critical

to attract, engage and retain talent.

Employees who feel a connection to

their leaders/managers and have good

communication with them perform at

a higher level and are more engaged in

their work. Our HR team started taking

Human Capital


misbehaviour across any level. We

have also taken initiatives to spread

awareness amongst the employees

about the sexual harassment policy and

the Company’s zero-tolerance to any

such incidents. A high level committee

with appropriate representations, who

possess subject matter knowledge

to look after these issues, has been

formed.

No single case was registered under the

policy during the year under review.

Whistle blower policyTo maintain the highest level of

governance and to provide a gateway

to employees to voice concern in a

responsive manner about financial

impropriety, abuse, malpractices or any

other wrongdoing within the Company.

The Whistle Blower Policy has been

formulated. The detailed policy is made

available on the Company’s portal for

all the employees. One senior-most

management personnel has been

designated as Ombudsman to deal

with such issues.

During the year under review, there

were no such cases, which have

been brought to the notice of the

Ombudsman.

Anti-fraud policyThe Company has established

a reasonable process to detect,

investigate and resolve potentially

significant frauds. Such a process,

also includes proper framework that

facilitate to detect potentially significant

frauds/wrongdoings identified within

the organisation. A detailed Fraud Risk

Management Policy is being drafted to

make the Company furthermore robust

and strong against any possible fraud

risk scenario.

During the year under review, there has

been no significant instances of fraud

which have been noticed/reported.

There has been no occurrence of any

fraud which involves the management

or senior employees who have a

significant role in the internal control

structure.

Ombudsman processMytrah has also laid down the

‘Ombudsman’ process to deal with the

concerns raised through Whistle Blower

Policy and other matters pertaining to

the Code of Conduct and Ethics and

Fraud. Pursuant to such a process,

one of the senior-most personnel has

been appointed as the Ombudsman

by the Compliance Committee. It is

the responsibility of the Ombudsman

to initiate proper investigation on the

concern raised by any employee over

the malpractices, abuse, financial

impropriety or any other wrongdoing.

The process lays down a systematic

and time-bound approach to resolve

the concerns. Based on the findings

of the Ombudsman, the Compliance

Committee will initiate appropriate

action. The process assures that all

the concerns are treated with full

confidentiality and the employee

raising the concern is safeguarded.

Greener Earth


It is our business to leave a greener

earth for generations to come. By

choosing to generate power from wind

energy, we have made a conscious

decision in avoiding carbon emissions,

which is not the case when power is

produced from conventional sources.

By producing power from wind, we

are also making a conscious decision

in conserving water, which is used for

creating steam that turns the turbine

in thermal to generate electricity and

is also used to cool the turbines in the

thermal plant.

At Mytrah, we have avoided carbon

footprint of around 5,51,000 tons of

carbon emissions in FY 2013-14.

SustainabilityIn line with our core values and

philosophy – Inspiring solution – we

ensure that we are responsible in

utilising nature’s resources. At Mytrah,

we believe that the only way we can

do business is to do it in a sustainable

manner. We firmly believe that we are

catalysts of change and have taken it

upon ourselves in building a powerful

nation.

We have engaged independent third

party expertise in this field to assist in the

development of our own comprehensive

social, environmental, health and

safety management system alongside

establishing detailed standards,

policies and procedures and internal

accountabilities and governance. These

standards, policies and procedures are

designed to ensure that we comply

with the following standards (which

are consistent with local regulatory

requirements and guidelines, both

generic and sector specific, issued by the

World Bank Group)

Performance standard 1: Assessment

and management of environmental

and social risks and impacts

Performance standard 2: Labor and

working conditions

Performance standard 3: Resource

efficiency and pollution prevention

Performance standard 4: Community

health, safety, and security

Performance standard 5: Land

acquisition and involuntary resettlement

Performance standard 6: Biodiversity

conservation and sustainable

management of living natural resources

Performance standard 7: Indigenous

peoples

Performance standard 8: Cultural

heritage

The study was conducted across eight

wind farms comprising – Sinner, Chakla

in Maharashtra; Mokal and Kaladongar

in Rajasthan; Mahidad and Jamanwada

in Gujarat and Vajrakarur in Andhra

Pradesh.

Sustainability Report

Greener Earth


Sinn

erC

hakl

aM

okal

Kala

dong

arM

ahid

adJa

man

wad

aVa

jrak

arur

Rem

arks

Incr

ease

d he

alth

and

saf

ety

focu

s (O

ccup

atio

nal H

ealth

and

Saf

ety)

PP

PP

PP

P

Impa

cts

asso

ciat

ed w

ith s

uppl

y ch

ains

whe

re lo

w la

bor

cost

is a

fact

or in

com

petit

iven

ess

of it

em s

uppl

ied

PP

PP

PP

P

PS 3

Pollu

tion

pre

vent

ion

and

abat

emen

t

Avo

id r

elea

se o

f po

lluta

nts

or m

inim

ise

and

cont

rol t

he in

tens

ity o

r

load

of

the

rele

ase

PP

PP

PP

P

Avo

id a

nd m

inim

ise

gene

ratio

n of

haz

ardo

us a

nd n

on-h

azar

dous

was

te s

ubst

ance

sP

PP

PP

PP

Prep

ared

ness

to

addr

ess

any

proc

ess

upse

t, a

ccid

enta

l and

em

erge

ncy

situ

atio

nsP

PP

PP

PP

Emer

genc

y re

spon

se p

lan

to a

ddre

ss t

he t

rain

ing,

res

ourc

es,

resp

onsi

bilit

ies,

com

mun

icat

ion,

pro

cedu

re a

nd o

ther

asp

ects

PP

PP

PP

P

Adh

eren

ce w

ith t

he a

pplic

able

EH

S gu

idel

ines

PP

PP

PP

P

Emph

asis

on

clea

n pr

oduc

tion

and

ener

gy e

ffic

ienc

yP

PP

PP

PP

Impl

emen

tatio

n of

Pes

t M

anag

emen

t Pr

ogra

mP

PP

PP

PP

PS 4

Com

mun

ity,

hea

lth,

saf

ety

and

secu

rity

Eval

uatio

n of

ris

ks a

nd p

oten

tial i

mpa

cts

on h

ealth

and

saf

ety

of lo

cal

com

mun

ity b

y av

oidi

ng o

r m

inim

isin

g ris

ks a

nd im

pact

s.P

PP

PP

PP

Dis

clos

ure

of r

isks

and

pot

entia

l im

pact

s to

aff

ecte

d co

mm

uniti

es a

nd

conc

erne

d go

vern

men

t ag

enci

esP

PP

PP

PP

Ade

quat

e sa

fety

mea

sure

s to

saf

egua

rd p

erso

nnel

and

pro

pert

yP

PP

PP

PP

Ade

quat

e sa

fety

mea

sure

s fo

r ha

ndlin

g of

haz

ardo

us s

ubst

ance

sP

PP

PP

PP

Avo

id a

nd m

inim

ise

adve

rse

impa

cts

of t

he p

roje

ct o

n so

il, w

ater

and

othe

r na

tura

l res

ourc

es in

use

by

the

affe

cted

com

mun

ityP

PP

PP

PP

Avo

id e

xace

rbat

ion

of im

pact

s ca

used

by

natu

ral h

azar

ds if

any

,

thro

ugh

proj

ect

activ

ities

PP

PP

PP

P

Prev

ent

or m

inim

ise

pote

ntia

l for

exp

osur

e to

wat

er b

orne

,

wat

er-b

ased

ris

ks, w

ater

-rel

ated

, vec

tor

born

e di

seas

es a

nd o

ther

com

mun

icab

le d

isea

ses

PP

PP

PP

P

Trai

ning

on

rule

s of

con

duct

and

han

dlin

g of

sec

urity

equ

ipm

ent

to

all t

he s

ecur

ity p

erso

nnel

PP

PP

PP

P

Sinn

erC

hakl

aM

okal

Kala

dong

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ahid

adJa

man

wad

aVa

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arur

Rem

arks

PS 1

Soci

al a

nd E

nvir

onm

enta

l Ass

essm

ent

& M

anag

emen

t Sy

stem

s

“1. A

lthou

gh a

n or

gani

satio

nal f

ram

ewor

k

rega

rdin

g Q

SHE/

SEM

S ha

s be

en d

evel

oped

,

form

al d

ocum

ente

d de

fined

rol

es a

nd

resp

onsi

bilit

ies,

det

aile

d ta

ilore

d m

anua

l for

Myt

rah

Gro

up e

mbo

dyin

g va

rious

asp

ects

like

emer

genc

y re

spon

se, c

risis

man

agem

ent

etc.

and

a de

taile

d tr

aini

ng c

alen

dar

in t

his

resp

ect

are

in t

he p

roce

ss o

f de

velo

pmen

t

2. G

rieva

nce

Intim

atio

n Sy

stem

is b

eing

intr

oduc

ed.”

Soci

al a

nd E

nviro

nmen

tal I

mpa

ct A

sses

smen

tP

PP

PP

PP

App

licat

ion

of r

obus

t m

anag

emen

t sy

stem

to

addr

ess

soci

al a

nd

envi

ronm

enta

l asp

ects

and

impa

cts

PP

PP

PP

P

Trai

ning

for

em

ploy

ees

and

cont

ract

ors

for

effe

ctiv

e im

plem

enta

tion

PP

PP

PP

P

Broa

der

soci

al c

onsi

dera

tions

by

com

mun

ity e

ngag

emen

t in

all

rele

vant

issu

es t

hrou

gh d

iscl

osur

e, c

onsu

ltatio

n an

d gr

ieva

nce

Redr

essa

l mec

hani

smP

PP

PP

PP

Mon

itorin

g an

d re

port

ing

mec

hani

sm (i

nter

nal a

s w

ell a

s ex

tern

al) f

or

perf

orm

ance

ass

uran

ceP

PP

PP

PP

Add

ress

lega

l req

uire

men

ts f

or b

oth

soci

al a

nd e

nviro

nmen

tal

para

met

ers

PP

PP

PP

P

PS 2

Labo

r an

d w

orki

ng c

ondi

tion

s

Wel

l-def

ined

Hum

an R

esou

rce

Polic

yP

PP

PP

PP

“App

lies

four

cor

e IL

O p

olic

ies

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imin

atio

n of

for

ced

and

com

puls

ory

labo

r

- A

bolit

ion

of c

hild

labo

r

- El

imin

atio

n of

dis

crim

inat

ion

in r

espe

ct o

f em

ploy

men

t an

d

occu

patio

n

- Fr

eedo

m o

f as

soci

atio

n an

d co

llect

ive

barg

aini

ng”

PP

PP

PP

P

Fair

wag

es a

nd f

air

labo

r pr

actic

es t

hrou

gh d

efin

ed w

ages

, ben

efits

,

hour

s of

wor

k, o

vert

ime

arra

ngem

ents

, com

pens

atio

n, e

tc.

PP

PP

PP

P


Sinn

erC

hakl

aM

okal

Kala

dong

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ahid

adJa

man

wad

aVa

jrak

arur

Rem

arks

Incl

udes

con

side

ratio

n of

hab

itat

rest

orat

ion

mea

sure

s af

ter

cons

truc

tion

PP

PP

PP

P

Intr

oduc

es “

no g

o” c

once

ptP

PP

PP

PP

PS 7

Indi

geno

us p

eopl

e

Avo

id im

pact

on

indi

geno

us c

omm

uniti

es t

o th

e ex

tent

fea

sibl

eP

PP

PP

PP

Dev

elop

an

ongo

ing

rela

tions

hip

with

indi

geno

us c

omm

uniti

es

thro

ugh

the

life

of t

he p

roje

ctP

PP

PP

PP

Invo

lve

repr

esen

tativ

es (c

ounc

il of

eld

ers)

incl

udin

g m

en a

nd w

omen

for

colle

ctiv

e de

cisi

on-m

akin

gP

PP

PP

PP

Prot

ect

cultu

ral h

erita

ge o

f in

dige

nous

peo

ple

PP

PP

PP

P

Prov

ide

them

a f

orum

to

expr

ess

thei

r vi

ews

and

conc

erns

in t

heir

own

lang

uage

PP

PP

PP

P

Prov

ide

them

opp

ortu

nitie

s fo

r cu

ltura

lly-a

ppro

pria

te d

evel

opm

ent

bene

fits

PP

PP

PP

P

PS 8

Cul

tura

l Her

itag

e

Broa

dens

def

initi

on t

o in

clud

e “h

erita

ge”

vers

us t

he p

revi

ous

“pro

pert

y” t

o en

com

pass

inta

ngib

le c

ultu

re (e

.g. –

loca

tions

of

spiri

tual

impo

rtan

ce)

PP

PP

PP

P

Avo

id r

emov

ing

cultu

ral h

erita

ge u

nles

s th

ere

are

no a

ltern

ativ

es, a

nd

bene

fits

outw

eigh

cos

tsP

PP

PP

PP

Sinn

erC

hakl

aM

okal

Kala

dong

arM

ahid

adJa

man

wad

aVa

jrak

arur

Rem

arks

Prev

entio

n or

min

imis

ing

pote

ntia

l for

exp

osur

e to

wat

er b

orne

,

wat

er-b

ased

ris

ks, w

ater

-rel

ated

, vec

tor

born

e di

seas

es a

nd o

ther

com

mun

icab

le d

isea

ses

that

cou

ld r

esul

t fr

om t

he p

roje

ct a

ctiv

ities

PP

PP

PP

P

Focu

sed

in p

art

on g

aini

ng c

omm

unity

sup

port

thr

ough

eff

ectiv

e

cons

ulta

tion

PP

PP

PP

P

PS 5

Focu

sed

in p

art

on g

aini

ng c

omm

unit

y su

ppor

t th

roug

h ef

fect

ive

cons

ulta

tion

“All

sign

ifica

nt r

elat

ed r

egul

atio

ns im

pact

ing

esta

blis

hmen

t an

d op

erat

ions

of

the

proj

ects

ha

ve b

een

com

plie

d. N

o no

n-co

mpl

ianc

es

have

bee

n so

far

bro

ught

to

the

noti

ce

of t

he t

op m

anag

emen

t by

any

sta

tuto

ry

auth

orit

ies

nor

Man

agem

ent

Ass

uran

ce

Gro

up h

as b

een

info

rmed

abo

ut a

ny s

uch

case

s.”

Feas

ible

pro

ject

des

ign

to a

void

or

at le

ast

min

imis

e ph

ysic

al o

r

econ

omic

dis

plac

emen

tP

PP

PP

PP

Com

pens

atio

n an

d be

nefit

s to

aff

ecte

d pe

ople

and

com

mun

ities

PP

PP

PP

P

Cons

ult

with

and

fac

ilita

te p

artic

ipat

ion

of t

he a

ffec

ted

peop

le a

nd

com

mun

ities

in d

ecis

ion-

mak

ing

proc

esse

s re

late

d to

res

ettle

men

tP

PP

PP

PP

Cont

inua

l pro

cess

of

cons

ulta

tion

durin

g im

plem

enta

tion,

mon

itorin

g

and

eval

uatio

n of

com

pens

atio

n pa

ymen

t an

d re

sett

lem

ent

PP

PP

PP

P

Grie

vanc

e Re

dres

sal m

echa

nism

to

addr

ess

conc

erns

abo

ut

com

pens

atio

n an

d re

loca

tion

PP

PP

PP

P

Rese

ttle

men

t pl

anni

ng a

nd im

plem

enta

tion

with

app

ropr

iate

soc

io-

econ

omic

bas

elin

e da

taP

PP

PP

PP

Com

pens

atio

n fo

r lo

ss o

f in

com

e an

d/or

live

lihoo

d du

e to

the

pro

ject

PP

PP

PP

P

Colla

bora

tion

with

gov

ernm

ent

agen

cy t

o ac

hiev

e de

sire

d ou

tcom

esP

PP

PP

PP

PS 6

Biod

iver

sity

con

serv

atio

n an

d su

stai

nabl

e re

sour

ce m

anag

emen

t

Emph

asis

on

sust

aina

ble

man

agem

ent

of b

iodi

vers

ity a

nd h

abita

t

beyo

nd p

rote

cted

are

as (m

odifi

ed h

abita

t, n

atur

al h

abita

t, c

ritic

al

habi

tat

and

lega

lly p

rote

cted

are

as)

PP

PP

PP

P

No

inte

rnat

iona

l int

rodu

ctio

n of

inva

sive

alie

n sp

ecie

sP

PP

PP

PP

Man

agem

ent

of r

enew

able

res

ourc

esP

PP

PP

PP


Directors’ Biographies

Ravi KailasChairman and Chief Executive Officer

Mr Kailas has over 20 years of entrepreneurial experience in telecom, software and real estate. He was the founder of a number of start-up companies, including Zip Global Network, a telecom services company, Xius Technologies, a telecom software company, and Altius, a real estate options company. Mr Kailas has a Bachelor’s degree in Electronics and Communications Engineering from Osmania University and a Master’s degree from the Graduate School of Business, Stanford University.


Russell WallsNon-Executive Director


Russell Walls has a strong financial background, with extensive experience as a Finance Director, and possesses a broad range of experience across a number of sectors. Mr Walls is currently Non-Executive Director of Biocon Limited (healthcare), Signet Jewellers Ltd (retail) and the regulated holding company for the UK General Insurance business of Aviva (Insurance) plc. Mr Walls was formerly Independent Non-Executive Director and Chairman of the Audit Committee of Aviva (Insurance) plc, Group Finance Director of BAA plc (transport), Wellcome plc (pharmaceuticals) and Coats Viyella plc (textiles). In addition, Mr Walls was former Senior Independent Non-Executive Director and Chairman of the Audit Committee of Stagecoach Group plc (transport) and Hilton Group plc (leisure).



Mr Phansalkar is the Chairman and CEO of RKP Capital, Inc., a US based merchant banking boutique. He was previously the Chairman and CEO of Osicom Technologies, an optical networking company. He was the co-founder, Vice Chairman and CEO of Newbridge Capital, a private equity firm investing in India, and formerly the Head of Energy Finance Group at Oppenheimer & Co. Mr Phansalkar was Co-head of the Energy Finance Group at Shearson American Express, Managing Director of Bear Stearns and Managing Director at Oppenheimer & Co. Mr Phansalkar was the Founding Chairman of The India Fund. Mr Phansalkar received an MBA from the Graduate School of Business, Harvard University.

Rohit PhansalkarNon-Executive Director


The Board has a breadth of experience relevant to the Group at its current stage of development, and the Directors believe that any changes to the Board’s composition can be managed without undue disruption.

The biographical profiles of the Directors can be found on page 60.

The Company’s Articles of Incorporation

require that all Directors are subject to re-election by shareholders at the first Annual General Meeting following their initial appointment, and at each Annual General Meeting one-third of the Directors retire by rotation. The Board has voluntarily adopted the relevant provisions of the UK Corporate Governance Code regarding annual re-election of Directors and will all

offer themselves for re-election by shareholders at the 2014 Annual General Meeting.

Directors’ interestsDetails of the share interests of the Directors, their service contracts and terms of appointment are shown in the Remuneration Report.

Acquisition of the Company’s own sharesThe Company did not acquire any of its shares during the year ended 31 December 2013 (for the period to 31 December 2012: Nil).

Statement of Directors’ responsibilities in respect of the Annual Report and the consolidated financial statementsThe Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

The Directors have elected to prepare the consolidated financial statements in accordance with International Financial Reporting Standards (‘IFRS’) as adopted by the European Union. The consolidated financial statements are required to give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group for the period.

In preparing those consolidated financial statements, the Directors are required to:

Select suitable accounting policies and then apply them consistently;

Make judgments and estimates that are reasonable and prudent;

State whether applicable accounting standards have been followed, subject to any material departures being disclosed

and explained in the consolidated financial statements; and

Prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The Directors confirm that they have complied with the above requirements in preparing the annual consolidated financial statements.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the consolidated financial statements comply with the Companies (Guernsey) Law 2008. They are also responsible for safeguarding the assets of the Group and hence for taking steps to prevent and detect fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included in the Company’s website.

In addition the Directors confirm, to the best of their knowledge, that:

The Group financial statements prepared in accordance with IFRS as adopted by the European Union give a true and fair view of the assets, liabilities, financial position and profit of the Group; and

The Business Review includes a fair

review of the development and performance of the business and the position of the Group, together with a description of the principle risks and uncertainties that it faces.

Disclosure of information to auditorsEach Director has responsibility for ensuring that, as far as he is aware, there is no relevant audit information of which the auditors are unaware, and that he has taken all the steps that he ought to have taken to make himself aware of any relevant information that is relevant to the preparation of the auditors’ report and to establish that the Group’s auditors are aware of that information.

AuditorsThe Auditors, KPMG Audit LLC, were appointed at the Annual General Meeting held on 31 July 2013. A resolution concerning the re-appointment of KPMG Audit LLC as Auditors will be proposed at the 2014 Annual General Meeting.

By order of the Board

Susan WallaceCompany Secretary

17 March 2014

Registered Office:Frances House PO Box 156, Sir William Place St Peter Port, Guernsey, GY1 4EU

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

Name Age Position Date of Appointment

Ravi Kailas 47 Chairman & CEO 13 August 2010

Rohit Phansalkar 69 Non-Executive Director 13 August 2010

Russell Walls 69 Non-Executive Director 4 November 2011

Substantial shareholdersOn 31 December 2013, the Company had been notified of the following holdings of 3% or more of the 163,636,000 Ordinary Shares:

Name Percentage of voting rights and issued share capital

The Raksha Trust* 57.60

Esrano Overseas Ltd 14.67

Henderson Global Investors Ltd 7.45

Capital Research Global Investments 7.08

Blackrock Investment Management 4.03

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

and some of his family members and also a philanthropic trust are discretionary beneficiaries.

The Directors present their report, together with the audited financial statements for the year ended 31 December 2013. The information in the Chairman and Chief Executive’s Statement, the Business Review, the Directors’ Profiles, the Corporate Governance Report and the Directors’ Responsibilities Statement form part of the Directors’ Report.

Principal activities and review of businessThe principle activities of the Group are developing, owning and operating wind energy assets in India. A detailed review of the business is set out in the Chairman and Chief Executive’s Statement on page 12.

Business reviewThe Company is required by the Companies (Guernsey) Law 2008

to include a Business Review in this report. The information that fulfils the requirements of the Business Review can be found on pages 14 to 20, which are incorporated in this report by reference.

Results and dividendsThe Group posted profit after tax of USD 6.90 m for the year ended 31 December 2013 (for the period 31 December 2012: USD 11.97 m) on a turnover of USD 50.92 m (period ended 31 December 2012: USD 30.92 m) and EBITDA of USD 46.51 m (period ended 31 December 2012: USD 35.12 m). At 31 December 2013 the Group had cash and bank balances of USD 21.38 m (for the period to 31 December 2012: USD 9.47 m).

The Directors do not recommend the payment of a dividend for the current year (31 December 2012: USD nil).

Capital structureDetails of the Company’s issued share capital and movements during the period are shown in note 26. The Company has one class of ordinary share, which carry no right to fixed income. Each share carries the right to one vote at general meetings of the Company. There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed by the general provisions of the Articles of Incorporation and prevailing legislation. The Directors are not aware of any agreements between holders of the Company’s shares that may result in restrictions on transfers or on voting rights.

Details of employee share schemes are set out in note 35.

No person has any special rights of control over the Company’s share capital and all issued shares are fully paid.

Directors’ Report


Corporate Governance Report

The Board embraces the high standards of corporate governance contained in the 2013 Quoted Companies Alliance Corporate Governance Guidelines for Smaller Quoted Companies (“QCA Guidelines”) and, where relevant, the UK Corporate Governance Code issued by the Financial Reporting Council.

In respect to the QCA Guidelines, as at the date of this report the Group was compliant, save that the Board does not have a Chairman deemed independent on appointment as recommended under Guideline 9 of the said QCA Guidelines. However, the Board believes that Ravi Kailas’s appointment as Chairman and CEO is appropriate for the business in its current stage of development.

The Board continually reviews its governance arrangements. During the year:

An annual Internal Audit Plan was approved and adopted for the Group’s subsidiaries in India (where the principle operations of the Group are undertaken). The internal assurance group along with the external advisers were appointed to conduct regular assessments on internal and external regulatory and legislative issues pertinent to the Group, such as compliance with Land Procurement and Land Laws, the UK Bribery Act, EHS compliance, entity level fraud risk management framework and balance of plant operations. These assessments are reviewed by the MEL Audit Committee on a quarterly basis;

As part of the Annual Internal Audit Plan, the Internal Auditors conducted periodic fraud and corruption and risk assessment audit reviews and reported their findings on a quarterly basis to the Audit Committee which, in turn, made

recommendations to the Board where appropriate;

The Board conducted an annual Board and Committee effectiveness review;

The Board and its Committees reviewed their terms of references, to ensure they are in line with best practice and corporate governance guidelines.

The Board maintained a responsibilities’ statement setting out the roles and responsibilities of the Board, Chairman and CEO and the Senior Independent Director. In line with best practice, the Board made the current terms of reference for each Board Committee available on the Investor Relations’ section of the corporate website.

The BoardCompositionThe composition of the Board is shown on page 66. It is considered that a smaller number of Directors allow the Board to work more effectively and increase the speed and efficiency of decision making.

The role and operations of the boardThe role of the Board is to ensure delivery of the business strategy and long-term shareholder value. The general obligations of the Board and the roles and responsibilities of the Chairman and CEO and Senior Independent Director are set out in a formal Board responsibilities statement approved by the Board. The Board fulfils its role by approving the annual operating plan and monitoring business performance throughout the period. The Board held two formal scheduled Board meetings during the financial year and in addition held a number of unscheduled ad-hoc meetings, typically by conference call. There is in place a schedule of matters

reserved for Board approval.

The Board have approved an annual Board calendar setting out the dates, location and standing agenda items for each formal scheduled Board and Committee meeting and scheduled Board calls. Board papers are circulated to Directors in advance of scheduled and unscheduled meetings, which are of an appropriate quality to enable the Directors to fulfil their obligations and adequately monitor the performance of the business. Directors who are unable to attend a meeting are expected to provide their comments to the Chairman and CEO, Senior Independent Director or the Company Secretary as appropriate. The Board also received management information on a monthly basis which sets out the performance of the business.

During the year, the topics subject to Board discussion at formal scheduled Board meetings included:

Business strategy;

Investor relations;

Financial and operational performance;

Project updates;

Market and competitor reports;

Acquisitions and Group structure changes;

Financing activities;

Industry regulatory and compliance developments;

Related party transactions;w

Appointment of Nomads;

Approval of Annual and Half-Year Reports;

Findings of the Board and Committee effectiveness review;

Risk and internal controls

68 Mytrah Energy Limited | 31 December 2013 | Financial Statements 69

Board balance and independenceFollowing an annual formal review by the Board undertaken in June 2013, taking into account all relevant factors as set out in the QCA Guidelines and UK Corporate Governance Code, the Board considers Rohit Phansalkar and Russell Walls to be independent in character and judgment.

Whilst the Board does not have a Chairman who was deemed independent on appointment, the Board consists of one Executive Director and two independent Non-Executive Directors. Consequently, over half the Board is comprised of independent Non-Executive Directors to ensure that no individual or small group of individuals can dominate the Board’s decision taking.

Senior Independent DirectorRussell Walls is the Senior Independent Director. He is available to investors to discuss governance issues or should there be matters of concern that have not, or cannot, be addressed through the normal channels of communication with the Chairman and CEO.

Russell Walls is also available to act as an intermediary between Directors, if required, and to act as a sounding board for the Chairman and CEO.

Advice, insurance and indemnitiesAll Directors have access to the services of the Company Secretary and may take independent professional advice at the

Company’s expense in conducting their duties.

The Company provides insurance cover for its Directors and officers, which is reviewed annually, and has entered into deeds of indemnity with the Directors who were in service at the time of the IPO in 2010.

ConflictsConsideration of Directors’ interests is a standing agenda item at each formal scheduled Board meeting. Each Director is required to disclose any actual or potential conflicts of interest and a register of Directors’ interests is maintained by the Company Secretary. If there is a conflict of interest or a matter relating to a particular Director or a related party transaction, then the Board understands that the relevant Director should excuse themselves from the discussion. In August 2013, Ravi Kailas excused himself from discussions regarding a related party transaction that was approved by the Board and announced to the market on 30 August 2013.

Board evaluationA formal and rigorous evaluation of the performance and effectiveness of the Board and its Committees was undertaken in Q4 2012 and was coordinated by the Company Secretary. The Senior Independent Director led the evaluation of Ravi Kailas in his role as

Chairman. The review also gave Directors an opportunity to identify technical and wider industry topics where they considered they would benefit from additional training.

The review involved a tailored questionnaire, the results of which were summarised in a Board report. As a result of the above findings, the following actions were taken during the year:

The Non-Executive Directors visited the Hyderabad office in April 2013 and September 2013. During the 3 day visit in April, the Non-Executive Directors attended a Board meeting of Mytrah Energy (India) Limited and held meetings with senior management to discuss the business and the wider Indian wind energy sector. They also met representatives of the head of the internal management assurance group and audit partner at Ernst & Young who were appointed as our co-sourced internal audit firm effective 1 April 2013.

Appropriate time was allocated on the agenda at the Board meeting held in February 2013 to discuss strategy.

Information of interest to the Board regarding the Group and the Indian wind energy sector are circulated as part of the quarterly board packs.

In Q1 2014 a Board effectiveness review was carried out with satisfactory results. Recommendations of relatively minor

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

Formal Scheduled Board Meetings during the year ended 31 December 2013

Director Maximum Possible Attendance Meetings Attended Attendance

Ravi Kailas 3 2 2

Rohit Phansalkar 3 3 3

Russell Walls 3 3 3

Maytra_069_124_V2.indd 69 11/06/14 7:21 PM


importance have been made and will receive due consideration.

The Board will consider each year whether the review should be conducted by an independent third party.

Board developmentAll new Directors appointed to the Board receive a comprehensive structured induction programme. In 2013, Russell Walls and Rohit Phansalkar visited the Hyderabad Office twice during the year, where they had a structured programme of meetings with senior management and underwent training sessions on various aspects of the business and the Indian wind energy sector.

Reappointment of Directors at the Annual General MeetingThe Company’s Articles of Incorporation require all new Directors to submit themselves for re-election by shareholders in their first year following appointment. The Company’s Articles of Incorporation also require all Directors to submit themselves for re-election at least every three years if they wish to continue to serve on the Board and are considered by the board to be eligible.

Following the publication of the UK Corporate Governance Code, it is deemed best practice in the UK for the boards of

FTSE350 listed companies to annually submit themselves for re-election by shareholders. The Board has decided to voluntarily comply with this provision of the UK Corporate Governance Code and annually submit themselves for re-election at the Annual General Meeting.

Relations with investorsThroughout the year, Ravi Kailas and Alastair Cade, an Executive Director of Mytrah Energy (India) Limited, met regularly with shareholders and their views were reported back to the Board. This allowed all Directors to develop a good understanding of the shareholders’ needs and expectations and in turn for the shareholders to appreciate the opportunities and constraints faced by the Group. Consideration of investor relations issues is a standing agenda item at each formal scheduled Board meeting.

The Company produces an Annual Report which is distributed to all shareholders and available on the investor relations section of the Company’s website, which also contains information on the Group, copies of Board Committee terms of references and market announcements.

The Board ensures that financial reporting and operational updates

are communicated to the market on a timely basis and give an accurate and balanced assessment of the business. The Company’s market communications policy sets out how the Directors meet their obligations under the AIM rules in this regard and how the advisers are involved in the market communications process coordinated by the Company Secretary.

Board committeesThe terms of reference of the Board Committees set out below are all available in the corporate governance section of the Company’s website at www.mytrah.com.

The Composition of all Board Committees are compliant with best practice as set out in the QCA Guidelines and the UK Corporate Governance Code.

NominationMembershipSince November 2012, the Nomination Committee is chaired by Ravi Kailas and its other members are Rohit Phansalkar and Russell Walls. The Committee formally met once during the year to review Board and Committee composition. The Committee has a calendar of activities for the year.

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

Director Maximum Possible Attendance Meetings Attended

Ravi Kailas 1 1

Rohit Phansalkar 1 1

Russell Walls 1 1

RemunerationFull information on the composition, role, operation and meeting attendance of the Remuneration Committee is set out in the Remuneration Report on page 73.

AuditMembershipSince November 2012, the Audit Committee is chaired by Russell Walls

and its other member is Rohit Phansalkar. Russell Walls is considered by the Board to have recent and relevant financial experience.

The Committee has a calendar of activities agreed each year. Senior management, the external auditors and a representative of the out-sourced internal audit service providers, (Brahymayya & Co, and Ernst &

Young), attend meetings at the request of the Committee. Ravi Kailas has a standing invite to attend all meetings and receive all meeting materials.

Attendance at scheduled Committee Meetings during the year is shown below. Additional ad-hoc meetings by conference call were also held during the year.

ResponsibilitiesThe key responsibilities of the Committee are:

i. Recommending Director nominees to the Board;

ii. Recommending Committee chairs and membership to the Board and Committees;

iii. When appropriate, taking into account the current the early stage of the Company’s development, reviewing succession plans for the Board and Committees;

iv. Making recommendations to the Board in respect of the re-appointment of any Non-Executive Director at the conclusion of their specified term of office

taking into account their performance and their contribution together with the knowledge, skills, leadership and experience requirements of the Board and Committees; and

v. Regularly reviewing the structure, size and composition (including the balance of skills, knowledge and experience) required for the Board.




Russell Walls 5 5

ResponsibilitiesThe key responsibilities of the Committee are:

i. Monitoring the integrity of financial statements, including approving any material changes in accounting policy, reviewing the financial statements, and any market announcements relating to the Group’s financial performance;

ii. Reviewing the integrity of internal financial control and risk management systems and codes of corporate conduct and ethics and any published statements regarding these systems and codes;

iii. Making recommendations to the Board regarding the engagement of the external auditors, approving their terms of engagement, monitoring their objectivity and performance and setting policy regarding the provision of non-audit services by the external auditors;

iv. Reviewing the plan, scope and results of the annual audit, the external auditors’ letter of comments and management’s response thereto; and

v. Receiving reports from internal audit relating to risk control and management’s response to internal audit review findings.

During the year, the topics subject to Committee discussion at formal scheduled Board meetings included:

Receipt and consideration of reports from the external auditors regarding the scope and findings of their audit of the annual report and review of the half-year report;

Recommendation of the annual report and half-year report to the Board for approval, together with the management representation letter and audit fees;

Review of audit and non-audit related fees paid to the external auditors and monitoring the independence of the external auditors;

Receipt and consideration of reports from the internal auditors and management’s responses to their findings; and

Review and consideration of accounting treatment policy changes in line with industry practice, as recommended by external auditors.

To ensure the objectivity and independence of the external auditors, any service provided by the external auditors must be approved in accordance

with the Group’s policy on auditor independence and the provision of non-audit services, which is consistent with the UK Auditing Practices Board’s Ethical Standards for Auditors.

The external auditor is only selected to provide non-audit services if they are well placed to provide the required service at a competitive cost and the Committee is satisfied that the assignment will not impair their objectivity. In accordance with relevant professional standards, the external auditors have confirmed their independence as auditors in a letter to the Directors. Details of fees paid to the external auditors for both audit and non-audit services are given in the note 8 to the financial statements.

Internal controlThe Board is responsible for ensuring the Group has effective and sound systems of internal controls, which are designed to manage, but not eliminate the risk of failure to achieve business objectives and provide reasonable, but not absolute, assurance against material misstatements and loss.

The day-to-day management and monitoring of the Group’s systems of internal control is delegated to the


Role and responsibilitiesThe Remuneration Committee determines and agrees with the Board the broad policy for the remuneration of the Group’s employees, as well as reviewing the ongoing appropriateness and relevance of the Group’s remuneration policy, ensuring that it is structured in a way that aligns reward with performance, shareholder interests and the long-term interests of the business.

The key responsibilities of the Committee are:

i. Determining the total individual remuneration packages, including pension arrangements, of the Executive Director, senior management and the Company Secretary;

ii. Reviewing and approving share incentive plans and non-material changes to them;

iii. Approving and determining targets for performance-related pay schemes, including the annual discretionary bonus scheme;

iv. Ensuring that the remuneration and other incentives of newly appointed Directors and senior management are within the Company’s overall remuneration policy;

v. Reviewing and approving the scope of any termination payments and severance terms for Executive Directors, ensuring that contractual terms on termination and any payments made are fair to the individual and the Company, that failure is not rewarded and that the duty to mitigate loss is fully recognised.

The full terms of reference of the Remuneration Committee are available on the Company’s website (www.mytrah.com) and on request from the Company Secretary.

The Committee has access to the advice and views of the Chairman and Chief Executive as well as the use of external consultants, if required. No external consultants were engaged by the Committee during the period.

Remuneration policyThe Board considers that appropriate remuneration policies are a key driver of performance and a central element of corporate strategy. The Group remuneration policy aims to:

provide market competitive total compensation;

motivate, retain and promote individual and corporate outperformance;

differentiate on merit and performance;

emphasise variable performance-driven remuneration;

ensure adherence to the Group’s Code of Conduct;

align senior management with shareholders’ interests; and

deliver clarity, transparency and fairness of process.

The Group remuneration policy has a strong focus on variable compensation as the Board believes that the interests of the business, shareholders and employees are best served by containing




Russell Walls 2 2

Executive Director and the Management Committee, comprising the Chairman & Chief Executive, Chief Financial Officer and Managing Director of the Group’s main operating subsidiary, Mytrah Energy (India) Limited, President, and Finance Director of Mytrah Energy (India) Limited.

The Management Committee ensures that the Group’s risk management framework and control culture are embedded within the business, and to that end, during the year the Management Committee ensured that each employee undertook induction training on the Group Code of Conduct established during the year. The Executive Director and senior management provides assurance to the Board, through the Audit Committee, that risks are monitored, appropriately escalated and managed within the risk appetite of the Board.

The systems of internal control are designed to cover all business, financial, reputational and legal risks of the Group and are embedded within the day to day operations of the Group.

The financial reporting controls in place are designed to maintain proper accounting records and provide reasonable assurance concerning the accuracy and integrity of financial information reported both internally and externally. The financial reporting controls are monitored on a monthly basis by internal audit and are reported on a monthly basis to the Management Committee and on a quarterly basis to the Audit Committee.

Effectiveness of the identification and evaluation of business risk and the mitigation provided by controls are assessed on an annual basis by each business area. This annual review is coordinated by the internal auditors and reported to the Management Committee for review and challenge before ultimately being reported to the Audit Committee. This risk and control assessment process forms a key part of the annual internal audit plan and links to the Board’s assessment of the key risks and the overall effectiveness of internal controls.

In accordance with the QCA Guidelines and UK Corporate Governance Code and best practice guidance for Directors on internal controls issued by the Financial Reporting Council, the Board, with the advice of the Audit Committee, has reviewed the effectiveness of the systems of internal control for the year to 31 December 2013. As part of this review, the Board received assurances from the Chairman & Chief Executive and the Chief Financial Officer of Mytrah Energy (India) Limited that the Directors Responsibilities Statement on page 67 is founded on a sound system of risk management and internal controls and that the systems of internal controls are operating effectively in all material respects in relation to reporting financial risks and the mitigation of material business risks.

Relationship agreementThe Company, Mirabaud (the Company’s co-broker), Strand Hanson and certain shareholders, namely, Bindu Urja Capital

Inc, Bindu Urja Investments Inc, Bindu Urja Holdings Inc, Ravi Kailas, Sila Energy Inc, Esrano Overseas Limited and Angad Paul (the ‘Shareholders’) entered into a relationship agreement on 4th October 2010 whereby those Shareholders undertake to the Company and Strand Hanson, inter alia, not to exercise their voting rights to take control of the Board and to conduct all transactions and relationships between them (and any of their associates or concert parties) and the Company on terms which allow the Company to carry on its business independently, at arm’s length and on a normal commercial basis. The agreement remains in force for so long as such Shareholders, their associates and concert parties together control, directly or indirectly, more than 30% of the voting rights of the Company.

Going concernThe Directors have considered the net current liabilities of USD 41.1 m of the Group at 31 December 2013, the Group’s cash position and forecast cash flows for 18 months period from the date of these consolidated financial statements. The Directors also continue to monitor the cash flows from time to time including the short term and long term liquidity position. At the balance sheet date, the Company has unused long term credit facilities to offset the short term loans taken. The Directors have a reasonable expectation that the Group has adequate resources to continue its operational existence for a foreseeable future and thus adopt going concern basis of accounting in preparing these consolidated financial statements.

The remuneration committeeMembershipSince November 2012, the Remuneration Committee is chaired by Rohit Phansalkar and its other member is Russell Walls. A calendar of activities for the Committee for the year has been agreed.

Senior management attend meetings at the request of the Committee and recuse themselves from discussions and decisions taken by the Remuneration Committee in respect of their own remuneration.

Attendance at scheduled Committee Meetings during the year is shown below. Additional ad-hoc meetings by conference call were also held during the year.

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

the year to 31 December 2013.

Remuneration Report


Basic salarySalaries are reviewed annually for the Executive Director and certain Executive Directors of Mytrah Energy (India) Limited.

Annual bonusAt the discretion of the Committee, each Executive Director and certain Executive Directors of Mytrah Energy (India) Limited may receive a cash bonus subject to achieving performance targets set by the Committee and are generally paid in May each year. The Committee has the discretion and flexibility to take into account other factors in determining any bonus.

Each element of the Executive Directors’ reward package supports the achievement of key business measures and rewards outperformance.

Mytrah share option schemesThe Company has three Share Option Plans – The Caparo Energy Employee Cashless Stock Option Scheme, Mytrah Energy Employee Cashless Stock Option

Scheme and the Mytrah Energy Executive Cashless Stock Option Scheme.

All three schemes enable participants to acquire shares at an option price fixed at the time of grant. A participant may receive one or several awards of stock options.

Benefits and benefits in kindThe Chairman & Chief Executive is contractually entitled to a lump-sum life assurance benefit and private healthcare medical insurance, car and housing allowances. The Chairman & Chief Executive does not have any pension entitlements.

The Directors, both Executive and Non-Executive, also benefit from indemnity arrangements in respect of their services as Directors, and from Directors’ and Officers’ liability insurance.

Directors’ service contractsThe Chairman & Chief Executive have a service agreement with the Company, which is terminable by either party on not less than 12 months notice. There

are no provisions for remuneration payable on early termination.

Non-Executive DirectorsThe remuneration of the Non-Executive Directors is determined by the Executive Director. The Non-Executive Directors serve the Company under formal letters of appointment that are terminable on six month’s written notice which sets out their role, obligations as a Director and the expected time commitment required. It is the Company’s policy that the Non-Executive Directors participate in the Mytrah Share Option Plan to align the interests of Non-Executive Directors with shareholders. Such awards are approximate in value on grant with one year’s fees and, in compliance with the QCA Guidelines, are not subject to performance conditions. The Group share dealing code requires Non-Executive Directors to hold shares acquired through the exercise of options throughout their tenure (other than to the extent of paying taxes related to the exercise of an option).

During the year, the annual fee payable to each Non-Executive Director was £45,000 per annum. An additional fee of £10,000 is payable in respect to the chairmanship of a Board Committee and £5,000 in respect to the Senior Independent Director role.

fixed remuneration costs and maximizing the proportion of total remuneration that is directly performance related.

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

Element Structure Purpose Performance Measure

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

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

Annual Bonus Variable Executive and senior management

bonuses are determined by the

Remuneration Committee taking

into account the performance of the

business, individual performance and

market comparatives.

Committee discretion, taking into account:

Delivery of the Annual Operating Plan

Performance against agreed KPI’s

Overall financial performance of the Group

Market comparables

Any other factor deemed relevant by the

Committee

Share Option

Grants

Variable Share awards aim to align total

remuneration with the growth of the

business and shareholder value.

Market comparables and individual

performance. Annual awards are not

envisaged by the Remuneration Committee.

Performance graphThe following graph shows the Company’s share price performance compared with the performance of the FTSE AIM All Share Index.

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Pric

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Jan’ 1

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Apr’ 13

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3

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Nov’ 13

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Sep’ 1

3

Jun’ 13

Dec’ 13

MYT FTSEAI All Share

Name Year ended

31 December 2013

USD

Nine months ended

31 December 2012

USDExecutiveRavi Kailas - 278,163Vikram Kailas * - 327,834Alastair Cade * - 185,442Non-ExecutivePeter Neville* 23,445 53,646Rohit Phansalkar 85,965 65,567Philip Swatman* 31,260 71,528Russell Walls 93,780 66,891Total 234,450 1,049,071

* Alastair Cade, Vikram Kailas, Peter Neville and Philip Swatman stepped down from the Board on 8th November 2012 at the

conclusion of the AGM.

Certain annual bonuses for senior executives and the salary for one senior executive is being paid by The Raksha Trust, of which

Ravi Kailas is a beneficiary, however these costs may be borne by the Company in future years. All payments made under these

arrangements are in line with recommendations made by the Remuneration Committee.

Directors’ emoluments and compensation (audited)Directors’ remuneration for the year ended 31 December 2013 was as follows:

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

We have audited the Group financial statements (the

“consolidated financial statements”) of Mytrah Energy Limited

(the “Company”) and its subsidiaries (together the “Group”)

for the for the year ended 31 December 2013 which comprise

the Consolidated Income Statement, Consolidated Statement

of Other Comprehensive Income, Consolidated Statement of

Financial Position, Consolidated Statement of Changes in Equity,

Consolidated Statement of Cash Flows and the related notes to

the consolidated financial statements. The financial reporting

framework that has been applied in their preparation is

applicable law and International Financial Reporting Standards

(IFRSs) as adopted by the European Union.

This report is made solely to the Company’s members, as

a body, in accordance with Section 262 of the Companies

(Guernsey) Law, 2008. Our audit work has been undertaken so

that we might state to the Company’s members those matters

we are required to state to them in an auditor’s report and for

no other purpose. To the fullest extent permitted by law, we

do not accept or assume responsibility to anyone other than

the Company and the Company’s members as a body, for our

audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and auditor

As explained more fully in the Directors’ Responsibilities

Statement, the Directors are responsible for the preparation of

the financial statements and for being satisfied that they give

a true and fair view. Our responsibility is to audit and express

an opinion on the Group financial statements in accordance

with applicable law and International Standards on Auditing

(UK and Ireland). Those standards require us to comply with

the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts

and disclosures in the financial statements sufficient to give

reasonable assurance that the financial statements are free

from material misstatement, whether caused by fraud or

error. This includes an assessment of: whether the accounting

policies are appropriate to the Group’s circumstances and

have been consistently applied and adequately disclosed; the

reasonableness of significant accounting estimates made by

the Directors; and the overall presentation of the financial

statements. In addition, we read all the financial and non-

financial information in the annual report to identify material

inconsistencies with the audited financial statements. If we

become aware of any apparent material misstatements or

inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion the Group financial statements:

• give a true and fair view of the state of the Group’s affairs

as at 31 December 2013 and of its profit for the year then

ended;

• have been properly prepared in accordance with IFRSs as

adopted by the European Union; and

• have been prepared in accordance with the requirements of

the Companies (Guernsey) Law, 2008.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters

where the Companies (Guernsey) Law, 2008 requires us to

report to you if, in our opinion:

• proper accounting records have not been kept; or

• the financial statements are not in agreement with the

accounting records; or

• we have not received all the information and explanations

we require for our audit.

17 March 2014

KPMG Audit LLC

Chartered Accountants

Heritage Court,

41 Athol Street

Douglas,

Isle of Man


Ordinary Shares

held at 31

December 2013Executive DirectorRavi Kailas 94,288,500*Non-Executive DirectorsRohit Phansalkar -Russell Walls 30,000

* 94,250,000 shares are held by R&H Trust Co (Jersey) Limited (the “Trustee”) as trustee of The Raksha Trust (the “Trust”), a Jersey

based discretionary trust settled by Mr. Kailas, of which he and some of his family members and also a philanthropic trust are

discretionary beneficiaries. 38,000 shares are held under Mr. Kailas within Roy Nominees a/c 22607.

Directors’ share interests (audited)The interests of the Directors in shares of the Company as at 31 December 2013 are shown below.

Director’s interests in share awardsAs at 31 December 2013, the Directors held the following share options (refer to note 35 of the consolidated financial statements

for more detail):

Name Date of grant Number of Ordinary Shares under option

Exercise price per share (pence)

ExecutiveRavi Kailas 22 December 2011 9,090,889 115pNon-Executive DirectorsRohit Phansalkar 4 October 2010 38,700 115p

10 January 2013 21,300 95pRussell Walls 22 December 2011 38,700 95p

10 January 2013 21,300 95p

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

Approved and signed on behalf of the Board

Rohit Phansalkar

Remuneration Committee Chairman

Consolidated income statementfor the year ended 31 December 2013

Note Year ended31 December 2013

USD

Period ended31 December 2012

RestatedUSD

Continuing operationsRevenue 6 50,924,436 30,922,696Cost of sales (8,245,161) (5,320,355)Gross profit 42,679,275 25,602,341Other operating income 6 - 7,993,199Administrative expenses (5,782,194) (4,174,187)Operating profit 7 36,897,081 29,421,353Finance income 6, 10 485,940 409,624Finance costs 11 (29,009,972) (16,664,459)Profit before tax 8,373,049 13,166,518Income tax expense 12 (1,470,670) (1,194,583)Profit for the year/period from continuing operations attributable to the equity holders of the Company

6,902,379 11,971,935

Earnings per share from continuing operationsBasic 13 0.0422 0.0731Diluted 13 0.0422 0.0731

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

Consolidated statement of other comprehensive incomefor the year ended 31 December 2013

Year ended 31 December 2013

USD

Period ended 31 December 2012

RestatedUSD

Profit for the year/period from continuing operations attributable to the equity holders of the Company

6,902,379 11,971,935

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

Actuarial (loss)/gain on employment benefit obligations (note 29) (6,322) 54,359b) Items that are or may be reclassified to profit or loss

Change in fair value of available-for-sale financial assets (note 29) 73,054 (11,230)Foreign currency translation adjustments (note 29) (14,020,190) (5,867,292)

Other comprehensive loss for the year/period (13,953,458) (5,824,163)Total comprehensive (loss)/income for the year/period attributable to the equity holders of the Company

(7,051,079) 6,147,772



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Consolidated statement of financial positionas at 31 December 2013

Note 31 December 2013

USD

31 December 2012Restated

USDAssetsNon-current assetsIntangible assets 14 469,735 699,259Property, plant and equipment 15 446,828,888 358,174,528Other non-current assets 16 41,112,196 44,696,236Deferred tax assets 17 348,063 3,089,279Total non-current assets 488,758,882 406,659,302 Current assetsTrade receivables 18 6,737,251 7,187,329Other current assets 19 10,002,419 4,230,125 Current investments 20 11,248,817 3,191,023Cash and bank balances 21 21,382,346 9,469,106Total current assets 49,370,833 24,077,583Total assets 538,129,715 430,736,885LiabilitiesCurrent liabilitiesBorrowings 22 70,355,230 16,402,362Trade and other payables 23 18,723,701 27,108,668 Retirement benefit obligations 24 7,239 1,214Current tax liabilities 12 1,412,290 2,201,272 Total current liabilities 90,498,460 45,713,516Non-current liabilitiesBorrowings 22 306,130,741 252,036,630Liability component of compulsorily convertible preference shares 25 9,215,456 11,298,416Derivative financial instruments 22 & 25 2,978,580 2,947,030Other payables 23 9,005,639 -Retirement benefit obligations 24 16,002 4,242Total non-current liabilities 327,346,418 266,286,318Total liabilities 417,844,878 311,999,834Net assets 120,284,837 118,737,051EquityShare capital 26 72,858,278 72,858,278Capital contribution 27 7,357,620 -Retained earnings 28 14,339,815 7,437,436Other reserves 29 (29,666,048) (16,953,835)Equity attributable to owners of the Company 64,889,665 63,341,879Non-controlling interests 30 55,395,172 55,395,172Total equity 120,284,837 118,737,051

These financial statements were approved by the Board of Directors and authorised for use on 17 March 2014Signed on behalf of the Board of Directors by:

Ravi Kailas Russell WallsChairman and CEO Director



Notes to the consolidated financial statements for the year ended 31 December 2013

1. General information

Mytrah Energy Limited (“MEL” or the “Company”) is a non-cellular company liability limited by shares incorporated on 13 August

2010 under the Companies (Guernsey) Law, 2008 and is listed on the Alternate Investment Market (‘AIM’) of the London Stock

Exchange.The address of the registered office is PO Box 156, Frances House, Sir William Place, St Peter Port, Guernsey, GY1 4EU.

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:

Subsidiary Country of incorporation or

residence

Date of Incorporation

Proportion of ownership interest/voting power

Activity

31 December 2013

31 December 2012

Bindu Vayu (Mauritius) Limited (“BVML”)

Mauritius March 29, 2012 100.00 100.00 Investment company

Mytrah Energy (India) Limited (“MEIL”)

India November 12, 2009

99.99 99.99 Operating company

Bindu Vayu Urja Private Limited (“BVUPL”)

India January 5, 2011 99.99 99.99 Operating company

Mytrah Vayu (Pennar) Private Limited (“MVPPL”)

India December 21, 2011


Mytrah Vayu (Krishna) Private Limited (“MVKPL”)

India June 18, 2012 99.99 99.99 Operating company

Mytrah Vayu (Manjira) Private Limited (“MVMPL”)


Mytrah Vayu Urja Private Limited (“MVUPL”)

India November 24, 2011


Mytrah Vayu (Bhima) Private Limited (“MVBPL”)


Mytrah Vayu (Indravati) Private Limited (“MVIPL”)


Mytrah Engineering & Infrastructure Private Limited (“MEIPL”)

India March 29, 2012 99.99 99.99 Operating company

Mytrah Engineering Private Limited (“MEPL”)

India March 30, 2012 99.99 99.99 Operating company

Mytrah Vayu (Gujarat) Private Limited (“MVGPL”)

India December 24, 2011

99.99 - Operating company

Mytrah Power (India) Limited (“MPIL”)

India September 12, 2013

99.99 - Operating company

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

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

The functional currency of all the above subsidiaries is Indian Rupee (INR), except for BVML which is determined as USD.

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

out in note 3.

2. Adoption of new and revised accounting standards and interpretations

2.1. New and amended standards adopted during the year:

During the current year, the following new and revised standard and interpretation have been adopted by the Group:

a) Amendments to IAS 1 Presentation of items of Other Comprehensive Income

The main change resulting from this amendment is a requirement for entities to group items presented in ‘other comprehensive

income’ (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassificable adjustments).

b) IAS 19 Employee Benefits (as revised in 2011)

IAS 19, ‘Employee Benefits’ was revised in June 2011 and effective from 1 January 2013. The revised standard requires the

Consolidated statement of cash flowsfor the year ended 31 December 2013


USD


RestatedUSD

Cash flows from operating activitiesProfit before tax 8,373,049 13,166,518Adjustments:Depreciation and amortisation 8,551,202 5,593,722Interest income on bank deposits and non-convertible debentures (431,540) (203,052)Finance costs 29,009,972 16,527,605Loss on derivative financial instruments 390,650 313,367Gain on sale of investments (445,050) (519,939)Equity settled employees benefits 1,241,245 984,396Unrealized foreign exchange loss 401,527 4,547,937Changes in operating assets and liabilities: Trade receivables (3,589,609) (2,658,022) Other assets (14,002,517) (1,584,553) Trade and other payables 524,210 (3,279,839)Cash generated from operating activities 30,023,139 32,888,140Taxes paid (644,354) (460,293)Net cash generated from operating activities 29,378,785 32,427,847Cash flows from investing activitiesPurchase of property, plant and equipment (117,975,331) (134,301,589)(Investment)/redemption of investments in mutual funds (net) (8,386,163) 2,795,430Deposits placed with banks (5,849,509) (7,283,914)Interest income on bank deposits and non-convertible debentures 204,631 225,054Net cash used in investing activities (132,006,372) (138,565,019)Cash flows from financing activitiesCapital contributions from shareholders 7,357,620 -Repayment of compulsorily convertible preference shares (1,325,712) -Proceeds from borrowings 157,875,444 162,803,732Repayment of borrowings (9,611,866) (38,409,829)Interest paid (43,791,173) (19,585,430)Net cash generated from finance activities 110,504,313 104,808,473Net increase in cash and cash equivalents 7,876,726 (1,328,699)Cash and cash equivalents at beginning of the year/period 2,185,192 3,151,975Effect of exchange rates on cash and cash equivalents (1,812,994) 361,916Cash and cash equivalents at end of the year/period (note 21) 8,248,924 2,185,192



Notes to the consolidated financial statements for the year ended 31 December 2013 (continued)

3. Significant accounting policies

The Group accounting policies are summarized below:

Basis of accounting

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

Union.

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

statement of financial position. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

a) Derivative financial instruments are measured at fair value

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

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

rate method.

d) Share based payment expenses are measured at fair value

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 December 2013 and the period ended 31 December 2012.

Consolidation

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

(its subsidiaries) made up to 31 December each year. Control is achieved where the Company has the power to govern the financial

and operating policies of an investee entity so as to obtain benefits from its activities. All intra-group transactions, balances, income

and expenses are eliminated on consolidation. The financial statements of subsidiaries are included in the consolidated financial

statements from the date on which control commences until the date on which control is ceased.

Going concern

The Directors have considered the financial position of the Group, its cash position and forecast cash flows for the 18 months period

from the date of these consolidated financial statements. The Directors have, at the time of approving the consolidated financial

statements, a reasonable expectation that the Group has adequate resources to continue its operational existence for a foreseeable

future. Thus they continue to adopt the going concern basis of accounting in preparing these consolidated financial statements.

Further details is contained in the Directors Report on page 66.

Foreign currencies

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

statements will be used by international investors and other stakeholders because the Company’s shares are listed on AIM. The

functional currency of the parent company is sterling (“GBP”). The functional currency of the subsidiaries is mentioned in note 1.

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

currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each

reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-

monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date

when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not

retranslated.

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

consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated into US dollars (USD)

using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average

exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates

at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and

accumulated in equity.


actuarial gains or losses to be recognised through ‘Other comprehensive income’. Furthermore the revised standard also requires

the interest expense/income on the plan assets to be considered in profit and loss to be restricted to the discount rate based on

the government securities yield. Refer note 36 for impact on financial statements upon adopting the revised standard.

c) IFRS 13 Fair Value Measurement

The Group has applied IFRS 13 during current year. IFRS 13 establishes a single source of guidance for measuring fair value and

requires disclosures about fair value measurements. The scope of IFRS 13 is broad; the fair value measurement requirements

of IFRS 13 apply to both financial instrument items and non-financial instrument items for which other IFRSs require or permit

fair value measurements and disclosure about fair value measurements. Fair value under IFRS 13 is an exit price regardless

of whether that price is directly observable or estimated using another valuation technique. Also IFRS 13 includes extensive

disclosure requirements. IFRS 13 requires prospective application from 1 January 2013. Other than the additional disclosures,

the application of IFRS 13 has not had any material impact on the amounts recognised in the consolidated financial statements.

2.2. New standards and interpretations not yet adopted:

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).

Topic Key requirements Effective dateAmendment to IAS 32,

‘Financial instruments:

Presentation’, on asset and

liability offsetting

These amendments are to the application guidance in IAS 32, ‘Financial

instruments: Presentation’, and clarify some of the requirements for offsetting

financial assets and financial liabilities on the balance sheet.

1 January 2014

IFRS 10, ‘Consolidated

financial statements

IFRS 10 establishes principles for the presentation and preparation of

consolidated financial statements when an entity controls one or more

other entity (an entity that controls one or more other entities. It defines the

principle of control, and establishes controls as the basis for consolidation. It

sets out how to apply the principle of control to identify whether an investor

controls an investee and therefore consolidate the investee.

1 January 2014

IFRS 11 ‘Joint

arrangements’

IFRS 11 requires classifying its interests in joint arrangements as either joint

operations or joint ventures depending on the entity’s rights to the assets

and obligations of the arrangements after considering the structure, the

legal form, contractual terms of the arrangements and other facts and

circumstances.

1 January 2014

IFRS 12, ‘Disclosures of

interests in other entities’

IFRS 12 includes the disclosure requirements for all forms of interests in other

entities, including joint arrangements, associates, special purpose vehicles and

other off balance sheet vehicles.

1 January 2014

Amendment to IAS 36,

‘Impairment of assets’

on recoverable amount

disclosures

This amendment addresses the disclosure of information about the

recoverable amount of impaired assets if that amount is based on fair value

less costs of disposal.

1 January 2014

Based on the Group’s current business model and accounting policies, Management does not expect that the adoption of these

standards or interpretations will have a material impact on the financial statements of the Group. The Group does not intend to

early adopt any of these pronouncements.



3. Significant accounting policies (continued)

Financial instruments (continued)

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.

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

Financial assets at fair value through profit and loss

Financial assets at fair value through profit or loss include financial assets that are held for trading or are designated by the entity to be carried at fair value through profit or loss upon initial recognition. Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with gains or losses recognised in the income statement.

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

Investments in mutual funds held by the Group that are traded in an active market are classified as being AFS and are stated at fair value. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in fair value reserve with the exception of impairment losses, interest calculated using the effective interest method and foreign exchange gains and losses on monetary assets, which are recognised directly in the income statement.

Held-to-maturity investments (“HTM”)

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity. Investments are classified as held-to-maturity if it is the positive intention and ability of Group’s management to hold them until maturity. Held-to-maturity investments are subsequently measured at amortised cost using the effective interest method. This method uses an effective interest rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. Gains and losses are recognised in the consolidated statement of comprehensive income when the investments are derecognised or impaired, as well as through the amortisation process. In addition, if there is objective evidence that the investment has been impaired, the financial asset is measured at the present value of estimated cash flows. Any changes to the carrying amount of the investment are recognised in profit or loss.

Impairment of financial assets

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

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

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

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.

Non-derivative financial liabilities

Debt and equity instruments issued by a Group 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.



Foreign currencies (continued)

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

31 December 2013 31 December 2012Closing rate 61.7744 54.6890Average rate for the year/period 58.4411 54.3772

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

31 December 2013 31 December 2012Closing rate 1.6488 1.6153Average rate for the year/period 1.5630 1.5895

Revenue recognition

Revenue is recognised when it is probable that future economic benefits will flow to the entity and these benefits can be measured reliably.

Sale of electricity

Revenue from the sale of electricity is recognised when earned on the basis of contractual arrangements and reflects the number of units supplied in accordance with joint meter readings undertaken on a monthly basis by representatives of the buyer and the Group at rates stated in the contract or as applicable, net of any actual or expected trade discounts.

Generation-based incentives

Revenue from generation-based incentives are recognised based on the number of units supplied, when registration under the relevant programme has taken place or if the eligibility criteria is met under the Indian Renewable Energy Development Agency Limited - Generation Based Incentive scheme.

Interest income

Interest income is recognised in the consolidated income statement, as it accrues using the effective interest rate method.

Financial instruments

Financial instruments

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

Non-derivative financial assets

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

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

• loans and receivables

• financial assets at fair value through profit or loss

• available-for-sale financial assets

• held-to-maturity investments

The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Financial assets are categorised as current assets if they are expected to be settled within 12 months otherwise they are classified as non-current.

Effective interest rate method

The effective interest rate method is a method of calculating the amortised cost of a financial asset held at amortised cost and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.




Property, plant and equipment (continued)

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised in the consolidated income statement.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction and production of qualifying assets are capitalised as part of the costs of those assets. Qualifying assets are those that take a substantial period of time to prepare for their intended use. Capitalisation of borrowing costs continues up to the date when the assets are substantially ready for their use.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

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

Depreciation

Depreciation is provided to write off the cost of property, plant and equipment over their estimated useful lives after taking into account their estimated residual value, using the straight-line method as stated below:

Furniture and fittings 5 years

Office equipment 4-5 years

Computers 4 years

Vehicles 5 years

Plant and machinery 5-50 years

Buildings 20 years

Lease acquisition costs 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 available for use.

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

Further, the Company has adopted component accounting of depreciation for the plant and machinery class of the fixed asset and accordingly revised the useful lives of the different components of the plant and machinery as mentioned below:

Particulars Revised useful life (in years)Nacelles 25Blades 30Towers 50Transformers 25Erection and commissioning 25Civil works, electrical lines and evacuation facilities 50

Impairment

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

Intangible assetsIntangible assets that are acquired by the Group and have finite useful lives are measured at costs less accumulated amortization and accumulated impairment losses. Intangibles are amortised over its useful life using straight line method as stated below:

Application software 4 years

ERP software license 4 years

Amortisation method and useful lives are reviewed at each reporting date and adjusted, if appropriate.



Financial instruments (continued)

Equity instruments

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

Compound instruments

The component parts of compound instruments (convertible bonds) issued by the Group are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised costs basis using the effective interest method until extinguished upon conversion or at the instruments’ maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity, net of income tax effects, and is not subsequently remeasured.

Financial liabilities

Financial liabilities are initially measured at fair value, net of transaction costs and subsequently measured at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Derecognition of financial liabilities

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

Embedded derivatives

Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at fair value through profit and loss.

An embedded derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the hybrid instrument to which the embedded derivative relates is more than 12 months and is not expected to be realised or settled within 12 months.

The Company has taken an accounting policy choice in accordance with IAS 32 and IAS 39 wherein the Company writes options that give non-controlling shareholders right to put subsidiary’s shares to the Company in exchange for a variable number of Company’s shares and the Company has an option to settle in cash when the non-controlling shareholders exercise the options. Accordingly the preference shares held by the non-controlling interest (NCI) shareholders are classified as equityand the related put options are accounted for as a derivative liablilities under IAS 39 at fair value with changes therein recognised in profit and loss.

Property, plant and equipment

Recognition and measurement

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

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

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

The cost of replacing part of an item of plant and equipment is recognised in the carrying amount of an item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The cost of the day-to-day servicing of plant and equipment are recognised in the consolidated income statement as incurred.




Employee benefits (continued)

Defined contribution plans

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

Defined benefit plans

The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income (OCI). The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognized in consolidated income statement.

Earning per shareThe Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year/period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which includes all stock options granted to employees.

Government grantsThe Group recognises government grants only when there is reasonable assurance that the conditions attached to them will be complied with, and the grants will be received. Government grants received in relation to assets are presented as a reduction to the carrying amount of the related asset. Grants related to income are recognised as a credit to the consolidated income statement.

Share-based paymentsEquity-settled share-based payments to employees, Directors and key management personnel are measured at the fair value of the equity instruments at the grant date with a corresponding increase in the equity over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest. The fair value excludes the effect of non-market-based vesting conditions.

At each balance sheet date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market-based vesting conditions. The impact of the revision of the original estimates, if any, is recognised in the income statement such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to equity reserves.

Share options granted to employees are treated as cancelled as and when employees cease to contribute to the scheme. This results in accelerated recognition of the expenses that would have arisen over the remainder of the original vesting period.

Finance income and expenseFinance income consists of interest income on funds invested (including available-for-sale financial assets), dividend income and gains on the disposal of available-for-sale financial assets. Interest income is recognised as it accrues in the consolidated income statement, using the effective interest method. Dividend income is recognised in the consolidated income statement on the date that the Company’s right to receive payment is established. The associated cash flows are classified as investing activities in the statement of cash flows.

Finance expenses consist of interest expense on borrowings and debentures. Borrowing costs are recognised in the consolidated income statement using the effective interest method. The associated cash flows are classified as financing activities in the statement of cash flows.

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



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

Current tax

Current tax is the expected tax payable on the taxable income for the year/period, using the rates enacted or substantially enacted at the reporting date and any adjustments (if any) to the tax payable in respect of previous year. Taxable profit differs from profit as reported in the consolidated income statement because it excludes items of income or expense that are taxable or deductible in future years and it further excludes items that are permanently exempt from tax or allowable as a tax deduction.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of the taxable profit, and is accounted for using the balance sheet approach. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary differences arise from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Any deferred tax asset or liability arising from deductible or taxable temporary differences in respect of unrealised inter-company profits are recognised using the tax rate enacted or substantially enacted of the jurisdiction in which the company owns the assets.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised on tax laws and rates that have been enacted at the balance sheet date. Deferred tax is charged in the consolidated income statement, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also recognised with in other comprehensive income.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

LeasesLeases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards incident to the ownership. The leased assets are measured initially at an amount equal to the lower of their fair value and present value of minimum lease payments. All other leases are classified as operating leases.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred. Land taken on lease basis from the suppliers of wind turbine generators is amortised over the period ranging upto 20 years.

ProvisionsProvisions are recognised when the Group has a present legal or constructive obligation, as a result of past events, and it is probable that an outflow of resources that can be reliably estimated will be required to settle such an obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognised in the consolidated income statement as a finance cost. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimate.

A contingent liability is disclosed where the existence of an obligation will only be confirmed by one or more future events or where the amount of the obligation cannot be measured reliably. Contingent assets are not recognised, but are disclosed where an inflow of economic benefits is probable.

Employee benefitsShort term employee benefits

Short term employee benefits are expensed as the related services are provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.



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

Significant valuation issues are reported to the Group Audit Committee.

When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

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

• Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

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

If the inputs used to measure the fair value of asset or liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

5. Segment information

IFRS 8 establishes standards for the way to report information on operating segments and related disclosures about products and services, geographic areas, and major customers. The Group operations predominantly relate to generation and sale of electricity. The chief operating decision maker evaluates the Group’s performance and allocates resources based on an analysis of various performance indicators at operational unit level. Accordingly there is only a single operating segment “generation and sale of electricity”. Consequently no segment disclosures of the Group are presented.

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

6. Revenue

The Group’s revenue from continuing operations is as follows: Year ended 31 December 2013

USD


USDSale of electricity 45,267,767 28,130,545Generation based incentive 5,527,769 2,741,371Sale of renewable energy certificates 128,900 50,780Total revenue 50,924,436 30,922,696Finance income (note 10) 485,940 409,624Other operating income - 7,993,199 Total income 51,410,376 39,325,519

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

On 4 September 2013, Ministry of New and Renewable Energy of the Government of India has issued a notification of the “extension of the generation based incentive (GBI) for Grid Interactive Wind Power Projects” and as per the scheme, GBI will be provided to wind electricity producers at H0.5 per unit of electricity fed into the grid for a period not less than four years and a maximum of ten years. Considering the above notification, management has recognised GBI revenue of USD 415,948 during the current year relating to units generated during the previous period ended 31 December 2012.

Other operating income recognised during the previous period represents liquidated damages claimed from project suppliers in relation to delays in the execution, cancellation and downsizing of certain projects.

7. Expenses by nature

Profit for the year/period has been arrived at after charging the following: Year ended 31 December 2013

USD


USDContinuing operationsAmortisation of intangible assets (note 14) 202,282 89,567Depreciation of property, plant and equipment (note 15)

- included in cost of sales 8,049,322 5,020,125- included in administrative expenses 299,598 184,559

Employee costs (note 9) 2,636,426 4,376,474


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

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

Critical judgements and estimates in applying the Group’s accounting policiesThe estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

a) Useful life of depreciable assets

Management reviews the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets to the Group and any change in useful lives and methods of depreciation are adjusted prospectively if appropriate.

b) Classification of financial instruments as equity or liability

Significant judgement is required to apply the rules under IAS 32, Financial Instruments: Presentation and IAS 39: Financial Instruments: Recognition and Measurement to assess whether an instrument is equity or a financial liability. Management has exercised significant judgement to evaluate the terms and conditions of certain financial instruments with reference to the applicability of contingent settlement provisions, evaluation of whether options under the contract will be derivative or a non-derivative, assessing if certain settlement terms are within the control of the Company and if not whether the occurrence of these events are extremely rare, highly abnormal and very unlikely, clarifications between the parties to the agreement subsequent to the date of the agreement to conclude that the instruments be classified as an equity instrument.

c) Deferred tax assets

The assessment of the probability of future taxable income in which deferred tax assets can be utilised is based on the Group’s latest approved budget forecast, which is adjusted for significant non-taxable income and expenses and specific limits to the use of any unused tax loss or credit. The tax rules in India in which the Group operates are also carefully taken into consideration. If a positive forecast of taxable income indicates the probable use of a deferred tax asset, especially when it can be utilised without a time limit, that deferred tax asset is usually recognised in full. The recognition of deferred tax assets that are subject to certain legal or economic limits or uncertainties is assessed individually by management based on the specific facts and circumstances.

d) Recoverability of trade receivables

The Group analyses the historical payment patterns of customers, customer concentrations, customer creditworthiness and current economic trends on an ongoing basis. If the financial condition of a customer deteriorates, additional provision is made in the accounts.

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

Management has assessed applicability of IFRIC 12: Service Concession Arrangements for certain arrangements. In assessing the applicability, management has exercised significant judgement in relation to the underlying ownership of the assets, the ability to enter into power purchase arrangements with any customer and ability to determine prices and concluded that the arrangements do not meet the criteria for service concession arrangements.

f) Measurement of fair value

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

The Group has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the CFO.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from third parties to support the conclusion that such valuation meets the requirements of IFRS, including the level in the fair value hierarchy in which such valuations should be classified.



11. Finance costsYear ended

31 December 2013USD


USDContinuing operations:Interest on borrowings* (39,437,232) (18,806,187)Other borrowing costs (1,514,133) (812,257)Interest on liability portion of CCPS (538,657) (458,950)Total interest expense (41,490,022) (20,077,394)Less: amounts included in the cost of qualifying assets (note 15) 12,480,050 3,412,935Total finance cost recognised in the income statement (29,009,972) (16,664,459)

Amounts included in the cost of qualifying assets during the year represent interest on project specific as well as general borrowings which are sanctioned for the purpose of construction of a qualifying asset. The balance represents the actual finance costs incurred on those borrowings, calculated using the effective interest rate method.

*includes USD 651,904 (2012: USD Nil) of one-off non recurring costs primarily relating to interest on deferred payments to suppliers.

12. Taxation Year ended

31 December 2013USD


USDContinuing operationsCurrent year tax charge (347,757) (2,326,395)Deferred tax (charge)/credit (note 17) (1,122,913) 1,131,812Income tax expense (1,470,670) (1,194,583)

The prima-facie tax expense for the year/period is reconciled to the tax expense recognised in income statement as follows:


USD


USDProfit before tax 8,373,049 13,166,518Enacted tax rates 33.99% 32.45%Expected tax expense (2,845,999) (4,272,535)Effect of:Income not offered to tax - 2,593,793Other permanent differences 1,375,329 484,159MAT charge (347,757) (2,326,395)MAT deferred tax credit 347,757 2,326,395Income tax expense recognised in the income statement (1,470,670) (1,194,583)

The Company is exempt from Guernsey income tax under the Income Tax (Exempt bodies) (Guernsey) Ordinance, 1989 and is subject to an annual fee of USD 962. As such, the Company’s tax liability is zero. However considering that the Company’s operations are entirely based in India, the effective tax rate of the Group of 33.99% has been computed based on the current tax rates prevailing in India.

Indian companies are subject to corporate income tax or Minimum Alternate Tax (“MAT”). If MAT is greater than corporate income tax then MAT is levied. The Company has recognised MAT of USD 347,757 (31 December 2012: USD 2,326,395) as MAT is greater than corporate income tax for the current year.

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



Fees payable to the auditors of Company and its subsidiaries for :audit of the Company’s annual accounts 77,369 71,527 audit of the Company’s subsidiaries pursuant to legislation 40,406 60,203

Total audit fees 117,775 131,730Audit related assurance services 23,445 23,843Total non-audit fees 23,445 23,843

9. Employee costsYear ended

31 December 2013Period ended

31 December 2012Staff other than Directors and key management personnel:Salaries 1,127,275 699,500 Contribution to provident fund 19,372 69,613Staff welfare 3,059 126,035Gratuity and leave encashment (note 24) 11,026 17,310Share based payment expense (note 35) 408,039 77,808

1,568,771 990,266Directors and key management personnel:Salaries1,2

Share based payment expense (note 35) 234,450 2,479,620833,205 906,588

2,636,426 4,376,474

1Includes bonus paid to Executive Directors USD nil (2012: USD 0.9 m). Due to change in the composition of the Board, the number of Directors reduced from seven in 2012 to three in 2013. Hence, resulting in a decrease in overall remuneration paid to Directors.

2Includes costs of USD: Nil (2012: USD 0.79 m) which are directly attributable to the construction of qualifying assets and hence capitalised as part of cost of those assets.

10. Finance incomeYear ended

31 December 2013USD


USDInterest on investments in non-convertible debentures - 65,713Loss on redemption of non-convertible debentures - (25,180)Interest on bank deposits (note 21) 431,540 162,519Gain on derivative instruments within CCDs 50,820 365,226Loss on derivative instruments within CCPS (441,470) (678,593)Gain on disposal of current investments (note 20) 445,050 519,939Total finance income 485,940 409,624


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The tax expense represents non-cash net deferred tax liability on timing differences accounted during the year/period.

Tax liabilities As at 31 December 2013

USD

As at31 December 2012

USDCurrent tax liabilities 1,412,290 2,201,272 Total current tax liabilities 1,412,290 2,201,272

13. Earnings per shareBasic earnings per share is calculated by dividing profit attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year/period.

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


USD


USDBasic and diluted:Profit attributable to the equity holders of the Company 6,902,379 11,971,935Weighted average number of ordinary shares outstanding during the year/period 163,636,000 163,636,000Basic and diluted earnings per share 0.0422 0.0731

14. Intangible assets – Application softwareAs at

31 December 2013 USD


USDCost:Balance at the beginning of the year/period 800,177 77,392Additions during the year/period 42,046 726,800Exchange differences (91,779) (4,015)Closing balance 750,444 800,177Amortisation Balance at the beginning of the year/period 100,918 12,511Charge for the year/period 202,282 89,567Exchange differences (22,491) (1,160)Closing balance 280,709 100,918

Carrying amount Closing balance 469,735 699,259Opening balance 699,259 64,881



18. Trade receivablesAs at



USDTrade receivables 6,737,251 7,187,329Trade receivables 6,737,251 7,187,329

Trade receivables disclosed above are classified as loans and receivables in accordance with IAS 32 and are therefore measured at amortised cost. Trade receivables held by the Group are non-interest bearing were not collectively impaired or written off.

Trade receivables include amounts which are past due at the reporting date but against which the Group has not recognised any allowance for doubtful receivables because there has not been a significant change in credit quality and the amounts are still recoverable. The average age of the receivables was 50 days during the year ended 31 December 2013 (31 December 2012: 49 days)

The maximum exposure to credit risk at the reporting date is the carrying value of each customer.

Ageing of receivables are as follows:

As at 31 December 2013

USD


USDNot due 2,340,835 1,448,7700-60 days 3,352,941 3,539,48561-90 days 718,997 1,723,16491-180 days 64,052 265,905More than 180 days 260,426 210,005Total 6,737,251 7,187,329

The fair value of trade receivables approximates their carrying amounts largely due to the short-term maturities of these instruments and hence management considers the carrying amount of trade receivables to be approximately equal to their fair value.

As at 31 December 2013, the Group has five customers (31 December 2012: five customers).

19. Other current assetsAs at



USDDeposits 35,284 319,901Accrued interest 258,419 49,422Prepayments 261,888 459,765Accrued income 4,950,110 2,178,338Other receivables 2,962,313 694,828Current tax asset 1,534,405 527,871Total other current assets 10,002,419 4,230,125

Prepayments primarily relate to amounts paid in advance for lease rentals for land.

Accrued income primarily represents amounts receivable from the customer on the sale of electricity and the amount recoverable from Indian Renewable Energy Development Authority (“IREDA”) as generation based incentive but not billed for as at 31 December 2013.

Other receivables primarily include advances to vendors of USD 2,788,577 (2012: USD 694,828).


16. Other non-current assetsAs at



USDDeposits 11,341,652 675,684Capital advances 20,956,631 38,054,081Prepayments 8,813,913 5,966,471Total other non-current assets 41,112,196 44,696,236

Deposits mainly comprise of security deposits placed with related parties towards usage of land and power evacuation facilities.

Capital advances represent advance payments made to suppliers and related parties for the construction of wind farm assets, as part of long-term construction service contracts.

Prepayments primarily relate to amounts paid in advance towards land lease rentals for existing and upcoming projects. Land has been taken on lease basis from the suppliers of wind turbine generators for period ranging upto 20 years and is renewable provided the main lease is renewed by the government authority.

17. Deferred taxThe following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the current period.


MAT credit reversed against provision for tax

Recognised in income Statement

Exchange difference


USD USD USD USD USDProperty, plant and equipment (5,687,371) - (4,088,790) 872,957 (8,903,204)

Provisions 14,142 - (4,239) (1,394) 8,509Share issue costs 411,652 - (130,053) (40,198) 241,401 MAT credit 2,453,266 (1,319,302) 347,757 (300,149) 1,181,572 Unrealised inter-group profits 2,104,744 - 8,955 (241,893) 1,871,806 Tax losses 3,792,846 - 2,743,457 (588,324) 5,947,979 Net deferred tax asset 3,089,279 (1,319,302) (1,122,913) (299,001) 348,063

Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:


USD


USDDeferred tax assets 9,251,267 8,776,650Deferred tax liabilities (8,903,204) (5,687,371)Deferred tax asset, net 348,063 3,089,279



22. Borrowings (continued)

Further, MEIL has entered into an option agreement with PTC on the same date whereby PTC can put the CCDs (the “put option”) or alternatively, MEIL can call the CCDs (the “call option”) in exchange for cash providing PTC a stated rate of return. The call option can be exercised any time from the date of issue whereas the put option can be exercised over a period beginning from 41 months to 47 months from the date of issue of CCDs.

2. During 2011 MEIL has issued 5,000,000 compulsory convertible debentures (“CCDs”) at H300 (~ USD 6) each to IDFC including any of its affiliates under an agreement between the Group and IDFC. The purpose of this is to fund the capital projects of the Group. The following are the significant terms in relation to the CCDs:

• The CCDs carry a fixed rate of interest payable quarterly in arrears on the principal amount of the CCDs outstanding.

• The CCDs, along with unpaid interest, if any, mandatorily convert into such number of equity shares of MEIL at the end of 48 months from the date of issue so as to provide the investor a stated rate of return.

• The CCDs are secured by collateral support in the form of pledge of shares held by Bindu Urja Capital Inc (BUCI) in the Company, certain non-disposal undertakings by the Company and an irrevocable and unconditional corporate guarantee by the Company to IDFC.

Further, the Company has entered into an option agreement with IDFC on the same date whereby IDFC can put the CCDs (the “put option”) or alternatively, the Group can call the CCDs (the “call option”) in exchange for cash providing IDFC a stated rate of return. The call option can be exercised any time after 18 months from the date of issue whereas the put option can be exercised over a period beginning from 36 months to 48 months from the date of issue of CCDs.

Consistent with IAS 32, Financial Instruments: Presentation, and IAS 39 Financial Instruments: Measurement, on initial recognition, the issue proceeds have been segregated in the financial statements between the financial liability and the derivative portion.Accordingly, the options were subsequently measured at fair value through profit and loss and the financial liability is subsequently measured at amortised cost. The period end balance of the options was USD (404,698) (2012: USD (400,995)) (see consolidated statement of financial position) and the CCD financial liability was USD 40,981,284 (31 December 2012: USD 45,523,216).

3. The Group has drawn down the term loan facility with banks and financial institutions to finance the construction of wind farm assets. The carrying amount of the liability measured at amortised cost is USD 279,498,662 (2012: USD 216,553,062). The repayment terms of the term loans loans range from 12 to 14 years. In compliance with the terms of the loan agreement, the Group has created a charge on all project movable, immovable properties, cashflows, receivables and revenues in favour of banks and financial institutions. Mr. Ravi Kailas has provided unconditional and irrevocable guarantee to the extent of any shortfall in the revenue from the sale of Certified Emission Reductions (‘CER’) under the Clean Development Mechanism in any financial year at H 0.30 per unit of electricity sold for the CERs generated from the respective projects and the said guarantee will be invoked only in case of a default by the Group in meeting its loan obligations.

Further, the loan drawn down by MEIL is secured by way of first charge on the pledge of shares held by Bindu Vayu (Mauritius) Limited in the equity shares representing 51% of the total paid up equity share capital of the MEIL. The loan drawn down by BVUPL and MVPPL is secured by way of first charge on the pledge of shares held by the MEIL in the equity shares representing 51% of the total paid-up equity share capital of BVUPL and MVPPL. Also the loans drawn down by MVKPL and MVMPL is secured by way of first charge on the pledge of shares held by the MEIL in the equity shares representing 51% and 70% of the total paid-up equity share capital of MVKPL and MVMPL respectively.

4. The working capital facilities include fund based (USD 22,372,880) and non-fund based facilities (USD 33,633,145)and it will be paid out from the unused facilities available related to the capital expenditure incurred by the group. The working capital loan facilities are secured by way of first charge and hypothecation of entire immovable properties pertaining to the respective projects, both present and future, including movable plant and machinery, machinery spares, tools, accessories, entire project cash flows, receivables, book debts and revenues of the Group. The facilities are repayable on a yearly rollover basis and carries interest in the range of 11% to 12.5% per annum.

5. Refer note 33 for maturity profile of the borrowings.

20. Current investmentsAs at

31 December 2013 As at

31 December 2012Available-for-sale investments carried at fair value (mutual funds) 11,248,817 3,191,023Total current investments 11,248,817 3,191,023

The Group has investments in the following mutual fund schemes, which are classified as available-for-sale investments.

Mutual fund scheme: Units as at 31 December 2013

Units as at 31 December 2012

IDFC cash fund – Growth-Direct Plan 383,459 62,298IDFC cash fund – Growth-Regular Plan - 107,828IDFC ultra short term fund – Growth-Regular Plan - 602,594BSL floating rate short term plan 659,093 -BSL Cash plus growth regular plan - 14,979BSL Savings fund growth plan - 52,682

The fair value of the quoted units is determined by reference to published data. During the year, disposals resulted in a gain of USD 445,050 (2012: USD 519,939) (refer note 10) recognised in the consolidated income statement.

21. Cash and bank balances


USD


USDCash on hand 38 176Bank balances 8,248,886 2,185,016Cash and cash equivalents 8,248,924 2,185,192Bank deposits 13,133,422 7,283,914Total cash and bank balances 21,382,346 9,469,106

Bank deposits include margin money deposits of USD 13,039,792 (2012: 7,283,914) placed with banks towards bank guarantees provided to various third parties.

22. Borrowings


USD


USDBorrowings at amortised costCompulsorily convertible debentures1,2 40,981,284 45,523,216Term loans from banks and financial institutions3 279,498,662 216,553,062Working capital loans from banks4 56,006,025 6,362,714Total borrowings 376,485,971 268,438,992

Amounts due for settlement within 12 months - USD 70,355,230 (31 December 2012: USD 16,402,362 )

Amounts due for settlement on or after 12 months - USD 306,130,741 (31 December 2012: USD 252,036,630)

1. During the previous period, the Company’s subsidiary, MEIL has issued 3,333,333 compulsory convertible debentures (“CCDs”) at H300 (~ USD 5.71) each to PTC India Financial Services Limited (PTC) including any of its affiliates (the “Investor”) amounting to USD 18,285,211 under an agreement between the Group and PTC. The purpose of this is to fund the capital projects of the Group. The following are the significant terms in relation to the CCDs:

• The CCDs carry a fixed rate of interest payable quarterly in arrears on the principal amount of the CCDs outstanding.

• The CCDs, along with unpaid interest, if any, mandatorily convert into such number of equity shares of Mytrah Energy (India) Limited (“MEIL” or subsidiary of the Company) at the end of 49 months from the date of initial disbursement so as to provide the investor a stated rate of return.

• The CCDs will be secured by collateral support in the form of pledge of 49% shares of Bindu Vayu Urja Private Limited (“BVUPL”) held by MEIL.




24. Retirement benefit obligations (continued)

(a) Gratuity (continued)

Movements in the present value of the benefit obligation were as follows:


USD


USDChange in benefit obligation Projected benefit obligation at the beginning of the year/period 14,781 38,659Current service cost 8,287 7,706Interest cost 1,106 2,949Benefits paid (1,637) -Actuarial loss/(gain) 5,222 (32,655)Translation adjustment (2,397) (1,878)Projected benefit obligation at the end of the year/period (A) 25,362 14,781

Movement in fair value of plan assetsOpening balance of fair value of plan assets 20,246 -Contributions made during the year/period - 20,246Benefits paid (1,637) -Other adjustments (2,258) -Translation adjustment (1,975) -Closing balance of fair value of plan assets (B) 14,376 20,246Net liability/(asset) recognised in the balance sheet (A-B) 10,986 (5,465)

Cost of employee benefits for the year/periodCurrent service cost 8,287 7,706Interest cost 1,107 2,949Net actuarial loss/(gain) recognised in other comprehensive income 5,222 (32,655)Net loss/(gain) recognised for the year/period 14,616 (22,000)

Key assumptions used:Year ended

31 December 2013USD


USDDiscount rate (%) 8.00% 8.00%Long-term rate of compensation increase (%) 7.00% 7.00%Attrition (%) 6.00% 6.00%Mortality table LIC (1994 -96) LIC (1994 -96)

(b) Leave encashment

The Group also provides for leave encashment (the “leave encashment plan”), a defined benefit plan covering eligible employees.

Under the leave encashment plan, employees are entitled to future payments upon termination of service with the Company,

whether it be by death during service or upon reaching retirement age.

The present value of the defined benefit obligation and the related current service cost was measured using the projected unit credit

method.

The projected unit cost method is an accrued benefits valuation method in which the scheme liabilities make allowance for projected

earnings. The accumulated benefit obligation (ABO) is an actuarial measure of the present value for service already rendered but

differs from the projected unit credit method in that it includes no assumption for future salary increases. At the balance sheet date

the ABO was USD 12,255 (31 December 2012: USD 10,921).


23. Trade and other payablesAs at



USDCurrent:Trade payables1 754,921 583,108Other payables2 17,968,780 26,525,560

18,723,701 27,108,668Non-current:Other payables3 9,005,639 -

1Trade creditors relate to amounts outstanding for trade purchases and ongoing costs.

2Other payables include payables for purchase of capital assets amounting to USD 15,111,642 (31 December 2012: USD 24,177,085) and accrued interest on borrowings amounting to USD 2,143,437 (31 December 2012: USD 1,788,339).

3An amount of USD 9,005,639 classified under ‘Other non-current liabilities’ represents amount payable for purchase of capital assets in five yearly instalments from the date of commissioning of projects in MVKPL.

The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

The fair value of trade and other payables approximates their carrying amounts largely due to the short-term maturities of these instruments hence management consider that the carrying amount of trade and other payables to be approximately equal to their fair value.

24. Retirement benefit obligations

Defined contribution planProvident fund:The Group makes contributions to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the Group is required to contribute a specified percentage of the qualified employees’ pay to fund the benefits. These contributions are made to a fund administered and managed by the Government of India. The Group’s monthly contributions are charged to the consolidated income statement in the period they are incurred.

The total cost charged to consolidated income statement of USD 19,372 (31 December 2012: USD 69,613) represents contributions payable to these schemes by the Group at rates specified in the rules of the plan. As at 31 December 2013, contributions of USD Nil (31 December 2012: USD 6,606) were due in respect of the current reporting period.

Defined benefit plan

(a) Gratuity

In accordance with the Payment of Gratuity Act, 1972 of India, the Group provides for gratuity, a defined benefit retirement plan (the ‘Gratuity Plan’) covering eligible employees. The Group makes annual contributions under the Gratuity Plan to Life Insurance Corporation of India to fund the benefit obligation.

The present value of the defined benefit obligation, the related current service cost and past service cost was measured using the projected unit cost method.

The projected unit cost method is an accrued benefits valuation method in which the scheme liabilities make allowance for projected earnings. The accumulated benefit obligation (ABO) is an actuarial measure of the present value for service already rendered but differs from the projected unit cost method in that it includes no assumption for future salary increases. At the balance sheet date the gross ABO was USD 25,362 (31 December 2012: USD 14,781).



25. Compulsory convertible preference shares

During the previous year, MEIL has issued 11,666,566 Series A CCPS at H 300 (~USD 6) each to Indian Infrastructure Fund (IIF) under an Investment Agreement between the Group, IIF and Mr.Ravi Kailas. The following are the salient features of the CCPS:

• IIF is entitled to receive a preference dividend before any dividends are declared to the ordinary shareholders. These carry a step-up dividend which is cumulative.

• The CCPS convert into equity shares of MEIL at a fixed price of H 300 (~USD 6) per share, for a fixed number of shares, at the end of six years if the call and put options are not exercised by either of the parties.

• As part of the investment agreement, IIF were issued with 100 ordinary shares in MEIL.

Further, the Company entered into an option agreement with IIF on the same date whereby the Company can call the CCPS (the “call option”) or alternatively, IIF can put the CCPS (the “put option”) in exchange for cash or a variable number of shares in the Company providing IIF a stated rate of return. The call option can be exercised at any time after four years three months and the put option can be exercised at any time after five years three months from the date of issue.

In accordance with IAS 32, Financial Instruments: Presentation and IAS 39 Financial Instruments: Measurement, upon initial recognition, the issue proceeds has been segregated in the financial statements as mentioned below:

The issue proceeds of USD 69,932,181 (net of issue costs of USD 1,891,056) were first attributed to the embedded derivatives, with the fair value of the options amounting to USD 2,670,325. As the instrument entitles the holder to a fixed number of shares the remaining value of the proceeds were bifurcated such that there is a liability component and an equity component. The liability component, being USD 11,866,684 was estimated by discounting the mandatory preference share dividend of six year cash flows using an interest rate from an equivalent instrument without a conversion feature, with the residual value of USD 55,395,172 representing equity. The effective interest rate on the financial liability is 5.6%.

During the current year, the Group has paid dividend amounting to USD 1,325,712 to IIF.

The options are subsequently measured at fair value through profit and loss and the financial liability is subsequently measured at amortised cost. The period end balance of the options was USD 3,383,278 (31 December 2012 USD 3,348,025) (see consolidated statement of financial position), the liability component of the preference shares was USD 9,215,456 (31 December 2012: USD 11,298,416) and the equity component of the CCPS was USD 55,395,172 (31 December 2012: USD 55,395,172).

26. Share capitalAs at



USDIssued and fully paid up share capital of the Company:163,636,000 ordinary shares with no par value 72,858,278 72,858,278

After its incorporation on 13 August 2010 MEL acquired 119,999,999 shares in BVML, from its existing shareholders namely, Esrano Overseas Ltd, Bindu Urja Investments Inc, Bindu Urja Holding Inc, Bindu Urja Capital Inc and Sila Energy Inc. In consideration of the said transfer the Company issued shares of the Company at no par value in its capital. Subsequently the Company issued 43,636,000 shares of no par value through listing of its shares on AIM.

The issued share capital refers to ordinary share capital, which carries voting rights with entitlement to an equal share in dividends authorised by the board and in the distribution of the surplus assets of the Company.

27. Capital contributionAs at



USDCapital contributions received during the year 7,357,620 -Balance at end of the year/period 7,357,620 -

During the year, the Company’s subsidiary, MEIL entered into an investment agreement with related parties, Mytrah Wind Developers Private Limited (“MWDPL”) and Bindu Urja Infrastructure Limited (‘BUIL’) to issue 40,000,000 Series B Cumulative Compulsorily Redeemable Preference Shares (“RPS”) at H 300 (~ USD 5.71) per share and carry a nominal dividend of 0.01% per annum. Pursuant to the agreement BUIL and MWDPL made long-term non-reciprocal capital contributions (“capital contributions”) of US$ 7.3 m, which as per the terms of agreement are not available for distribution as dividend. Management has evaluated that these contributions are in substance in the nature of equity and accordingly classified the amounts received as “Capital Contributions”.


24. Retirement benefit obligations (continued)

(b) Leave encashment (continued)

Movements in the present value of the benefit obligation were as follows:


USD


USDChange in benefit obligation Projected benefit obligation at the beginning of the year/period 10,921 27,302Interest cost 814 2,082Current service cost 818 4,572Actuarial loss/(gain) 1,100 (21,704)Translation adjustment (1,398) (1,331)Projected benefit obligation at the end of the year/period 12,255 10,921

Cost of employee benefits for the period/yearInterest cost 814 2,082Current service cost 818 4,572Net actuarial loss/(gain) recognised in other comprehensive income 1,100 (21,704)Net loss/(gain) recognised for the year/period 2,732 (15,050)

Key assumptions used:Year ended

31 December 2013USD


USDActuarial assumptions for long-term compensated absences Discount rate 8.00% 8.00%Mortality table LIC (1994-96) LIC (1994-96)Long-term rate of compensation increase (%) 7.00% 7.00%Attrition 6.00% 6.00%

(c) Summary of retirement benefit obligations recognised in the balance sheet

Current portionUSD

Non-current PortionUSD

Liability recognised as at 31 December 2013:Gratuity 7,239 3,747Leave encashment - 12,255

7,239 16,002Liability/(Asset) recognised as at 31 December 2012:Gratuity 1,214 (6,679)Leave encashment - 10,921

1,214 4,242



29. Other reserves (continued)

(d) Actuarial valuation reserve

Actuarial valuation reserve comprises the cumulative net gains/losses on actuarial valuation of post-employment obligations. Refer note 36 for further details.


USD


USDBalance at beginning of the year/period 5,794 (48,565)(Loss)/gain on actuarial valuation of post-employment benefits (6,322) 54,359Balance at end of the year/period (528) 5,794Total other reserves (29,666,048) (16,953,835)

30. Non-controlling interestsAs at



USDBalance at beginning of the year/period 55,395,172 55,395,172Additions during the year/period - -Balance at the end of the year/period 55,395,172 55,395,172

31. Commitments(a) Capital commitments


USD


USDCapital commitments 301,731,841 208,313,149

The capital expenditures authorised and contracted relate to the provision of wind farm assets, which have not been provided for in the accounts. These commitments are net of advances paid of USD 20,956,631 (2012: USD 38,054,081) (see note 16).

(b) Operating leases

The Group leases office premises under non-cancellable operating lease agreements with a term of three years. The lease arrangement contains a renewal clause providing the Company with the option of extending the lease for a further period of three years to four years at the prevailing market rates.

Total operating lease expense recognised in the consolidated income statement as administrative expenses is USD 556,294 (31 December 2012: USD 497,198).

At 31 December 2013, the Group had no outstanding commitments for future minimum lease payments under non-cancellable operating leases.

32. Capital managementThe Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through its optimisation of the debt and equity balance.

The capital structure of the Group consists of net debt, which includes the borrowings disclosed in note 22 after deducting cash and cash equivalents, equity attributable to equity holders of the parent, comprising issued capital and reserves and retained earnings as disclosed in notes below.

The Group’s risk management committee reviews the capital structure on a semi-annual basis. As part of this review, the committee considers the cost of capital and the risks associated with each class of capital.


28. Retained earnings As at



USDBalance at beginning of the year/period 7,437,436 (4,583,064)Impact of change in accounting policy - 48,565Profit for the year/period 6,902,379 11,971,935Balance at end of the year/period 14,339,815 7,437,436

29. Other reserves(a) Foreign currency translation reserve


USD


USDBalance at beginning of the year/period (18,822,270) (12,954,978)Foreign currency translation adjustments (14,020,190) (5,867,292)Balance at end of the year/period (32,842,460) (18,822,270)

Foreign currency translation reserve comprises foreign currency differences arising from the translation of the financial statements of foreign operations from their functional currency into the Group’s presentational currency.

(b) Equity-settled employee benefits reserve:

The equity-settled employee benefits reserve relates to the share options granted to employees under the employee share option plan. Further information about share-based payments is set out in note 35.


USD


USDBalance at beginning of the year/period 1,842,215 857,819Additional cost during the year/period 1,241,245 984,396Balance at end of the year/period 3,083,460 1,842,215

(c) Fair value reserve


USD


USDBalance at beginning of the year/period 20,426 31,656Change in the fair value of available for sale financial instruments 73,054 (11,230)Balance at end of the year/period 93,480 20,426

The fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until the assets are derecognised or impaired.


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33. F

inan

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inst

rum

ents

– F

air

valu

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nd r

isk

man

agem

ent

(con

tinu

ed)

Acc

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clas

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The

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incl

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g th

eir

leve

ls in

the

fai

r va

lue

hier

arch

y.

31 D

ecem

ber

2013

:

Not

es t

o th

e co

nsol

idat

ed f

inan

cial

sta

tem

ents

for

the

year

end

ed 3

1 D

ecem

ber

2013

(con

tinue

d)


32. Capital management (continued)

The gearing ratio at the year end is as follows:


USD


USDDebt (note 22) 376,485,971 268,438,992Cash and cash equivalents (note 21) (21,382,346) (9,469,106)Net debt (a) 355,103,625 258,969,886Equity 120,284,837 118,737,051Net debt and equity (b) 475,388,462 377,706,937Net debt to net debt+equity ratio 75% 69%

Debt is defined as long and short-term borrowings (excluding derivatives) as detailed in note 22. Equity includes all capital and reserves of the Group that are managed as capital, including non-controlling interests of the Group.

Details of the significant accounting policies and methods adopted (including the criteria for recognition, the basis of measurement and the basis for recognition of income and expenses) for each class of financial asset, financial liability and equity instrument are disclosed in note 3.

Capital management policiesThe Group’s objective when managing capital is to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for stakeholders. The Group also proposes to maintain an optimal capital structure to reduce the cost of capital. Hence, the Group may adjust any dividend payments, return capital to shareholders or issue of new shares. Total capital is the equity as shown in the consolidated statement of financial position. Currently, the Group primarily monitors its capital structure in terms of evaluating the funding of wind farm projects. Management is continuously evolving strategies to optimise the returns and reduce the risks. It includes plans to optimise the financial leverage of the Group.

Equity comprises all components of equity and includes the non-controlling interests.

33. Financial instruments – Fair values and risk managementIFRS 13 Fair Value Measurement requires entities to disclose measurement of fair values, for both financial and non-financial assets and liabilities. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

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

• Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

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



33. Financial instruments – Fair values and risk management (continued)

Measurement of fair value:The following is the summary of valuation techniques used in the measurement of fair value of financial instruments:

Current investments:

Current investments represent the investments in traded mutual funds, whose fair value is determined by reference to their quoted market price at the reporting date. The fair value represents the net asset value as stated by the issuer of these mutual fund units in the published statements. Net asset value represents the price at which either the issuer will issue further units in the mutual fund or the investor can redeem the investments.

Derivative financial instruments:

The fair value of the option contracts embedded in the derivative financial instruments are determined based on the appropriate valuation techniques prescribed under the terms of contract.

Financial risk management:The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company’s primary risk management focus is to minimise potential adverse effects of market risk on its financial performance. The Company’s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Board of Directors and the Audit Committee is responsible for overseeing the Company’s risk assessment and management policies and processes.

A. Market Risk(i) Currency riskForeign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rate. The Group’s presentation currency is the US dollar. The Group’s exposure to foreign currency arises in part when the Group holds financial assets and liabilities denominated in a currency different from the functional currency of the entity. Based on the current profile of the Group, the net liability held in foreign currency is USD Nil (31 December 2012: USD Nil) and as such the Group’s exposure to currency risk is limited.

(ii) Interest rate riskInterest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. The Group is exposed to interest rate risk on its cash and bank balances. Cash and bank balances expose the company to cash flow interest rate risk. However, the Group does not carry any fixed interest bearing financial liabilities that are designated at fair value through profit or loss except for the derivative financial instruments embedded in the CCPS and CCDs. Hence, the Group is exposed to the fair value risk on such derivative financial instruments.

The average interest rate on short-term bank deposits during the year was 8.36% (2012: 8.22%).

Interest rate risk management

The primary goal of the Group’s investment strategy is to ensure risk free returns are earned on surplus funds. Market price risk arises from cash and bank balances held by the Group. The Group monitors its investment portfolio based on market expectations and creditworthiness. Material investments within the portfolio are managed on an individual basis.

The Group’s exposure to interest rates on financial instruments is detailed below:


USD


USDFinancial assetsCash and bank balances (note 21) 21,382,346 9,469,106Total interest rate dependent financial assets 21,382,346 9,469,106

Financial liabilitiesBorrowings (note 22) 376,485,971 268,438,992Total interest rate dependent financial liabilities 376,485,971 268,438,992

The amounts included above for interest rate dependent financial assets are fixed interest bearing financial assets.

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)

31 D

ecem

ber

2012

:

Not

es t

o th

e co

nsol

idat

ed f

inan

cial

sta

tem

ents

for

the

year

end

ed 3

1 D

ecem

ber

2013

(con

tinue

d)




The Group has access to financing facilities as described below, of which USD 84,791,145 (2012: USD 63,048,327) were unused

at the balance sheet date. The Group expects to meet its other obligations from operating cash flows and proceeds of maturing

financial assets.


USD


USDAmount used 317,456,388 209,401,342Amount unused 84,791,145 63,048,327Total bank facility 402,247,533 272,449,669

C. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to

a financial loss. The group’s credit risk arises from accounts receivable balances on the sale of electricity. The Indian entities have

entered into purchase power agreements with transmission/distribution companies incorporated by the Indian State Government

and other electricity transmission and trading companies to export the electricity generated. The Group is therefore committed to

sell power to these customers and regards any potential risk of default as being predominantly a governmental one. The Group is

paid monthly by the transmission companies for the electricity it supplies. The Group assesses the credit quality of the purchaser

based on its financial position and other information.

Financial assets that potentially expose the Company to credit risk consist principally of cash and bank balances, which are held with

institutions with a minimum credit rating of AA. The fair value of financial assets represents the maximum credit exposure.

The Group is reliant on a small number of suppliers and customers.

The industry currently benefits supports from the Indian Government. Changes in the Government policy could impact tariff/taxes

which could have an impact on the revenue and the profit of the Group.

34. Related party transactions

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated

and are not disclosed in this note. The transactions with related parties are priced on an arm’s length basis and are settled as per

agreed terms. Details of transactions between the Group and related parties are disclosed below.

The Directors of the Company who are also considered to be the key management personnel are

1. Mr Ravi Kailas – Chairman and CEO

2. Mr Rohit Phansalkar – Non-Executive Director

3. Mr Russell Walls – Non-Executive Director

The entities where certain key management personnel have significant influence are:

1. Bindu Urja Capital Inc

2. Bindu Urja Holding Inc

3. Bindu Urja Investments Inc

4. Bindu Urja Inc

5. Sila Energy Inc

6. Bindu Urja Infrastructure Limited

7. Mytrah Wind Developers Private Limited



If interest rate on INR denominated borrowings had been increased or decreased by 100 basis points with all other variables held constant, post tax income for the year ended 31 December 2013 would have been increased/decreased by USD 1,754,354 (2012: USD 1,201,318).

(iii) Price riskThe Group is exposed to mutual funds price (Net Asset Value – ‘NAV’) risk because of investments in debt-based mutual fund units held by the Group and classified on the statement of financial position as available-for-sale financial assets. The Group is not exposed to any commodity price risk. In order to manage its price risk arising from investment in mutual fund units, the Group diversifies its portfolio; in accordance with the limits set by the Group risk management policies.

As the Group invests in mutual fund units which in turn invest in short-term (in the range 30-90 days) equity instruments with low yield and hence carry a very minimal mark-to-market risk. Moreover, the accruals earned by the said units are distributed on a daily basis; which mainly represents the dividend accruals rather than the fair value movements. Hence, any reasonable movement in interest yields are not expected to have any impact on the NAV of the said units.

B. Liquidity riskUltimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. Details of additional undrawn facilities that the Group has at its disposal to reduce further liquidity risk are set out below.

The following table details the Group’s remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay as at 31 December 2013 and 31 December 2012:

As at 31 December 2013:

2014USD

2015USD

2016USD

2017USD

ThereafterUSD

TotalUSD

Non-derivative financial liabilities:Borrowings 47,890,349 56,920,861 18,057,573 19,832,705 233,784,483 376,485,971Trade and other payables 18,723,701 - - - - 18,723,701Liability component of CCPS 2,473,115 3,371,170 3,371,171 - - 9,215,456Derivative Financial liabilities:Derivative instruments not designated as hedge

- - 2,978,580 - - 2,978,580

Total financial liabilities 69,087,165 60,292,031 24,407,324 19,832,705 233,784,483 407,403,708

As at 31 December 2012:

2013USD

2014USD

2015USD

2016USD

ThereafterUSD

TotalUSD

Non-derivative financial liabilities:Borrowings 16,402,362 12,440,124 58,814,898 14,635,603 166,146,005 268,438,992Trade and other payables 27,108,668 - - - - 27,108,668Liability component of CCPS 1,556,597 2,571,003 3,585,408 3,585,408 - 11,298,416Derivative Financial liabilities:Derivative instruments not designated as hedge

- - - 2,947,030 - 2,947,030

Total financial liabilities 45,067,627 15,011,127 62,400,306 21,168,041 166,146,005 309,793,106



35. Share-based paymentsThe Company has an equity-settled share option scheme for certain Directors of the Company and employees in the Group. All options have a vesting period of three years. Each share option converts into one ordinary share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of the expiry. Options lapse if the employee leaves the Company before the options vest.

Details of the share options outstanding during the period are as follows.

Year ended 31 December 2013 Period ended 31 December 2012Number of

share optionsWeighted average

exercise price(GBP)

Number of share options

Weighted average exercise price

(GBP)Outstanding at beginning of year/period 14,959,599 1.13 14,708,689 1.14Granted during the year/period 42,600 0.95 250,910 0.94

Cancelled during the year/period (173,493) 0.94 - -Outstanding at the end of the year/period 14,828,706 1.14 14,959,599 1.13

The options outstanding as at 31 December 2013 had a weighted average exercise price of GBP 1.14, and a weighted average remaining contractual life of 8 years.

Details of the share options granted during the year are as follows:

Directors/Employees Shares granted during

the year

Expiry date Exercise price (GBP) Fair value at grant date

(GBP)Directors 42,600 28.02.2015 0.95 0.95

The aggregate fair value of the share options granted during the year was USD 63,254. The fair value of options is measured using the Black-Scholes Merton valuation model. Measurement inputs include the following:

Weighted average share price (GBP) 1.01

Weighted average exercise price (GBP) 0.95

Expected volatility 36.20%

Expected life 3 Years

Risk-free interest rate 0.72%

Expected volatility was determined by calculating the historical volatility of the Group’s share price from the date of listing on 12 October 2010 to the date of issue of options. The expected life use in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.The Group recognised total expenses of USD 1,241,244 (31 December 2012: USD 984,396) related to equity-settled share-based payment transactions in the current year.

36. Changes in accounting policiesThe Group has adopted revised IAS 19, ‘Employee benefits’ effective from 1 January 2013. The revised employee benefit standard introduces changes to the recognition, measurement, presentation and disclosure of post-employment benefits. The revised standard also requires the actuarial gains/losses to be recognised through ‘Other comprehensive income’ (OCI), the effect of this

is summarised in the following tables:



Impact on consolidated income statement(Decrease)/Increase in administrative expenses (6,322) 54,359Increase/(Decrease) in profit before tax 6,322 (54,359)Impact on statement of comprehensive income (Decrease)/Increase in other comprehensive income (6,322) 54,359


The following related party transactions occurred during the year/period: Year ended 31 December 2013

USD


USDAdvance to related parties towards development and construction of wind farm projects:Bindu Urja Infrastructure Limited 7,113,141 1,252,537Mytrah Wind Developers Private Limited 4,187,341 486,520Purchase towards development and construction of wind farm projects:Bindu Urja Infrastructure Limited 19,474,703 -Mytrah Wind Developers Private Limited 988,401 -Deposits placed towards usage of land and power evacuation facilities:Bindu Urja Infrastructure Limited 8,558,908 -Mytrah Wind Developers Private Limited 2,566,687 -Capital contributions received from (note 27):Bindu Urja Infrastructure Limited 3,056,475 -Mytrah Wind Developers Private Limited 4,301,145 -

The following balances were outstanding at the end of the reporting year/

period:


USD


USDAdvance recoverable from related parties towards development and construction of wind farm projects:Bindu Urja Infrastructure Limited 5,082,232 1,252,537Mytrah Wind Developers Private Limited 2,377,292 486,520Deposits placed towards usage of land and power evacuation facilities:Bindu Urja Infrastructure Limited 8,097,076 -Mytrah Wind Developers Private Limited 2,428,190 -Capital contributions received from (note 27):Bindu Urja Infrastructure Limited 3,056,475 -Mytrah Wind Developers Private Limited 4,301,145 -

Remuneration of key management personnel:

The remuneration of Directors, who are the key management personnel of the Group, is set out below for each of the categories

specified in IAS 24 Related Party Disclosures. Further information about the remuneration of the individual Directors is provided in

the Directors’ Report on page 66.

The following related party transactions occurred during the year/period: Year ended 31 December 2013

USD


USDSalaries and fees 234,450 2,479,620Share-based payments 833,205 906,588

1,067,655 3,3862,08

As per the CCPS investment agreement (note 25), for a period of one year from the completion date or commissioning of a

cumulative 400 MW capacity, whichever is later, Mr Ravi Kailas without prior consent of IIF shall not sell or dispose, directly or

indirectly his shareholding in Mytrah Energy Limited.

34. Related party transactions (continued)



36. Changes in accounting policies (continued)

Impact on assets, liability and equity



As at1 April 2012

Increase/(Decrease) in retained earnings 528 (5,794) 48,565Increase/(Decrease) in actuarial valuation reserve (528) 5,794 (48,565)Increase/(Decrease) in net assets - - -

Furthermore, the standard also requires net interest expense/income on the plan assets to be considered in the income statement

to be restricted to the discount rate based on the yield from government securities. The actual return on the plan assets in excess

of such yields is required to be recognised through OCI. The effect of these changes is immaterial and accordingly no further

disclosures have been made in these consolidated financial statements.

37. Change in the useful life and residual value

As a result of the review of useful lives of fixed assets, the estimated useful lives of fixed assets have been revised prospectively, as

detailed below, with effect from 1 April 2012.

Category of asset Useful life as estimated till31 March 2012

Revised estimated useful life from1 April 2012

Plant and machinery 5-20 years 5-50 years

Further, the Company has adopted component accounting of depreciation for the plant and machinery class of the fixed asset and

accordingly revised the useful lives of the different components of the plant and machinery as mentioned below:

Particulars Revised useful life (in years)Nacelles 25Blades 30Towers 50Transformers 25Erection and commissioning 25Civil Works, electrical lines and evacuation facilities 50

Consequently, the annual depreciation charge thereon has been prospectively revised downwards from 1 April 2012. As a result,

the depreciation charge for the period ended 31 December 2012 is lower by USD 4,276,602.

38. Change in the financial year

During the previous period, the Company changed its annual balance sheet date from 31 March to 31 December. On account of

this change in its financial year, the current period financials are for twelve months ended 31 December 2013 and the previous

period financials are for nine months ended 31 December 2012. Accordingly, the comparative amounts for the income statement,

statement of changes in equity, cash flow statement and related notes are not entirely comparable.

39. Contingent liabilities

The Group is involved in appeals, claims, inspections and other matters that arise from time to time in the ordinary course of

business. Following are the details of contingent liabilities not recognised in the financial statements, which the Group considers

will not have any material impact on the financial statements.

The following balances were outstanding at the end of the reporting year/

period:


USD


USDIndirect tax matters pending in appeal 1,165,939 -Unexpired letters of credit 409,696 -Claims against the company not acknowledged as debt 183,510 -

1,759,145 -


Notice of Annual General MeetingMytrah Energy Limited

(Incorporated and registered in Guernsey with company number 52284)

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR

IMMEDIATE ATTENTION. If you are in any doubt about the

contents of this document or as to the action you should

take, you are recommended immediately to seek your own

financial advice from your stockbroker, bank manager,

solicitor, accountant or other independent financial adviser

duly authorised pursuant to the Financial Services and

Markets Act 2000.

If you have sold or otherwise transferred all of your Ordinary

Shares in Mytrah Energy Limited, please immediately forward

this document and the accompanying Form of Proxy to the

purchaser or transferee or to the stockbroker, bank or other

agent through whom the sale or transfer was effected for

onward transmission to the purchaser or transferee. However,

such documents should not be forwarded or transmitted in

or into any jurisdiction in which such act would constitute a

violation of the relevant laws in such jurisdictions. Therefore,

persons into whose possession this document comes should

inform themselves about and observe any such laws and

restrictions in any such jurisdictions. Any failure to comply with

these restrictions may constitute the violation of the security

laws of such jurisdictions. If you have sold or transferred only

part of your holding of Ordinary Shares in Mytrah Energy

Limited you should retain these documents.

Notice is hereby given that the 2014 Annual General Meeting

(“AGM”) of the shareholders of Mytrah Energy Limited (the

“Company”) will be held at Frances House, Sir William Place,

St Peter Port, Guernsey, GY1 4EU, Channel Islands on Thursday

17th July 2014 at 12.00 noon to consider and, if thought fit,

pass the following resolutions.

Resolutions 1 to 9 will be proposed as ordinary resolutions and

resolution 10 will be proposed as a special resolution.

Ordinary resolutions1. TO receive the accounts of the Company and the Directors’

report for the financial year ended 31 December 2013 and

the report of the Company’s auditor thereon (the “Annual

Report and Accounts”).

2. TO approve the “Directors’ Remuneration Report” set out

in the Annual Report and Accounts for the financial year

ended 31 December 2013.

3. TO re-appoint KPMG Audit LLC as auditor of the Company,

to hold office until the conclusion of the next AGM to be

held in 2015.

4. TO authorise the Directors to determine the remuneration

of the auditor of the Company.

5. TO re-elect as a Director Mr Ravi Kailas, who voluntarily

retires in accordance with the recommendations of the UK

Corporate Governance Code.

6. TO re-elect as a Director Mr Rohit Phansalkar, who voluntarily

retires in accordance with the recommendations of the UK

Corporate Governance Code.

7. TO re-elect Mr John Russell Fotheringham Walls, who

voluntarily retires in accordance with the recommendations

of the UK Corporate Governance Code.

8. THAT the Directors of the Company be and are hereby

authorised to exercise all powers of the Company to

issue or grant equity securities (as defined in the Articles

of Incorporation of the Company) in the capital of the

Company in accordance with Article 4.3 of the Articles of

Incorporation of the Company:

(A) up to a maximum number of 54,545,333 ordinary

shares of the Company (“Ordinary Shares”) (equal to

approximately one third of the number of Ordinary


Incorporation of the Company did not apply to such issue or

grant, this authorisation being limited to:

(A) the issue or grant of equity securities in connection with

an offer of such securities by way of rights (including

without limitation, under a rights issue, open offer or

similar arrangement) to holders of equity securities in

proportion (as nearly as may be practicable) to their

respective holdings of such securities, but subject to

such exclusions or other arrangements as the Directors

may deem necessary or expedient to deal with fractional

entitlements, record dates or any other legal or

practical problems under the laws of any territory, or

the requirements of any regulatory authority or stock

exchange; and

(B) the issue or grant of equity securities up to a maximum

number of 54,545,333 Ordinary Shares (equal to

approximately one-third of the number of Ordinary

Shares in issue as at the date of publication of this notice)

and after giving effect to the exercise of any warrants,

options or other convertible securities outstanding as at

the date of this Resolution,

such authorities to expire at the end of the AGM of the

Company to be held in 2015 or, if earlier, at the close of

business on the date falling 15 months from the date of

the passing of this Resolution (unless previously renewed,

revoked or varied by the Company by special resolution)

save that the Company may before such expiry make an

offer or agreement which would or might require equity

securities to be issued or granted after such expiry and the

Directors may issue or grant equity securities in pursuance

of such an offer or agreement as if the authority conferred

by the above resolution had not expired. This resolution

revokes and replaces all unexercised authorities previously

granted to the Directors of the Company to issue or grant

equity securities in the capital of the Company wholly for

cash as if the pre-emption rights contained in article 4.13 of

the Article of Incorporation of the Company did not apply

to such issue or grant but without prejudice to any issue of

shares or grant of rights already made, offered or agreed to

be made pursuant to such authorities.

By order of the Board

Registered Office: Susan Wallace

PO Box 156 Company Secretary

Frances House, Sir William Place

St Peter Port, Guernsey GY1 4EU

Registered in Guernsey with registered number 52284

Dated: 16 June 2014

Notes:1. A member entitled to attend and vote at the AGM is

entitled to appoint one or more proxies to speak and vote

instead of them. A proxy need not be a member of the

Company. Completion and return of the Form of Proxy will

not preclude members from attending or voting at the

AGM if they so wish.

2. More than one proxy may be appointed provided each proxy is

appointed to exercise the rights attached to different shares.

3. In accordance with the provisions of the UK Corporate

Governance Code it should be noted that a vote withheld is

not a vote in law and will not be counted in the calculation of

the proportion of the votes for and against each resolution.

4. A Form of Proxy is enclosed for use at the AGM. The Form

of Proxy should be completed in accordance with the

instructions set out therein and sent, together with the power

of attorney or other authority, if any, under which it is signed,

or a notarially certified copy of such power or authority, so

as to reach the Company’s agent, for this purpose being,

Computershare Investor Services (Guernsey) Limited, c/o the

Pavilions, Bridgwater Road, Bristol, BS99 6ZY not less than 48

hours before the time for holding the AGM.

5. All persons recorded on the register of shareholders as

holding shares in the Company as at 12.00 noon on 15 July

2014 or, if the AGM is adjourned, as at 48 hours before the

time of any adjourned AGM, shall be entitled to attend and

vote (either in person or by proxy) at the AGM and shall be

entitled to one vote per share held.

6. If the AGM falls to be adjourned because it is not quorate, it

will be adjourned to the same time and place five business

days later or to such other day and/or time and/or place as

the Directors of the Company may determine, whereupon

those shareholders then present in person, by their

representative or by proxy, shall form the quorum. In the

event of any such adjournment the Company will announce

the adjournment via a regulatory information service but no

notification will be sent directly to shareholders.

7. Where there are joint registered holders of any shares such

Shares in issue as at the date of publication of this notice)

and after giving effect to the exercise of any warrants,

options or other convertible shares outstanding at the

date of the passing of this Resolution (such number to

be reduced by any issue or grants made under paragraph

(B) below in excess of any equivalent number); and

(B) up to a maximum number of 109,090,666 Ordinary

Shares (equal to approximately two-thirds of the

number of Ordinary Shares in issue as at the date of

publication of this notice) and after giving effect to the

exercise of any warrants, options or other convertible

shares outstanding as at the date of the passing of this

Resolution (such number to be reduced by any issues

or grants made under paragraph (A) above) solely in

connection with an offer by way of a rights issue:

(i) to Ordinary Shareholders in proportion (as nearly as

may be practicable) to their existing holdings; and

(ii) to holders of other shares or securities, as required

by the rights of those securities or as the Directors of

the Company otherwise consider necessary,

and so that the Directors of the Company may impose

any limits or restrictions and make any arrangements

which it considers necessary or appropriate to deal with

treasury shares, fractional entitlements, legal, regulatory

or practical problems in, or under the laws of, any

territory or any other matter,

such authorities to expire at the end of the AGM of the

Company to be held in 2015 or, if earlier, at the close of

business on the date falling 15 months from the date of

passing of this Resolution (unless previously renewed,

revoked or varied by the Company by ordinary resolution),

but, in each case, during this period the Company may make

offers, and enter into agreements, which would, or might,

require equity securities to be issued or granted after the

authority given to the Directors of the Company pursuant

to this Resolution ends and the Directors of the Company

may issue or grant equity securities under any such offer or

agreement as if the authority given to the Directors of the

Company pursuant to this Resolution had not ended. This

Resolution revokes and replaces all unexercised authorities

previously granted to the Directors of the Company to issue

or grant securities but without prejudice to any issue of

shares or grant of rights already made, offered or agreed to

be made pursuant to such authorities.

9. THAT the Company be and is hereby generally authorised in

accordance with section 315 of The Companies (Guernsey)

Law, 2008 (as amended) (the “Companies Law”), conditional

on Ordinary Shares of the Company remaining listed on

AIM, a market operated by the London Stock Exchange, to

make one or more market acquisitions (within the meaning

of section 316 of the Companies Law) of Ordinary Shares

(which following their acquisition may be cancelled or, to

the extent permitted by the Companies Law, be held in

treasury), provided that:

(A) the maximum aggregate number of Ordinary Shares that

may be purchased under this authority is 32,727,200

(equal to approximately 20 per centage. of the number

of Ordinary Shares in issue as at the date of publication of

this notice);

(B) the minimum price (exclusive of expenses) which may be

paid for an Ordinary Share is £0.01 per Ordinary Share;

(C) the maximum price (exclusive of expenses) which may

be paid for an Ordinary Share is 150% of the highest

independent bid made (i) on the day on which that Ordinary

Share is acquired and (ii) on the trading platform where the

purchase is carried out; and

(D) the authority hereby conferred shall (unless it is previously

renewed, revoked or varied by the Company by ordinary

resolution) expire at the conclusion of the AGM of the

Company held in 2015 or, if earlier, at the close of business

on 30 December 2015, save that the Company may make

a contract to acquire Ordinary Shares under this authority

before its expiry which will or may be executed wholly or

partly after its expiration and the Company may make an

acquisition of Ordinary Shares pursuant to such a contract,

and the general authority previously granted pursuant to

section 315 of the Companies Law at the annual general

meeting of the Company held on 31st July 2013 be and it is

hereby revoked.

Special Resolution10. THAT, if Resolution 8 (being the proposed ordinary resolution

of the Company numbered 8 in this notice of AGM) is

passed, the Directors of the Company be and they are

hereby authorised to exercise all powers of the Company to

issue or grant equity securities (as defined in the Articles of

Incorporation of the Company) in the capital of the Company

wholly for cash pursuant to the issue or grant referred to

in Resolution 8 (being the proposed ordinary resolution of

the Company numbered 8 in this notice of AGM) as if the

pre-emption rights contained in article 4.13 of the Articles of


authority to issue shares or grant rights to subscribe for, or

convert any securities into, shares up to a maximum number

of 54,545,333 Ordinary Shares in the Company. This amount

represents approximately one-third of the issued Ordinary

Share capital of the Company as at the date of publication of

this notice.

In line with guidance issued by the Association of British

Insurers (‘ABI’), paragraph (B) of this Resolution would give the

Directors authority to issue shares or grant rights to subscribe

for, or convert any securities into, shares in connection with a

rights issue in favour of shareholders up to a maximum number

of 109,090,666 Ordinary Shares in the Company. This amount

(before any reduction) represents approximately two-thirds of

the issued Ordinary Share capital of the Company as at the date

of publication of this notice.

In order to ensure that the maximum amount of shares issuable

under Resolution 8 is in total never more than an amount

equal to approximately two-thirds of the issued Ordinary Share

capital, deductions will be made from (A) or (B) to ensure that

this remains the case, whether or not the Company issues

shares under (A) or (B) first.

Without prejudice to the Company’s business strategy (which

may involve future issues of shares), the Directors have no

specific present intention to exercise either of the authorities

sought under this Resolution. However, if they do exercise the

authorities, the Directors intend to follow ABI recommendations

concerning their use (including as regards the Directors standing

for re-election in certain cases).

The authorities sought under paragraphs (A) and (B) of this

Resolution will expire at the conclusion of the AGM of the

Company to be held in 2015, or, if earlier,15 months after the

date of the AGM.

Resolution 9: Authority to purchase own shares

The Company has previously granted authority to make market

acquisitions of its Ordinary Shares to address, among other

things, any imbalance in the supply of, and demand for, Ordinary

Shares. The current authority expires at the end of the AGM.

This Resolution proposes to renew the authority of the

Company to make market acquisitions of up to a maximum

number of 32,727,200 Ordinary Shares in the Company. This

amount represents approximately 20% of the issued Ordinary

Shares capital of the Company as at the date of publication of

this notice.

The Directors will exercise this power only when, in the light

of market conditions prevailing at the time, they believe that

the effect of such purchases will be in the best interests of

the Company and of its shareholders generally and when

the Directors believe, after careful consideration, that such a

purchase would be expected to result in an increase in adjusted

earnings per share. The Directors consider it to be desirable

for this general authority to be available to provide flexibility

in the management of the Company’s capital resources and

to satisfy the exercise of employee share options under the

Mytrah Employee and Mytrah Executive Share Option Schemes.

The Company may hold in treasury any of its own shares

that it purchases pursuant to the authority conferred by this

Resolution, (subject to a maximum limit of 10% of issued share

capital as set out in the Companies Law).

In accordance with the Companies Law, the Company may

only make market purchases of its Ordinary Shares provided it

satisfies the ‘solvency test’ (as detailed in the Companies Law)

if (i) it is able to pay its debts as they become due; and (ii)

the value of its assets is greater than the value of its liabilities.

In connection with any purchase of the Company’s Ordinary

Shares, the Directors will therefore need to confirm that the

solvency test will be satisfied immediately following such

purchase being made.

The minimum price which may be paid for an Ordinary Share

is £0.01. Given the volatility of the share price and limited

liquidity, the maximum price which may be paid for an Ordinary

Share has been set at 150% of the highest independent bid

made (i) on the day on which that Ordinary Share is acquired

and (ii) on the trading platform where the purchase is carried

out.However, the Board will seek at all times to comply, where

practicable, with best practice guidance which recommends

that the maximum price, exclusive of expenses, which may be

paid for an Ordinary Share is the higher of: (i) an amount equal

to 5% above the average market value for an Ordinary Share

for the five business days immediately preceding the date of the

purchase; and (ii) the higher of the price of the last independent

trade and the highest current independent bid on the trading

venues where the purchase is carried out.

Any Ordinary Shares purchased under the renewed authority

will either be cancelled or held in treasury (subject to the

maximum number of shares that may be held in treasury of

10% of the issued Ordinary shares of the Company, as set out in

section 317 of the Companies Law), which may be re-issued to

satisfy the exercise of employee share options under the Mytrah

Employee and Mytrah Executive Share Option Schemes.

persons shall not have the right of voting individually in

respect of such shares but shall elect one of their number to

represent them and to vote whether in person or by proxy

in their name. In default of such election the person whose

name stands first on the register of shareholders shall alone

be entitled to vote.

8. On a poll votes may be given either personally or by proxy

and a shareholder entitled to more than one vote need not

use all their votes or cast all the votes they use in the same

way.

9. Any corporation which is a shareholder may by resolution

of its Board of Directors or other governing body authorise

such person as it thinks fit to act as its representative at the

AGM. Any person so authorised shall be entitled to exercise

on behalf of the corporation which he represents the same

powers (other than to appoint a proxy) as that corporation

could exercise if it were an individual shareholder.

10. As at 9 June 2014 (the latest practicable date prior to the

printing of this notice) the Company’s issued share capital

consisted of 163,636,000 Ordinary Shares of no par value,

all carrying one vote each per share. No Ordinary Shares are

held in treasury.

11. Copies of the following documents are available for

inspection at the registered office of the Company during

usual business hours on any weekday (weekends and public

holidays excluded) and will be available for inspection at

the place of the AGM for 15 minutes before and during the

AGM itself:

(a) a copy of the Company’s Annual Report and Accounts

for the year ended 31 December 2013; and

(b) copies of the service contract for Ravi Kailas and the

Non-Executive Directors’ appointment letters.

Explanatory notes to the Notice of Annual General Meeting

At the AGM there are 10 Resolutions which shareholders will be

asked to consider and, if thought fit, approve. An explanation

of each of these Resolutions is given below. Resolutions 1 to

9 (inclusive) are proposed as ordinary resolutions. An ordinary

resolution requires more than 50% of votes cast at the AGM

relating to that resolution to be in favour of it for the resolution

to be passed. Resolution 10 is proposed as a special resolution,

which requires at least 75% of votes cast at the AGM relating

to that resolution to be in favour of it for the resolution to be

passed.

Ordinary ResolutionsResolution 1: Annual Report and Accounts

For each financial year the Directors are required to lay the

Annual Report and Accounts before its annual general meeting.

Shareholders are asked to receive the Annual Report and

Accounts of the Company for the year ended 31 December

2013.

Resolution 2: Report on Directors’ Remuneration

The Annual Report and Accounts for the year ended 31

December 2013 contains a Report on Directors’ Remuneration,

which sets out the remuneration policy for the Company and

reports on the remuneration arrangements in place for its

Directors. The shareholder vote will be advisory only, but the

Directors of the Company will take the outcome of the vote

into consideration when reviewing and setting the Company’s

remuneration policy.

Resolutions 3 and 4: Appointment and remuneration of

the Auditors

KPMG Audit LLC have indicated that they are willing to continue

to be the Company’s Auditors for the next year. You are asked

to approve their reappointment and to authorise the Directors

of the Company to determine their remuneration.

Resolutions 5 to 7 (inclusive): Election of Directors

In accordance with the recommendations of the UK Corporate

Governance Code, Ravi Kailas, Russell Walls and Rohit

Phansalkar, have resolved to voluntarily submit themselves for

re-election by the shareholders at the AGM.

Having considered the performance and contribution made

by each of the Directors, the Board believes that each of them

continue to perform effectively and with commitment to

their roles and, as such, recommends their re-election. Brief

biographical details of the Directors seeking re-election can be

found in the Annual Report and Accounts.

Resolution 8: Authority to issue shares

Paragraph (A) of this Resolution would give the Directors the

122

MYTRAH ENERGY LIMITED(Incorporated and registered in Guernsey with company number 52284)

FORM OF PROXY

Please read the notice of Annual General Meeting and the explanatory notes below before completing this form.

For use by holders of Ordinary Shares at the Annual General Meeting of Mytrah Energy Limited (the “Company”) convened for Thursday 17th July 2014 at 12 noon at Frances House, Sir William Place, St Peter Port, Guernsey GY1 4EU and at any adjournment thereof:

I/We ................................................................................................................................................................................................................................(Block Capitals)

Of ...................................................................................................................................................................................................................................(Block Capitals)

being (a) shareholder(s) of the Company hereby appoint the Chairman of the meeting

or ..........................................................................................................................................................................................................................................................

as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company (the “AGM”) to be held on 17th July 2014 at 12 noon and at any adjournment thereof.

I/WE direct the proxy to vote on the Resolutions as follows:

Ordinary Resolutions FOR AGAINST WITHHELD

1. TO receive the Annual Report and Accounts of the Company for the year ended 31 December 2013, together with the Report of the Directors and Auditors thereon.

2. TO approve the Directors’ Remuneration Report set out in the Annual Report and Accounts for the year ended 31 December 2013.

3. TO reappoint KPMG Audit LLC as Auditors of the Company, to hold office until the conclusion of the next Annual General Meeting of the Company to be held in 2015.

4. TO authorise the Directors to determine the remuneration of the Auditors of the Company.

5. TO re-elect as a Director Mr Ravi Shankar Kailas, who voluntarily retires in accordance with the recommendations of the UK Corporate Governance Code.

6. TO re-elect as a Director Mr Rohit Phansalkar, who voluntarily retires in accordance with the recommendations of the UK Corporate Governance Code.

7. TO re-elect as a Director Mr John Russell Fotheringham Walls, who voluntarily retires in accordance with the recommendations of the UK Corporate Governance Code.

8. TO authorise the Directors to issue Ordinary Shares.

9. TO authorise the Company to make market purchases of its own shares which may be cancelled or held as treasury shares.

Special Resolution FOR AGAINST WITHHELD

10. TO disapply pre-emption rights under Article 4.13 of the Articles of Incorporation.

Please indicate with an X in the appropriate space how you wish your vote to be cast. On receipt of the form duly executed and in the absence of a specific direction, your proxy will vote or abstain as he or she thinks fit on the resolutions.

Signed: .………………………….......……… Date ………………..……….2014

Notes:

1. If it is desired to appoint as proxy any person other than the Chairman of the AGM, his/her name and address should be inserted in the relevant place and reference to the Chairman of the meeting deleted and the alteration initialled.

2. If the shareholder is a corporation, this form must be executed under its common seal or under the hand of its duly authorised officer or attorney.

3. In the case of joint registered holders of any shares, such persons shall not have the right of voting individually in respect of such shares but shall elect one of their number to represent them and to vote whether in person or by proxy in their name. In default of such election the person whose name stands first on the register of shareholders shall alone be entitled to vote.

4. Any alterations to this Form of Proxy should be initialled by the person who signs it.

5. The Form of Proxy should be completed in accordance with the instructions set out therein and sent, together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power or authority, so as to reach the Company’s agent, for this purpose being, Computershare Investor Services (Guernsey) Limited, c/o the Pavilions, Bridgwater Road, Bristol, BS99 6ZY not less than 48 hours before the time for holding the Meeting.

6. Completing and returning a Form of Proxy will not prevent a member from attending in person at the meeting and voting should he or she so wish.

7. In the event that a Form of Proxy is returned without an indication as to how the proxy shall vote on the resolutions, the proxy will exercise his discretion as to whether and, if so, how he votes.

8. A shareholder entitled to exercise more than one vote need not cast all his or her votes in the same way.

9. In accordance with the provisions of the UK Code of Corporate Governance it should be noted that a vote withheld is not a vote in law and will not be counted in the calculation of the proportion of the votes for and against each resolution.

As at the date of publication of this notice, no Ordinary Shares

are held by the Company in treasury and options and other

rights to subscribe for shares were outstanding over a total of

14,828,706 Ordinary Shares.

The authority sought under this Resolution will expire at the

end of the AGM to be held in 2015, or, if earlier, 17 October

2015.

Special ResolutionResolution 10: Disapplication of pre-emption rights

Article 4.13 of the Articles of Incorporation requires that where

Ordinary Shares are issued, or rights to subscribe for, or convert

any securities into, Ordinary Shares are granted, wholly for

cash, or where Ordinary Shares are sold out of treasury wholly

for cash, either shareholder approval must be sought to make

a non-pre-emptive offer or a pre-emptive offer must be made

to all existing shareholders (but allowing the Directors to

make such provision as they think fit in relation to fractional

entitlements and/or certain overseas shareholders and/or any

other matters). The Board believes that the ability to issue

new Ordinary Shares on a non-pre-emptive basis is in the best

interests of the Company as this affords considerable flexibility

and a significant reduction in time and costs in effecting

fundraisings.

If approved, the disapplication authority will allow the Board

to issue up to a maximum number of 54,545,333 Ordinary

Shares (equal to approximately one-third of the total number

of Ordinary Shares in issue as at the date of publication of this

notice) on a non pre-emptive basis.

The authority sought under this Resolution will expire at the

end of the AGM of the Company to be held in 2015 or, if earlier,

15 months after the date of the AGM.

Company Advisers ..................................................01Our Company .......................................................03Our Mission ..........................................................05Our Philosophy .....................................................06Our Core Values ....................................................07Overview ...............................................................08Current Operational Highlights ..............................09Our Performance ...................................................10Chairman and CEO’s Statement .............................12Financial Performance ...........................................21Q&A with CFO ......................................................27Company Structure ...............................................30Our Intellectual Property ........................................43What went right in 2013 .......................................47Human Capital ......................................................49

Greener Earth ........................................................53Sustainability Report ..............................................55Directors’ Biographies ...........................................60Directors’ Report ...................................................66Corporate Governance Report ...............................68Remuneration Report ............................................73Independent Auditor’s Report to the

members of Mytrah Energy Limited .......................77Consolidated Income Statement ............................78Consolidated Statement of Comprehensive Income 79Consolidated Statement of Financial Position .........80Consolidated Statement of Changes in Equity ........81Consolidated Statement of Cash Flows ..................82Notes to the Consolidated Financial Statements .....83

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